"U.S. equities burst to the upside [...] as earnings in the financial and tech sectors broke through the gloom," analysts at Action Economics said.
The Dow Jones Industrial Average surged 200 points in the first few minutes of trade. In recent action, it rose 188 points, or 1.5%, to 12,811, with 27 of its 30 components opening higher.
Banking giant Citigroup posted a first-quarter loss of $1.02 a share, worse than the loss of 95 cents expected by analysts, but revenue exceeded expectations.
The firm also took write-downs and other losses totaling about $12 billion and reiterated a promise to continue divesting non-core assets.
Yet, its shares jumped 4.3%, with the market having already priced in a lot of the pain for the bank and for much of the ailing financial sector.
Citigroup followed solid gains scored Thursday for Merrill Lynch , which also advanced after the Wall Street firm missed forecasts but said it remains well capitalized.
The Dow also received strong support from upbeat results at equipment-maker Caterpillar Inc. , whose shares jumped 4%. Away from the Dow, Honeywell Inc. , another industrial firm, rose 3.3%.
The S&P 500 index gained 20 points, or 1.5%, to 1,385, while the Nasdaq Composite rose 48 points, or 2%, to 2,390.
Google's tech boost
Google shares surged 18% after the Internet giant posted a 31% rise in first-quarter profit to $1.31 billion late Thursday and said growth in paid clicks -- or the number of times users click on sponsored links -- was much higher than recent speculation had suggested.
Banking stocks were much in focus in Europe following reports that Royal Bank of Scotland may raise as much as $24 billion in fresh capital from shareholders.
With little on the economic calendar, the dollar posted solid gains on the back of Citigroup's results, adding 1% against a basket of major currencies.
Oil prices edged lower, with the May-dated light crude contract down $1.21, or 1%, at $113.66 a barrel in electronic trading.
Overnight, Japan's Nikkei 225 Average finished 0.6% higher Friday, bucking a broadly lower trend in Asia, while European markets moved higher.
By Nick Godt