Stocks rallied on 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.

Apple Inc shares rose more than 4 percent, on track to post their best day in almost three months with the iPad maker's shares set to snap 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 Dow Jones industrial average gained 204.61 points, or 1.58 percent, to 13,126.02. The S&P 500 Index rose 23.13 points, or 1.69 percent, to 1,392.70. The Nasdaq Composite added 62.86 points, or 2.10 percent, to 3,051.26.

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. The shares rose 1.9 percent to $206.57.

Yahoo Inc is also due to report after the close, but the results may be overshadowed by comments from its new chief executive, who is expected to lay out his vision for the struggling web pioneer. Shares gained 2 percent to $15.08.

Coca-Cola climbed 2.7 percent to $74.36 and was one of the top boosts to the Dow after the soft drink group reported higher quarterly profit.

Goldman fell 0.9 percent to $116.72 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 less than 0.1 percent to $64 after its quarterly profit rose more than expected but revenue fell slightly.

This week, 86 S&P 500 companies are scheduled to report results.

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. The PHLX housing index gained 2 percent.

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.

(Reporting by Rodrigo Campos)

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