(Reuters) - Wall Street stocks kicked off 2012 with a rally on Tuesday after construction and factory data signaled the U.S. economic recovery was gaining steam.

Indexes held on to gains after minutes from last month's Federal Reserve meeting said a number of Fed officials believed economic conditions could well warrant a further easing of monetary policy.

Traders, with cash on hand for the new year, were also encouraged by data from China and Germany suggesting improvement in those economies.

Data showed U.S. manufacturing sector growth accelerated in December, its best month since June, while a rise in new orders suggested the economy gained momentum in the year end. Separately, construction spending in November surged to the highest in nearly 18 months.

There's more and more evidence the U.S. economy is doing OK, said Giri Cherukuri, head trader at OakBrook Investments in Lisle, Illinois.

There were some good economic numbers from outside the U.S., and people have cash to invest for the new year so that's driving up prices, he said. It's a good start but we'll have to wait and see for the trend.

The Dow Jones industrial average .DJI added 215.28 points, or 1.76 percent, at 12,432.84. The Standard & Poor's 500 Index .INX rose 22.14 points, or 1.76 percent, at 1,279.74. The Nasdaq Composite .IXIC was up 46.89 points, or 1.80 percent, at 2,652.04.

Materials shares were among the market leaders as the Reuters/Jefferies CRB commodities index .CRB jumped 2.7 percent, its largest daily gain since late September.

Financial stocks were also among the best performers with the KBW bank index .BKX up 3.7 percent.

On the downside, Exelon Corp (EXC.N) fell 3.1 percent to $42.01 after a downgrade from Macquarie [ID:nL3E8C34CY] and other utilities also fell as natural gas futures earlier hit their lowest intraday price since September 2009. The S&P utilities sector .GSPU fell 1.6 percent.

Shares of McDonald's Corp (MCD.N), the Dow's biggest gainer in 2011, fell 1.4 percent to $98.92 on Tuesday, while some of the S&P 500's worst performers last year rallied.

First Solar (FSLR.O), down 74 percent in 2011, jumped 7.8 percent to $36.39 and Netflix (NFLX.O), off more than 60 percent last year, added 4.7 percent to $72.57.

The market's move was foreshadowed by a large jump in stock index futures after data showed China, the world's largest consumer of metals, avoided economic contraction in December. Also boosting investors' mood was German unemployment, which declined more than forecast.