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World markets sink as protests escalate in Egypt
NEW YORK — Escalating protests in Egypt are jarring world financial markets. Stocks fell while the dollar and Treasurys rose as investors sought to reduce their exposure to risk. The Egyptian government's response to escalating street protests unnerved investors. The military was deployed in an effort to quell the largest challenge to Egyptian president Hosni Mubarak's 30-year rule. The fall of the Tunisian government two weeks ago caused worries that other Middle Eastern governments could also be toppled.
Disappointing earnings reports also helped send stocks lower. The Dow Jones industrial average had its first down week after an eight-week winning streak. The Dow fell 166 points, or 1.4 per cent, to close at 11,823.
The S&P 500 fell 23, or 1.8 per cent, to 1,276. The Nasdaq composite fell 68, or 2.5 per cent, to 2,686.
Meanwhile, Fitch Rating revised down its outlook for Egypt, dropping it to “negative.” Fitch said it was holding steady Egypt’s other ratings, including its long-term foreign currency issuer default rating, which was held at the investment grade BB+.
“The Outlook revision reflects the recent upsurge in political protests and the uncertainty this adds to the political and economic outlook ahead of September’s elections,” said Richard Fox, head of Fitch’s Middle East and Africa Sovereign Ratings. Egypt is slated to hold presidential elections in the fall. (AP)
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