* Caterpillar jumps after raising forecast for second time
McDonald's hits all-time high as sales jump
* Eli Lilly, 3M fall after posting quarterly results
* Indexes up: Dow 0.59 pct, S&P 0.39 pct, Nasdaq 0.07 pct (Updates to early afternoon)
By Tanya Agrawal
July 25 (Reuters) - The S&P hit a record and the Dow was higher on Tuesday, helped by a string of strong quarterly earnings from companies, including McDonald's and Caterpillar, while a drop in Alphabet weighed on the Nasdaq.
Shares of McDonald's rose 3.8 percent, hitting an all-time high, after the fast-food giant posted the biggest rise in sales at established restaurants globally in five years.
Caterpillar was up 5.1 percent, touching a more than five-year high, after the company raised its full-year outlook for the second time this year.
"It looks like earnings are coming in better than expected and that's giving the market a jump this morning," said Ken Moraif, senior adviser at Money Matters, a wealth management and investment firm.
However, Alphabet fell 3.1 percent, after the tech giant warned that expenses would remain high as more searches shift to mobile devices.
The S&P tech index has been the best performing sector this year, but there have been concerns about stretched valuations, putting earnings from big tech companies in the spotlight.
Amazon and Facebook, part of the high-flying "FAANG" stocks, report results later this week, while Apple is due to report next week.
"My concern is that it seems like these companies can do no wrong and when you have so much concentrated on such a small group, eventually these stock prices are going to become unrealistic," Moraif said. "If the rest of the market isn't there to support them, it could impact the sector in a big way."
Earnings are expected to have climbed 9.1 percent in the second quarter, compared with an 8 percent rise estimated at the start of the month, according to Thomson Reuters I/B/E/S.
At 12:38 p.m. ET (1638 GMT), the Dow Jones Industrial Average was up 126.18 points, or 0.59 percent, at 21,639.35.
The S&P 500 was up 9.83 points, or 0.39 percent, at 2,479.74. It had hit a record high of 2,481.24.
The Nasdaq Composite was up 4.40 points, or 0.07 percent, at 6,415.21.
Seven of the 11 major S&P sectors were higher, with the energy index's 1.87 percent rise leading the gainers.
The Fed kicks off a two-day meeting later in the day and while no rate hike is expected due to subdued inflation, the central bank's statement on Wednesday will be parsed for clues on the pace of future rate hikes.
DuPont was up 1.3 percent after beating estimates for profit and results.
Eli Lilly was down 4.1 percent, while 3M fell 5.2 percent after reporting results.
Advancing issues outnumbered decliners on the NYSE by 1,809 to 1,004. On the Nasdaq, 1,836 issues rose and 1,006 fell. (Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)