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By Marc Jones LONDON (Reuters) - European shares edged down on Wednesday after three days of gains as signs of a still stuttering Chinese economy and rising worries about Ukraine offset a reassuring set of European economic numbers. U.S. stock futures pointed to a flat start for Wall Street on what will be another heavy day of company earnings as well as U.S. PMI readings.. Data compiler Markit's equivalent readings for Europe, seen as good indicators of future growth, showed that while France's economy was still lagging, Germany continued to power the euro zone's recovery.
By Aaron Maasho ADDIS ABABA (Reuters) - Ethiopia's bold decision to pay for a huge dam itself has overturned generations of Egyptian control over the Nile's waters, and may help transform one of the world's poorest countries into a regional hydropower hub. By spurning an offer from Cairo for help financing the project, Addis Ababa has ensured it controls the construction of the Renaissance Dam on a Nile tributary. But the decision to fund the huge project itself also carries the risk of stifling private sector investment and restricting economic growth, and may jeopardise Ethiopia's dream of becoming a middle income country by 2025. The dam is now a quarter built and Ethiopia says it will start producing its first 750 megawatts of electricity by the end of this year.
By Jeremy Laurence and Mirwais Harooni KABUL (Reuters) - A $375 million hole in the Afghan budget is threatening public projects and civil servants' salaries, officials say, putting the aid-dependent economy under stress just as Afghanistan awaits a new leader and foreign troops prepare to go home. U.S., U.N. and Afghan finance ministry officials have discussed ways to resolve what they say has become a critical situation for the budget, with civil projects most at risk as international assistance starts to taper off. "If the political situation of the country does not become normal and businesses do not start again soon this problem will become even more worrying," Alhaj Muhammad Aqa, director general of the treasury at the finance ministry, told Reuters on Wednesday. "We will not only face problems in paying salaries of employees but we will have difficulties in other issues too." Funding for security will not be affected, as costs are met by foreign governments which recognize that any chance of stability in Afghanistan rests on quelling the Taliban insurgency.
By Jonathan Cable and Kevin Yao LONDON/BEIJING (Reuters) - Chinese factory activity shrank for the fourth straight month in April but private businesses across the euro zone enjoyed their best month in nearly three years, surveys showed on Wednesday. Within the euro zone, Germany - Europe's largest economy - saw activity accelerate whereas in France, the bloc's second biggest, momentum waned. "Given the problems the euro zone faces, to get even a modest rate of positive growth this year is a good sign. But there is an increasing concern that two of the larger economies - Italy and France - are struggling to gain any traction," said Peter Dixon at Commerzbank.
By Leika Kihara TOKYO (Reuters) - Over 90 percent of Japanese banks have increased loans and investment in riskier assets in the past year, the Bank of Japan said on Wednesday, suggesting that the wall of money it is pumping out is spilling over into the broader economy. "Financial institutions have reduced investment in domestic bonds, especially Japanese government bonds (JGBs), while increasing investment in relatively high-risk assets such as loans," the central bank said in a semi-annual report analyzing Japan's financial system. Banks are lending to a wider range of industries and are more keen to lend to small- and medium-sized companies whose appetite for loans is on the rise, the report said. Bank lending rose 2.1 percent in March from a year earlier, marking the 29th straight month of increase, with lending by regional banks up 3.2 percent, a monthly BOJ data showed.
By Hilary Russ NEW YORK (Reuters) - The "Bridgegate" scandal that rocked New Jersey Governor Chris Christie's administration earlier this year is threatening a deal that would allow developer Larry Silverstein to finish building the next World Trade Center skyscraper. Silverstein needs a guarantee from the Port Authority of New York and New Jersey to secure a $1.2 billion construction loan for 3 World Trade Center. On Wednesday, the agency's board will vote on whether to approve that guarantee, part of a deal that would provide hundreds of millions of dollars more to the Port Authority and allow it to foreclose on the $2.4 billion tower if Silverstein cannot pay debt service costs. But Silverstein's deal, even with the concessions to the Port Authority, has become entangled in a fierce debate within the agency over its mission, including whether it should be in the real estate business at all.
Zimbabwe will let foreigners keep majority stakes in banks for now because locals have no money to buy shares, the finance minister said on Wednesday, signalling a pause in President Robert Mugabe's black economic empowerment drive. But Patrick Chinamasa said the government would not amend on plans to force foreign mining companies to sell at least 51 percent of their local holdings to Zimbabweans under the empowerment programme, known locally as indigenisation. The southern African country, which ditched its hyper-inflated local currency in 2009, is facing a serious dollar crunch as a result of lack of foreign donor support and investment, and some smaller local banks are struggling to stay afloat. The law obliging foreign-owned firms, including mines and banks, to sell at least 51 percent of their stakes to blacks was passed as long ago as 2008.
Britain's economic recovery is gaining momentum but Bank of England policymakers held different views about the amount of slack in the economy and the medium-term inflation outlook, minutes from their April 9 meeting showed. The Bank expects the economy grew by 1 percent in the first three months of this year from the fourth quarter of 2013, up slightly from a previous growth forecast of 0.9 percent, the minutes showed. Economists at the Bank expected a slight slowdown in the April-June period. Members of the Monetary Policy Committee also thought it was "possible" that a sustainable rise in real wages, consistent with a durable recovery, was on the way.
We are looking at 0.5 percent quarter-on-quarter GDP growth if we continue to see this level," said Chris Williamson, chief economist at Markit. Inflation fell to just 0.5 percent in March, its sixth straight month in what European Central Bank President Mario Draghi has called a "danger zone" below 1 percent and keeping pressure on the ECB to intervene. However, Markit's flash Composite Purchasing Managers' Index, which is widely regarded as a good gauge of growth, suggested the economic support, at least, may not be necessary.
By Antoni Slodkowski and Linda Sieg TOKYO (Reuters) - The United States put last-minute pressure on Japan to compromise in tough trade talks on Wednesday, shortly before President Barack Obama was to arrive for a state visit. The two-way talks - focusing on Japan's agricultural market and both countries' car markets - are key to reaching a multilateral trade pact that is central to Obama's strategic shift towards Asia. Japanese Prime Minister Shinzo Abe has touted the broader trade deal as vital for growth in the world's third biggest economy. "This a moment for Japan to take an elevated view and to choose a bold path of economic renewal, revitalization and regional leadership," U.S. Trade Representative Michael Froman told reporters after negotiating with Economy Minister Akira Amari ahead of Obama's evening arrival.
Snohomish County was on Wednesday to consider a six-month ban on new construction in landslide-prone areas countywide after a slide last month that killed 41 people, local media reported. A rain-soaked hillside collapsed above the Stillaguamish River on March 22 unleashing a torrent of mud that swallowed up a stretch of state highway and about three dozen homes near the small community of Oso, about 55 miles northeast of Seattle. The Snohomish County Medical Examiner's Office said the remains of 41 victims had been recovered from the slide that buried the river valley neighborhood in the Cascade mountain foothills. U.S. President Barack Obama on Tuesday visited the site, offering condolences to the families of victims, encouragement to rescue workers and promises of government support.
(Reuters) - The mother of a 17-year-old student who was among 10 people killed in a highway crash in northern California earlier this month has sued FedEx Corp for negligence, California-based City News Service reported. More than 30 others were injured when a FedEx tractor-trailer crossed a highway median and slammed into a bus on Interstate 5 about 90 miles north of Sacramento. FedEx and the family's attorney did not immediately respond to requests for comment. "We remain focused on providing support to those affected and cooperating with the authorities as they conduct their investigation," FedEx said in a statement, according to CNS.
Germany's private sector expanded faster in April, recovering from a slight slowdown in growth in March, as both manufacturing and services industry activity rose more than expected, surveys showed on Wednesday. Markit's preliminary composite Purchasing Managers' Index (PMI), which tracks activity in the manufacturing and services sectors and covers more than two-thirds of the euro zone's largest economy, rose to 56.3 in April from March's final 54.3. "This is a nice bounce back with good broadbased growth in the services and manufacturing sector... It is looking like it will be a good year for Germany," Markit economist Chris Williamson said. Germany's economy expanded just 0.4 percent in 2013, but growth is seen picking up this year, driven by domestic demand.
SACRAMENTO, Calif. (AP) — Nearly 20 years after California became the first state to ban the use of race and ethnicity in college admissions, a proposal to reinstate affirmative action has sparked a backlash that is forging a new divide in the state's powerful Democratic Party and creating opportunity for conservatives.
By Kevin Yao BEIJING (Reuters) - China's factory activity shrank for the fourth straight month in April, signaling economic weakness into the second quarter, a preliminary survey showed on Wednesday, although the pace of decline eased helped by policy steps to arrest the slowdown. "It's generally in line (with expectations), reflecting that growth momentum is stabilizing," said Zhou Hao, China economist at ANZ in Shanghai. Hao expected economic growth to pick up slightly to 7.5 percent in the second quarter. MODEST STIMULUS MEASURES China's central bank will cut the amount of deposits rural banks must hold as reserves by between 0.5 and 2 percentage points, it said on Tuesday, the latest in a series of measures to help combat the slowing economy.
By Heide Brandes OKLAHOMA CITY (Reuters) - Oklahoma Governor Mary Fallin issued a one-week stay in the execution of a death row inmate due to die by lethal injection on Tuesday, in a move to clear up confusion over which state body has the final say over executions. Fallin ordered the stay for convicted murderer Clayton Lockett a day after the state Supreme Court issued its own emergency stay for Lockett and a second inmate, Charles Warner, amid legal wrangling over drugs used in lethal injections. The stay issued by Fallin moves back Lockett's execution to April 29, the same day Warner is scheduled to be executed.
A teenage boy who stowed away on a flight from California to Hawaii in the frozen, oxygen-deprived wheel well of a passenger jet was resting in hospital on Tuesday, two days after his death-defying jaunt over the Pacific, a Hawaii official said. The teenager, whose name has not been released, is "resting comfortably" at a hospital in Hawaii, Kayla Rosenfeld, spokeswoman of the state's Department of Human Services, said in a statement. The boy, who is from Santa Clara, California, is in the custody of the department's Child Welfare Services division, and officials were working to ensure his safe return home, she said. A local CBS-affiliate reported the boy was living with his father in Santa Clara, but his mother lives in Somalia.
By Steve Gorman LOS ANGELES (Reuters) - A U.S. congressman from a Los Angeles community is seeking to lure the factory that makes the bestselling Sriracha-brand hot pepper sauce to his district after residents in its current location complained about the smell. U.S. Representative Tony Cardenas, a Democrat whose district includes much of the San Fernando Valley, wants to convince David Tran, the owner of Huy Fong Foods company which makes the hot sauce, to relocate rather than continue to fight with the residents of the city of Irwindale, California. Cardenas said the company grossed $60 million in sales from its Sriracha brand alone last year, with little marketing, and hailed Tran, an ethnic Chinese immigrant from Vietnam who founded his company in Los Angeles in 1980, as "an American success story." Huy Fong Foods hires 70 full-time employees and 200 seasonal workers and produces over 20 million bottles of hot sauce yearly.
By Sharon Bernstein SACRAMENTO, California (Reuters) - A measure to regulate California's chaotic medical marijuana industry passed a key legislative hurdle on Tuesday, in a move that could lay the groundwork to tax and control recreational use of the drug if it ultimately becomes legal. U.S. states are increasingly moving to remove curbs on marijuana following landmark voter initiatives in Colorado and Washington state in 2012 that legalized the drug for recreational purposes. But the drug remains illegal under federal law, leaving states that have opted for medicinal legalization struggling to control a thriving trade in medical cannabis. "The current state of chaos around medical marijuana has got to come to an end," said state Assemblyman Tom Ammiano, a San Francisco Democrat.