US stocks rise after EU bailout hurdle cleared
NEW YORK—U.S. stocks edged up in early trading Wednesday, after Germany's high court cleared the way for the country to participate in a European rescue fund.
The Dow Jones industrial average rose 35 points to 13,361 shortly after 10 a.m.
Germany's highest court ruled Wednesday that the country could contribute to Europe's (EURO)500 billion ($640 billion) rescue fund to help indebted governments.
"The ruling simply removed a near-term item that was more speed bump than hurdle," said Dan Greenhaus, chief global strategist at the brokerage BTIG, in a note to clients. "More legislative and political challenges lay ahead. Today's ruling simply does nothing to change that larger story."
In other trading, the broader Standard & Poor's 500 index rose five points to 1,438, and the Nasdaq composite index added seven points to 3,112.
Attention now shifts to the Federal Reserve, whose interest-rate committee starts a two-day meeting Wednesday. Many economists and investors expect the Fed to take new steps to support the economy, through buying bonds or promising to keep short-term rates near zero beyond 2014.
Facebook's stock jumped 5 percent in early trading. At a tech conference Tuesday, Mark Zuckerberg, the social networking company's founder and CEO, reportedly said Facebook would work on finding ways to generate profit from the many users who visit its website through mobile phones. The stock gained $1.03 to $20.46.
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 Energy Corp. rose 1 percent, or 20 cents, to $20.26.
The Dow and S&P 500, the benchmark for most stocks 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.