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News Wrap: Egypt’s High Court Quashes Parliamentary Elections

June 14, 2012 at 12:00 AM EDT

HARI SREENIVASAN: New numbers on claims for unemployment benefits reinforced questions about the recovery today. The Labor Department reported first-time claims rose last week and the four-week average was the highest in six months.

But Wall Street rallied anyway. Stocks made a late-day surge after news that major central banks might pump more money into the World Banking system. The Dow Jones industrial average gained 155 points to close near 12,652. The Nasdaq rose 17 points to close at 2,836.

Meanwhile, in Europe, the governments of Spain and Italy came under new pressure as their cost of borrowing money rose again. The turmoil in the European bond markets intensified as investors looked ahead to elections in Greece this weekend. If leftist parties win power, they may cancel the terms of an international bailout and quit the eurozone.

In Egypt, the country’s highest court dealt a double blow to the newly empowered Muslim Brotherhood. The judges found the law governing last fall’s elections was unconstitutional. and they ordered the new Islamist- dominated parliament dissolved. They also rejected a bid to bar former Prime Minister Ahmed Shafiq from this weekend’s presidential runoff, against Mohammed Morsi, the Muslim Brotherhood candidate.

Shafiq served under ousted President Hosni Mubarak, and his supporters hailed the ruling.

HANAN MOHAMED, supporter of Ahmed Shafiq (through translator): This is only fair. We didn’t like the result of parliamentary elections. I am very happy that the court didn’t disqualify Shafiq and I am optimistic that he will become president.

HARI SREENIVASAN: A senior leader in the Muslim Brotherhood said the rulings amounted to a full-fledged coup by the ruling military and by the judges, who are holdovers from the Mubarak era. And Islamist supporters gathered in the streets.

MOHAMED ABDEL QUODOUS, activist (through translator): Everyone is here outside the court today demanding Shafiq’s disenfranchisement, as he is a remnant of the old guard. All political powers agree on the necessity to disqualify Shafiq because this is a humiliation to Egypt and its revolution.

HARI SREENIVASAN: In Washington, Secretary of State Hillary Clinton urged the military council to make a full transfer of power to a civilian government. She warned there must be no going back on the move to democracy in Egypt.

U.N. observers finally entered the Syrian town of Haffa today, a day after government troops recaptured the place. U.S. and U.N. officials had warned of a potential massacre there. The monitors found the coastal town wrecked and nearly deserted. Army guns had shelled Haffa, virtually without pause, for nine days.

Also today, a car bomb exploded in a suburb outside the capital of Damascus. The blast wounded 14 people and damaged a Shiite shrine.

British Prime Minister David Cameron faced questioning today about his ties to top officials of the Murdoch newspapers. The Leveson inquiry, as it’s known, zeroed in on Cameron’s ties to Rebekah Brooks. She’s facing criminal charges over phone hacking by the Murdoch tabloid that she once ran.

We have a report from Gary Gibbon of Independent Television News.

DAVID CAMERON, British prime minister: The evidence I shall give — I give shall be the truth.

GARY GIBBON: Last summer, David Cameron said politicians got too close to the press bosses. The courtroom today got a flavor of how close.

The inquiry was shown a text David Cameron received from Rebekah Brooks the day before his 2009 party conference speech: “I’m so rooting for you tomorrow, not just as a proud friend but because professionally we are definitely in this together. Speech of your life? Yes, he Cam!”

DAVID CAMERON: I think what it means was that we were, as she put, friends. But, professionally, me as leader of the Conservative Party, her in newspapers, we were going to be pushing the same political agenda.

GARY GIBBON: David Cameron rubbished Gordon Brown’s claim that to win Murdoch newspapers’ support, David Cameron had switched policies on media regulation and the BBC. There was, he insisted, no pre-election grand bargain with the Murdochs.

DAVID CAMERON: There was no overt deal for support. There was no covert deal. There was no nods and winks. There was a Conservative politician, me, trying to win over newspapers, trying to win over television, trying to win over proprietors, but not trading policies for that support.

GARY GIBBON: Lord Justice Leveson wanted to know just how far down the track of new rules for the press the prime minister was willing to go.

BRIAN LEVESON, judge: It might be thought by some to be a bit rich for you to have asked me to make recommendations and then for me to ask you what the answer is.

GARY GIBBON: He kind of did. And David Cameron said his preference was not to pass new laws governing the press if tougher self-regulation could be worked out.

HARI SREENIVASAN: Cameron himself initiated the public inquiry into British media standards last July.

Former Texas tycoon R. Allen Stanford was sentenced today to 110 years in prison for bilking investors of more than $7 billion. The one-time billionaire was convicted last March in one of the largest Ponzi schemes in American history. He has been jailed since June of 2009.

Those are some of the day’s major stories.