Wal-Mart holiday profit rises despite lackluster sales


(Reuters) - Wal-Mart Stores Inc posted a larger-than-expected rise in quarterly profit on Thursday, as a lower-than-anticipated tax rate helped to overcome some weakness in sales at its major Walmart U.S. unit that persisted into the beginning of February.


The world's largest retailer also raised its dividend payout. Its shares fell 1 percent in premarket trading.


Wal-Mart earned $1.67 per share from continuing operations in the fiscal fourth quarter, up from $1.51 per share a year earlier. Wal-Mart had forecast a profit of $1.53 to $1.58 per share from continuing operations, and analysts expected it to earn $1.57 per share, according to Thomson Reuters I/B/E/S.


Walmart U.S. has had a slow start to February, which Walmart U.S. Chief Executive Bill Simon attributed largely to a delay in income tax refunds. The company expects sales at Walmart U.S. stores open at least a year, or same-store sales, to be about flat during the current first quarter. A year earlier, such sales rose 2.6 percent.


Efforts such as extending its layaway program and matching competitors' prices attracted shoppers during the competitive holiday season, but Walmart U.S. same-store sales rose just 1 percent in the fourth quarter. The company had forecast an increase of 1 percent to 3 percent, and analysts, on average, had looked for a 1.5 percent gain.


A year earlier, Walmart U.S. same-store sales rose 1.5 percent.


Still, Wal-Mart said that its biggest unit gained market share in major categories of food, consumables, health and wellness and over-the-counter medications, as well as in entertainment and toys, which are big sellers during the holiday period, citing data from Nielsen and the NPD Group.


(Reporting by Jessica Wohl in Boca Raton, Florida; Editing by Maureen Bavdek)



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Vladimir Pekhtin Resigns From Russian Parliament





MOSCOW — A senior lawmaker from Russia’s ruling party, who is also the chairman of Parliament’s ethics committee, resigned from the legislature on Wednesday after opposition bloggers revealed that he owned more than $1.3 million worth of luxury real estate in Florida, which he did not list on required disclosure forms.




The lawmaker, Vladimir A. Pekhtin, said that he did not want the scandal to taint his party colleagues in United Russia, and announced his departure at a morning parliamentary session.


He said he had not broken any law, but that “there are very controversial documents that have been made public on the Internet,” and it was necessary to clear up “obvious legal misunderstandings.”


“I will give up my mandate, which I always achieved in honest political battle, and my opponents, my rivals, know this,” he said, in comments broadcast on television. “Nevertheless, I will not cling to it. Because I think that my personal matters are secondary to United Russia. Thank you for many years of work, and for your trust.”


Whether he surrendered his seat voluntarily or under pressure from the Kremlin, Mr. Pekhtin’s departure set a precedent in the Russian government, where high-level corruption and lavish spending overseas have developed into a serious political liability. It represents a victory for opposition activists, who have never achieved such a swift response to an exposé.


Officials, meanwhile, have been given a powerful reminder of their own vulnerability, said Mikhail Y. Vinogradov, chairman of the St. Petersburg Politics Fund. He added that it is not yet clear whether this case represents a one-time occurrence or “a change in the rules of the game.”


“This is a way to show that discussion of a ‘battle against corruption’ leaves the majority of officials without protection,” he said. “Naturally, officials’ anxiety over their property will grow for the time being. There won’t be any attempts to torpedo this campaign — they will simply hope that this is just another campaign that will exhaust itself in three or four months. That’s what the representatives of the elite will count on.”


The blogger Aleksei Navalny, who published documents about Mr. Pekhtin’s extensive real estate holdings last week, was jubilant, remarking that “now he can finally move to Miami and live in peace, without having to listen to any complaints.”


“In fairness, one must acknowledge that Mr. Pekhtin’s actions show that somewhere deep inside him there are remnants of a conscience,” he wrote on the Web site of Ekho Moskvy, a radio station. “Maybe other members of United Russia felt this, and that’s the reason they named him to the ethics committee? Let’s watch how the others who are hiding foreign property behave.”


Mr. Navalny published the property records last Wednesday, a day after Mr. Putin proposed legislation that would bar senior Russian officials from holding bank accounts or owning stock outside the country.


The proposal did not prohibit officials from owning real estate overseas, but signaled a Kremlin crackdown on their lavish spending abroad, so the revelations about Mr. Pekhtin came as an ill-timed embarassment.


The records showed the lawmaker’s name on the deeds of at least three properties in Florida, including a South Beach apartment bought last year for nearly $1.3 million, in a building where Mark Cuban, the owner of the Dallas Mavericks basketball team, also owns a unit.


Late last year, the newspaper Vedomosti published a report on a huge mansion outside St. Petersburg and other properties which Mr. Pekhtin had not disclosed.


Mr. Pekhtin initially shrugged off the reports, telling the newspaper Izvestiya that he had “practically no” real estate holdings outside Russia, though his grown son did. Within a matter of hours, however, he announced that he was temporarily relinquishing his position as chairman of the parliamentary ethics committee until his name was cleared by an investigation.


On Wednesday morning, Mr. Pekhtin cast the scandal as a salvo in a larger standoff between social forces in Russia.


“In this case, our opponents are not interested in Pekhtin,” he said, according to  Interfax. “They need to discredit the Parliament, the authorities, which are represented by every person sitting in this hall, and every one of us may turn out to be a target for them. As an honest person, I do not want and cannot make peace with this, and I do not want the shadow of unfounded allegations to fall on our party.”


After Mr. Pekhtin made his announcement, fellow lawmakers gave him a standing ovation and warmly applauded. Many went out of their way to praise his decision. But Sergei Mironov, head of the minority A Just Russia party, said he expected Mr. Pekhtin’s decision marked the beginning of a process, not the end.


“Pandora’s box has been opened,” said Mr. Mironov, in comments broadcast on Channel One. “I don’t doubt that the sixth sitting of the State Duma will have a record number of early terminations of deputies’ authority. For me it is completely obvious that, if there were not some real facts there, the deputy would not have voluntarily given up his authority.”


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Robin Roberts Welcomed Back to GMA by the Obamas















02/20/2013 at 07:50 AM EST







From left: Josh Elliott, Sam Champion, Robin Roberts, Lara Spencer, and George Stephanopoulos


Heidi Gutman/ABC


A standing ovation from her crew greeted Robin Roberts at the door of the ABC Times Square studio of Good Morning America, even before the sun rose Wednesday – exactly five months after the anchor had a bone marrow transplant to treat myelodysplastic syndrome, or MDS, a rare blood disorder.

Outside, in the street, a crowd of fans had already gathered with placards, banners and even an ebullient fellow from Dallas waving what he called the world's largest wristband, hailing his heroine. It read, "WELCOME BACK ROBIN."

Once the show hit the air, Roberts, with her colleagues surrounding her, looked into the camera, broke into a great big smile, and announced: "Hi, it's Robin. I've been waiting 174 days to do this: Good Morning America!"

Said her co-anchor George Stephanopoulos: "We've been waiting for that drumroll. It is official now. Welcome back, Robin."

From Jimmy Kimmel and Bradley Cooper, sitting at Kimmel's talk show desk in Hollywood: "Welcome back, girlfriend."

And from 1600 Pennsylvania Avenue: "Good morning, America, and welcome back, Robin," said President Barack Obama, First Lady Michelle Obama sitting with him.

"Robin," said Mrs. Obama, "we just want you to know that the whole Obama family, we've been thinking about you, and praying for you, and rooting for you every step of the way."

"You've been an inspiration to all of us," said the President, "and we couldn't be happier that you're back here, doing what you do best."

Said Roberts, 52 – besides claiming she wasn't wearing the froggy slippers she had sported around her apartment ("Or, am I?" she said) – "I keep pinching myself and I realize that this is real. This is really happening.

"Faith, family and friends have brought me to this moment and I am so full of gratitude."

Her medical team was introduced later in the show. Before that, Roberts said, "There's so many people that I want to thank throughout the morning, my doctors and nurses and family and colleagues and people who have sat in this chair and those who have blazed the trail before me."

"As my mother said, 'We all have something.' Everyone’s story has purpose and meaning and value, and I share this morning, this day of celebration with everyone."

She added later, after witnessing an impromptu jam session taking place in her honor outside the studio, "Our viewers have been incredible."

Roberts recently received the all-clear from her doctors, as tests have shown no abnormalities and she has continued to gain strength. She had already been back in the studio, doing a series of dry runs before her official return Wednesday.

A special edition of 20/20 on Feb. 22 will offer a behind-the-scenes look at Roberts's experience and those who have been inspired by her example.

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Drug overdose deaths up for 11th consecutive year


CHICAGO (AP) — Drug overdose deaths rose for the 11th straight year, federal data show, and most of them were accidents involving addictive painkillers despite growing attention to risks from these medicines.


"The big picture is that this is a big problem that has gotten much worse quickly," said Dr. Thomas Frieden, head of the Centers for Disease Control and Prevention, which gathered and analyzed the data.


In 2010, the CDC reported, there were 38,329 drug overdose deaths nationwide. Medicines, mostly prescription drugs, were involved in nearly 60 percent of overdose deaths that year, overshadowing deaths from illicit narcotics.


The report appears in Tuesday's Journal of the American Medical Association.


It details which drugs were at play in most of the fatalities. As in previous recent years, opioid drugs — which include OxyContin and Vicodin — were the biggest problem, contributing to 3 out of 4 medication overdose deaths.


Frieden said many doctors and patients don't realize how addictive these drugs can be, and that they're too often prescribed for pain that can be managed with less risky drugs.


They're useful for cancer, "but if you've got terrible back pain or terrible migraines," using these addictive drugs can be dangerous, he said.


Medication-related deaths accounted for 22,134 of the drug overdose deaths in 2010.


Anti-anxiety drugs including Valium were among common causes of medication-related deaths, involved in almost 30 percent of them. Among the medication-related deaths, 17 percent were suicides.


The report's data came from death certificates, which aren't always clear on whether a death was a suicide or a tragic attempt at getting high. But it does seem like most serious painkiller overdoses were accidental, said Dr. Rich Zane, chair of emergency medicine at the University of Colorado School of Medicine.


The study's findings are no surprise, he added. "The results are consistent with what we experience" in ERs, he said, adding that the statistics no doubt have gotten worse since 2010.


Some experts believe these deaths will level off. "Right now, there's a general belief that because these are pharmaceutical drugs, they're safer than street drugs like heroin," said Don Des Jarlais, director of the chemical dependency institute at New York City's Beth Israel Medical Center.


"But at some point, people using these drugs are going to become more aware of the dangers," he said.


Frieden said the data show a need for more prescription drug monitoring programs at the state level, and more laws shutting down "pill mills" — doctor offices and pharmacies that over-prescribe addictive medicines.


Last month, a federal panel of drug safety specialists recommended that Vicodin and dozens of other medicines be subjected to the same restrictions as other narcotic drugs like oxycodone and morphine. Meanwhile, more and more hospitals have been establishing tougher restrictions on painkiller prescriptions and refills.


One example: The University of Colorado Hospital in Aurora is considering a rule that would ban emergency doctors from prescribing more medicine for patients who say they lost their pain meds, Zane said.


___


Stobbe reported from Atlanta.


___


Online:


JAMA: http://www.jama.ama-assn.org


CDC: http://www.cdc.gov


___


AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com


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Stock futures flat with data, Fed minutes on tap

NEW YORK (Reuters) - Stock index futures were little changed on Wednesday, ahead of data on the housing market and inflation, as well as minutes from the Federal Open Market Committee's January meeting.


Housing starts and permits for January along with the January producer price index are due at 8:30 a.m. (1330 GMT).


Economists in a Reuters survey forecast the housing starts data to show a 925,000-unit annualized rate in January versus 954,000 in December, and a total of 915,000 permits in January compared with 909,000 in the prior month. PPI is expected to show a 0.4 percent rise compared with a 0.3 percent drop in December. Excluding volatile food and energy items, PPI is expected to rise 0.2 percent versus with a 0.1 percent increase in December.


Later in the session, investors will look to the minutes from the Fed's January meeting for any clues on how long the current monetary policy will remain in effect.


The S&P 500 <.spx> is up 7.4 percent for the year, fueled by legislators' ability to sidestep an automatic implementation of spending cuts on tax hikes on January 1, better-than-expected corporate earnings and modestly improving economic data that has been tepid enough for the Fed to maintain its stimulus policy.


S&P 500 futures slipped 0.5 point and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 14 points, and Nasdaq 100 futures added 2 points.


As earnings season winds down, S&P 500 companies set to report include Devon Energy Corp and Fluor Corp .


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


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


European shares traded flat, consolidating after the previous session's sharp gains, held back by weak earnings newsflow and as traders cited caution ahead of the minutes from the Fed's January policy meeting. <.eu/>


Asian shares scaled their highest levels since August 2011 after an improving global economic outlook whetted investor appetite for risk, while the yen firmed amid doubts over Japan's commitment to drastic reflation.


(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)



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Pistorius Denies Murder in Killing of Girlfriend





PRETORIA, South Africa — Facing a charge of premeditated murder following the killing of his girlfriend, Oscar Pistorius, the double amputee track star and one of the world’s best-known athletes, flatly denied on Tuesday that he intended to take her life when he opened fire at a closed bathroom door at his home last week.




“I fail to understand how I could be charged with murder, let alone premeditated, ” he said in an affidavit read to a packed courtroom, “I had no intention to kill my girlfriend.”


His assertion contradicted an earlier accusation from prosecutor Gerrie Nel that Mr. Pistorius committed premeditated murder when he rose from his bed, pulled on prosthetic legs, walked more than 20 feet from a bedroom and pumped four bullets into the door, three of which struck Reeva Steenkamp, Mr. Pistorius’s girlfriend, on the other side.


It was the first time that either the prosecution or Mr. Pistorius, appearing at a bail hearing, had publicly provided details of their version of events. The case — one of the most sensational in recent times — stunned South Africa last Thursday when the police arrived at Mr. Pistorius’s house in a gated community in Pretoria to find Ms. Steenkamp dead from gunshot wounds.


“We were deeply in love and I could not be happier. I know she felt the same way,” Mr. Pistorius’s affidavit said. As it was read out, the athlete wept so uncontrollably that magistrate Desmond Nair ordered a brief recess to permit him to regain his composure.


Mr. Pistorius said he heard a noise from the bathroom and walked on his stumps, not prosthetic legs. He was nervous, he said, because the toilet window did not have burglar bars and contractors who had been working there had left ladders.


The room was dark, he said, and he did not realize that Ms. Steenkamp was not in bed. He felt vulnerable and fearful without his prosthetics and opened fire at the door, he said, then broke it down with a cricket back to discover Ms. Steenkamp.


He carried her downstairs, he said, and “she died in my arms.”


Earlier, Mr. Nair, the magistrate, had said he could not exclude premeditation in the killing so Mr. Pistorius’s bail application would be much more difficult. But he said he would consider downgrading the charges depending on evidence at subsequent hearings.


Prosecutor Nel said Ms. Steenkamp, a model and law graduate who had just made her debut in a reality television show, had been in a tiny room measuring less than 20 square feet when the shots rang out. “She could not go anywhere,” he said. “It must have been horrific.”


“She locked the door for a purpose. We will get to that purpose,” he said. She was struck by three of the four rounds, he said.


But a lawyer acting for Mr. Pistorius, Barry Roux, said the defense would “submit that this is not a murder.” He said there was no evidence that Mr. Pistorius, 26, and Ms. Steenkamp, 29, had fought and there was no evidence of a motive. He also challenged the prosecution to produce a witness to corroborate its version of Mr. Pistorius’s actions.


“Scratch the veneer” of the prosecution case, he said, and there was no evidence to support it.


“All we really know is she locked herself behind the toilet door and she was shot,” Mr. Roux said.


Mr. Nel, the prosecutor, however, declared: “If I arm myself, walk a distance and murder a person, that is premeditated,” he said. “The door is closed. There is no doubt. I walk seven meters and I kill.”


He added “The motive is ‘I want to kill.’ That’s it.”


If convicted of premeditated murder, Mr. Pistorius would face a mandatory life sentence, though under South African law he would be eligible for parole in 25 years at the latest. South Africa abolished the death penalty in 1995.


Mr. Pistorius was appearing for the second time since Friday. He arrived in court looking grim-faced, his jaw set. But, as during his earlier appearance, he broke down in tears when the prosecutor said that he had “killed an innocent woman.”


As the court went into a midday recess, Ms. Steenkamp’s private funeral service began in the southern coastal city of Port Elizabeth, her hometown, with six pallbearers carrying a coffin swathed in a white cloth and white flowers as mourners expressed emotions from dismay to rage. More than 100 relatives and friends attended the funeral at the Victoria Park crematorium.


“Why? Why my little girl? Why did this happen? Why did he do this?” June Steenkamp, the victim’s mother, said in a published interview in The Times of Johannesburg.


Gavin Venter, a former jockey who worked for the victim’s father, a horse trainer, said on Tuesday, “She was an angel. She was so soft, so innocent. Such a lovely person. It’s just sad that this could happen to somebody so good.”


“I’m disgusted with what he did. He must be dealt with harshly,” he added, according to news reports.


The affair has stunned a nation that had elevated Mr. Pistorius as an emblem of the ability to overcome acute adversity and a symbol of South Africa’s ability to project its achievements onto the world stage.


During his first court appearance on Friday, Mr. Pistorius did not enter a formal plea. But a statement released by his agent said that he disputed the charge of premeditated murder “in the strongest terms” and that “our thoughts and prayers today should be” for Ms. Steenkamp, and her family, “regardless of the circumstances of this terrible, terrible tragedy.”


Mr. Pistorius was born without fibula bones and both of his legs were amputated below the knee as an infant. But he became a Paralympic champion and became the first Paralympic sprinter to compete against able-bodied athletes at the 2012 London Olympics.


His triumphs made him a global track star. Several companies have withdrawn lucrative sponsorships and his case has played into an emotional debate in South Africa about violence against women.


Members of the Women’s League of the ruling African National Congress protested outside the building, waving placards saying: “No Bail for Pistorius,” Reuters reported.


Lydia Polgreen reported from Pretoria, South Africa, and Alan Cowell from London.



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Oscar Pistorius Charge Upgraded to Premeditated Murder






Breaking News








02/19/2013 at 07:20 AM EST







Oscar Pistorius


Antonie de Ras/Reuters/Landov


Charges against Oscar Pistorius have been upgraded to premeditated murder, after the judge in Pretoria, South Africa, said during Tuesday's bail hearing that he could not rule out the possibility that the "Blade Runner" track star planned the shooting death of girlfriend Reeva Steenkamp, reports CNN.

Magistrate Desmond Nair said he would consider downgrading the charge at a later date. Wearing a blue shirt and gray suit, and sometimes clenching his jaw, Pistorius also openly wept in the packed courtroom as prosecutors provided details of their accusations.

Prosecutors said Pistorius, 26, opened fire on Steenkamp, 29, four times through a locked bathroom door of his home in a gated community last Thursday after attaching his prosthetic legs and walking more than 20 feet from a bedroom.

Prosecutor Gerrie Nel said Steenkamp, a model who only recently had made her debut in a reality TV show, had been in a room less than 20 square feet when the shots were fired, reports The New York Times.

"She could not go anywhere," said Nel. "It must have been horrific."

A lawyer for Pistorius, Barry Roux, said the defense would "submit that this is not a murder," citing a lack of evidence or motive.

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Hip implants a bit more likely to fail in women


CHICAGO (AP) — Hip replacements are slightly more likely to fail in women than in men, according to one of the largest studies of its kind in U.S. patients. The risk of the implants failing is low, but women were 29 percent more likely than men to need a repeat surgery within the first three years.


The message for women considering hip replacement surgery remains unclear. It's not known which models of hip implants perform best in women, even though women make up the majority of the more than 400,000 Americans who have full or partial hip replacements each year to ease the pain and loss of mobility caused by arthritis or injuries.


"This is the first step in what has to be a much longer-term research strategy to figure out why women have worse experiences," said Diana Zuckerman, president of the nonprofit National Research Center for Women & Families. "Research in this area could save billions of dollars" and prevent patients from experiencing the pain and inconvenience of surgeries to fix hip implants that go wrong.


Researchers looked at more than 35,000 surgeries at 46 hospitals in the Kaiser Permanente health system. The research, published Monday in JAMA Internal Medicine, was funded by the U.S. Food and Drug Administration.


After an average of three years, 2.3 percent of the women and 1.9 percent of the men had undergone revision surgery to fix a problem with the original hip replacement. Problems included instability, infection, broken bones and loosening.


"There is an increased risk of failure in women compared to men," said lead author Maria Inacio, an epidemiologist at Southern California Permanente Medical Group in San Diego. "This is still a very small number of failures."


Women tend to have smaller joints and bones than men, and so they tend to need smaller artificial hips. Devices with smaller femoral heads — the ball-shaped part of the ball-and-socket joint in an artificial hip — are more likely to dislocate and require a surgical repair.


That explained some, but not all, of the difference between women and men in the study. It's not clear what else may have contributed to the gap. Co-author Dr. Monti Khatod, an orthopedic surgeon in Los Angeles, speculated that one factor may be a greater loss of bone density in women.


The failure of metal-on-metal hips was almost twice as high for women than in men. The once-popular models were promoted by manufacturers as being more durable than standard plastic or ceramic joints, but several high-profile recalls have led to a decrease in their use in recent years.


"Don't be fooled by hype about a new hip product," said Zuckerman, who wrote an accompanying commentary in the medical journal. "I would not choose the latest, greatest hip implant if I were a woman patient. ... At least if it's been for sale for a few years, there's more evidence for how well it's working."


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Online:


Journal: http://www.jamainternalmed.com


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Stock futures edge higher after seven-week rally

NEW YORK (Reuters) - Stock index futures edged higher on Tuesday, indicating the S&P 500 will build on its seven-week winning streak ahead of data on the housing market.


* The S&P 500 <.spx> has risen for seven straight weeks, its longest streak since January 2011, and is up 6.6 percent for the year.


* The strong start to the year was fueled by legislators in Washington averting a series of automatic spending cuts and tax hikes that were set to take effect on January 1, as well as better-than-expected corporate earnings and data that pointed to modest economic improvement but no immediate change in the Federal Reserve's stimulus plans.


* But further gains for the benchmark S&P index have been a struggle recently as investors look for new catalysts to lift the index as it hovers near five-year highs.


* Economic data on tap includes the National Association of Home Builders/Wells Fargo housing market index for February at 10 a.m. (1500 GMT). Economists in a Reuters survey expect a reading of 48 compared with 47 in January.


* Improving housing data has been cited by analysts as one of the key factors in the equity market rally.


* S&P 500 futures rose 1.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 18 points, and Nasdaq 100 futures added 5.25 points.


* Office Depot Inc jumped 11.1 percent to $5.10 in premarket trading after a person familiar with the matter said the No.2 U.S. office supply retailer is in advanced talks to merge with smaller rival OfficeMax Inc and a deal could come as early as this week. OfficeMax shares climbed 13.5 percent to $12.20 in light premarket trade.


* Computer-maker Dell reports fourth-quarter results, expected to show earnings per share fall to $0.39 from $0.51 one year earlier. Analysts will have their first chance to question management on a buyout deal struck earlier this month by chief executive Michael Dell, private equity firm Silver Lake and Microsoft .


* An investor bid to break up Hess Corp's sprawling energy empire has drawn unwelcome attention to one of the commodity trading world's lesser-known players, a venture that has stumbled in recent years after a decade of success.


* European shares rose on Tuesday, lifted by gains at food group Danone and fresh signs of a German economic recovery, although broader market sentiment remained cautious ahead of Italian elections this weekend. <.eu/>


* Philippine and Australian shares scaled new heights but other Asian shares were mixed, with worries about the risk of an inconclusive outcome in Italy's election and U.S. budget talks limiting the upside after strong rallies in early February.


(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)



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South African Leader Launches New Political Party







JOHANNESBURG (Reuters) - Respected anti-apartheid activist Mamphela Ramphele launched a new political party on Monday to challenge South Africa's ruling ANC, saying self-interested and corrupt leaders were threatening the continent's biggest economy.




Invoking the spirit of Nelson Mandela and the optimism that prevailed at South Africa's first all-race elections in 1994, Ramphele said the dream of the "Rainbow Nation" was dying under the African National Congress (ANC).


"Our society's greatness is being undermined by a massive failure of governance," she said, urging South Africans to "build our nation into the country of our dreams".


Ramphele, 65, faces a formidable challenge. Although political support for the ANC is weakening 19 years after the end of white-minority rule, it remains an unrivalled political machine and commands a nearly two-thirds majority in parliament.


But the medical doctor and former World Bank managing director has the respect of much of the country's black majority as a partner of Black Consciousness leader Steve Biko, who died in 1977 in apartheid police custody.


She was also placed under house arrest for seven years by the apartheid government because of her political work. She has regularly challenged authority and the ANC on its failings.


The new party, which will contest elections due early next year, will be called 'Agang', the Sesotho word for "Let us build".


The ANC "noted" her announcement but said Ramphela's launch speech, outside the Constitutional Court in central Johannesburg, offered nothing new.


The 101-year-old liberation movement also dismissed Ramphele's accusation that it was to blame for income inequality, social violence, failing education and other problems.


"The criticism of the ANC is a failure to acknowledge that many of the challenges were not created by the ANC. It is historical," party spokesman Keith Khoza said.


"Any party that won elections would have faced the same societal issues in education, health, housing and so on."


A group of ANC heavyweights split off in 2008 to form the Congress of the People (COPE) but the party fared poorly in elections the following year and has since all-but imploded amid infighting and wrangling.


(Reporting by Jon Herskovitz; Writing by Ed Cropley; Editing by David Dolan and Andrew Heavens)


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