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US stocks edging higher ahead of Fed decision

Associated Press
FILE-In this Friday Sept. 7, 2012, file photo, trader Richard Scardino, center, works on the floor of the New York Stock Exchange. Stocks edged higher during trading on Wednesday, Sept. 12, 2012. Investors were happy to see that Germany's highest court cleared the way for that country to participate in a European rescue fund. Attentions now shift to the Federal Reserve, which wraps up its two-day meeting Thursday. (AP Photo/Richard Drew, File)
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FILE-In this Friday Sept. 7, 2012, file photo, trader Richard Scardino, center, works on the floor of the New York Stock Exchange. Stocks edged higher during trading on Wednesday, Sept. 12, 2012. Investors were happy to see that Germany's highest court cleared the way for that country to participate in a European rescue fund. Attentions now shift to the Federal Reserve, which wraps up its two-day meeting Thursday. (AP Photo/Richard Drew, File)

NEW YORK (AP) — U.S. stocks edged higher Thursday ahead of a key decision by the Federal Reserve on the economy.

The Dow Jones industrial average rose 20 points to 13,353 at noon EDT. The Standard & Poor's 500 was up a point to 1,438. The Nasdaq composite was up nearly five at 3,119.

The Fed was scheduled to issue a statement at 12:30 p.m. to announce the results of a two-day policy meeting. Many investors think it will announce a third round of bond-buying to lower long-term interest rates, get people to borrow and spend more and push them into stocks.

But the Fed may decide to take smaller steps to stimulate the economy, disappointing investors. It could decide to just extend its pledge to hold short-term interest rates near zero.

Investors are also keeping an eye on turmoil in the Middle East. Protesters stormed the U.S. Embassy compound in Yemen's capital Thursday, and there was violence around the U.S. mission in Cairo. The U.S. ambassador to Libya was killed Tuesday.

Stocks have rallied on news of bond-buying by the Fed in the past. In the three months following March 2009, when the Fed said it would expand its first round of buying, the S&P 500 rose 18 percent. In the three months after the central bank hinted at a second round of buying in August 2010, the S&P rose 14 percent.

In other news Thursday, the Labor Department reported that the number of people seeking unemployment benefits jumped last week to the highest level in two months, though the figures were skewed in part by Hurricane Isaac.

The figures come after a disappointing jobs report last week. Employers added only 96,000 jobs in August, far below the average 226,000 a month added in the January-March quarter.

The government also said that wholesale prices rose 1.7 percent in August, the most in three years. They were driven up by higher costs for gas and food. Removing the impact of energy and food, however, the increase in prices has been mild.

Among stocks making moves, Pall Corp. rose $4.48, or nearly 8 percent, to $62.65. The company, which makes filtration equipment, posted net income that beat Wall Street predictions.

Apple climbed $8.23, or 1.2 percent, to $678.02. On Wednesday, the company unveiled an iPhone with a bigger screen.

The Dow rose to a four-year high Wednesday after Germany's highest court rejected calls to block the creation of Europe's rescue fund for indebted governments.

In Treasury trading, the yield on the benchmark 10-year fell to 1.72 percent from 1.76 percent late Wednesday.

The attacks in the Middle East pushed crude prices higher. Oil was up 96 cents, or 1 percent, at $97.97 on the New York Mercantile Exchange.

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