Saturday, Jun 23, 2018
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Stocks head higher ahead of a busy week; Fed begins two-day meeting Wednesday

NEW YORK — Investors are looking ahead to two events sure to move markets this week: a Federal Reserve meeting and a court decision on whether Germany can help support its struggling neighbors. And if the stock market’s gains today are any indication, they expect both events to turn out well.

The Dow Jones industrial average rose 83 points to 13,337 shortly after noon. Alcoa led the 30 stocks in the Dow, rising 3 percent, or 29 cents, to $9.34.

Federal Reserve officials will gather for a two-day meeting on Wednesday. Many expect the Fed will launch a new effort to revive the sluggish economy.

On the same day the Fed starts its meeting, Germany’s 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 today.

“It’s going to get interesting this week,” said Randy Frederick, managing director of active trading and derivatives at the brokerage Charles Schwab.

Mr. 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.

“Prior to the employment report people weren’t as sure,” Mr. Frederick said. “I am definitely on the majority side here. There’s some sort of easing coming.”

In other trading, the broader Standard & Poor’s 500 index rose six points to 1,435. The Nasdaq composite gained nine points to 3,113.

Today, the Commerce Department reported that exports to Europe dropped 11.7 percent in July, stoking concerns that Europe’s 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.

Morgan Stanley and Citigroup rose after the two banks settled a dispute over their jointly owned brokerage firm, Morgan Stanley Smith Barney. The deal ended a disagreement over the brokerage’s price and cleared the way for Morgan Stanley to buy Citigroup’s 49 percent stake. Citi gained 69 cents to $32.52. Morgan Stanley rose 42 cents to $17.03.

A profit warning from luxury clothing chain Burberry helped tug down other high-end retailers in early trading. Burberry said slowing sales to China will likely weaken earnings. Ralph Lauren lost $4.75 to $155.56. Tiffany & Co. sank an even $1 to $62.04.

Among other stocks making moves:

— Legg Mason jumped 6 percent following reports that its CEO will step down Oct. 1. Clients have been pulling money out of the money manager’s funds, weakening revenue. Legg Mason’s stock rose $1.49 to $26.96.

— Hewlett-Packard gained 46 cents to $17.90. The computer and printer maker said late Monday that it will cut 29,000 jobs by October 2014, or 2,000 more than it had previously planned. Sales of personal computers have slumped as people favor smartphones and lightweight tablet computers.

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