US STOCKS-Wall St rallies on China stimulus, cautious earnings optimism
* Hasbro reports surprise revenue rise, shares jump
* Royal Caribbean falls as strong dollar hurts onboard spending
* IBM to report after the bell
* Indexes up: Dow 1.2 pct, S&P 0.93 pct, Nasdaq 1.15 pct (Updates to afternoon)
By Noel Randewich
April 20 (Reuters) - U.S. stocks rose on Monday, reversing much of the previous session's sharp decline, as China's steps to stimulate its slowing economy and cautious optimism about U.S. earnings lured investors into equities.
In the second industry-wide cut in two months, China's central bank on Sunday reduced the amount of cash that banks must hold as reserves in a move to help spur bank lending and combat slowing growth.
"China was part of a two-pronged news event that caused part of the selloff on Friday. The move over the weekend changed that perspective and caused a little bit of a boost today," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin.
Morgan Stanley shares rose 1.08 percent to $37.15 after the Wall Street investment bank reported a 60 percent rise in quarterly profit and boosted its dividend. Continuación...