Stocks rise on hopes for earnings, Europe

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

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

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. Aluminum demand is seen as a proxy for broader economic trends because so many industries rely on the metal.