By Will Horner

U.S. stocks gained amid a busy day of earnings reports and ahead of the inauguration of Joe Biden as the 46th president.

The S&P 500 rose 0.6% in early trading Wednesday, while the tech-heavy Nasdaq Composite Index gained 1.1%. Dow Jones Industrial Average added 87 points, or 0.3%.

Investors were parsing earnings from UnitedHealth, Procter & Gamble, U.S. Bancorp and Morgan Stanley, with United Airlines due to report results just after markets close.

Shares of Procter & Gamble slipped 0.8% after the Cincinnati-based consumer goods company said sales jumped in the fourth quarter. Morgan Stanley gained 2.6% after the release of its earnings.

Stocks had begun the week on an upbeat note, with all three major indexes hovering just below their record highs. Investors remain optimistic that fiscal stimulus is supporting businesses through the damage wrought by the Covid-19 pandemic.

That will pressure companies to deliver during this earnings season and meet the market's expectations, said Brian O'Reilly, head of market strategy at Mediolanum Investment Funds.

"Any company that is likely to miss or modestly disappoint on earnings will be punished quite heavily," said Mr. O'Reilly. "A lot of optimism has already been priced in and typically you don't get too much room for maneuver when a stock is at a historic high."

As earnings reports pick up, focus is likely to center on sectors most exposed to the U.S. economy, such as banks and energy companies, and those which have suffered the most during the pandemic, such as leisure and hospitality, said Hugh Gimber, a strategist at J.P. Morgan Asset Management.

"The most interesting thing will be how much leveling-off do we see, how much are last year's laggards able to catch up," he said.

Ahead of the opening bell, shares of Netflix rose over 13% after the streaming company said it had topped 200 million subscribers.

Chinese internet giant Alibaba jumped 8.5% in Hong Kong after the company's embattled owner, Jack Ma, made his first public appearance in three months, ending concerns about his whereabouts.

The inauguration of Joe Biden as president is scheduled to begin at midday ET amid tight security in the capital. Mr. Biden has laid out plans for a $1.9 trillion Covid-19 relief package to help Americans get through the economic shock of the pandemic and direct money into testing and vaccine distribution.

In commodity markets, Brent crude, the international benchmark for oil, rose 0.7% to $56.31 a barrel. Gold prices fell 0.2% to $1,836 a troy ounce.

Overseas, the Stoxx Europe 600 index rose 0.5%. Shares of Pearson rose nearly 6% after the British education publisher reported sales growth, in part due to the increase in online learning during the pandemic.

In Asia, stocks indexes were mixed. The Nikkei 225 ended the day down 0.4%, while the Shanghai Composite Index rose 0.5%.

In Hong Kong, the Hang Seng Index gained 1.1% to hit a 20-month high, with stocks buoyed in recent days by hefty inflows from mainland China.

Write to Will Horner at William.Horner@wsj.com

(END) Dow Jones Newswires

01-20-21 0947ET