Dow Dips Late on Egypt Tension

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Heading into the Fourth of July holiday, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) started off strong, but dipped late in the afternoon on word of instability in Egypt, finishing down 42 points, or 0.3%.

As seasoned market-watchers know, Wall Street hates uncertainty of any kind, whether it be in energy prices, monetary policy, or political unrest. Today's news that the most populous country in arguably the world's most volatile and energy-rich region has a potential revolution on its hands understandably shook the market. Today, thousands rallied in Tahrir Square in Cairo demanding that President Mohammed Morsi step down. Pockets of violence broke out, and the military issued a two-day ultimatum for him to stop the crisis. The protests threaten to undo what seemed to be a watershed moment in the Arab Spring of just a few years ago, which led to Morsi's democratic election, the first in the country's history. Investors are probably concerned that the unrest could spread to other Arab countries and jeopardize oil supplies. Oil prices were up 1.5% on the reports.

Before the news out of Egypt took over, investors were encouraged by strong June auto sales, as well as a better-than-expected factory orders report, and data that showed May home prices jumping 12.2% from a year ago, the biggest such leap in seven years.

General Electric (NYSE: GE  ) led the Dow losers today, falling 1.9%, after the company decided not to fight a regulatory decision that names its financial arm, GE Capital, as systemically important, which will subject it to tougher oversight. GE joins AIG and Prudential as the three companies the government named to warrant stricter oversight. While this is no cause for concern among investors, it serves as a reminder that GE's multiple business segments bring in additional risk factors, including those resulting from the Dodd-Frank law.

Boeing (NYSE: BA  ) shares were also down 1.7%, as reports revealed that its Dreamliner 787 jet may still not be ready for primetime. United Airlines said it's canceling 787 flights almost four times as often as for its other planes. United said the 787s had a 3.8% cancellation rate in the last month, and though it didn't provide details on the causes, airlines in Japan have scrapped 787 flights for reasons including computer failure and problems with the anti-icing mechanism. With most of Boeing's 787s still yet to be delivered, the aircraft maker may have to go back to the drawing board once again, shortly after the entire 787 fleet was grounded because of battery-fire problems.

Bucking the downward trend today was JPMorgan Chase (NYSE: JPM  ) , which gained 1.3%, after getting an upgrade from Raymond James to "strong buy" from "outperform." The research firm argued that strong earnings growth potential and decreased risk following the London Whale incident warranted the upgrade. Oddly enough, today's bounce came as the Federal Reserve approved higher capital requirements for the nation's banks. The news comes after several rounds of stress tests and other such requirements, so most of the big banks should have no trouble complying with the new standards.  

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