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Tuesday, July 7, 2009

Boeing to pay $580M for 787 parts plant in SC

Boeing Co. will pay $580 million for a plant that makes large sections of its 787 jetliner, an apparent effort to rein in supplier problems that have led to costly delays of the next-generation aircraft and hurt the company's credibility.

The plant, owned by Vought Aircraft Industries, makes barrel-like sections of the 787's fuselage that fit between its wings and tail and are composed primarily of lightweight materials.

Deliveries of the 787 have been postponed by nearly two years partly because of problems with components made by suppliers and work that suppliers didn't complete. Those hang-ups are expected to cost the airplane maker billions of dollars in added expenses and penalties.

Boeing took a new approach to building airplanes when it announced its 787 program in 2004. Instead of building the plane's parts in the U.S., it used suppliers around the world to build huge sections of the plane that are later assembled at the company's commercial aircraft plant near Seattle. Ill-fitting parts and other problems have hamstrung production ever since.

Vought, owned by private equity firm The Carlyle Group, claims financial problems, not production glitches, prompted the sale, which is expected to close in the third quarter. Under Tuesday's deal, Boeing will release Vought from obligations to repay money advanced earlier by Boeing.

Vought President and CEO Elmer Doty said his company's investment in 787 parts was far greater than expected, and that the financial demands of the program "are clearly growing beyond what a company our size can support."

But Richard Aboulafia, an analyst at the Teal Group, an aerospace consultancy in Fairfax, Va., said, "this clearly is more about securing the supply chain and undoing numerous mistakes."

"It's a good move, it's a proactive move, it undoes some damage," he said. "But on the other hand, it shows this program still has more than a few challenges to overcome. ... I don't think Carlyle quite knows what to do with this asset, and they might not have been prepared to give it the necessary resources."

Despite those problems, Boeing spokesman Jim Proulx said Tuesday the company has no plans to change its 787 production plan.

"We remain committed to the business model and the global strategy for the 787," he said.

The mid-sized, long-haul 787 will be able to carry between 210 to 330 passengers. Its design includes wider seats and aisles, larger windows and a ventilation system that will allow for higher humidity, all of which Boeing says will make the cabin feel more comfortable.

It's Boeing's first all-new aircraft since the 777 and the first commercial jet made mostly of carbon-fiber composites instead of more traditional aluminum. Boeing says it will be about 20 percent more fuel efficient than planes of comparable size.

Chicago-based Boeing has booked orders for a record 850 of the planes, but some 60 have been canceled so far this year, including the cancellation of 15 and the delayed delivery of another 15 by Qantas Airways last month.

Boeing said the acquisition of Vought's North Charleston, S.C., plant will boost its capacity to develop and build large plane sections made from carbon-fiber composites, the lightweight material expected to make the 787 more fuel efficient than other planes.

Adam Pilarski, an aviation economist with Washington, D.C.-based consulting firm Avitas, said Boeing may want the Vought plant as part of a plan to start a second 787 production line. The added capacity is in response to strong demand for the plane.

"Boeing made it very clear that they need a second line," he said. "They need it more now than they did before because they are behind."

It remains unclear when Chicago-based Boeing will conduct the first test flight of the 787, previously scheduled for the second quarter of this year.

Vought will continue to run other plants that work on different 787 components as well as parts for Boeing's 737s, 747, 767, 777, C-17 and V-22 aircraft.

Shares of Boeing slid 4 cents to $39 in after-hours trading following a decline of $1.52, or 3.8 percent, to $39.04 in the regular session.

Oil, Gas Market Speculation May Face Restrictions

U.S. regulators say they may clamp down on oil and gas price speculators by limiting the holdings of energy futures traders, including index and exchange-traded funds.

The Commodity Futures Trading Commission will hold hearings this month and next to explore the need for government-imposed restrictions on speculative trading in oil, gas and other energy markets, Chairman Gary Gensler said today in a statement.

The hearings come amid increased scrutiny of the impact of speculators on oil prices. Senator Bernie Sanders, a Vermont independent, and Representative Bart Stupak, a Michigan Democrat, blame speculators for last year’s surge in crude-oil prices to a record $147.27 a barrel and called for CFTC action to avert a repeat. Oil has climbed 41 percent this year in New York trading, while demand has dropped and inventories climbed.

“Our first hearing will focus on whether federal speculative limits should be set by the CFTC to all commodities of finite supply, in particular energy commodities such as crude oil, heating oil, natural gas, gasoline and other energy products,” Gensler said in the statement. “This will include a careful review of the appropriateness of exemptions from these limits for various types of market participants.”

Among the questions the agency will ask is whether it needs additional authority from Congress to apply the limits across all markets, Gensler said. The agency didn’t specify dates when the hearings would take place or who would be asked to speak.

In an interview last week, the chairman, who took office in May, said he had called on the agency’s staff to review all available options for ensuring fair markets.

‘Sign of Life’

“The CFTC has the authority to do a whole series of things to fix what’s wrong with these markets, they just have not had the will to do so,” Senator Byron Dorgan, a North Dakota Democrat who voted against Gensler’s nomination, said in a phone interview today. It is the “first sign of life at the CFTC for a long while. We thought we were going to have to have a memorial service for that agency.”

The Futures Industry Association, which represents the world’s largest futures brokers, issued a statement saying it “would be concerned by any measures to bar legitimate participants from these markets or that would make it less efficient for U.S. corporations to use futures as a tool for managing price risk.”

Shares of Intercontinental Exchange Inc. and CME Group Inc., owners of futures markets where energy contracts are traded, fell after the CFTC plan was announced.

Atlanta-based Intercontinental dropped $12.05, or 11 percent, to $98.03 today in New York Stock Exchange composite trading. CME Group of Chicago was down $15.19, or 5.1 percent, at $282.06 in Nasdaq Stock Market trading.

Trading Restrictions

Restrictions on trading energy futures could hurt commodities trading advisers, or CTAs, funds with about $200 billion in assets.

CTAs posted gains of 13.5 percent in 2008, while hedge funds had an average loss of 22 percent, according to BarclayHedge, a Fairfield, Iowa-based fund tracker. CTAs fell 3.3 percent so far this year, according to the Barclays BTop50 Index of the largest funds.

‘Most Liquid’

“Crude oil was one of the main trades for trend followers in 2008, that’s where they made their money,” said Emanuel Balarie, managing director of Chicago-based Balarie Capital Management. “They trade the most liquid markets they can, and crude oil futures are among the most liquid markets there are.”

He called the CFTC proposal “pretty vague” and said “speculation is what makes markets efficient.”

“If speculators leave the market, then the market is less liquid and you have weaker price discovery,” Balarie said.

Crude oil for August delivery fell $1.13, or 1.8 percent, to $62.92 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $62.35, the lowest since May 27.

Regulation and oversight of deliverable futures contracts have always been necessary, said Michael Cosgrove, head of North American energy operations for broker GFI Group Inc. in New York.

“Oversight of contracts that do not affect supply and demand, such as Nymex cash-settled futures and ICE cash-settled swaps, is a misguided waste of taxpayer dollars,” Cosgrove said today in an e-mail. “These contracts affect supply and demand no more than the betting at a race track affects the speed of the horses.”

Postpone or Abandon

Energy producers may be forced to postpone or abandon some oil and natural-gas projects because the trading limits proposed by Gensler will constrain the ability of banks to act as counterparties in hedging deals, said Paul Smith, chief risk officer at Mobius Risk Group. Oil and gas companies routinely use forward contracts to lock in future revenue from production.

“This would be bullish for prices,” Smith said in a telephone interview from Houston, where Mobius advises energy companies, utilities and buyout firms. “The bid-ask spread is going to widen and some people are going to be shut out of the market until the banks figure out how to handle this.”

Smaller traders likely won’t be affected by the changes, said John Brady, senior vice president at MF Global Inc., the world’s largest broker of exchange-traded funds.

“The proposed regulations aren’t going to matter materially for 90 percent of the floor and firms in Chicago,” Brady said in an interview today. “Only the largest macro-funds would be affected.”

Introduced Measures

Members of Congress, unable to get restrictions on speculation enacted last year, have introduced measures again this year to curb financial players in commodity markets.

Dorgan and Sanders had questioned President Barack Obama’s choice of Gensler to lead the CFTC because of his involvement in legislation in 2000 that exempted certain derivatives trading from oversight.

Sanders has introduced legislation that would force the CFTC to invoke emergency authority to stop oil speculation. Stupak’s proposal, which was included as part of climate-change legislation approved by the House last month, would impose position limits on energy speculators across all markets.

Asset Bubble

The agency is seeking input on whether it should impose such aggregate position limits, Gensler said.

Gensler said in a letter to lawmakers earlier this year that speculators contributed to an asset bubble in commodities in 2008. His statement broke from former CFTC Acting Chairman Walter Lukken, who testified to Congress on Sept. 11 that there wasn’t “strong evidence” index traders were driving up prices.

Gensler wouldn’t say in the interview last week if he thought the same thing was happening this year.

“The CFTC currently sets and ensures adherence to position limits with respect to certain agriculture products,” Gensler said in the statement. “For energy commodities, futures exchanges set position limits and accountability levels to protect against manipulation and congestion. The exchanges are not required to set and enforce position limits to prevent the burdens of excessive speculation.”

Gensler said the CFTC is reviewing exemptions from position limits for “bona fide hedging,” after seeking public comment on whether the exemption should continue to apply to traders who are in the market for financial reasons, rather than those that actually use the commodity.

The chairman also said the agency was going to improve its weekly commitment of traders’ reports by separating out swaps dealers and hedge funds from the larger category of “commercial” traders. The agency will continue to collect and report data from swaps dealers and index investors, extending a “special call” from last year, Gensler said.

“Enhancing the quality of information in these weekly reports will better inform market participants and the public about the positions of the various types of traders,” he said.

To contact the reporter on this story: Tina Seeley in Washington at

Caraco: FDA approves generic prostate cancer drug

Boston (DbTechNo) - The FDA have granted approval to Sun Pharmaceutical to sell a generic version of AstraZeneca Plc’s prostate cancer drug Casodex.

Sun Pharmaceutical is based in India, and had previously applied to the FDA for possible approval of the generic drug.

Generic drugs are gaining in popularity because they are much cheaper than the brand name version.

Prostate cancer is a tricky cancer to treat because it rarely exhibits symptoms in its early stage.

All men over the age of 50 are recommended to go for an annunal prostate exam to check for any signs of the disease.

Treatment options for prostate cancer range from surgery and drug therapy, to taking a wait and see approach.

Generic Plan B Contraceptive Approved For Teens

Approved For Teens Under 17

The Food and Drug Administration (FDA) has approved the first generic version of the Plan B by prescription for women ages 17 and under.

Plan B as the morning-after-pill is known, was first approved in 1999 for women of all ages by prescription use only. Duramed Pharmaceuticals Inc. of Cincinnati is the maker.

In 2006, nonprescription use was approved for women ages 18 and older and available for younger women by prescription only.

Wednesday’s approval will allow a generic product for women ages 17 and under by prescription only. The generic version for women 18 and older for nonprescription use, will be available after August 24, when Duramed’s marketing exclusivity for nonprescription Plan B expires.

Watson Pharmaceuticals of Corona, California, has received Food and Drug Administration (FDA) approval for the generic version, which will be known as “Next Choice”.

The generic version (levonorgestrel 0.75 mg), if taken within 72 hours of intercourse reduces the risk of pregnancy. It does not protect against sexually transmitted disease, HIV, and does not terminate a pregnancy.

The Bush administration had imposed an 18-year-old age limit for use of Plan B. In March, a federal court directed the FDA to permit Plan B be made available to women 17 and older, without a prescription,

Last April, a Federal court decided the FDA restriction was based on politics and not science. The FDA okayed sales to teenagers 17 and younger, over-the-counter without a prescription, according to the FDA.

In a statement, Cecile Richards, president of Planned Parenthood Federation of America, called the announcement "a strong statement to American women that their health comes before politics."

"This decision is commonsense policy that will help reduce the number of unintended pregnancies and protect the health and safety of all women," she said to MedPage Today.

Gardasil Rival Cervarix More Effective Maker Says

GlaxoSmithKline Plc’s (GSK) Cervarix is more effective than its rival, Gardasil in fighting the most common cervical cancer-causing viruses, says its maker.

GSK is heralding a study published in today’s issue of The Lancet as it awaits U.S. approval for the drug in girls, women, and down the line in men and boys.

The Lancet study finds Cervarix is effective against five viruses, two most common virus types that cause HPV or human papillomavirus (types 16 and 18), as well as three of the next most common cancer causers ( HPV virus types 31, 33, and 45).

HPV -16/18 cause about 70 percent of cervical cancers. The cross protection could add an additional 11 to 16 percent protection against cervical cancer.

HPVs are a group of more than 100 related viruses, some that cause warts, few of which are high-risk and cause cancer.

It is also the first time any cervical cancer vaccine has shown significant protection against pre-cancerous lesions not containing the two most common virus types, reports Reuters.

The Lancet study, was multi-center and double-blind and involved 18,644 women between the ages of 15 and 25 from 14 countries, reports the Wall Street Journal.

It was funded by GlaxoSmsithKline Biologicals, maker of the Cervarix vaccine.

The drug is already approved in Europe and more than 90 countries. Researchers behind the Lancet article conclude that the only way to stop the spread of sexually transmitted disease is to also vaccinate boys and men.

"Women have shouldered responsibility for contraception since its inception. The goal to eradicate sexually transmitted carcinogenic viruses can be jointly carried by women and men and could be accomplished within a few decades," said Karin Michels from the Harvard Medical School in Boston and Harald zur Hausen from the German Cancer Research Centre in Heidelberg.

About one in four teenage girls ages 13 to 17 have reportedly received the Gardasil vaccine, estimates the Centers for Disease Control and Prevention (CDC) as of last year.

According to Judicial Watch, a Washington D.C. based nonprofit public interest group, there have been nearly 9,000 adverse health events reported to the government concerning the drug, including a number of deaths reported since September 2007 and at least 18 deaths total.

Of those 18, eleven occurred less than one week after receiving the vaccine and seven in less than two days.

The approval could also translate into a revenue generator for GSK. So far it generated $231 million in sales in 2008. Rival Gardasil, made by Merck & Co. generated more than 4400 million in revenue in 2008, but forecasters say sales are trending downward.

HPV Virus Cervarix Works Well in Trial, Drug Maker Says

Cervarix, the GlaxoSmithKline vaccine for the human papillomavirus (HPV), performed well in a large clinical trial against not only the two types of HPV most associated with cervical cancer, but also other strains of the disease, company officials said.

Cervarix competes with Gardasil, the vaccine given to millions of girls and young women in the United States and around the world to protect against cervical cancer. Gardasil, the blockbuster shot made by Merck & Co. and approved in the U.S. in 2006, has been met with some controversy and concerns about deadly allergic reactions and severe complications in some patients.

Recently, the Food and Drug Administration ordered Merck to beef up the warning label on Gardasil to further caution physicians and users of some of the risks associated with the vaccinations.

Study Shows Benefits of Cervarix

In the recent company-sponsored study of Cervarix, 18,644 girls and women between the ages of 15 and 25 were given the vaccine and tested to see how the drug prevented lesions caused by HPV types 16 and 18, which are the most likely strains of the virus to cause cervical cancer. Women in the study either had evidence of previous or current HPV infection or no such evidence of infections.

Researchers found that women who received all three doses of Cervarix were provided with 92.9 percent protection from lesions. Further, there was evidence that the vaccine protected the women against lesions caused by HPV types 31, 33, and 45, which are the next most likely to cause cervical cancer after strains 16 and 18, according to GlaxoSmithKline.

The study was the largest-to-date to test Cervarix in preventing HPV and cervical cancer.

Seeking U.S. Approvals

Cervarix is not yet approved for use in the United States, but it is available in some European nations and other countries around the world. If granted FDA approvals, the vaccine would directly compete with Merck’s Gardasil and according to the study results, may protect against more strains of HPV which may cause cervical cancer.

In 2008, Cervarix generated $231 million in sales around the globe. A decision on whether the U.S. FDA will grant the new vaccine approvals could be made later this year.

Health Buzz: Stem Cell Rules and Other Health News

NIH Sets Limits for Using Embryonic Stem Cells

Monday the National Institutes of Health issued rules for how embryonic stem cells may be used in government-funded research, the Associated Press reports. The NIH has decided embryos used for stem cell research may only be those that fertility clinics intend to discard. Even stem cells used to generate existing lines used for research funded under the Bush administration must meet the requirement, according to the AP. The ethical requirements also stipulate that couples who donate their embryos for research must be told what might be done with them, Reuters reports. In March, President Obama removed some restrictions on stem cell research, but he allowed the NIH to determine a code of ethics for the use of embryos in research.

While the attention of the public and ethicists has been focused on embryonic stem cells, research into other kinds of stem cells has been advancing and, in some cases, exploding, U.S. News's Katherine Hobson reports. Consider 10 diseases that stem cells may--or may not--cure. Here are 3 ways that stem cells may speed new cures. And learn why Dr. Bernadine Healy says embryonic stem cells are obsolete.

Can Mark Sanford Save His Marriage? Probably Not

After he confessed to having an affair, South Carolina Gov. Mark Sanford also eagerly promised to try to "fall back in love" with his wife of 20 years. But that may not be possible if he's already in love with someone else, says one relationship expert. Dopamine, a chemical in the brain, causes focused attention and may allow us to concentrate on only one person at a time, according to the researcher. U.S. News's Deborah Kotz asks: Can a marriage truly work if a couple isn't in love? While couples can still feel emotionally attached when a partner is in love with someone else, that attachment may not be enough to make a marriage work, Kotz writes.

More than 80 percent of men and women say they wouldn't marry a person they weren't in love with—even if they were compatible in all other ways. Learn about the chemistry of romantic attraction and what fuels attraction. It's possible that our DNA that dictates the chemical makeup of our brains also determines to whom we're most attracted. Also, consider what science is discovering about why we kiss—and why we lie.

Personalized Medicine Moves Beyond Cancer, Entering Heart Care and More

One woman's breast cancer may be more likely to spread than another's, even if the two tumors look the same. Another patient's genetic makeup makes him more likely than other men to develop dangerous bleeding after taking a medicine. Personalized medicine focuses on such variations and aims to match each patient with the therapy most effective for her—not just for the average patient. To find out where personalized medicine is headed, U.S. News talked to Edward Abrahams, executive director of the Personalized Medicine Coalition. He predicts that in five years, there will be numerous drugs whose prescribing information is linked to the results of a molecular diagnostic test. To make it happen, the government needs to invest more in research—into the genetic basis of disease and into the electronic health information infrastructure, so that genetic information can be part of electronic medical records, he says.

Here's how scientists are looking to cure cancer by unraveling its genetic makeup. The Cancer Genome Atlas project, a program underway at the National Institutes of Health since 2006, aims to map the full genome—the comprehensive DNA instruction book—of virtually all human cancers. Read about two researchers who are decoding genomes to personalize treatments for cancers.

US HOT STOCKS: Ruby Tuesday, Amylin Active In Late Trading

U.S. stocks were lower Tuesday as the Dow Jones Industrial Average fell 1.9% to 8164, the S&P 500 dropped 2% to 881 and the Nasdaq Composite lost 2.3% to 1746. Among the companies whose shares are actively trading in the after-hours session are Ruby Tuesday Inc. (RT), Amylin Pharmaceuticals Inc. (AMLN) and Alkermes Inc. (ALKS).


Ruby Tuesday's fiscal fourth-quarter earnings rose 3.7% as the company continued to keep a lid on costs and slowed the pace of same-store sales declines. The company also offered fiscal 2010 earnings guidance roughly in line with Wall Street expectations, but the restaurateur warned operating margins may tighten. Shares climbed 9.6% to $8.11 in late trading as results topped analysts' projections.


Amylin, Eli Lilly & Co. (LLY) and Alkermes said the Food and Drug Administration agreed to review its application for potential blockbuster diabetes drug exenatide once weekly. The three companies are developing the treatment for type 2 diabetes that is injected once a week. Exenatide is the active ingredient in Byetta, which is injected twice a day and has been on the market since June 2005. Amylin shares rose 4.3% to $13 in late trading, while Alkermes gained 3.8% to $10.65. Eli Lilly increased 0.39% to $33.62.

   Regular Session Movers

Hansen Medical Inc. (HNSN, $3.15, -$1.58, -33.40%) projected second-quarter revenue well below Wall Street estimates, saying its sales were hurt by "general macroeconomic conditions" that affected potential customers' capital spending. As such, the robotic technology maker also withdrew its guidance for system placements for the year.


Discover Financial Services (DFS, $9.37, -$1.13, -10.76%) has launched a $500 million stock offering and is planning to offer senior notes in the near future. Some of the stock-offering proceeds may go toward buying back preferred stock issued under the U.S. Treasury's Capital Purchase Program. In March, the credit-card company got $1.2 billion in funds under the Troubled Asset Relief Program.


Shares of Jazz Pharmaceutical Inc. (JAZZ, $4.21, +$0.58, +15.98%) soared Tuesday after the drug company said it made a back payment of $14.6 million in interest and believes it will be in compliance on future payments, including the principal of $119.5 million due in 2011. Jazz also announced it raised $7 million from Longitude Capital with the sale of 1.9 million shares and warrants to purchase another nearly 950,000 shares.


Littelfuse Inc. (LFUS, $22.63, +$2.50, +12.42%), which makes circuit-protection devices, boosted its second-quarter revenue outlook and expects a profit excluding restructuring charges for the period, saying automotive and electronics sales improved more than expected.


Auto-parts supplier Lear Corp. (LEAR, $0.28, -$0.01, -2.09%) filed for Chapter 11 bankruptcy protection Tuesday, days after the maker of seats and electronic equipment announced a plan with creditors to restructure some $3.6 billion in loans and notes. American Axle & Manufacturing Holdings Inc. (AXL, $2.38, -$0.46, -16.20%) continued its slump amid concerns it could be the next to go under, although its lenders agreed to an amendment and waiver on a loan facility, giving the company until the end of the month to meet terms on the debt. Also falling were ArvinMeritor Inc. (ARM, $3.62, -$0.33, -8.35%), Titan International Inc. (TWI, $6.05, -$0.28, -4.42%) and TRW Automotive Holdings Corp. (TRW, $11.34, -$0.29, -2.49%).


GenCorp Inc. (GY, $2.11, +$0.27, +14.67%) reported its second-quarter profit leapt 59% as the diversified manufacturing company cut costs, particularly retirement spending, to offset a drop in sales and volumes in its aerospace and defense segment.


Pain Therapeutics Inc. (PTIE, $4.56, -$0.92, -16.79%) shares fell following news that it will take longer than expected for its partner on Remoxy - King Pharmaceuticals Inc. (KG, $9.36, -$0.14, -1.47%) - to resubmit a new drug application for the abuse-resistant painkiller. Following discussions with the U.S. Food and Drug Administration in a July 2 meeting, King said Tuesday that it now expects to resubmit the application to the agency in the middle of next year. Analysts had expected resubmission to occur late this year or early next year.


Shares of American International Group Inc. (AIG, $13.75, -$2.44, -15.07%) fell Tuesday, as investors continue to remain concerned about the struggling insurance giant's future, especially given the uncertainty over who will succeed Chief Executive Edward Liddy. Meanwhile, a jury Tuesday found a sister company to AIG, Starr International Co., not liable for breach of trust or improper conversion in a dispute with AIG over millions of shares of the insurer's stock. AIG had been seeking $4.3 billion in damages.


Shares of Astec Industries Inc. (ASTE, $24.39, -$2.43, -9.06%) fell Tuesday after an analyst said interest in boosting highway spending has fallen by the wayside as the Obama Administration looks to tackle other issues, including energy and health-care reform. Barrington Research analyst Walter Liptak cut his rating on Astec, which manufactures and markets equipment used for repairing infrastructure, to market perform from outperform, expecting the White House to delay renewing a transportation-spending bill until after the 2010 midterm elections that could bolster demand for Astec products.


Investors should take advantage of Callaway Golf Co.'s (ELY, $5.02, +$0.22, +4.58%) low share price, Lazard Capital said as it initiated coverage of the stock at buy. Callaway is an industry leader with earnings power of $1.00/share, and should emerge from recession a "strong, leaner player facing less competition," the firm said.


Shares of CEC Entertainment Inc. (CEC, $30.31, +$1.31, +4.52%) rose after a C.L. King analyst said the impact the swine flu outbreak had on traffic doesn't appear to be as bad as many anticipated, signaling the company's second quarter may show strength.


Volatile CIT Group Inc. (CIT, $1.98, +$0.22, +12.50%) recovered from losses Monday, when investors worried about the likelihood the company would get access to the FDIC's Temporary Liquidity Guarantee Program.


Shares of Dyax Corp. (DYAX, $2.88, +$0.20, +7.46%) extended a rally that started early last month, gaining 23% so far this week, on what Needham's Mark Monane calls continuing excitement surrounding two catalysts: the FDA's setting an action date for ecallantide, the company's treatment for severe attacks of a rare swelling disorder, and bad news for competitor ViroPharma Inc.'s (VPHM, $5.68, -$0.02, -0.35%) treatment Cinryze, which suffered a blow after the FDA requested more clinical studies that could push its OK date well past Dyax's.


Greenbrier Cos. (GBX, $6.31, -$0.61, -8.82%) blasted General Electric Co. (GE, $11.01, -$0.47, -4.09%) for breach of contract Tuesday as the rail-car maker swung to a fiscal third-quarter loss on $55.7 million in goodwill write-downs and lower demand. Greenbrier said GE, one of the nation's largest rail-car leasers, has told it to slow production of new cars to a point that "does not allow for efficient operations of our manufacturing facility." GE, which contracted for the cars in 2007 under a $1.2 billion, multiyear deal, currently accounts for about 84% of Greenbrier's rail-car backlog, or 11,800 cars.


KBW raised its stock-investment rating on KeyCorp (KEY, $5.29, +$0.21, +4.13%) to outperform from market perform, saying it's one of the more inexpensive names and has one of the strongest tangible common equity ratios among large-cap banks. In addition, its recent capital raise exceeded the Treasury's requirement.


Standard & Poor's Ratings Services cut ratings on Key Energy Services Inc. (KEG, $5.17, -$0.26, -4.79%) and Complete Production Services Inc. (CPX, $6.22, -$0.20, -3.12%) deeper into junk territory amid worries that conditions in the U.S. oil and gas industry will remain weak for the rest of the year.


Shares of Repros Therapeutics Inc. (RPRX, $4.56, +$0.32, +7.55%) rose after the pharmaceutical company released data about its Proellex treatment for uterine fibroids and endometriosis that showed the number of women with clinically significant elevated liver enzymes as a side effect was less than feared. Investors had been concerned about the side effect after Repros last week said it was discontinuing the 50mg dose of the drug, citing an increase in liver enzymes in "a low percentage of women."


Sequenom Inc. (SQNM, $3.70, +$0.34, +10.12%) still plans to expand its Grand Rapids laboratory when it begins marketing some of its prenatal tests later this summer, the Grand Rapids Press reported, citing a company official. "I think people are looking at that and saying to themselves 'these guys aren't done yet,'" Soleil said. "If they're expanding the Grand Rapids facility possibly there's some life left to the story." The firm noted Sequenom - which is under SEC and internal investigations into mishandled Down Syndrome test data - has a lot of emotionally driven retail investors, "so any even hints that something positive's coming out of this story is going to make the stock pop."


Steel fundamentals in the U.S. have bottomed, Bank of America-Merrill Lynch said, as the inventory destocking process is relatively complete and production capacity utilization rates have recovered from a low of 40% in April. BofA-Merrill said the Street's 2010 and 2011 estimates are still too optimistic, however, raising risk of a correction as 2010 outlooks come down. The firm upgraded Steel Dynamics Inc. (STLD, $13.57, +$0.30, +2.26%) to buy, saying it has a competitive cost position and attractive long-term growth prospects.


Suntech Power Holdings Co.'s (STP, $15.69, -$1.42, -8.30%) chief operating officer Johnson Chiang resigned last week, citing personal reasons. Guangchunm Zhang, the company's vice president of manufacturing, technology and quality, will take control of the company's silicon photovoltaic cell manufacturing in China.


Tellabs Inc. (TLAB, $5.18, -$0.34, -6.16%) plans to lay off about 150 employees, the telecommunications-equipment maker disclosed in a filing with the U.S. Securities and Exchange Commission. The company said the job cuts will "align our costs with customer spending and market conditions" and are the centerpiece of a restructuring from which it expects to record pretax charges of $5 million to $6 million between this year's second quarter and the first quarter of 2010.


Shares of Trex Co. Inc. (TWP, $12.91, +$0.42, +3.36%) climbed Tuesday as an analyst said the deck and railing maker is offsetting the weak macroeconomic environment by gaining market share. Stifel Nicolaus analyst John A. Baugh raised his stock-investment rating on Trex to buy from hold, saying the company can also drive earnings growth in the near term by internally driving margin expansion.


Trinity Biotech PLC (TRIB, $4.65, +$0.20, +4.49%), an Ireland-based maker of medical testing and diagnostic equipment, got U.S. Food and Drug Administration approval for its Destiny Max haemostasis, or blood clot, analyzer. The device is already in use in Europe and the company believes the U.S. market could be worth $500 million a year.


Managed-care stocks gained Tuesday following indications that the White House is open to a public health-insurance plan that would be introduced only if the marketplace fails to provide sufficient competition on its own. Gainers included UnitedHealth Group Inc. (UNH, $25.17, +$1.08, +4.48%), Cigna Corp. (CI, $25.24, +$1.77, +7.54%), Aetna Inc. (AET, $25.94, +$1.53, +6.27%), Humana Inc. (HUM, $31.98, +$1.04, +3.36%) and Coventry Health Care Inc. (CVH, $18.55, +$0.49, +2.71%). The sector has been volatile in the past few months due to uncertainties over how health-care reforms would affect the industry.


Weyerhaeuser Co. (WY, $27.86, -$2.13, -7.10%) slashed its dividend 80% and said it might become a real-estate investment trust as the embattled forest-products company continues to struggle.

US health department response to H1N1 mixed -study

CHICAGO, July 7 (Reuters) - Many local health departments in the United States were slow to alert residents to the public health threat posed by the new H1N1 influenza virus in April, according to a report released on Tuesday.

Researchers at the non-profit Rand Corp research organization said only a third of 153 local health departments surveyed posted information about the new swine flu on their websites within the first 24 hours after federal health officials declared a public health emergency.

State health departments did better -- 46 of 50 posting some information about the outbreak within 24 hours of the federal announcement, according to the study published in the journal Health Affairs.

U.S. health officials say communication is often the best way to combat a rapidly spreading infectious disease, and the federal government's flu plan stresses that state and local officials must take much of the responsibility.

The H1N1 outbreak, which has been declared a pandemic by the World Health Organization, came at a vulnerable time for cash-strapped state and local health departments, following a decision by Congress last spring to cut $870 million slated for flu preparedness from the economic stimulus bill.


Late in April, President Barack Obama asked Congress for $1.5 billion to pay for swine flu measures. The White House has scheduled a H1N1 Flu Preparedness Summit for Thursday to discuss preparations for the possibility of a more severe outbreak of H1N1 this fall.

The H1N1 virus has infected at least 1 million people in the United States alone, the U.S. Centers for Disease Control and Prevention says.

While it has caused mild flu symptoms in most people, 440 people have died globally, according to WHO, and health experts are keeping a close watch in case it changes into a more serious form that cannot be treated by existing drugs.

According to the Rand study, responses varied widely by local health departments across the five states that had confirmed cases at the outset of the epidemic -- California, Texas, New York, Ohio and Kansas.

While 73 percent of the California counties sampled provided some online information, just 8 percent of the counties in Kansas and 18 percent of the Texas counties quickly provided information online, the researchers found.

They said the swine flu outbreak offered a rare chance to assess how well state and local health departments could respond during an actual emergency.

Companies are currently making test batches of a vaccine against the virus in advance of flu season in the northern hemisphere, and the CDC has asked state and local health departments to draw up plans for administering the shot in case it is needed.

The U.S. Food and Drug Administration said on Tuesday it has scheduled a July 23 advisory panel meeting to discuss clinical trials of the vaccines against the H1N1 influenza virus.

Companies working on an H1N1 vaccine include Sanofi-Aventis (SASY.PA), Novartis AG (NOVN.VX), Baxter International Inc (BAX.N), GlaxoSmithKline (GSK.L) and Solvay (SOLB.BR).

Tax on health benefits causing second thoughts

WASHINGTON (AP) — The White House and Democratic congressional leaders struggled to build momentum for health care legislation on Tuesday in the face of concerns about the pace of bipartisan talks in the Senate as well as apprehension among moderate Democrats in the House.

Officials said a deal was pending with the nation's hospitals to give up about $155 billion in government payments over the next decade, money that then could be used to expand health care to millions who lack it. An announcement was possible as early as Wednesday.

At the same time, one lawmaker deeply involved in bipartisan negotiations in the Senate indicated there were second thoughts about a proposed new tax on the costliest employer-paid insurance benefits.

"It's clearly a very difficult issue. ... You go to the public to ask them what they think and they don't like it," said Sen. Kent Conrad, D-N.D., referring to recent polling. A compilation of four recent polls reviewed at the session showed at least 59 percent of the public opposed to taxing health care benefits to "pay for reform," and as many as 70 percent.

As a result, Conrad said, "we're looking at other options" to help finance a bill whose price tag is expected to reach $1 trillion or slightly more. He did not identify any.

In a sign of higher-level concern over the pace of bipartisan talks, Senate Majority Leader Harry Reid told reporters he intends to meet Wednesday with a small group of Republicans who have been involved in the discussions. While Democrats and the White House have said they would prefer a bipartisan bill, they also must be careful not to let the talks drag on so long that they fall hopelessly behind schedule.

There were similar efforts under way in the House, where White House chief of staff Rahm Emanuel arranged to attend a closed-door meeting of the Democratic rank and file, and Democratic leaders reviewed possible tax increases and spending cuts to pay for their version of the bill. And a similar set of challenges, too, including balky moderates who could face difficult re-election prospects next year.

It was unclear whether these and other difficulties were enough to imperil Obama's objective of signing a health care bill this fall, or whether they were merely the type of obstacles that emerge any time Congress attempts to pass major legislation.

The developments occurred as Congress returned from a weeklong vacation to find health care the top item on its agenda for the month of July. House Speaker Nancy Pelosi has set a target of month's end to enact health care legislation, while in the Senate, Reid hopes to complete legislation by the end of the first week in August.

At its core, the effort as outlined by Obama is designed to achieve twin purposes: expand health insurance to an estimated 50 million who now lack it, and reduce the explosive growth in health care generally.

Any bill is expected to require insurance companies to issue a policy, without the ability either to deny coverage or charge higher premiums on the basis of preexisting medical conditions.

In the House, government subsidies for private Medicare plans were on the chopping block as Democratic leaders reviewed their options, as was a variety of other proposed trims in Medicare and Medicaid, the federal health care programs for seniors and the poor.

A long menu of possible tax increases was also in circulation, including one that would fall on the upper-income. Officials said a proposed hike in the Medicare payroll tax had lost favor in recent days. If included in the bill, it would violate Obama's campaign pledge not to raise taxes on the middle class.

Separately, numerous officials said moderate to conservative Democrats were unhappy that the legislation was likely to include an option for the government to sell insurance in direct competition with private companies.

Several of these rebellious lawmakers prefer giving private companies exclusive rights to sell insurance, with the government entering the market place only if consumers don't have enough choice in the coverage available to them.

With millions more Americans covered by insurance, the White House and Sen. Max Baucus, the chairman of the Senate Finance Committee, have been negotiating with numerous outside groups in search of at least half of the money needed to finance the expansion in care.

A deal with the drug companies marked their first achievement, and a deal with hospitals would give them leverage as they seek similar deals with groups representing doctors and insurance companies.

Baucus has long championed a tax on health benefits as the best way to pay for health care while simultaneously restraining the growth of the cost in coverage in the future. Republicans, too, have been supportive, but the plan has drawn strong opposition from organized labor. House Democrats have been highly resistant, and Obama campaigned hard against it in last year's run for the White House.

Separately, the administration threw its support behind creation of a program to help families struggling with burdensome costs of long-term care.

The voluntary insurance program, sponsored by Sen. Edward M. Kennedy, D-Mass., would pay a modest daily cash benefit of at least $50 that people could use for a range of in-home services or nursing home expenses. While the committee that Kennedy chairs is expected to include the provision in its overhaul health care bill, the Congressional Budget Office has warned that premiums won't be enough to cover benefit costs after only a few years.

Republicans said that over the next 75 years, it could eventually cost $2 trillion.

Ghana Hopes Obama Brings Tourism Boom

Ghana is hoping that this week's visit by U.S. President Barack Obama brings with it an increase in tourism revenue, especially from black Americans.

At Accra's main tourist market, Ama Serwaa sells mugs and key rings in Ghana's red, yellow, and green colors. She has jewelry made from shells and rolls of the country's traditional Kente cloth.

But nothing is selling faster than Barack Obama T-shirts. Some have Mr. Obama's face inside the presidential seal. Others include first lady Michelle Obama and their children Sasha and Malia above the title "America's New First Family."

Serwaa says this week's visit by the Obama family will be good for business.

"It's the best thing. Because he is coming here, a lot of tourists will be coming here. And the name of Ghana is also going higher," she said. "So it brings more tourists to this place because people will find out why he came here."

Tourism is Ghana's fourth largest foreign currency earner behind gold, cocoa, and timber. Tourism earned the country $1.4 billion last year. The government is expecting as much as a 20 percent increase from the Obama visit.

"We want to make Ghana the next destination for most people. Because we see that Senegal currently is, but we want to overtake Senegal," said Kwabena Akyeampong, Ghana's deputy minister of tourism. "Senegal got the break when Clinton visited Goree Island. We believe that if Obama, the first black president and the most-admired man on earth, is coming to Ghana and going to Cape Coast Castle, that is our break and we need to take advantage of that."

Sites central to the African slave trade including Senegal's Goree Island and Ghana's Cape Coast Castle are especially attractive to black American tourists.

On his tour of Cape Coast Castle, President Obama is expected to visit the slave dungeons and the so-called "gate of no return" through which slaves passed toward waiting ships that carried them across the Atlantic for nearly 300 years.

While any presidential visit is good for tourism, Akyeampong says nothing compares with America's first black president making his first trip to sub-Saharan Africa.

"The fact that he is the first black American president visiting Ghana is a thing for us," he said. "We think that it is going to sell to people in the diaspora which tends to be our biggest market when it comes to tourism promotion."

At Accra's tourist market, painter Sam Appiah sells a variety of Obama portraits. He is certain that artisans across the continent are jealous that Ghana is getting President Obama first.

"It's fantastic. And I know that even those in Kenya, they are going to envy us because they are going to be saying why isn't Obama coming to our country because he is from here. But it is all good," he said. "We like it that Obama is coming here."

After the president's tour of Cape Coast Castle Saturday he was scheduled to address thousands of Ghanians at Independence Square. But that speech has now been moved indoors to parliament because of the start of Ghana's rainy season.

Prosecutors Urge ICC to Charge Bashir With Genocide

Prosecutors at the International Criminal Court are appealing the court's decision not to charge Sudan's president, Omar al-Bashir, with carrying out genocide in Darfur.

The prosecutors said Tuesday they have evidence showing Mr. Bashir mobilized his entire government to destroy a substantial part of three Darfur ethnic groups (Fur, Masalit and Zaghawa) over a six-year period.

The prosecutors say they believe the evidence provides "reasonable grounds" for judges at The Hague-based tribunal to charge Sudan's president with three counts of genocide.

The ICC already has charged Mr. Bashir with war crimes and crimes against humanity in Darfur, where his government has been fighting rebels since 2003.

The court said President Bashir organized a campaign of rape, murder and other crimes against civilians in Darfur, but said there was insufficient evidence to charge him with genocide.

The court issued an arrest warrant against Mr. Bashir in March. The Sudanese leader has defied the court by traveling outside Sudan several times without being arrested.

African Union leaders meeting in Libya last Friday approved a resolution vowing not to cooperate with the ICC's arrest warrant.

The African Union has called for the ICC to delay any arrest of Mr. Bashir, saying it would compromise peace efforts in Darfur.

Some African governments also complain the ICC is targeting African leaders for prosecution disproportionately compared to the rest of the world.

The United Nations estimates the fighting in Darfur has killed up to 300,00 people and displaced 2.7 million others since 2003. Mr. Bashir's government says 10,000 people have died in the conflict.

New London memorial marks 4 years since attacks

LONDON (AP) — Families of terrorist victims joined royalty and lawmakers Tuesday to unveil a memorial of 52 steel pillars in a London park — one for each victim of the July 7, 2005, attacks on the city's transit system.

British Prime Minister Gordon Brown, London Mayor Boris Johnson and the Prince of Wales and his wife the Duchess of Cornwall attended the memorial service along with the bereaved. The stainless steel columns stand 3.5 meters (11.5 feet) tall in central London's Hyde Park.

"I believe the date of the London bombings is etched vividly on all our minds, as a brutal intrusion into the lives of thousands of people," Prince Charles told those gathered for the memorial.

Some relatives of those who died left single white or red roses next to a memorial plaque, while the names of all those killed were read aloud.

Cathey Johnson, whose husband Adrian Johnson was killed, attended with her two children. "I think the designers have been really careful to accommodate everybody's needs. I think it's very fitting," she said of the memorial.

Marc Lambert, a 46-year-old art consultant who works close to the park, carried a large bouquet of roses to the memorial service. He said he'd left flowers at the bomb sites each year since the attacks.

"Every year I have usually brought bouquets to each of the sites as a gesture to say that 'London hasn't forgotten you'," said Lambert. "I hope this will crystalize as a place to remember how London gets knocked down, gets up and carries on."

Former Mayor Ken Livingstone, who was in office at the time of the attacks by four suicide bombers on three subway trains and a bus, praised the design of the memorial. "I think it's just exactly right," he said.

As Londoners gathered for the ceremony, British lawmakers warned that the city's subway and bus network remain extremely vulnerable to attack by terrorists. The Home Affairs Select Committee said in a report published Tuesday that the city's famous Tube and bus networks remain iconic targets.

Transport for London, which operates public transport in Britain's capital, said it has carried out major improvements to security and upgraded communications systems for emergency staff.

Committee chairman Keith Vaz said that the panel will hold a new inquiry into the July 7, 2005 attacks and will ask the heads of Britain's intelligence agencies to give evidence.

Parliament's Intelligence and Security Committee has held two previous inquiries into the attacks, both of which rejected claims that security officials did too little to thwart the attacks.

"We must never underestimate the continued grave threat the U.K. faces from terrorist attack," committee chairman Keith Vaz said in a statement. "There is no doubt that there are sophisticated groups out there focused on doing us harm."

Bombings prompt Arroyo to summon Cabinet

MANILA, Philippines—President Gloria Macapagal-Arroyo Tuesday convened a command conference in MalacaƱang amid the rash of bombings in Mindanao, which the authorities believed were “test missions” for new trainees of the Moro Islamic Liberation Front (MILF).

“The purpose of this command conference is to do swift actions to help the victims and families of the Mindanao bombings, and strategize and plan to contain the seemingly planned pre-SONA noises,” she told Cabinet members.

She was referring to her State of the Nation Address later this month.

After Sunday’s blast in Cotabato City, two bombings rocked Jolo and Iligan City Tuesday morning.

In a presentation, Director General Jesus Verzosa of the Philippine National Police said police were looking into the possibility that the bombings were test missions for “renegade bombers” who recently finished their training in Mindanao.

Armed Forces chief of staff Gen. Victor Ibrado was more specific.

“The Special Operations Group of the MILF conducted three training (sessions) in different places in Maguindanao, and these are all about improvised explosive device training. We think that most of these bombings were done as a test mission for all these trainees that graduated,” he said.

Both the military and police declared “full alert” in Mindanao and “heightened alert” in other areas in the aftermath of the bombings, according to Verzosa.

“We have directed our offices to secure our vital installations and intensify checkpoints. We have also deployed additional troops to these troubled areas,” he said.

Ibrado said he had directed the commanders in the Western Mindanao Command and Eastern Mindanao Command to declare red alert and “strengthen their checkpoints.”’

“I have also instructed them to provide additional EOD and K-9 teams to Cotabato and other places which are reportedly to be threatened by these bombings,” he said.

In the PowerPoint presentation, Verzosa said the police were looking into other motives behind the three bombings.

He said the bombings could be aimed at diverting the Army’s ongoing operations. These could also be extortion activities, retaliation for the transfer of “high-risk detainees” from the Kidapawan provincial jail to the Bicutan jail, and a “show of force” before peace talks with the MILF resume, Verzosa said.

Earlier in the day, Defense Secretary Gilbert Teodoro said that the authorities had yet to pinpoint the perpetrators, but said it would be a sign of goodwill on MILF’s part if it condemned the bombings.

After dropping names of their suspects in the church bombing in Cotabato City, the military and police were noticeably extra cautious in disclosing groups being tagged in the string of blasts that rocked Mindanao Tuesday morning.

At Least 16 Killed in Reported Drone Strike in Pakistan


ISLAMABAD, Pakistan — Two missiles fired from a remotely piloted American aircraft struck a militant base on Tuesday in the South Waziristan tribal region, killing 16 militants, according to intelligence officials and residents reached by telephone.

A recent attack on the same village, Zangara, missed the leader of the Pakistani Taliban by hours, a Pakistani security official said soon after that missile strike.

The United States and Pakistan routinely withhold comment on suspected drone attacks.

The Pakistan military, which is locked in renewed battle with the Taliban, has been preparing a full-scale offensive in South Waziristan, where the leader of the Pakistani Taliban, Baitullah Mehsud, is based. In the prelude to the offensive, drone attacks have appeared to try to home in on Mr. Mehsud and forces loyal to him.

Before that, the United States was mainly sending drones to attack foreign members of Al Qaeda or Taliban commanders who focused their attacks on neighboring Afghanistan. Mr. Mehsud, however, has taken on the Pakistani government and is accused of masterminding a string of deadly suicide bombings in the country.

One intelligence official who spoke about Tuesday’s drone attack on the condition of anonymity said three Uzbek militants had been killed along with 13 local Taliban militants.

Mr. Mehsud’s subtribe, the Shabi Khel, is based in the area, and Makeen, a town where intelligence officials have thought Mr. Mehsud is based, is nearby. “The attack was very precise and accurate,” a resident reached by telephone said.

Several rooms of the militants’ compound were destroyed in the attack, which took place at midday, the intelligence official said.

The mountainous region where Mr. Mehsud’s fighters are entrenched is considered one of the most difficult terrains for conventional warfare.

Publicly, Pakistani officials have been critical of the drone strikes, citing them as a breach of the country’s sovereignty. But privately, Pakistani officials acknowledge the utility of such attacks, especially when militants are struck with few civilian casualties.

The Pakistani government has repeatedly asked the United States to give it drones to conduct attacks on its own. In an interview The Daily Telegraph in Britain published on July 6, Pakistan’s president, Asif Ali Zardari, reiterated the demand. “My position is that I have always asked for possession of the drone; I want the Pakistani flag on it,” the paper quoted Mr. Zardari as saying.

Opposition politicians, on the other hand, vociferously oppose drone strikes and see them as a major cause of public dissatisfaction with the United States.

Israel seeks Arab response for settlement building freeze

By Barak Ravid

The Barack Obama administration is continuing its efforts to draft a comprehensive agreement for freezing West Bank settlement construction and normalizing relations between Israel and the Arab states.

Meanwhile, Israeli officials told U.S. envoy George Mitchell in recent weeks that Jerusalem is willing to temporarily freeze settlement construction, but that the move would be conditioned on substantive steps from the Arab side, as well as guarantees from the United States.

Yesterday Obama sent a letter to King Mohammed VI of Morocco expressing his hope and expectation the Arab states will take steps to end Israel's "isolation" in the Middle East, and that he hopes "Morocco will be a leader in bridging gaps between Israel and the Arab world."

Israeli officials said yesterday they believe the United States is seeking to encourage Morocco and the Persian Gulf states to allow Israel to open diplomatic offices in their territory, and to send their own diplomatic delegations to Israel.

In his meeting with Mitchell, Barak encouraged the envoy to engage in "shuttle diplomacy" between Jerusalem and a number of Arab capitals to draft a regional peace plan. Another proposal that emerged in the talks was the convening of an international peace summit in the coming months on a "comprehensive regional agreement" that would lay out the steps ahead for both the Israeli and Arab sides.

Israeli officials said the thrust of the message delivered to Mitchell was "the length and breadth of the temporarily building freeze will be in proportion to the scope of the renewal of peace talks, and signals received from the Arab states."

Tomorrow Barak and Mitchell will meet again in London to discuss solutions to the settlement issue and steps to be taken by Arab states in return. Barak will be joined by Yitzhak Molcho, a diplomatic adviser to Prime Minister Benjamin Netanyahu.

At the center of the meeting will be the fate of some 2,500 housing units currently being built in West Bank settlements. Israel is prepared to announce a temporary construction freeze of several months, but is seeking U.S. acquiescence to complete building projects that have already begun.

The talks are aimed at reaching an agreement on the majority of issues that remain points of conflict between Washington and Jerusalem, and to reach final understandings ahead of Netanyahu's meeting with Mitchell in Jerusalem in two weeks.

Israel protests EU criticism of Jewish settlements

JERUSALEM (Reuters) - Israel protested on Tuesday against a European Commission statement that said Jewish settlements in occupied territory were paralysing the Palestinian economy at European taxpayer expense.

Israel's Foreign Ministry said it had summoned the European Union's ambassador to Israel, Ramiro Cibrian Uzal, and told him Israel "strongly rejects" the commission statement of Monday.

The controversy underscored a rift between Israel and Western leaders, led by U.S. President Barack Obama, who have pressed for a halt to settlement building in the occupied West Bank under efforts to renew Israeli-Palestinian peace talks.

The commission's statement, as published on its website, quoted its charge d'affaires in Jerusalem, Roy Dickinson, as repeating Europe's view that settler enclaves Israel has built in West Bank land Palestinians want for a state were illegal.

Dickinson said the settlements and Israeli military measures in the territory it captured in a 1967 war "contribute to strangling the Palestinian economy" making Palestinians more dependent on donor aid.

"And it is European taxpayers who pay most of the price of that dependence," the European statement added.

The Israeli official, Rafael Barak told Uzal the remarks were "unfounded" and the settlement issue was being addressed by Western-sponsored peace efforts alongside demands for Palestinians to rein in militants.

The European Union is a leading donor to the Palestinian government headed by President Mahmoud Abbas and based in the West Bank town of Ramallah. The Commission statement said this year's aid total came to some 202 million Euros.

The West Bank is home to some three million Palestinians and about half a million Jewish settlers.

British soldier dies in helicopter crash

By Ben Farmer in Kabul

A British soldier has died in Afghanistan after a helicopter crashed while taking off from a military base.

The unnamed soldier from 22 Engineer Regiment, Royal Engineers, died alongside two Canadians.

A spokesman said the crash had not been caused by enemy fire, but it was not yet known whether a mechanical failure in the Canadian Griffon helicopter or a pilot error was to blame.

A spokesman for the Nato-led forces in Afghanistan said the crash happened in Zabul province, and not in Helmand where British forces are in the third week of a major offensive in a Taliban stronghold.

The death brings the total number of British casualties in Afghanistan to 175 since operations began in 2001.

It is the sixth British death in the past week.

Major Luc Gaudet said: "An air wing flight safety investigation is under way and it has determined that the crash did not occur as a result of enemy fire." The Griffon helicopter is widely used by the Canadian military and carries three crew and up to 10 passengers.

The Canadians who died were named as Master Corporal Pat Audet and Corporal Martin Joannette.

Seven more international soldiers were killed in the country on Monday, six of them by homemade bombs and one from hostile fire.

More than 170 international soldiers have lost their lives in Afghanistan this year, and casualties are expected to climb as thousands of reinforcements push into Taliban heartlands.

Insurgent attacks have climbed steadily in recent years, with this summer seeing the most frequent attacks since the Taliban regime was toppled in 2001 for harbouring al Qaeda.

Commanders fear violence could escalate further still in the approach to next month's presidential election.

Israel criticised for thwarting medical mission to Palestinian territories

• Border guards turn away team including British medics
• Doctors had planned to perform surgeries on children

Israel was yesterday criticised after it refused to allow a group of doctors on a humanitarian mission organised by the French government to enter Gaza.

The team, including three British medics, was turned back by Israeli border guards on Sunday and Monday. They say their mission is purely humanitarian, aimed to helping those in medical need, and some of whom were left injured and in need of surgery after Israel's attack on Gaza earlier this year.

One of the Britons refused entry to Gaza, Sonia Robbins, who is a reconstructive plastic surgeon, said: "I don't know why we are being refused permission to enter.

"The consequences are that patients will not be operated on, children will have to wait until next time for surgery, and that won't happen until six months time.

"I think it is unacceptable to refuse a humanitarian mission."

The team had tried to enter through the Erez crossing. Robbins said she had been allowed to work in Gaza before. She said the team of nine medics were concentrating on surgery to the upper limbs, and that their papers to gain entry into Gaza were all in order. She added the border guards had been courteous as they refused the medical team permission to enter Gaza, where as well as treating the injured, they would help teach Palestinian doctors.

The mission is organised by the French doctor Professor Christophe Oberlin. His lawyer has sent a letter to the Israeli defence ministry, demanding an explanation, and wrote: "The purpose of their meeting was for the both teams, to hold activities together of medical consultation, surgery and teaching."

The letter says the denial of entry to the medical team amounts to Israel violating "the basic international humanitarian law principles, the obligations of Israel as the occupying power of the occupied territories, [and] its obligations under the international covenant of civil and political rights and the convention on the rights of the child."

Bodies of Yemeni Plane Victims Apparently Located off Tanzania

Several bodies apparently from a Yemeni airliner that crashed near Comoros last week have been found off the coast of Tanzania.

A Yemeni committee overseeing the crash investigation said Tuesday eight bodies were found in Tanzanian waters. Tanzanian authorities say they found the bodies and some wreckage near Mafia Island. It was not clear if the bodies have been identified as being from the plane.

A Yemenia Airbus A-310 with 153 passengers and crew crashed into the Indian Ocean on June 30 on a flight from France to Comoros via Yemen and Djibouti. A 12-year-old girl survived, but the other people on board are missing and feared dead.

A French submarine detected a signal from the plane's flight recorders on Sunday. But, French officials said it may take some time to reach the recorders because they are deep under water.

Obama Outlines Vision for Young Russians

07 July 2009

U.S. President Barack Obama has told graduates of the New Economic School in Moscow that the future belongs to them. It was a standard phrase frequently used in graduation speeches, to which Mr. Obama attached messages about poverty, nuclear weapons, national sovereignty, and the rule of law. The speech was well-received by the school's students and faculty.

President Obama told New Economic School graduates they represent the last generation born when the world was divided by the Cold War; when people stood on the brink of nuclear catastrophe and competition between America and Russia turned everything from astrophysics to athletics into a zero sum game. Mr. Obama rejected the notion that both countries are destined to be antagonists.

"That is why I have called for a "reset" in relations between the United States and Russia," he explained. "This must be more than a fresh start between the Kremlin and the White House - though that is important, and I've had excellent discussions with both your president and your prime minister. It must be a sustained effort among the American and and Russian people to identify mutual interests, and expand dialogue and cooperation that can pave the way to progress," he said.

Mr. Obama said he would not define Russia's interests, but told the audience about America's: nuclear non-proliferation, defeating violent extremists, and global prosperity. He noted, however, that many expectations for peace and prosperity after the Cold War have not been fulfilled.

New Economic School Professor Oleg Zamulin told VOA he agrees with the president's observation that great wealth created since the end of the Cold War has not eliminated vast pockets of crushing poverty.

"I wouldn't say every Russian is better off than 20 years ago. But I think the country overall is better off, because we are on the right track. I think if we didn't start reforms, if we didn't start market, economic and democratic transition, that our country would be much worse off than it is today," he said.

Zamulin said Mr. Obama was strong and open about the need for rule of law and civil society in Russia, yet did so without naming names. Instead, the president held out the promise of U.S.-Russian cooperation in new energy sources and combating climate change. He also noted that government can promote this cooperation, but individuals must advance it.

"Because the greatest resource of any nation in the 21st century is you. It's people. It's young people especially," he stressed. "And the country, which taps that resource will be the country that will succeed. That success depends upon economies that function within the rule of law. As President Medvedev has rightly said, a mature and effective legal system is a condition for sustained economic development," said the U.S. president.

Mr. Obama told graduates their lives coincide with an era of transition since the disappearance of old Soviet political and economic restrictions. He said there are no clear answers yet about Russia's future, or about the future of U.S.-Russian relations. Those questions, he noted, will be decided by the graduates and members of their generation in America and around the world.

Anton Smyslov, who completed a Masters in Economics, told VOA that a new generation of Russians is already working to improve their country.

"Some of the graduates from today already work for the Ministry of Economic Development. And I hope, and I'm pretty sure that they are going to make good careers, and they're going to apply the knowledge that the got at NES for the benefit of Russia and the benefit of the whole world," said the graduate.

President Obama recalled that when he was born, racial segregation was still law in America. And 100 years ago, a Czar-ruled Russia and Europe was a place of Empire. Anton Smyslov agreed that the Age of Empire is over, and said Russia must focus on developing as a nation.

"I can't understand some actions of the present government. Maybe we don't like if someone tries to influence Ukraine and Georgia, but if independence is indeed what is good for all of the countries, they have to be independent from both the U.S. and Russia," Smyslov said.

The Kremlin has resented NATO expansion and opposes Ukrainian and Georgian membership in the alliance. Mr. Obama noted in his address that for any country to become a NATO member, a majority of its people must choose to; they must undertake reforms; and must contribute to the alliance mission.

The president also held out the vision of a future that can be built if Americans and Russians refuse to be burdened by old obstacles and old suspicions. Together, he said, both nations can build a world where power serves progress.

By Firdevs Robinson
BBC News

The Chinese authorities are blaming Uighur exiles for masterminding the violence in Urumqi, the capital of Xinjiang province.

They single out the Washington-based Rebiya Kadeer as the mastermind behind the troubles.

This is not surprising. The 62-year-old exiled Uighur businesswoman has come to personify the Uighur cause in recent years.

Once an example of a successful entrepreneur and millionaire in Xinjiang, Mrs Kadeer was imprisoned for six years for separatist activities before she was sent into exile in the US.

Mrs Kadeer compares her treatment by the Chinese to that of the Tibetan spiritual leader, the Dalai Lama.

Angry demonstrations

The World Uighur Congress that she heads is the biggest and the most influential of the Uighur exile groups.

How influential she is inside Xinjiang is more difficult to assess.

Chinese government denunciations of her seem to add to her already strong charisma among her supporters outside China.

The World Uighur Congress has representatives in various European capitals, and it is mainly supporters of this movement who have been taking to the streets in cities around the world.

In Germany and the Netherlands, Uighur protestors caused damage to Chinese consulate buildings.

It was in Turkey, which is home to a significant number of Uighurs, that the angriest demonstrations took place.

Many Turks with strong nationalist sentiments see the Uighurs as their ethnic kin.

Uighur groups receive financial and political support from nationalists and pro-Islamist groups.

The recent events in Xinjiang seem to have increased public support in Turkey for the Uighur cause.

It was only 10 days ago that the Turkish President Abdullah Gul visited Urumqi with a big delegation of Turkish businessmen looking for closer trade links.

'Abuse of power'

However, the tide seems to have turned against China.

Even the normally enthusiastic Industrialists and Businessmen's Association is expressing concern over the incidents in Urumqi, asking Turkish businesses to reconsider their dealings with China.

Turkey, with its own ethnic divisions, does not want to be seen to be sympathetic to separatist movements.

But Uighur activists reject the label of separatism. They say they are fighting for their basic human rights.

Many Uighurs inside and outside China express a desire to have political and religious freedoms and a bigger share of economic prosperity.

But there are a few armed groups known to be active in China and beyond.

The East Turkistan Islamic Movement is the best known of these, and is on the US terrorist blacklist.

The Chinese government frequently points to the threat caused by the radical extremists, but human rights observers say China is exaggerating the threat as an excuse to cover up its abuse of power in Xinjiang.

  • Xinjiang population is 45% Uighur, 40% Han Chinese
  • Uighurs are ethnically Turkic Muslims
  • China re-established control in 1949 after crushing short-lived state of East Turkestan
  • Since then, large-scale immigration of Han Chinese
  • Sporadic violence since 1991
  • Attack on 4 Aug 2008 near Kashgar kills 16 policemen