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Some investors were disappointed that the company did not raise its full-year forecast by a wider margin.

"The concern is they didn't really guide a whole lot higher than they had originally for the year, if you take into account the earnings surprise," said Fort Pitt Capital Group senior analyst Kim Caughey Forrest. "That's a little disappointing."

IBM shares were little changed, dropping to $165.36 from their New York Stock Exchange close of $165.40.

The world's largest technology services firm managed to beat expectations for the first quarter, even though it does about 11 percent of its business in crisis-stricken Japan.

That was partially because of strong performance in the red-hot markets of Brazil, Russia, India and China, where revenue was up a combined 26 percent from a year earlier.

"These numbers show IBM's resiliency. They beat on just about every area I had hoped," said Ted Parrish, co-portfolio manager of the Henssler Equity Fund.

International Business Machines Corp raised its forecast for full-year profit, excluding items, to at least $13.15 from its previous view of at least $13.00.

IBM benefited from strong demand for the latest version of its mainframe computer, which it introduced in the third quarter of last year. Sales of that product were up 41 percent from a year earlier.

The company also reported first-quarter profit, excluding items, of $2.41 per share, ahead of the average analyst forecast of $2.30, according to Thomson Reuters I/B/E/S.

Revenue rose 8 percent from a year earlier to $24.6 billion, beating the average analyst forecast of $24.0 billion.

(Additional reporting by Yinka Adegoke. Reporting by Jim Finkle, editing by Bernard Orr)

Goldman Sachs Group Inc (GS.N), the largest U.S. investment bank, rose 1.1 percent to $155.50 after posting stronger-than-expected quarterly profit, earning more money from bond trading than analysts had forecast.

Healthcare company Johnson & Johnson (JNJ.N), up 3 percent to $62.30, was the top boost to the Dow after reporting stronger-than-expected sales and earnings, helped by the weaker dollar and higher sales of prescription drugs.

"It is kind of nice to see a couple of big headline companies come in with positive surprises after a string of headline companies delivering negative surprises over the last week," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.

"Investors really are going to be focusing on earnings and trying to get a read on guidance -- guidance is going to be the name of the game right now."

The Dow Jones industrial average .DJI gained 45.26 points, or 0.37 percent, to 12,246.85. The Standard & Poor's 500 Index .SPX rose 4.41 points, or 0.34 percent, to 1,309.55. The Nasdaq Composite Index .IXIC climbed 9.73 points, or 0.36 percent, to 2,745.11.

Companies also scheduled to report quarterly results later on Tuesday include Intel Corp (INTC.O), International Business Machines Corp (IBM.N), Yahoo Inc (YHOO.O) and CSX Corp (CSX.N).

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

The results were stronger than many analysts had expected, but with Goldman sounding cautious notes about its future profits, the bank's shares were little changed.

The largest U.S. investment bank posted a 7 percent decline in revenue; revenue from customer trading, a key source of income, fell 22 percent.

Goldman faces serious pressure from regulatory reform in many of its main businesses. U.S. financial reform laws limit banks' ability to trade for their own account, which is expected to cut into Goldman's trading profit. Regulatory pressure to move many types of derivative trading to exchanges also threatens future earnings.

When the bank posted a 53 percent decline in fourth-quarter profit and talked about how client trading volume in December was "dead," many investors feared it would have real trouble boosting future profits.

On Tuesday, the bank said trading revenue in the first quarter had rebounded 83 percent from the fourth quarter. But on a conference call with investors and analysts, it noted the hurdles it faces in the future.

Goldman's clients are still cautious, given the economic and regulatory environment, and the bank still sees the climate as uncertain, Chief Financial Officer David Viniar said.

The bank posted a profit to common shareholders of $908 million, or $1.56 a share. Analysts' average forecast was 82 cents a share, according to Thomson Reuters I/B/E/S.

Goldman repurchased $5 billion of preferred shares from Warren Buffett's Berkshire Hathaway in the quarter, resulting in a one-time charge of $1.64 billion.

Excluding the preferred share buyback, the bank would have earned $4.38 a share.

A year earlier, it posted earning of $3.3 billion, or $5.59 a share.

Revenue from fixed income, currency and commodities was down 28 percent. Last year's trading results were unusually strong.

Goldman set aside $5.23 billion for employee compensation in the quarter, a 5 percent decline from a year earlier.

The bank's shares were down 39 cents to $153.39 in morning trading on the New York Stock Exchange.

(Reporting by Lauren Tara LaCapra and Dan Wilchins; Additional reporting by Angela Moon; editing by John Wallace)