By Joe Wallace
U.S. stocks rose Tuesday, signaling that major indexes may extend this week's gains ahead of earnings from technology giants Amazon.com and Google parent Alphabet.
The S&P 500 rose 1%, a day after the broad stocks gauge posted its biggest one-day advance since November. The Dow Jones Industrial Average gained 306 points, or 1%, and the technology-heavy Nasdaq Composite Index climbed roughly 1.2%.
Stock markets have steadied globally this week after a choppy January, when extreme moves in some individual stocks, signs of a slowdown in the U.S. economy, and concerns about the pace of the vaccine rollout and new coronavirus variants weighed on share prices. Investor sentiment has been lifted by robust earnings reports from large-cap companies, as well as a decline in coronavirus cases in the U.S. and several other major economies.
Investors will parse quarterly earnings from Amazon.com and Alphabet after markets close. Shares of giant tech companies have continued to power the broader market in 2021, pushing the Nasdaq Composite up 4% so far this year.
"The bar for tech was actually quite high" coming into earnings season, said Hani Redha, a multiasset portfolio manager at PineBridge Investments. "Overall, for the sector, we are still seeing very strong earnings delivered."
Earnings for the last quarter of 2020 have been better than analysts had anticipated. Of the 189 companies on the S&P 500 index that had reported results by late Monday, 81% have beaten expectations, according to FactSet.
Silver prices slid after Monday's steep ascent, when they posted their biggest one-day advance in over a decade in the latest example of wild market moves spurred by online traders. Futures for the metal fell over 6% on Tuesday after CME Group's Comex exchange responded to the volatility by raising margin requirements.
Some of the stocks that have been most popular among online day-traders plunged in premarket trading. Shares of GameStop continued to slump, dropping 40% ahead of the opening bell in New York. Headphones-maker Koss and AMC Entertainment Holdings each declined over 25%. Express, Naked Brand and BlackBerry also retreated.
In the bond market, yields on 10-year Treasurys ticked up to 1.115%, from 1.077% Monday. The WSJ Dollar Index, which tracks the U.S. currency against a basket of others, slipped 0.2%.
Investors are closely following discussions around another round of coronavirus relief in Washington. A group of Senate Republicans on Monday outlined their roughly $618 billion offer, including a round of $1,000 direct checks for many adults. The proposal omits measures favored by many Democrats, such as aid for state and local governments and a plan to raise the federal minimum wage to $15 an hour.
"There is still hope of arriving at something bipartisan," said Mr. Redha. Passing a smaller bill than President Biden's proposed $1.9 trillion package along bipartisan lines could be positive for stocks by opening the way to more stimulus spending later in his term, Mr. Redha added.
Shares rallied in overseas markets. The pan-continental Stoxx Europe 600 rose 1%, led higher by shares in French companies as well as makers of cars and car parts. In London, silver miner Fresnillo dropped over 6%.
Shares of BP dropped almost 3% in London. The energy giant returned to profit in the fourth quarter but said Tuesday that the pandemic would continue to challenge its business this year.
In Asia, India's S&P BSE Sensex index rose 2.5%, extending gains that began when the government laid out plans to boost economic growth and health care spending on Monday. China's Shanghai Composite Index rose 0.8% and Hong Kong's Hang Seng climbed 1.2%.
Elsewhere in commodities, Brent-crude futures, the benchmark in international energy markets, rose 1% to $56.96 a barrel.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
February 02, 2021 09:48 ET (14:48 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.