US Markets

U.S. stocks kicked off the new year with strong gains, as better than expected economic data around the globe buoyed investor sentiment on the first U.S. trading day of 2012. The Dow Jones Industrial Average jumped 223 points, or 1.8%, to 12441, its highest level since late July. The blue-chip Dow was on pace for its third-biggest point gain to start a new year in its history. All but three of the Dow's 30 components traded higher. Bank of America, the Dow's biggest loser in 2011, was among the index's biggest advancers Tuesday, up 5%. McDonald's, the biggest blue-chip gainer last year, dropped 1.2%. The Standard & Poor's 500-stock index climbed 23 points, or 1.8%, to 1280, led higher by financial and material stocks. The technology oriented Nasdaq Composite advanced 48 points, or 1.9%, to 2654.

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Stocks got an additional boost Tuesday after a report showed the U.S. manufacturing sector continued to expand in December and did so more than analysts expected. The Federal Reserve also announced intentions to publish its interest-rate forecasts, beginning later this month, which is part of a communications revamp that is supposed to increase transparency. Fed officials will tell the public when they expect short-term interest rates to rise from near zero based on economic growth projections, unemployment and inflation, according to the minutes of the Fed's Dec. 13 policy meeting released Tuesday.

January is typically one of the strongest months of the year for stocks. In 60 of the past 83 years, the S&P 500 has closed the year in the same direction as it finished the month of January, according to S&P Indices. In corporate news, Chesapeake Energy advanced 4.4% after the company said it sold a minority stake in its Ohio shale discovery to a subsidiary of France's Total for $2.32 billion. 3M agreed to acquire Avery Dennison's office and consumer products business for $550 million, increasing the diversified manufacturer's presence in the sector. Shares of the blue-chip company rose 2.6%. Caterpillar locked out about 450 union workers at a locomotive plant in Canada starting late Sunday. The Dow component's stock gained 4.2%.

European Markets

European stocks ended higher Tuesday, with resource and pharmaceutical stocks leading the advance and U.K. markets playing catch-up to the previous day's rally in the rest of the region. The Stoxx Europe 600 index rose 1.6% to close at 251.06, adding to gains after Wall Street stocks opened sharply higher in their first trading day of the new year. Helping drive Europe higher, London's FTSE 100 index reopened after Monday's bank holiday and jumped 2.3% to settle at 5,699.91, making it one of the best performers in Europe. Resource stocks were among the top performers as crude and precious and base metals prices rose.

Heavily weighted Rio Tinto PLC and BHP Billiton PLC each gained more than 6%. Mining stocks and commodities are sensitive to signs of growth in China, and an official reading of China's purchasing-managers index released Sunday was stronger than analysts had expected. BP PLC rose 2.3%. The energy group has filed U.S. court documents asking contractor Halliburton Co. to pay all cleanup costs related to the 2010 Gulf of Mexico oil spill, media reports stated. BP declined to comment, and Halliburton couldn't be reached. Analysts at Societe Generale moved to overweight on pharmaceuticals from neutral. Stoxx 600 drug heavyweights Novartis AG and Roche Holding AG rose 1.3% and 1.7%, respectively.

The German DAX 30 index jumped 1.5% to finish at 6,166.57 on the heels of the previous day's 3% rally. Automobile stocks rose, with Daimler AG gaining 3.7%, BMW AG rising 4%, and Volkswagen AG adding 2.5%. Research firm R.L. Polk & Co. predicted a 6.7% rise in global sales of cars and light trucks in 2012, led by demand from China, according to Bloomberg News. The CAC 40 index underperformed, rising 0.7% to close at 3,245.40. Banks dragged on the index but trimmed losses by the closing bell. Societe Generale SA ended the day down 0.5%. The Spain IBEX 35 index erased earlier weakness to end up 0.1% at 8,732.40.

Asian Markets

Asia markets rallied Tuesday, with Hong Kong stocks jumping as an improvement in Chinese manufacturing activity helped sentiment. The Hang Seng Index rose 2.4% to 18,877.41 in Hong Kong, South Korea's Kospi jumped 2.7% to 1,875.41, and Taiwan's Taiex added 1.5% to 7,053.38. Japanese and mainland Chinese markets remained shut Tuesday. Resource sector stocks benefited across Asia as a weakened U.S. dollar pushed commodity prices higher. Zijin Mining Group Co. climbed 3.1% in Hong Kong on a rally in gold prices. Cnooc Ltd. climbed 4.1% as Nymex crude-oil prices topped $100 a barrel in electronic trading.

PetroChina Co. surged 4.5%, also getting a boost after Daiwa upgraded the stock to hold from underperform. Other mining and metals stocks also climbed sharply, with Korea Zinc Co. soaring 6% in Seoul and Jiangxi Copper Co. rising 3.2% in Hong Kong. South Korean shipbuilders jumped after suffering steep declines recently. Hyundai Mipo Dockyard Co. gained 3.7% and Daewoo Shipbuilding & Marine Engineering Co. surged 6.8%. Several financials also ranked among the day's gainers. Industrial & Commercial Bank of China Ltd. climbed 3% and China Life Insurance Co. added 4% in Hong Kong.

Commodities

Base metals closed higher on the London Metal Exchange Tuesday, marking a strong start to the 2012 trading year. At the close, flagship three-month copper was at $7,790 a metric ton, up 2.5% from the end of last week and its highest close in three weeks. Thinly traded tin gained the most, up 4.1% at $19,990/ton.

Crude-oil futures rose sharply Tuesday, lifted by a report indicating growth in China's manufacturing sector, a higher-than-expected increase in a gauge of U.S. manufacturing, and continued tensions between Iran and the West. Light, sweet crude for February delivery settled $4.13 higher at $102.96 a barrel on the New York Mercantile Exchange. Gold rose and silver surged nearly 6% Tuesday as investors saw a bargain in the rattled markets as the dollar sank and strength in global manufacturing activity pointed to steady demand.

The most actively traded gold contract, for February delivery, rose $33.70, or 2.2%, to settle at $1,600.50 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement price since Dec. 23.