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Entries in Egypt (7)

Friday
Feb112011

Stocks Up, Oil Down as Egypt Reverberates onto the Markets

Photo Courtesy - Getty Images(NEW YORK) -- U.S. stock markets ended the week with a modest celebration of the revolution in Egypt. The Dow Jones Industrial Average settled up 0.36 percent or 44 points (a 105 point swing from the low point of the day) to settle at 12,273.26. The broader S&P 500 saw an increase of 0.68 percent to settle at 1,329.15.
 
The price of oil, driven up in the past two weeks by concerns over the uncertain status of the Suez Canal and Sumed pipeline, fell during U.S. trading. NYMEX futures showed the price of a barrel of oil falling by $1.15 to close at $85.58 a barrel Friday.
 
One reason for the rather tepid improvement is the long journey ahead -- Egypt must take the revolution and turn it into some form of government that reflects the diversity of one of North Africa’s most vibrant countries. Not an easy task.
 
“We are not yet done with instability in Egypt, and the market will no doubt be reactive,” said Diane Swonk, economist at Mesirow Financial. “It remains unclear, however, how much these shifts could affect the actual outlook for oil production and distribution, which is what would have the largest impact on our economy.”

Copyright 2011 ABC News Radio

Thursday
Feb032011

Bernanke on Egypt: 'Unfair' to Blame the Fed for Rising Food Prices

Photo Courtesy - Getty Images(WASHINGTON) -- Federal Reserve Chairman Ben Bernanke said Thursday that it was “unfair” to blame the Federal Reserve’s monetary policies for inflation in emerging markets and defended the Fed against accusations that it has contributed to the rise of global food prices, which have fueled political instability in countries like Tunisia and Egypt. 

Bernanke was asked about the situation in Egypt during a rare question-and-answer session following a speech Thursday at the National Press Club in Washington, D.C. He initially rejected the premise of the question, but went on to discuss food prices.

“The most important development globally is the fact that the world is growing more quickly, particularly in emerging markets,” he explained. “I think it’s entirely unfair to attribute excess demand pressures in emerging markets to U.S. monetary policy because emerging markets have all the tools they need to address excess demand in those countries…It really is up to emerging markets to find the appropriate tools to balance their own growth.”

Bernanke repeated that the Fed's monetary policy is aimed at stabilizing the economy and said that no one could argue the U.S. economy was “overheated” or “growing too quickly.”

During his wide-ranging speech, Bernanke defended the Fed’s controversial decision to purchase up to $600 billion in Treasury bonds in an effort to stimulate the economy.

“A wide range of market indicators supports the view that the Federal Reserve's securities purchases have been effective at easing financial conditions,” he said.

Bernanke also pushed aside fears that increasing fuel prices may lead to more inflation. While Bernanke said there have been increases in “some highly visible prices,” such as gasoline, he stressed that “overall inflation remains quite low.”

Copyright 2011 ABC News Radio

Thursday
Feb032011

Kenneth Cole in Hot Water Over Tweet About Egypt Protest

Photo Courtesy - NICHOLAS KAMM/AFP/Getty Images(NEW YORK) -- The Internet is outraged over a major league fashion faux pas.

Someone at Kenneth Cole sent a tweet Thursday morning that used the civil unrest in Egypt to promote the fashion house's new spring collection.

The tweet, sent out just after 10 a.m. ET, read in its entirety: "Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online at http://bit.ly/KCairo - KC"

Whoever wrote it also made use of the Cairo hashtag -- #Cairo -- used on Twitter to help people follow the topic more easily, a breach of Twitter etiquette.

According to the bio on the Kenneth Cole account, tweets signed "KC" are written by Kenneth Cole himself.

Multiple calls to the company by ABC News were not returned.

Reaction on Twitter was swift and overwhelmingly negative, even including a few calls for boycott.

The tweet rubbed thousands of people the wrong way -- they denounced it as tone deaf at best, cynically tacky at worst -- for exploiting a democratic movement in which people have died in order to sell shoes and handbags.

Already, a parody Twitter account exists, much along the lines of the fake BP publicity account that popped up during the massive Gulf oil spill last year.

"Iran is enriching uranium. Our shoes will enrich your suits," reads one of "@KennethColePR's" less offensive tweets.

Two hours after the offending tweet sent thousands of Web surfers into a tizzy, "KC" issued an apology tweet: "Re Egypt tweet: we weren't intending to make light of a serious situation. We understand the sensitivity of this historic moment - KC"

Still, while the Internet's tongue clucking went into overdrive, the markets didn't even blink.

On a day where the rest of the S&P 500 was relatively flat, four hours after the kerfuffle erupted, Kenneth Cole shares were up almost 2.5 percent. 

Copyright 2011 ABC News Radio

Thursday
Feb032011

Expect to Pay More for Gas

Photo Courtesy - Getty Images(WASHINGTON) -- Even if the violence in Egypt does not get worse, expect to pay more for gas and oil this summer and next winter, according to Richard Newell of the Energy Information Administration.

"The EIA expects the retail price of regular gasoline to average about $3.17 a gallon this year; about 40 cents per gallon higher than last year", Newell says.

Newell told the Senate energy committee those prices will be even higher during the summer driving season.

Oil prices on the world market rose for a fifth day in a row, as the violence in Egypt continued.
       
"We expect the price to rise to an average of $99 a barrel by the fourth quarter of 2012", according to Newell.

Newell also says the long-term outlook is for less-dependence on foreign oil, as U.S. Energy supplies expand. 

Copyright 2011 ABC News Radio

Monday
Jan312011

Google Exec Missing in Egypt

Photo Courtesy - ABC News (CAIRO) -- Google's head of marketing for the Middle East and North Africa, Wael Ghonim, is reportedly missing after traveling to Cairo, Egypt in support of protesters.

Friends and relatives of Ghonim advised him not to participate in the protests, according to The Next Web, but Ghonim decided against them.

Now among the many missing protesters in Egypt, Ghonim was last heard from on Jan. 27, according to his Twitter profile.  He tweeted, "Pray for #Egypt.  Very worried as it seems that government is planning a war crime tomorrow against people.  We are all ready to die."

Copyright 2011 ABC News Radio

Monday
Jan312011

Analysts Fear Effect Egypt Protests Will Have on Oil Markets

Photo Courtesy - Getty Images(CAIRO) -- The uprising and political unrest in Egypt is already having economic affects around the world.

On Monday, analysts will watch to see if the stock market rebounds from Friday's 166-point drop, as the price of oil continues to rise.

Though Egypt doesn't produce much oil, it controls the Suez Canal and a major pipeline that exports two million barrels of oil from the Persian Gulf.  Oil industry analysts predict that in the worst case scenario the Suez Canal will shut down and revolt will spread throughout the Arab world, which could interrupt production.

"You start getting into a doomsday scenario, where you do get very high oil prices.  But you are going to see more than the price of oil affected.  You are going to see the world economy effected everywhere," Robin West, an oil industry analyst said.

West added that it is very unlikely the effects will be that widespread.  There may be short-term volatility, but whoever is in charge of Egypt will want to make money, so they will find a way to sell oil, he said. 

Copyright 2011 ABC News Radio

Friday
Jan282011

Markets Roiled by Egypt Events

Photo Courtesy - Getty Images(NEW YORK) -- While Egypt is not a significant oil exporter or massive economy (GDP is 40th largest), US markets reacted to the growing unrest in the country.
 
Traders are concerned that the riots on the streets of Cairo might push the region into a period of upheaval that could threaten global energy supplies, especially as the country controls the Suez Canal and the vital trade that flows through it.
 
At the end of the trading day, oil prices had surged more than four percent settling at $89.34 in New York.
 
U.S. stock markets also saw stiff selling, especially as the images from Egypt showed widespread rioting.
 
The Dow Jones Industrial average was off 1.4 percent (-166 points) and the broader S&P 500 was down 1.8 percent (-23 points) at the end of trading.

There’s a widespread anticipation that the unrest in Egypt might spread, destabilizing the entire region.
 
“While we anticipate little direct impact for the global economy from the political unrest in Egypt, the indirect political and economic consequences of regime change in the country (were it to happen) could be consequential, and hard to fully anticipate,” writes Adolfo Laurenti, an economist at Mesirow Financial.
 
All these unknowns are adding a level of risk to the world economy that is pushing concerns on markets everywhere. The VIX -- a widely respected measure of “concern” in the U.S. stock markets -- jumped more than 24 percent Friday as the images in Egypt continued to fill television screens on trading floors.

“We are worried about the developing geopolitical risk in the Middle East and North Africa,” writes David Kotok, an investor who runs Cumberland Advisors. “We do not know where it will spread nor do we know how it will run its course. We also do not know what direction these regimes will take if there is over throw of the existing system in any of these countries. We do know that we see turmoil in Egypt, Tunisia and Yemen.”
 
Kotok’s words are powerful -- but his actions even more so. He said his firm is going into the weekend with all those questions and with its highest cash reserve since the height of the financial crisis in 2008.

Copyright 2011 ABC News Radio







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