World markets sink as unrest continues in Egypt

NEW YORK (AP) — Escalating protests in Egypt jarred world financial markets today. Stocks fell while the dollar, Treasurys and gold rose as investors sought to reduce their exposure to risk.

The Egyptian government's response to escalating street protests unnerved investors. The military was deployed in an effort to restore order and the headquarters of the ruling party was on fire. Thousands of people defied a curfew, and Internet and cell phone service has been cut off.

Earlier, riot police fired tear gas, rubber bullets and used water cannons to disperse crowds that had gathered in the largest challenge to Egyptian president Hosni Mubarak's 30-year rule.

Investors have been concerned that the collapse of the Tunisian government Jan. 14 could lead to challenges to other authoritarian governments in the Middle East.

"The safety trade is back," said Jeffrey Frankel, president of broker Stuart Frankel & Co. "Gold is up. Oil is up. Anything related to overseas is getting hit."