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Dow jumps to near five-year high

Tuesday, September 11, 2012 - 02:08

Sept 11 - Summary of business headlines: Stocks rise ahead of Federal Reserve meeting and German court vote; Burberry warning shakes Tiffany, Ralph Lauren and Coach shares; Apple iPhone launch expected Wednesday; Texas Instruments fine-tunes forecast, but no big warning. Sasha Salama reports.

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Stocks rallied to their highest levels in nearly five years ahead of key decisions in the U.S. and Germany. Federal Reserve officials begin their two-day interest rate policy meeting Wednesday. Many investors expect the Fed to announce more stimulus measures to revive the sluggish U.S. economy. But international investor, Jim Rogers, is skeptical. SOUNDBITE: JIM ROGERS, CEO, ROGERS HOLDINGS, (ENGLISH) SAYING: "QE1 failed. QE2 failed. You really think it's going to work? Never in history has printing money made the fundamental change in any economy. Of course, it blows up a few sectors for a while, improves them for a while. But this is not going to solve our problems. This is going to make our problems worse." One area of the economy that could be vulnerable after a nearly three-year boom…high-end retailers. British fashion house, Burberry, warned that full-year profits will fall at the lower end of forecasts in the wake of an economic slowdown in China and Europe's debt crisis. That warning hit others in the luxury goods sector including jeweler Tiffany, which already cut its forecasts for the second, straight quarter, retailer Ralph Lauren and handbag maker Coach. Apple rolls out its latest iPhone Wednesday - the iPhone 5. JP Morgan's chief economist wrote in a note to clients that the iPhone 5 could not only help Apple's bottom line but also could give a significant boost to the U.S. economy in the fourth quarter. In its mid-quarter update, chipmaker Texas Instruments raised the low-end of its earnings forecast. Ahead of that update, tech stocks barely budged. The Dow and S&P rose less than one percent. Banks led the gains in Europe with Germany's Dax closing at a new high for the year. Germany's high court is expected to rule Wednesday on whether that country can participate in a European bailout fund. The expectation is it will rule in favor. Sasha Salama, Reuters.