Manufacturing in India and China improved in December, a sign the world
A long-awaited government report said design flaws and sloppy management caused a bullet train crash in July that killed 40 people and triggered a public outcry over the high cost and dangers of China’s showcase transportation system.
A former railway minister was among 54 officials found responsible for the crash, a Cabinet statement said Wednesday.
The crash report was highly anticipated by the public. Regulations required the government to release the report by Nov. 20. When that date passed, the government offered little explanation, drawing renewed criticism by state media, which have been unusually skeptical about the handling of the accident and the investigation.
The Cabinet statement cited “serious design flaws and major safety risks” and what it said were a string of errors in equipment procurement and management.
The report affirmed earlier government statements that a lightning strike caused one bullet train to stall and a sensor failure allowed a second train to keep moving on the same track and slam into it.
Among those singled out for blame was former Minister of Railways Liu Zhijun, who was the public face of efforts to build the bullet train and was detained in February amid a graft investigation. The Cabinet also cited the general manager of the company that manufactured the signal, who died of a heart attack while talking to investigators in August.
London’s departing police chief revealed Tuesday that 10 of the 45 press officers in his department used to work for News International, but he denied there are any improper links between the force and Rupert Murdoch’s media empire.
Paul Stephenson was giving evidence to a committee of lawmakers investigating wrongdoing at the now-shuttered tabloid News of the World, and allegations of bribery and collusion between Murdoch employees and the police.
“I understand that there are 10 members of the (Department of Public Affairs) staff who have worked in News International in the past, in some cases journalists, in some cases undertaking work experience with the organization,” he said.
News International is the British newspaper division of Murdoch’s global News Corp.
Stephenson denied wrongdoing, or knowing the News of the World was engaged in phone hacking _ but acknowledged that in retrospect he was embarrassed the force had hired Neil Wallis, a former executive of the paper, as a PR consultant,
After being asked about his relationship with Wallis, who was arrested last week, Stephenson said he had “no reason to connect Wallis with phone hacking” when he was hired for the part-time job in 2009.
He said now that the scale of phone hacking at the paper has emerged, it’s “embarrassing” that Wallis worked for the police.
Stephenson announced his resignation Sunday, saying allegations about his contacts with Murdoch’s News International were a distraction from his job.
He was followed out the door by assistant commissioner John Yates, who gave evidence before a hotly anticipated appearance by Rupert Murdoch, his son James and the media mogul’s former U.K. newspaper chief, Rebekah Brooks.
Yates said that with the benefit of hindsight he would have re-opened an inquiry into electronic eavesdropping of voicemail messages.
Yates said if he “knew now” how the phone hacking scandal would enfold, he would have done something different.
He has denied wrongdoing in the scandal.
Rupert Murdoch’s car was mobbed by photographers as he arrived for a grilling from U.K. lawmakers about the phone hacking scandal that has swept from his media empire through the London police and even to the prime minister’s office.
The elder Murdoch’s Range Rover was surrounded as he arrived at the Houses of Parliament three hours early, and it quickly drove off. The vehicle returned to Parliament about half an hour before the hearing was due to start.
Politicians will be seeking more details about the scale of criminality at the News of the World, while the Murdochs will try to avoid incriminating themselves or doing more harm to their business without misleading Parliament, which is a crime.
Lawmakers are also holding a separate hearing to question London police about reports that officers took bribes from journalists to provide inside information for tabloid scoops and to ask why the force decided to shut down an earlier phone hacking probe after charging only two people.
Detectives reopened the case earlier this year and are looking at a potential 3,700 victims.
London’s Metropolitan Police force said Tuesday it had asked watchdog to investigate its head of public affairs over the scandal _ the fifth senior police official being investigated. The Independent Police Complaints Commission will look at Dick Fedorcio’s role in hiring a former News of the World executive as an adviser to the police.
Fedorcio also was questioned by lawmakers Tuesday, along with Stephenson and Yates.
It was the appearance by the Murdochs and Brooks that was drawing huge public interest.
Members of the public and journalists lined up hours ahead of time in hope of a spot in the small committee room, which holds about 40 people. More will be able to watch in an overspill room, and Britain’s TV news channels are anticipating high ratings for the appearance.
Prime Minister David Cameron cut short a visit to Africa and is expected to return to Britain for an emergency session Wednesday of Parliament on the scandal.
A former News of the World reporter, Sean Hoare, who helped blow the whistle on the scandal, was found dead Monday in his home quick pay day loan. Police said the death was “unexplained” but is not being treated as suspicious. A post-mortem was being conducted Tuesday. Hoare was in his late forties.
Brooks’ spokesman, David Wilson, said police had been handed a bag containing a laptop and papers that belong to her husband, former racehorse trainer Charlie Brooks. Wilson said the bag did not contain anything related to the phone hacking scandal and he expected police to return it soon.
The bag was found dumped in an underground parking lot near the couple’s home on Monday, but it was unclear how exactly it got there. Wilson said Tuesday that a friend of Charlie Brooks had meant to drop the bag off, but he would say only he left it in the “wrong place.”
Murdoch shut down the News of the World tabloid that Brooks once edited after it was accused of hacking into the voice mail of celebrities, politicians, other journalists and even murder victims. Still, the closure has done little to end a string of revelations about the murky ties between British politics and the country’s tabloid media.
The scandal has prompted the resignation and subsequent arrest of Brooks and the resignation of Wall Street Journal publisher Les Hinton, sunk Murdoch’s dream of taking full control of lucrative satellite broadcaster British Sky Broadcasting and raised questions about his ability to keep control of his global media empire.
Rupert Murdoch is eager to stop the crisis from spreading to the United States, where many of his most lucrative assets _ including the Fox TV network, 20th Century Fox film studio, The Wall Street Journal and the New York Post _ are based.
In New York, News Corp. appointed commercial lawyer Anthony Grabiner to run its Management and Standards Committee, which will deal with the scandal. But News Corp. board member Thomas Perkins told The Associated Press that the 80-year-old Murdoch has the full support of the company’s board of directors, and it was not considering elevating Chief Operating Officer Chase Carey to replace Murdoch as CEO of News Corp.
News Corp.’s widely traded Class A shares fell 68 cents to $14.97 Monday _ down 17 percent since the scandal reignited on July 4.
Britain’s Independent Police Complaints Commission also is looking into the phone hacking and police bribery claims, including one that Yates inappropriately helped get a job for the daughter of Wallis. Wallis has been arrested on suspicion of conspiring to intercept communications.
London police also confirmed that they once employed a second former News of the World employee besides Wallis. Alex Marunchak had been employed as a Ukrainian language interpreter with access to highly sensitive police information between 1980 and 2000, the Metropolitan Police said.
The police force said it recognized “that this may cause concern and that some professions may be incompatible with the role of an interpreter,” adding that the matter will be looked into.
Meanwhile, Internet hackers took aim at Murdoch late Monday, defacing the sites of his other U.K. tabloid, The Sun, and shutting down website of The Times of London. Visitors to The Sun website were redirected to a page featuring a story saying Murdoch’s dead body had been found in his garden.
Internet hacking collective Lulz Security took responsibility for that hacking attack via Twitter, calling it a successful part of “Murdoch Meltdown Monday.”
Lulz Security, which has previously claimed hacks on major entertainment companies, FBI partner organizations and the CIA, hinted that more was yet to come, saying “This is only the beginning.”
It later took credit for shutting down News International’s corporate website. Another hacking collective known as Anonymous claimed the cyberattack on The Times’ website.
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Danica Kirka and Bob Barr contributed to this report.
Meera Selva can be reached at http://twitter.com/Meera_Selva.
Jill Lawless can be reached at http://twitter.com/JillLawless
Investors largely put aside their concerns about the Greek financial crisis Monday and focused instead on value. Stocks rose broadly after the market shook off its longest weekly losing streak in nearly a decade.
The downturn brought the S&P 500 close to its average level over the prior 200 days. So long as the index doesn’t sink far below that level, many technical traders see it as a sign to start buying stocks again. The S&P is now 6 percent below the 2011 high it reached on April 29.
“In the short term, stocks have been oversold, and you’re going to get some sort of bounce, whether justified or not, just for technical reasons,” said Paul Simon, chief investment officer for Tactical Allocation Group, which has $1.5 billion in assets under advisement.
The S&P 500 index rose 6.86 points, 0.5 percent, to close at 1,278.36. The Dow Jones industrial average added 76.02 points, or 0.6 percent, to 12,080.38. The Nasdaq composite gained 13.18, or 0.5 percent, to 2,629.66.
Health care companies like Aetna Inc. and Humana Inc. rose 1 percent, the largest gain among the 10 industry groups that make up the S&P 500 index. Financial companies like Morgan Stanley, which lost 1.9 percent, were the only group to lose ground.
The S&P 500 notched its third straight day of gains, the longest stretch of increases in the stock market for nearly a month. The index eked out a tiny gain last week, breaking a six-week losing streak driven by concerns that U.S. economic growth would falter in the second half of the year and that Greece’s debt crisis would spread. It was the S&P’s longest slide since 2002.
Signs that the European financial crisis may be contained helped ease investors’ concerns. European Union officials in Luxemburg said Monday that the EU would take steps to prevent Greece’s debt problems from affecting other struggling countries like Ireland and Portugal.
European leaders failed over the weekend to agree on releasing more financial aid to Greece, saying the country must first agree to more budget cuts. Greece’s recent efforts to slash spending have led to street protests and political turmoil in Athens. The Greek government faces a confidence vote on Tuesday.
Prime Minister George Papandreou’s newly-reshuffled government is expected to prevail in the vote, and officials say they expect Greece to get its next installment of emergency loans in July. If Greece were to default, it could trigger losses for the banks that hold Greek bonds and more turmoil in financial markets.
Some analysts say investors are ready to move beyond the Greek crisis and focus on corporate earnings and the U.S. economy.
“There’s a little fatigue about hearing about the same problems, and there’s no shock factor anymore,” said Oliver Pursche, president of Gary Goldberg Financial Services. Traders are now starting to look ahead to the Federal Reserve’s two-day policy meeting, which begins Tuesday, and the next round of corporate earnings reports that begin in July, he said.
Analysts expect that operating earnings per share for companies in the S&P 500 index rose 14 percent in the second quarter. They also expect the Fed to keep interest rates at nearly zero, a record low.
Among U.S. companies, PNC Financial Services Group Inc. fell 2 percent after saying it would buy the U.S. retail operations of Royal Bank of Canada for $3.45 billion. The deal will make PNC the fifth biggest U.S. bank with 2,870 branches.
Whole Foods Market Inc. gained 2.2 percent after a BMO Capital Markets analyst upgraded the stock following a recent sell-off. And Wal-Mart stores Inc. rose 0.4 percent after the Supreme Court blocked a sex discrimination lawsuit brought against the retailer by a large group of female employees.
Two stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3.1 billion shares.
For nearly four decades, Jill McClelland has sold and repaired hunting rifles and handguns to customers from around the world at a tiny shop in a sparsely populated area in St. Charles County.
The recession didn’t put a dent in gun sales at the New Melle Gun Shop. The single-story building behind McClelland’s home averages between 600 and 700 gun sales annually, mostly handguns, a pace that has stayed steady even during tough economic times.
Now, though, McClelland and her two employees face the permanent closure of her business after her license to sell firearms was revoked because of record-keeping and reporting lapses spanning many years, according to federal officials.
A judge in the case affirmed the Bureau of Alcohol, Tobacco, Firearms and Explosives’ license revocation this week. The store is among the less than one percent of more than 10,000 gun stores inspected annually in the nation to have their licenses revoked.
On Thursday, the Department of Justice notified McClelland that the store must close.
McClelland’s attorney, Lawrence Fleming, said he plans to file an appeal of the decision and will seek a stay on the revocation so the store can remain open during the appeal process.
For McClelland, keeping the store open means keeping alive the dream she and her husband embarked on in 1974 when they quit their jobs and opened their own business.
Jack, her husband of 44 years, died in September 2008 from non-Hodgkin’s lymphoma. McClelland admits that dealing with his death led to discrepancies in paperwork at the store.
“I’m not making excuses,” she said. “My life was in turmoil. I don’t think there ever is a worse pain than losing your mate.”
In its final notice of license revocation dated August 2010, the Department of Justice listed hundreds of violations against the gun shop dating back as far as 1981. Since 2007, the ATF alleges that in 32 instances, the store took guns on consignment without completing the proper forms or doing the required background checks on the guns’ owners, and in 33 instances, the store sold firearms without contacting the National Instant Criminal Background Check System, as required by law.
The largest number of violations
The union that represents Toronto
Libya’s oil minister defected and fled to Tunisia, a Tunisian security official said Tuesday, one of the highest profile figures to abandon Moammar Gadhafi’s government.
Shukri Ghanem, the head of the National Oil Co. and Libya’s oil minister, crossed into Tunisia by road on Monday and defected, the Tunisian official said. The official, based in the region around the Ras Jdir border crossing, spoke on condition of anonymity because he was not authorized to speak to the media.
Ghanem is one of the most prominent members of Gadhafi’s government to leave amid fighting between the military and rebels seeking to end Gadhafi’s more than 40-year rule.
Others who have defected include Foreign Minister Moussa Koussa, one of Gadhafi’s earliest supporters; Interior Minister Abdel-Fatah Younes; Justice Minister Mustafa Abdul-Jalil, and Ali Abdessalam Treki, a former U.N. General Assembly president. A number of ambassadors and other diplomats also have resigned their posts.
A NATO-led campaign _ authorized by the United Nations _ is enforcing a no-fly zone over the country and launching airstrikes to try to protect civilians from attacks by Gadhafi’s forces.
Early Tuesday, NATO jets pounded two government buildings in the Libyan capital, including the Interior Ministry, setting them on fire. A government spokesman suggested that the ministry was targeted because it contained files on corruption cases against senior members of the Benghazi-based rebel leadership.
In Geneva, meanwhile, the U.N. refugee agency said Tuesday that Libyan authorities appeared to be encouraging African migrants to board unseaworthy boats bound for Europe.
Melissa Fleming, a spokeswoman for the U.N. High Commissioner for Refugees, told reporters that the Libyan conflict has opened up a route for migrants that was closed for two years because of an agreement between Libya and Italy.
Already some 14,000 people _ mostly from sub-Saharan Africa _ have used Libya as a springboard to reach Europe, and thousands more are poised to make the treacherous sea journey in the coming weeks as weather conditions in the Mediterranean improve.
“The authorities (in Libya) are not discouraging, at all, in fact there may be signs that they are encouraging these boat journeys,” she said.
Some are migrants fleeing the fighting in Libya, but others appear to be crossing into Libya from elsewhere in Africa because it is easier to get onto smugglers’ boats there.
Ghanem, the latest minister to defect, had been at odds with the Gadhafi regime before, basically losing his post for a while in 2009 as two of Gadhafi’s sons differed on the direction the country should take in reforming its political and economic systems. His resignation was seen, at least in part, as linked to the creation of a new superstructure governing the nation’s oil sector, with the new agency designed to replace one he supported.
Before assuming the oil ministry’s portfolio, Ghanem served for around three years as prime minister at a time when Libya was emerging from under the cloud of more than a decade of international sanctions.
Ghanem is among Gadhafi government officials under U.S. sanctions announced by the Treasury Department in early April.
Abdel Moneim al-Houni, a former Libyan Arab League representative who was among the first wave of Libyan diplomats to defect, confirmed that Ghanem had defected but said no official announcement has been made out of concern for the safety of family members who are still in Tripoli. Al-Houni said that he spoke to Ghanem after he crossed the border.
“Most of the officials remaining in Tripoli are forced to stay under intimidation and pressure. They are not happy with what is happening,” Al-Houni told the AP.
Guma El-Gamaty, London-based spokesman for the Libyan opposition’s Interim National Council, said “all what we know is that Shukri Ghanem is in Tunisia.”
NATO has stepped up strikes on the Libyan capital Tripoli, and one of the buildings hit early Tuesday was used by the Interior Ministry, which is responsible for internal security.
Libyan spokesman Moussa Ibrahim suggested the ministry was targeted because it contained files on rebel leaders in Benghazi, the de-facto capital of the eastern half of the country, which is under opposition control.
“If they (NATO) are really interested in protecting civilians … then we call upon them to stop and start talking to us,” Ibrahim said.
In Moscow, Russia’s foreign minister on Tuesday urged Libya’s government representatives to allow the delivery of humanitarian aid.
Minister Sergey Lavrov says that Gadhafi’s representatives reiterated their willingness to consider a peace plan tabled by the African Union that called for an immediate cease-fire and dialogue between the government and the rebels. The rebels have rejected that plan.
The meeting follows a Monday visit to Moscow by the United Nations special envoy for Libya.
Japan’s government decided Friday to set up a fund to help pay damages stemming from the crisis at a tsunami-crippled nuclear plant, financed by public money and mandatory contributions from utility companies.
Tokyo Electric Power Co. expects a deluge of damage claims from those affected by the radiation-leaking Fukushima Dai-ichi nuclear plant on the northeastern coast, whose problems constitute the worst nuclear accident since Chernobyl in 1986. However, the utility is not expected to be able to pay all of them.
The government’s plan, which would spread the burden for the crisis and must be referred to parliament for its expected approval, would create an entity that collects money for compensation from TEPCO and other utilities that operate nuclear power plants. The government will issue the body special bonds that can be cashed when needed to pay claims.
TEPCO earlier this week agreed to a cost-cutting reorganization, also intended to ensure its ability to pay compensation that includes creating a commission to monitor the company’s management.
Economy and Trade Minister Banri Kaieda insisted earlier this week that the new fund was not a bailout for TEPCO, but rather a way to ensure victims get paid.
“We want to avoid big changes in the electricity bills and contain (the public burden) as much as possible,” Kaieda said Friday.
TEPCO President Masataka Shimizu said he expects the plan to go into effect soon.
“Under this support scheme, while receiving support from the government, we will prepare to compensate those who are suffering in a fair and prompt manner,” he said in a statement.
Shinichi Ichikawa, the director of equity research at Credit Suisse in Tokyo, said the plan needed to achieve three goals: maintain a stable electricity supply, ease concerns of financial markets and ensure victims of the nuclear disaster would be compensated.
“It looks like it’s a good solution,” he said.
TEPCO has sought a 2 trillion yen ($24.8 billion) loan to get it through the initial emergency period. It expects to pay 50 billion yen ($620 million) in initial compensation to nearly 80,000 residents evacuated from around the radiation-leaking plant, which was hit by a giant tsunami after Japan’s massive March 11 earthquake. Overall damages are expected to be much higher.
Also Friday, the operator of a nuclear plant in central Japan began suspending operations at its reactors while it strengthens tsunami protections, under a separate agreement with the government.
The crisis at Fukushima had prompted the government to evaluate all of Japan’s 54 reactors for quake and tsunami vulnerability. The March 11 tsunami knocked out electricity and crucial cooling systems at the Fukushima plant.
That assessment led to Prime Minister Naoto Kan to request a temporary shutdown at the Hamaoka plant in Shizuoka prefecture amid concerns an earthquake with a magnitude of 8 or higher could strike central Japan sometime within 30 years. The Hamaoka facility sits above a major fault line and has long been considered Japan’s riskiest nuclear power plant fast cash online.
Chubu Electric Power Co., which supplies electricity to central Japan, including the city of Toyota, where the automaker is based, said steps to idle the No. 4 reactor at the Hamaoka plant started Friday morning. The company expects to begin halting the No. 5 reactor _ its only other operating reactor _ on Saturday.
Nuclear energy provides more than one-third of Japan’s electricity and shutting the Hamaoka plant is likely to exacerbate power shortages expected this summer. Its reactors account for more than 10 percent of Chubu’s power supply.
The government has said it will not seek similar shutdowns of any other reactors in the country.
Chubu Electric will also indefinitely delay a planned resumption of Hamaoka’s No. 3 reactor, which was shut down for regular maintenance late last year.
In a serious setback for efforts to stabilize the Fukushima plant, officials said Thursday that one of the reactors had been more heavily damaged than previously thought. The findings likely mean it will take longer than expected to restore the plant’s cooling systems. The original plan promised to bring the plant’s three troubled reactors to a cold shutdown by early next year.
Nuclear officials said that new data showed that the water level in the core of Unit 1 was much lower than expected, fully exposing what was left of the fuel rods that had partially melted in the hours and days immediately following the tsunami.
The findings _ which came after workers repaired monitoring equipment this week _ indicate that melted fuel also had fallen to a lump in the bottom of the pressure chamber and may have even slipped into the larger beaker-shaped drywell, or containment vessel.
Nuclear Industrial and Safety Agency spokesman Hidehiko Nishiyama acknowledged for the first time Friday that the condition constituted a “meltdown” under the Japanese definition, which requires melted fuel to drop to the bottom of the core.
“Meltdown” is not a scientific term and the definitions for it vary, though generally a “partial meltdown” refers to the melting of fuel rods _ as has been known to have happened at Fukushima for some time _ and a “complete meltdown” can mean the pressure vessel and other containments have been breached.
Officials made it clear that the fuel had melted early on the crisis and posed no danger now, as the temperature at the bottom of the reactor was around 100 degrees Celsius.
TEPCO had adopted an unorthodox method of trying to cool Unit 1’s reactor by trying to fill the drywell with water leaking from the core. But the new information means that they will have to find a new strategy, said Goshi Hosono, a prime minister’s aide and director of the nuclear crisis task force.
“We were too optimistic,” he said.
Gas prices rose to a record high Tuesday, averaging $1.396 a litre at Toronto pumps, and gas-price watchdog Dan McTeague says the bad news isn
Shares of chipmaking companies soared on Tuesday following Texas Instruments’ late Monday $6.5 billion bid for rival National Semiconductor.
Both companies make analog chips, which are used to help computers sense the world around them.
National Semiconductor (NSM) led the pack, gaining more than 70% in early trading, but other analog chipmakers also rose significantly: Intersil (ISIL) climbed 13%, ON Semiconductor (ONNN) rose 5%, and Fairchild Semiconductor (FCS) gained 3%
Shares of Analog Devices (ADI), Linear Technology (LLTC), Maxim Integrated Products (MXIM),International Rectifier (IRF) all rose about 1%.
The deal would give Texas Instruments (TXN, Fortune 500), already the world’s largest analog chipmaker, an even more sizable lead over its competition. The combined company would control 18% of the market, with the next largest rivals holding a 4% to 6% share.
As a result, analysts anticipate more deals in that segment of the chip market
"We do believe that more consolidation is possible in the analog space given the fragmented and diffuse nature of that market, and given that TI is so much larger than its next few competitors," said Craig Berger, analyst at FBR Capital Markets.
TI could buy up more analog chipmakers, or smaller competitors could merge for scale and efficiencies, analysts say. Shares of TI fell more than 2%.
Berger sees Fairchild Semiconductor and International Rectifier as the most attractive takeover targets. Both have high exposure to the industrial and automotive sectors, and their share prices are relatively cheap compared to their earnings expectations.
Even Intel (INTC, Fortune 500), AMD (AMD, Fortune 500), and Nvidia (NVDA), which have all suffered through recent slumps and aren’t players in the analog business, were up about 1% on Tuesday.
Chip stocks got knocked around in the past two days, after IHS iSuppli reported that semiconductor suppliers’ string of six consecutive quarters of sequential sales growth ended in the fourth quarter of 2010.
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