By Lewis Krauskopf
(Reuters) - The S&P 500 pulled back from record highs on Tuesday, while the Dow industrials held slim gains as investors digested a mixed bag of earnings reports as well as lowered expectations for global economic growth.
Netflix's disappointing quarterly results weighed down the S&P 500 and the Nasdaq, while Johnson & Johnson's strong earnings and forecast helped prop up the Dow.
The International Monetary Fund cut its global growth forecasts for the next two years, citing uncertainty over Britain's looming exit from the European Union.
Even with the economic concerns triggered by Britain's recent vote, the S&P 500 and Dow have hit record highs in the past week. But investors are closely watching U.S. corporate earnings for signals on whether the momentum for equities can be maintained.
"There's enough uncertainty out there in a market that's done pretty well as of late to cause people to take some money off the table today," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
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The Dow Jones industrial average rose 9.66 points, or 0.05 percent, to 18,542.71, the S&P 500 lost 5.17 points, or 0.24 percent, to 2,161.72, and the Nasdaq Composite dropped 21.36 points, or 0.42 percent, to 5,034.42.
The S&P 500 and the Dow closed at record highs on Monday.
All 10 S&P sectors were negative in afternoon trading, with materials <.SPLRCM> dropping 0.8 percent.
Second-quarter earnings for S&P 500 companies, which began reporting in earnest this week, are expected to fall by 4.3 percent, according to Thomson Reuters I/B/E/S.
Netflix slumped 13.6 percent after its subscriber numbers missed estimates. It was one of the biggest drags on the Nasdaq and the S&P 500.
Microsoft was down 1.6 percent ahead of the expected release its quarterly results after the close, weighing on the tech sector <.SPLRCT> as well as on the major U.S. indexes.
Goldman Sachs dropped 1.3 percent, with most of its businesses reporting weaker results even as the Wall Street bank reported a higher quarterly profit.
Shares of health insurers were stung by reports that U.S. antitrust officials plan to block Anthem's acquisition of Cigna and Aetna's takeover of Humana .
Declining issues outnumbered advancing ones on the NYSE by a 1.58-to-1 ratio; on Nasdaq, a 1.77-to-1 ratio favoured decliners.
The S&P 500 posted 21 new 52-week highs and one new low; the Nasdaq Composite recorded 64 new highs and 22 new lows.
(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Leslie Adler)