Wall Street gains 1%, lifted by gold, earnings and data

Inflation data, which reinforced expectations that Fed will keep its stimulus plan in place, added to bullish sentiment

US stocks jumped more than 1% on Tuesday, a day after their worst decline since November, as gold prices rebounded and earnings from Coca-Cola and Johnson & Johnson improved the outlook for first-quarter results.

Inflation data, which reinforced expectations that the Federal Reserve will keep its stimulus plan in place, added to bullish sentiment.

The price of gold jumped 1% after its record daily drop in dollar terms on Monday. The SPDR Gold Shares ETF , which fell 8.8% on record volume Monday, rose 1.1% to $132.80. The S&P 500 materials index climbed 1.9%, leading the index higher.

The market's advance followed the S&P 500's drop of more than 2% drop on Monday, giving the index its worst one-day percentage loss since November 7. The S&P 500 is up 10.4% since the start of the year after enjoying a strong first-quarter run, partly as a result of the Fed's continued stimulus efforts.

 

"Yesterday I think was a bit out of line ... But I think the trend is that the market is consolidating, that we're going to see a little bit of a pullback here over the next month and a half or so, and then we'll get on to greener pastures," said Brian Amidei, managing director at HighTower Advisors in Palm Desert, California.

Coca-Cola Co shares rose 5.7% to $42.37, after rising intraday to $42.48, their highest since 1998, and giving the Dow its biggest boost. The stock's surge followed Coca-Cola's earnings on Tuesday, when the world's largest soft drinker maker reported a higher-than-expected profit and a deal to unload some distribution territory to five independent US bottlers.

The stock of another Dow component Johnson & Johnson touched a record high of $83.54 after the diversified healthcare company reported better-than-expected first-quarter earnings. J&J shares ended up 2.1% at $83.44.

S&P 500 earnings are now expected to have risen 1.8% in the first quarter, based on actual results from 42 companies and estimates for the rest, up from a recent estimate of 1.1% growth.

The Dow Jones industrial average jumped 157.58 points, or 1.08%, to close at 14,756.78. The Standard & Poor's 500 Index gained 22.21 points, or 1.43%, to finish at 1,574.57. The Nasdaq Composite Index rose 48.14 points, or 1.50%, to end at 3,264.63.

The Dow Jones Transportation Average, often an indicator of investors' perception of the economy, gained 2.2%.

After the bell, shares of Yahoo lost 3.5% to $22.95 following the release of its results, while shares of Intel inched up just 0.1% to $21.94 after its earnings.

During the regular session, Yahoo slid 0.8% to $23.79, while Intel rose 2.5% to $21.92.

On Monday, a drop in the price of gold and other commodities triggered a sharp selloff in stocks. But stocks fell further late in the session after news of two fatal explosions near the finish line of the Boston Marathon.

The S&P 500's slide on Monday took the index back to a range it had held for about a month. Yet the index closed on Tuesday above its 14-day moving average.

In Tuesday's session, US-listed shares of Randgold Resources gained 1.9% to $70.33.

Analysts' positive views on basic materials companies also helped the sector.

International Paper , up 4.7% at $47.47, and Vulcan Materials , up 6.8% at $48.69, were among the materials sector's top performers after analysts' bullish notes.

Further supporting stocks, data showed the US Consumer Price Index fell in March for the first time in four months, giving the Federal Reserve room to maintain its monetary stimulus to speed up economic growth.

A separate report showed US housing starts rose 7.0% last month to an annual rate of 1.04 million units, the highest in nearly five years.

An index of housing stocks jumped 2.6%.

Among other earnings, Goldman Sachs reported higher quarterly profit but said revenue from client trading fell 10%, raising questions about the health of its biggest money maker. Goldman's shares fell 1.6% to $144.10.

Volume was roughly 6.4 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the average daily closing volume of about 6.36 billion this year.

Advancers outpaced decliners by a ratio of about 4 to 1 on both the NYSE and the Nasdaq.