QCOM QUALCOMM Inc

By Will Horner and Sam Goldfarb 

U.S. stocks edged higher Wednesday as investors reacted to a mixed batch of corporate earnings reports and tracked the progress in Washington toward another round of coronavirus relief spending.

The S&P 500 ticked up 0.3%. The Dow Jones Industrial Average was near flat. The tech-heavy Nasdaq Composite Index climbed 0.5% after Alphabet 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, a decline in new coronavirus cases 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 8.3% after the parent of Google said late Tuesday that it had booked record revenue in the fourth quarter.

Spotify Technology, though, slipped around 7.8% after it offered a cautious view of the year ahead early Wednesday, and Biogen fell 5.1% after it also offered downbeat guidance.

Amazon.com edged down 0.4%. 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.

More companies including Qualcomm, PayPal Holdings and Costco Wholesale are due to report earnings after markets close.

"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 closely following 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.

Some stocks that have soared in popularity among traders on online forums climbed again Wednesday, after suffering sharp reversals in the previous session. AMC Entertainment Holdings rose 18%, having fallen 41% on Tuesday. GameStop climbed 13%, 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.

Last week, major stock indexes fell at the same time as stocks at the center of the social media frenzy surged, suggesting that headlines about the phenomenon were making some investors nervous.

"Any time we see extensive volatility in markets that brings a level of uncertainty for investors across the board," said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Volatility, though, "has come down quite a bit from where it was last week," he said.

Meanwhile, fresh economic data released Wednesday showed further improvement in the U.S. services sector. The Institute for Supply Management's services index for January climbed to 58.7 in January from a revised 57.7 the previous month. Economists surveyed by The Wall Street Journal had anticipated a reading of 57.0.

In commodity markets, Brent crude, the international benchmark for oil, rose around 2% to $58.69 a barrel. The gauge is near its highest level since the pandemic rattled global financial markets last spring.

Silver prices gained 2.3% to $27 a troy ounce.

In the bond market, the yield on the 10-year Treasury note held gains after the Treasury Department said it intends to maintain the size of its nominal note and bond sales this quarter. It was recently up to 1.131% from 1.105% Tuesday.

Overseas, the pan-continental Stoxx Europe 600 rose 0.3%. Italy's FTSE MIB stocks index outperformed other regional benchmarks after former European Central Bank President Mario Draghi was asked to form a new government.

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

Write to Will Horner at William.Horner@wsj.com and Sam Goldfarb at sam.goldfarb@wsj.com

(END) Dow Jones Newswires

February 03, 2021 13:29 ET (18:29 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.