June 13 - While the U.S. markets are holding steady, rising tensions in Iraq are a source of concern, especially for the energy markets. Bobbi Rebell reports.
U.S. markets kept a close eye on the escalating violence in Iraq- but reassurances from President Obama that there were no plans to send in ground troops- kept stocks near record levels. Clearpool Group CEO Peter Kenny: SOUNDBITE: PETER KENNY, CEO AND CO-CHAIRMAN, CLEARPOOL GROUP (ENGLISH) SAYING: "Not having the need for ground troops, at least in terms of this assessment, is positive in that it appears the situation on the ground can be managed in some way that does not put American forces in harm's way, and it doesn't escalate this issue." The lofty levels make it a precarious time for investors- SOUNDBITE: PETER KENNY, CEO AND CO-CHAIRMAN, CLEARPOOL GROUP (ENGLISH) SAYING: "It's a very, very difficult market to play if you are looking to trade. Trading volumes are down very sharply, so this is not a traders market. At the end of the day, investors need to be looking at good solid fundamentals. Stocks that pay dividends. Stocks that have very good visibility in the future and good guidance and the stocks that tend to be less exposed to the geopolitical risks that we are talking about, in terms of Iraq." Kenny points to sectors like home building and regional banking- as well as domestic energy production. Oil prices have been on the rise- reaching nine month highs on Friday. There are concerns that the insurgency could disrupt oil exports. Iraq is the second largest OPEC producer. Jeff Grossman is President of BRG Brokerage: SOUNDBITE: JEFF GROSSMAN, PRESIDENT, BRG BROKERAGE (ENGLISH) SAYING: "It's definitely the talk of the day. There is no question that everyone is on edge. There is talk of people not wanting to go home short over the weekend. But again after all is said and done this is not really affecting anything with the oil as far as again production and delivery." And in fact Obama said so far the insurgency has not caused major disruptions in oil supplies from Iraq. But he added that if insurgents took control of refineries, other oil producers in the Middle East would need to help pick up the slack.