Feb 3 (Reuters) – U.S. stocks rose in Wednesday afternoon trading and were set to register a third straight day of gains, with Alphabet Inc’s shares jumping following its strong quarterly results.
Alphabet shares were last up 9% as it benefited from lockdowns that drove retail and other advertisers online.
Videogame retailer GameStop Corp gained about 14%, clawing back after nearly halving in value on Tuesday on the back of a social media-driven trading rollercoaster ride.
U.S. Treasury Secretary Janet Yellen is calling a meeting this week of top officials, including from the Securities and Exchange Commission and the Federal Reserve, to discuss market volatility driven by retail trading in shares of GameStop, silver and other stocks favored on social media.
“The broad tape continues to be strong,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.
The retail trading frenzy is likely “to be here for a while,” said O’Rourke. “I don’t know if it’s going to be here with the same intensity … It’s hard to maintain that type of intensity. What we’ll probably see are coordinated movements in individual names by that crowd.”
The Cboe Volatility index eased.
Amazon.com Inc shares dipped 0.7% as Jeff Bezos’ surprise move to step down as chief executive quashed optimism about bumper quarterly results. However, analysts were upbeat on the promotion of its cloud computing head to the top job.
U.S. companies are on track to post earnings growth for the fourth quarter of 2020, data from Refinitiv showed on Wednesday, which would defy expectations for profits to drop 10% due to the pandemic. Based on results from 223 companies and estimates for the rest, S&P 500 earnings are expected to have risen 0.9% in the fourth quarter of 2020 from a year ago.
The Dow Jones Industrial Average rose 88.28 points, or 0.29%, to 30,775.76, the S&P 500 gained 17.25 points, or 0.45%, to 3,843.56 and the Nasdaq Composite added 69.96 points, or 0.51%, to 13,682.74.
U.S. President Joe Biden is to meet with congressional Democrats preparing to advance his $1.9 trillion COVID-19 relief plan despite Republican pushback. Biden told congressional Democrats he would not back down on including $1,400 checks for struggling Americans in his COVID-19 relief plan but would consider tighter limits on who gets them, lawmakers and aides said.
On the economic front, the ADP Report showed hiring by U.S. private employers rebounded by 174,000 in January after a drop in December. A more comprehensive jobs report is expected on Friday.
A separate ISM survey showed U.S. services industry activity raced to its highest level in nearly two years in January.
Advancing issues outnumbered declining ones on the NYSE by a 1.64-to-1 ratio; on Nasdaq, a 1.83-to-1 ratio favored advancers.
The S&P 500 posted 8 new 52-week highs and no new lows; the Nasdaq Composite recorded 161 new highs and 1 new lows.
(Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel and Diane Craft)