US STOCKS-Wall St surges 2 pct on improved earnings picture

(Updates to midday. changes byline)

By Cal Mankowski

NEW YORK, April 18 (Reuters) - U.S. stocks jumped 2 percent on Friday after quarterly results from Citigroup Inc (C.N: Quote, Profile, Research) gave investors hope the credit crisis was nearing an end, and strong earnings from Google Inc (GOOG.O: Quote, Profile, Research) dispelled fears of an online advertising slump, igniting a rally in Internet stocks.

Adding to investor enthusiasm, manufacturers Honeywell International (HON.N: Quote, Profile, Research) and Caterpillar Inc (CAT.N: Quote, Profile, Research) both reported stronger-than-forecast earnings on robust international sales.

The Dow industrials rose to a three-month high, helped by the advances in Citigroup and Honeywell.

The strong earnings across a range of sectors helped improve the first-quarter earnings picture, which got off to a rough start last week with disappointments from Alcoa Inc. (AA.N: Quote, Profile, Research) and General Electric Co (GE.N: Quote, Profile, Research).

"Just as last week on a Friday we had negative news from GE that sent the market lower, the earnings tone this week has been by and large better," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.

"It's still an open question as to what kind of results we'll see in the ensuing quarters," Battipaglia said, adding that he thinks Wall Street expectations for the second half of 2008 are too high.

The Dow Jones industrial average .DJI was up 256.07 points, or 2.03 percent, at 12,876.56. The Standard & Poor's 500 Index .SPX was up 28.26 points, or 2.07 percent, at 1,393.82. The Nasdaq Composite Index .IXIC was up 66.43 points, or 2.84 percent, at 2,408.26.