Wall Street gains after German court backs rescue fund

NEW YORK (Reuters) - Stocks rose Wednesday, boosted by the decision of a top German court to support the euro zone's new 700-billion-euro bailout fund in the latest effort to stem the region's debt crisis.

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.

"You are seeing the market just confirming what their expectation already was - 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.

"This was one of those cases where a bad decision could significantly disappoint the market, but a good decision just is in line with expectations."

The Dow Jones industrial average gained 29.19 points, or 0.22 percent, to 13,352.55. The Standard & Poor's 500 Index rose 4.51 points, or 0.31 percent, to 1,438.07. The Nasdaq Composite Index added 9.11 points, or 0.29 percent, to 3,113.63.

The S&P 500 index has advanced more than 9 percent since the start of June on hopes for global central bank stimulus. But the index has been unable to significantly pierce the 1,438-1,440 level, seen by many analysts as a significant resistance point.

European stocks touched a 14-month high and yields on Spanish and Italian debt fell after the decision. The FTSEurofirst 300 index of top European shares gained 0.2 percent. The PHLX Europe sector index climbed 1.6 percent.