US stocks close higher as investors find support from earnings and economic data

• US stocks end Tuesday's session higher, marking a win as February trading began.
• Energy stocks helped push the S&P 500 higher, leaving that index up for a third straight session.

US stocks finished higher Tuesday in another topsy-turvy session for Wall Street, with a batch of better-than-expected earnings reports helping the S&P 500 pull out a third straight win as February trading got underway.

The energy and materials sectors led the S&P 500 to add to a two-day rally and tech stocks on the Nasdaq Composite also notched gains after losing ground during the session. The S&P 500 was coming off of January's drop of 5.3% as stocks were rocked by investors repricing valuations on Fed monetary policy expectations.

Among the day's winners, UPS shares jumped after the parcel delivery service raised its quarterly dividend and beat earnings expectations and ExxonMobil climbed as the oil heavyweight's adjusted profit of $2.05 a share outstripped Wall Street's targets. But AT&T fell after saying it would slash its annual dividend following its spinoff of WarnerMedia.

Here's where US indexes stood at 4:00 p.m. on Tuesday:

• S&P 500: 4,546.35, up 0.68%

• Dow Jones Industrial Average: 35,403.86, up 0.77% (272.00 points)

• Nasdaq Composite: 14,346.00, up 0.75%

Investors also assessed economic reports to gauge how the Federal Reserve may proceed with what the market expects will be a series of interest rate hikes this year to combat high inflation. The ISM Manufacturing Index dropped to 57.6 in January from 58.8 in December.

But of "particular note was the decrease in the backlog of new order index, which fell to its the lowest level since 2020. The continued decline in the backlog of orders index suggests that the supply chain freeze continues to thaw, offering a glimmer of hope on the inflationary front," said Peter Essele, head of portfolio management for Commonwealth Financial Network, in a note.

Around markets, the world's biggest ETF saw its largest-ever investor exodus in January. Meanwhile, a "violent" rally is coming for US stocks this month after the sell-off went too far, says Fundstrat's Tom Lee.

Bitcoin won't be surpassed by competing cryptocurrencies because it is a 'superior' form of money, Fidelity Digital Assets says.

Oil prices fell. West Texas Intermediate crude lost 0.2% to $87.94 per barrel. Brent crude, the international benchmark, slipped 0.3% to $88.97.

Gold rose 0.3% to $1,801.30 per ounce. The 10-year yield edged up 1 basis point to 1.792%.

Bitcoin rose 0.1% to $38,537.48. Bitcoin could test $27,000 as support, says Fairlead's Katie Stockton.