Egypt’s un­rest res­onates in U.S. mar­kets

The Washington Post Sunday - - ON THE MONEY -

U.S. stocks slid, pre­vent­ing the long­est stretch of weekly gains for the Dow Jones in­dus­trial av­er­age since 1995, as un­rest in Egypt trig­gered the biggest one-day drop since Novem­ber and over­shad­owed high­erthan-pro­jected earn­ings at com­pa­nies from In­tel to DuPont.

Ford Mo­tor and Ama­ lost more than 3.5 per­cent for the week af­ter their earn­ings and fore­cast, re­spec­tively, missed es­ti­mates. Amer­i­can Ex­press, Bank of Amer­ica and John­son & John­son posted weekly losses ex­ceed­ing 4.2 per­cent af­ter pro­tes­tors in Egypt chal­lenged Hosni Mubarak’s 29year pres­i­dency.

The Dow lost 48.14 points, or 0.4 per­cent, to 11,823.70 last week, af­ter ris­ing above 12,000 for the first time since 2008 dur­ing three trad­ing ses­sions. The Stan­dard& Poor’s 500 In­dex de­creased 0.6 per­cent to 1,276.34.

“ This is a healthy trade,” said Joe “JJ” Ki­na­han, the chief de­riv­a­tives strate­gist at Omaha-based TD Amer­i­trade Hold­ing. “A mar­ket that goes straight up is not nec­es­sar­ily a healthy mar­ket, but one that bounces its way up usu­ally can lead to longer-term gains.”

The S&P 500 has surged 22 per­cent since Fed­eral Re­serve Chair­man Ben S. Ber­nanke said Aug. 27 that he was pre­pared to take ac­tion to help the econ­omy. The Fed last week main­tained its plan to buy $600 bil­lion in Trea­suries to stim­u­late growth.

The Trea­sury will sell $32 bil­lion in three­month and $30 bil­lion in six-month bills Mon­day. They yielded 0.145 per­cent and 0.167 per­cent in when-is­sued trad­ing.

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