Egypt clashes roil US stock markets
2011-02-03 17:36:11
Clashes between partisans of the embattled Egyptian president Hosni Mubarak and his opponents roiled US stock markets Wednesday, as traders worried about rising instability in the region.
"Those who were sanguine about Egypt and the contagion risk must re-think their positions," said David Kotok of Cumberland Advisors. "We are seeing the contagion signs in Jordan, Yemen and other countries."
The blue-chip Dow rose very slightly, up 0.02 percent (1.81 points) to 12,041.97 at the close, after ending Tuesday above 12,000 points for the first time since June 2008.
But the broader S&P 500 index fell 0.27 percent (3.56 points) to 1,304.03 and the tech-heavy Nasdaq index dropped 0.04 percent (1.03 points) to 2,750.16.
Television images and reports of bloody clashes in the Egyptian capital caused traders to revisit their initial muted reactions to unrest in the Middle East.
"We expect more violence," said Kotok, "we do not know how this will turn out. We do not have an estimate of the eventual spread. We do not know how much economic damage will be witnessed in global markets and in the incipient global economic recovery."
Egypt sits astride the strategically vital Suez Canal and at the center of the oil-rich Middle East.
The turmoil in Egypt overshadowed positive data released Wednesday morning that showed private businesses in the United States added 187,000 jobs in January, starting the year with gains across major industries.
Meanwhile airline stocks were battered amid the latest round of bad weather in the United States, which has seen thousands of flights canceled.
Delta Air Lines tumbled 3.7 percent and American Airlines fell 2.1 percent.
Ford, which has plants in badly affected regions, saw its share price fall three percent, helped downward by analysts downgrading the automaker's earnings estimates.
The bond market was down, with the yield on 10-year Treasuries rising to 3.49 percent from 3.44 percent on Tuesday, while that of the 30-year bond rose to 4.64 percent from 4.61 percent.
Bond prices and yields move in opposite directions.