U.S. stocks gained on Tuesday after Alcoa forecasted strong global demand for 2012 as well as optimism about growth in the U.S. economy.

Aluminum maker Alcoa reported its fourth-quarter earnings late Monday, kicking off a new earnings season. Report showed Alcoa lost 191 million U.S. dollars in the last three months of 2011, but its revenue increased 6 percent to 5.99 billion dollars, well above market expectations.

Alcoa CEO Klaus Kleinfeld predicted that global aluminum demand will increase 7 percent in 2012, boosting confidence as it is seen as a proxy for broader economic trends because many industries rely on the metal.

As for shares, commodities shares climbed on the news. Energy sectors jumped as crude oil settled about 102 dollars a barrel.

Also positive for stocks, rating agency Fitch on Tuesday warned that it may cut sovereign credit rating of Italy over deepening eurozone debt crisis.

However, it reiterated that it will keep the triple-A rating of France unchanged in 2012. The news pushed European markets broadly higher as a downgrade for France could scuttle the region's efforts to stem its debt crisis.

On the economic front, market sentiment for small businesses was boosted in December for the fourth consecutive month.

Meanwhile, the U.S. Commerce Department said wholesale inventories climbed 0.1 percent in November, short of previous expectation of 0.5 increase, indicating that the economy had not significantly improved.

The Dow Jones industrial average gained 69.78 points, or 0.56 percent, to 12,462.47. The Standard & Poor's 500 was up 11.38 points, or 0.89 percent, to 1,292.08.

The Nasdaq Composite Index rose 25.94 points, or 0.97 percent, to 2,702.50. As for other markets, the U.S. dollar fell against major currencies in late New York trading on Tuesday on rating agency's warnings and less-than-expected U.S. wholesale data.

The dollar index dipped 0.29 percent to 80.82 on Tuesday. Oil prices gained on Tuesday as optimism about robust global demand boosted sentiment.

Light, sweet crude for February delivery rose 93 cents, or 0.92 percent to settle at 102.24 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for February delivery also went up and last traded at about 113 dollars a barrel.