Markets Trade Higher Through Most Of Session, Paring Gains Near Bell

U.S. stocks rose slightly yesterday, with the major indexes moving back near four-year highs after a German court paved the way for a conditional launch of the European Stability Mechanism, ruling Berlin can contribute to a bailout fund for struggling eurozone countries. Stocks also rallied on stimulus hopes with the Federal Reserve today starting its two-day meeting on monetary policy and Chinese officials signaling they were open to boosting the world's second largest economy with additional liquidity.

Traders were widely expecting the Fed today to announce a third round of bond purchases, with nearly two-thirds of the experts participating in a Bloomberg poll expecting the central bank to embark on more quantitative easing. The Fed also will likely commit to hold interest rates near zero into 2015, the survey showed.

Germany's Federal Constitutional Court earlier yesterday dismissed motions seeking to keep the government from participating in the European Stability Mechanism. The legal challenge threatened to sideline efforts to remedy the region's debt crisis although the judges gave hardliners one more opportunity to derail the bailout fund, ruling parliament must approve any increase of the country's $245 billion of liabilities.

Energy and financial stocks helped pace gains for stocks yesterday, easing somewhat near the close to pare gains for the broader market gauges. Shares of industrial and consumer discretionary companies also ended higher while more defensive plays such as consumer staples and utilities closed solidly lower for the session.

In company news, Apple (AAPL) rolled out its iPhone 5, the latest version of its popular mobile telephone that includes a bigger screen and is 20% lighter than its predecessors. The new iPhone will be available through AT&T (T) and Sprint (S) in the United States as well as other carriers in Canada, Japan and Europe. AAPL shares briefly reversed early losses, turning positive during the afternoon presentation at TechCrunch today, only to slide underwater again just before the close and eroding a small advance among tech stocks as well..

Commodities were mostly lower. Crude oil for October delivery was off 17 cents at $97 a barrel. October natural gas settled 7 cents higher at $3.06 per 1 million BTU. December gold fell $1.70 to $1733.40 an ounce while December silver fell 32 cents to $33.26 an ounce. December copper was down a penny at $3.69 a pound.

Here's where the markets stood at end-of-day:

Dow Jones Industrial Average up 9.99 (+0.07%) to 13,333.35

S&P 500 up 3.00 (+0.21%) to 1,436.56

Nasdaq Composite Index up 9.78 (+0.32%) to 3,114.31

GLOBAL SENTIMENT

Hang Seng Index up 1.10%

Shanghai China Composite Index up 0.28%

FTSE 100 Index down 0.17%

UPSIDE Movers

+) SSRX, Receives preliminary non-binding proposal from its chairman and chief executive officer to acquire all of its outstanding shares and take the biotech company private for $15 apiece.

(+) FB, Stocks climbs after founder Mark Zuckerberg late yesterday tells a tech conference the company is working on finding ways to generate profit from users who visit its website through mobile phones.

(+) JVA, Reports Q2 earnings of $0.19 a share, up from $0.03 in the year-ago quarter. Revenues rose 24.3% to $44.5 million, crushing the analyst estimate of $36 million.

DOWNSIDE MOVERS

(-) HK, Launching secondary offering of 35 million shares of common stock now held by EnCap Energy Capital Fund VIII LP.

(-) XRTX, Cuts revenue guidance for the quarter ended Aug. 31 to $271 million to $276 million, blaming reduced OEM demand. Analysts are expecting $344.5 million, according to FactSet.

(-) GCOM, Reports Q4 adjusted earnings of $0.13 a share, trailing estimates by $0.07. Sees FY13 revenues of $340 million to $360 million, or at least $44.9 million below expectations.