Jan. 10, 2012 at 1:00 PM ET
By msnbc.com staff and news services
Stocks were trading off their session highs in early afternoon Tuesday, but were still buoyed in part by news that France’s credit rating wouldn’t be downgraded and a promising opening to earnings season.
As 1 p.m. approached on Wall Street, the Dow Jones industrial average was up 0.52 percent (chart). The S&P 500 rose 0.79 percent and the Nasdaq was 0.79 higher.
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.
Alcoa's fourth-quarter revenue exceeded analysts' expectations, raising traders' hopes for strong earnings announcements in the coming weeks. CEO Klaus Kleinfeld predicted late Monday that global aluminum demand will increase 7 percent in 2012. Alcoa's quarterly report marks the unofficial start of U.S. corporate earnings season.
The gains were spread across all 10 industry groups in the S&P 500. All but three of the 30 stocks in the Dow increased.
The U.S. economy appeared to strengthen in recent weeks. A series of positive reports on hiring, manufacturing and consumer sentiment eased fears that Europe will drag the U.S. into another recession.
Traders hope the brighter outlook will boost corporate earnings results, which are due to be announced over the next few weeks. As the job market improves and consumers grow more willing to spend, companies might enjoy stronger consumer demand. Household spending is a crucial motor of economic growth.
The Associated Press contributed to this report.