By Devik Jain and Medha Singh
(Reuters) - U.S. stock indexes rose on Tuesday, building on the previous session's momentum, as investors anticipated strong results from Amazon and Google-parent Alphabet (NASDAQ:GOOGL) while also looking for signs of progress on a pandemic relief package.
Alphabet, which will report the cost and operating profit of its Google Cloud business for the first time, added 1.8%, while retail behemoth Amazon.com Inc (NASDAQ:AMZN) rose 1.6%.
Shares of both the companies, set to report their fourth-quarter earnings after market close, were among the top boosts to the S&P 500. The NYSE FANG+TM index firmed 1%.
Investors are gauging outlooks from big corporations to justify elevated stock market valuations, at a time when concerns over a raging pandemic and new coronavirus variants have triggered fears of a short-term pullback in markets.
Meanwhile, the Democratic-led U.S. House of Representatives prepared to take the first step forward on President Joe Biden's $1.9 trillion COVID-19 relief package on Tuesday, with a key vote expected to fast-track the measure through Congress.
"It's the new president's first real test – does he want to be seen as reaching across the aisle, or does he actually want to get things done? The markets will be hoping for the latter," said Connor Campbell, financial analyst at spreadbetters Spreadex.
Ten of the 11 major S&P sectors advanced, with economy linked energy, financial and industrials gaining the most.
At 9:49 a.m. ET the Dow Jones Industrial Average rose 383.72 points, or 1.27%, to 30,595.63, the S&P 500 gained 48.81 points, or 1.29%, to 3,822.67 and the Nasdaq Composite gained 182.88 points, or 1.36%, to 13,586.28.
New cases of COVID-19 in the United States fell for a third week in a row, the first time the country has seen such an extended decline since last September.
The number of people who have received the first dose of a COVID-19 vaccine is fast closing in the total infections across the country, according to U.S. CDC data as of Feb. 1.
"The pandemic news is getting better. The distribution of vaccines and the pace of vaccinations is improving," said John Brady, senior vice president at R.J. O'Brien & Associates in Chicago.
Wall Street's fear gauge retreated to near one-week lows as a retail-driven mania for shorted assets showed signs of fizzling out.
The so-called "meme" stocks GameStop Corp (NYSE:GME), AMC Entertainment and Nokia (HE:NOKIA) tumbled between 7.3% and 45%, while miners Hecla Mining Co and Coeur Mining Inc tracked a fall in spot silver prices.
Exxon Mobil Corp (NYSE:XOM) posted its first annual loss as a public company after the COVID-19 pandemic hammered energy prices and reduced the value of its shale gas properties by more than $20 billion. However, its shares rose 1.5%.
United Parcel Service Inc (NYSE:UPS) gained 4.4% after it beat quarterly profit estimates on a surge in home delivery volume due to pandemic-fueled online purchases of holiday gifts and staples.
Advancing issues outnumbered decliners by a 2.8-to-1 ratio on the NYSE and by a 2.9-to-1 ratio on the Nasdaq.
The S&P 500 posted 13 new 52-week highs and no new lows while the Nasdaq recorded 121 new highs and three new lows.