Beth Belton and Adam Shell -- USA TODAY
Stocks plunged briefly Tuesday after a fake tweet from the Associated Press' Twitter account said there had been two explosions at the White House and President Obama was injured.
The Dow Jones industrial average plunged more than 128 points in seconds, but quickly recovered when the tweet was found to be a hoax.
Earlier, benchmark stock indexes jumped Tuesday as many first-quarter earnings reports out before the market open beat or matched Wall Street estimates.
In afternoon trading, the Dow Jones industrial average rose 1%, the Standard & Poor's 500 index was gaining 1%, and the Nasdaq composite index was up 1.2%.
About a third of the companies in the S&P 500 index report earnings this week and investors had feared quarterly results for the first three months of 2013 would disappoint after a better-than expected fourth quarter. So far, for the most part, that doesn't seem to be the case.
Corporate America's ability to continue to churn out decent profits and generate sales in a soft economy has given investors a reason to buy, says Richard Cripps, chief investment officer at Stifel Financial.
Analysts are upwardly revising their earnings forecasts as companies post better-than-expected results. Heading into Tuesday's trading session, analysts were forecasting profit growth of 2.1% for companies in the S&P 500. It's the highest first-quarter estimate in two months, according to S&P Capital IQ.
Markets have closed higher the past 14 Tuesdays. Wall Street is on track to continue the Tuesday trend, thanks to strong quarterly earnings reports from Dow components Dupont, the chemical making conglomerate, and United Technologies, along with robust results posted by video streaming giant Netflix, insurance provider Travelers and other firms.
Including this morning's reports, nearly 69% of the 132 companies in the S&P 500 that have reported have topped expectations. That compares to 63% of those companies beating estimates on average the past 20 years, according to Thomson Reuters.
About 21% of companies have fallen short of analysts' forecasts, in line with longer-term averages.
"The overall picture is that while earnings expectations aren't robust, they are still positive and headed in the right direction," says Cripps. "And that is driving the bigger theme of an asset allocation shift to stocks from other assets."
On Monday, after trading mixed to lower most of the day, the Dow rose 0.1% to close at 14,567.17. The Standard & Poor's 500 index rose 0.5%, to 1,562.50. The Nasdaq composite gained 0.9%, to 3,233.55.
In Tuesday markets, the yield on the benchmark 10-year U.S. Treasury rose to 1.71% from 1.7% Monday. Bond prices fall and yields rise when demand for the securities weakens. The rising yield reflects investors moving their money out of safer government bonds into the stock market.
The price of gold, in futures contract trading for June delivery, about $7.50 an ounce to $1,414. The price of gold has fallen about 12% the past six months, with 5% of the decline coming in one day on April 12.
Shares in European markets ended sharply higher as more U.S. companies reported quarterly results that were better than expected. Britain's FTSE 100 closed up 2% to 6,406.12, Germany's DAX 30 index finished up 2.4% to 7,658.21, and France's CAC 40 index ended up 3.6% to 3,783.05.
In Asia, markets fell Tuesday after China's manufacturing growth slowed in April. Mainland China's Shanghai Composite Index tumbled 2.6% to 2,184.54. The Nikkei 225 in Tokyo fell 0.3% to 13,529.65.
Benchmark oil for June delivery was down about 25 cents to about $89 per barrel in electronic trading on the New York Mercantile Exchange. The contract for May gained 75 cents to close at $88.76 on the Nymex on Monday.
Contributing: USA TODAY's Kim Hjelmgaard, The Associated Press