Stocks were off to the races Tuesday as Alcoa opened earnings season with a big beat on the top line. Around 12:30 p.m. ET, the Dow Jones Industrials (INDEX: ^DJI) were up 83 points to 12,476, while the S&P 500 (INDEX: ^GSPC) jumped 11 points to 1,292. Both measures touched their highest levels in more than five months during today's trading. A survey of small businesses also reported increasing levels of optimism for economic improvement.

Among the Dow's winners, Bank of America topped the list, but Caterpillar (NYSE: CAT) was also up strongly, rising more than 2.5% in early afternoon trading. The company is building out its presence in China, investing money in an R&D center in Wuxi and starting construction on an equipment-testing area and large-wheel loader production site in Tongzhou. The stock is within striking distance of regaining the $100-per-share mark for the first time since last summer's market swoon.

Also notable was United Technologies (NYSE: UTX), which also rose about 2.5%. The company's Pratt & Whitney aerospace division got a $194 million contract from the Defense Department to produce engines for the F-35 Lightning II fighter. The move is another piece of evidence against worries that defense cuts will threaten the company's long-term prospects.

The biggest loser was General Electric (NYSE: GE), bucking the bull trend by falling almost 1%. A profit warning from Philips Electronics gave an early indicator of how weak sales are among European consumers, an area in which GE has a significant presence as well.

Want a top stock idea? Look outside the Dow for the best prospects. Check out The Motley Fool's latest special report to discover our top stock pick for 2012. It's free, but it won't be available for long, so get your copy now.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.