Stocks up, U.S. debt down on German court ruling
By Ellen Freilich
NEW YORK (Reuters) - U.S. stocks opened higher and global shares reached a five-month high after Germany's top court gave its go-ahead to the euro zone's new rescue fund and the market anticipated more liquidity from the U.S. Federal Reserve.
The German Constitutional Court allowed Germany to ratify the new rescue fund and budget, but gave parliament veto powers over future increases in the size of the fund.
Oil also rose as the German court ruling cleared a potential obstacle on the road to aiding the euro zone and global economy. Oil was also boosted on political risk, underscored by the killing of the U.S. ambassador to Libya and three other staff members.
"We have the expectation for some liquidity - by the Fed, by the ECB, and Mario Draghi has been aggressive in his statements," said Leo Kelly, managing director at HighTower Advisors in Sparks, Maryland, referring to the European Central Bank president.
The Dow Jones industrial average .DJI was up 32.45 points, or 0.24 percent, at 13,355.81. The Standard & Poor's 500 Index .SPX was up 4.38 points, or 0.31 percent, at 1,437.94. The Nasdaq Composite Index .IXIC was up 4.89 points, or 0.16 percent, at 3,109.42.
The Federal Reserve begins a two-day policy meeting on Wednesday and markets expect it to announce more easing measures when the meeting concludes on Thursday.
European stocks touched a 14-month high and yields on Spanish and Italian debt fell after the German court decision.
The decline in Spanish bond yields to well below 6 percent prompted Spain's Prime Minister Mariano Rajoy to say improved market conditions may make aid unnecessary. Continued...