Wall Street rallied and the S&P 500 hit its highest level since June 2008 on Tuesday as a flood of positive corporate results added to increasing optimism about the economic growth outlook.

Ford Motor Co , 3M Co and United Parcel Services Inc were among the bellwether names to impress, continuing a string of better-than-expected results. 3M and UPS also raised their full-year profit outlooks, contributing to the bullish sentiment.

Shares of 3M, a Dow component, rose 2.2 percent to $96.22 while UPS was up 1.2 percent at $74.52. Ford advanced 2.5 percent to $15.92.

The very positive outlooks from today means things look very bright going forward, said Peter Andersen, portfolio manager of the Boston-based Congress Asset Management.

I was frankly delighted with Ford's results, and the market is taking some of its cue from the strength there, added Andersen, who helps manage $7 billion and owns Ford.

Though 73 percent of New York Stock Exchange issues were in positive territory, there were some disappointments. Coca-Cola Co fell 1.7 percent to $66.61 and was the Dow's biggest loser after its results were hurt by lost Japanese revenue. U.S. Steel Corp and Netflix Inc also fell after results.

The Dow Jones industrial average <.DJI> was up 108.83 points, or 0.87 percent, at 12,588.71. The Standard & Poor's 500 Index <.SPX> was up 11.55 points, or 0.87 percent, at 1,346/80. The Nasdaq Composite Index <.IXIC> was up 20.85 points, or 0.74 percent, at 2,846.73.

The three major U.S. stock indexes hit highs for the year, and the Nasdaq was at its highest since late 2007, erasing losses after a drop in February. But some caution remained a day before a press conference by U.S. Federal Reserve Chairman Ben Bernanke.

The conference follows the Fed's last policy statement before it is expected to stop its quantitative easing program at the end of June. Investors have concerns that the end of that program could remove support for buying stocks.

Trading volume was weaker than average, with 3.94 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq as of 1 p.m. EST.

There's some apprehension about what to expect, Andersen said. People are anxious to reinvest in equity markets, but they're tentative about the Fed, which is why you've been seeing such low volume lately.

U.S. consumer confidence rose in April as inflation expectations eased somewhat and consumers felt better about the short-term outlook, according to a private-sector report. The data helped ease concerns that the recent rise in oil prices have started to hit shoppers.

(Reporting by Ryan Vlastelica; Editing by Jan Paschal)