Stocks eased off their highs in the final minutes of trading, but still finished the first trading day of 2012 with a bang, as Wall Street cheered a handful of better-than-expected economic reports from around the world.
The Dow Jones Industrial Average jumped 179.82 points, or 1.47 percent, to finish at 12,397.38, led by Alcoa and JPMorgan . McDonald's was the biggest laggard on the blue-chip index.
The S&P 500 rallied 19.46 points, or 1.55 percent, to end at 1,277.06. The Nasdaq added 43.57 points, or 1.67 percent, to close at 2,648.72.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, finished below 23.
Most S&P sectors ended firmly in the black, led by financials,while utilities dragged.
“Market’s feeling euphoric and focusing on the positives—we’ve had better news out of Asia and Europe,” said Kenny Polcari, managing director of ICAP Equities. “I think the euphoria stays until Jan. 9 when Sarkozy and Merkel meet [in Berlin]…and barring an implosion in Europe, we may see a bit of a rally.”
Worries over the European debt crisis, which dictated the wild market swings for most of the year, are expected to continue.
French President Nicolas Sarkozy, German Chancellor Angela Merkel and British Prime Minister David Cameron all warned of a difficult year aheadin their New Year messages to their respective nations.
“Volume isn’t telling us much today,” said Joe Saluzzi, co-manager of trading at Themis Trading. “I expect pain to the upside and pain to the downside…it’s a maximum frustration market again and there will be more days when stocks gap up and down 200 points.”
On the economic front, growth in the U.S. manufacturing sector accelerated in December, according to the Institute for Supply Management. And construction spending increased to its highest level since June 2010, according to the Commerce Department.
January has typically been one of the strongest months for equities. And according to market statistics, on days where the first trading day of the year ends higher, the full-year closes in positive territory almost 70 percent of the time.