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US stocks mixed and Dow up

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Gold down sharply as investors take profits

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Trump-Xi meeting next week

(Updates gold, other prices)

By Caroline Valetkevitch

NEW YORK, Oct 21 (Reuters) - Major stock indexes were

mostly near flat on Tuesday, with upbeat results and forecasts

from top U.S. companies providing some support, while gold

prices dropped more than 5% as investors took profits after a

recent rally.

The yen fell to a one-week low after conservative Sanae

Takaichi was elected as Japan's prime minister. Japan's Nikkei

share gauge closed at a record high on Tuesday.

Spot gold fell 5.31% to $4,123.85 an ounce, and

had its steepest daily percentage fall since August 2020. Prices

scaled an all-time peak of $4,381.21 on Monday and have gained

about 60% this year.

U.S. President Donald Trump said he expected to reach a fair

trade deal with Chinese President Xi Jinping when the two meet

next week in South Korea, and played down the risks of a clash

over the issue of Taiwan.

The prospect of a resolution also helped bolster investor

sentiment, along with a deal between Australia and the United

States for the supply of rare earths minerals.

In earnings, GM shares jumped after the company

raised its full-year forecast, and Coca-Cola gained after

the company posted results that beat analysts' estimates.

But the S&P 500 technology sector was down 0.2%,

and Michael Green, chief strategist at Simplify Asset Management

in Philadelphia, said the reaction to some earnings surprises

was modest.

"The earnings are better than expected as companies continue

to gain slightly in terms of margins, which suggests that

(companies) have to be passing through the tariffs or pushing

the tariffs back onto the importers," Green said.

The Dow Jones Industrial Average rose 218.16 points,

or 0.47%, to 46,924.74, the S&P 500 rose 0.22 points,

essentially flat, to 6,735.35 and the Nasdaq Composite

fell 36.88 points, or 0.16%, to 22,953.67.

MSCI's gauge of stocks across the globe

fell 0.84 points, or 0.08%, to 994.85.

The pan-European STOXX 600 index rose 0.21%.

Against the Japanese yen, the dollar strengthened

0.81% to 151.96.

Takaichi became Japan's first female prime minister and

leader of its ruling Liberal Democratic Party on Tuesday.

Traders bet that Takaichi's government could muddy the

interest rate outlook and bring about greater fiscal spending.

The dollar also rose against other currencies. The dollar

index, which measures the greenback against a basket of

currencies including the yen and the euro, was 0.35% higher at

98.95, with the euro down 0.33% at $1.1602.

U.S. Treasury yields eased as investors looked ahead to the

Federal Reserve's next moves.

The Fed could deliver as many as three rate cuts in the next

six months based on market-based expectations, while the

European Central Bank, which meets next week, is not expected to

deliver a rate cut any time soon.

The yield on benchmark U.S. 10-year notes fell

2.9 basis points to 3.959%, from 3.988% late on Monday.

Investor confidence was hit hard last week as a clutch of

bad loans at U.S. regional banks ignited concern over credit

risks that threatened to spill into the broader markets. The

prolonged U.S. government shutdown also weighed on risk assets.

Oil prices ended higher. Brent crude futures rose 31

cents, or 0.5%, to settle at $61.32 a barrel, while U.S. West

Texas Intermediate crude futures for November delivery,

which expired on Tuesday's settlement, closed up 30 cents, or

0.5%, at $57.82.