Wall Street Edges Up On Stimulus Hopes
NEW YORK (Reuters) - Stocks moved higher in quiet trading on Tuesday ahead of a key ruling by a German court and possible policy action from the Federal Reserve that could point to more monetary stimulus.
Wall Street's advance was led by energy, industrial and financial firms, but volume was light.
Last week, equities rallied on expectations for fresh stimulus measures from central banks, with economists forecasting a 60 percent chance the Fed will announce another round of quantitative easing at the conclusion of its two-day meeting this Thursday.
Some investors have concerns, however, that action by the Fed could distort market prices and would not be beneficial.
"I don't want the Fed to do anything," said Peter Cook, chief investment officer at Performance Trust Investment Advisors, LLC. "But the market is up, which makes you think some kind of quantitative easing is coming."
Germany's Constitutional Court on Wednesday is expected to approve the European Stability Mechanism -- the euro zone's new bailout fund -- but legal experts believe it will impose tough conditions limiting Berlin's flexibility on future rescues. A more stringent ruling could be seen as a negative by markets.
Another event which could cause turbulence in markets is a Dutch general election on Wednesday, with voters divided between bailouts for troubled euro zone economies and austerity measures locally.
The Dow Jones industrial average <.dji> was up 82.90 points, or 0.63 percent, at 13,337.19. The Standard & Poor's 500 Index <.spx> was up 5.90 points, or 0.41 percent, at 1,434.98. The Nasdaq Composite Index <.ixic> was up 4.33 points, or 0.14 percent, at 3,108.35.
Investors are keeping an eye on big-cap bellwether technology names because of their role in global business spending. Techs fell on Monday following Intel's
"I think Intel is the model for what we are going to be seeing over the coming earnings season, which is going to be missing estimates and lowering guidance across the sectors," said Cook.
Package delivery companies FedEx Corp
Knight Capital Group Inc
(Editing by Dave Zimmerman)
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