The NewsFuror

Saturday, October 20, 2007

Dow Jones tumbles on credit fears

The Dow Jones, the main US share index, saw shares plummet more than 360 points by the end of the week, amid concerns over the state of the US economy.

The benchmark index of blue-chip stocks shed 366.94 points or 2.64% at 13,522.02 by Friday's close of trade.

The slump followed a warning by equipment firm Caterpillar that the housing slowdown would harm the wider economy and cut its profit forecast.

Turmoil in world markets since the summer has raised fears of a recession.

'Poster child'

Caterpillar saw its shares down 5.3% to $73.57, and predicted weakness ahead after its earnings results, which missed forecasts.

"It's pretty ugly," said Bill Strazzullo, chief market strategist at Bell Curve Trading.

"A company like Caterpillar should be a poster child for global growth and benefits of the weak dollar," he said.

"It makes you question: Is global growth really that strong? Has the earnings kick from the weak dollar played itself out?"

The fall came on the twentieth anniversary of Black Monday - the day when stocks saw their biggest fall on the Dow Jones, losing some 23%.

Andy Brooks, head of trading at T Rowe Price, said: "Some of the earnings reports were a little disappointing but not that bad."

"I think we're responding emotionally to the 20th anniversary of the October 1987 stock market crash. I'd like to laugh except it hurts."

For stocks to fall by such proportions nowadays would mean a drop of around 3,000 points based on current market levels.

Global growth

The technology-laden Nasdaq fell 74.15 points or 2.65% to 2,725.16, while the broad-market Standard & Poor's 500 index declined 39.45 points 2.56% to 1,500.63.

Even though stocks have been volatile since the summer, with fears that the US housing slowdown would trigger broader problems, not long before indexes had been hitting record highs.

Finance leaders from G7 nations sought to mitigate the damage to the global economy in the wake of the credit crisis during meetings on Friday in Washington.

Ministers issued a statement pledging that they were "committed to doing our part in sustaining strong global growth," ahead of talks over the weekend involving the IMF and the World Bank.

G7 calls for stronger China yuan

Finance ministers from the G7 group of leading industrial countries have called on China to allow its currency to rise in value more quickly.

This would make Chinese goods less competitive and could help curb China's international trade surplus.

The G7 said it could also help reduce inflationary pressures in China because it would make imports cheaper.

The deputy governor of China's central bank said it was committed to gradual revaluation alongside economic reform.

But, added Wu Xiaoling, "moving the exchange rates in the absence of economic restructuring policies will hurt China".

In a statement issued after a meeting in Washington, the G7 also said their own economies remained fundamentally strong but there was an acknowledgement that oil prices and the US housing market are potential problems.

More speed sought

The yuan has in fact moved up 10% since China began to adopt a more flexible policy in 2005 and that was welcomed by the G7.

But they think it would be in everybody's interests for it to happen more quickly.

"They have always said that the reason they're not moving more quickly is they care about stability," said US Treasury Secretary Henry Paulson.

"And we care about stability. I just happen to think there's more risk in moving too slow than in moving more quickly."

A similar call was made by minsters from the Eurozone countries last week.

The G7 said that the fundamentals of their own economies remained strong but they did acknowledge that high oil prices and problems in the United States housing market are likely to cause global growth to be somewhat slower.

Mr Paulson said that the housing market and the mortgage crisis is the most significant risk to the US economy.

"We talked about the housing market, mortgage markets, sub-prime... It has been subtracting from our growth now for a number of quarters. And, despite that, the US economy is growing - very little evidence that it's spilled over into other areas."

JJB Sports acquires 10% in Umbro

JJB Sports has bought a 10.1% stake in sportswear firm Umbro in a move to protect its stake in the market for England football shirts.

Reports a day earlier said an unnamed suitor had targeted Umbro, sending its shares 27.5% higher.

The newly-acquired 10.1% stake, plus Sport Direct's existing 15% stake in Umbro, mean any suitor would have a tougher battle ahead, say analysts.

By Friday's close of trade, Umbro shares had risen by 13%.

Umbro has suffered in the wake of poor performance from the England team.

Hopes of a trading recovery are slipping as the chances of England qualifying for the 2008 European Championships drop.

On Thursday, Reuters said sources close to the matter named competitor Nike as the suitor for Umbro. The US firm would not comment on what it called "speculation".

The sportswear market has consolidated since Adidas bought Reebok in 2005.

Adidas is now the subject of takeover rumours while French retailer PPR has built up a large stake in German sportswear firm Puma.

Umbro confirmed it had received an approach but said that it "may or may not lead to an offer being made" for the firm.

As well as providing kit for the England team, Umbro also supplies the kit for six Premier League clubs.

Oil prices fall from record highs

Oil prices ended lower close of trade in New York, after investors locked in earlier profits after crude oil hit record highs earlier.

But analysts say the downward trend is likely to be temporary, as the factors triggering recent highs remain, notably supply fears and the lower dollar.

US light sweet crude fell 87 cents to $88.60 after an earlier $90.07 record.

And London Brent crude settled 81 cents lower at $83.79, after reaching an all-time high of $84.88 on Thursday.

"The petroleum markets are seeing some short-term profit taking," said Citigroup analyst Tim Evans following Friday's falls.

But the overall trends in recent days has been upwards, with oil prices setting new records in the wake of geopolitical tensions which have triggered fears that supplies could be threatened.

Another factor behind the rise has been the dollar reaching a record low against the euro, and a three-week low against the yen, not helped by weak US jobs and manufacturing data on Thursday.

Dollar weakness, caused by fears over the strength of the US economy, has made oil a more attractive investment.

This has increased expectations that the Federal Reserve will cut US interest rates further from the current 4.75% later this month.

Turkish concern

The tension in eastern Turkey centres on possible military action by the Turkish army against Kurdish rebels operating from across the Iraqi border.

Earlier this week, the Turkish parliament approved a government plan to carry out excursions across the border, although imminent military action is not expected.

Oil producers' cartel Opec has hinted that it may boost output to help reduce prices.

Nigerian Oil Minister Odein Ajumogobia said Opec leaders could now meet as early as 17 November, three weeks ahead of their next planned meeting.

Oil prices have quadrupled since 2002 because of strong demand from fast-growing economies such as China and India, allied to instability in oil-producing nations in the Middle East and Africa.

Dollar stays near record euro low

The US dollar hovered near record lows against the euro by close of trade in New York on Friday, as expectations over a US interest rate cut increased.

One euro was worth $1.4265 by mid-afternoon in the US, after the greenback sank just short of $1.4320.

Analysts said a rise in US unemployment adds to chances of an interest rate cut when The Federal Reserve meets in October, in a bid to boost the economy.

Against Japan's yen, the dollar stayed near three-week lows, at 114.77 yen.

Rejuvenate confidence

Commentators now say the Fed could well reduce rates from 4.75% to 4.5%.

The dollar has been sliding since the Federal Reserve cut rates from 5.25% to 4.75% in September to help rejuvenate confidence in the world's largest economy.

This followed a summer of turmoil in the world's credit markets, sparked by record loan defaults in the US sub-prime mortgage sector.

Since then, a raft of mostly disappointing economic news and soft inflation figures has prompted the anticipation of further rate cuts.

While lowering borrowing costs can jump start the economy, it can also have an adverse impact as investors seek to place money in economies where the returns are higher.

Smiths star made music professor

Former Smiths guitarist Johnny Marr has been made a visiting professor of music at the University of Salford.

Marr, who lent his guitar style to hits such as Panic and Heaven Knows I'm Miserable Now, will deliver a series of workshops to undergraduates.

"Salford University is offering some fantastic opportunities to students in music," said the 43-year-old.

The Smiths split up in 1987. Marr went on to form the group Electronic and now plays with US indie band Modest Mouse.

Best gig

The Manchester-born musician will deliver a series of workshops and masterclasses to students on the BA Popular Music and Recording degree.

The Smiths, formed in Manchester in 1982 by Marr and singer Morrissey, have close ties to Salford, and posed in front of the Salford Lads Club for the sleeve of their 1986 album The Queen is Dead.

The band also played one of their final gigs at the university in 1986, which Marr recalled as one of the best gigs they ever played.

He said: "The PA [system] had to be tied down because the floor was bouncing up so high that the stage was practically falling to pieces."

John Sweeney from the university's school of media, music and performance said Marr was "a revered guitarist and composer" who was held "in the highest esteem by many of his fellow performers".

"At the moment, he is back at the height of his considerable powers," Mr Sweeney added, "so it is a tremendous opportunity for our students to gain from Johnny's expertise and experience."

"He has so much to give and he is such a willing and enthusiastic guy - those students lucky enough to benefit from Johnny's appointment are in for something really special."

Rome honours actress Sophia Loren

Italian actress Sophia Loren has been given a lifetime achievement honour at the Rome Film Festival.

The Oscar-winning star, 73, received the award at a red carpet ceremony in the Italian capital on Thursday.

"It's the first time I have had a career award in Italy," she told reporters. "I hope I deserve it!"

The film festival, which runs until 27 October, will also see appearances from Cate Blanchett, Reese Witherspoon, Robert Redford and Halle Berry.

Friday was branded "Loren Day" at the event, with the actress answering questions from 700 fans, plus a screening of Marriage Italian Style, one of her most famous films.

The festival opened with the French film noir Le Deuxieme Souffle (Second Wind), starring Monica Bellucci as a gangster's moll.

Bellucci, who dyed her hair blonde for the role, said she was inspired by "blonde French actresses of the '50s [such as] Bardot, Deneuve and Simone Signoret".

But the Italian actress admitted she had "happily" reverted to her natural brunette hairstyle after filming.

Second Wind is one of 14 in competition at the festival, along with Hector Babenco's El Pasado (The Past) and Reservation Road, starring Joaquin Phoenix and Mira Sorvino.

Presented out of competition are Redford's Lions for Lambs, starring Tom Cruise and Meryl Streep, and Jake Gyllenhaal's torture drama Rendition.

Director Francis Ford Coppola will also premiere his first release in 10 years, World War II film Youth Without Youth.

The festival, established last year, is the brainchild of Rome's mayor, film buff Walter Veltroni.

Pirelli calendar

Loren was born in 1934 and grew up in the slums of Naples.

She started working as a model at the age of 14, and was ushered into acting by future husband Carlo Ponti - who died earlier this year.

In 1962, she won a best actress Oscar for her role as Cesira, a woman who flees Rome with her daughter during World War II, in the Italian-language film Two Women.

She was also given an honorary Oscar for her body of work in 1991, when she was dubbed "one of the genuine treasures of world cinema".

Despite her age, Loren is regularly voted among the world's sexiest women, and posed for the Pirelli calendar last year.

Winehouse fined for drugs offence

Singer Amy Winehouse has been arrested and held overnight in Norway for possession of cannabis.

Winehouse was released on Friday morning after paying a fine of 500 euros (£350; $714), a prosecutor said.

She, her husband Blake Fielder-Civil and a third person were arrested at a hotel in Bergen after being found with 7g (0.25oz) of the drug, he added.

The singer took to the stage at 2300 GMT in Bergen on Friday. She will perform the capital, Oslo, on Saturday.

Winehouse will then travel to the Netherlands, where her European tour continues on Monday.

Health issues

"She's paid the fine, so this thing is over for us now," Norwegian prosecutor Lars Morten Lothe told the Associated Press.

"She was released without charge," said the singer's spokesman, Shane O'Neill. "The show in Bergen is going ahead as planned."

The arrests were made after a tip-off.

Winehouse, who won two prizes at the Music of Black Origin (Mobo) awards in London last month, was forced to cancel a series of concerts and appearances after reportedly being treated for drug addiction.

The US leg of her tour in September was shelved while she continued to address problems with her health, and is now expected to take place early next year.

The singer is also due to perform a string of dates around the UK, starting in Birmingham on 14 November.

Shock at SA reggae star shooting

Lucky Dube pictured on his most recent album, Respect
Fans across the world are mourning the South African reggae star, Lucky Dube, who has been shot dead.

He was dropping his teenage son and daughter off in a Johannesburg suburb when he was attacked by car thieves.

Local radio stations have been flooded with tearful callers expressing outrage at the murder and renewing demands that the authorities act to curtail crime.

South Africa's leader paid tribute to him and called on people to "confront this terrible scourge of crime".

Alongside Bob Marley, Lucky Dube was thought of as one of the great reggae artists - singing about social problems.

He was also one of the apartheid regime's most outspoken critics.

'Freedom fighter'

Correspondents say the killing of the 43-year-old singer has shocked South Africans who are already accustomed to one of the highest murder rates in the world.

He will be missed as a great musician and for his love for the children and the suffering people in Africa
Abitekaniza Denis, Kampala, Uganda

Music producer TK of TS records and a friend of Dube's told that the killing was tragically ironic.

"The whole continent has lost a performer, musician, a guy that fought for freedom in his own way, in his own right, was just shot by some guy who wanted to take his car, you know, which is Mickey Mouse really," he said.

Opposition parties and the youth wing of the ruling African National Congress party have called on the government to take drastic measures against crime.

Callers to radio stations have urged the country's rugby team to show some form of respect when they take to the field in Saturday's World Cup final against England in Paris.

President Thabo Mbeki is attending the final and took time to pay tribute to the dreadlocked reggae star before he jetted off to France.

"It's indeed very very sad that this happens to an outstanding South African, an outstanding musician - world renowned," he said.

"We shall continue to act together as a people to confront this terrible scourge of crime, which has taken the lives of too many of our people - and does so every day."

The BBC's Mpho Lakaje in Johannesburg says police are still hunting for three men thought to be behind the attack.

Police say Dube's son and daughter were already out of the car when three shots were fired through the car window killing their father on Thursday evening in Rosettenville.

Witnesses say the wounded singer tried to drive away, but lost control of his car and hit a tree.

"He was declared dead on the scene," Police inspector Lorrain Van Immareck told the BBC.

'Big blow'

The BBC has been inundated with thousands of text and email messages paying tribute to the 43-year-old singer.

"I am a 27-year-old black South African girl. I have dreadlocks and I love reggae music so much and I am proud to be who I am, being black and African. I will miss Lucky Dube, you are an inspiration to many of us," Sbongile Diko in Durban wrote.

But the tributes have been worldwide - especially from Africa.

"Lucky filled up stadiums all over the continent. I would say he was far bigger outside South Africa then he was in South Africa," South African music journalist Peter Makurube told the BBC's Network Africa programme.

Dube began his career by singing mbaqanga (traditional Zulu) music and recorded his first album with the Super Soul band in 1982.

He later moved into reggae, producing Rastas Never Die which was banned by the apartheid government.

His albums Slave, Prisoner and Together As One saw him gain first national, and then global, recognition.

Three years ago his 1989 anti-apartheid hit Together as One, which calls for world peace and harmony, was voted one of Africa's top 10 songs by BBC readers and listeners.

Lucky Dube released his most recent album, Respect, in April.

FBI raids Copperfield warehouse

A Las Vegas warehouse belonging to magician David Copperfield has been raided by FBI agents.

They took a computer hard drive, a digital camera memory chip and $2m (£937,000) in cash, Las Vegas TV station KLAS said.

Copperfield's lawyer said a woman had made "serious allegations" against the magician, but insisted they were false.

Copperfield, 51, is known for his stunts, such as apparently walking through the Great Wall of China.

"We're just confirming that investigative activity took place at the warehouse," David Staretz, chief division counsel, for the FBI in Las Vegas, told Reuters news agency.

However, the FBI would not explain the reasons for the raid, saying only that the investigation was related to a case in Seattle.

Copperfield's attorney, David Chesnoff, issued a prepared statement saying it was important the allegations be put into perspective.

"An unidentified woman has made serious allegations against David Copperfield," Mr Chesnoff said.

"Although authorities have not revealed her identity to us, we know these allegations are false because David Copperfield has never forced himself on anyone."


On Wednesday night, Copperfield performed two shows at the MGM Grand Hotel and Casino, the final performances of his latest run there.

He performs stints of between six and eight weeks there several times a year, MGM Mirage spokeswoman Yvette Monet said.

The illusionist is next scheduled to perform in Jakarta, Indonesia, on Tuesday.

Copperfield has won several Emmy awards for his work.

His other feats include escaping from the infamous Alcatraz prison and seemingly making the Statue of Liberty disappear.

Oceans are 'soaking up less CO2'

The amount of carbon dioxide being absorbed by the world's oceans has reduced, scientists have said.

University of East Anglia researchers gauged CO2 absorption through more than 90,000 measurements from merchant ships equipped with automatic instruments.

Results of their 10-year study in the North Atlantic show CO2 uptake halved between the mid-90s and 2000 to 2005.

Scientists believe global warming might get worse if the oceans soak up less of the greenhouse gas.

Researchers said the findings, published in a paper for the Journal of Geophysical Research, were surprising and worrying because there were grounds for believing that, in time, the ocean might become saturated with our emissions.

'Saturated' ocean

BBC environment analyst Roger Harrabin said: "The researchers don't know if the change is due to climate change or to natural variations.

"But they say it is a tremendous surprise and very worrying because there were grounds for believing that in time the ocean might become 'saturated' with our emissions - unable to soak up any more."

He said that would "leave all our emissions to warm the atmosphere".

Of all the CO2 emitted into the atmosphere, only half of it stays there; the rest goes into carbon sinks.

There are two major natural carbon sinks: the oceans and the land "biosphere". They are equivalent in size, each absorbing a quarter of all CO2 emissions.

Bhutto determined to contest poll

Ms Bhutto described the attacks as "dastardly and cowardly"

Former Pakistani PM Benazir Bhutto has promised she will never surrender to militants following twin bomb attacks on her convoy which killed 130 people.

Ms Bhutto told that there could be more attacks to come, but said she and her party were determined to contest the parliamentary elections in January.

The carnage has raised questions about the safety of campaigning for the poll.

Earlier, she said ex-army officials had been behind the attacks, but stressed she was not blaming the government.

She also said she had been warned that she would be targeted by four militant groups before returning to Pakistan after eight years in self-imposed exile.

Correspondents say many are asking why Ms Bhutto held the procession in Karachi on Thursday despite such fears.

'Saving democracy'

In an interview, Ms Bhutto said she was lucky to be alive following the two attacks on her motorcade as it travelled down the main road from Karachi's airport to the city centre.

What I really need to ask myself is: do I give up, do I let the militants determine the agenda?
Benazir Bhutto

Authorities have said the first blast was caused by a hand grenade and that the second was a suicide bombing, but the exact sequence of events remains unclear.

She said armed militants had targeted her and that she had been saved by the bravery of her bodyguards.

Ms Bhutto conceded she was at constant risk of another attack in the future, particularly during an election campaign.

"What I really need to ask myself is: do I give up, do I let the militants determine the agenda?" she said.

Ms Bhutto said she and the Pakistan People's Party (PPP) were determined to contest the parliamentary election due to be held by mid-January and were ready to take the risks to defend democracy.

"I've been having a party meeting and, believe me, the spirit amongst the party is one that I'm so proud of because they say we can't let the militants dictate to us what's going to happen, and that we have to try and save Pakistan by saving democracy. So my supporters are ready."


Ms Bhutto was not very specific about who she thought had attacked her, but did say she had received a warning about Pakistani and Afghan members of al-Qaeda, the Taleban and local Pakistani groups.

I don't believe the state or the government was involved in the attack on me at this stage
Benazir Bhutto

Several Islamist militant groups had threatened to attack Ms Bhutto after she promised to confront those operating in the northern tribal areas bordering Afghanistan.

Half an hour before the bombs went off, she said, her security personnel had detained someone found with explosives around his body.

The person was handed over to the police, but Ms Bhutto said she did not know whether the police had discovered anything.

Ms Bhutto said Pakistan's President, Gen Pervez Musharraf, had called her shortly after the attack and that she was not blaming the government for what had happened.

06 Oct: Presidential polls held
17 Oct: Supreme Court resumes hearing challenges to Musharraf candidacy
18 Oct: Benazir Bhutto's homecoming
15 Nov: Parliamentary term ends and general election must be held by mid-January

"I don't believe the state or the government was involved in the attack on me at this stage," she said.

"But I do believe that the sympathisers of the militants had managed to infiltrate some of our agencies and some of our administrative apparatus in a new guise and that they abused their positions to give covert support to the militants, which is why controlling militancy has really not succeeded within the country."

Ms Bhutto said extremists were a small minority in Pakistan and that she wanted to appeal to those who wanted to build a moderate society.

Airmen punished for nuclear error

The US Air Force has relieved several officers of their commands after a B-52 bomber was mistakenly flown across the US loaded with nuclear-armed missiles.

Three colonels, a lieutenant colonel and 66 other personnel were punished following the incident at Minot Air Force Base, North Dakota, on 29 August.

Maj Gen Richard Newton said ground crews had failed to follow procedures.

The incident has been described as one of the worst known breaches of nuclear weapons procedures in decades.

Six cruise missiles armed with nuclear warheads were mounted on the bomber's wings before it was flown to Louisiana.

The missiles were supposed to have been taken to Barksdale Air Force Base, but the warheads should have been removed beforehand.

'Procedural errors'

Announcing the results of his six-week investigation, Gen Newton said there had been an "erosion of adherence to weapons-handing standards".

They did not follow the formal scheduling processes that would have allowed them to do the proper maintenance and handling of those weapons
Maj Gen Richard Newton
Air Force Deputy Chief of Staff

"In the countless times our dedicated airmen have transferred weapons in our nation's arsenal, nothing like this has ever occurred," the Air Force deputy chief of staff for operations said.

Gen Newton said the "unprecedented string of procedural errors" had begun with a failure by airmen to conduct a required inspection of the missiles before they were loaded onto the wing of the B-52 at Minot.

The crew flying the plane were unaware it was carrying nuclear warheads, he said.

Experts have said that if the B-52 had crashed, there would not have been a nuclear explosion. However, there could have been a threat from plutonium leakage from the W80-1 warheads, which have a yield of five to 150 kilotons.

"This was an unacceptable mistake and a clear deviation from our exacting standards," Air Force Secretary Michael Wynne said.

"We hold ourselves accountable to the American people and want to ensure proper corrective action has been taken."

Both Mr Wynne and Gen Newton insisted the case was an isolated incident and that the current procedures for handing nuclear weapons were sound.