Investors scooped up the euro and global stocks on Tuesday as better-than-expected economic data in the United States, Europe and China whetted risk appetite, while tensions in the Middle East between Iran and the United States boosted oil prices.
The pace of growth in the U.S. manufacturing sector accelerated in December, its best month since June, as U.S. construction spending surged to a near 1-1/2 year high in November. and
"That we continue to make progress toward a full recovery is more important than any specific data," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "People are very optimistic that 2012 will prove to be a big year for the recovery and the stock market."
Global stocks, as measured by the MSCI world equity index , were up 1.97 percent after ending 2011 down 9.2 percent.
Key U.S. indexes also advanced shortly after opening, accelerating gains after the U.S. data. The Dow Jones industrial average climbed 2.01 percent as the Nasdaq Composite Index added 2.29 percent and the Standard & Poor's 500 Index gained 2.09 percent.
The euro jumped 1 percent against the U.S. dollar to $1.3059. The single currency has struggled as the region's ongoing sovereign debt crisis stokes worries that the monetary union could slip into recession.
The U.S. figures followed data released earlier in the day that showed German unemployment fell more than expected in December, with the jobless rate falling to the lowest level since the unification of Germany two decades ago.
Chinese premier Wen Jiabao also said the country will fine-tune monetary policy in 2012, suggesting the government will move to support growth in the world's second-biggest economy.
Data earlier showed that China's big manufacturers narrowly avoided a contraction in December, but downward risks persist.
ICE Brent crude futures climbed 3.71 percent to $111.36 a barrel on the first day of trading for 2012. U.S. crude futures were up 3.79 percent to $102.58 a barrel.
Military exercises in the Gulf by Iran and the movement of U.S. naval vessels in the area has raised fears of a confrontation between Tehran and Washington that could cut off oil exports from the region.
Iran has said it could shut the Strait of Hormuz, through which 40 percent of world oil is shipped, if sanctions were to be imposed on its crude exports.
