By Joy Wiltermuth and Mark DeCambre
U.S. stocks mostly booked modest gains Wednesday, after Amazon and Google reported healthy results in the second-busiest week of the quarter for earnings reports.
Energy stocks led gains as U.S. oil prices closed at a 12-month high of $55.69 a barrel, while shares of financials also edged up with bond yields.
How did stock benchmarks perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.48% rose 36.12 points, or 0.1%, to close at 30,723.60, rising for three days straight
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.36% added 3.86 points to end at 3,830.17, a gain of 0.1%.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.10% fell 2.23 points, or less than 0.1%, to finish at 13,610.54, but only 0.2% off its Jan. 25 closing record at 13,635.99.
On Tuesday , stocks finished sharply higher, with the Dow /zigman2/quotes/210598065/realtime DJIA +0.48% jumping 475.57 points, or 1.6%, to 30,687.48, and marking its best percentage gain in three months. The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.36% advanced 52.45 points, or 1.4%, to finish at 3,826.31, while the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.10% closed up 209.38 points, or 1.6%, to end at 13,612.78.
What drove the market?
The Dow, S&P 500 index posted modest gains Wednesday, with energy and financial shares up after U.S. oil futures closed at a 12-month high of $55.69 a barre l, two tech giants reported robust quarterly earnings, and as a steeper bond yield curve benefited banks.
“Oil has moved above its $54 range,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management, pointing to expectations of increased future demand as the vaccine rollout gathers steam and the recent shutdown by the Biden administration of the Keystone XL pipeline project as catalysts. “That is what’s helping drive the energy space up,” he told MarketWatch.
Corporate earnings reporting season also has been in high gear, with investors thus far emboldened by better-than-expected results, including from the likes of Google parent Alphabet and Amazon.
Alphabet’s stock /zigman2/quotes/205453964/composite GOOG +0.05% on Wednesday advanced 7.4% to close at a record $2,070.07, after the search-engine behemoth reported its most-profitable quarter ever ($15.23 billion) on Tuesday.
Amazon also reported a record fourth-quarter profit and revenue of $125.6 billion on Tuesday, trouncing its own forecast and analysts’ expectations. It also said Amazon Web Services head Andy Jassy will replace Amazon founder Jeff Bezos in the third quarter.
But the broader stock market has struggled to punch substantially higher after recouping much of last week’s losses, which were tied to a short-squeeze drama that swept up a handful of smaller stocks, including GameStop Corp. /zigman2/quotes/203755179/composite GME -1.12% .
After soaring last week, GameStop stock slumped more than 70% in the past two days, but climbed 2.7% Wednesday, after the company said it hired former Amazon Web Services cloud business engineer Matt Francis as chief technology officer , effective Feb. 15.
To discuss the volatility inspired by individual investors in internet chat rooms like Reddit, U.S. Treasury Secretary Janet Yellen has called a meeting with the Securities and Exchange Commission, the Federal Reserve Board, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, according to a statement from her department.
Will Geisdorf, senior research analyst with Sarasota, Fla.-based Allegiant Private Advisors, said stocks were being held back from making significant gains by a stretch of bad economic numbers, like December’s jobs report, combined with a market that was a bit overvalued.
“A little bit of the air is coming out of the volatility,” he told MarketWatch. “It looks like we’re about to get some additional stimulus, and the package that was passed recently is just starting to work its way into the economy. That will be an upside catalyst.”