California governor declares drought emergency

California Governor Jerry Brown declared a drought emergency on Friday, a move that will allow the parched state to seek federal aid as it grapples with what could turn out to be the driest year in recorded state history for many areas.

The dry year California experienced in 2013 has left fresh water reservoirs with a fraction of their normal reserves and slowed the normally full American River so dramatically that brush and dry riverbed are showing through in areas normally teeming with fish.

"We can't make it rain, but we can be much better prepared for the terrible consequences that California's drought now threatens, including dramatically less water for our farms and communities and increased fires in both urban and rural areas," Brown, a Democrat, said in a statement.

"I've declared this emergency and I'm calling all Californians to conserve water in every way possible," he said, in a move that will allow him to call for conservation measures and provide flexibility in deciding state water priorities.

Speaking at a news conference in San Francisco, he said the drought threatens to leave farms and communities with dramatically less water and increases the risk of fires in both urban and rural areas.

He appealed to residents to keep a lid on water use with the aim of reducing overall consumption by 20 percent, telling them that "this takes everybody pitching in." He warned that mandatory conservation programs may be initiated down the road.

In a sign of the severity of the drought, some of the state's reservoirs are at their lowest levels in years. The Folsom Reservoir near Sacramento is so low that the remains of a Gold Rush-era ghost town - flooded to create the lake in the 1950s - are visible for the first time in years.

The state's mountain ranges, where runoff from melting snow provides much of the water for California's thirsty cities and farms, have just 20 percent of the snow they normally have at this time of year, officials noted.

Lake Shasta, the largest reservoir in California, is down from its historical average by nearly half.

Other sources of water, including the massive Sacramento-San Joaquin Delta, are also affected, prompting cities to dip into reserves and forcing farmers to scramble. Some public agencies may be able to purchase just 5 percent of the water that they contracted to buy from the state.

Adding to concerns, January and February are usually the wettest months in much of the state, but 2014 has so far been mostly dry, with little precipitation expected, according to the National Weather Service.


In declaring a drought emergency, Brown said he did not know if he would be successful in persuading the federal government to free up funds for drought relief but he would try his best.

"It's important, first of all, to awaken all Californians to the serious matter of drought," he said, also warning of upcoming "conflicts and different perceptions on how water is to be allocated."

Water has long been a contentious issue in California, where it has been diverted from mountain lakes and streams to irrigate farms and slake the thirst of metropolitan areas.

Many of the state's efforts to deal with the problem are controversial, including a $25 billion plan to divert water from above the delta by sending it through a pair of huge tunnels.


For many in the state's $44.7 billion agriculture business, water scarcity is a problem made worse by a recent switch to orchard-style crops such as almonds and olives. Unlike vegetables or cotton, which grow in fields that can be left fallow in dry years, the trees need water every year.


Already, there were signs of competing priorities among groups that contend for water and will be closely watching how state officials use their new flexibility in allocating it.


Assemblywoman Connie Conway, the leader of the Republican minority in the state Assembly who represents a heavily agricultural area in central California, expressed hope that with the declaration more water could go toward "Valley farmers and workers who depend on water to feed the world."


John McManus, executive director of the Golden Gate Salmon Association, said his group's concern was for the health of salmon and a fishing industry that supports tens of thousands of jobs in California and Oregon.


"If the drought declaration results in more attention to saving the salmon that are in the Sacramento Valley rivers, and which are in dire need of attention, then that is good thing," he said.


Doug Obegi, an attorney at the Natural Resources Defense Council, said California has a complex system that allocates water to areas that laid claim to it first - often over 100 years ago - and which many view the system as unfair.


"Because it's so contentious, there are times when it's hard to make progress," Obegi said.


But in some ways the state has done well. Over the last 40 years, the state's agriculture industry has doubled the revenue per drop of water used, largely from improved efficiency and changes in the plants grown, Obegi said.


(Writing by Sharon Bernstein and Alex Dobuzinskis; Editing by Cynthia Johnston, G Crosse and Marguerita Choy)


Exclusive: Senior U.S. senators push South Sudan leaders on violence

Senior members of the influential U.S. Senate Foreign Relations Committee urged South Sudan's leaders on Friday to stop violence threatening to spiral into civil war in a country that has received billions of dollars in U.S. taxpayer funds.

In letters obtained by Reuters, Democratic Senators Robert Menendez, chairman of the committee, and Chris Coons, chairman of the Africa subcommittee, wrote to South Sudanese President Salva Kiir and former Vice President Riek Machar expressing deep concern about the turmoil.

Fighting since mid-December, often along ethnic lines, has pitted Kiir's SPLA government forces against rebels loyal to Machar, raising fears the oil-exporting country could become Africa's next failed state.

At least 1,000 people have been killed, with some estimates as high as 10,000, and more than 200,000 have been displaced. Oil exports - key to South Sudan's economy - have plummeted, adding to regional instability.

"As long-time friends of South Sudan, we must first express our deep concern to you, its president, with the hope that you do everything in your power to bring the violence to an immediate end," Menendez and Coons wrote to Kiir.

The senators urged all parties to agree to an immediate ceasefire, without preconditions. They also called on Kiir to release political detainees to allow them participate in peace negotiations.

They called for a more inclusive and transparent political dialogue, as well as an end to any harassment of relief workers, and expressed alarm about human rights violations.

"We are closely monitoring potential human rights violations and atrocities against innocent civilians, committed by any and all parties. We strongly urge you to demand restraint," they wrote to Machar.

Washington has spent billions of dollars - congressional aides estimated $600 million per year - to help build the fledgling nation, including allowing weapons sales to its government and providing security training for its armed forces.

Unlike many African countries, South Sudan enjoys the strong interest of a broad range of U.S. lawmakers, who backed the push by largely Christian and African southern Sudan to split from Muslim- and Arab-dominated northern Sudan and form the world's youngest state three years ago.

But some members of Congress have been expressing deep frustration with the wave of violence and several have questioned whether it is appropriate for the United States to cut back on aid or slap sanctions on those responsible.

Menendez called a Senate Foreign relations hearing last week to question U.S. officials and activists about the crisis. The House of Representatives Foreign Affairs Committee held a similar hearing this week.

(Reporting by Patricia Zengerle; Editing by Jonathan Oatis)

Top Christie aides subpoenaed in New Jersey bridge probe

Twenty New Jersey officials, including top aides to Governor Chris Christie, were served with subpoenas on Friday as the state assembly begins its investigation into a massive bridge traffic jam that was apparently politically motivated.

Christie, seen as a likely Republican candidate for the White House in 2016, has denied any involvement in the so-called "Bridgegate" scandal that is dogging his second term in office.

Assembly Democrats said 20 subpoenas had gone out seeking information related to the September traffic snarl, created by the abrupt closing of access lanes to the busy George Washington Bridge, which spans the Hudson River connecting New York and New Jersey.

Among those receiving subpoenas were Christie spokesmen Michael Drewniak and Colin Reed, communications director Maria Comella, the governor's incoming chief of staff Regina Egea, and Christie's former campaign manager Bill Stepien.

The list also includes David Samson, chairman of the Port Authority of New York and New Jersey, as well as Bill Baroni and David Wildstein, two former Port Authority officials who have resigned.

Two batches of emails between top Christie aides and officials at the Port Authority of New York and New Jersey, which oversees the bridge, appeared to show the lane closures were orchestrated to punish Fort Lee's Democratic mayor for not endorsing Governor Christie's re-election bid last year.

Four days of hours-long jams left commuters fuming, and delayed school buses and emergency vehicles.

Nothing in the emails suggests that Christie had any direct knowledge of the plan to close the lanes. Christie has described himself as devastated and "blindsided" by his aides' actions.

Port Authority Executive Director Patrick Foye, who ordered the lanes reopened, said in publicly released emails that he believed the closings violated state and federal law. New Jersey's federal prosecutor has opened an investigation into the matter.

A New Jersey state Senate panel is likely to issue subpoenas next week as part of its own investigation.

"We're going to try to work together," said State Senator Loretta Weinberg.

On Thursday, the Christie administration, which says it is cooperating fully with the probes, hired outside legal counsel.

(Editing by Gunna Dickson)

Obama takes swipe at Snowden in spy reform speech

President Barack Obama on Friday took a swipe at Edward Snowden, the former U.S. spy contractor whose revelations about American surveillance practices tarnished relations with foreign allies and prompted reforms in Washington.

Obama unveiled those reforms during a long-awaited speech that balanced pledges to increase privacy protections with a warning that intelligence gathering would continue.

But the president could not get through his remarks without mentioning the man who, to the Obama administration's chagrin, forced its hand in changing the system.

"Given the fact of an open investigation, I'm not going to dwell on Mr. Snowden's actions or his motivations," Obama said in his address at the Department of Justice, taking the somewhat unusual step of mentioning the former National Security Agency contractor by name.

"I will say that our nation's defense depends in part on the fidelity of those entrusted with our nation's secrets."

The White House has argued that Snowden - along with other whistleblowers - had other options for raising concerns about intelligence practices without making massive and damaging leaks.

Snowden fled to Hong Kong and then to Russia, where he currently has asylum. The White House wants him returned to the United States for prosecution.

"If any individual who objects to government policy can take it into their own hands to publicly disclose classified information, then we will not be able to keep our people safe, or conduct foreign policy," Obama said.

"Moreover, the sensational way in which these disclosures have come out has often shed more heat than light, while revealing methods to our adversaries that could impact our operations in ways that we may not fully understand for years to come."

A legal adviser to Snowden, Jesselyn Radack, said Obama's comments framed the issue in a false way of making people choose between liberty and security.

"His unnecessary swipe at Snowden for the unauthorized disclosure ... was really unwarranted," Radack, the national security and human rights director at the Government Accountability Project, said in an interview.

Obama noted he had called for a "robust" public discussion about the balance between providing security and protecting personal liberty only weeks before the Snowden revelations.

"What I did not know at the time is that within weeks of my speech, an avalanche of unauthorized disclosures would spark controversies at home and abroad that have continued to this day," he said.

(Reporting by Jeff Mason; Editing by Lisa Shumaker)

U.S. states could turn to firing squads if execution drugs scarce

Lawmakers for at least two U.S. states say they should conduct executions by firing squad if opposition to capital punishment by pharmaceutical companies makes it hard to obtain drugs for lethal injections.

States have turned to pharmacies that customize drugs and adopted untested new mixes after supplies of traditional execution drugs were cut off by manufacturers opposed to their use for the procedure.

The debate over lethal injections was reignited on Thursday when an inmate gasped and convulsed violently during his execution in Ohio as the state used a two-drug method for the first time in the United States.

Missouri state Representative Rick Brattin, said Friday the controversy over lethal injections forces families of murder victims to wait too long for justice so he introduced his bill Thursday to add "firing squad" as an execution option.

"A lot of folks may picture the 1850s and everyone lining up to shoot, but the reality is that people suffer with every type of death," said Brattin, a Republican. "This is no less humane than lethal injection."

Missouri, which is scheduled to execute an inmate in late January, uses lethal injection by statute and permits execution by gas, a method it has not used since 1965.

The United States has executed more than 1,300 prisoners since it resumed the death penalty in the 1970s, nearly 1,200 by lethal injection. Only Utah has used firing squads, executing three inmates that way since 1977, the last in 2010.

Brattin's bill follows a measure Republican Wyoming state Senator Bruce Burns introduced last week to add firing squad as an execution option for the state if drugs are not available.

"If I had my choice, I would take the firing squad over lethal injection," Burns said.

Wyoming law also allows inmates to be gassed, but the state does not have a gas chamber, Burns said.

Richard Dieter, executive director of the Death Penalty Information Center, which tracks the use of capital punishment, said the firing squad proposals show the desperation some lawmakers have to find a way around the issues raised by lethal injection.

Utah uses firing squads only at the inmate's option and is phasing out the method, Dieter said. Two death row inmates in Utah still have the firing squad option, he said.

(Reporting by Kevin Murphy in Kansas City, editing by David Bailey and Andrew Hay)

U.S. man pleads guilty to sending ricin to Obama, two others

A Mississippi man accused of sending poisoned letters to President Barack Obama and two other public officials, and then pinning them on an Elvis impersonator, pleaded guilty in U.S. court and agreed to a 25-year jail sentence, the Justice Department announced on Friday.

James Everett Dutschke, 41, has been jailed since his arrest last April, when authorities accused him of sending ricin-tainted letters to Obama, U.S. Senator Roger Wicker of Mississippi and a local Lee County judge, Sadie Holland.

Ricin is a highly toxic protein found in castor oil plants that can kill an adult human in tiny doses.

Dutschke, a former martial arts instructor and one-time political candidate, originally had denied the charges but on Friday changed his plea in U.S. District Court in Oxford, Mississippi, according to a Justice Department press release.

"It's closure, and any time you can get that it's a good thing," said Lee County Sheriff Jim Johnson, whose department had assisted the FBI and other agencies in identifying and arresting Dutschke last April.

The guilty plea "has eased our community and eased our victims and the other people he could have come in contact with," said Johnson, who described Dutschke as a manipulator who thinks he can "outsmart any person of authority or any system."

Dutschke's attorney, Ken Coghlan, said the plea agreement involved resolution of outstanding state charges of child molestation.

"He (Dutschke) was facing a lot of uncertainty and at least now he knows where he stands," said Coghlan, noting that his client faced a maximum penalty of life in prison.

Under the agreement, Coghlan said Dutschke would plead guilty to the molestation charges next week and would serve his sentences concurrently in federal prison.

Dutschke pleaded guilty to four charges of developing and possessing the biological agent ricin and subsequently mailing ricin-laced, threatening letters, including one that threatened bodily harm to the president of the United States.

Only Holland received one of the letters. The U.S. Postal Service intercepted those that were sent to Obama and Wicker.

The plea agreement was announced by John Carlin, acting assistant attorney general for national security; Felicia Adams, the U.S. attorney for the Northern District of Mississippi; and Daniel McMullen, special agent in charge of the FBI's Jackson field office.

Dutschke will be sentenced in about 60 days, the Justice Department said.

Dutschke previously had pleaded not guilty to five counts of a grand jury indictment and denied sending the letters. He also pleaded not guilty on December 3 to a new charge that he tried to continue the scheme from jail.

An initial indictment in June said Dutschke tried to frame Paul Kevin Curtis, an Elvis impersonator, by lifting phrases from Curtis's Facebook account to make it look as though he was responsible for the letters.

(Additional reporting by David Adams and Eric M. Johnson; Editing by Colleen Jenkins, Sophie Hares, Leslie Adler and Ken Wills)

Obamacare rules on equal coverage delayed: NY Times

The Obama administration is delaying enforcement of a provision of the new healthcare law that prohibits employers from providing better health benefits to top executives than to other employees, the New York Times reported on Saturday.


Tax officials said they would not enforce the provision this year because they had yet to issue regulations for employers to follow, according to the Times.

Internal Revenue Service spokesman Bruce Friedland said employers would not have to comply until the agency issued regulations or other guidance, the newspaper reported.

The IRS was not immediately available to confirm the Times story.

The rollout of the Affordable Care Act, known as Obamacare, has been marked by a number of delays in implementing certain parts of the law. In November, the administration announced a one-year delay in online insurance enrollment for small businesses.

Technical problems with the enrollment website plagued its launch on October 1, but they have largely been fixed and more than 2 million people have signed up for private insurance. The White House hopes to have 7 million people sign up by March 31, the deadline for coverage under Obamacare.

The law, adopted in 2010, says employer-sponsored health plans must not discriminate "in favor of highly compensated individuals" with respect to either eligibility or benefits.

IRS officials said they were wrestling with complicated questions like how to measure the value of employee health benefits, how to define "highly compensated" and what exactly constitutes discrimination, the Times reported.

The ban on discriminatory health benefits was to take effect in 2010. Administration officials said then that they needed more time to develop rules and that the rules would be issued well before this month, when other major provisions of the law took effect.

A similar ban on discrimination, adopted more than 30 years ago, already applies to employers that serve as their own insurers. The new law extends that policy to employers that buy insurance from commercial carriers.

(Writing by Eric Beech; editing by Gunna Dickson)

Christie's staff held disaster aid 'hostage' over project: NJ mayor

The New Jersey mayor who added to Governor Chris Christie's woes with fresh claims that his office punishes uncooperative local officials stuck to her story on Sunday, overshadowing the governor's fundraising trip in Florida.

Widely seen as a Republican contender for the White House in 2016, Christie avoided mention of his troubles at home while he raises funds on a closely watched trip to Florida this weekend.

His office dismissed as false claims by Hoboken Mayor Dawn Zimmer that he sent his deputy to tell her she risked not getting requested funds for Superstorm Sandy relief unless she backed a redevelopment project in her city.

But Zimmer stuck to her story on Sunday that two state officials, including Lieutenant Governor Kim Guadagno, told her Christie would withhold funding if Zimmer did not support a bid by the New York-based Rockefeller Group to build on several blocks in the city.

"She came and made a direct threat to me," Zimmer told CNN television, describing a conversation she had with Guadagno in a parking lot shortly before an event in Hoboken in May. "I'm offering to testify under oath."

Zimmer says she has only received a fraction of the $127 million in relief funds she requested for Hoboken, a city just across the Hudson River from Manhattan that was badly flooded by Sandy in late 2012.

"The lieutenant governor said, essentially: 'You've got to move forward with the Rockefeller project,'" Zimmer said on Sunday. "She said this is a direct message from the governor: 'I was with him on Friday night.'"

Christie is in Florida this weekend to raise money for Republican Governor Rick Scott, on a trip viewed as a test of donor confidence in a potential presidential bid in 2016.

It is his first political trip since his office was engulfed by scandal this month after it emerged that some of his closest aides orchestrated chaotic traffic jams in the city of Fort Lee by closing lanes on the busy George Washington Bridge linking New Jersey and New York City.

So far, Christie has largely avoided speaking with news reporters in Florida. Reporters were kept on the highway outside and out of view of the Country Club of Orlando while Christie joined Scott at a benefit lunch there on Saturday. Attendees told reporters Christie did not speak about the allegations he is facing in New Jersey.


The bridge closures appeared to be retribution against Fort Lee's Democratic mayor, who declined to endorse Christie for re-election. Christie said he did not know of his aides' plans, and fired two of the aides after their role in the closures emerged.

Federal prosecutors and both chambers of the state legislature are now investigating what happened. Nearly two dozen New Jersey officials, including much of Christie's inner circle, were served with subpoenas on Friday over the lane closures.

Assemblyman John Wisniewski, a Democrat leading one of the investigations, said on Sunday that Zimmer was a "well-respected" mayor and that her claims need to be examined.

"I think we have to give the allegations serious thought because it is a pattern that we've heard time and time again throughout New Jersey," he said in an interview with NBC television. "I think the committee needs to look at the facts, hear her story, look at the emails and consider where we go next."

Federal officials are also reviewing Christie's use of about $2 million in storm Sandy relief funds for a tourism campaign that features him and his family. New Jersey Democratic Rep. Frank Pallone requested the probe, saying he was concerned about the bidding process for the marketing campaign.


Zimmer's accusations were the third blow to Christie in two weeks.


A Christie spokesman disputed the mayor's account.


"Mayor Zimmer's categorization about her conversation in Hoboken is categorically false," Colin Reed, the spokesman, said in an email. He declined to answer further questions about what Guadagno and Zimmer actually discussed, and said the lieutenant governor was not available for an interview.


Reed said Zimmer and other Democratic mayors had a "political ax to grind" and only wanted a chance to be on television.


The mayor and the governor's office have wildly diverging accounts about how much funding has been given to Hoboken. Reed said Hoboken has received about $70 million, including about $50 million from various Federal Emergency Management Agency programs.


Zimmer said that number was misleading, and was mostly made up of payouts on residents' and businesses' insurance policies.


"We got just a little bit more than $300,000," Zimmer said. "They're playing games with the numbers, and it's a deflection."


(Additional reporting by Barbara Liston in Orlando; Editing by Dina Kyriakidou and Jonathan Oatis)


UK Queen's granddaughter Zara Phillips gives birth to a girl

Queen Elizabeth's granddaughter, Zara Phillips, gave birth to a girl on Friday who becomes 16th in line to the British throne, Buckingham Palace said.


It is Phillips' first child with her rugby-player husband Mike Tindall and the Queen's fourth great grandchild.

The pair are known in Britain for their sporting success with Phillips, 32, the 15th in line to the throne, winning an equestrian silver medal at the London Olympic Games in 2012 and Tindall, 35, the former captain of the England rugby union team.

The palace said in a statement: "Mrs. Michael Tindall today safely delivered a baby girl at Gloucestershire Royal Hospital. Mr. Tindall was present at the birth. The weight of the baby was 7lbs 12oz (3.5 kg).

"The Queen, The Duke of Edinburgh, The Princess Royal, Captain Mark Phillips and Mike's parents, Mr. Phillip and Mrs. Linda Tindall, have been informed and are delighted with the news. The baby's name will be confirmed in due course."

Phillips is the only daughter and second child of Princess Anne, Queen Elizabeth's only daughter. Anne married Olympic equestrian Mark Phillips in 1973 but they divorced in 1992. She is now married to retired naval officer Timothy Laurence.

Phillips and Tindall met in Australia during England's Rugby World Cup campaign in 2003 and married in 2011 in Edinburgh.

Just six weeks after their marriage, CCTV footage showed Tindall hugging and kissing another woman at a bar in New Zealand, where his team was competing at the World Cup. He later apologized and said the woman was "just an old friend".

(Reporting by Belinda Goldsmith; editing by Stephen Addison)

Facebook 'relationships guy' courts Hollywood, media in new push

Beyonce fans got a big surprise at midnight on December 13, when the pop star announced her new album from out of the blue.

Just as surprising was her decision to announce the album by posting a 15-second video on Instagram, the Facebook-owned online photo-and-video sharing service.

The exclusive announcement - virtually unheard of for a recording artist of that caliber - was a coup for Facebook, which has been upstaged by younger rival Twitter Inc as the go-to online forum for celebrities, sports and news.

Potentially billions of dollars in television advertising are at stake as consumers increasingly turn to social networks to stay abreast of the latest news and entertainment. Twitter and Facebook both are wooing advertisers with video ad platforms and trying to hold off mobile communications startups like WhatsApp and SnapChat, which have lured many younger users.

Leading the Facebook charge is Dan Rose, vice president of partnerships, acquisitions chief, and architect of some of the social network's key deals during his eight years there.

Rose maintains a low profile compared with Mark Zuckerberg, Facebook's founder, and Chief Operating Officer Sheryl Sandberg, whose "Lean In" book on women in business was a cause celebre. A surfer, Rose has a reputation as calm, friendly but persistent at the 5,800-employee company.

Previously at, the 42-year-old Rose helped launch the Kindle reader and nail down deals with publishers.

When Facebook's stock was beaten down in the wake of its IPO in May 2012, Rose told an all-staff meeting that Amazon plowed through the turbulence of its early years by ignoring the "noise" around it and focusing on long term goals, a person who was present at the meeting said.

His approach has helped Rose find common ground in sometimes tricky relationships. He was instrumental in three years of talks to win Apple Inc permission in 2012 for Facebook to tap directly into iPhone features like pictures, as well as a 2006 advertising pact with Microsoft Corp which a year later made a seminal investment in the young company.

Now Rose is spearheading the efforts to broaden the Facebook conversation, dominated by talk of friends and family, by tying up with celebrities, news organizations and other "content" providers.

People "like to see stuff from their friends, that's where Facebook started and kind of where our origin is, but they also really like to see stuff from public voices," said Rose.

"When that type of stuff shows up in people's newsfeeds they like it, they click on it, they comment on it, they engage with it," Rose said in an interview.

In November, Rose and Facebook product chief Chris Cox hosted a lunch at the posh Soho House club in West Hollywood with representatives of various celebrities, including Madonna, rapper Pitbull and actor Channing Tatum.

In recent months, Rose's team has also made frequent visits to broadcasters and other media organizations, preaching the virtues of Facebook and discussing potential partnerships. Facebook may soon announce a series of tie-ups with a broadcaster around some popular television shows and sporting events, a source familiar with the matter said.

"There's a lot of disconnect between Hollywood and the Valley on many different fronts. He plays a really important role," said Guy Oseary, the manager for Madonna and band U2, who was at Soho House lunch.



Analysts say Facebook's efforts to recast itself as the virtual town square for public conversations about everything from yesterday's football game to breaking news will not be easy.


"Facebook is still the place where you see friends," said Ben Schachter of Macquarie Research. Changing consumers' online habits is tough, he added.


Some media and entertainment organizations, such as the ESPN television sports network, have nearly as many followers on Twitter as they do on Facebook, even though Facebook's total audience of 1.2 billion active members is five times Twitter's. CNN and CNBC have more followers on their Twitter accounts than on Facebook.


Twitter, known for 140-character messages, has created a system for broadcasters to show video clips and ads through tweets coordinated with what is being shown on TV. In September it struck a deal with the National Football League to show video highlights of games on Twitter.


Past efforts to nudge consumers into using Facebook's social network in different ways have fizzled, from movie rentals to online shops by big retailers.


Facebook said the movie rentals were an effort that the film studios initiated on their own, and noted that the current focus on public content is aimed at better supporting user behavior that's already occurring on its social network.


Facebook users posted 20 million comments and "likes" about the opening game of the National Football League season as the match unfolded.


On Thursday, Facebook took a page from Twitter and introduced a "Trending" feature, offering a personalized list of hot discussion topics.




To cozy up to the media and entertainment industry, Rose needs to demonstrate the benefits of its social network and its massive audience, something rival Twitter has proven adept at.


"I think of it kind of like nation-state relationships, for these larger companies and these larger partnerships, where you have diplomats and ambassadors," said Rose. "The goal of those people is to find areas of mutual shared interest."


In September, Facebook began providing broadcasters with reports detailing the conversations their shows generated on the social network. And it created special tools to help programs such as ABC's "Dancing with the Stars" incorporate public comments of Facebook users into their shows.


Rose has also turned the mergers and acquisitions team, which he runs, to the project. In December, Facebook acquired Sportstream, whose technology organizes comments that sports fans post on Facebook, making it easier for sports broadcasters to discover and use some of the real-time conversations.


Then there's Instagram, the photo and video-sharing service that Facebook acquired for roughly $700 million last year, and which is popular among movie stars, athletes and other public figures.


Rose's team, including his deputy for celebrity outreach Justin Osofsky, cultivated a relationship with Beyonce for months. When she proposed the album announcement on short notice, they leapt at the opportunity.


Beyonce declined to comment on the launch of the album, a secret until the Instagram video. It sold a record 1 million copies on Apple's iTunes store in six days.

(Editing by Edwin Chan, Peter Henderson and Grant McCool)

Russell Johnson, 'The Professor' on 'Gilligan's Island,' dies at 89

Russell Johnson, the veteran character actor who appeared in science fiction films and Westerns before earning enduring fame as "The Professor" on the classic 1960s sitcom "Gilligan's Island," died on Thursday at the age of 89, his agent said.

"He died at 5:21 a.m. of natural causes at home in Washington state," agent Michael Eisenstadt said, adding that Johnson's wife and his daughter were at his side.

"Gilligan's Island," which was created by producer Sherwood Schwartz, ran for three seasons on the CBS network, from 1964 to 1967, and attracted even more popularity in syndication.

"I worked with him for over 20 years. He was a gentleman, a great guy and a family man, an iconic figure," Eisenstadt said. "In the history of television ‘Gilligan's Island' was one of the most re-run shows. He'll be missed. He was old-time Hollywood."

Actress Dawn Wells, who played the perky Mary Ann Summers in the show, posted a photograph on Facebook of herself along with Johnson and Bob Denver, who starred as the zany Gilligan and died in 2005.

"My 2 favorite people are now gone. The Professor past away this morning. My heart is broken," she wrote.

The show followed four men and three women stranded on a tropical island after being shipwrecked on the S.S. Minnow. Johnson, a decorated World War Two veteran who was a bombardier on a B-24 Liberator shot down over the Philippines in 1945, played Professor Roy Hinkley, simply called "The Professor."

Johnson had appeared in Westerns including "Law and Order" (1953) starring future President Ronald Reagan and sci-fi films including "It Came from Outer Space" (1953), "This Island Earth" (1955) and "Attack of the Crab Monsters" (1957).

John Gabriel, best known for his later role on the soap opera "Ryan's Hope," initially was cast in the Professor role but the producers wanted someone else. Johnson said he twice turned down auditions for "Gilligan's Island" because he was in the running for starring roles on other series.

"I didn't want to be one of seven," he told the Archive of American Television in 2004.

The other roles fell through, he auditioned and got the job.

The cast also included Alan Hale Jr. as "The Skipper," Jim Backus as millionaire Thurston Howell III, Natalie Schafer as his wife, and Tina Louise as movie star Ginger.

"Just sit right back and you'll hear a tale, a tale of a fateful trip," the show's theme song promised, as the crew of two and their five passengers sailed into a storm on what was supposed to be a three-hour pleasure tour from Honolulu.

For all his supposed scientific expertise, The Professor failed to devise a way to get the castaways off the island - even as a procession of guest stars successfully dropped in and were able to get out.

"The Professor was the glue that held the more colorful characters in place in the Gilligan mosaic," Schwartz wrote in his book "Inside Gilligan's Island." "And Russell Johnson played him perfectly: intellectual, serious, sincere. He supplied the logic on the island and he supplied it so well that he convinced the other castaways and the viewers as well that whatever he said was scientifically sound."



Schwartz, who later produced "The Brady Bunch" series, kept "Gilligan's Island" completely chaste, even with the voluptuous Tina Louise and former Miss Nevada Dawn Wells parading around.


"He kept its innocence," Johnson said of Schwartz.


"In those days, we were working in a situation where you couldn't see a woman's navel. I mean it," he told the Archive of American Television. "On Dawn Wells' shorts, they had to bring it up a little bit so you didn't see her navel. They were fighting all the time with Tina Louise's cleavage."


Johnson said that in one episode, a character played by Zsa Zsa Gabor showed up on the island. "She makes a play for The Professor. She's really all over him. And he's talking about Lepidoptera (moths and butterflies) and flora and fauna."


"They kept The Professor asexual," Johnson said.


One controversy involved the show's theme song. In the first season, every character except The Professor and Mary Ann was mentioned -- they were tossed off with the words "and the rest." Johnson and Wells complained and their characters eventually were inserted into the song.


The show ended after three seasons and 99 episodes. There also were TV movie sequels like "Rescue from Gilligan's Island" (1978), "The Castaways on Gilligan's Island" (1979) and "The Harlem Globetrotters on Gilligan's Island" (1981).


Johnson also appeared on a variety of other TV shows including "Dallas" and "Dynasty." Denver's death in 2005 left Johnson as the last surviving male cast member of "Gilligan's Island."


Johnson was born in 1924 in Pennsylvania and was sent to a boarding school with his brothers when his father died.


He was married three times and had two children and one stepchild. He married his third wife, Constance, in 1982 and they lived in Washington state. His son, David, died of AIDS at age 39 in 1994 and Johnson became active in AIDS fund-raising efforts.


(Reporting by Will Dunham; additional reporting by Patricia Reaney; Editing by Bill Trott and Leslie Adler)


With panache and profanity, Rita Moreno accepts actors' honor

Rita Moreno, the 82-year-old actress who won an Oscar for her role as Anita in "West Side Story," lit up the Screen Actors Guild awards on Saturday accepting a lifetime achievement award with a wistful song and an exclamation of profanity.


Moreno uttered the expletive as soon as she ascended to the stage to accept the award presented to her by actor Morgan Freeman.

"I am sorry about that word. Actually, I am not," she added later, laughing.

The standard TV telecast delay allowed the network to bleep out the profanity for television viewers.

Moreno, who also sang Frank Sinatra's song "This Is All I Ask" while on stage, was soon after the top trending topic on Twitter.

The outspoken Puerto Rico-born actress is the only Hispanic to have won the four major awards in the entertainment industry - the Emmys, the Grammys, the Oscars and the Tonys.

"The difference between getting an Oscar, for instance, and having an honor like this tonight is that the Oscar is really meant for a performance and a specific film," Moreno said speaking to media off stage. "This, I don't call it an award. I call it an honor because it's about a lifetime."

The actress, whose career began in the racially segregated United States of the 1950s, also spoke about the continuing challenges for Hispanic women in Hollywood.

"I'm not surprised because as long as you have problems with immigration, and the reform of immigration, in my lifetime it will always be difficult," she told reporters backstage.

Moreno, who coyly greeted actors Brad Pitt and Jeremy Renner from the stage during her speech, capped her acceptance singing parts of Sinatra's ballad about growing old, which she told reporters was the "essence of what I feel."

"So let the music play as long as there's a song to sing and I will be, I will be, younger than spring," she sang on stage.

(Reporting by Eric Kelsey; Editing by Lisa Shumaker)

More than 1,000 rhinos poached in South Africa last year - Government

More than 1,000 rhinos were poached for their horns in South Africa in 2013, a record number and an increase of over 50 percent from the previous year, the country's department of environmental affairs said on Friday.

Rhino hunting is driven by soaring demand in newly affluent Asian countries such as Vietnam and China, where the animal's horns are prized as a key ingredient in traditional medicine.

Rhino horn has a street value of more than $65,000 a kg in Asia, conservation groups say, making it more valuable than platinum, gold or cocaine.

The data is sure to ring conservation alarm bells about a downward population spiral in a country that is home to almost all of Africa and the world's rhinos, and it may bring renewed pressure on the government to do something to halt the slayings.

In 2013, 1,004 of the massive animals were illegally killed in South Africa, compared with 668 the previous year and 448 in 2011.

Most of the killings are taking place in South Africa's flagship Kruger National Park, which lost 606 rhinos last year and 425 in 2012.

The park service has been turning its rangers into soldiers, using drones to patrol airspace and sending out crack units by helicopter when suspected poachers are sighted.

The Kruger borders impoverished Mozambique, where most of the poachers are believed to be drawn from. Criminal syndicates promise cash to poor and unemployed rural villagers willing to take the risk of hunting down the animals.

"A total of 37 rhino have been poached since the start of 2014," the department of environmental affairs said.

South Africa's rhino population totals around 20,000.

Elsewhere in Africa, elephants are being poached at an alarming rate for their ivory, which is used for carvings and has been valued for millennia for its color and texture.

The surging demand for ivory also mostly comes from rapidly growing Asian economies.

(Editing by Hugh Lawson)

This little piggy went to the Vatican, to get a blessing

With an oink oink here and a cluck cluck there, animals arrived at the Vatican on Friday to get a blessing.


The animals, including pigs, chickens, horses, cats and dogs, were at St. Peter's Square to mark the feast of St. Anthony the Abbot, the third-century holy man who is the Catholic Church's patron of animals.

Farmers, ranchers and breeders brought their animals to the square for a blessing by Cardinal Angelo Comastri, the archpriest of St. Peter's Basilica. Comastri also said a Mass inside the church for the humans - the animals waited outside.

As well as the spiritual comfort, veterinarians from the Italian animal breeders association AIA offered free check-ups to pets brought to the square.

(Reporting By Philip Pullella; Editing by Janet Lawrence)

U.S. man pleads guilty to sending ricin to Obama, two others

A Mississippi man accused of sending poisoned letters to President Barack Obama and two other public officials, and pinning them on an Elvis impersonator, pleaded guilty in U.S. court and agreed to a 25-year jail sentence, the Justice Department announced on Friday.

James Everett Dutschke, 41, has been jailed since his arrest last April, when authorities accused him of sending ricin-tainted letters to Obama, U.S. Senator Roger Wicker of Mississippi and a local Lee County judge, Sadie Holland.

Ricin is a highly toxic protein found in castor oil plants that can kill an adult human in tiny doses.

Dutschke, a former martial arts instructor and one-time political candidate, originally had denied the charges but on Friday changed his plea in U.S. District Court in Oxford, Mississippi, according to a Justice Department press release.

"It's closure, and any time you can get that it's a good thing," said Lee County Sheriff Jim Johnson, whose department had assisted the FBI and other agencies in identifying and arresting Dutschke last April.

The guilty plea "has eased our community and eased our victims and the other people he could have come in contact with," said Johnson, who described Dutschke as a manipulator who thinks he can "outsmart any person of authority or any system."

Dutschke's attorney, Ken Coghlan, did not return calls for comment.

Dutschke pleaded guilty to developing and possessing the biological agent ricin and subsequently mailing ricin-laced, threatening letters, including one that threatened bodily harm to the president of the United States.

Only Holland received one of the letters. The U.S. Postal Service intercepted those that were sent to Obama and Wicker.

The plea agreement was announced by John Carlin, acting assistant attorney general for national security; Felicia Adams, the U.S. attorney for the Northern District of Mississippi; and Daniel McMullen, special agent in charge of the FBI's Jackson field office.

Dutschke will be sentenced in about 60 days, the Justice Department said.

Dutschke previously had pleaded not guilty to five counts of a grand jury indictment and denied sending the letters. He also pleaded not guilty on December 3 to a new charge that he tried to continue the scheme from jail.

An initial indictment in June said Dutschke tried to frame Paul Kevin Curtis, an Elvis impersonator, by lifting phrases from Curtis's Facebook account to make it look as though he was responsible for the letters.

The charges against Dutschke carried a maximum penalty of life in prison.

(Additional reporting by David Adams and Eric M. Johnson; editing by Colleen Jenkins, Sophie Hares and Leslie Adler)

Ex-Wisconsin medical examiner pleads guilty; took body parts to train dog

A former Wisconsin medical examiner who took a piece of spinal column that had been removed from a corpse to train her cadaver dog, pleaded guilty to felony charges on Friday, according to court documents.

Traci England, 46, will be sentenced February 10 on two felony counts of misconduct in public office. Theft and obstruction charges against England were dismissed as part of a plea bargain, the Forest County Circuit Court records showed.

The criminal complaint said England took a piece of bone from a corpse's spinal column after another medical examiner removed it during an autopsy on September 5, 2011.

She told fellow employees she planned to use the bone to train her cadaver dog, the complaint said.

Investigators wrote in the complaint that England "made a comment on how lucky she was to have gotten this section of the spine because it was hard to come by."

During a search of her Town of Newbold home on January 4, 2012, investigators found what appeared to be brain and liver tissue along with a piece of bone in bags on a shelf in her garage, the complaint said.

(Editing by Gunna Dickson)

U.S. man pleads guilty to sending ricin to Obama, two others

A Mississippi man accused of sending poisoned letters to President Barack Obama and two other public officials, and then pinning them on an Elvis impersonator, pleaded guilty in U.S. court and agreed to a 25-year jail sentence, the Justice Department announced on Friday.

James Everett Dutschke, 41, has been jailed since his arrest last April, when authorities accused him of sending ricin-tainted letters to Obama, U.S. Senator Roger Wicker of Mississippi and a local Lee County judge, Sadie Holland.

Ricin is a highly toxic protein found in castor oil plants that can kill an adult human in tiny doses.

Dutschke, a former martial arts instructor and one-time political candidate, originally had denied the charges but on Friday changed his plea in U.S. District Court in Oxford, Mississippi, according to a Justice Department press release.

"It's closure, and any time you can get that it's a good thing," said Lee County Sheriff Jim Johnson, whose department had assisted the FBI and other agencies in identifying and arresting Dutschke last April.

The guilty plea "has eased our community and eased our victims and the other people he could have come in contact with," said Johnson, who described Dutschke as a manipulator who thinks he can "outsmart any person of authority or any system."

Dutschke's attorney, Ken Coghlan, said the plea agreement involved resolution of outstanding state charges of child molestation.

"He (Dutschke) was facing a lot of uncertainty and at least now he knows where he stands," said Coghlan, noting that his client faced a maximum penalty of life in prison.

Under the agreement, Coghlan said Dutschke would plead guilty to the molestation charges next week and would serve his sentences concurrently in federal prison.

Dutschke pleaded guilty to four charges of developing and possessing the biological agent ricin and subsequently mailing ricin-laced, threatening letters, including one that threatened bodily harm to the president of the United States.

Only Holland received one of the letters. The U.S. Postal Service intercepted those that were sent to Obama and Wicker.

The plea agreement was announced by John Carlin, acting assistant attorney general for national security; Felicia Adams, the U.S. attorney for the Northern District of Mississippi; and Daniel McMullen, special agent in charge of the FBI's Jackson field office.

Dutschke will be sentenced in about 60 days, the Justice Department said.

Dutschke previously had pleaded not guilty to five counts of a grand jury indictment and denied sending the letters. He also pleaded not guilty on December 3 to a new charge that he tried to continue the scheme from jail.

An initial indictment in June said Dutschke tried to frame Paul Kevin Curtis, an Elvis impersonator, by lifting phrases from Curtis's Facebook account to make it look as though he was responsible for the letters.

(Additional reporting by David Adams and Eric M. Johnson; Editing by Colleen Jenkins, Sophie Hares, Leslie Adler and Ken Wills)

Exclusive: Fox, CBS, ESPN bid for Thursday night NFL games - sources

Fox, CBS and ESPN have submitted bids for the rights to broadcast as many as eight Thursday night National Football League games, three people familiar with the bidding process told Reuters, as bidders began assembling for what is expected to be a highly contested auction.

NBC, which already broadcasts NFL games on Sunday nights, is expected to join the bidding by Friday night, when bids are due, according to one of the people.

Fox, owned by 21st Century Fox Inc, CBS, Comcast's NBC and Disney's ESPN sports channel were among TV networks that the NFL has invited to join the bidding process.

Based on the reported $950 million that NBC pays for its package of 19 NFL Sunday night games, an eight-game lineup could be worth $400 million or more.

The bids may come in lower because the league wants Thursday night games simultaneously televised on its own NFL Network cable channel along with the winning bidder's network, according to two of the people.

Representatives for Fox, CBS and NBC did not return requests for comment. An ESPN spokesman declined comment. The NFL also would not comment.

The NFL is seeking bids for a single season, starting this September, people familiar with the matter have said, with the likelihood of extending the contract after its first year. The league will determine how many Thursday night games it will offer based on the specific proposals it receives.

The football league is seeking bids for as many as eight of the games now exclusively telecast on the NFL Network on Thursday evenings, in an effort to get higher ratings and boost the match-ups' prominence.

The league wants to boost ratings for the Thursday night games to give them the same profile the NFL enjoys for its Sunday and Monday match-ups, according to a person with knowledge of the NFL's thinking.

NFL Network's Thursday night games were viewed by an average of 8 million viewers for a 13-game schedule in 2013, a 10 percent boost from 2012 but well below NBC's average 21.5 million viewers for its Sunday night contests.

(Writing by Edwin Chan; Editing by Leslie Adler)

Up to 15, mostly foreigners, killed in Kabul suicide attack

Up to 15 people, mostly foreigners, were killed on Friday when a suicide bomber blew himself up outside a popular Lebanese restaurant in the Afghanistan capital of Kabul, police said.

Islamist Taliban insurgents claimed responsibility for the attack in the upscale Wazir Akbar Khan district, which hosts many embassies and restaurants catering for expatriates.

The International Monetary Fund (IMF) said its representative in Afghanistan was one of the dead, and the United Nations said four of its staff were unaccounted for.

General Ayoub Salangi, an Afghan deputy interior minister, said between 13 and 15 people, mostly foreigners, were killed but their nationalities were not immediately clear.

A Taliban spokesman said that those killed were German nationals. In Berlin, the Foreign Ministry said it could not confirm that Germans were involved.

The attack took place during a busy dinner time on a Friday evening when expatriates in Kabul tend to eat out. The heavily fortified diplomatic district also houses many wealthy Afghans and business people. Bursts of gunfire followed the attack.

"First there was a suicide attack near a restaurant for foreigners where a man detonated his explosives attached to his body, and then possibly one or two insurgents entered the restaurant," one Afghan security source said.

IMF representative Wabel Abdallah, a 60-year-old Lebanese national, was killed in the explosion, the IMF said. He had been leading the Fund's office in Kabul since 2008.

"This is tragic news, and we at the fund are all devastated," IMF Managing Director Christine Lagarde said in a statement. "Our hearts go out to Wabel's family and friends, as well as the other victims of this attack."

U.N. spokesman Farhan Haq said in New York that several employees of the United Nations had not been located.

"Four U.N. civilian personnel, who reportedly could have been present in close proximity to the scene of today's attack in Kabul, still remain unaccounted for. The U.N. is making efforts to clarify the status of its personnel," he said.

Interior Ministry spokesman Sediq Sediqi said three suicide bombers had approached the building, one of whom detonated his bomb whereas the other two were shot by security forces.

On Friday night, gunfire continued for about 20 minutes after the blast and the main road leading to the area was cordoned off.

After the explosion, two gunmen stormed into the restaurant and started shooting at people dining there, security sources said, adding that foreign casualties had been taken to an international military camp in eastern Kabul.

In a nearby hospital, those wounded from the attack screamed and some people cried, pressing scarves against their faces to stifle sobs, as doctors administered treatment. One man, the son of an Afghan victim, kicked the wall as he howled in grief.

"One of the restaurant's cooks was injured," said Abdul Bashir, a doctor. "Two dead bodies have been taken to the morgue."


Hashmat Stanekzai, a spokesman for Kabul police, said earlier that an operation to clear the building was under way.


"The clearance operation is still ongoing. Our security forces are not inside the restaurant yet," he said. "There might be some insurgents inside so we have to act carefully to avoid possible casualties."




The attack as most foreign forces are preparing to leave Afghanistan this year after more than a decade of war and almost daily attacks.


Security concerns have been rising ahead of an April presidential election when Afghans will choose a successor to President Hamid Karzai, an event likely to be targeted by the Taliban insurgents.


Security remains a major concern as Afghanistan and the United States struggle to agree on a key bilateral security pact, raising the prospect that Washington may yet pull out all of its troops this year unless differences are ironed out.


Two years ago, the United States ended its military mission in Iraq with a similar "zero option" after the failure of talks with Baghdad.


Karzai is still deliberating whether to allow some U.S. troops to stay to help his nation regain calm and stability after years of conflict. If no agreement is reached, Afghan forces would be left to fight the insurgents on their own.


(Writing by Maria Golovninal; Additional reporting by Erik Kirschbaum in Berlin and Louis Charbonneau in New York and Anna Yukhananov in Washington; Editing by Gareth Jones and Amanda Kwan)


Intel to reduce global workforce by five percent in 2014

Intel Corp plans to reduce its global workforce of 107,000 by about 5 percent this year as the chipmaker, struggling with falling personal-computer sales, shifts focus to faster-growing areas, a company spokesman said on Friday.

The announcement, equivalent to over 5,000 positions, comes a day after Intel posted a fourth-quarter earnings report that did little to dispel concerns about a slowing PC industry.

"This is part of aligning our human resources to meet business needs," spokesman Chris Kraeuter said.

The job reductions may include retirements, voluntary programs and other options, Kraeuter said, adding that Intel's typical annual attrition worldwide is about 4 percent.

He declined to say whether details of the changes had been announced internally.

On a conference call with analysts on Thursday after the earnings release, Chief Financial Officer Stacy Smith alluded to a reduction in employment this year and said that Intel would increase investments in areas such as data center technology, low-power chips and tablets.

Intel dominates the PC chip industry, but it has been slow to adapt its processors for smartphones and tablets, markets now dominated by rivals such as Qualcomm Inc and Samsung Electronics Co Ltd.

"If they've got a bunch or resources in a market that may not be dead but is not growing a ton, it probably makes sense to reprioritize those investments in areas where there are fast-growing markets," said Bernstein analyst Stacy Rasgon.

Intel has both added and shed significant numbers of jobs over the past decade. Struggling to fend off a challenge by smaller rival Advanced Micro Devices Inc in 2006, Intel announced it would reduce its workforce by over 10,000 positions, but its overall number of employees has grown since then.

The chipmaker is also not the only tech company to trim its workforce because of slowing demand for PCs since Apple's iPad started to cut into demand for laptops in 2010.

Hewlett-Packard Co is in the midst of a years-long internal restructuring that would ultimately see it shed 34,000 jobs, or 11 percent of its workforce, through fiscal 2014.

Dell succeeded last year in taking itself off public markets, allowing CEO and founder Michael Dell to restructure away from Wall Street's scrutiny. That overhaul is expected to encompass layoffs.

Earlier this week, Intel said a newly built factory in Chandler, Arizona, originally slated as a $5 billion project that in late 2013 would start producing Intel's most advanced chips, would remain closed for the foreseeable future while other factories at the same site are upgraded.

In its report on Thursday, Intel forecast March-quarter restructuring charges of $200 million, a portion of which could be earmarked for severance pay.

Last September, Intel said it would close an old factory in Massachusetts, eliminating about 700 jobs.

Intel has said it plans to quadruple tablet chip volume this year to 40 million units and aggressively stake out market share ahead of future mobile chip launches. Essentially buying its way into tablets, Intel plans to subsidize its customers' engineering and manufacturing expenses, effectively reducing its gross margins in 2014 by 1.5 percentage points.


Shares of Intel closed 2.6 percent lower at $25.85 on the Nasdaq on Friday. They earlier traded down as low as $25.25.


(Reporting by Noel Randewich; Editing by Matthew Lewis and Lisa Shumaker)


Wall St. Week Ahead: Stocks may be vulnerable in earnings blitz

The initial reads on earnings have been mixed, and yet U.S. stocks are hovering near all-time highs. Next week, investors will see whether the first companies out of the gate were a harbinger of what's to come.

More than 60 S&P 500 companies are scheduled to release results next week, including more than half a dozen Dow components. The reports will give the fullest picture yet of how corporations are faring and whether the market can advance further as Fed stimulus begins to recede.

"Given that equities are fully valued and arguably overvalued, we need earnings and revenue to come through to support the gains we've already made," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "There's a reasonable chance we could see a 10 percent correction in the event we get some high-profile disappointments."

Earnings for S&P 500 companies are seen rising 7 percent in the quarter, down from the 7.6 percent rate that had been forecast at the start of the year.

While the season started with many financial firms, including JPMorgan Chase & Co ( id="symbol_JPM.N_0">JPM.N) and Bank of America ( id="symbol_BAC.N_1">BAC.N), topping profit expectations, Intel Corp ( id="symbol_INTC.O_2">INTC.O) sounded a sour note, slumping on a weak revenue outlook. General Electric Co ( id="symbol_GE.N_3">GE.N) sold off despite posting higher-than-expected revenue, suggesting blowout results may be needed to justify elevated valuations.

With 10 percent of the S&P 500 having reported results so far, 50 percent have topped earnings forecasts, well below the historical average of 63 percent, according to Thomson Reuters data. More than 67 percent have beaten revenue expectations, above the long-term average of 61 percent.

Procter & Gamble ( id="symbol_PG.N_4">PG.N), McDonald's ( id="symbol_MCD.N_5">MCD.N), Microsoft ( id="symbol_MSFT.O_6">MSFT.O), Johnson & Johnson ( id="symbol_JNJ.NJNJ.N) and Verizon Communications ( id="symbol_VZ.NVZ.N) are among the Dow components scheduled to report next week. Texas Instruments ( id="symbol_TXN.OTXN.O) and Starbucks Corp ( id="symbol_SBUX.OSBUX.O) are also on tap.


The U.S. stock market will be closed on Monday for the Martin Luther King Jr. holiday.




BMO's Ablin said that results from more cyclical groups would be especially important for insight into the strength of the overall economy.


"The next leg of the cycle has to be driven by business spending," he said. "I'm looking for clues that businesses are taking their excess cash flow and spending it, which means tech and industrial reports will be very important, especially any outlooks they offer."

Another key name will be Netflix Inc ( id="symbol_NFLX.O_11">NFLX.O), the S&P 500's biggest gainer in 2013. The online movie renter's stock nearly quadrupled last year, raising concerns it may follow the same path as another of 2013's momentum favorites, Best Buy Co Inc ( id="symbol_BBY.NBBY.N). On Thursday, the electronics retailer's stock suffered its worst daily decline since 2002 after posting weak holiday sales and giving a downbeat margin forecast.


Jonathan Krinsky, chief market technician at MKM Partners in Greenwich, Connecticut, said the market was "absolutely vulnerable to a pullback on big disappointments," though the S&P 500 might find support at its 50-day moving average, about 1.7 percent below Friday's close at 1,838.70.

"If we take that out, that would be the first time we've made a lower low in a while," he said. "That could push us to retest the December low around 1,770."

In the latest week, the Dow rose 0.1 percent, the S&P 500 slipped 0.2 percent and the Nasdaq climbed 0.6 percent. Both the Dow and S&P 500 are within striking distance of all-time highs.

For the year so far, the Dow is down 0.7 percent and the S&P 500 is down 0.5 percent, while the Nasdaq is up 0.5 percent.


The forward price-to-earnings ratio for the S&P 500 is about 15.22, according to Thomson Reuters data, roughly in line with the historic average. While that suggests valuations are not tremendously stretched, further steep gains may be difficult to come by.


"We're much more likely to fall on negative earnings than we are to rally on strong ones," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. "There's much more downside risk than upside at these levels, and that will probably be the case until we work off some of the excess out there."


Next week will be a light one for economic data, with Thursday's read on December existing home sales perhaps the biggest report. Sales are forecast to edge up for the month, according to economists polled by Reuters.


(Editing by Nick Zieminski and Jan Paschal)


Warner Bros pushes Superman-Batman film back to 2016

Warner Bros. pushed back the release date of the still untitled film that will bring together superheroes Superman and Batman, delaying it by almost a year to May 2016, the studio said on Friday.


The sequel to last year's hit Superman film "Man of Steel" was revealed at the Comic-Con convention last July by director Zack Snyder, who said the two DC Comics' caped crusaders will face off against each other.

Warner Bros., a unit of Time Warner Inc, said in a statement that it needed to move back the date to allow "the filmmakers time to realize fully their vision, given the complex visual nature of the story."

The decision was made after the start of production was moved to the second quarter of this year, Warner Bros. said.

The superhero-duo was originally slated for July 17, 2015, and Warner Bros. said it would put a still untitled Peter Pan adventure into that slot.

"We are happy to take advantage of these coveted summer dates, which are perfect for two of our biggest tentpole releases," said Dan Fellman, president of domestic distribution.

"Man of Steel," starring British actor Henry Cavill as Superman/Clark Kent, premiered in June 2013 and grossed $668 million worldwide. In the North American market, it was the fourth-biggest film of 2013, with ticket sales of $291 million.

In the first encounter of the two superheroes on the big screen, Cavill returns to play Superman, while "Argo" actor and director Ben Affleck has been cast as Batman in a controversial choice that split fans.

(Reporting By Mary Milliken; Editing by Ken Wills)

Firefighters make progress controlling California blaze

Firefighters sought to prevent a wildfire in the foothills near Los Angeles from flaring up on Saturday, as they put out embers from a blaze that has destroyed five homes, officials said.

The so-called Colby Fire, which officials said started from a campfire early on Thursday, has blackened nearly 1,900 acres of drought-parched chaparral and is 30 percent contained, said U.S. Forest Service spokesman Robert Brady.

That was the same level of containment firefighters reported on Friday, but officials were optimistic they were gaining the upper hand on the blaze centered in the San Gabriel Mountains, on territory that is part of the Angeles National Forest.

"It's not spreading anymore," Brady said.

More than 1,100 firefighters, backed by four water-dropping airplanes and three helicopters, are battling the blaze, officials said.

Hot, dry Santa Ana winds from interior deserts fanned the flames when it broke out on Thursday, but the next day, the winds subsided and the fire barely grew in size.

On Saturday, the winds were expected to be even tamer, authorities said on their Incident Information System website.

The fire prompted some 3,500 residents in parts of Glendora and neighboring Azusa northeast of Los Angeles to vacate their homes on the order of authorities.

By Friday morning, some 2,800 evacuees had been allowed to return home. Some 200 to 300 homes in an Azusa neighborhood remained under mandatory evacuation orders, according to U.S. Forest Service spokeswoman Sherry Rollman.

The fire has destroyed five homes and damaged 17, Brady said. Three firefighters, including one who was hospitalized with serious burns, and two civilians with minor injuries have been hurt, he said.

The blaze broke out when three men were building a campfire and used paper to feed the flames, officials said. Bail was set at $500,000 for each of the men, who were jailed on Thursday on suspicion of recklessly starting the fire.

(Reporting by Alex Dobuzinskis; editing by Ian Simpson, G Crosse)

Islamist militants strengthen grip on Iraq's Falluja

Al Qaeda and other insurgent groups have tightened their grip on Falluja, defying the Shi'ite-led Iraqi government's efforts to persuade local tribesmen to expel them from the Sunni Muslim city, residents and officials say.

Despite an army siege, fighters and weapons have been flowing into the city, where U.S. troops fought some of their fiercest battles during their 2003-11 occupation of Iraq.

In an embarrassing setback for a state that has around a million men under arms, the al Qaeda-linked Islamic State of Iraq and the Levant (ISIL) and its tribal allies overran Falluja and parts of the nearby city Ramadi on January 1.

Prime Minister Nuri al-Maliki, seeking a third term in a parliamentary election in April, deployed troops and tanks around the city of 300,000 and funneled weapons to anti-Qaeda tribesmen, but has ruled out a full-scale military assault.

He was quoted by the Washington Post on Thursday as saying that 80 soldiers and police had been killed so far, as well as more than 80 civilians and double that number of insurgents.

Ramadi, the provincial capital of the vast western province of Anbar, is mostly back under state control, but Maliki's calls on local tribesmen to evict the militants from Falluja, just 50 km (31 miles) west of Baghdad, have so far come to nought.

Instead, scores more ISIL fighters have sneaked into the city along with an array of weaponry ranging from small arms and mortars to Grad missiles and anti-aircraft guns, according to security and local officials, residents and tribal leaders.

"Our sources in Falluja indicate that militant numbers have increased to more than 400 in the last few days and that more anti-aircraft guns were received," said a senior local official who declined to be named. His figure could not be confirmed.

The weapons and fighters are reaching Falluja mainly from its southern environs, an area entirely under the sway of tribes hostile to the government, security officials said.

"The tribes scattered around Falluja have zero loyalty to the central government," Sheikh Mohammed al-Bajari, a tribal leader and negotiator in the city, told Reuters by phone.

"Now they (the army) are not controlling anything and no roads can be closed," he said of Falluja's southern approaches.


ISIL, which is also playing an aggressive role in Syria's civil war, is greatly outnumbered by armed tribesmen in Falluja, a symbol of Sunni identity and resistance in Iraq, many of whom lean towards the militants or other insurgent factions.

Since the city fell out of government control, various rebel groups have loosely aligned with ISIL or are asserting their own influence, officials, tribal leaders and residents said.

These include Islamist factions such as the 1920 Revolution Brigades, the Islamic Army, the Mujahedin Army, the Rashidin Army and Ansar al-Sunna, as well as the Army of the Men of the Naqshbandi Order, a Baathist militia created by Izzat al-Duri, a former lieutenant of Iraq's deposed leader Saddam Hussein.

Despite its limited numbers, ISIL dominates by its zeal and fearsome reputation on and off the battlefield, frequently using suicide bombers in Iraq and in Syria - where it has even turned them on rival rebel factions in a bitter power struggle.


In Falluja, it distributed leaflets on Thursday announcing a new "Committee for the Promotion of Virtue and Prevention of Vice" to enforce its strict Islamic code, residents said.


That recalled memories of the harsh Islamic courts set up in Falluja when the city was dominated by an umbrella group known as the Mujahideen Shura Council from late 2005 to 2006.


Dozens of youths accused of collaborating with the U.S. occupation were executed on the orders of these courts.


A leader of that council, Abdullah al-Janabi, who was also prominent in an ISIL precursor called the Islamic State of Iraq, returned to Falluja two days after its takeover this year.


"Blood is on the hands of all policemen. Police buildings were used to torture and to extract confessions ... and must be cleansed," the Sunni cleric told worshippers at the Saad bin Abi Waqas mosque in northern Falluja on Friday.


"We swear by God almighty and the blood of martyrs that the Safavid army will not enter the city except over our dead bodies," he said, in a derogatory reference to the Iraqi army.


About 200 masked militants using looted police vehicles guarded the road leading to the mosque, where worshippers were checked for weapons before Janabi's sermon at weekly prayers.


Many residents ignored a call from Sunni clerics involved in a year-long anti-government protest movement to gather for mass prayers at al-Furqan mosque in the city center. Instead most worshippers prayed at neighborhood mosques where gunmen were absent.




Many people in Falluja loathe Maliki's government, which they see as oppressive and provocative towards minority Sunnis, but also fear the revival of Islamist militant rule.


Last week Falluja community leaders nominated a new police chief and mayor. The militants responded by blowing up the police chief's house on Tuesday and briefly kidnapping the mayor. Both men have since fled north to Iraqi Kurdistan.


Two days later, they set up checkpoints in several districts and rummaged through people's wallets in search of identity cards that might reveal links with the security forces or government-backed Sahwa (Awakening) Sunni militias.


Fear of ISIL, as well as frequent bombardment by the army, which says it is responding to militant fire, prompted hundreds more families to flee the city in the last few days.


Eliana Nabaa, spokeswoman for the U.N. mission in Iraq, said more than 14,000 families - at least 80,000 people - had left Falluja and Ramadi since the crisis erupted in late December.


That figure does not include many displaced people not registered by the government or relief agencies, or those who have fled from Falluja since Thursday, she said.


Negotiations for the peaceful removal of ISIL from Falluja are continuing, but have yet to bear fruit.


"We don't expect ISIL fighters to respond positively," said a local official and negotiator, who declined to be named.


"They have come to impose their control on the there is no way to drive them away without fighting."


(Editing by Alistair Lyon and Sonya Hepinstall)


Fukushima's operator says spin-off an option only for the future

Spinning off the clean-up project at Japan's wrecked Fukushima nuclear plant from the rest of operator Tokyo Electric Power's business could be an option in the future if the decommissioning runs smoothly, the company's president said.

Nearly three years after a devastating earthquake and tsunami hit the plant, Tokyo Electric (Tepco) is still struggling to contain radioactive water at the site and turn around its battered finances.

"Paying compensation (to evacuees), decontamination, and the work at the Fukushima plant; there is a lot of work to be done ... We have to continue doing this, while maintaining the workers' safety, their sense of responsibility, duty and keeping up their morale," said Naomi Hirose in an interview with Reuters on Saturday.

Hirose said if working conditions improve significantly at Fukushima and worker shortages become no longer a problem, the utility could consider hiving off the Fukushima decommissioning from the rest of the business, a suggestion that had been made by policymakers since the disaster. But for now, Hirose said he remained opposed to such a scheme.

Japan this week approved a plan by Tepco, Asia's largest utility, which aims to make savings in costs of $46 billion over 10 years, upgrade fossil fuel power plants and join alliances with other firms to procure liquefied natural gas (LNG) more cheaply.

But central to Tepco's revival plan is the restart of the reactors at Kashiwazaki Kariwa, the world's biggest nuclear power plant, as early as July, which faces staunch opposition from a local governor who has repeatedly called for the company's liquidation.

Governor Hirohiko Izumida of Niigata, home to the Kashiwazaki plant some 300 kilometers (180 miles) northwest of Tokyo, said this week Tepco's plan does not hold shareholders and banks accountable. He has also said that Tepco must not be allowed to consider restarting its other nuclear facilities before a comprehensive review of the Fukushima disaster.

Tepco also said in its latest revival plan that it may have to raise electricity prices by as much as 10 percent if Kashiwazaki restarts are further delayed.


The unprecedented, 30-year decommissioning plan for Fukushima relies heavily on technological breakthroughs and on Tepco managing to get enough staff to work there.

Tepco doubled pay for contract workers at the plant to around $200 a day last year after criticism over its handling of their pay.

Previously a Reuters investigation had found that the pay of some workers was being skimmed off by sub-contractors, some had been hired under false pretences, and some contractors had links to organized crime gangs.

Hirose said Tepco does not permit workers' pay to be skimmed by the various companies in the chain of contractors operating at Fukushima, but admitted that verifying whether laborers' wages had actually been docked or not was complex.

"We did not increase (wages) to give out more money to those (firms) in the middle. Raising wages from 10,000 yen ($100) to 20,000 yen was difficult for us ... of course we want the money to reach the correct place," he said.

($1=104.27 Japanese yen)

(Editing by Greg Mahlich)

Thai protesters march on, defiant after grenade attack

Anti-government protesters marched defiantly through Thailand's capital on Saturday, with one group entering a police compound, undeterred by a grenade explosion the day before that wounded 35 demonstrators and killed one.

Friday's blast sent tension rippling through Bangkok after several days of relative calm that had suggested the movement to close down the government and force the resignation of Prime Minister Yingluck Shinawatra was running out of steam.

It was unclear who was behind the attack on the protesters. Their firebrand leader, Suthep Thaugsuban, blamed the government and said the incident would not dent the morale of thousands who on Monday stepped up a two-month agitation, blockading key arteries of the city and occupying ministries.

The incident, which came two weeks before a general election, may have heightened the risk of a move by the Thai army to end an impasse that is starting to damage the economy.

Boonyakiat Karavekphan, a political scientist at Ramkamhaeng University in Bangkok, said the attack had raised chances of "a significant clash between the protesters and groups they perceive to be their enemies, the police or forces loyal to the government, in order to provoke some sort of military reaction and speed up chances of a military intervention".

The army has staged or attempted 18 coups in 81 years of on-off democracy, but it has tried to remain neutral this time, and many believe it will stay in its barracks.

"Isolated incidents of violence could provoke retaliatory actions ... but these are less likely to prompt military intervention than street clashes that lead to a large number of fatalities," the Eurasia political risk group said.

At an Army Day parade in the capital, military chief Prayuth Chan-ocha said in a speech that it was the army's duty to protect the country's sovereignty, religions and the king, but he made no mention of the street protests.

The turmoil is the latest episode in an eight-year conflict pitting Bangkok's middle class and royalist establishment against poorer, mainly rural supporters of Yingluck and her brother, the self-exiled former premier Thaksin Shinawatra.

The protesters accuse the pair of corruption, and want Yingluck to step down to make way for an unelected "people's council" to push through broad political reforms.

Strong support from rural voters has enabled Thaksin or his allies to win every election since 2001 and Yingluck's Puea Thai Party seems certain to win the vote set for February 2. But the protesters and opposition parties are boycotting the poll and want the prime minister to step down immediately.


The grenade hurled at demonstrators marching in the city centre on Friday injured 36. The Erawan Medical Center, which monitors Bangkok hospitals, said one of the injured, a 46-year-old man, died of bleeding during the night.

Suthep led a march near the site of Friday's explosion and one group of protesters entered a police compound in the city on Saturday, meeting no resistance. A ceremony of remembrance for the man who died was due to be held in the evening.

The government rejected Suthep's charge that it was responsible for the attack and derided the protest movement.

"Its attempt to shut down this city has not been successful so it is trying different tactics, including staging attacks and blaming them on the government," Anusorn Iamsa-ard, deputy spokesman for Yingluck's Puea Thai Party, said on Friday.


The agitation that began in November has been relatively peaceful until now, though sporadic flare-ups between protesters, police and government supporters have left eight people dead and scores injured.


The demonstrations are the biggest since pro-Thaksin protesters paralyzed Bangkok in April and May 2010. That movement ended with a military crackdown and more than 90 people, mostly protesters, were killed.


Pro-government "red shirt" protesters have stayed outside Bangkok this time, limiting the risk of factional clashes.


In northern and north-eastern cities - usually bastions of support for Thaksin - hundreds of farmers have staged protests and blocked roads to demand payment for rice sold to the government under a controversial subsidy scheme.


"We will march to join the major protest in Bangkok if we don't get our money. We will fight to the death," said one farmer who joined a protest in Phicit province on Saturday.


An anti-corruption agency said this week it would investigate the money-guzzling subsidy program introduced by Yingluck's party, which promised poor farmers they would be able to sell their rice at above-market prices.


Critics say the scheme is riddled with corruption and - a particular gripe of the more well-heeled protesters - that it has cost taxpayers as much as 425 billion baht ($12.9 billion), although that figure would drop if the government managed to find buyers for the rice in state stockpiles.


Yingluck is nominally head of the National Rice Committee and could therefore eventually face charges.


"The greater risk to Yingluck's government remains judiciary intervention," Eurasia Group said, adding that the inquiry into the rice purchasing scheme had created a "pathway through which the courts could take action to remove her administration".


(Writing by John Chalmers; Editing by Simon Cameron-Moore)


Death of Indian minister's wife 'unnatural' say doctors

Th death of an Indian government minister's wife was described as "sudden" and "unnatural" following an autopsy on Saturday, a day after she was found dead in a New Delhi hotel room having earlier accused her husband of adultery.

Police have launched an inquest into the death of junior human resource development minister Shashi Tharoor's wife.

Earlier in the week the wife, Sunanda Pushkar, had gone public on Twitter saying she wanted to expose a "rip-roaring affair" between her husband and a Pakistan-based journalist.

"It was sudden, unnatural death. There were certain injuries on the body," Sudhir Gupta, the head of the forensic sciences department at the All India Institute of Medical Sciences, said after an autopsy was conducted on the body.

He told reporters it would take a couple of days to determine the precise cause of death.

The scandal could hardly come at a worse time for India's ruling Congress party, as it prepares for an election due by May. On Friday, the party announced 41-year-old Rahul Gandhi would lead the Congress election campaign, in the hope that charisma of a family that has supplied three prime ministers would keep voters loyal.

Gandhi will struggle to restore his party's reputation, damaged by allegations of corruption, while the main opposition Hindu nationalist party appears resurgent after its own change of leadership.

Television images showed Sunanda's young son from a previous marriage hugging close relatives outside the morgue where her body lay.

Tharoor himself complained of chest pains early on Saturday hours after he found his wife dead in her bed. He was taken to hospital where doctors said his condition was stable. He later left the hospital, his face drawn.

Sunanda, his wife of four years, had been embroiled this week in a spat with the Pakistan-based journalist, Mehr Tarar, whom she accused, in a series of Twitter posts, of pursuing her husband.

Sunanda, 52, said she had gone into her husband's Twitter account and put out private messages that she said Tarar had sent to her husband over Blackberry Messenger to expose their affair.

Tarar denied any involvement with the Indian minister. The scandal was splashed on the front pages of newspapers and went viral on social media.

Tharoor is a former U.N. diplomat and a prolific author whose Twitter handle showed more than 2 million followers. One of the most active users of the microblogging site in government, he made no comment at the time his wife went public with the allegations.

On Thursday, the couple issued a statement saying they were distressed by the controversy caused by unauthorized use of their Twitter accounts.


Tharoor, 57, married Sunanda in 2010, in a third marriage for both.


Earlier that year he had been forced to resign from his first ministerial job after accusations linking him to a company bidding for a cricket team in the lucrative Indian Premier League from his home state of Kerala.


Sunanda had a stake in the company at the time.


Tharoor's aides said the couple had checked into the luxury hotel this week because of renovation work at his Delhi bungalow.


On Friday, he left the hotel room to attend a session of the Congress party in the capital but returned late in the day to find the door locked. His wife's body was found after the door was forced open.


The Pakistani journalist Tarar said she was shocked by the death. "Oh my God...," she wrote in a Twitter post. "This is too awful for words. So tragic I don't know what to say. Rest in peace."


Tharoor has stirred controversy in the past by posting a message that he would travel "cattle class" following reports about his lavish lifestyle.


(Additional reporting by Vipin Das M; Editing by Simon Cameron-Moore)


Seven militant suspects shot dead in Russia's Dagestan

Seven suspected militants were killed by security forces in a shootout on Saturday near Makhachkala in Dagestan, Russian news agencies reported, a day after a grenade and bomb attack outside a restaurant in the regional capital injured several people.


A spokesman for Russia's Anti-Terrorist Committee told ITAR-TASS agency those killed were suspected of carrying out Friday's attack in the mostly Muslim Dagestan region.

Interfax news agency, citing the Investigative Committee department for Dagestan, said one woman was among the suspects killed when police stormed a house where they were hiding.

The Dagestan region has been plagued by bombings and shootings that target state and police officials as part of a campaign by militants to create an Islamist state there.

Regional capital Makhachkala is about 620 km (385 miles) east of the Black Sea resort of Sochi, the site of next month's Winter Olympic Games, which President Vladimir Putin has made his top priority for promoting Russia's image abroad.

Moscow has said it expects more than 6,000 athletes from 85 countries and hundreds of thousands of sports fans in Sochi.

It has introduced a security clampdown in the city, bringing in about 30,000 personnel to ensure safety after 34 people were killed last month in suicide bombings in Volgograd, some 700 km (400 miles) northeast of Sochi.

"Our task as the organizers is to ensure security for the participants of the Olympics and guests of this sports fete and we will do everything to that end," Putin said in an interview with several TV channels, according to excerpts run by ITAR-TASS news agency on Friday evening.

The International Olympic Committee has expressed confidence the Games will be safe.

(Reporting by Katya Golubkova; Editing by Jason Bush and Sophie Hares)

Iran diplomat dead after resisting kidnap attempt in Yemen

An Iranian diplomat was killed in Yemen's capital Sanaa on Saturday when he resisted gunmen who were trying to kidnap him near the ambassador's residence, the Iranian Foreign Ministry and Yemeni security sources said.


Iranian Foreign Ministry spokeswoman Marzieh Afkham told Fars News Agency the diplomat was seriously injured when he resisted his attackers and was taken to a Sanaa hospital, where he died.

"We are seriously following up the dimensions of this terrorist action with the relevant Yemeni government officials," Afkham said.

Security sources in Yemen told Reuters the diplomat was travelling in a car belonging to the Iranian embassy, but the ambassador was not in the car at the time of the attack.

The gunmen fled, and there was no immediate claim of responsibility, they said.

Kidnapping of foreigners in Yemen is common, often carried out by disgruntled tribesmen seeking to press the government to free jailed relatives or to improve public services, or by Islamist militants linked to al Qaeda.

Iran is the leading Shi'ite Muslim power in the Middle East, and its diplomatic missions in the Arab world have occasionally been targeted as sectarian violence spreads in the region.

Sectarian rivalry between Shi'ite Muslim Houthis and ultra-conservative Sunni Salafis has increased in northern Yemen in the last several months, with at least 210 people killed.

The sectarian rivalry has cast a shadow over reconciliation efforts in Yemen, a U.S.-ally that is home to one of the most active wings of the Sunni militant force al Qaeda.

The country, in turmoil since a popular uprising ousted president Ali Abdullah Saleh in 2011, is also facing southern secessionists and an economic crisis.

(Reporting by Mohammed Ghobari; Additional reporting by Babak Dehghanpisheh in Beirut; Writing by Maha El Dahan; Editing by Peter Graff and Sonya Hepinstall)

The U.S. government's bitcoin bonanza: How, where and when to sell?

U.S. prosecutors in Manhattan are sitting on a multimillion-dollar bitcoin gold mine. And it could get much bigger.

Federal authorities hauled in 29,655 units of the digital currency - worth $27 million at current exchange rates - through an official forfeiture by Bitcoin this week.

The bitcoins had belonged to Silk Road, an anonymous online black market that authorities say was a conduit for purchases of drugs and computer hacking services - even a place where assassins may have advertised. It was shuttered after an FBI raid in September, when agents took control of its server and arrested the man they say was its founder in San Francisco.

No one stepped forward to claim these bitcoins, which were found in electronic "wallets" used to store the digital currency. An additional 144,336 bitcoins, worth more than $128 million today, were also discovered, but the government's claim on them is being disputed by Ross William Ulbricht, 29, who U.S. authorities say was the founder and main operator of Silk Road. They had been stashed on his laptop.

It all puts authorities in an unusual position, given their concerns about the way in which bitcoins and other digital currencies are used by criminals to circumvent regulations intended to prevent money laundering. By trading in bitcoins, the government could give the currency some legitimacy.

Bitcoin is essentially software code that defines units of value, which users can move back and forth among themselves. Unlike other virtual money transmitters, its value isn't pegged to a hard currency like the dollar or the euro; it is determined by the demand for bitcoins.

The U.S. Marshals Service, which is in charge of liquidating such seized assets, will have to decide whether to sell the units on a Bitcoin exchange or find a private buyer, perhaps through an auction.

A spokeswoman for Preet Bharara, the U.S. Attorney for New York's Southern District, said Friday that the government is still trying to decide what to do with the forfeited bitcoins.

The timing of any sale could make a big difference in the amount the government could realize.

Bitcoin's value has fluctuated wildly over the past six months. When Silk Road was seized, the bitcoins found on the server were worth $3.6 million, far below their current $27 million value. Friday's exchange rate was about $900 per bitcoin, according to the Tokyo-based Bitcoin exchange MtGox.

It is unclear whether a large sale of bitcoins by the government could drive down the price. Friday's volume on MtGox, which is the largest Bitcoin exchange, was 8,656 units.

"If it's worth $27 million now, is that a high part of the market? A low part of the market? That's one of the decisions they're going to have to make," said Louis Rulli, a professor at the University of Pennsylvania Law School.

"It would seem to me that they would probably convert those bitcoins into cash relatively quickly."

Barry Silbert, the founder of one of the first investment funds that lets retail investors gain exposure to Bitcoin, declined to offer an opinion on what the government should do with its stash or how a sale would affect the market.

Marco Santori, chairman of the regulatory affairs committee for the Bitcoin Foundation, which is Bitcoin's official trade group, said the group did not have an official position on the matter.



Most goods seized by U.S. authorities end up in the hands of the U.S. Marshals, where they are auctioned or, at times, repurposed for government use. But the Marshals aren't just practiced at unloading forfeited SUVs or houses; they also deal with complex financial instruments, foreign companies and other kinds of obscure assets forfeited by criminals.


"While Bitcoin is a somewhat new form of asset, it's not unusual for them to have to find out how to liquidate a new asset," said Jeffrey Alberts, a partner at Pryor Cashman and a former federal prosecutor in Manhattan. "This won't be difficult for them, whether they do it through an exchange or find a buyer who wants to buy it directly from them."


Ulbricht was arrested October 1 in a San Francisco public library and charged by prosecutors in New York with one count each of money laundering, computer hacking and drug trafficking. He is being held at a federal detention center in New York without bail. He has not entered a formal plea but has maintained his innocence through statements by his lawyer.


Prosecutors last week asked a judge to grant them a default judgment in the civil forfeiture case they filed after the raid on Silk Road and Ulbricht's arrest claiming Silk Road's assets. U.S. District Judge J. Paul Oetken signed an order to that effect on Wednesday, giving the government control of the 29,655 Bitcoins from Silk Road's server but not of the bitcoins - the larger sum - discovered on Ulbricht's computer. Those are still in dispute.


The proceeds from any sale would be turned over to an asset forfeiture fund from which the U.S. Justice Department can draw for law enforcement activities. If any money were to come back to prosecutors' budgets, it would be distributed evenly among U.S. attorneys' offices, a policy meant to prevent individual offices from unduly seizing assets to pad their budgets.


(This story was fixed to correct Marco Santori's title in 15th paragraph)


(Reporting By Emily Flitter; Editing by Martin Howell and Douglas Royalty)