WASHINGTON — United States stocks started 2012 on a positive note as the Dow, Nasdaq and S&P 500 indexes shot up 1.4 percent each on the first trading day of the new year, the Associated Press reported.
The jump comes after manufacturers reported higher than expected demand for manufactured goods in the US, Asia, and Australia. Even US banks, which have been battered by penalties and the worldwide economic downturn, added value. Caterpillar Inc., the American construction equipment manufacturer that is seen as an indicator of global economic health, was up over 4 percent, Bloomberg reported. According to Reuters, the US Commerce Department said Tuesday that construction spending in November was at its highest level in nearly a year-and-a-half.
Energy companies such as ExxonMobil and ConocoPhillips also added value as the price of oil rose in response to threats by Iran to close the Strait of Hormuz. At 2:33 PM EST, the price of oil was up over 4 percent on the day at $102.85 per barrel.
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Markets in Europe and Asia were also up at midday in the US, with London’s FTSE and Hong Kong’s Hang Seng indexes posting the strongest gains at over two percent each.
While today’s gains are better than expected, projections for the year are still dim. Bloomberg reported that its average of global economic forecasters indicates that research firms still expect high levels of government debt and deficit reduction will stifle worldwide growth. But that doesn't mean stocks will have a weak year like they did in 2011 - CNN Money reported that its survey of researchers pegs the S&P 500 up 7 percent by the end of 2012.
The New York Times reported that Joseph Saluzzi, co-head of trading at Themis Trading, doesn't see much to be optimistic about in today's news. "Nothing is really going to change until you start to see some real hard economic numbers that show growth. We’ve seen these sort of inklings before and they haven’t led to much in the past,” he said, according to the Times.