* Amazon hits record high, boosting S&P and Nasdaq
* Higher oil drives up energy shares
* Gap drops after sales fall for fifth straight quarter
* Indexes end up: Dow 1.26 pct, S&P 1.25 pct, Nasdaq 1.26 pct (Updates to close)
By Noel Randewich
May 10 (Reuters) - U.S. stocks rose across the board on Tuesday, with a jump in oil and a rally in Amazon.com helping propel the S&P 500 to its best day in two months.
Buoyed as well by higher global stock markets, Wall Street’s gains appeared to breathe new life into a two-month rally that had petered out in mid-April, and left the S&P 500 with an increase of nearly 2 percent for 2016.
Amazon jumped 3.43 percent to a record of $703.07, giving the biggest boost to the S&P 500 and the Nasdaq. Bernstein raised its price target on the stock to $1,000, the highest on Wall Street, saying it believes Amazon’s margins will expand much faster than currently expected.
All 10 major S&P sectors gained and seven of them were up over 1 percent, led by a 1.75 percent rise in the energy index . Oil rose over 4 percent as supply disruptions in Canada and elsewhere overshadowed fears of oversupply.
International stock markets were helped by solid corporate earnings in Europe, progress on Greek debt talks, and a new pledge by Japan that it was prepared to weaken the yen.
“A great triple-digit day, it’s fantastic,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “People are feeling confident.”
With first-quarter earnings reports almost all in and not quite as bad as expected, investors have become more optimistic that the profit recession that has weighed on large-cap stocks for almost a year may be losing its grip.
The proportion of companies that have raised their forecasts versus those that lowered forecasts is the healthiest it has been since 2011, according to Thomson Reuters data.
“While we aren’t expecting a massive improvement in profit, I do expect to see some revenue growth in the second quarter,” said Dan Farley, regional investment strategist at U.S. Bank Wealth Management in Minneapolis.
The Dow Jones industrial average climbed 1.26 percent to end at 17,928.35 and the S&P 500 jumped 1.25 percent to 2,084.39.
The Nasdaq Composite added 1.26 percent to 4,809.88.
The S&P 500 and Dow Jones notched their biggest daily percentage gain since March 11 and the Nasdaq recorded its biggest gain since April 13.
After the bell, Walt Disney Co posted a fiscal second-quarter report that disappointed investors and its stock fell 5 percent.
During the session, Gap tumbled 11.51 percent after the retailer reported a decline in sales for the fifth straight quarter.
Allergan added 5.28 percent after the Botox maker reported a better-than-expected quarterly profit.
Advancing issues outnumbered decliners on the NYSE by 2,300 to 701. On the Nasdaq, 1,864 issues rose and 946 fell.
The S&P 500 index showed 49 new 52-week highs and four new lows, while the Nasdaq recorded 48 new highs and 61 new lows.
About 6.6 billion shares changed hands on U.S. exchanges, below the 7.3 billion daily average for the past 20 trading days, according to Thomson Reuters data. (Additional reporting by Tanya Agrawal; Editing by Nick Zieminski and James Dalgleish)