US STOCKS-S&P 500 gains modestly, warning of higher COVID-19 deaths curb recovery hopes

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* Merck slides on warning $2.1 bln hit to FY sales
* Consumer confidence plummets
* Apple, Starbucks, Ford reporting after the bell
* Fed's two-day policy meeting convenes
* Dow up 0.38%, S&P 500 up 0.23, Nasdaq off 0.45%

(Updates to late afternoon, changes dateline, byline)
By Stephen Culp
April 28 (Reuters) - The bellwether S&P 500 index inched
higher on Tuesday, with fresh warnings of a possible higher
death toll from the new coronavirus and plunging consumer
confidence curbing investor hopes for a near-term economic
revival as states began to relax restrictions enacted to halt
the pandemic's spread.
The Dow joined the S&P 500 in positive territory but the
Nasdaq was in the red, weighed down by technology stocks.
The S&P 500 is now within 15% of its all-time high set in
February, with the Dow and the Nasdaq now about 18% and 12%,
respectively, from their February records.
"The market seems to be resilient but I don't know how much
longer that will last," said Peter Cardillo, chief market
economist at Spartan Capital Securities in New York. "It's a
question of time before the market pulls back. The notion that
this is going to be V-shaped recovery is fading."
Smaller companies have fared better than their larger
counterparts in recent days, as they stand to reap more benefits
from the state-by-state easing of shutdown restrictions. The
Russell 2000 .RUT , which tracks small-cap companies, was on
course for its fifth straight advance.
But with U.S. coronavirus cases topping 1 million, a
predictive model often cited by White House officials warned the
U.S. coronavirus death toll could climb higher than previously
projected if states reopen prematurely. First-quarter earnings season has shifted into high gear
with 3M Co MMM.N and PepsiCo PEP.N , among others, posting
results, and Alphabet Inc GOOGL.O , Starbucks Corp SBUX.O and
Ford Motor Co F.N due after the bell.
First-quarter S&P 500 earnings are expected to be down 14.8%
from a year ago, a dramatic U-turn from the 6.3% year-on-year
growth seen on Jan. 1, according to Refinitiv data.
The U.S. Federal Reserve convenes its two-day monetary
policy meeting to contend with crushing joblessness and an
ailing economy. On the economic front, consumer confidence plunged in April,
with the 'current conditions' component suffering its largest
drop ever, according to the Conference Board.
"Consumer confidence goes hand-in-hand with spending, and
the consumer leads the economy," Cardillo added.
The Dow Jones Industrial Average .DJI rose 90.97 points,
or 0.38%, to 24,224.75, the S&P 500 .SPX gained 6.58 points,
or 0.23%, to 2,885.06 and the Nasdaq Composite .IXIC dropped
39.42 points, or 0.45%, to 8,690.74.
Of the 11 major sectors in the S&P 500, eight were in the
black, led by energy .SPNY and industrials .SPLRCI .
Healthcare stocks .SPXHC dropped 1.3%. Merck & Co MRK.N
warned of a $2.1 billion hit to its 2020 revenue. The
drugmaker's shares were down 2.6%.
3M, manufacturer of highly sought-after N95 protective
masks, reported better-than-expected quarterly profit, sending
its shares up 2.2%.
Harley-Davidson Inc HOG.N shares jumped 14.1% after the
motorcycle maker took steps to boost its cash reserves to
contend with dropping demand due to lockdowns. PepsiCo rose 1.5%, benefiting from rising snack demand amid
stay-at-home orders. Caterpillar Inc CAT.N reported a steeper-than-expected
first-quarter loss but still said its financial position
remained "strong," sending its shares up 1.1%.
Advancing issues outnumbered declining ones on the NYSE by a
3.14-to-1 ratio; on Nasdaq, a 1.72-to-1 ratio favored advancers.
The S&P 500 posted 12 new 52-week highs and 1 new lows; the
Nasdaq Composite recorded 51 new highs and 2 new lows.