NEW YORK (AP) -- Stocks are climbing on Wall Street Tuesday, recovering some of last week's losses to pull closer to their record highs.
The S&P 500 was 0.6% higher in early trading and got back within 1% of its record set earlier this month. The Dow Jones Industrial Average was up 140 points, or 0.5%, at 30,955, as of 9:47 a.m. Eastern time, and the Nasdaq composite was 0.8% higher.
Wall Street's rally is getting back on track after stocks ran out of steam last week. Markets have been rising on enthusiasm about a coming economic recovery as COVID-19 vaccines roll out and amid expectation that Washington will soon try to deliver another massive round of stimulus for the economy.
Janet Yellen, President-elect Joe Biden's nominee to be Treasury Secretary, is calling on Congress to do more to boost the economy. In testimony prepared for her confirmation hearing on Tuesday, she said that with interest rates near their record lows, "the smartest thing we can do is act big" to avoid an even worse downturn in the near term and scarring for the economy in the long term.
Biden last week released details of a $1.9 trillion plan to bolster the economy, which would include $1,400 cash payments for most Americans. Democrats are also pushing for an accelerated rollout of COVID-19 vaccines, a higher minimum wage for workers and enhanced benefits for laid-off workers. The hope is that such stimulus can carry the economy until later this year, when more widespread vaccinations get life returning to some semblance of normal.
The case for such stimulus has been rising by the day. Dismal reports have piled up showing how the worsening pandemic has more workers applying for jobless benefits and shoppers feeling less confident.
Tuesday's Senate Finance Committee hearing with Yellen is one of several that the Senate will be holding as the incoming Biden administration tries to get its top Cabinet officials in office quickly. Biden is set to take the oath of office on Wednesday, ending President Donald Trump's four-year term.
Besides stocks, the optimism about an eventual acceleration for the economy and another round of stimulus have also helped push Treasury yields up sharply recently.
The yield on the 10-year Treasury climbed back to 1.11% from 1.08% late Friday. It's been rising sharply this month on a combination of expectations for more U.S. government borrowing, stronger economic growth and higher inflation.
Higher rates could eventually add pressure on stocks, underscoring more how expensive stocks have become relative to the profits that companies are producing.
But some areas of the stock market could benefit, including banks. Higher rates and a healthier economy would allow them to earn bigger profits from making loans.
Bank of America was flipping between small losses and gains in morning trading after reporting a weaker profit for the last three months of 2020 than a year earlier, but still above analysts' expectations. The bank also said expectations for a healing economy mean it doesn't need to hold onto as much in reserves to cover for potentially bad loans.
Goldman Sachs, State Street and Halliburton also reported stronger results for the end of 2020 than analysts expected as earnings reporting season picks up pace. Wall Street is expecting a relatively weak showing this time around, with another sharp drop in earnings per share. But analysts expect growth to rebound powerfully through 2021.
General Motors jumped 8.4% for one of the biggest gains in the S&P 500 after it said it will work with Microsoft and self-driving car company Cruise to develop autonomous, all-electric vehicles. GM, Microsoft, Honda and other investors will also pump $2 billion into Cruise, valuing it at $30 billion.
Microsoft added 0.3%.
In Europe, Germany's DAX returned 0.1%, and France's CAC 40 slipped 0.1%. The FTSE 100 in London dipped 0.1%.
In Asian markets, Hong Kong's Hang Seng gained rose 2.7%, the Nikkei 225 in Tokyo gained 1.4% and South Korea's Kospi jumped 2.6%. Stocks in Shanghai slipped 0.8%.
On Monday, trading got off to a slow start for the week around the world with U.S. markets closed in observance of Martin Luther King Day.