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By Will Horner 

U.S. stocks opened mixed Wednesday, with technology stocks gaining as investors cheered corporate earnings and the prospect of more fiscal stimulus.

The S&P 500 ticked up 0.2%. The Dow Jones Industrial Average slipped 86 points. The tech-heavy Nasdaq Composite Index rose 0.5% after Alphabet and Amazon.com reported strong sales growth late Tuesday.

Stock markets have rallied this week, shaking off concerns about stretched valuations, a sharp run-up in prices for a handful of stocks and silver, a weak economic backdrop and the threat of new coronavirus variants. Investors have focused instead on better-than-expected corporate results and bets that President Biden will deliver more fiscal spending in coming weeks.

"The last two days have seen the return of the feeling that we still have monetary stimulus in the background and the prospect of an additional stimulus package to come," said Seema Shah, chief strategist at Principal Global Advisors. "The path ahead isn't a smooth one, but we think it is an upward one."

Shares in Alphabet climbed over 7% in premarket trading after the parent of Google said late Tuesday that it had booked record revenue in the fourth quarter.

Amazon.com edged up 2% ahead of the opening bell. The giant online retailer late Tuesday posted record quarterly sales, marking the first time its revenue crossed more than $100 billion in a three-month period. It also said Jeff Bezos would be stepping down as CEO.

Spotify Technology slipped nearly 7% premarket after it offered a cautious view of the year ahead early Wednesday.

More companies including Qualcomm, PayPal Holdings and Costco Wholesale are due to report earnings after markets close. PayPal rose over 2% premarket.

"Earnings have been definitely quite a bit stronger than anyone expected, and they are led by the areas that we have so far seen strength in: the tech sector, the stay-at-home sector," said Matt Forester, chief investment officer of BNY Mellon's Lockwood Advisors. "We still have a lot to see, though, particularly in the sectors that have been so heavily impacted by Covid."

Investors are also tracking talks between lawmakers over another round of coronavirus relief measures. President Biden's administration has called for a package totaling $1.9 trillion, though a counter offer from Republicans this week was less than half of that. The Democrats are expected to make a decision in coming days on whether to start trying to quickly push into law a larger stimulus bill on their own.

"The bigger focus is on the timing," said Mrs. Shah. "There is a general view that the stimulus will be sizable, the important question is, does it come soon enough because the U.S. economy needs it now."

Some stocks that have soared in popularity among traders on online forums were choppy in early Wednesday trading, after suffering sharp reversals in the previous session. AMC Entertainment Holdings rose about 8% before the opening bell, having fallen 41% on Tuesday. GameStop edged up 10% premarket, after slumping 60% Tuesday.

Treasury Secretary Janet Yellen has called a meeting with top financial regulators to discuss recent volatility in financial markets related to GameStop, a Treasury spokeswoman confirmed Tuesday night.

Later in the day, fresh economic data will offer clues on the health of the services sector. The Institute for Supply Management's services index for January is due at 10 a.m. ET, and is expected to show a continued expansion in activity for January.

In commodity markets, Brent crude, the international benchmark for oil, rose 1.2% to $58.16 a barrel. The gauge is near its highest level since the pandemic rattled global financial markets last spring.

Silver prices gained 2.8% to $27.14 a troy ounce.

Overseas, the pan-continental Stoxx Europe 600 rose 0.5%.

Italy's FTSE MIB stocks index outperformed other regional benchmarks, rising almost 2.6% after former European Central Bank President Mario Draghi was asked to form a new government. The nation's bond yields ticked down to 0.583%, from 0.651% on Tuesday.

In Asia, Japan's Nikkei 225 rose 1% by the close of trading. Hong Kong's Hang Seng added 0.2% while on the Chinese mainland, the Shanghai Composite Index fell almost 0.5%.

Write to Will Horner at William.Horner@wsj.com

(END) Dow Jones Newswires

February 03, 2021 09:48 ET (14:48 GMT)

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