Financial markets react calmly to turmoil sweeping Egypt
Crude oil prices rose but so did stock prices Monday as world financial markets reacted calmly overall to the anti-government protests roiling Egypt.
Oil prices surged to a fresh two-year high, with near-term crude oil futures in New York jumping $2.85, or 3.2%, to close at $92.19 a barrel. That topped the recent high of $91.86 on Jan. 12.
The price jump was driven by worries that the unrest shaking Egypt could spread to other countries in the region, especially oil-rich Saudi Arabia. Oil traders also fretted over the potential for disruption to oil tankers traveling through the Suez Canal.
But after falling Friday, stock prices in the U.S. moved higher Monday thanks to encouraging U.S. economic news. Consumer spending rose 0.7% in December, topping the 0.5% consensus forecast. And an index of manufacturing activity in the Chicago area jumped to a 22-year high last month.
The Dow Jones industrial average gained 68.23 points, or 0.6%, to 11,891.93. The Dow skidded 166 points Friday. European stocks on Monday also largely shrugged off the turmoil in Egypt.
"The U.S. economy’s fundamentals are improving, and that’s the most important thing to investors," said Jason Trennert, chief investment strategist at Strategas Research Partners in New York.
The relative stability in the financial markets reflected the vastly improved investor sentiment that has set in since last year’s financial crises in Greece and other European countries.
At that time, world financial markets swooned amid fear that the woes of financially strapped European governments could boil over into the global economy. But investors are feeling increasingly upbeat today.
“Globally we have a much better outlook now than one year ago,” said Adolfo Laurenti, an economist at Mesirow Financial in Chicago.
-- Walter Hamilton and Tom Petruno