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Stock Market Today - 2/2: Stocks End Higher as Nasdaq Gains on Google, AMD Boost

Stocks ended higher for the fourth straight day Wednesday following blowout earnings from Google and AMD and a modest easing in Treasury bond yields.

Updated at 4:10 EST

Stocks finished higher Wednesday, powered by better-than-expected tech sector earnings and fading bets of a big rate increase from the Federal Reserve.

The Dow Jones Industrial Average finished up 224 points, 0.63%, to 35,629, while the S&P 500 gained 0.94% and the tech-focused Nasdaq ended up 0.5%.

Google's  (GOOGL) - Get Free Report blowout fourth quarter profits after the close of trading last night, alongside plans to split its $3,000 stock down to around $150 a share, coupled with a robust chip sector outlook from Advanced Micro Devices  (AMD) - Get Free Report looks set to rip tech stocks higher Wednesday, clawing back losses from the sector's worst January performance in more than a decade.

Stocks are also got help from fading bets on a 50 basis point rate hike from the Fed next month, with the CME Group's FedWatch tool indicating a 90.5% chance of a 25 basis point move as more data suggests a modest slowing of the U.S. economy's post-pandemic recovery.

Still, faster-than-expected inflation figures from Europe today, showing the region's estimate of harmonized consumer prices rose 5.1% last month -- the fastest on record -- is a reminder that the 'transitory' narrative is no longer in place, and quicker U.S. readings could alter the Fed's policy tract in the months ahead.

Brent crude contracts for April delivery, the global pricing benchmark, were last seen 48 cents higher on the session at $89.64 per barrel. 

Google shares opened at an all-time high after the ad sales and tech giant blasted Wall Street earnings forecasts and planned a 20-for-1 split of its $3,000 stock.

Google also said it has approved a 20-for-1 stock split, following similar moves by Apple  (AAPL) - Get Free Report and Tesla  (TSLA) - Get Free Report over the past two years, that would give each investor a special 'one-time' dividend of 19 shares for each of its Google holdings. CFO Ruth Porat said the decision was aimed a "making our shares more accessible." 

AMD shares rose 5.1% after the chipmaker posted record fourth quarter earnings and issued a bullish sector forecast for the coming year.

PayPal  (PYPL) - Get Free Report, however, plunged 24.6% after the group cautioned that Ebay's  (EBAY) - Get Free Report decision to go with an in-house system payments system would carve more than $600 million from its near-term revenue forecast.

PayPal's 2022 forecasts were also affected by a strategy shift that will focus on customer engagement over account growth, a move that could improve margins by concentrating on higher-end users but is likely to result in much slower-than-expected net new account growth.

Starbucks  (SBUX) - Get Free Report shares were also on the back foot, falling 1% after the world's biggest coffee chain posted softer-than-expected December quarter earnings as input costs and store closures eroded its bottom line.

In overseas markets, the searing back of January inflation in the eurozone has added pressure to European Central Bank rate bets, with a March move now likely, but hasn't yet hit regional stocks, which were marked 0.54% higher.

Overnight in Asia, the region-wide MSCI ex-Japan index jumped 0.42% as China stocks remained closed for Spring Festival and New Year Celebrations while stronger-than-expected earnings from Sony helped the Nikkei 225 close 1.68% higher in Tokyo at 27,533.60 points.