Rice Arrives In Mideast; Local Markets Hold Up Well

by: Mick Weinstein

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Rice Makes Surprise Visit to Beirut and In Battle to Remove Hezbollah, Both Israel, Lebanon Pay Price and ABREAST OF THE MARKET: Mideast Stocks Hold Up Well Amid Conflict

  • Summary: U.S. Secretary of State Rice made a surprise stopoff in Lebanon on her way to Israel, attempting to jumpstart diplomatic efforts aimed at resolving the ongoing Israeli/Hezbollah conflict. Both the U.S. and Israel now must balance their commitment to disarm the terrorist Hezollah group with the growing toll the war is taking on Lebanon, Israel and President Bush's plans for regional reform. Hezbollah has now shot more than 2,000 missiles into Israel, disrupting much of the country's economy, while Israel's strikes at Hezbollah operatives and infrastructure have left officials there scrambling to provide services to citizens. Rice hopes to build Arab support to pressure Hezbollah to disarm, while strengthening the Lebanese government. Interestingly, while the warfare has pressured world markets, most Mideast markets have held up quite well: Israel's Tel Aviv 100 index is actually up about 1% since July 12, and investors in some Arab markets such as Dubai, Qatar, and Saudi Arabia have been enthused over higher oil prices. Egypt has fallen 7.2% and Morrocco is down 2.5% however.
  • Comment on related stocks/ETFs: Oil prices fell about .75% this morning on the hope for a diplomatic breakthrough and a statement from the Saudi oil minister that OPEC wants to avoid "raising prices in a way that might affect the global economy." Follow opinion and analysis of Israeli stocks traded in the U.S. in our Israel category.

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