NEW YORK Investors spent Tuesday preparing for two events sure to move markets this week: a Federal Reserve meeting and a German court decision on whether the country can help pay for the debt of its struggling neighbors. And if the stock markets gains Tuesday are any sign, they expect both events to turn out well.
The Dow Jones industrial average rose 69.07 points to close at 13,323.36. The average of 30 large company stocks already has gained 1.8 percent to start September, a month which is usually dismal for stocks.
Bank of America led the 30 stocks in the Dow, rising 5 percent, or 45 cents, to $9.03.
Federal Reserve officials will gather for a two-day meeting on Wednesday. Many expect the Fed will announce a new effort to revive the sluggish economy Thursday afternoon.
On the same day the Fed starts its meeting, Germanys high court is expected to rule on whether the country can participate in a European bailout fund. The court rejected a last-minute appeal to delay the decision Tuesday.
Its going to get interesting this week, said Randy Frederick, managing director of active trading and derivatives at the brokerage Charles Schwab.
Frederick expects the Fed will make some sort of move, especially after the government reported last Friday that employers added fewer than 100,000 jobs in August, much weaker than economists expected.
Prior to the employment report, people werent as sure, Frederick said. I am definitely on the majority side here. Theres some sort of easing coming.
In other trading, the Standard & Poors 500 index rose 4.48 points to 1,433.56. The Nasdaq composite increased 0.51 of a point to 3,104.53.
The assumption that the Fed will announce new stimulus measures is so widespread that some worry the market could take a plunge if the Fed fails to deliver.
Ron Florance, managing director of investment strategy at Wells Fargo Private Bank in Scottsdale, Ariz., said hes always wary when stocks rise on nothing more than expectations.
These are the things that make you nervous, when markets are going strong in anticipation of news, Florance said.
Also Tuesday, the Commerce Department reported that exports to Europe dropped 11.7 percent in July, stoking concerns that Europes troubles could smother the U.S. recovery. Overall U.S. exports fell 1 percent to $183.3 billion, lowered by weaker sales of autos, telecom equipment and heavy machinery.