Optimism about earnings help stocks end sharply higher

By msnbc.com staff and news services

Stocks closed higher Tuesday amid optimism sparked by a strong start to earnings season.

According to preliminary calculations, the Dow rose  69.40 points, or 0.56 percent, to 12,462.09. The Standard & Poor's 500 closed  11.35 higher, or 0.89 percent, to 1,292.05. The Nasdaq ended up 25.94, or 0.97 percent, to 2,702.50.

The Dow and S&P 500 hit their highest intraday levels in five months.

The market was bolstered by recent economic reports and optimism about the U.S. earnings season, although Wall Street's enthusiasm was tempered by upcoming debt auctions this week by Italy and Spain, two countries at the center of the euro zone crisis.

"The general economy, outside of the financial market, seems to be doing well, and there is a broader consensus from retailers (retail investors) that they have nothing to fear," said Sean Darby, global head of equity strategy at Jefferies Group.

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Trade news Tuesday showed strong Chinese demand for metals and a bullish forecast by aluminum company Alcoa pointed to a stronger global economy.

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Also, European markets soared after Fitch Ratings said it will not downgrade France's debt this year. A downgrade for France could scuttle the region's financial rescue efforts. A European bailout fund depends on the sterling credit ratings of France and Germany to borrow at cheap rates. Benchmark indexes in France and Germany gained more than 2 percent.

Reuters and Associated Press contributed to this report.