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Stocks rally after Mubarak relinquishes power

Stocks rally after Mubarak relinquishes power

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NEW YORK — News that Egypt’s President Hosni Mubarak resigned sent stocks modestly higher around the world Friday. Investors were waiting to see if the unrest in Egypt might still spread to other countries.

Markets had been lower earlier Friday after Mubarak had tried to cling to office. The Dow Jones industrial average was down 49 points, then regained that ground and was up 12. Markets in Europe also recovered from losses and were modestly higher.

Investors have been concerned during the nearly three weeks of violence in Egypt that if the unrest spread to nearby oil producing countries, the supply of crude might be disrupted. That concern lingered Friday.

“If the contagion starts spreading and oil prices start spiking, it will lead to a volatile ride for the stock and bond prices in the coming months,” said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group.

Egypt is not a major producer of oil, but it plays a key role in the industry because it controls the Suez Canal, a major route for oil tankers and cargo ships.

The Dow rose 2.50, or 0.02 percent, to 12,230.62. The Standard & Poor’s 500 index rose 2.03, or 0.2 percent, to 1,323.90. The Nasdaq composite index rose 6.68, or 0.2 percent, to 2,797.13.

Stocks have generally been rising as traders watched the situation in Egypt but still kept buying. The market did have one big drop, on Jan. 28, when the Dow fell 166 points. But the Dow also made its first move past 12,000 since August 2008 while the violence continued.

Traders were also encouraged by a pickup in consumer sentiment in the U.S. Economists said the University of Michigan’s consumer sentiment index rose to 75.1 in February, from 74.2 in January. The index of current conditions rose to 86.8, its highest reading since January 2008.

Economists said they expect consumer confidence to continue to rise this year as hiring increases and financial situations improve.

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