The Dow Jones industrial average surged 206.68 points, or 2.05 percent, to 10,300.56. It was the Dow's biggest one-day point gain since March 4, when the blue chips rose 217.96.
The market's broader indicators also rose sharply. The tech-focused Nasdaq climbed 61.39, or 3.5 percent, to 1,815.17 and the Standard & Poor's 500 index gained 25.56, or 2.3 percent, to 1,128.11.
Automaker GM joined other household names in reporting good earnings. Scorecards from long-distance telephone company Sprint Corp. and Novellus Systems Inc., the chip equipment maker, helped push semiconductor and telecommunications shares higher.
GM, the strongest Dow industrial Tuesday, rose $2.95 to $64.05 after reporting first-quarter profits of $1.39 a share, 25 cents higher than analysts had forecast. GM also raised its full-year earnings estimate, a sign that GM believes consumer spending, which accounts for two-thirds of the economy, will continue to strengthen.
Texas Instruments climbed $1.66 to $33.79, having reported earnings late Monday of a penny a share, beating Wall Street's break-even estimates. The firm also said orders rose and that it has turned the corner in the semiconductor slump.
"We think we can say goodbye to the bottom," said Ron Slaymaker, the company's manager of investor relations.
Investors also got a wide array of economic news, most of it upbeat.
The beleaguered factory sector had its best showing in two years, the Federal Reserve said, and retail inflation data, as measured by the U.S. Consumer Price Index, showed costs rose less than economists had forecast in March.
The tame inflation data gave the market a boost as some bet the Federal Reserve will be able to wait until at least June to raise interest rates.
"I felt the data were fabulous," said Phil Orlando, chief investment officer of Value Line's Asset Management division. "And importantly, there is no inflation in the economy so the Fed is absolutely not raising rates at the May or June meetings ... and that means the market can rally."