Markets rise on better euro, China news

Slight improvements in Europe's troubled debt markets and China's economy were enough to lift stocks Tuesday. The Dow Jones industrial average rose by as much as 151 points in the morning before fading to a 60-point gain at the close.

Debt auctions by Spain, Greece and Europe's bailout fund drew solid interest from investors, easing fears that recent credit-rating downgrades would prevent them from obtaining funds. The downgrades had threatened to increase borrowing costs and intensify the region's debt crisis.

"The economic data broadly exceeded expectations," Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Va., said. "That's why we had an immediate lift to the market."

The Chinese government said earlier that its economy slowed less dramatically in the fourth quarter than analysts had expected.

There's so much money sitting in short-term accounts and earning zero return that even a shred of good news can jolt the market higher, said David Kelly, chief market strategist with J.P. Morgan Funds.

The Dow rose 60.01 points, or 0.48 percent, to close at 12,482.07. It was the Dow's highest close since July 26, before the European debt crisis set off months of wrenching volatility. The Dow is up 264 points in the first 10 days of the year, the best start to a year since 2003.

The Standard & Poor's 500 index gained 4.58 points, or 0.36 percent, to 1,293.67. The S&P 500 had risen earlier to 1,303.02; it hasn't traded above 1,300 since Aug. 1. The Nasdaq composite index added 17.41 points, or 0.64 percent, to 2,728.08.