By Medha Singh and Devik Jain
(Reuters) – U.S. stocks advanced on Tuesday following a slate of positive earnings reports from companies including IBM and Coca-Cola, and on hopes for fiscal stimulus to prop up an economy reeling from the COVID-19 pandemic.
The Nasdaq treaded water after hitting an intraday record high shortly after the opening bell, as shares of Amazon.com Inc <AMZN.O> weighed.
Coca-Cola Co <KO.N> rose 3.9% as it said demand for its sodas were improving after the “most challenging” quarter for the year.
International Business Machines Corp <IBM.N> jumped 2.7% after it signaled higher demand in its cloud computing business, as large corporations accelerate their digital shift.
“If this economic recovery slowly continues, tech stocks will probably continue to be one of the leaders. Technology is up to the altar and they need to justify so much of this strength and earnings,” said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina.
With the second quarter expected to see the worst of the pandemic’s hit on profits, investors are more focused on hints on how long corporate America would take to bounce back.
The S&P 500 closed higher for the year and the Nasdaq notched a record closing high on Monday after promising early data from trials of three potential vaccines and a boost from high-flying companies including Amazon.com Inc <AMZN.O> and Microsoft Corp <MSFT.O>.
U.S. lawmakers and White House officials headed into a day of negotiations on Capitol Hill on Tuesday, aimed at hammering out an agreement on new coronavirus aid legislation as infections and deaths surged to record levels across the country.
The U.S. government has less than two weeks to agree on a legislative package before additional unemployment assistance runs out for tens of millions of Americans.
Overnight, European Union leaders agreed on a massive coronavirus relief program.
At 9:44 a.m. ET, the Dow Jones Industrial Average <.DJI> was up 269.28 points, or 1.01%, at 26,950.15, the S&P 500 <.SPX> was up 19.65 points, or 0.60%, at 3,271.49. The Nasdaq Composite <.IXIC> was up 7.40 points, or 0.07%, at 10,774.49.
Lockheed Martin Corp <LMT.N> rose 2.6% as the U.S. weapons supplier raised its full-year profit and revenue forecasts driven by higher quarterly sales in its aeronautics unit that makes the F-35 fighter jet.
Energy sectors <.SPNY> jumped 4%, more than any other S&P sector. Technology <.SPLRCT> and consumer discretionary <.SPLRCD> stocks were in the red.
Advancing issues outnumbered decliners for a 5.51-to-1 ratio on the NYSE and a 2.59-to-1 ratio on the Nasdaq.
The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 87 new highs and one new low.
(Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta)
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