Wall Street ends lower on growth worries

NEW YORK (Reuters) - U.S. stocks fell for a second straight day on Thursday and the S&P 500 posted its worst two-day loss since November after reports cast doubt over the health of the U.S. and euro-zone economies.


But a late-day rally helped stocks erase some of their losses with most of the pullback concentrated in the technology- heavy Nasdaq. The move suggested investors were still willing to buy on dips even after the sharp losses in the last session.


In Europe, business activity indexes dealt a blow to hopes that the euro zone might emerge from recession soon, showing the downturn across the region's businesses unexpectedly grew worse this month.


"The PMI numbers out of Europe were really a blow to the market," said Jack De Gan, chief investment officer at Harbor Advisory in Portsmouth, New Hampshire. "The market was expecting signs that recovery is still there, but the numbers just highlighted that the euro-zone problem is still persistent."


U.S. initial claims for unemployment benefits rose more than expected last week while the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. mid-Atlantic region fell in February to the lowest in eight months.


Gains in Wal-Mart Stores Inc shares helped cushion the Dow. The shares gained 1.5 percent to $70.26 after the world's largest retailer reported earnings that beat expectations, though early February sales were sluggish.


The Dow Jones industrial average <.dji> fell 46.92 points, or 0.34 percent, to 13,880.62 at the close. The Standard & Poor's 500 Index <.spx> lost 9.53 points, or 0.63 percent, to 1,502.42. The Nasdaq Composite Index <.ixic> dropped 32.92 points, or 1.04 percent, to close at 3,131.49.


The two-day decline marked the U.S. stock market's first sustained pullback this year. The Standard & Poor's 500 has fallen 1.8 percent over the period and just managed to hold the 1,500 level on Thursday. Still, the index is up 5.3 percent so far this year.


The abrupt reversal in markets, which started on Wednesday after minutes from the Federal Reserve's January meeting suggested stimulus measures may end earlier than thought, looks set to halt a seven-week winning streak for stocks that had lifted the Dow and the S&P 500 close to all-time highs.


Wall Street will soon face another test with the upcoming debate in Washington over the automatic across-the-board spending cuts put in place as part of a larger congressional budget fight. Those cuts, set to kick in on March 1 unless lawmakers agree on an alternative, could depress the economy.


Semiconductor stocks ranked among the weakest of the day, pressuring the Nasdaq as the Philadelphia Semiconductor Index <.sox> fell 1.8 percent. Intel Corp fell 2.3 percent to $20.25 while Advanced Micro Devices lost 3.7 percent to $2.60 as the S&P 500's biggest percentage decliner.


The Dow also got a helping hand from personal computer maker Hewlett-Packard Co , which rose 2.3 percent to end the regular session at $17.10. The company was scheduled due to report first-quarter results after the closing bell.


Shares of Boeing Co rose 1.6 percent to $76.01 as a senior executive was set to meet with the head of the U.S. Federal Aviation Administration on Friday and present a series of measures to prevent battery failures that grounded its 787 Dreamliner fleet, according to a source familiar with the plans.


In other company news, shares of supermarket operator Safeway Inc jumped 14.1 percent to $22.97 after the company reported earnings that beat expectations.


Shares of VeriFone Systems Inc tumbled nearly 43 percent to $18.24 after the credit-card swipe machine maker forecast first- and second-quarter profits well below expectations.


Of the 427 companies in the S&P 500 that have reported results so far, 69.3 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data through Thursday morning.


Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.9 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.


Berry Petroleum Co jumped 19.3 percent to $46.02 after oil and gas producer Linn Energy LLC said it would buy the company in an all-stock deal valued at $4.3 billion, including debt. Linn Energy shares advanced 2.8 percent to $37.68.


About two stocks fell for everyone that rose on the New York Stock Exchange and Nasdaq. About 7.64 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, well above the 20-day moving average of around 6.6 billion shares.


(Editing by Jan Paschal)



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SAfrica police replace top Pistorius investigator


PRETORIA, South Africa (AP) — South African police appointed a new chief investigator Thursday in the Oscar Pistorius murder case, replacing a veteran detective after unsettling revelations that the officer was charged with seven counts of attempted murder.


The sensational twist in the state's troubled investigation fueled growing public fascination with the case against the double-amputee Olympian, who is charged with premeditated murder in the Valentine's Day slaying of his girlfriend, Reeva Steenkamp.


Pistorius, a sporting icon and source of inspiration to millions until the shooting last week, is backed by a high-powered team of lawyers and publicists. The abruptness of his fall, and its gruesome circumstances, have gripped a global audience and put South Africa's police and judicial system under the spotlight.


The man at the center of the storm sat in the dock during his bail hearing, mostly keeping his composure in contrast to slumped-over outbursts of weeping on previous days in court. In front of Pistorius, defense lawyer Barry Roux pounced on the apparent disarray in the state's case, laying out arguments that amounted to a test run for the full trial yet to come.


Roux pointed to what he called the "poor quality" of the state's investigation and raised the matter of intent, saying Pistorius and Steenkamp had a "loving relationship" and the athlete had no motive to plan her killing.


Pistorius, 26, says he mistook Steenkamp for an intruder when he shot her through a locked bathroom door in his home. Prosecutors believe the shooting happened after the couple got into an argument, and prosecutor Gerrie Nel painted a picture of a man he said was "willing and ready to fire and kill."


Much of the drama Thursday, however, happened outside the courtroom as South African police scrambled to get their investigation on track.


In a news conference at a training academy, National Police Commissioner Riah Phiyega said a senior detective would gather a team of "highly skilled and experienced" officers to investigate the killing of 29-year-old Steenkamp, a model and budding reality TV contestant.


The decision to put police Lt. Gen. Vinesh Moonoo in charge came soon after word emerged that the initial chief investigator, Hilton Botha, is facing attempted murder charges, and a day after he offered testimony damaging to the prosecution.


Botha acknowledged Wednesday in court that nothing in Pistorius' version of the fatal shooting contradicted what police had discovered, even though there have been some discrepancies. Botha also said that police left a 9 mm slug in the toilet and lost track of allegedly illegal ammunition found in Pistorius' home.


"This matter shall receive attention at the national level," Phiyega told reporters after testimony ended in the third day of Pistorius' bail hearing.


Bulewa Makeke, spokeswoman for South Africa's National Prosecuting Authority, said the attempted murder charges had been reinstated against Botha on Feb. 4. Police say they found out about it after Botha testified in Pistorius' bail hearing Wednesday.


Botha and two other police officers had seven counts of attempted murder reinstated against them in connection with a 2011 shooting incident in which they allegedly fired shots at a minibus they were trying to stop.


Makeke indicated the charges were reinstated because more evidence had been gathered. She said the charge against Botha was initially dropped "because there was not enough evidence at the time."


Pistorius' main sponsor, Nike, meanwhile, suspended its contract with the multiple Paralympic champion, following eyewear manufacturer Oakley's decision to suspend its sponsorship. Nike said in a statement on its website: "We believe Oscar Pistorius should be afforded due process and we will continue to monitor the situation closely."


On Thursday, Chief Magistrate Desmond Nair asked the defense regarding Pistorius' bail application: "Do you think there will be some level of shock if the accused is released?"


Defense lawyer Roux responded: "I think there will be a level of shock in this country if he is not released."


Prosecutor Nel suggested signs of remorse from Pistorius had nothing to do with whether he planned to kill his girlfriend.


"Even if you plan a murder, you plan a murder and shoot. If you fire the shot, you have remorse. Remorse might kick in immediately," Nel said.


As Nel summed up the prosecution's case opposing bail, Pistorius began to weep in the crowded courtroom, leading his brother, Carl Pistorius, to reach out and touch his back.


"He (Pistorius) wants to continue with his life like this never happened," Nel went on, prompting Pistorius, who was crying softly, to shake his head.


"The reason you fire four shots is to kill," Nel persisted.


Earlier Thursday, Nair questioned Botha over delays in processing records from phones found in Pistorius' house following the slaying.


"It seems to me like there was a lack of urgency," the magistrate said.


Botha is to appear in court in May to face seven counts of attempted murder in connection with the minibus shooting incident. He has been quoted in the South African media as denying allegations he was drunk at the time, saying he and the other officers were trying to stop the vehicle and didn't know there were people inside.


While Botha has been dropped from the Pistorius investigation, he has not been suspended from the police force, Phiyega said, and could still be called by defense lawyers at trial.


Pistorius, wearing the same gray suit, blue shirt and gray tie combination he has worn throughout the bail hearing, stood ramrod straight in the dock, then sat calmly looking at his hands.


Roux said an autopsy showed that Steenkamp's bladder was empty, suggesting she had gone to the bathroom to use the toilet, rather than fled there to escape an enraged Pistorius, as prosecutors contend.


"The known forensics is consistent" with Pistorius' statement, Roux said, asking that bail restrictions be eased for his client.


But the prosecutor said Pistorius hadn't given guarantees to the court that he wouldn't leave the country if he was facing a life sentence. Nel also stressed that Pistorius shouldn't be given special treatment.


"'I am Oscar Pistorius. I am a world-renowned athlete.' Is that a special circumstance? No," Nel said. "His version (of the killing) is improbable."


Nel said the court should focus on the "murder of the defenseless woman."


Botha testified Thursday that he investigated a 2009 complaint against Pistorius by a woman who said the athlete assaulted her. However, Pistorius did not hurt the woman, who in fact injured herself when she kicked a door at Pistorius' home, Botha said.


___


AP Sports Writer Gerald Imray contributed to this report from Johannesburg


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Drew Peterson: 'The media turned me into a monster'









Moments after screaming in court, "I did not kill Kathleen," Drew Peterson was sentenced to 38 years in prison for the 2004 murder of his third wife Kathleen Savio.

Peterson had faced as much as 60 years, but Judge Edward Burmila said he gave Peterson some consideration for his years as a police officer and his service in the military. Peterson is 59.


The sentence was handed down after Peterson, who did not testify at his trial, made an emotional appeal to the judge, at times appearing to choke up as he argued that he was convicted by "rumors, gossip, outrageous lies and, most importantly, unreliable hearsay."


"I don't deserve this," he told Burmila. "I don't deserve this."








Peterson, a former Bolingbrook police sergeant, was convicted last fall of drowning Savio in her bathtub.


Peterson began his appeal to the judge today by telling him, "Good day, my name is Drew Peterson. I hope I don't aggravate the situation here, but I have a lot of things to be said." Then he screamed, "I did not kill Kathleen!"

"Yes, you did," a woman said.

"Ma'am, I'd like you to leave the courtroom," Burmila said. "And Mr. Peterson, don't make any outbursts that are designed to aggravate people."

"I'm sorry, your honor. I must have been woozy," Peterson said.


After the sentencing, State's Atty. James Glasgow dismissed the outburst as a "shrill, kind of feminine screech."


Peterson insisted to the judge he is the victim of an unjust and invasive police investigation that ignored or lost evidence that could have shown his innocence. He accused the state police of falsifying reports.

"What they did uncover was rumors, gossip, outrageous lies, and most importantly, unreliable hearsay. Hearsay that pierced three privileges that have stood for centuries," Peterson said.

Peterson bitterly complained that the Rev. Neil Schori betrayed his promise never to repeat anything that was said by Peterson or Stacy. Schori testified at trial that Stacy confided to him that she lied to state police about Peterson's alleged slaying of Savio.

"Out of the privileged information from Neil Schori, the state police was able to create" a case, he said.

"I find it hard to believe that the state was able to take information that they obtained illegally and turn it to their benefit."

Kathleen Savio’s divorce attorney Harry Smith, who also testified at trial about a conversation he had with Stacy before she disappeared, "gave up privileged information from both Kathy and Stacy, like it was yesterday's garbage," he said. "Ultimately, it led to my conviction.

"Hearsay is a scary thing. There's no proof. Anything can be said and no0body's accountable for the truth.

"In my experience, in divorce situations everybody lies, and everybody lies under the instruction of their attorneys."

"There was an incident where Kathleen exited the house. . .and punched Stacy in the face. They went to trial, my 9- and 10-year-old sons were called to testify, and under oath they lied," Peterson said.

"On their next visit, I questioned them, 'Why’d you guys lie?' They said Harry Smith told them to. They didn’t want their mom to go to jail,” Peterson said, growing emotional as he spoke. “I couldn't be mad at them.”

"Stacy provided me an alibi for Kathleen's death. Then she later said she was lying about that. Seems like Stacy was lying all the time about everything. But the state's attorney picked and chose what they wanted to believe.

"Stacy clearly had a crush on the Rev. Schori, which I think was a factor in this.

"There was a constant and consistently illegal activity by the state’s attorney’s, including the state’s attorney himself.

"So what did the state’s attorney do? They hire a skinny. . .spokesperson (Peterson family spokeswoman Pam Bosco) to go out and say anything she wants. It buffered the state’s attorney’s office from anything the court might bring.

"And when it came time for a vote from the grand jury, only a handful of people were selected. Not the entire grand jury was brought in to do the vote. Pretty much guaranteed. . .that I was indicted, which I was.

"There was a first investigation on this case, in which probably one of the most experienced investigators was the first one on the scene in this case, and he determined Kathleen's death was an accident.

"Dr. (Bryan) Mitchell looked at Kathy's body when it was in its freshest state. He determined her death was an accident."

So did the coroner's jury, Peterson said. "All this was done when the evidence was freshest."

Peterson then paused and asked for some water. He resumed by talking about his service in the military and lengthy law enforcement career.

"I was probably one of the highest decorated officers in the Bolingbrook Police Department," he said.


"I always took my job seriously, I never violated the public trust," he said, his voice husky with emotions. "And I never beared false witness against anyone.

"I loved having a job that helped people," he said. "In my private life, I ran up to six companies at one time. I employed nearly 100 people."

"Until this happened, I thought I was a great guy," he said. "And in moments, the media turned me into a monster.

"As soon as I get a chance, I'm going to get a tattoo on my back, from shoulder to shoulder, that says, 'No good deed goes unpunished.' "

He said he loved Savio and called her a good wife and mother who did not deserve to die, but insited it was an accident.  He then talked about Savio’s upbringing, calling it difficult and abusive.

"The most pathetic thing I’ve ever seen in my life was the night after our wedding, when I held Kathy and she cried because her father failed to show up and give her away on her wedding.

"At Kathy's wake, friends and family put money in cards and envelopes to help cover the cost of the funeral.

“I paid for the funeral."

"That's a lie right there," a man in court shouted.

"I paid for Kathy’s funeral at the request of her sister, who's sitting right there," Peterson said.

He then attacked State's Atty. James Glasglow.

"Mr. Glasgow, all aspects of my life have been destroyed. Everything from my personal life to my professional life to my social life -- all aspects have been destroyed. And I tell you this to give you greater cause for celebration, when you celebrate the fact that you perpetrated the largest railroad job in the history of this country.

"Since I've been incarcerated, I've had nine family members who have died, six of which were cousins," Peterson said. None of them made it past the age of 60, he said.

“And in telling you this, I'm not looking for any sympathy, but anything you sentence me to, you're sentencing me to the Department of Corrections to die!" Peterson said.

Peterson said he believes his constitutional rights have been violated.

"And I think the only thing left to make this case run true to form would be a cruel and unusual punishment. And I don't think anybody would care because nobody cares. I can't believe I spent 32 years defending a constitution that allowed this to happen to me. I can't believe people fought and died in wars protecting a constitution that allowed this to happen to me.”

America should be outraged, but nobody cares, he said.

"I take full responsibility for my relationship with the media," Peterson continued. "I just wanted them away from my home because they were scaring my kids. They hounded me. I agreed to go on TV and tell my story and ask for legal help.

"Everybody from busy bodies like Nancy Grace. . .to that ridiculous movie that played repeatedly before and during my trial.

"It pretty much guaranteed that I would not get a fair trial. It's pretty clear that the state took part in that movie because things I remember saying only to the state police appeared in that movie," Peterson said, apparently referring to a Lifetime TV movie starring Rob Lowe at Peterson.

"I'm an obnoxious man by nature, truly. And after 30 years as a police officer, as is normal with police officer, my defense mechanism is comedy. The media took that and capitalized on that, and my obnoxious nature showed through. But I want to ensure the court that at no time did I want to portray any insensitivity about Kathy's death. That was not my intention.

“I hope Mr. Glasgow looks me in the eye right now. Never forget my face! Never forget what you’ve done. 

“Originally I had some cute and funny things to say. But now in closing, it's time to be sentenced to a life of hardship and abuse in prison. I don't deserve this, I don't deserve this.

“Thank you.”


Earlier in the afternoon, Savio’s sister Anna Marie Savio-Doman told the judge that "my loss of my baby sister is beyond words. There will be no more birthday parties, backyard gatherings, holiday celebrations or other family activities to share. The laughter, hugs, guidance, advice, sense of security and those opportunities to say, ‘I love you’ are forever gone.

“One of the hardest things for me is knowing the pain and fear that Kathleen must have suffered at the time of her murder. The horror and betrayal she must have felt when she realized that someone she had trusted and loved more than anything was actually killing her. I wonder if she could feel her heart breaking when she thought about leaving her two boys forever. The helplessness she must have felt knowing she was going to die.

“I have to say it hurts a lot. I hope it gets better, but I am not confident it will get better. I still talk to her. I hope she can hear me.”

Susan Doman described her sister as a “rock” and told the court she looked up to Savio, even though Savio was younger. She also expressed her anger toward Peterson.

“He showed no remorse,” she said. “For years I watched Peterson parade on TV, radio, photo shoots, and (that) radio promotion to win a date with him. That was a big joke to him. And he loved all the attention.

“Your honor, the defendant shows no remorse to this day for the horrible crime that he did to my sister Kathleen. This senseless action is inexcusable. I am placing my trust that you will give Kathleen justice once and for all.”

The judge also read a statement from Savio’s father, but not aloud.

In arguing for a maximum sentence, Glasgow reminded the judge about the damage done to his young children with Stacy. Prosecutors have said they believe Peterson killed Stacy and could seek charges in that case.

"Not only is their mother gone, but also their father is gone, as he sits before you," Glasgow said.

Glasgow said Peterson also should not get a break for living a law abiding life because of his attacks on his second wife, when he threatened to kill her.

"There's a recurring them here with Mr. Peterson. He’s a police officer, and there's a number of occurrences with the victims here being afraid to call the police department.

"These are obviously very dangerous situation, and in this case, led to the demise of two young women."

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French, Malian forces fight Islamist rebels in Gao


GAO, Mali (Reuters) - French and Malian troops fought Islamists on the streets of Gao and a car bomb exploded in Kidal on Thursday, as fighting showed little sign of abating weeks before France plans to start withdrawing some forces.


Reuters reporters in Gao in the country's desert north said French and Malian forces fired at the mayor's office with heavy machineguns after Islamists were reported to have infiltrated the Niger River town during a night of explosions and gunfire.


French Defense Minister Jean-Yves Le Drian told a news conference in Brussels that Gao was back under control after clashes earlier in the day.


"Malian troops supported by French soldiers killed five jihadists and the situation is back to normal," he said.


In Kidal, a remote far north town where the French are hunting Islamists, residents said a car bomb killed two. A French defense ministry source reported no French casualties.


French troops dispatched to root out rebels with links to al Qaeda swiftly retook northern towns last month. But they now risk being bogged down in a guerrilla conflict as they try to help Mali's weak army counter bombings and raids.


"There was an infiltration by Islamists overnight and there is shooting all over the place," Sadou Harouna Diallo, Gao's mayor, told Reuters by telephone earlier in the day, saying he was not in his office at the time.


Gao is a French hub for operations in the Kidal region, about 300 km (190 miles) northeast, where many Islamist leaders are thought to have retreated and foreign hostages may be held.


"They are black and two were disguised as women," a Malian soldier in Gao who gave his name only as Sergeant Assak told Reuters during a pause in heavy gunfire around Independence Square.


Six Malian military pickups were deployed in the square and opened fire on the mayor's office with the heavy machineguns. Two injured soldiers were taken away in an ambulance.


French troops in armored vehicles later joined the battle as it spilled out into the warren of sandy streets, where, two weeks ago, they also fought for hours against Islamists who had infiltrated the town via the nearby river.


Helicopters clattered over the mayor's office, while a nearby local government office and petrol station was on fire.


A Gao resident said he heard an explosion and then saw a Malian military vehicle on fire in a nearby street.


Paris has said it plans to start withdrawing some of its 4,000 troops from Mali next month. But rebels have fought back against Mali's weak and divided army, and African forces due to take over the French role are not yet in place.


Islamists abandoned the main towns they held but French and Malian forces have said there are pockets of Islamist resistance across the north, which is about the size of France.


CAR BOMB


Residents reported a bomb in the east of Kidal on Thursday.


"It was a car bomb that exploded in a garage," said one resident who went to the scene but asked not to be named.


"The driver and another man were killed. Two other people were injured," he added.


A French defense ministry official confirmed there had been a car bomb but said it did not appear that French troops, based at the town's airport, had been targeted.


Earlier this week, a French soldier was killed in heavy fighting north of Kidal, where French and Chadian troops are hunting Islamists in the Adrar des Ifoghas mountains, which border Algeria.


Operations there are further complicated by the presence of separatist Tuareg rebels, whose rebellion triggered the fighting in northern Mali last year but were sidelined by the better-armed Islamists.


Having dispatched its forces to prevent an Islamist advance south in January, Paris is eager not to become bogged down in a long-term conflict in Mali. But their Malian and African allies have urged French troops not to pull out too soon.


(Additional reporting by Emanuel Braun in Gao, Adama Diarra in Bamako, David Lewis and John Irish in Dakar and Adrian Croft in Brussels; Writing by David Lewis; Editing by Jason Webb and Roger Atwood)



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Homebuilding takes a breather; wholesale prices up


WASHINGTON (Reuters) - U.S. builders broke ground on fewer homes last month but a jump in permits for future construction to a 4-1/2-year high indicated the housing market recovery remains on track.


Another report on Wednesday showed wholesale prices rose in January for the first time in four months. However, the gain was smaller than expected and left scope for the Federal Reserve to keep buying bonds to stimulate the economy.


Housing starts dropped 8.5 percent in January to an 890,000-unit annual rate, pulled down by a sharp drop in the volatile multi-family unit category, the Commerce Department said.


Starts for single-family homes hit their highest level since July 2008, and permits for future construction, which lead starts by at least a month, were at their highest level since June 2008.


The drop in starts followed an outsized gain in December and was confined to the Northeast and Midwest, suggesting winter weather likely contributed to the pullback.


"The fundamentals are there and the drivers are looking good," said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. "We see more new construction this year. The only question is whether it will be in the multi-family or single-family segment."


Housing has shifted from being a headwind for the economy to being a pillar of support, although mortgage rates have crept higher in recent weeks, cooling loan demand.


Luxury homebuilder Toll Brothers on Wednesday reported disappointing quarterly results, hurt in part by lower selling prices, but other homebuilders have been able to take advantage of the recovering market.


A separate report from the Labor Department showed producer prices rose 0.2 percent last month as rebounding food costs offset declining gasoline prices. Wholesale prices had slipped 0.3 percent in December, and economists had expected them to rise 0.4 percent in January.


Food prices accounted for more than 75 percent of the rise in wholesale prices last month.


INFLATION PRESSURES MUTED


Away from the spike in food prices, the producer price report showed inflation pressures were generally muted.


In the 12 months through January, wholesale prices were up 1.4 percent and data on Thursday is expected to show consumer inflation below the U.S. central bank's goal of 2 percent.


"Inflationary pressures remain well contained," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "The Federal Reserve would rather see inflation slightly higher in response to stronger economic conditions than benign because the recovery remains tepid."


In an effort to drive down borrowing costs and spur stronger growth, the Fed last year launched an open-ended bond buying program and said it would keep it up until it saw a substantial improvement in the outlook for the labor market.


But minutes of the U.S. central bank's January 29-30 meeting showed a number of policymakers believed the Fed might have to slow or stop asset purchases before seeing an acceleration in job growth because of concerns over the costs.


U.S. stocks fell on the minutes, with the Standard & Poor's 500 index posting its biggest one day percentage decline since mid-November.


The dollar rose against a basket of currencies. Prices for U.S. Treasury debt ended higher.


Wholesale prices excluding volatile food and energy costs edged up 0.2 percent last month after gaining 0.1 percent in December. In the 12 months through January, those so-called core prices rose 1.8 percent, the smallest gain since February 2011.


A surge in the cost of fresh and dried vegetables pushed up food prices in January. Gasoline prices surprisingly recorded another substantial decline last month, even though prices at the pump have been rising almost every week this year.


The core PPI was lifted by a jump in the cost of drugs, while passenger car and light truck prices fell.


(Additional reporting by Jason Lange; Editing by Andrea Ricci, Tim Ahmann and Leslie Adler)



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Police offer confused testimony in Pistorius case


PRETORIA, South Africa (AP) — The detective leading the police investigation into Oscar Pistorius' fatal shooting of his girlfriend offered confusing testimony Wednesday, at one point agreeing with the athlete's defense that officers had no evidence challenging the runner's claim he accidentally killed her.


Testimony by Detective Warrant Officer Hilton Botha of the South African Police Service left prosecutors rubbing their temples, only able to look down at their notes as he misjudged distances and acknowledged a forensics team left in the toilet bowl one of the bullet slugs fired at Reeva Steenkamp. However, Botha still poked holes in Pistorius' own account that he feared for his life and opened fire on Valentine's Day after mistaking Steenkamp for an intruder.


The second day of the bail hearing in a case that has riveted South Africa and much of the world appeared at first to go against the double-amputee runner, with prosecutors saying a witness can testify to hearing "non-stop talking, like shouting" between 2 a.m. and 3 a.m. before the predawn shooting on Feb. 14. However, Botha later said under cross examination that the person who overheard the argument was in a house 600 meters (yards) away in Pistorius' gated community in the suburbs of South Africa's capital, Pretoria.


Later, prosecutor Gerrie Nel questioned Botha again and the detective acknowledged the distance was much closer. But confusion reigned for much of his testimony, when at one point Botha said officers found syringes and steroids in Pistorius' bedroom. Nel quickly cut the officer off and said the drugs were actually testosterone.


Pistorius' lead defense lawyer, Barry Roux, asserted when questioning the detective — who has 16 years' experience as a detective and 24 years with the police — that it was not a banned substance and that police were trying to give the discovery a "negative connotation."


"It is an herbal remedy," Roux said. "It is not a steroid and it is not a banned substance."


The name of the drug, offered later in court by Roux, could not be immediately found in reference materials by The Associated Press. A spokesman for prosecutors later said it's too early to know what the substance is, as they don't yet have results of forensic testing on the material.


Pistorius, 26, said in an affidavit read in court Tuesday that he and his 29-year-old girlfriend had gone to bed and that when he awoke during the night he detected what he thought was an intruder in the bathroom. He testified that he grabbed his 9 mm pistol and fired into the door of a toilet enclosed in the bathroom, only to discover later to his horror that Steenkamp was there, mortally wounded.


Pistorius, the first Paralympian runner to compete at the Olympics, is charged with premeditated murder in the case.


The prosecution attempted to cement its argument that the couple had a shouting match, that Steenkamp fled and locked herself into the toilet stall of the bathroom and that Pistorius fired four shots through the door, hitting her with three bullets.


Botha said: "I believe that he knew that Reeva was in the bathroom and he shot four shots through the door."


But asked if the police found anything inconsistent with the version of events presented by Pistorius, Botha responded that they had not. He later said nothing contradicted the police's version either.


Nel projected a plan of the bedroom and bathroom in the courtroom and argued that Pistorius had to walk past his bed to get to the bathroom and could not have done so without realizing that Steenkamp was not in the bed.


"There's no other way of getting there," Nel said.


Botha said the trajectory of the bullets showed the gun was fired pointed down and from a height. This seems to conflict with Pistorius' statement Tuesday, because the athlete said that he did not have on his prosthetics and on his stumps and feeling vulnerable because he was in a low position when he opened fired.


Officers also found .38-caliber pistol rounds in a safe, which Botha said Pistorius owned illegally and for which he said the athlete would be charged with a crime. However, Botha also acknowledged investigators didn't take photographs of the ammunition and let Pistorius' supporters at the crime scene take them away.


Botha said the holster for the 9 mm pistol was found under the left side of the bed, the side on which Steenkamp slept. He also implied it would have been impossible for Pistorius to get the gun without checking to see if Steenkamp was there. Roux later argued that Pistorius had suffered an injury to his right shoulder and wore a "medical patch" the night of the killing which forced him to sleep on the left side of the bed.


Steenkamp was shot in the head over her right ear and in her right elbow and hip, breaking her arm and hip, Botha said. However, Roux later asked Botha if Steenkamp's body showed "any pattern of defensive wounds." The detective said no.


Botha also said the shots were fired from 1.5 meters (five feet), and that police found three spent cartridges in the bathroom and one in the hallway connecting the bathroom to the bedroom. However, later on cross-examination by the defense, Botha said he wasn't a forensics expert and couldn't answer some questions.


Police also found two iPhones in the bathroom and two BlackBerrys in the bedroom, Botha said, adding that none had been used to phone for help. Roux later suggested that a fifth phone, not collected by the police, was used by Pistorius to make calls for a hospital and help. After the hearing, Roux told journalists that Pistorius' defense team had the phone, but did not elaborate.


Guards at the gated community where Pistorius lives did call the athlete, Botha said. The detective said that all the athlete said was: "I'm all right."


He didn't hang up, Botha said, and the guards heard him uncontrollably weep.


"Was it part of his premeditated plan, not to switch off the phone and cry?" Roux asked sarcastically.


___


Gerald Imray reported from Johannesburg. Associated Press writer Michelle Faul in Johannesburg contributed to this report.


___


Jon Gambrell can be reached at www.twitter.com/jongambrellAP. Gerald Imray can be reached at www.twitter.com/geraldimrayAP.


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What legacy for Hillary on gay rights?






STORY HIGHLIGHTS


  • Frida Ghitis: As secretary of state, Clinton made equality for gays a foreign policy value

  • She says treatment of LGBT citizens is a microcosm of a nation's human rights approach

  • She says Clinton used U.S. sway to advance LGBT rights as global standard

  • Ghitis: Clinton gave a boost to human rights for all and nudge to process of freedom




Editor's note: Frida Ghitis is a world affairs columnist for The Miami Herald and World Politics Review. A former CNN producer and correspondent, she is the author of "The End of Revolution: A Changing World in the Age of Live Television." Follow her on Twitter: @FridaGColumns


(CNN) -- As Hillary Clinton makes a whirlwind round of appearances in her last days as secretary of state, one groundbreaking aspect of her work deserves a moment in the spotlight: In a bold departure with tradition, Clinton made the promotion of equality for gay people a core value of U.S. foreign policy.


That is a transformative change, one that advances the cause of human rights around the world -- not just for gays and lesbians, but for everyone.



Frida Ghitis

Frida Ghitis



The way governments treat their LGBT (lesbian, gay, bisexual and transgender) citizens can tell us much about their overall approach to human rights and democracy. Mistreatment of sexual minorities is a microcosm of greater repression.


Take a look at the gruesome spectacle of young gay men executed by the government of Iran in the streets, for all to see. Or, look at the new anti-gay laws coming into effect in Russia's increasingly authoritarian regime. It is no accident that the growing repression of LGBT Russians coincides with a dramatic deterioration of political freedom and what the nonpartisan Freedom House called "the return of the iron fist in Russia."


It is clear that gays and lesbians are the canaries in the coal mine of human rights. When gays live under pressure, everyone should worry.



That, however, is not how Clinton explained it 14 months ago, when she stood before the Human Rights Council in Geneva, in front of an audience filled with representatives from Arab and African countries, from places where homosexuality is a crime, even one punishable by death, and declared that gay rights and human rights "are one and the same." Gay people, she explained, deserve equality simply because everyone does.


It was Human Rights Day, the commemoration of the signing of the 1948 U.N. Declaration of Human Rights, and she used the occasion to send a message to the world on behalf of the United States. She declared unequivocally that there is no exception for gay people when it comes to human rights.


Opinion: President Hillary Clinton? If she wants it


She admitted that the U.S. record on human rights for gays and lesbians "is far from perfect." But by proclaiming, without caveat or qualification, the American stance on the issue, she sent a signal to the rest of the world that, while equality for gay people is far from reached, the rightness of the goal is beyond debate, much like it is with equal rights for women or for racial minorities.


In doing this, she announced it was now the official policy of the U.S. government to promote the rights of LGBT people everywhere. Clinton has always been a couple of steps ahead of President Barack Obama when it comes to gay rights. It's a safe bet she persuaded him to jump on board and put the full force of the administration behind this new policy.


In Geneva that day, she announced that the president had instructed all U.S. government agencies working in other countries to "combat the criminalization of LGBT status and conduct" to help protect vulnerable LGBT, helping refugees and asylum seekers and responding to abuses.






Today, American diplomats, as part of their official mandate and as an explicit tenet of U.S. values, must speak up for the rights of individuals experiencing persecution on the basis of their sexual orientation, as when a couple were sentenced in Cameroon for "looking" gay.


News: Hillary Clinton talks future 'adventures'


America may be not as influential as it once was, but no country carries more weight; there's not even a close second. America's opinion matters if you want foreign aid or political assistance.


But it matters even more to people on the ground, eager, perhaps desperate to make their case before the authorities, their boss or their family. In the latter case, that it was the popular and respected Hillary Clinton making the argument undoubtedly made a difference on a personal level, even if dictators did not relent.


Clinton also noted that "being gay is not a Western invention; it is a human reality," and noted nations that have enacted protections for their gay citizens, including South Africa, Colombia and Argentina.


It was a rebuke to that tragicomic moment in 2007, when Iranian President Mahmoud Ahmadinejad told an audience in New York, "In Iran, we do not have homosexuals like you do in your country," prompting an explosion of laughter from the crowd. Of course, gay people live in Iran, where homosexuality is punishable by death.


America's stance, promoted so passionately by Clinton, is gradually becoming the global standard for human rights.


Under intense lobbying from America, the usually feckless and frequently counterproductive U.N. Human Rights Council adopted a measured entitled "Ending Violence Based on Sexual Orientation and Gender Identity," and another supporting equality, important symbols that this is a standard for the entire world.


Clinton moved the issue of equality for members of the LGBT community to the front of America's diplomatic agenda; in the process, she gave a boost to human rights for all and a considerable nudge to the inexorable progress of freedom. Let's hope her successor doesn't let up.


Follow us on Twitter @CNNOpinion.


Join us on Facebook/CNNOpinion.


The opinions expressed in this commentary are solely those of Frida Ghitis.






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Drew Peterson: Ex-attorney Brodsky meets with Stacy's sister









During a courtroom break this afternoon, Drew Peterson’s former lead attorney Joel Brodsky chatted in the hallway with the sister of Peterson’s missing fourth wife, Stacy.

Stacy’s sister Cassandra Cales wouldn’t discuss the content of the roughly five-minute conversation, but Brodsky said, "We were just discussing how to make sure that her sister Stacy isn't forgotten after Drew goes away."






Peterson is the sole suspect in Stacy’s 2007 disappearance, but he has not been charged. Prosecutors have said they believe Peterson killed Stacy and plan to review the case and whether to bring charges.

Attorneys continued to argue this afternoon about whether Peterson should get a new trial after his murder conviction last fall in the drowning of his third wife, Kathleen Savio.

If the judge does not grant a new trial, sentencing would come next for Peterson. Attorneys indicated that the sentencing hearing, if it happens, likely would be Thursday. Peterson, 59, faces 20-60 years in prison.
 
In arguing for a new trial, the defense said hearsay evidence and certain witnesses should never have been allowed at trial. Attorneys then turned to their argument that Brodsky's decision to call divorce attorney Harry Smith to testify scuttled Peterson's chance at a fair trial.
 
Smith testified at the murder trial last year that he had a phone conversation with  Stacy about whether she could use knowledge about Savio’s death in a potential divorce proceeding against Peterson. Some jurors have said Smith’s testimony convinced them Peterson was guilty.

"It was an awful decision,” defense attorney Steve Greenberg said in court. “It ruined the case -- we brought out the worst possible evidence, and the best evidence for the state."

Greenberg said Judge Edward Burmila has the opportunity to undo the problems caused by Brodsky's insistence on calling Smith to the stand.

“We have to give the courts a chance to correct errors that were made during a trial, and that’s what we’re doing here today," Greenberg told Burmila. "Ultimately, if you boil it down, Harry Smith's testimony was probably the most incriminating piece of evidence against Mr. Peterson, and it was brought out by the defense. There could be no reasonable trial strategy."

"Whatever kernel of impeachment Mr. Brodsky thought he was going to get out of it paled in comparison to the mountain of damage that it brought out," Greenberg said. "It was awful strategy,  and that strategy alone means Mr. Peterson should get a new trial from this court.”

Burmila asked if Peterson didn't bear some responsibility for listening to Brodsky over the objections of his other attorneys.

But Greenberg said a client doesn't get a say in trial strategy, and said that while Brodsky was wise to bring in experienced criminal attorneys, he never listened to them.

“It was a dictatorship," Greenberg said.

In the overflow room across the hall where media members and other court observers were listening to the proceedings in the courtroom, Brodsky groaned at every accusation.

"I'm a dictator," he said, shaking his head. "Unbelievable."

Earlier this afternoon, Peterson’s attorneys asked Burmila to throw out the jury’s guilty verdict and acquit their client of murder.

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French general urges EU to equip "impoverished" Mali army


BAMAKO, Mali (Reuters) - The European Union should complement a mission to train Mali's army, routed by rebels last year, by providing equipment from uniforms to vehicles and communications technology, a French general said on Wednesday.


General Francois Lecointre, appointed to head the EU training mission to Mali (EUTM) that was formally launched this week, said in Bamako equipping the "very impoverished" and disorganized Malian army was as important as training it.


Europe, along with the United States, has backed the French-led military intervention in Mali which since January 11 has driven al Qaeda-allied Islamist insurgents out of the main northern towns into remote mountains near Algeria's border.


European governments have ruled out sending combat troops to join French and African soldiers pursuing the Islamist rebels.


But the EU is providing a 500-strong multinational training force that will give military instruction to Malian soldiers for an initial period of 15 months at an estimated cost of 12.3 million euros ($16.45 million).


While hailing what he called the EU's "courageous, novel, historic" decision to support Mali, Lecointre told a news conference the Malian army's lack of equipment was a problem.


"I know the Malian state is poor, but the Malian army is more than poor," the French general told a news conference, adding that it urgently needed everything from uniforms and weapons to vehicles and communications equipment.


Last year, when Tuareg separatist forces swelled by weapons and fighters from the Libyan conflict swept out of the northern deserts, a demoralized and poorly-led Malian army collapsed and fled before them, abandoning arms and vehicles.


Mali's military was further shaken by a March 22 coup by junior officers who toppled President Amadou Toumani Toure, sowing division among rival army factions. Islamist radicals allied to al Qaeda later hijacked the victorious Tuareg rebellion to occupy the northern half of the country.


In a fast-charging military campaign led by Paris, French and African troops have driven the jihadists out of principal northern towns like Gao and Timbuktu, and are fighting the rebels in the Adrar des Ifoghas mountains.


HUMAN RIGHTS INSTRUCTION


Flanked by Mali's armed forces chief, General Ibrahima Dembele, Lecointre said he was disappointed that a meeting of international donors last month pledged funds for an African military force, known as AFISMA, being deployed in Mali, but included "very few" contributions for the Malian army itself.


"The European Union needs to invest today in the equipping of the Malian army and not just in its training," the general said, adding he would make this point strongly in a report to EU member state representatives early next month.


Asked how much re-equipping the army would cost, he said it would be "much more" than the 12 million euros of EU financing for the training mission, but could not give a precise estimate.


Starting early in April, the EU mission will start instructing Malian soldiers with a plan to train four new battalions of 600-700 members each, formed from existing enlisted men and new recruits.


Lecointre said the EU training would include instruction in human rights. Demands for this increased after allegations by Malian civilians and international human rights groups that Malian soldiers were executing Tuaregs and Arabs accused of collaborating with Islamist rebels.


The European training contingent is drawn from a range of European countries, but the main contributors would be France, Germany, Italy, Spain and Britain, EUTM officers said.


Mali's army has received foreign training before - several battalions that fled before the rebels last year were trained by the U.S. military and the leader of the March 22 coup, Captain Amadou Sanogo, attended training courses in the United States.


Dembele said U.S. training failed to forge cohesion among Malian units and he hoped the EU training would achieve this.


The United States, which halted direct support for the Malian military after last year's coup, could eventually resume aid if planned national elections in July fully restore democracy to the West African country.


Washington is providing airlift, refuelling and intelligence support to the French-led military intervention in Mali. ($1 = 0.7479 euros)


(Reporting by Pascal Fletcher; Editing by Jason Webb)



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M&A deals lift Wall Street shares nearer a record high

NEW YORK (Reuters) - U.S. stocks rose on Tuesday as this year's ongoing surge in merger activity suggested investors were still finding value in the market even as indexes closed in on all-time highs.


Office Depot Inc surged 9.4 percent to $5.02 after a person familiar with the matter said the No. 2 U.S. office supply retailer was in advanced talks to merge with smaller rival OfficeMax Inc , which jumped more than 20 percent.


News of the potential move came just days after Berkshire Hathaway and a partner agreed to acquire H.J. Heinz Co for $23 billion, and following a revised $20 billion takeover of Mexican brewer Grupo Modelo by Anheuser-Busch InBev .


Deal activity has helped equities resist a pullback as investors use dips in stocks as buying opportunities. The S&P is up about 7 percent so far in 2013 and has climbed for the past seven weeks in its longest weekly winning streak since January 2011, though most of the weekly gains have been slim.


The Dow industrials closed 0.9 percent away from their record high while S&P 500 was 2.2 percent off its peak.


"Deals are good for the market," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "The fact that they're being done is a positive."


More than $158 billion in deals has been announced so far in 2013, more than double the activity in the same period last year and accounting for 57 percent of global deal volumes, according to Thomson Reuters Deals Intelligence.


The Dow Jones industrial average <.dji> gained 53.91 points, or 0.39 percent, to 14,035.67. The Standard & Poor's 500 Index <.spx> gained 11.15 points, or 0.73 percent, to 1,530.94. The Nasdaq Composite Index <.ixic> gained 21.56 points, or 0.68 percent, to 3,213.59.


Other stocks in the office supplies sector also rose. Larger rival Staples Inc shot up 13.1 percent to $14.65 as the best performer on the S&P 500.


"Equity investors have to be encouraged by M&A since, if the number crunchers are offering large premiums, that shows how much value is still in the market," said Mike Gibbs, co-head of the equity advisory group at Raymond James in Memphis, Tennessee.


On the downside, health insurance stocks tumbled, led by a 6.4 percent drop in Humana Inc to $73.01. The company said the government's proposed 2014 payment rates for Medicare Advantage participants were lower than expected and would hurt its profit outlook.


UnitedHealth Group lost 1.2 percent to $56.66. The Morgan Stanley healthcare payor index <.hmo> dropped 1.2 percent.


Wall Street's strong start to the year was fueled by better-than-expected corporate earnings, as well as a compromise in Washington that temporarily averted automatic spending cuts and tax hikes that are predicted to damage the economy.


The compromise on across-the-board spending cuts postponed the matter until March 1, at which point the cuts take effect. Ahead of the debate over the cuts, known as sequestration, further gains for stocks may be difficult to come by.


Some investors say the debate could be the catalyst for a long anticipated sell-off after the market's recent strong run.


Carter Worth, a technical analyst at Oppenheimer, pointed to the "especially complacent action of the past six weeks," noting that, as of Friday, stocks have gone 33 sessions without a dip of more than 1.5 percent.


"We would be selling aggressively into the market's current strength," he said in a research note.


Economic data showed the NAHB/Wells Fargo Housing Market index unexpectedly edged down to 46 in February from 47 in the prior month as builders faced higher material costs.


According to the Thomson Reuters data through Monday morning, of the 391 companies in the S&P 500 that have reported results, 70.1 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.


Fourth-quarter earnings for S&P 500 companies have risen 5.6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.


Express Scripts rose 2.5 percent to $56.98 after the pharmacy benefits manager posted fourth-quarter earnings.


About two stocks rose for everyone that fell on the New York Stock Exchange and Nasdaq. About 6.48 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, in line with the daily average so far this year.


(Additional reporting by Chuck Mikolajczak Ryan Vlastelica and Rodrigo Campos; Editing by Chizu Nomiyama, Kenneth Barry and Nick Zieminski)



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