NEW YORK ( TheStreet) -- Stocks rose Tuesday as investors looked to promising economic data from around the globe, including signs that China will avoid a hard landing.
The three major averages finished well off the session's highs, however, with the
Dow Jones Industrial Average
up 60 points, or 0.5%, at 12,482, after rising more than 150 points earlier in the day. The
closed up 5 points, or 0.4%, to 1,294 and the
gained 17 points, or 0.6%, to 2,728.
Chinese gross domestic product growth slowed to a rate of 8.9% in the fourth quarter, its slowest growth in 10 quarters, but better than the 8.7% expected by economists, according to a survey by Thomson Reuters. The Chinese statistics bureau also reported that industrial production increased 12.8% in December from a year earlier, a sign that China may yet avoid a hard landing provoked by declining demand from Europe.
Investors looked fondly on the prospect of monetary policy easing after growth slowed to its lowest level in more than two years in the world's second-largest economy. While better-than-expected, China's falling GDP growth led to speculation the government may have to loosen controls to maintain high levels of expansion through 2012.
Market participants noted that on the whole, market sentiment was turning positive despite a sweeping downgrade of nine European countries by ratings firm Standard & Poor's on Friday. "There's a much better mental feeling out there even though the downgrade will still create volatility in the near term," said Jeremy Hare, managing director of investments with Gilford Securities.
In the U.S., the Federal Reserve Bank of New York reported that manufacturing in the region rose to its highest level since April. The Empire State Manufacturing Survey improved to a reading of 13.5 in January from a revised 8.2 in December for a third-straight increase after hovering in negative territory June through October. Economists had expected the measure to rise to 10.5, according to
"The indicator was better than expected, which continues the recent trend of generally improving macroeconomic indicators," Dan Greenhaus, chief global strategist at BTIG, wrote in a note. "Perhaps most importantly, companies in the region remain more optimistic about the future. While this isn't a foolproof indicator, it is an important gauge of expectations and right now, there is a better tone to sentiment and data."
Two-thirds of components on the Dow rose with
United Tech Corp
leading the way. Closing at the bottom,
dropped 2.9% and
Bank of America
The long weekend seemed to help renew investor commitment to a new year rally. The S&P 500, which broke above the 1,300 mark on Tuesday for the first time in six months, posted its eighth day of gains in 10 trading days. Stocks fell Friday as investors anticipated Standard & Poor's downgrade announcement.
Amid Tuesday's promising economic data, Europe's problems persisted with Greek citizens meeting in the capital to protest European Union and International Monetary Fund interference in the country. The uprising comes officials meet in a race-against-the-clock meeting to pull together an agreement for a second bailout package before a bond payment comes due in late March.
Despite fears that Greece is moving closer to a disorderly default, European stocks posted gains. Germany's DAX closed 1.7% higher while London's FTSE climbed 0.6%. Japan's Nikkei Average settled 1.1% higher and Hong Kong's Hang Seng climbed 3.2%.
In corporate news,
(C - Get Report)
kicked off earnings reports this week with a big miss. The lender posted a fourth quarter profit of 38 cents a share on revenue of $17.2 billion, falling well short of the average estimate of 50 cents a share.
(WFC - Get Report)
, on the other hand, reported quarterly results a little better than forecast with earnings of 73 cents a share on revenue that climbed 20% from last quarter to $8.1 billion. Analysts expected
profits of 72 cents a share,
according to Zacks.com. Citigroup shares were down 8.1% to $28.25. Wells Fargo rose 0.7% to $29.81.
(CCL - Get Report)
cruise liner Costa Concordia ran aground off the coast of Italy Jan. 13, killing six people, while another 29 passengers remain missing. The ship began taking on water Friday when the vessel deviated from its programed course and struck a reef. The wreck may cost the cruise line-operator's insurers as much as $800 million, according to analysts at Numis Securities. Shares tumbled 13.7% to $29.60.
Carnival's insurers include
, based in Trieste, Italy, London-based
RSA Insurance Group
(SHLD - Get Report)
was gaining Tuesday amid rumors that the struggling retailer may be the target of a private equity bid. The company's chief executive officer Edward Lampert may seek to turn the company private as he continues to add shares to his personal holdings, Mary Ross-Gilbert, an analyst at Imperial Capital, told CNBC. Sears shares surged 9.5% to $36.75.
Royal Bank of Scotland
(RBS - Get Report)
said Tuesday it would sell its aircraft leasing division -- RBS Aviation Capital -- to Japan's
Sumitomo Mitsui Financial
for $7.3 billion. RBS Aviation owns 206 aircraft and has commitments to buy another 87 by 2015, commitments the Japanese company takes on with the purchase, according to
The Associated Press
. RBS jumped 1.9% to $7.50.
said it has received a revised non-binding proposal from
(VRX - Get Report)
and will consider the updated proposal. Valeant raised its offer to $7.50 a share in cash from $6.50 and has set a target price of $8.50 a share in cash. Valeant shares advanced 3.6% to $50.98, while Ista surged 13.1% to $8.22.
February oil futures rose $2.01 to $100.71 a barrel, while February gold futures settled $24.80 higher to $1655.60.
The dollar index was dropping 0.4%. The benchmark 10-year Treasury was falling 1/32, increasing the yield to1.862%.
-- Written by Chao Deng and Kaitlyn Kiernan in New York