Wall Street edges higher as Fed decision looms

NEW YORK (Reuters) - Wall Street edged higher on Wednesday after Europe cleared another hurdle in resolving the debt crisis and on speculation the Federal Reserve will provide more stimulus for the U.S. economy.

Germany's Constitutional Court approved the new euro zone rescue fund, which will allow the European Central Bank to buy sovereign bonds in an effort to reduce crippling borrowing costs faced by Spain and Italy.

Investors shifted attention to the Fed, which concludes a two-day meeting on Thursday. Equities have rallied sharply on expectations of a third round of quantitative easing from the U.S. central bank to keep interest rates lows, leading some analysts to warn of risks of disappointment.

"There has been a lot of optimism built into the market that QE3 is actually going to occur," said Catherine Avery, president of Catherine Avery Investment Management in New Canaan, Connecticut. "It could be one of those situations where you buy on the rumor and sell on the news."

The Dow Jones industrial average <.DJI> gained 7.94 points, or 0.06 percent, to 13,331.30. The Standard & Poor's 500 Index <.SPX> rose 2.21 points, or 0.15 percent, to 1,435.77. The Nasdaq Composite Index <.IXIC> added 5.34 points, or 0.17 percent, to 3,109.86.

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 as a significant resistance point.

Apple Inc rose 0.39 percent to $663.19 after it unveiled its iPhone 5. It has a larger 4-inch "retina" display, ability to surf a high-speed 4G LTE network and is 20 percent lighter than the previous version of iPhone. The introduction of the new iPhone comes as Apple tries to fend off competition that has reached fever pitch.

Facebook Inc jumped 6.7 percent to $20.74 after Chief Executive Mark Zuckerberg hinted at new growth areas from mobile to search in his first major public appearance since the No. 1 social network's rocky IPO in May.

Ford Motor's stock was up 0.7 percent to $10.22 after the company's board of directors decided to discuss this week a succession plan for Chief Executive Alan Mulally, who is expected to retire by the end of 2013, Bloomberg reported on Tuesday, citing a person familiar with the matter.

Chesapeake Energy slipped 0.7 percent to $19.96 after the company said it is selling $6.9 billion in gas fields and pipelines, with most of its assets in the Permian Basin being sold to Royal Dutch Shell Plc and Chevron Corp , as well as most of its remaining infrastructure network.

Mediware Information Systems Inc shares surged 39 percent to $21.87. The clinical software solutions provider agreed to be acquired by private equity firm Thoma Bravo LLC for $22 per share in cash.

(Editing by Kenneth Barry)