Markets soar on EU rally, sunny aluminum forecast

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

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

Europe’s bailout fund needs France and Germany to keep their sterling credit ratings so it can borrow at affordable rates.

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. Stronger aluminum demand often signals broader economic growth. A wide range of industries need aluminum to make their products.

Many analysts had feared weaker corporate profits in the fourth quarter because of Europe’s deepening economic troubles and slower growth in the developing world.

The S&P 500 index rose 11.38 points, or 0.9 percent, to 1,292.08. All 10 of its industry groups rose. Among the biggest gainers were materials companies such as Alcoa, which benefit from rising commodities prices.

The Dow Jones industrial average rose 69.78 points, or 0.6 percent, to 12,462.47. The Nasdaq composite index gained 25.94, or 1 percent, to 2,702.50.

Ford unveils new sedan in effort to revive Lincoln

Lincoln was once the pinnacle of luxury. Continental limousines carried presidents from Franklin D. Roosevelt to Ronald Reagan. Town Cars ferried executives through Manhattan. Athletes and rappers cruised around in Navigator SUVs.

But over the last two decades, the Lincoln lineup grew stale as Ford transformed its other cars and trucks. Now it’s finally Lincoln’s turn for an update, one that aims to show customers the brand can make more than hearses and airport limos.

On Tuesday, Ford pulled the wraps off an MKZ sedan that is close to the model that will go on sale this fall. Among its features is an all-glass roof that opens automatically and slides over the back window, giving all passengers a convertible-like ride.

Reports: Deutsche Boerse, NYSE merger will be blocked

European regulators will push to block the planned $10 billion merger of the New York Stock Exchange and its German counterpart, two people close to the merger said Tuesday.

Antitrust regulators fear that the combined company would unfairly dominate trading of financial tools called derivatives in Europe, one of the people said.

The European Union’s competition commissioner, Joaquin Almunia, will recommend blocking the deal, between NYSE Euronext and Deutsche Boerse, at a meeting with fellow commissioners Feb. 1, this person said.

The second person said it appeared the European Commission, the EU’s executive arm, was “working toward a prohibition.” Both people spoke on condition of anonymity because the process is confidential.