Wednesday, September 12, 2012

Stocks rise ahead of Fed, euro developments

Richard Grasso, former CEO of the NYSE, and Kenneth Langone, Invemed Associates chairman, discuss Facebook and its impact on retail investors, who now seem to believe the game is rigged against them.

By NBC News wire services

Updated at 11:30 a.m. ET: Stocks were moving higher Tuesday as investors exercised caution ahead of possible policy action from the Federal Reserve and a key decision by a German court.

The Dow Jones industrial average was lately up over 90 points, having touched its highest level since December 2007.

Investors may be wary of making bets on risky assets ahead of a trio of key events later in the week, which could greatly impact markets. The S&P 500 slipped 0.6 percent on Monday as investors locked in gains on a recent rally.

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.

Investors also were awaiting a decision by the Federal Reserve on any additional stimulus measures when the central bank announces its policy decision after a two-day meeting on Thursday. Equities have 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.

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.

"There is a lot of stuff out there that people are waiting on right now, a lot of jockeying going on," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

McDonald's Corp advanced after the fast-food restaurant chain reported a 3.7 percent rise in August sales at established restaurants around the world, slightly below expectations of a 3.9 percent increase.

Package delivery companies FedEx Corp and United Parcel Service Inc have received approval to provide express-package services in some cities of China on their own, the country's State Postal Bureau (SPB) said on its website last week.

Sales of the new iPhone could add between a quarter and a half percentage point to fourth-quarter annualized growth in the United States, J.P. Morgan's chief economist Michael Feroli said in a note to clients on Monday.

Zynga Inc's chief marketing officer resigned on Monday, becoming the latest senior executive to depart the struggling social games company behind popular Facebook Inc games such as Farmville.

Economic data showed the U.S. trade deficit grew slightly in July, as exports to Germany, France and other European nations shrank and imports from China soared to a new record.

Reuters contributed to this report.

Source: http://marketday.nbcnews.com/_news/2012/09/11/13803476-stocks-rise-ahead-of-fed-euro-developments?lite

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