U.S. stocks soared Tuesday on good corporate earnings, falling Spanish interest rates and an improved International Monetary Fund forecast for economic growth.

Johnson & Johnson (NYSE: JNJ), the world's second-biggest health care company, reported better-than-expected first-quarter profit on cost cutting and strong demand for new drugs, which offsets drags from generic competition and recalls.

The Coca-Cola Co. (NYSE: KO), the world's largest soft-drink maker, reported first-quarter profits that topped analysts' estimates, helped by price increases and strong demand in emerging markets.

Goldman Sachs Group Inc. also issued quarterly earnings that beat analyst expectations.

Of the 39 S&P 500 companies reporting earnings so far, 74.4 percent have beat analyst expectations, according to Thomson Reuter's data.

Growth is what matters, Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said to Bloomberg News. His firm oversees $160 billion. There's a lot of room for positive surprises given how pessimistic things were. We've got data showing the German economy is still growing strong, positive earnings surprises in the U.S. and some good news out of Spain. We were due for a bounce.

Yields on 10-year Spanish debt fell below the critical 6 percent level after investors snapped up 12-month and 18-month sovereign debt from Europe's fifth-largest economy.

The International Monetary Fund on Tuesday raised its projection of growth in the U.S. gross domestic product to 2.1 percent this year and 2.4 percent next year, from 1.7 percent in 2011.

There was good news on Monday, as well. The Commerce Department said sales at U.S. retailers rose sharply for the third straight month in March, as Americans continued to weather the hike in gasoline prices and splurged on buying new cars and renovating their homes.

Retail sales jumped 0.8 percent in March, after advancing 1 percent in February, Commerce Department figures showed Monday. Economists polled by Reuters had forecast a much smaller gain of 0.3 percent.

In late afternoon trading, the Dow Jones Industrial Average rose 195.72, or 1.51 percent, to 13,117.13. Apple Inc. jumped $26.88, or 4.6 percent, to $606.99 to help lift the Nasdaq Composite 60.33, or 2.02 percent, to 3,048.73, and the S&P 500 was up 21.83, or 1.59 percent, to 1,391.40.