Feb 2 (Reuters) - U.S. stocks finished up sharply for a second straight day on Tuesday, helped by gains in Amazon.com and Google-parent Alphabet ahead of their results and by optimism over progress on a U.S. pandemic relief package.
Alphabet and Amazon.com Inc were among the top boosts to the S&P 500. Each were set to post fourth-quarter results after the bell, with Alphabet expected to report the cost and operating profit of its Google Cloud business for the first time.
More than 80% of reports from S&P 500 companies so far have surpassed analysts’ earnings expectations, with 97% of reports from technology companies beating, according to IBES data from Refinitiv.
Investors also were optimistic as Democrats in Congress prepared to take the first steps toward fast-track passage of President Joe Biden’s $1.9 trillion COVID-19 relief package.
Adding to the upbeat mood, new cases of COVID-19 in the United States fell for a third week in a row, the first time since last September.
“Some form of the Biden proposal will pass, and there are certainly investors who are willing to look down the road and think the market and economy will look brighter,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Unofficially, the Dow Jones Industrial Average rose 476.09 points, or 1.58%, to 30,688, the S&P 500 gained 52.37 points, or 1.39%, to 3,826.23 and the Nasdaq Composite added 209.38 points, or 1.56%, to 13,612.78.
The recent market mania driven by retail traders over heavily shorted assets showed some signs of fizzling out. GameStop Corp, one of the stocks that had been pushed up sharply in the frenzy, sank for a second day.
“Hedge funds are looking for places to put money and the easy trade for them is to go into big-cap stocks and probably the broad market in general, just to ensure that they are not left behind,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York, New York. “That’s probably where we’re getting all of the extra flows here.”
Wall Street’s fear gauge, the Cboe Volatility index, retreated.
Exxon Mobil Corp posted its first annual loss as a public company. However, its shares were higher as its quarterly adjusted profit topped estimates.
Shares of United Parcel Service Inc climbed after it beat quarterly profit estimates on a surge in home delivery volume due to pandemic-fueled online purchases of holiday gifts and staples.
(Additional reporting by Devik Jain and Medha Singh in Bengaluru; editing by Uttaresh.V, Maju Samuel and Dan Grebler)