US STOCKS-S&P, Nasdaq slip from record levels as earnings season gains speed
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* GE jumps as free cash flow tops estimates
* J&J rises on upbeat 2021 profit outlook; vaccine data 'soon'
* AmEx drops after quarterly profit falls
* GameStop surges again as short-squeeze, retail frenzy continues
* (Updates to close)
By Chuck Mikolajczak
NEW YORK, Jan 26 (Reuters) - The S&P and Nasdaq slipped from record levels at the close on Tuesday as investors digested a batch of corporate earnings results, while an expected policy announcement from the Federal Reserve on Wednesday helped to limit moves.
3M Co climbed as one of the biggest boosts on the Dow after it benefited from lower costs and demand for disposable respirator masks, hand sanitizers and safety glasses amid a surge in coronavirus infections.
Johnson & Johnson also provided a strong lift as the drugmaker said it expected to report eagerly awaited COVID-19 vaccine data early next week.
Of the 84 companies in the S&P 500 that posted earnings through Tuesday morning, 86.9% have topped analyst expectations, according to Refinitiv data.
Still, some companies showed the toll the pandemic has had on their businesses. American Express Co fell and was the biggest drag on the Dow after it posted a 15% drop in quarterly profit as pandemic-led lockdowns and business restrictions kept the credit card issuer's members from traveling and dining out.
Verizon lost ground after the company posted earnings that topped expectations but missed prepaid phone subscriber estimates.
"It is still somewhat the early days but we are getting into the heart of it here," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
"Expectations are for a continuation of the massive positive surprises we saw last quarter. The risk is that if the expectations are already there and there are disappointments, you get stocks like you see in American Express today getting slammed."
Unofficially, the Dow Jones Industrial Average fell 12.24 points, or 0.04%, to 30,947.76, the S&P 500 lost 4.6 points, or 0.12%, to 3,850.76 and the Nasdaq Composite dropped 5.54 points, or 0.04%, to 13,630.45.
Tech heavyweights Microsoft Corp and Advanced Micro Devices Inc were both modestly higher ahead of their earnings report after markets close.
Few, if any, changes are expected in the U.S. Federal Reserve's policy statement at the end of a two-day meeting on Wednesday, with Fed Chair Jerome Powell likely to address inflation in his post-meeting news conference.
With the S&P 500 trading at more than 22 times 12-month forward earnings, concerns about stock bubbles on Wall Street are sparking fears of a pullback. Investors are keeping an eye out for forecasts from corporate America to justify the higher valuations.
Progress in stimulus talks is in focus, with U.S. Senate Majority Leader Chuck Schumer saying Democrats will move forward on President Joe Biden's coronavirus relief plan without Republican support if necessary.
Videogame retailer GameStop Corp climbed after surging 144% on Monday, as individual investors again piled into a number of niche stocks, prompting short sellers to scramble to cover losing bets.
General Electric Co jumped after the industrial conglomerate offered an upbeat outlook for its business this year and reported a surge in quarterly free cash flow.
(Reporting by Chuck Mikolajczak; Editing by Dan Grebler)
