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* Gold prices rebound 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 pct, Nasdaq up 1.2 pct
By Rodrigo Campos
NEW YORK, April 16 (Reuters) - U.S. stocks rose on Tuesday, bouncing back after their worst decline since early November, following solid earnings from Coca-Cola and Johnson & Johnson, and inflation data that reinforced expectations that the Federal Reserve will keep its stimulus in place.
The price of gold rebounded after its biggest-ever daily drop in dollar terms on Monday. U.S.-listed shares of Randgold Resources climbed 3.3 percent to $71.32. The PHLX Gold/Silver index advanced 1.1 percent.
Positive analyst views on basic materials companies helped the sector lead the S&P 500 higher, with its materials index up 1.6 percent after a drop of more than 5 percent in the two previous sessions combined.
Shares of Coca-Cola, up more than 5 percent at their highest since 1998, and J&J, at a new record high, led the Dow industrials after reporting earnings that pleasantly surprised Wall Street.
Coca-Cola Co gained 5.3 percent to $42.21 and gave the biggest boost to the Dow after the world's largest soft drink maker posted slightly higher-than-expected profit and announced a deal to unload some distribution territory to five independent U.S. bottlers.
The stock of fellow Dow component Johnson & Johnson touched a record high of $83.50 after the diversified healthcare company reported better-than-expected first-quarter earnings. J&J shares shot up 1.8 percent to $83.18.
International Paper and Vulcan Materials were among the top performers after bullish analyst notes.
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.
"Dovish economic data is not good in the long run, but it is certainly supportive of more Fed action," said Art Hogan, managing director at Lazard Capital Markets in New York.
He said earnings from safety plays like Coca-Cola and J&J are going to determine if the market enters a correction phase that many are expecting - or if it finds more buyers looking for yield.
The Dow Jones industrial average climbed 117.12 points or 0.80 percent, to 14,716.32. The S&P 500 rose 16.06 points or 1.03 percent, to 1,568.42. The Nasdaq Composite gained 37.80 points or 1.18 percent, to 3,254.29.
On Monday, U.S. stocks posted their largest drop since Nov. 7 as sharp declines in the price of gold, oil and other commodities triggered a broad selloff in equities. Stocks fell further after two fatal explosions near the finish line of the Boston Marathon.
The S&P 500 is up 10 percent so far this year.
The benchmark S&P 500's slide on Monday took the index back to a range it had held for about a month. The S&P 500 faces technical resistance near 1,568, its 14-day moving average.
Other U.S. data released on Tuesday showed industrial production grew 0.4 percent last month, topping expectations for a gain of 0.2 percent, while capacity utilization edged up to 78.5 percent in March from 78.3 percent in February.
Goldman Sachs reported higher quarterly earnings but said revenue from client trading fell 10 percent, raising questions about the health of its biggest money maker. Goldman's shares fell 1.7 percent to $143.94.
After the closing bell, Intel Corp and Yahoo Inc are scheduled to report quarterly earnings. Intel's stock was up 1.7 percent at $21.74. In contrast, Yahoo's shares slipped 0.5 percent to $23.86.