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* Alphabet falls after missing quarterly profit estimates
* Merck, Pfizer gain on upbeat earnings
* Fed two-day policy meeting starts on Tuesday
* U.S. consumer confidence data at 10 a.m. ET
* Futures: Dow down 0.15%, S&P off 0.06%, Nasdaq flat (Adds comments, updates market action)
By Arjun Panchadar
Oct 29 (Reuters) – Wall Street was set to open lower on Tuesday as investors assessed a mixed batch of earnings reports, including from Google parent Alphabet and big drugmakers Merck and Pfizer.
Hopes of a U.S.-China trade deal and expectations of another rate cut by the Federal Reserve propelled the benchmark S&P 500 to a lifetime high on Monday, while also pushing the Nasdaq within five points of its record closing high touched in late July.
Merck & Co Inc rose 2.7% in premarket trading after it quarterly earnings blew past analysts’ expectations, while Pfizer Inc gained 3.3% as it raised its 2019 earnings forecast.
Shares of Alphabet Inc, however, slipped 1.1% as the web search leader’s quarterly profit missed estimates due to higher costs.
Third-quarter earnings of S&P 500 companies have largely been better than expected, with over 78% of the 204 that have reported so far surpassing profit expectations, according to Refinitiv data.
“It’s a little bit of a retracement trade from yesterday’s move in the equity markets. Earnings continue to come somewhat decent with regards to what the management is saying about futures earnings,” said John Brady, senior vice president at R.J. O’Brien & Associates in Chicago.
Other marquee names reporting this week include tech heavyweights Apple Inc and Facebook Inc as well as oil majors Exxon Mobil Corp and Chevron Corp.
The office of the U.S. Trade Representative said late on Monday it was studying whether to extend tariff suspensions on $34 billion of Chinese goods set to expire on Dec. 28 this year.
“There is a little bit of a ray of sunshine poking through some very dark clouds in the market with … talks regarding the U.S.-China trade continuing to be more positive than negative, especially from those who are closely involved in it all,” Brady said.
All eyes will now be on the Fed meeting, where the central bank is widely expected to deliver a quarter percentage point interest rate cut for the third time this year amid fears of a global economic slowdown.
At 8:28 a.m. ET, Dow e-minis were down 40 points, or 0.15%. S&P 500 e-minis were down 1.75 points, or 0.06% and Nasdaq 100 e-minis were up 2.75 points, or 0.03%.
Beyond Meat Inc dropped 19% as the vegan burger maker said it would need to offer more store discounts amid rising competition.
Shares of GrubHub Inc plunged 32% after the online food delivery company warned of slowing growth as customers opted to choose from a growing pool of rival providers to get better deals.
On the economic front, data at 10:00 a.m. ET is expected to show reading on U.S. consumer confidence index rose to 128 in October from 125.1 in September. (Reporting by Arjun Panchadar and Medha Singh in Bengaluru; Editing by Anil D’Silva)