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.
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 Dow Jones industrial average climbed 9.99 points to close at 13,333.35, a four-year closing high. The Standard & Poor's 500 index added an even 3 points to 1,436.56, also close to a four-year high.
The ruling helped push Germany's main stock index, the DAX, to its highest level since July of last year. The euro rose to a four-month high against the dollar.
When the Fed wraps up its meeting Thursday, investors and economists expect it to announce 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 another 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. Both programs ignited stock rallies.