US close: Stocks extend rally as wave of speculative retail trading subsides

Wall Street stocks closed firmly in the green on Tuesday, with major indices extending yesterday's strong rally.

At the close, the Dow Jones Industrial Average was up 1.57% at 30,687.48, while the S&P 500 was 1.39% firmer at 3,826.31 and the Nasdaq Composite saw out the session 1.56% stronger at 13,612.78.

The Dow closed 475.57 points higher on Tuesday, building on gains recorded yesterday that came as concerns regarding a recent wave of speculative retail trading subsided.

Corporate earnings were again in focus on Tuesday, with Pfizer in the red after falling short of profit expectations and ExxonMobil topping fourth-quarter earnings per share estimates but falling short on revenues.

Amazon revealed that chief executive Jeff Bezos would be stepping down from the role and said fourth-quarter sales had topped $100.0bn, while Google parent Alphabet said revenues had frown 23% but warned that its cloud business was still haemorrhaging billions of dollars.

Following a meteoric rise last week, GameStop shares were down 60% at the close of trading following a 30% slide on Monday, meaning the stock has now lost more than half of its value in just two days.

Stimulus negotiations in Washington were also in focus after congressional Republicans made a counteroffer to Joe Biden's $1.9trn stimulus plan on Sunday. Biden met with the GOP lawmakers on Monday after congressional Democrats looked on track to pass a reconciliation bill despite not having bipartisan support.

On the macro front, the Institute for Supply Management's New York Index revealed current business conditions decreased 10.1 points to a two-month low of 51.2 in January, down from 61.3 a month earlier.