6 Stocks Driving the Economy in 2012

NEW YORK (TheStreet) -- Signs of an improving U.S. economy and that the worst has passed for Europe are allowing the most economically sensitive stocks to spread their wings again.

The Morgan Stanley Cyclical Index -- made up of companies whose fortunes are deeply tied to the state of the economy -- has soared 11% this year, led by companies such as Alcoa (AA) and Sears Holdings (SHLD). Furthermore, the S&P 500 has risen 4% so far this year after closing almost unchanged in 2011. All this, as corporate prospects begin to improve in the eyes of the investor, and companies show the results of the critical reforms they implemented while waiting out a period of tepid operating conditions.

As 2012 unfolds, many of the stocks most sensitive to economic changes are already beginning to take off again, shrugging off the more negative headlines on the economy and moving forward on constructive plans for growth.

Here are six economically sensitive stocks from the Morgan Stanley Cyclical Index that are showing the most gains so far in 2012.

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