Jittery market reacts to ABC News report on Israel plan

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Early turmoil in financial markets Tuesday was tied to a report on ABC's "World News" that claimed an Israeli attack on Iran is possible this year.

The report, by ABC News senior national security correspondent Jonathan Karl, aired on Monday night's "World News With Charles Gibson." Karl said an unnamed Pentagon official told him that Israel wants to destroy an Iranian nuclear facility before it creates enough highly enriched uranium for a nuclear weapon and before Iran can install a new air-defense system.

The report gave the markets a hiccup and an excuse for a further increase in the price of crude oil, which rose above $142 a barrel.

"World News" anchor Charles Gibson made mention of the effect the story had on Wall Street during a chat with Karl on Tuesday's "World News." "I know that report roiled the oil market this morning," Gibson said.

Speaking after Tuesday's broadcast, "World News" executive producer Jon Banner said that roiling the oil market was far from ABC's mind when it went with the story.

"Our purpose in reporting what we did is to let the American people hear what senior Defense Department officials think in terms of Iran and possible Israeli military action," Banner said. "That's of significant importance to the American public, regardless of whether it has an impact on oil market prices."

ABC News said it wasn't aware of any pushback or complaints about the story beyond a denial from the State Department.

By late morning, the markets calmed down a bit. Miller Tabak equity strategist Peter Boockvar said that oil and gold prices would have risen even further had the markets believed the ABC report. The Dow Jones industrial average closed Tuesday up 32 points to 11,382 after falling 150 points earlier in the day. (partialdiff)
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