US STOCKS-Wall Street rally pauses near record highs

(Updates to late afternoon)

* Dow, Nasdaq (Frankfurt: 813516 - news) set intraday records, S&P nears new mark

* Energy sector lags as oil prices fall

* GM (NYSE: GM - news) shares fall after results; Emerson jumps after report

* Indexes up: Dow 0.2 pct, S&P 0.02 pct, Nasdaq 0.12 pct

By Lewis Krauskopf

Feb 7 (Reuters) - U.S. stocks were little changed on Tuesday after key indexes hit record highs as oil prices turned lower and investors grappled with policy uncertainty under President Donald Trump.

The Dow Jones Industrial Average and the Nasdaq Composite hit all-time highs just after the market opened, with the S&P 500 coming just shy of yet another record high.

Energy was the worst-performing S&P sector, falling 1.3 percent. Chevron (Euronext: CHTEX.NX - news) 's 1.3-percent fall and Exxon's 0.6-percent drop were among the biggest drags on the S&P.

Oil prices were pressured by sluggish demand and evidence of a burgeoning revival in U.S. shale production that could complicate efforts to reduce a supply glut.

U.S. equities have rallied sharply after Trump's election victory in November, spurred by hopes the Republican-led government will cut regulations and taxes and enact higher infrastructure spending.

However, investors have expressed concerns those polices could be put off as Trump focuses elsewhere such as on immigration.

"There is probably a bit of political risk that investors are trying to weigh right now," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

"But outside of that, the story is a pretty good one for stocks in terms of it looks like the economy is continuing to grow, I think corporate profits have been pretty good, certainly enough to support higher prices.”

With (Other OTC: WWTH - news) more than half of the S&P 500 having reported results, fourth-quarter earnings are on track to have climbed 8.2 percent, which would be the best performance since the third quarter of 2014, according to Thomson Reuters I/B/E/S.

The Dow Jones Industrial Average rose 39.27 points, or 0.2 percent, to 20,091.69, the S&P 500 gained 0.4 points, or 0.02 percent, to 2,292.96 and the Nasdaq Composite added 7.06 points, or 0.12 percent, to 5,670.61.

In corporate earnings news, Emerson Electric (NYSE: EMR - news) shares rose 4.4 percent after the manufacturer reported a higher-than-expected profit.

General Motors fell 4.9 percent after the automaker said that fourth-quarter net income fell partly on the strength of the dollar against the British pound and forecast flat 2017 profit per share.

Michael Kors (Swiss: KORS.SW - news) dropped 11.6 percent, after the handbag maker forecast current-quarter profit below estimates.

Walt Disney (Swiss: DIS-USD.SW - news) and Gilead Sciences (NasdaqGS: GILD - news) are among the companies due to report after the market closes on Tuesday.

Declining issues outnumbered advancing ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 96 new highs and 35 new lows. (Additional reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)