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A round of relatively encouraging economic data from around the world sent stock-index futures soaring as traders shrugged off Standard & Poor's sovereign ratings cuts.
As of 8:38 a.m. ET, Dow Jones Industrial Average futures rallied 95 points to 12484, S&P 500 futures jumped 9.8 points to 1299 and Nasdaq 100 futures gained 21.3 points to 2395.
Market participants were greeted on Tuesday morning with reports suggesting three major global economies may be faring better than many economists expected.
China's economy expanded at a pace of 8.9% in the fourth quarter over the year prior, topping forecasts of 8.7%. Still, the world's second-biggest economy only grew at 2% from a quarter earlier in the latest sign the rate of growth is slowing down at a rapid pace. The data, however, suggest that China's economy is slowing down more gradually than some had feared, potentially tempering its shock to the global economy.
Analyst and investor sentiment in Germany also soared by the widest margin on record in January, according to the Zew think tank, which began reporting its estimates in 1991. This report was taken by markets as a positive sign, showing sentiment is brightening in Europe's biggest economy despite the economic and debt malaise hitting Europe.
Also setting a positive tone were data showing inflation in Great Britain cooled down significantly in December from November. Falling inflation comes as "good news in that it allows central banks to be more accommodative in the future," said Louise Cooper, a senior financial analyst at BGC Capital in an interview with FOX Business.
On the U.S. front, manufacturing in the New York region expanded more quickly than expected in January. The New York Federal Reserve's gauge of manufacturing rose to 13.5 in January from 8.2 in December, topping forecasts of a reading of 11. The more closely-tracked report from the Philadelphia Fed is on tap for Thursday.
These reports come after moves from Standard & Poor's to cut the credit ratings of nine eurozone countries, including France, which lost its coveted triple-A rating. The company also slashed its rating on the European Financial Stability Fund, which is the currency bloc's bailout fund. Both actions came when U.S. markets were closed, meaning Tuesday is the first chance markets had to respond to it.
The euro jumped 0.86% to $1.2776, while the U.S. dollar fell 0.76% against a basket of six world currencies.
Traders were mulling fourth-quarter earnings from several major financial institutions. Citigroup (NYSE:C) missed Wall Street's expectations on the top and bottom lines. The banking giant said it earned 38 cents per share, less than the 43 cents in earned in the same period in 2010, and weaker than the 49 cents analysts had been expecting. Sales came in at $17.2 billion, also shy of estimates of $18.5 billion.
Wells Fargo (NYSE:WFC), on the contrary, reported profit and revenue that came in ahead of estimates. The bank earned 73 cents a share on $20.6 billion in revenue. Analysts projected the company to earn 72 cents on $20.1 billion.
JPMorgan Chase (NYSE:JPM), America's biggest bank by assets, kicked off bank earnings season last week by reporting profits that were in-line with estimates, but revenue that came in slightly below forecasts.
Commodities markets were sharply higher, helped by a weaker dollar and relatively upbeat economic news from China.
The benchmark crude oil contract traded in New York jumped $2.01, or 2%, to $100.71 a barrel. Wholesale RBOB gasoline soared 2.3% to $2.797 a gallon.
In metals, gold climbed $20.30, or 1.3%, to $1,651 a troy ounce.
European blue chips jumped 1.5%, the English FTSE 100 rose 0.75% to 5,700 and the German DAX tacked on 1.8% to 6,331.
In Asia, the Japanese Nikkei 225 rallied 1.1% to 8,466 and the Chinese Hang Seng surged 3.2% to 19,628.