August 7, 2018 / 5:21 PM / 2 months ago

US STOCKS-Amazon and Alphabet push S&P 500 closer to record high

(Adds detail on stock moves, comment from investor)

* Tesla jumps on Musk tweets about taking co private

* Higher 10-year treasury yields lift financial stocks

* Indexes up: Dow 0.62 pct, S&P 0.38 pct, Nasdaq 0.34 pct

By Noel Randewich and Sinéad Carew

Aug 7 (Reuters) - The S&P 500 inched toward a record high on Tuesday, lifted by Amazon, Alphabet and Microsoft, and by a strong second-quarter earnings season that fueled optimism about the strength in the U.S. economy.

The S&P 500 last closed at a record high on Jan. 26, and a new peak would reassure investors who have worried in recent months that almost a decade of gains on Wall Street might be ending.

A sharp rally in tech stocks has already helped Nasdaq recover much faster than the broader markets from a selloff in February, hitting a record high late last month.

"We might hit the record and blow through it. As long as there are still strong earnings and there are no corporate blow-ups, there's nothing that says we have to stop. Momentum can go on for a long time," said Liz Young, Senior Investment Strategist at BNY Mellon Investment Management in New York.

The financial sector rose 0.77 percent as higher yields on the 10-year U.S. Treasury note buoyed bank stocks. JPMorgan rose 0.5 percent and Bank of America added 0.3 percent.

The S&P 500 energy index gained 1 percent after U.S. sanctions on Iranian goods went into effect, intensifying concerns about supply.

"Energy has been trending higher for a number of months as oil prices have climbed higher, but we’re seeing a pickup in that price as sanctions on Iran become a reality,” said Quincy Krosby, chief market strategist at Prudential Financial in New Jersey.

Google-parent Alphabet rose 1.8 percent and Microsoft moved up 0.7 percent, driving a 0.45 percent gain in the S&P information and technology index.

Amazon.com added 1.1 percent. The Internet retail and infrastructure heavyweight provided the greatest lift to the S&P 500, followed by Alphabet and Microsoft.

A strong earnings season has helped U.S. stocks cushion some of the impact from the ongoing trade issues.

With second-quarter reporting season winding down, 79 percent of S&P 500 companies have topped estimates. If the beat rate holds, it will be the highest on record, dating back to the first quarter of 1994, according to Thomson Reuters I/B/E/S.

At 2:34 p.m. ET, the Dow Jones Industrial Average was up 0.62 percent at 25,660.45 points, while the S&P 500 had gained 0.38 percent to 2,861.14, just short of its January record of 2,872.87.

The Nasdaq Composite added 0.34 percent to 7,886.47.

The CBOE Volatility Index, Wall Street's fear gauge, dropped to 10.99 points, its lowest since January.

Tesla jumped 7.4 percent after Chief Executive Elon Musk in a tweet said that he was considering taking the company private.

Broadridge Financial rose 9.8 percent and Mosaic climbed 5 percent after reporting quarterly results.

Walt Disney added 1.2 percent ahead of its results after markets close.

Advancing issues outnumbered declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favored advancers.

The S&P 500 posted 30 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 101 new highs and 62 new lows. (Additional reporting by Sinead Carew and James Thorne in New York, and by Amy Caren Daniel in Bengaluru Editing by Nick Zieminski)

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