Markets rally on positive reports

Markets jumped on Tuesday, with the S&P 500 rising 3.0 percent and oil gaining 3.6 percent.

Markets were buoyed by positive news around the world.

In the US, housing starts increased 9.3 percent in November to the highest rate since April 2010.

Europe also provided good news for a change.

In Germany, Ifo’s business climate index rose for a second month to 107.2 in December from 106.6 in November, its biggest rise since February. Meanwhile, GfK reported that German consumer confidence for January was unchanged from the previous month.

UK consumer confidence has been weak recently. Nationwide reported that its consumer confidence index rose to 40 in November from 36 in October but remained at its second-lowest reading in the survey's seven-year history. GfK NOP's consumer confidence index fell to -33 in December from -31 in November, its lowest reading since February 2009.

However, despite the weak consumer sentiment, UK retail sales rose in December, the CBI distributive trades survey's reported sales balance jumping to +9, the highest since May, from -19 in November.

In European financial markets, there was relief as Spain exceeded its debt sale target on Tuesday and sold bills at lower yields than in the previous auction.

Also adding to the positive news flow for markets was a cut in interest rate by Sweden's central bank. The Riksbank lowered its seven-day repo rate 25 basis points to 1.75 percent.