US stocks take leap forward on first biz day of new year

NEW YORK (AP) — The stock market got a big jump on beating last year's flat performance.

Stocks rose sharply today in the first trading of 2012 as investors returning from the holiday were encouraged by positive economic reports from the United States and around the world.

The Dow Jones industrial average rose more than 260 points in morning trading before sliding back at midday. At 12:15 p.m. EST, the Dow was up 214 points, or 1.7 percent, at 12,430.

The market could be getting an extra boost this year from what is traditionally called the January effect: Investors sell stocks at the end of the year to lock in losses for tax purposes, then come back in January and buy stocks to reinvest.

The effect could be more pronounced this year because the stock market was so volatile in 2011 and more investors were forced to take losses, said Sam Stovall, chief equity strategist at Standard & Poor's Capital IQ.

Those investors are back hunting for bargains.