A currency trader stretches in front of the Korea Composite Stock Price Index (Kospi), left, and the exchange rate between the U.S. dollar and South Korean won at the Korea Exchange Bank headquarters in Seoul, South Korea, Tuesday, Jan. 10, 2012. Asian stocks rose Tuesday, tracking slight gains on Wall Street and assisted by an absence of bad financial news. South Korea's Kospi rose 1.46 percent, or 26.73 points, to close at 1,853.22. (AP Photo/Ahn Young-joon)
A currency trader stretches in front of the Korea Composite Stock Price Index (Kospi), left, and the exchange rate between the U.S. dollar and South Korean won at the Korea Exchange Bank headquarters in Seoul, South Korea, Tuesday, Jan. 10, 2012. Asian stocks rose Tuesday, tracking slight gains on Wall Street and assisted by an absence of bad financial news. South Korea's Kospi rose 1.46 percent, or 26.73 points, to close at 1,853.22. (AP Photo/Ahn Young-joon)
Currency traders work under an electronic monitor screen showing the U.S. dollar currency rate against the Japanese yen, top, and Japan's benchmark Nikkei 225 index at a foreign exchange dealing room in Tokyo Tuesday, Jan. 10, 2012, after a three-day holiday weekend. Asian stocks plodded higher Tuesday, tracking slight gains on Wall Street and assisted by an absence of bad financial news. (AP Photo/Koji Sasahara)
A currency trader works in front of the Korea Composite Stock Price Index (Kospi), left, and the exchange rate between the U.S. dollar and South Korean won at the Korea Exchange Bank headquarters in Seoul, South Korea, Tuesday, Jan. 10, 2012. Asian stocks rose Tuesday, tracking slight gains on Wall Street and assisted by an absence of bad financial news. South Korea's Kospi rose 1.46 percent, or 26.73 points, to close at 1,853.22. (AP Photo/Ahn Young-joon)
PARIS (AP) ? Stock markets rose strongly Tuesday as investors hoped for strong corporate earnings from the U.S. and looked to a new round of talks in Berlin for progress in solving Europe's debt crisis.
The U.S. economy has shown new signs of strength recently, and investors are hoping that will boost corporate earnings results due to be announced in coming weeks. In particular, signs that the U.S. labor market is improving has raised the possibility of a recovery in American consumer spending, one of the main motors of global economic growth.
In Europe, Britain's FTSE 100 index of leading shares was up 1.4 percent at 5,693 while Germany's DAX rose 2.3 percent to 6,153. France's CAC-40 was 2.3 percent higher at 3,201. Italy's main market outperformed its peers, trading 3 percent higher as the country's biggest bank UniCredit recouped some lost ground.
The euro was also fairly well-supported, especially in comparison to last week, trading up around the $1.28 mark. On Monday it had fallen to a 16-month low of $1.2676.
In the U.S., the Dow Jones industrial average opened strongly, trading 0.7 percent higher at 12,482 while the broader Standard & Poor's 500 futures rose 0.9 percent to 1,292.
Over the coming days, attention is shifting to the U.S. corporate earnings results season, which kicked off, as is traditional, with numbers from aluminum producer Alcoa Inc. The statement encouraged investors as revenues topped expectations and the company suggested the global economy was improving.
There was less good corporate news in Europe, where Dutch electronics giant Royal Philips Electronics NV warned that its fourth quarter profits were worse than expected due to a weak European market that made it difficult to charge customers as much as it wanted to for light bulbs. Philips shares fell 6 percent to euro14.715 in early trading in Amsterdam.
Despite the resilience in markets, sentiment remains fragile in light of ongoing worries in Europe ahead of a meeting later between the International Monetary Fund's head Christine Lagarde is due to meet German Chancellor Angela Merkel later this evening. Debt-crippled Greece is expected to be a major point of the discussions.
Neil MacKinnon, global macro strategist at VTB Capital, said "uncertainties" over the European debt crisis as policymakers struggle to come up with "credible policy moves" will continue to weigh on sentiment.
Fitch Ratings warned that a number of euro countries, including Italy, could see their credit ratings downgraded by the end of this month as they struggle to cope with too much debt and slowing economic growth.
Its head of sovereign ratings David Riley said the agency will give its verdict on several countries by the end of January. Fitch currently has Italy, Spain, Belgium, Ireland, Slovenia and Cyprus on so-called "ratings watch negative."
Much interest in the markets centers on Italy, which Riley says is the "front line" of Europe's debt crisis.
Meanwhile, the Bank of Portugal said it expects the bailed-out country's recession to deepen this year under the weight of austerity measures meant to reduce public debt. Portugal went into a double-dip recession last year and the jobless rate has climbed to a record 13.2 percent.
Further signs of stress emerged with figures showing that the amount of overnight deposits that the region's banks held with the European Central Bank swelled to euro481.9 billion ($613 billion) on Monday, breaking the record euro463.56 billion set only a day before.
The high deposits mean banks are keeping spare cash in a safe place even though they earn low interest. They also reflect large amounts of cash put into the banking system from ECB emergency loans of euro489 billion taken up by more than 500 banks in late December.
Earlier in Asia, Japan's Nikkei 225 index reopened after a three-day holiday weekend, added 0.4 percent to close at 8,422.26. Hong Kong's Hang Seng index rose 0.7 percent to 19,004.28 while South Korea's Kospi jumped 1.5 percent to 1,853.22.
Oil prices tracked equities higher with benchmark crude for February delivery up $1.44 at $102.75 a barrel in electronic trading on the New York Mercantile Exchange.
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Pamela Sampson in Bangkok contributed to this report.
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