Swedish minister denies claims of racism over black woman cake stunt

Sweden's minister of culture has been accused of racism after cutting a cake depicting a naked black woman.

Lena Adelsohn Liljeroth was taking part in an event at the Moderna Museet in Stockholm, the capital's museum of modern art and home to works by Picasso and Dalí. She was invited to cut the cake, an art installation meant to highlight the issue of female genital mutilation. She began, as instructed, by taking a chunk from the cake's "clitoris".

The artist, Makode Aj Linde, who created the installation for World Art Day on 15 April, took part in the cake-cutting, with his blackened face and head sticking up next to the cake's stomach and arms. The cakes "insides" were a gruesome red. A video shows him screaming loudly every time a visitor hacks off another slice of the cake.

Linde posted photos of the "genital mutilation cake" on his Facebook page. But the images provoked a furious response, with Sweden's African-Swedish Association describing it as "a racist spectacle".

A spokesman for the association, Kitimbwa Sabuni, told Sweden's The Local newspaper: "In our view, this simply adds to the mockery of racism in Sweden."

The association has demanded her resignation. In a statement, Sabuni said the association doubted a cake party meant to highlight the issue of female genital mutilation had achieved its aim. Instead, the cake was just "a racist caricature of a black woman". He said the minister's decision to take part in a dubious event with cannibalistic overtones showed her "incompetence and lack of judgment".

Sabuni told the newspaper: "Her participation, as she laughs, drinks and eats cake, merely adds to the insult against people who suffer from racist taunts and against women affected by circumcision."

Adelsohn Liljeroth, however, said she sympathised with the association's criticisms but denied she had done anything wrong. Speaking to the TT news agency, she conceded the cake installation was provocative and rather bizarre, and said she had been invited to speak about artistic freedom and the right to offend.

She added: "They wanted me to cut the cake." Ultimately, the artist was to blame for any confusion, she said, arguing that the situation had been misinterpreted. "He claims that it challenges a romanticised and exoticised view from the west about something that is really about violence and racism," she said. "Art needs to be provocative."

Sabuni dismissed the remarks, according to Swedish media reports, and called the minister's comments "extremely insulting". He added: "Sweden thinks of itself as a place where racism is not a problem. That just provides cover for not discussing the issue, which leads to incidents like this.

"To participate in a racist manifestation masquerading as art is totally over the line and can only be interpreted as the culture minister supporting the Moderna Museet's racist prank," he said.

The Guardian

Brad Pitt and Angelina Jolie: Engaged Since Christmas

BRAD Pitt proposed to Angelina Jolie over Christmas, it has been revealed.

According to America’s Life & Style magazine, Pitt went down on one knee over the festive period but the couple decided to keep their engagement a secret until the timing was just right.

“Brad had the ring designed last year and made sure it was ready by Christmas because he wanted a romantic Christmas proposal — and he got it,” a source said.

“They didn’t announce their engagement sooner because Angie focused so much on promoting her directorial debut, In the Land of Blood and Honey.

“She was very busy with the movie and her Oscar campaign. She also worried that the engagement would take over press on her film and detract from that. There was some negative press on Blood and Honey that bothered her a lot, and she didn’t feel the timing was right. So they waited.”

Showbiz Spy

Gulf Leaders Discuss UAE-Iran Island Dispute

Foreign ministers of the six-nation Gulf Cooperation Council held an emergency meeting in Doha Tuesday to discuss a territorial dispute between Iran and the United Arab Emirates, which some believe could pose a threat to international security. The talks followed a visit by Iranian President Mahmoud Ahmadinejad to Abu Musa, a Persian Gulf island controlled by Iran, but also claimed by the UAE.

Iranian state media said Mr. Ahmadinejad traveled to the disputed territory last week to deal with domestic issues.

Abu Musa is one of three islands claimed by both Iran and the UAE that lie near the Strait of Hormuz, the strategic channel through which roughly one-fifth of the world’s oil supplies are shipped.

Iran threatened to close the strait earlier this year in response to sanctions targeting its nuclear program. Analysts said if Iran were to carry out the threat, it would likely use troops stationed on Abu Musa.

Ahead of Tuesday’s meeting, UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan called on Tehran to end its “occupation” of the islands, saying it is not likely the consequences could “be contained by either the UAE or Iran” if the discord carried on much longer.

However, Iranian officials said their rule of the land is “not negotiable.”

Abdulkhaleq Abdulla, professor of political science at the UAE University, expects Mr. Ahmadinejad’s stopover in Abu Musa to become a turning point in the confrontation.

"I think the UAE now is going to change course. It used to follow a more diplomatic, a more quiet, more peaceful approach," Abdulla said. "From now on, I think all options are open for the UAE.”

Iran has had control of the three islands since 1971, but recently agreed to negotiations with the UAE to resolve the dispute.

Sheikh Abdullah says the Iranian president’s recent actions undermined the agreement and deepened the mistrust between Iran and its neighbors.

Sunni Arab states in the Gulf have become increasingly weary of Shi’ite Iran and accuse the country of fomenting unrest in Bahrain to extend its influence in the region.

Tehran denies the accusations, but has been highly critical of Bahrain’s crackdown on Shi’ite protesters, and even built a replica of the Pearl Roundabout monument on Abu Musa.  Destroyed by the government, the original monument has become a symbol of Bahrain’s opposition movement.

In light of the escalating tensions between Iran and its Arab neighbors, David Roberts - deputy director of the Royal United Services Institute for Defense and Security Studies in Qatar - suggests other regional issues will quickly overshadow the UAE’s territorial dispute with Iran.

“It’s in this argumentative accusatory context that we are talking about this and therefore, given that tensions are still quite high, I don’t see how there is enough space for a reasoned, measured discussion to take place,” Roberts said.

Abdulla also doubts a resolution is on the horizon. “I expect the days to come are going to be a very difficult time for the UAE-Iran relationship and the UAE-GCC relationship and 2012 is not going to be an easy year for either of us here, he said.

The UAE has urged Tehran to take the island dispute to the International Court of Justice in The Hague.

VOA News

Palestinian prisoners in mass hunger strike

At least 1,200 Palestinian inmates of Israeli jails began an open-ended hunger strike on Tuesday, as rallies across the occupied territories marked "Prisoners' Day".

As thousands gathered in towns and cities in both the West Bank and the Gaza Strip, three-quarters of the 4,700 Palestinians held by Israel began refusing food, the Israel Prisons Service (IPS) said.

"In the framework of (Palestinian) Prisoners' Day, around 2,300 security prisoners said they were refusing their daily meals, and around 1,200 prisoners said they were starting a hunger strike," IPS spokeswoman Sivan Weizman said on Tuesday.

Another eight women inmates had also said they were refusing food as a show of solidarity with the Palestinian security prisoners, Weizman said.

"We have coped with hunger strikes in the past and we are prepared to do so again now," she added.

Speaking to crowds gathered in the northern West Bank city of Nablus, Qadura Fares, head of the Palestinian Prisoners Club, gave a higher figure for the hunger strike, saying "1,500 prisoners from all the factions" had joined it already and more were expected to later in the month.

"We are united and undivided when it comes to prisoners, and we will stand by them until they get their demands," he said.

The Palestinian Prisoner Affairs Ministry says there are about 4,700 Palestinians being held in Israeli prisons, including 319 being held without charge in so-called "administrative detention".

The action by prisoners comes on the same day that Palestinian activist Khader Adnan was due to be released as part of a deal struck earlier this year to end his 66-day hunger strike in protest at his detention without charge.

Throughout the morning, thousands of people held marches and rallies across the West Bank, with about 3,000 people gathering in Shuhada Square in central Nablus, waving Palestinian flags and holding up pictures of imprisoned relatives.

Another 1,000 or so people gathered in central Ramallah, with a sit-in planned for later in the afternoon outside the nearby Ofer prison.

In the southern West Bank city of Hebron, 1,500 people gathered holding up flags, pictures and slogans reading: "Stop the policy of solitary confinement."

Hundreds more gathered in the northern towns of Tulkarem and Qalqilya, a witneses said.

In Gaza City, about 2,000 people marched to the headquarters of the Red Cross where they set up a solidarity tent with the hunger strikers.

There are currently 10 Palestinians on hunger strike in Israeli prisons, four of whom have been transferred to prison hospitals because of the fragile state of their heath, the Palestinian Prisoners Club says.

Two of them, Bilal Diab, 27, and Thaer Halahla, 34, have been refusing food for 50 days, with medics expressing concern over their deteriorating health.

Another prisoner, Hassan Safdi, on hunger strike for 44 days, was being held in the same facility, with his condition described as "very serious".

All 10 are being held without charge under administrative detention orders, which means they can be held for renewable periods of up to six months.

Aljazeera

Argentina moves to seize control of Repsol's YPF

Argentine President Cristina Fernandez unveiled plans on Monday to seize control of leading energy company YPF, drawing swift warnings from key trade partners and risking the country's further economic isolation.

YPF (YPFD.BA), controlled by Spain's Repsol (REP.MC), has been under intense pressure from Fernandez's center-left government to boost production, and its share price has plunged due to months of speculation about a state takeover.

Until recently, YPF had a harmonious relationship with Fernandez, whose increasingly interventionist and off-beat policies infuriate critics. She praised YPF when it found massive resources of shale oil and natural gas in late 2010.

However, a surging fuel import bill has pushed a widening energy shortfall to the top of her agenda at a time of worsening state finances in Latin America's No. 3 economy.

Fernandez said the government would ask Congress, which she controls, to approve a bill to expropriate a controlling 51 percent stake in the company by seizing shares held exclusively by Repsol, saying energy was a "vital resource."

"If this policy continues - draining fields dry, no exploration and practically no investment - the country will end up having no viable future, not because of a lack of resources but because of business policies," she said.

YPF's market value is $10.6 billion, although an Argentine tribunal will be responsible for valuing the company as part of the takeover. Central bank reserves or state pension funds could be used for compensation, analysts say.

Fernandez, who still wears the black of mourning 18 months after the death of her husband and predecessor as president, Nestor Kirchner, stunned investors in 2008 when she nationalized private pension funds at the height of the global financial crisis.

She has also renationalized the country's flagship airline, Aerolineas Argentinas.

Such measures are popular with ordinary Argentines, many of whom blame free-market policies such as the privatizations of the 1990s for the devastating economic crisis and subsequent debt default of 2001/02.

Her announcement of the YPF takeover plan, however, drew strongly worded warnings from Spain, Mexico and the European Union, a key market for Argentina's soymeal exports.

Spain vowed "clear and strong" measures over what it called a hostile decision, while the EU's executive European Commission warned that an expropriation would send a very negative signal to investors.

Mexico's President Felipe Calderon said Fernandez's plan would damage chances for future foreign investment in Argentina and hurt YPF's controlling shareholder, Spain's Repsol, in which Mexico's state oil monopoly Pemex holds a 10-percent stake.

The U.S. State Department said it was following developments.

Repsol described Argentina's move as "clearly unlawful and seriously discriminatory" and said it would take legal action.

But Fernandez dismissed the risk of reprisals.

"This president isn't going to respond to any threats ... because I represent the Argentine people. I'm the head of state, not a thug," she said.

Venezuela, where socialist President Hugo Chavez has nationalized almost all the OPEC member's giant oil industry during his 13 years in power, applauded her move.

"Venezuela rejects the threats and attempts at intimidation from Europe ... and calls on all the sisterly nations of the continent to accompany Argentina in the exercise of its sovereign rights," its Foreign Ministry said in a statement.

Fernandez's row with YPF comes as her administration heaps pressure on Britain over oil exploration off the disputed Falkland Islands, over which Argentina claims sovereignty.

INVESTMENT CLIMATE

A decade after staging the biggest sovereign debt default in history, Argentina has yet to return to global credit markets, and economic analysts said seizing control of YPF might make it even harder for the country to get fresh financing.

"YPF's expropriation does little to improve the already poor investment climate," said Ignacio Labaqui, local analyst for New York-based consultancy Global Medley Advisors.

Under the terms of the bill, the government would hold 51 percent of the expropriated shares and the rest would be held by the country's energy-producing provinces.

All of the shares targeted by the government belong to Repsol, which owns 57 percent of YPF. Repsol's Argentine partner, the Eskenazi family's Grupo Petersen, will not be affected. Petersen owns a 25.5 percent stake in YPF.

Fernandez said she had also passed a decree giving the government immediate administrative control of the company.

Speculation over a takeover has been weighing on Argentine asset prices for weeks, meaning Monday's news had been factored in by many investors. Still, U.S.-listed YPF shares (YPF.N) fell 11 percent before trading was suspended in New York and Buenos Aires.

The spread between the yield on benchmark Argentine bonds and comparable U.S. Treasuries widened after the announcement but was up just 2 basis points at 948 basis points at 2100 GMT, according to the JPMorgan Emerging Markets Bond Index, in line with the rest of the index.

ENERGY TIME-BOMB

Energy analysts say the government's heavy-handed approach is unlikely to resolve Argentina's energy time-bomb despite the discovery of the huge shale oil and gas resources.

"In the short term, I don't think this will solve anything. It doesn't mean that YPF's going to start producing more starting tomorrow," Argentine analyst Eduardo Fernandez said.

Argentina's hydrocarbons output has been in decline for years at a time of strong demand from industry and consumers.

Crude production fell 5.9 percent and natural gas output slipped 3.4 percent last year as power demand rose 5.1 percent, according to the latest figures from the Argentine Institute of Petroleum and Gas.

YPF's proven reserves of crude and natural gas - which do not include the new shale finds - fell 15 percent and 31 percent respectively between 2007 and 2010.

Massive, long-term investment will be required to bring the shale resources on stream, and the spiraling cost of fuel imports prompted Fernandez to seek a swifter resolution to the country's growing energy deficit.

Imports of fuels such as liquefied natural gas and diesel doubled last year to about $9.4 billion, playing a major part in eroding the president's cherished trade surplus.

Bolstering foreign currency stocks is especially important for Fernandez because she uses them to service the public debt, freeing up more spending for the welfare programs that helped her win a landslide re-election late last year.

(Additional reporting by Karina Grazina, Juliana Castilla and Hugh Bronstein in Buenos Aires, Andres Gonzalez in Madrid, John Crawley in Washington, and Daniel Wallis in Caracas; Writing by Helen Popper; Editing by Dale Hudson and Lisa Shumaker)
Reuters

Halle Berry Breaks Silence Over Engagement to Olivier Martinez

Halle Berry has finally acknowledged her engagement to Olivier Martinez. Making her first red carpet appearance since her "Dark Tide" co-star popped the question, the 45-year-old beauty admitted to Terri Seymour of "Extra" on Saturday, April 14 that she shocked herself with her decision to marry again.

"Who knew? I swore it off, right?" said the actress playing Storm in three "X-Men" movies when congratulated on her engagement during an interview at the 2012 Jenesse Center Silver Rose Gala, an event benefitting victims of domestic violence. She then added with a laugh, "Never say never, people!"

Berry indeed had sworn to never get married again back in 2007. The former Bond girl, who at the time was dating Gabriel Aubry, told InStyle magazine, "I will never, never get married again. Actually it's just that now I've come to a place where I think two people can share their lives without the ring, without the piece of paper."

The Oscar winner has been married and divorced twice before. She was married to baseball player David Justice from 1992 to 1997. In 2001, she tied the knot with singer Eric Benet, only to separate two years later. She and Benet had their divorce finalized in 2005.

Berry met Martinez while shooting "Dark Tide". News of their engagement first came out in January when Berry was spotted with a sparkler on her ring finger. Then, a jeweler named Gurhan claimed to have designed the ring per request from Martinez. When Martinez confirmed their engagement in March, he told The Miami Herald, "There is a jeweler taking credit for doing the ring and it's a lie!"

AceShowbiz

South Korea central bank trims GDP, inflation forecasts

South Korea's central bank on Monday trimmed its forecast for economic growth in Asia's fourth-largest economy this year due to a global downturn and weak domestic demand.

The Bank of Korea said it expected gross domestic product to grow a real 3.5 percent, down from its previous forecast in December last year for 3.7 percent growth.

The revision was attributed to a weaker contribution from foreign trade as well as rising commodity prices.

Annual private consumption growth was also seen weaker at a real 2.8 percent from 3.2 percent previously. However the bank expected consumption to improve steadily throughout the year in line with trade, as consumption is heavily influenced by the performance of major exporting companies.

The bank also slightly wound back its forecast for inflation, saying consumer prices were expected to rise 3.2 percent on average in 2012, down from a forecasts for growth of 3.3 percent previously.

Inflation in South Korea is largely expected to ease on expanded government subsidies for child daycare and free school lunches this year.

"The current situation of (the South Korean economy) is more stable with less volatility compared to the previous few months," said Bank of Korea governor Kim Choong-soo last Friday after interest rates were held for a tenth straight month.

Despite mainly positive comments on the economy, Kim provided few clues on future policy direction as interest rates are expected to be held steady for the rest of the year.

South Korea's headline annual inflation growth slowed to a two-year low of 2.6 percent in March, but the central bank has emphasized that inflation expectations are still high.

Revised export numbers in March were unchanged from preliminary numbers, which showed negative 1.4 percent growth last month due to slowing demand.

Geopolitical tension in the Korean Peninsula also remains a risk that could destabilize the region, as government officials in South Korea have said North Korea could make sudden provocations following its failed missile launch.

(Reporting by Christine Kim; Editing by Richard Pullin)
Reuters

Spain's King Juan Carlos under fire over elephant hunting trip

While ordinary Spaniards cope with harsh austerity, recession and soaring unemployment, the country's royal family has been enjoying expensive hunting trips, one of which resulted in King Juan Carlos ending up in hospital.

The 74-year-old monarch's fall in a park in Botswana provided an excuse for Spanish newspapers, who normally treat their royal family with kid gloves, to plaster their pages with photos of the king standing proudly in front of a dead elephant.

The photograph came from the website of Botswana-based Rann Safaris, which had been taken down by Sunday. The pictures, taken before the latest hunting trip, also showed the king with two dead water buffaloes.

Shoots with Rann Safaris cost upwards of $8,700 (£5,500) a week, with an elephant costing a further $15,000 to kill. A day out with professional hunter Jeff Rann, pictured with the king, costs a further $2,000.

The king's accident, after which he was flown back to Madrid for a hip operation, came days after his grandson, 13-year-old Froilán Marichalar, shot himself in the foot while hunting in Spain. He also had to be hospitalised and doctors removed the contents of a 36-calibre shotgun cartridge from his foot. Newspapers reported that it was illegal for a 13-year-old to handle that type of gun.

The king's hunting trip, which officials described as private, has caused a storm of angry comment from animal lovers and those wanting to know how much it had cost.

A promotional video on YouTube shows Rann shooting elephants – which can be killed with licences bought at auction from the Botswana government – in the Okavango delta.

"You have to manage the world's animal populations, to their betterment," says Rann, who did not answer queries from the Guardian. "We are trying to improve their habitat."

King Juan Carlos has been involved in hunting scandals before. Six years ago, officials dismissed as ridiculous allegations that he had shot a drunken Russian bear that had been plied with honey and vodka. The royal family has a troubled history with guns. The king shot and killed his brother in an accident when he was a teenager.

The Guardian

Deadly tornadoes strike US Midwest

Tornadoes have struck the US states of Nebraska, Kansas and Oklahoma following a warning by forecasters to residents across the US Midwest about "life-threatening" weather.

The National Weather Service said in an advisory on Saturday afternoon that severe storms were possible from Texas in the south to Iowa, South Dakota and Minnesota in the north.

"Conditions will remain favourable for strong to violent and possibly long-lived tornadoes into the overnight hours," it said.

Tornadoes during the overnight hours can be particularly dangerous because people are often sleeping and don’t hear the warnings, plus it’s impossible to see them coming in the dark.

Local television station KOCO in Oklahoma City reported that the death toll reached four on early Sunday morning.

Citing the local medical examiner, KOCO reported that all four deaths occurred in Woodward just after midnight, and that two of the deaths were children.

KOCO also said that there the twister in Woodward caused "significant structural damage and several injuries".

In the Iowa town of Creston, the Greater Regional Medical Center hospital was damaged by a possible tornado, said a woman who answered the phone there but declined to give her name.

A dispatcher for the Union County sheriff's office said he was unable to release any information about damage to the hospital or buildings.

In northwestern Oklahoma, a tornado touched down for less than a minute in the afternoon, according to Rick Smith, a National Weather Service meteorologist in the town of Norman.

The area was, however, hit by severe hail, breaking windows and damaging buildings.

Emergency operations

A tornado was also spotted in Mustang, a suburb of Oklahoma City, before dawn. Kristy Yager, a spokeswoman for Oklahoma City, said that trees, power lines and fences were reported to have collapsed in the area.

"We'll have storms all night long in Oklahoma," Smith said. The pair of Oklahoma twisters hit a day after a tornado sliced across Norman on Friday afternoon.

The Federal Emergency Management Agency said the worst conditions were expected to hit late on Saturday between Oklahoma City and Salina, Kansas, while other areas could see baseball-sized hail and strong winds.

Oklahoma activated its emergency operations center as a precaution before the storms.

"We really want to make sure that the public is aware that this is a serious threat and make sure that people are prepared," said Keli Cain, a spokeswoman for the Oklahoma Department of Emergency Management.

The National Weather Service could not immediately confirm the storm was a tornado.

The US tornado season started early this year, with twisters already blamed for 57 deaths in 2012 in the Midwest and South, raising concerns that this year would be a repeat of 2011, the deadliest tornado year in nearly a century.

Some 550 people died in tornadoes last year.

Aljazeera

At least 11 militants killed in south Yemen clashes: government

At least 11 al Qaeda-linked militants were killed in clashes and an air strike in southern Yemen on Saturday, the Defence Ministry said on the sixth day of a government offensive which has killed about 200 people.

Yemeni air force planes destroyed a vehicle in the southern province of Bayda, killing three "leading al Qaeda terrorists", the ministry said on its website.

Ansar al-Sharia (Partisans of Islamic Law), a group affiliated with al Qaeda, said in a statement that three of its militants had been "martyred" in the attack which it said was carried out by a U.S. drone.

Meanwhile, outside the nearby port of Aden, militants opened fire on a checkpoint from two vehicles, prompting government troops to return fire, the ministry said. Eight militants and five soldiers were killed in the exchange of fire, it added. One of the militants' vehicles was also destroyed.

The deaths came as Yemen's military pressed ahead with an offensive against Islamist insurgents who attacked a military camp outside the southern city of Lawdar last week.

The ministry said troops were consolidating their gains in Lawdar on Saturday, flushing out pockets of militant resistance.

On Friday, at least 34 people, mostly Islamist militants, were killed near Lawdar, officials said, after the government intensified its operations, sending an elite anti-terrorism unit from the capital Sanaa to join the fight.

Ansar al-Sharia has repeatedly denied reports of government success in the fighting, and the killing of its leaders.

On Friday, it said in an emailed statement that its fighters had killed 37 tribesmen fighting for the government in the previous two days.

The conflict in the south is one of several challenges facing Abd-Rabbu Mansour Hadi, the new president.

Ansar al-Sharia seized a significant chunk of territory in the southern province of Abyan during the turmoil that led to the replacement of his predecessor President Ali Abdullah Saleh.

Hadi vowed to fight al Qaeda in a deal that eased Saleh from power. Saudi Arabia and the United States hoped the deal would prevent al Qaeda getting a foothold near key oil shipping routes in the Red Sea.

Washington, which has pursued a campaign of assassination by drones and missiles against alleged al Qaeda targets in Yemen, wants him to reunify a military that is split between Saleh's foes and allies, and direct its efforts at "counter-terrorism.

Hadi also faces challenges from Shi'ite Muslim rebels in the north and southern secessionists.

(Reporting by Mohammed Mukhashaf in Aden and Mohammed Ghobari in Sanaa; Writing by Firouz Sedarat; Editing by Andrew Osborn)
Reuters

China gives currency more freedom with new reform

China took a milestone step in turning the yuan into a global currency on Saturday by doubling the size of its trading band against the dollar, pushing through a crucial reform that further liberalizes its nascent financial markets.

The People's Bank of China said it would allow the yuan to rise or fall 1 percent from a mid-point every day, effective Monday, compared with its previous 0.5 percent limit.

The timing of the move underlines Beijing's belief that the yuan is near its equilibrium level, and that China's economy, although cooling, is sturdy enough to handle important, long-promised, structural reforms, analysts said.

The move would help China deflect criticism of its controversial currency policy ahead of the annual spring meeting of the International Monetary Fund in Washington next week.

A slowing world economy that has pared investor expectations of a steadily rising yuan likely also gave Beijing the confidence to proceed, knowing that a larger band would not necessarily lead to a stronger currency.

"The central bank chose a good time window to enlarge the trading band. The market's expectation for a stronger yuan is weakening," said Dong Xian'an, chief economist at Peking First Advisory in Beijing.

"The move partially clears away doubts on whether China can manage a soft landing in its economy, and makes clear China's reform road map."

Investors have widely expected China to widen the yuan's trading band this year, thanks to repeated hints from Beijing that the change would take China one step closer to its financial goal: a basically convertible yuan by 2015.

Having a currency that trades with fewer restrictions also enhances Shanghai's status as a financial center. China envisions turning the city into a global banking hub by 2020.

"From April 16, 2012, the trading band for the yuan against the dollar in the spot interbank currency market will be widened from 0.5 percent to 1 percent, " the People's Bank of China said in a short statement on its website.

"At present, the development of China's foreign exchange market is maturing, the market's ability to independently price and manage risks is growing by the day," the bank said.

Ultimately, the government wants the yuan to rival the dollar as a global reserve currency, and to this end it has gradually allowed the currency to trade more freely.

After a pilot programe last year was judged successful, in March this year it gave permission for firms across China to pay for imports and exports in yuan, a way of helping to increase the use of the yuan in trade deals.

NO SHARP GAINS

The yuan, also known as the renminbi or "people's money", hit a record high of 6.2884 against the dollar on Feb 10, but is little changed against the U.S. currency for the year, softening 0.14 percent since January.

Analysts say its listless showing is likely to persist through 2012, as expectations of future gains are dulled by China's easing economic growth, and speculation that the yuan is near equilibrium.

As China this year heads into its biggest leadership changeover in a decade, it would be in Beijing's interests to avoid dramatic fluctuations in the yuan that could hurt exporters, many of whom are battling rising costs and tepid demand as it is.

"The yuan is close to an equilibrium. We expect it could only gain 1.4 percent against the dollar this year, so the time is right to widen the band," said Lan Shen, an economist at Standard Chartered Bank in Shanghai.

So muted is the yuan's outlook that investors in the offshore non-deliverable forwards (NDF) market believe there is even room for the currency to fall. The benchmark one-year NDF is pricing for a 0.4 percent depreciation.

Any decline would be a stark contrast to the yuan's steadfast rise in recent years. It jumped about 5 percent in 2011 on top of nearly 4 percent in 2010, giving investors the impression that China was comfortable with a rising currency.

It has gained about 30 percent in nominal terms against the dollar since the landmark move in the summer of 2005 to de-peg the yuan from the greenback.

A WELCOME MOVE

The yuan's value has always been a point of contention between China and its trading partners, notably the United States, which say China suppresses the currency to boost exports. China repeatedly rejects the accusation.

Instead, Chinese leaders say the yuan is near its equilibrium level and that authorities aim to keep its value "basically stable", more flexibility notwithstanding.

Beijing's desire to have the yuan trade more freely was stressed by both Premier Wen Jiabao and Central Bank Governor Zhou Xiaochuan in March when they said conditions were ripe for changes.

Their calls came even as China is set to confront its slowest economic growth in a decade this year, leading many to believe Beijing is ready to foresake heady growth for a restructured economy driven more by domestic than export demand.

Although not a primary intention, a more flexible yuan also works in China's favor in turbulent times by giving it more room to guide the currency lower to aid exports.

"The message of this move is that the renminbi appreciation story is over. Greater two way volatility will be the name of the game going forward," said Qu Hongbin, an economist at HSBC.

Data on Friday showed China's economy suffered its weakest growth since the global financial crisis in the first quarter by expanding just 8.1 percent, below forecasts for 8.3 percent.

The last time China changed its currency policy was in June 2010, after a two-year period when it effectively re-pegged the yuan to the dollar to shield China from the 2008-09 global financial crisis.

"I think the step should be welcomed by foreign countries, especially the United States, who has called for reforms," said Dongming Xie, China economist at OCBC Bank in Singapore. "This is also related to growing domestic calls for economic reforms."

(Additional reporting by Fang Yan, Kevin Yao and Aileen Wang in BEIJING, and Doug Palmer in WASHINGTON; Editing by Robert Birsel, Emily Kaiser and Daniel Magnowski)
Reuters

Amanda Bynes Caught on Camera Texting While Driving a Week After DUI Arrest

Despite having just been arrested on suspicion of drunk driving, Amanda Bynes might have not learned her lesson. On Thursday, April 12 night, the former Nickelodeon actress went out partying again and broke another law as she was photographed texting behind the wheels while trying to park her car outside a Los Angeles hotspot.

Seemingly too focused on the screen of her white iPhone, Bynes eventually backed over a curb in a red zone with her car. A photographer additionally spilled to PEOPLE that the 26-year-old starlet was "not even looking at the road." According to the photog, she even "went right through a stop sign." It should be noted that texting while driving is illegal in the state of California since 2009.

On Thursday night, Bynes was spotted hitting two hotspots, Chateau Marmont and Greystone Manor. Arriving at the latter venue before midnight, the "Easy A" actress was joined by a male friend. A witness told the publication, "She was behind the wheel of a black BMW. When Amanda saw the photographers, she tried to hide under her sweater as she entered the club. Amanda was in a good mood."

Bynes was arrested for DUI in West Hollywood on early Friday, April 6 morning. A statement from West Hollywood Sheriff's Department regarding her arrest detailed that the "Hairspray" actress collided with the right rear quarter panel of a police car when she tried to pass it. She was released without posting any bail later that day.

AceShowbiz

US earnings season provides spring boost for Obama

The spring chill some feared would once again sap the US's fragile economic recovery appears to have held off as American firms have reported better-than-expected first-quarter earnings.

The earnings season started in earnest this week with Alcoa, Google and JP Morgan reporting better-than-expected results. The figures will be a boost to president Barack Obama who has put the economic recovery at the centre of his reelection campaign.

But Obama isn't out of the woods yet. Disappointing news from the jobs market has shown how fragile the economy remains, and next week another raft of US giants will update the markets on how they are fairing, including Goldman Sachs, Intel, McDonald's and Microsoft.

US stock markets closed down on Friday after their worst week of the year, on fears of slowing growth in China and continuing problems in Europe.

Jack Ablin, chief investment officer at Harris Private Bank, said this week had solidified his opinion that the economy was on the mend. "The outlook looks pretty robust and across a range of industries. We've had good results from Alcoa, Google, JP Morgan, it's encouraging," he said.

At the same time he said there was a lack of trust in the stock markets. For two years now, stock market rallies have fizzled in the first quarter. Last year Europe's economic crisis and the tragic tsunami and earthquake on Japan wiped out rallies in the markets.

Last month's news that jobs growth had slowed added to fears that history was repeating itself, said Ablin. "Before 2008, no one knew what a Black Swan was. Now everyone is looking for one," he said.

Steven Cochrane, managing director of Moody's Economy.com, said the earnings reports were a better indicator of the wider economy than recent jobs reports, as those may have been influenced by seasonal factors including the extremely mild winter.

"We are still adding 175,000 to 200,000 jobs a month, and that's enough to stabilise the jobs market and keep unemployment falling," he said. He said that the economy did now look like it was on a firmer footing, but added: "So much nervousness remains, in part because the recovery is still so slow," he said.

Worries over the impact of rising gas prices and the still-lacklustre housing market were weighing on consumer confidence and likely to add to more volatility in the markets in the months to come, he said.

Cochrane said that Europe's continuing woes were still a worry in the US, although far less pressing at the moment than they had been. Europe remains is crisis even as the US appears to be pulling out of its historic slump. Next week the International Monetary Fund meets in Washington. IMF managing director Christine Lagarde struck a cautiously optimistic note this week, saying that the IMF might not need as large a boost in financial resources as first thought to address Europe's debt crisis.

"We have seen some improvement in the economic climate," she said. "But let me also underline this point: The risks remain high, the situation fragile."

The Guardian

British PM, Suu Kyi back suspension of Myanmar sanctions

British Prime Minister David Cameron and Myanmar opposition leader Aung San Suu Kyi gave powerful backing on Friday for the suspension of sanctions on the country, a sharp change in stance that could trigger a flood of investment in the resource-rich state.

Cameron, the first Western leader to visit Myanmar in decades, and Nobel laureate Suu Kyi said during a joint news conference in Yangon that sanctions should be suspended, but not lifted altogether, to pressure the civilian government to continue its reform drive.

Suu Kyi and Britain have long been the biggest advocates for enforcing sanctions, which critics say have kept Myanmar's 60 million people in poverty.

"I think the time is right to suspend rather than lift the sanctions," Cameron said. "This would allow us to put them back in place."

The comments by Cameron, the first British prime minister to visit Myanmar since it won independence from Britain in 1948, come 10 days ahead of the annual review of EU sanctions, which will be debated by all 27 member states in Brussels.

He said on Friday he would push for all EU sanctions to be lifted at that meeting, except for an arms embargo.

EU sanctions, which are less stringent than those of the United States, include assets freezes, bans on arms sales and investments or trade related to timber or mining of metals and gemstones. It does not prohibit investment in other sectors.

The restrictions also deny Myanmar access to the Generalized System of Preferences, which give trade privileges to poorer countries, but EU diplomats say changing that could take time.

Suu Kyi's support for temporary easing of sanctions will carry huge weight due to her international standing, with many Western diplomats admitting she has long had a major influence on their policies towards Myanmar.

Cameron earlier held talks with President Thein Sein and urged him to release all political prisoners, make peace with ethnic rebels and persuade hardliners in his cabinet and party that reforms were the best way forward.

CAUTIOUSLY OPTIMISTIC

Cameron spent three hours in Naypyitaw, the remote, sparsely populated and grandiose capital built by the former dictators, before flying to the biggest city Yangon to meet Suu Kyi, who he said was "a shining example" to the world.

"The prime minister said he was cautiously optimistic for the future and thought the president was sincere in what has happened so far," a source in Cameron's office who attended the meeting, told reporters.

Cameron's visit comes as countries jockey for business and influence in a country rich in untapped resources and desperate to attract foreign investment.

Also known as Burma, Myanmar has for years been the target of Western sanctions over human rights abuses. After winning independence - largely due to the efforts of Aung San, Suu Kyi's late father - a 1962 coup heralded 49 years of unbroken, brutal and inept military rule.

That ended a year ago after the transfer to Thein Sein's quasi-civilian government stacked with former generals, a hegemony now at risk after Suu Kyi's National League for Democracy (NLD) took 43 of 45 seats in April 1 by-elections.

While Thein Sein's reform drive has been widely accepted as a giant leap for Myanmar, Cameron said his government needed to back up promises that the changes would not be undone.

"We should be under no illusions about what a long way there is to go and how much more the government has to do to show this reform is real and irreversible," Cameron told reporters in Naypyitaw. "We should be very cautious and very skeptical."

It is understood that both leaders discussed the importance of convincing hardliners in Myanmar, including members of Thein Sein's ruling Union Solidarity and Development Party (USDP) - which was thrashed by the NLD in the recent election - that reform was the right path.

The comments by Cameron and more crucially, Suu Kyi, will make it all but certain that the EU will lift some of its "restrictive measures", temporarily at least, this month.

That would give European firms the green light to pile into Myanmar, where they fear Asian rivals that have already secured a foothold could boost their presence.

While the West seems set on lifting some sanctions, some experts say Myanmar's rapid opening up to foreign trade could result in rushed investments that benefit only the economic elite closely allied with the military old guard.

(Writing by Martin Petty; Editing by Sanjeev Miglani)
Reuters

Is the Toyota Prius Plug-in a game changer?

So, it’s finally here: the hybrid Toyota Prius that will now do what people have expected the Prius to do all along. Available to order now, the Prius Plug-in arrive in showrooms on 9 July, to give extended electric running of nearly 15 miles instead of 15 seconds without the whining petrol engine kicking in and spoiling the green dream.

It is able to travel so much further on battery power alone because the battery is both bigger and, at last, modern lithium-ion rather than the older nickel metal hybrid design used by other Prius. This does mean it’s more expensive – from £32,895 – but low emissions mean it qualifies for the government grant named after it: £5,000 of Plug-in Car Grant takes the list price down to £27,895.

CO2 emissions of just 49g/km are the reason for its eligibility, which also bring combined fuel consumption of 128mpg. And it’s sheer fuel economy, rather than the new Prius Plug-in’s list price or low CO2 emissions, that is likely to prove the most noteworthy aspect of Toyota’s latest green car.

Remember, the Prius is the best-selling hybrid on sale here, by far, and is the car most associated with the hybrid movement. This new model is thus a significant introduction, because it will gain awareness from so many people, and also be directly presented to so many current owners who may be willing to consider it.

Toyota doesn’t have a mountain of awareness to tackle, because the awareness is already there. All it has to do is quote the combined economy figure – more than 55mpg better than the standard car! – and wait for the buzz to build. The list price? It’s high, but not ridiculously so. It’s still manageable, and the Prius remains a car people are familiar with. People WILL pay it, which is why its announcement is newsworthy.

Toyota isn’t mean, either. Owners also get plenty of kit for their money, with showroom draws including de rigueur LED daytime running lights, a boomsome JBL stereo, sat nav and DAB radio. All premium features that will draw people in from the high-end models this car is priced to compete with.

Indeed, it could be argued Toyota’s better off charging a few thousand more for it if it means these extras can be included, rather than not having the added advantage of their showroom appeal and disappointing people who see it as little different to an ordinary Toyota. In the fledgling super-green car sector, details like this matter.

Another neat trick: there’s a unique colour available, called Sky Blue Metallic. This’ll ensure Plug-in Prius drivers stand out from normal owners, and if it just so happens to mimic the special blue used by the VW Golf Bluemotion – which puts out 50g/km more CO2 – then so be it…

n the showroom, makes things easy for owners (and helps dealers market a price £5k lower than they otherwise could) by sorting out the logistics of arranging the grant. Owners don’t pay full list price and then claim back their £5k: rather, the Toyota dealer applies for it on their behalf, so that sub-£28k price really is the transaction price.

The firm says experience in handling scrappage deals means it can do this speedily and efficiently – this is a logistical issue easily overlooked, and one that can delay deliveries to customers, so it’s of note that Toyota feels so confident it has the process cracked.

The concept of charging their car up is something owners will have to get used to, though (‘what, fill it with fuel AND electric power?’). Toyota includes as standard five metre cable for this, which is stored in a compartment beneath the boot floor. Topping up the lithium ion batteries takes around three hours from a regular plug socket – more than manageable.

But crucially, it’s a concept that won’t punish if you get it wrong. Like the Vauxhall Ampera and Chevrolet Volt, it is an electric car without any form of range anxiety. The electric range is small, but likely to be enough for a lot of inner city motorists: more importantly, it allows everyone to benefit from the full range of zero-emissions running, rather than not undertaking a journey through fear of running low.

Here’s the thing: this may well prove to be the only way people will buy into electric cars. The vast majority will not take the leap into a full-commitment EV-only, but if they are given the opportunity to, essentially, ‘try before they buy’, they may find electric-only motoring suits them better than they think.

Many Chevrolet Volt owners are already boasting about how the petrol engine has not cut in for months. A bit more of this, and how many will be reckoning they can do without it altogether, and make the leap into a full electric car?

Even the very fact they have to charge it up may help people understand and chime with the methodology of electric motoring. It’s amazing how new processes can eventually become habit simply through repetition. Give it a few months and the concept of plugging the car in will be no more inconvenient or unusual for the Prius Plug-in owner than actually filling it with fuel. It will simply become something that has to be done.

The Prius Plug-in may not appear to be a landmark car, but its introduction may prove to be more significant than we realise. It improves on the current model and also helps take people painlessly into the future of motoring too. It’s the halfway house to a full electric car that, thanks to the Prius’ sheer popularity, could well prove to be just the launchpad many need to buy into more.

The Green Car Website

Avio head: Europe risks becoming a 'half-baked cake'

Europe risks being squeezed between "low-cost China" and "high-tech America" unless it can rediscover the knack for innovation, says the head of aerospace company Avio.

Francesco Caio, the CEO of Turin-based Avio, told me that Europe's prospects were bleak unless it could find a "new frontier of innovation."

"Europe runs the risk of (being) squeezed between the muscles of low-cost China and the innovation of high-tech America," said Caio, a corporate high-flyer whose resume includes heading Cable and Wireless, Indesit and Olivetti.

"I am genuinely concerned that if Europe is not determined to go all the way we run the risk of having a 'half-baked cake' -- which would be very dangerous if ... digested."

European leaders need to face the fact that "an industrial model that has worked very well to create wealth and growth has come to an end," he said.

"That is the challenge and that is the role of leadership in Europe -- (to) make sure we have the ideas, vision and new ability to mobilize the great forces and strength that Europe has for growth."

Avio is the prime contractor for Vega, the new European rocket system designed to launch the small satellites that are expected to be the main driver of the aerospace industry.

Watching the Vega's maiden launch from the Guiana Space Center in February had been exhilarating, said Caio.

"You put seven years of development on the line -- you have a few seconds in which the system needs to perform particularly well," he said. "It was a relief in the first 12 seconds, the first 24 seconds, and then it was off."

Made from carbon fiber, the Vega uses a solid propellant which gives it faster speeds than the Ariane 5.

"I think it lowers the barriers to entry for satellite launch, and for the exploration and exploitation of space technology, for smaller companies, university centers," he said.

Of the nine satellites launched into orbit by Vega rockets so far, seven had been developed by European students.

Despite the gloom surrounding his country's economic fortunes, Caio said there were "two stories" for Italian business at present.

"Companies that have a mix of domestic and export are doing very well, indeed, because they have hooked on to growing markets," he said. "People who have been focused just on domestic market? Yes, they are suffering."

Avio was now looking to Brazil and China for growth, said Caio. "We're going where new consumers are learning the beauty of flight."

CNN

Auto Bailout Losses Reduced to $21.7 Billion in Latest Treasury Estimate

The U.S. government now stands to lose an estimated $21.7 billion for the auto bailout, a figure  $2 billion less than the forecast from January 2012.

The improved outlook is due to an uptick in General Motors stock value, which closed at $24.03 on Wednesday, according to The Detroit News. GM’s stock is up about 19 percent this year, but that’s still not enough to compensate for the slip experienced since November 2010 when the value was $33 at its initial public offering.

The Treasury loaned $85 billion to the Chrysler Group and GM in 2009 as part of a bailout to save the Detroit automakers from bankruptcy. Last summer, Chrysler’s parent company Fiat bought out the remaining shares the U.S. and Canadian governments had in the company, but the Treasury still recorded a $1.3-billion loss owed by the “Old Chrysler.”

The Treasury has a 26.5-percent stake in GM, equal to about 500 million shares. GM’s stock price would need to jump to $53 per share for the government to recover its losses. The government has put off its sale of GM stock indefinitely. Thanks to its stake in GM, the government can enact limits within the company including compensation for executives. Earlier this week, it was reported that the government plans to freeze or limit the compensation of GM executives like CEO Dan Akerson. His 2012 salary shouldn’t change from 2011, which means he will earn a $1.7 million salary, $2 million in long-term stock, and $5.3 million in salary stock.

Auto Mobile

Restructuring firm AlixPartners for sale: sources

Private equity firm Hellman & Friedman is exploring a sale of AlixPartners in a deal that could value the restructuring advisory firm at more than $1 billion, according to four people familiar with the matter.

Efforts to sell AlixPartners are at an advanced stage and a deal is expected in the near future, the people said. Goldman Sachs Group and Bank of America Merrill Lynch are advising on the process, they said.

Representatives for Hellman & Friedman, AlixPartners, Goldman Sachs and Bank of America Merrill Lynch declined to comment.

Southfield, Michigan-based AlixPartners, founded by Jay Alix in 1981, competes in the restructuring and bankruptcy space with specialists such as FTI Consulting and Alvarez and Marsal, as well as the turnaround practices of major consulting firms including McKinsey & Company, Boston Consulting Group and Bain & Co.

AlixPartners' recent high-profile assignments have included advising General Motors Co on its ongoing restructuring of the loss-making European Opel unit.

With some 900 professionals around the world, the firm has also worked on Chapter 11 reorganizations of firms such as Enron, General Growth Properties and Eastman Kodak.

Hellman & Friedman led a leveraged recapitalization of AlixPartners about six years ago, and acquired a majority stake together with the company's employees.

The San Francisco-based private equity firm did not disclose financial terms at that time, but said the transaction puts the total enterprise value of the firm in excess of $800 million.

According to ratings agency Moody's, the 2006 leveraged recapitalization transferred an 80 percent equity stake in AlixPartners to a group led by Hellman & Friedman.

The transaction valued AlixPartners at $872 million, and was funded with $296 million of cash equity from the private equity firm, a $385 million term loan, and $218 of rollover equity from the founder and management, according to Moody's at that time.

(Reporting by Greg Roumeliotis and Soyoung Kim; Editing by David Gregorio)
Reuters

Rome prosecutors link Vatican cleric to 29-year mystery of missing girl

The Vatican is under pressure to help resolve one of the strangest of many enigmas lingering in Italy from the cold war years.

For four years, prosecutors in Rome have been making a renewed attempt to get at the truth behind the disappearance in 1983 of Emanuela Orlandi, the 15-year-old daughter of a Vatican employee.

They are seeking to ascertain whether she was seized by a notorious band of Rome criminals, and whether this has any bearing on the fact that the leader of the gang was buried in a Vatican basilica normally reserved for cardinals and other illustrious prelates.

Last month, Walter Veltroni, a former deputy prime minister, asked the interior minister in Mario Monti's government to confirm that the basilica of Sant'Apollinare, a few yards from the Piazza Navona in central Rome, did not enjoy extra-territorial status and was thus subject to Italian law.

His question was interpreted as an attempt to clear the way for the prosecutors to order the reopening of the tomb in which gangster Enrico de Pedis has been interred since 1990.

Emanuela's body has never been found and, according to one of the many theories about her disappearance, it was laid to rest alongside that of De Pedis. But at the beginning of the month, prosecutors unexpectedly withdrew support for the exhumation while briefing Italian reporters that they believed at least one high-ranking Roman Catholic cleric had information about her disappearance.

A source close to the prosecution service was quoted as saying "behind the sacred walls, someone is still alive [and] in possession of evidential fragments of the truth". But in an interview with the daily Corriere della Sera, Cardinal Giovanni Battista Re said: "If anyone on the inside had known anything, he would have said it. We were all interested in clearing [the case] up."

Her brother, Pietro Orlandi, expressed astonishment at the prosecutors' decision not to open De Pedis's tomb. "I don't understand what could have made them change their minds," he said.

According to a report in the Rome daily La Repubblica, the prosecutor leading the inquiry has visited the crypt where the gangster is buried under a marble structure copied from the tomb of a pope.

Conspiracy theorists have linked Emanuela's disappearance at a bus stop to any number of other events. She vanished as investigators were looking into the still obscure reasons for the assassination attempt on Pope John Paul II, and the murky affairs of the Vatican bank after the mysterious death in London of the financier Roberto Calvi.

In 2005, attempts to solve the case were given new life when an anonymous caller rang an Italian television programme to allege that Emanuela had been kidnapped as a favour to the man who was in 1983 the vicar general of Rome, Cardinal Ugo Poletti, and that whoever sought to solve the riddle should see who was buried in the basilica of Sant'Apollinare.

Subsequently De Pedis's former lover gave prosecutors another explanation: that Emanuela had been kidnapped and murdered by the gang on the orders of Archbishop Paul Marcinkus, at that time the president of the Vatican Bank. Marcinkus died in 2006.

Last year, a former gang member offered a third version, saying the teenager had been seized and held hostage in an effort to get back money invested by its members through the Vatican bank.

Antonio Mancini said that De Pedis decided to write off the money and stop pressuring the Vatican, and claimed this was how the gangster earned his interment in one of Rome's most august places of worship.

De Pedis – nicknamed Renatino – was shot dead in an ambush in a cobbled street near the Campo de' Fiori in 1990. The moving of his body from a cemetery to the basilica of Sant'Apollinare only came to light seven years later because of investigations by a journalist.

It subsequently emerged that the move was authorised – in apparent violation of canon law – by Cardinal Poletti.

The rector of the basilica at the time, Piero Vergari, later wrote: "I never knew anything about [De Pedis's] relations with other people … He helped me a lot to prepare the soup kitchens I organised for the poor."

The Guardian

Lower euro-zone yields, China GDP view lift Wall Street

U.S. stocks rose more than 1 percent on Thursday as lower Italian bond yields eased some euro-zone concerns and rumors about China's strong GDP growth bolstered investors' appetite for risk.

The S&P 500 popped above its 50-day moving average in a sign that traders may see the recent pullback of nearly 5 percent as an opportunity to catch up with the benchmark's performance. The index is up more than 10 percent for the year to date.

In a sign that the labor market's recovery may be stalling, government data showed new claims for unemployment benefits rose unexpectedly last week to their highest level since January. But some economists cited the Easter holidays for the spike in claims, adding that they expected applications will keep declining in the weeks ahead.

Benchmark bond yields in Italy and Spain dropped following solid demand at this week's Italian debt auctions, while the euro hit a one-week high against the U.S. dollar, indicating a reduction in near-term concern about the euro zone's debt troubles.

"The easing bond yields are a signal to investors here that things aren't quite that bad in Europe," said Brian Gendreau, market strategist with Cetera Financial Group.

The Dow Jones industrial average .DJI was up 169.72 points, or 1.32 percent, at 12,975.11. The Standard & Poor's 500 Index .SPX was up 16.66 points, or 1.22 percent, at 1,385.37. The Nasdaq Composite Index .IXIC was up 35.26 points, or 1.17 percent, at 3,051.72.

Basic materials shares led gains as the euro climbed against the U.S. dollar and commodity prices advanced. The S&P materials sector index .GSPM jumped 2.8 percent. U.S. Steel (X.N) gained 5.9 percent to $28.94. Freeport-McMoRan Copper & Gold (FCX.N) rose 6 percent to $37.93.

Early into earnings season, results are beating Wall Street's expectations at a fast clip. Analysts say the expectations could have been lowered too much and stocks can seem cheap after the S&P's recent pullback of almost 5 percent.

"What early reports we have already show a pretty good beat rate," said Jim Paulsen, chief investment officer of Wells Capital Management in Minneapolis. "I wonder if we're going to beat the low hurdle of earnings."

Market participants also cited expectations that China's gross domestic product data, due tonight, would surprise on the upside as a reason for gains in basic materials shares. But some were skeptical of this rumor.

"The China story I'm seeing is getting misinterpreted. The Chinese government researcher that supposedly commented on China GDP said 9 percent GDP growth for the full year of 2012, and that he only expected first quarter to be 8.4(percent) to 8.5 percent, which is in line with expectations," said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.

The U.S. Federal Reserve is running through data to determine if last month's soft non-farm payrolls report was a weather-related setback or a sign the recovery is losing momentum, said William Dudley, president of the Federal Reserve Bank of New York.

Dudley left the door open to additional stimulus measures if the economic recovery gets off track. Previous rounds of quantitative easing have provided a boost for equities and other risk assets.

(Editing by Jan Paschal)
Reuters