Summary Box: Stocks up on first day of 2012

AP News
Posted: Jan 03, 2012 4:46 PM
Summary Box: Stocks up on first day of 2012

BIG GAINS ON FIRST DAY: Stocks rose sharply in the first trading of 2012 after investors returned from the holiday and found encouraging economic reports from the United States and around the world. The Dow closed up 179.82 points.

ECONOMIC NUMBERS: Manufacturing expanded in December at the fastest rate in six months. Germany reported that the average number of people unemployed last year was the lowest in two decades.

JANUARY EFFECT: The market could be getting an extra boost from what's known as the January effect: Investors sell stocks at the end of the year to lock in losses for tax purposes, then come back in January and reinvest their money in stocks. January is also fairly good predictor of the year to come. Only seven times since 1950 has January turned out to be totally wrong in predicting the year to come.