* Gold prices rebound a day after massive selloff
* Coke, J&J lead blue chips after earnings
* Fed given room to maneuver after CPI falls in March
* Dow up 0.8 pct, S&P 500 up 1.1 pct, Nasdaq up 1.2 pct
By Caroline Valetkevitch
NEW YORK, April 16 (Reuters) - U.S. stocks advanced 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 in place, added to
The price of gold jumped after its record daily drop in
dollar terms on Monday. U.S.-listed shares of Randgold Resources
climbed 1.8 percent to $70.29. The S&P 500
materials index rose 1.5 percent, leading the index
The market's advance followed the S&P 500's drop of more
than 2 percent drop on Monday, giving the index its worst
one-day percentage loss since Nov. 7. The index is up 10 percent
since the start of the year after enjoying a strong
"It's a relief rally, and investors ... are looking, as they
have after any pullback we've had in the past several months, to
take advantage of it and buy," said Alan Lancz, president of
Alan B. Lancz & Associates Inc., an investment advisory firm
based in Toledo, Ohio.
Coca-Cola Co shares rose to $42.41, their highest
since 1998, and gave the biggest boost to the Dow after a
higher-than-expected profit and a deal to unload some
distribution territory to five independent U.S. bottlers.
The stock was up 5.3 percent at $42.23 in late
The stock of another Dow component Johnson & Johnson
touched a record high of $83.50 after the healthcare company
reported better-than-expected first-quarter earnings. J&J shares
shot up 1.7 percent to $83.13.
S&P 500 earnings are now expected to have risen 1.8 percent
in the first quarter, based on actual results from 42 companies
and estimates for the rest.
The Dow Jones industrial average was up 116.49
points, or 0.80 percent, at 14,715.69. The Standard & Poor's 500
Index was up 16.57 points, or 1.07 percent, at 1,568.93.
The Nasdaq Composite Index was up 37.34 points, or 1.16
percent, at 3,253.83.
Analysts' positive views on basic materials companies also
helped the sector. The materials index had dropped more than 5
percent in the two previous sessions combined.
On Monday, a drop in the price of gold and other
commodities triggered a sharp selloff in stocks. But U.S. stock
indexes 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. Tuesday's gains set it on
track to close above its 14-day moving average
International Paper and Vulcan Materials were
among the top performers in the materials sector after bullish
Further supporting equities, data showed the U.S. 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.
Intel Corp, up 2 percent at $21.81, and Yahoo Inc
, down 0.1 percent at $23.96, are due to report after
The semiconductor index was up 1.7 percent.