Oil near $98 as protests rock Egypt government

Monday, July 1st, 2013 | Finance News

BANGKOK (AP) — Oil hovered near $98 a barrel Tuesday, underpinned by political unrest in Egypt that raised fears of disruption to global crude supplies.

Benchmark crude for August delivery was down 3 cents to $97.96 a barrel at early afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract jumped $1.43 to close at $97.99 in New York on Monday.

After massive weekend protests in Egypt that continued Monday, the country's military issued an ultimatum to President Mohammed Morsi that gives him 48 hours to meet the demands of the millions who have taken to the streets seeking his ouster.

The ultimatum, rebuffed by Morsi, raised worries on both sides the military could outright take over, as it did after the 2011 ouster of autocrat Hosni Mubarak. It also raised the risk of a backlash from Morsi's Islamist backers, including his powerful Muslim Brotherhood and hard-liners, some of whom once belonged to armed militant groups.

Traders were concerned that the protests in Egypt and the civil war in Syria could affect the production and transport of oil supplies in the Middle East and North Africa.

"Egypt may not be an oil producer, but they are an important passageway for everything from the Middle East to the rest of the world," said Carl Larry of Oil Outlooks in a commentary.

Brent crude was up 12 cents at $103.12 a barrel on the ICE futures exchange in London.

In other energy futures trading on Nymex:

— Natural gas was up 0.2 cent at $3.579 per 1,000 cubic feet.

— Heating oil added 0.3 cent to $2.876 per gallon.

— Wholesale gasoline rose 1.1 cent to $2.745 per gallon.

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Asia stocks gain as Fed, China slowdown weighed

Monday, July 1st, 2013 | Finance News

BANGKOK (AP) — Asian stock markets were mostly higher Tuesday as speculation that lukewarm U.S. economic indicators would keep the Federal Reserve from ending its stimulus program early offset pessimism about China's economy.

Tokyo's Nikkei 225, the region's heavyweight index, jumped 1 percent to 13,994.35. Australia's S&P/ASX 200 was up 2.2 percent at 4,814.70 after the country's central bank left interest rates unchanged and said the Australian dollar is likely to continue falling, easing pressure on the economy.

Singapore's Straits Times Index rose 1.1 percent to 3,174.61. Seoul's Kospi was almost unchanged at 1,855.59

In China, the Shanghai Composite Index reversed early losses to rise 0.1 percent to 1,966.83 after reports on Monday that Chinese manufacturing weakened in June amid a credit crunch. Hong Kong's Hang Seng fell by 0.1 percent to 20,787.67.

Much of the decline in Hong Kong was led by Chinese banks, which are facing central bank credit restrictions that have caused interest rates on loans by banks to other banks to sharply rise.

"The market is still worrying that the liquidity crisis in Chinese banks is not over," said Francis Lun, chief economist of GE Oriental Financial Group.

The gains in Asian markets followed a rally on Wall Street after an ISM manufacturing survey for the U.S. that showed a weak rebound in June thanks to new orders and higher production. The survey boosted stock markets as investors estimated it was strong enough to show the recovery is on track, but not so strong as to encourage the Federal Reserve to start ending its monetary stimulus program ahead of time.

The Dow Jones industrial average gained 0.4 percent to 14,974.96 by day's end, while the broader S&P 500 index rose 0.5 percent to 1,614.96 and the Nasdaq composite rose 0.9 percent to 3,434.

"This rebound in the ISM and moderate employment growth in June would leave the Fed on track to start tapering" its bond purchases in September, said Paul Dales, analyst at Capital Economics.

U.S. economic indicators have been one of the main market drivers in recent weeks as investors gauge when the Fed is likely to wind down its stimulus.

After a volatile few weeks, Fed officials are trying to calm investors' concerns about the central bank's planned reduction in monthly purchases of financial assets. Those purchases are aimed at stimulating the economy by pushing down market interest rates, and investors worry that as the economy improves, a pullback could deprive them of cheap borrowing rates.

In that vein, the U.S. monthly jobs report due Friday will get huge attention as it is the most closely watched indicator for the world's largest economy.

Benchmark oil for August delivery was down 1 cent to $97.98 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.43 to close at $97.99 a barrel on Monday.

In currencies, the euro fell to $1.3062 from $1.3065 late Monday in New York. The dollar rose to 99.77 yen from 99.63 yen.

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FAA probes close call of Spirit jet, small plane

Monday, July 1st, 2013 | Finance News

DETROIT (AP) — The Federal Aviation Administration said Monday it is investigating a close call between a Texas-bound Spirit Airlines flight and a skydiving plane that forced the jetliner to dive sharply over Michigan, as screaming passengers feared the plane was going to crash.

Flight attendants bumped their heads and luggage spilled out of overhead binds during the incident Sunday evening.

The Airbus 319 jetliner took off from Detroit Metropolitan Airport with 126 passengers and a crew of five, bound for Dallas-Fort Worth International Airport. It was over Tecumseh in southeastern Michigan about 8:22 p.m. when controllers reported another plane nearby, the FAA said.

"Air traffic controllers notified the Spirit pilot that a skydiving jump plane was climbing just south of the jetliner's position," FAA spokeswoman Elizabeth Cory said in an email. "The Spirit pilot confirmed that he could see the smaller aircraft on his Terminal Collision Avoidance System. ... A minute later, the Spirit jet received an automated TCAS warning that required him to begin an immediate 1,600-foot descent to 12,800 feet from a previous altitude of 14,400 feet."

At the closest, the two planes were 1.6 miles apart horizontally and 400 feet vertically, Cory said.

The sudden dive caught the passengers unaware, said Janet Dunnabeck of Whitney, Texas, who was returning with her 10- and 19-year-old daughters from a visit with Michigan relatives.

"It was horrifying," Dunnabeck told The Associated Press. "Every person on that plane was screaming. We thought we were going down."

Dunnabeck said the plunge caused overhead luggage bins to spill open, drinks to spill and flight attendants to bump their heads.

Two of them complained of pain and asked for medicine, sitting down while nonworking flight attendants stepped up to help.

Jolene Dunnabeck, 10, said she was "really scared."

"It felt like we were falling, we were going to hit the ground and die," she said.

Only after the dive was the pilot able to give out information, announcing only that a "flight control issue" led to the maneuver.

"Thank God he was able to control the plane," said Janet Dunnabeck, who said she spoke with the pilot later at Dallas-Fort Worth airport.

No passengers were injured, said Spirit spokeswoman Misty Pinson.

"Our pilots followed appropriate procedures and adjusted their flight path upon receiving an advisory of another possible aircraft in range," Pinson said in an email. "The flight continued to Dallas/Fort Worth without incident."

Addressing why the two planes got dangerously close, the FAA pointed to the smaller plane's pilot.

"The skydiving plane was flying under Visual Flight Rules, under which pilots are responsible for seeing and avoiding other aircraft," Cory said.

Gabrielle Dunnabeck, 19, said she, her mother and sister want answers about what went wrong and whether air traffic controllers should have alerted the Spirit's crew sooner.

"We're still wondering who dropped the ball," she said.

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Broadcast editor Jennifer Garske in Washington assisted with this story.

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Follow David N. Goodman at http://twitter.com/davidngoodman

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