US STOCKS-Wall Street gathers steam as U.S. states prepare to reopen

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* Caterpillar drops after rating downgrade
* BOJ pledges unlimited bond buying
* Tesla up on reports of California factory reopening
* Indexes up: Dow 1.23%, S&P 1.30%, Nasdaq 1.29%

(Adds comment, details; updates prices)
By C Nivedita and Medha Singh
April 27 (Reuters) - U.S. stock markets jumped more than 1%
on Monday as more states prepared to ease stay-at-home orders
and investors geared up for one of the busiest weeks of
quarterly earnings reports, including from tech titans Apple and
Microsoft.
The U.S. benchmark 10-year Treasury yield US10YT=RR rose
for the second straight session, lifting the rate-sensitive
financial index .SPSY by 3%. Technology stocks .SPLRCT were
also the top boosts to the three main indexes.
Wall Street's fear gauge .VIX slipped for the fourth day
to hit its lowest level in more than seven weeks. US/
Colorado, Mississippi, Minnesota, Montana and Tennessee were
set to join several other states in reopening businesses this
week, despite disapproval from health experts as 16% of the U.S.
workforce has applied for unemployment benefits.
Although trillions of dollars in stimulus have helped the
S&P 500 .SPX recover nearly 30% from March lows, analysts say
growing economic damage may cap further gains, unless there is
progress on treatments for the disease. "There will certainly be a tsunami of negative news that
will come crashing down on markets and investors. That is
consensus. We have that assumption baked in," said Art Hogan,
chief market strategist at National Securities in New York.
"What we don't know is what the world looks like on the
other side of this, and how much of the potential economic
damage will be mitigated by the historic policy response."
With the Bank of Japan rolling out more stimulus on Monday,
focus this week will be on the Federal Reserve's meeting ending
on Wednesday, although expectations are low for more easing by
the U.S. central bank.
At 11:33 a.m. ET the Dow Jones Industrial Average .DJI was
up 293.23 points, or 1.23%, at 24,068.50, the S&P 500 .SPX was
up 36.83 points, or 1.30%, at 2,873.57 and the Nasdaq Composite
.IXIC was up 111.47 points, or 1.29%, at 8,745.99.
Tesla Inc TSLA.O jumped 9.5% and was the biggest boost to
the Nasdaq after a report said the electric-car maker is calling
some workers back to its California vehicle-assembly plant next
week. About 173 companies in the S&P 500 are scheduled to report
quarterly earnings this week, including Apple AAPL.O ,
Amazon.com AMZN.O , Microsoft MSFT.O and Boeing BA.N .
Overall, analysts expect a decline of nearly 15% in
first-quarter earnings of S&P 500 companies, with profits for
the energy sector estimated to have slumped 68%.
"Earnings are in some ways like economic data coming in -
abhorrent at the moment, and something that markets will try and
look through when that's negative," said Edward Park, deputy
chief investment officer at London-based firm Brooks Macdonald.
"What really matters is - are we seeing progress in terms of
new case growth, particularly in the United States, or what will
easing of the lockdown look like, and which sectors will be
involved."
Caterpillar Inc CAT.N fell 1% as Morgan Stanley downgraded
the heavy equipment maker to "underweight".
Advancing issues outnumbered decliners by a 3.32-to-1 ratio
on the NYSE and by a 4.24-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and no new
lows, while the Nasdaq recorded 46 new highs and six new lows.