U.S. stocks erased losses amid speculation Egyptian President Hosni Mubarak will meet protesters’ demands to step down, ending a political crisis that threatened to spread throughout the Middle East.
The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,321.3 at 11:39 a.m. in New York after tumbling as much as 0.7 percent earlier. The Dow Jones Industrial Average lost 16.12 points, or 0.1 percent, to 12,222.77, reversing most of an 83- point tumble.
“Even the possibility of Mubarak stepping down will have a positive effect on the markets,” said Mark Turner, head of U.S. sales trading at Instinet in New York, which handles about 4 percent of U.S. equity trading volume. “Any step in the right direction toward a peaceful resolution is good for the markets.”
Earlier declines came after Cisco Systems Inc.’s earnings forecast and profit margin trailed analysts’ estimates and concern grew that accelerating global inflation will trigger higher interest rates.
Mubarak will decide “within hours” whether he will step down or not, according to cabinet spokesman Magdy Rady.
“The decision was not taken yet,” Rady said when asked if the president plans to step down today. “The decision will be taken within hours by the governing bodies of the country and by the authorities of the country and by the president of the country. He has to decide himself whether he leaves or not.”
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