Chaos in Egypt Unsettles Markets
The unrest in Egypt continues to unsettle world markets.
Today, Moody's cut Egypt's bond rating. Foreign companies with operations there, including General Motors and Nissan, have suspended production for the time being. The Egyptian stock market remained closed today, and banks and ATMs report they are starting to run low on cash.
And, of course, one of the biggest sources of cash — foreign tourists — is rapidly disappearing. One key asset - the Suez Canal — is still operating. But the losses to the Egyptian economy could be as great as $10 billion dollars, by one estimate.
Despite the uncertainty, stocks climbed today, propelled in part by news of a merger in the energy business: Alpha Natural Resources will purchase Massey Energy, the operator of the Upper Big Branch Mine, where an explosion last year killed 29 workers.
Exxon Mobil is reporting its best quarterly earnings since a record it set in 2008. The company made $9.25 billion in the last three months of 2010. Higher oil consumption was partly responsible.
Markets rose today. The Dow gained 68 points, to close at 11,892. The S&P 500 was up 10 points, closing at 1,286. The NASDAQ closed at 2,700, adding 13 points.
Chinese Bank Eyes New York Branch
China already owns most of the United States' debt. Now, it wants to get into commercial banking in the United States.
The Industrial and Commercial Bank of China — owned by the Chinese government, and considered the world's largest bank by market value, has agreed to buy an 80 percent stake in the U.S. subsidiary of the Bank of East Asia.
BEA has branches in Chinese American communities in Manhattan's Chinatown, in Flushing, Queens and in Sunset Park, Brooklyn.
David Louie, chairman of the Chinese Chamber of Commerce, said he's concerned.
"As an American or as a citizen of the United States, I'd have to be concerned about a foreign country owning 80 percent of a very important bank in our area and using this as a testing ground for more investment into banks," he said.
Wellington Chen, executive director of the Chinatown Partnership, a non-profit group, said he's less fearful.
"I don't think this is so much that they want to dominate Chinatown," he said. "I think it's part of their global perspective. They need to diversify their portfolio and this is one of them."