Startling analysts, U.S. stocks soared today, the first day of trading for 2012, with the Dow jumping 180 points and the S&P 500 up 1.5 percent. The U.S. rally was joined by big gains in European and Asian stocks, leading to a range of theories about the New Year surge given Europe's persistent debt woes. Here's what analysts are saying: 

This is about manufacturing growth Julie Creswell at The New York Times reports that "some analysts" attributed the rise to a manufacturing report by the Institute for Supply Management. The report said "its manufacturing index rose to 53.9 points in December from 52.7 in November. Readings above 50 indicate expansion." Speaking with Bloomberg, Kevin Shacknofsky of Alpine Mutual Funds agreed. “The U.S. market has been cheering because of the fact the U.S. economy has been performing better,” he said. “In line with everything else today, the manufacturing data is better than expected.”

It's about beating (low) expectations  Chip Cobb, senior vice president at Bryn Mawr Trust Asset Management, senior vice president at Bryn Mawr Trust Asset Management, tells The Wall Street Journal, "The bar on all these numbers has been set so low, but we're continuing on a positive trend." He adds "Whether it's the manufacturing report, or the housing and employment data over the last several weeks, they're all heading in the right direction. They're just not heading at the pace that we want them to go. But they're beating low expectations."

A lack of bad news from Europe  Dan Greenhaus, chief global strategist at BTIG, tells MarketWatch that "most importantly, the lack of any headlines related to the European situation that is allowing people to focus on the economic data, at least for today."
 
Economic Data in Germany and Asia Analysts speaking to the Wall Street Journal cite the optimistic mood beginning in Europe and Asia driven by a slew of new economic reports. "The number of jobless in Germany, reported Tuesday, dropped by a more-than-expected 22,000 in December for an unemployment rate of 6.8%. On Monday, European markets rallied after data showing that manufacturing activity in December contracted at a slower rate in both the euro zone and Germany. Gains were held in check, however, on Spain's warning on Monday over the size of its deficit." On top of that, "Asian bourses also climbed, after data over the weekend showed that manufacturing activity in China returned to expansion in December, after contracting in November. Markets remained closed in Shanghai and Japan, but Hong Kong's Hang Seng Index surged 2.4% and South Korea's Kospi Composite ran up 2.7%."
 
It's cyclical Sal Catrini, a managing director for equities at Cantor Fitzgerald & Co, tells Reuters that New Year's fever generally has a warming effect on the markets. "The beginning of the year tends to start out positive as people want to put money to work." Dan Greenhaus, chief global strategist at BTIG, gives MarketWatch a similar assessment.“It’s a new year, and you can make the case people came in with a level of enthusiasm or optimism that might be guiding investment decisions."