* 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 1.1 pct, S&P 500 up 1.4 pct, Nasdaq up 1.5 pct
By Caroline Valetkevitch
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 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 index 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 shares rose 5.7 percent 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 U.S.
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 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 14,756.78 at the close. The Standard
& Poor's 500 Index gained 22.21 points, or 1.43 percent,
to 1,574.57. The Nasdaq Composite Index rose 48.14
points, or 1.50 percent, to end at 3,264.63.
The Dow Jones Transportation Average, often an
indicator of investors' perception of the economy, gained 2.2
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 on Tuesday closed
above its 14-day moving average.
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 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.
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.