Stocks soared Tuesday, as investors welcomed a slew of solid quarterly corporate results and after a German investor confidence survey surprised on the upside and Spanish benchmark yields eased.
By the close of trading, the Dow Jones industrial average was up 194 points, posting its best gain in about a month. It was the Dow’s first close above the psychologically-important 13,000 level since April 5.
Apple’s shares rose 5 percent, driving the Nasdaq composite index to its best gain of the year. The stock was on track to post its best day in almost three months. The iPad maker's shares ended a 5-day losing streak during which it lost 8.8 percent.
Profits at Coca-Cola, Goldman Sachs and Johnson & Johnson all beat analysts' estimates and lifted hopes for the rest of the earnings season.
Of the 39 S&P 500 companies that have reported earnings, 74.4 percent beat estimates, according to Thomson Reuters data.
"Earnings numbers have so far come in fairly positive and there was a lot of uncertainty regarding what those would look like," said Michael Yoshikami, CEO and founder at Destination Wealth Management in Walnut Creek, California.
"The Germany survey combined with the announcement from Spain has helped (the market)," he said.
German analyst and investor confidence rose unexpectedly in April to a high not seen since June 2010 while better-than-expected results from Spanish debt sales boosted confidence before a long-term debt auction later in the week.
An European Central Bank official said the ECB trusts Spain will keep to the deficit targets it has agreed with the European Commission and that "markets perhaps over reacted" when benchmark yields in Spain rose above 6 percent.
The S&P 500 hit a session high above its 14-day moving average and traded above its 50-day average for most of the session. The benchmark dipped below the 50-day line last week for the first time in more than three months.
Although not all the stocks of reporting companies rose, the results helped ease fears that earnings could start to tail off this quarter.
International Business Machines Corp reports earnings after the bell, and investors hope strong software demand will bring a repeat of last year's first-quarter performance, when the company raised its full-year forecast.
Coca-Cola climbed and was one of the top boosts to the Dow after the soft drink group reported higher quarterly profit.
Goldman fell after rising 2.8 percent during the previous four sessions. Earnings fell from a year earlier but topped many analysts' views.
Johnson & Johnson shares edged up after its quarterly profit rose more than expected but revenue fell slightly.
This week, 86 S&P 500 companies are scheduled to report results.
U.S. economic reports were mixed as groundbreaking on U.S. homes fell unexpectedly in March, but permits for future construction rose to their highest level in 3-1/2 years.
U.S. industrial output was flat for a second straight month in March, held back by a drop in manufacturing, a Federal Reserve report showed, while capacity utilization, a measure of how fully firms are using their resources, fell.
Reuters contributed to this report.