NEW YORK, April 16 (Reuters) - U.S. stocks jumped more than
1 percent 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
Inflation data, which reinforced expectations that the
Federal Reserve will keep its stimulus plan in place, added to
The price of gold jumped 1 percent after its record daily
drop in dollar terms on Monday. The SPDR Gold Shares ETF
, which fell 8.8 percent on record volume Monday, rose
1.1 percent to $132.80. The S&P 500 materials index
climbed 1.9 percent, leading the benchmark S&P 500 higher.
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 S&P 500 is up 10.4
percent since the start of the year after enjoying a strong
first-quarter run, partly as a result of the Fed's continued
"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
Coca-Cola Co stock rose 5.7 percent to $42.37, after
rising intraday to $42.48, its highest since 1998,and ranked as
the Dow's biggest percentage gainer. 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 U.S.
The stock of Johnson & Johnson, another Dow
component, 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 percent at $83.44.
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, up from a recent estimate of 1.1
The Dow Jones industrial average jumped 157.58
points, or 1.08 percent, to close at 14,756.78. The Standard &
Poor's 500 Index gained 22.21 points, or 1.43 percent, to
finish at 1,574.57. The Nasdaq Composite Index rose
48.14 points, or 1.50 percent, to end at 3,264.63.
Of the 30 Dow components, only two ended the day lower.
International Business Machines shares rose 1.3
percent to end at $212, their session high, and bolstered the
Dow two days before IBM's quarterly earnings. IBM is set to
release results on Thursday after the close.
Shares of the Walt Disney Co climbed 3.2 percent to
$60.75 and helped lift the Dow.
The Dow Jones Transportation Average, often an
indicator of investors' perception of the economy, gained 2.2
percent. Shares of United Parcel Service rose 1 percent
to $83.22, while the stock of FedEx Corp gained 0.5
percent to end at $95.14.
After the bell, shares of Yahoo lost 3.5 percent to
$22.95 following the release of its results, while shares of
Intel inched up just 0.1 percent to $21.94 after its
earnings. During the regular session, Yahoo slid
0.8 percent to $23.79, while Intel rose 2.5 percent 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, U.S.-listed shares of Randgold
Resources gained 1.9 percent to $70.33.
Analysts' positive views on basic materials companies also
helped the sector.
International Paper, up 4.7 percent at $47.47, and
Vulcan Materials, up 6.8 percent at $48.69, were among
the materials sector's top performers after analysts' bullish
Further supporting stocks, 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.
A separate report showed U.S. housing starts rose 7.0
percent 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 percent.
Among other earnings, Goldman Sachs reported higher
quarterly profit but said revenue from client trading fell 10
percent, raising questions about the health of its biggest money
maker. Goldman's shares fell 1.6 percent to $144.10.
In the retail sector, shares of Target dipped 0.2
percent to $68.38 after the discount chain warned that earnings
for the first quarter would miss its expectations.
On the flip side, shares of struggling retailer J.C. Penney
jumped 5.6 percent to $15.19. On Monday, the company
said it has borrowed $850 million from its revolving credit
facility to help buy inventory.
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.