Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2017. REUTERS/Brendan McDermid By Tanya Agrawal
U.S. stocks were modestly higher in early afternoon trading on Tuesday, with the Nasdaq Composite eking out another record high, helped by an Apple-led rise in technology stocks.
However, investors held off from making big bets as the two-day Federal Reserve meeting kicked off.
The Fed is widely expected to stand pat on interest rates, but investors are awaiting the central bank's statement on Wednesday for hints on the possibility of a rate hike in June.
The markets' gains were capped by a decline in auto stocks after automakers reported a fall in new vehicle sales for April. Ford (F.N) dropped 3.8 percent, while General Motors (GM.N) fell 2.8 percent.
"I think the auto sales numbers have caused the market to take a step back," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company in Milwaukee, Wisconsin.
"I think people are reading too much into that. There's a fear that is building on last quarter's GDP numbers that the consumer is pulling back, which we don't think is the case."
Data last week showed the U.S. economy grew at its slowest pace in three years in the first quarter. But, Schutte said strong corporate earnings have helped hold the market up.
"With earnings rising, that is backdrop for positive stock returns moving forward."
Overall, profits at S&P 500 companies are estimated to have risen 13.9 percent in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.
At 12:41 a.m. ET (1641 GMT) the Dow Jones Industrial Average .DJI was up 43.41 points, or 0.21 percent, at 20,956.87.
The S&P 500 .SPX was up 3.36 points, or 0.14 percent, at 2,391.69 and the Nasdaq Composite .IXIC was up 6.94 points, or 0.11 percent, at 6,098.54.
Eight of the 11 major S&P 500 sectors were higher, with the technology index's .SPLRCT 0.39 percent rise leading the advancers.
Apple (AAPL.O) hit a record high for the second straight day. The iPhone maker is due to report results after the close of market.
A 0.3 percent fall in consumer staples .SPLRCS led the laggard.
CVS Health (CVS.N) was down 2.8 percent at $79.70, while Archer Daniels Midland (ADM.N) fell 8.2 percent to $41.98, both after reporting results.
Dow component Pfizer (PFE.N) was down 1 percent at $33.43 after the drugmaker's quarterly revenue missed estimates.
Advanced Micro Devices (AMD.O) tumbled 18.9 percent to $11.04 after the chipmaker's second-quarter gross margins forecast raised some concerns.
Coach (COH.N) rose as much as 12.2 percent to a nine-month high of $43.47 after the handbag maker reported a higher-than-expected quarterly profit.
Advancing issues outnumbered decliners on the NYSE by 1,477 to 1,311. On the Nasdaq, 1,542 issues fell and 1,232 advanced.
The S&P 500 index showed 43 new 52-week highs and nine new lows, while the Nasdaq recorded 129 new highs and 36 new lows.
(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza)