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U.S. stocks rose, sending the Standard & Poor’s 500 Index toward a four-year high, after Germany’s highest constitutional court allowed the country to ratify the euro area’s permanent bailout fund.
Facebook Inc. (FB) climbed 5.4 percent after Chief Executive Officer Mark Zuckerberg said he’s addressing the missteps that have made it hard to reap the benefits of mobile advertising. Apple Inc. (AAPL) gained 0.5 percent before the company introduces its redesigned iPhone later today.
The S&P 500 added 0.4 percent to 1,438.81 at 9:40 a.m. in New York, surpassing the highest close since 2008 set last week. The Dow Jones Industrial Average gained 43.80 points, or 0.3 percent, to 13,367.16 today. Trading in S&P 500 companies was up 32 percent from the 30-day average at this time of day.
“It’s the removal of yet another potential negative,” John Manley, who helps oversee about $204 billion as chief equity strategist for Wells Fargo Advantage Funds in New York, said in a telephone interview. “The Europeans are making enormous progress.”
Germany’s Federal Constitutional Court dismissed motions that sought to stop the government from contributing to the rescue facility known as the European Stability Mechanism. The legal challenge delayed efforts by Chancellor Angela Merkel and other euro-area policy makers to stem the region’s debt crisis. The judges ruled that parliament must approve any increase of the country’s 190 billion euros ($245 billion) of liabilities.
In the U.S., the Federal Reserve begins a two-day meeting today amid speculation policy makers will provide more stimulus. The central bank will probably announce a third round of bond purchases tomorrow, according to almost two-thirds of economists in a Bloomberg survey. The central bank will also likely commit to hold interest rates close to zero into 2015, the survey showed.
Chairman Ben S. Bernanke and his colleagues on the Federal Open Market Committee will opt for further quantitative easing to support an economy that grew at less than 2 percent in the second quarter, according to economists. The unemployment rate has remained above 8 percent for 43 consecutive months. Stocks have rallied on expectations of easing by the central bank. Since Aug. 1, the S&P 500 has climbed 4.6 percent.
Facebook, the world’s largest social-networking website, rose 5.4 percent to $20.48 after Zuckerberg said yesterday at the TechCrunch Disrupt conference in San Francisco that the company should generate more revenue from mobile devices than from desktop computers.
The remarks helped allay concerns over Facebook’s ability to generate sales from users who increasingly socialize over handheld devices. The stock had plunged 49 percent since the May 17 IPO amid signs of slowing growth and executives’ silence over plans to turn the tide.
Zynga Inc. (ZNGA) jumped 3.9 percent to $2.90 after Zuckerberg also said business with the largest maker of social games is strong.
Apple added 0.5 percent to $664.14. The world’s most valuable company (AAPL) has scheduled a product event for 10 a.m. in San Francisco today, where analysts expect it to unveil its next iPhone version.
To contact the reporter on this story: Inyoung Hwang in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Lynn Thomasson at email@example.com