The U.S. stocks rallied on Tuesday, the first trading day of 2012, as investors welcomed a batch of upbeat economic data.

The Dow Jones industrial average gained 179.82 points, or 1.47 percent, to 12,397.38. The Standard & Poor's 500 was up 19.46 points, or 1.55 percent, to 1,277.06. The Nasdaq Composite Index rose 43.57 points, or 1.67 percent, to 2,648.72.

With no more bad news coming from Europe, investors finally focused on the latest batch of data, showing the economic recovery was picking up speed in the world's largest economy.

According to the U.S. Commerce Department, construction spending increased 1.2 percent in Nov. and reached the highest level since June 2010.

Meanwhile, the Institute for Supply Management said that the U. S. manufacturing sector expanded at a swifter pace. The ISM PMI rose to 53.9 in Dec. from 52.7 in November, topping estimates of 53.2.

Adding to the cheer, data from China and India showed their manufacturing sectors were improving in the last month of 2011, easing concerns for a prominent economic slowdown in major developing countries.