Tuesday, January 3, 2012

Stocks up on data, US Fed

Stocks started the year with a sharp rally Tuesday, boosted by better-than-expected US and European data and hopes the Fed could ease monetary policy further, even as crude surged on tensions between the United States and Iran.

US stock indexes rallied sharply, hitting multi-month highs.

The Dow Jones industrial average climbed as much as 2.15 percent, hitting its highest since July, before paring gains to close up 1.47 percent. The Nasdaq Composite Index added 1.67 percent. The Standard & Poor's 500 Index gained 1.55 percent after having notched its highest intraday level since late October.

European stocks ended at a five-month closing high after strong manufacturing data from the United States and China boosted investor confidence and helped shift attention away from the euro zone.

The FTSEurofirst 300 index of top European shares rose 1.6 percent to 1,028.00 points, its highest close since early August, on volume that was two thirds of the 90-day average.

Japan's leading share average ended higher but marked a 17% loss for 2011, a tumultuous year in which massive natural disasters triggered a nuclear crisis and Europe's debt turmoil drained volumes, leaving investors uncertain of a turnaround next year.

The Nikkei edged up 0.7% to 8,455.35 on the back of a recent run of positive economic data out of the United States, although it failed to top its closely watched 25-day moving average near 8,479. The broader Topix added 0.9% to 728.61.