Stocks close higher on hopes for Europe

January 11, 2012 at 12:00a.m.

Photo by: Associated Press

Specialist Christopher Gildea works on the floor of the New York Stock Exchange on Tuesday. U.S. stocks traded solidly higher Tuesday after European markets rallied and corporate bellwether Alcoa predicted stronger demand in 2012.

Associated Press

U.S. stocks rose solidly Tuesday after European markets rallied and corporate bellwether Alcoa predicted stronger demand in 2012. The Standard & Poor’s 500 index closed at its highest level since July.

European markets soared after Fitch Ratings said that it will not downgrade France’s credit rating this year. France’s CAC-40 index closed 2.7 percent higher, and Germany’s DAX rose 2.4 percent.

A downgrade for France could scuttle the region’s efforts to stem its debt crisis. Europe’s bailout fund needs France and Germany to keep their sterling credit ratings so it can borrow at affordable rates.

Kicking off U.S. corporate earnings season, aluminum maker Alcoa said late Monday that its fourth-quarter revenue far outpaced analysts’ projections. CEO Klaus Kleinfeld predicted that global aluminum demand will increase 7 percent in 2012.