By MATTHEW CRAFT, Associated Press
NEW YORK (AP) — The stock market edged higher Wednesday after a court cleared the way for Germany to participate in a European rescue fund. Attention shifted to the Federal Reserve, which began a big two-day meeting.
At 2 p.m. EDT, the Dow Jones industrial average was up 23 points to 13,346 and on track to set a four-year closing high. The Standard & Poor's 500 index added three points to 1,437, also close to a four-year high.
The highest court in Germany ruled that the country could contribute to Europe's $640 billion rescue fund to help indebted governments. The ruling offered investors relief, but not much more.
The issue was "more speed bump than hurdle," Dan Greenhaus, chief global strategist at the brokerage BTIG, told clients. "More legislative and political challenges lay ahead. Today's ruling simply does nothing to change that larger story."
The ruling also helped German stocks to a 14-month high and the euro to a four-month high against the dollar.
From the Fed, economists and investors expect new steps to stimulate economic growth, especially after a Labor Department report showed employers added fewer than 100,000 jobs last month.
Many investors are banking that the Fed will commit to buying more bonds and extend its pledge to keep short-term interest rates near zero until 2015. The Fed previously offered to keep them there until late 2014.
"Everyone is expecting the Fed to put the pedal to the metal," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Anything short of that and we could have some serious disappointment if the Fed doesn't come through. No news will be bad news."
Ablin was skeptical that the Fed would begin a new bond-buying program. The Fed hatched two previous efforts when economic figures looked bleaker than today. The first came in March 2009, right after the financial crisis.
The economy has plenty of problems, "but there are some great things happening, too," Ablin said.
In fact, he was about to give a talk detailing reasons for optimism: Falling prices for natural gas could usher in a shift to a cheaper, cleaner fuel source for vehicles than crude oil. And the housing market has begun to come back.
In other trading Wednesday, the tech-heavy Nasdaq composite index climbed nine points to 3,114. Apple stock added $1.86, or 0.3 percent, to $662.30 after unveiling a taller, slimmer version of its iPhone.
Facebook's stock jumped 6 percent. Founder Mark Zuckerberg reportedly said at a technology conference that Facebook would work on generating profit from users who use the social network on their phones. The stock gained $1.12 to $20.56.
Chesapeake Energy announced a sale of nearly $7 billion in infrastructure and properties. The natural gas producer has suffered from the plunging price of natural gas this year, and the deal should help Chesapeake wipe some debt off its books. Chesapeake rose 1 percent, or 20 cents, to $20.26.
The Dow and S&P 500, the benchmark for most stock funds, have already surged 2 percent in September, usually a grim month for the stock market.
The indexes reached four-year highs last Thursday when news out of Europe set off a rally. The European Central Bank laid out a concrete plan to support the region's struggling countries through buying their government bonds.
The Dow again closed Tuesday at its highest level since December 2007, the beginning of the Great Recession. It is about 800 points shy of its all-time high of 14,164.53, set two months earlier, in October 2007.
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