US STOCKS-S&P 500, Dow rise on optimism over earnings reports, stimulus

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* Energy stocks set for biggest gain in nearly 7 weeks
* IBM rises on quarterly profit beat
* Coca-Cola up after signaling demand recovery
* Indexes: Dow up 1.18%, S&P rises 0.65%, Nasdaq down 0.13%

(Adds quote, details; updates prices)
By Medha Singh and Devik Jain
July 21 (Reuters) - The S&P 500 and the Dow indexes rose on
Tuesday following a slate of positive earnings reports from
companies including IBM and Coca-Cola, and on optimism over an
eventual vaccine and fiscal stimulus to revive a
pandemic-battered economy.
The Nasdaq eased after hitting an intraday record high at
the start of the session, as shares of Amazon.com Inc AMZN.O
fell 1.7% following a near 8% jump a day earlier.
Energy .SPNY jumped 6%, more than any other S&P sectors,
tracking an uptick in oil prices on prospects of higher demand
for fuel. O/R
Technology .SPLRCT and consumer discretionary .SPLRCD ,
which are the best performing sectors this year, slipped.
"We've started to reposition portfolios a little bit away
from what's seen as a long-term structural winners, in favor of
companies that haven't really participated as much in the upside
of what markets have done," said Matt Stucky, portfolio manager,
equities, at Northwestern Mutual Wealth Management Co in
Milwaukee, Wisconsin.
Promising early data from trials of three potential vaccines
helped the S&P 500 close in the green for the year on Monday.
With the second quarter expected to see the worst of the
pandemic's hit on profits, investors are more focused on hints
on how long Corporate America would take to bounce back.
International Business Machines Corp IBM.N gained 1.5%
after it signaled higher demand in its cloud computing business,
as large corporations accelerate their digital shift.
Coca-Cola Co KO.N rose 3.2% as it said demand for its
sodas were improving after the "most challenging" quarter for
the year. "Commentary on earnings call has been really important to
investment communities, confirming the recovery story that's
seen in the broad (economic) data applied to individual
businesses, like Coca Cola," Stucky said.
U.S. lawmakers and White House officials headed into a day
of negotiations on Capitol Hill on Tuesday, aimed at hammering
out an agreement on new coronavirus aid legislation as
infections and deaths surged to record levels across the
country. The U.S. government has less than two weeks to agree on a
legislative package before additional unemployment assistance
runs out for tens of millions of Americans.
Overnight, European Union leaders agreed on a massive
coronavirus relief program. At 11:05 a.m. ET, the Dow Jones Industrial Average .DJI
was up 315.72 points, or 1.18%, at 26,996.59 and the S&P 500
.SPX was up 21.13 points, or 0.65%, at 3,272.97. The Nasdaq
Composite .IXIC was down 14.20 points, or 0.13%, at 10,752.89.
Lockheed Martin Corp LMT.N rose 2% as the U.S. weapons
supplier raised its full-year profit and revenue forecasts,
driven by higher quarterly sales in its aeronautics unit that
makes the F-35 fighter jet. Advancing issues outnumbered decliners by a 4.52-to-1 ratio
on the NYSE and by a 2.09-to-1 ratio on the Nasdaq.
The S&P index recorded 40 new 52-week highs and no new low,
while the Nasdaq recorded 107 new highs and six new lows.

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