PARIS &<51; The United Arab Emirates said Sunday that it had chosen a South Korean-led consortium for a $20 billion contract to create the first nuclear power reactors in the Middle East.

The Korean consortium beat out a General Electric-Hitachi team and a French consortium that included &>01;lectricit&>33; de France and Areva.

The deal, one of the largest in the energy sector this year, comes amid a resurgence of nuclear power projects and had involved high-profile lobbying from officials including the presidents Nicolas Sarkozy of France and Lee Myung-bak of South Korea.

The deal went forward after the U.A.E. signed an agreement with Washington on Dec. 17 to alleviate proliferation concerns. The Arab country, a federation of seven Gulf principalities, agreed in that protocol that it would not enrich uranium or reprocess spent fuel.

After a decade of strong growth, the U.A.E., a leading oil producer, is seeking to modernize its utilities sector and diversify its energy sources. It imports most of the natural gas that it burns to generate electricity and using its own oil would reduce amounts available for export.

Under the deal announced in Abu Dhabi on Sunday, Korea Electric Power will lead a group that includes Westinghouse, the American subsidiary of Toshiba, in designing, building and helping to operate four 1,400-megawatt nuclear power plants for the Emirates Nuclear Energy Corporation. The first of the third-generation units is supposed to be online in 2017, with the others providing electricity to the grid by 2020.

The contract had been hotly contested. The deal ultimately could be worth as much as $40 billion if the initial four plants are successful and the arrangement is extended.

&S220;The nature of this project will require a partnership that endures for nearly 100 years,&S221; Khaldoon Al Mubarak, chairman of ENEC, said in a statement announcing the winning bid emergency payday loan.

The Korean consortium agreed to take &S220;a high percentage&S221; of the contract under a fixed-price arrangement, an important consideration in an industry in which major cost overruns are the norm. Korean investors will also take an equity interest in the project, will be modeled on the South Korean utility sector.

The task is nonetheless a daunting one. Essentially all of the technical expertise and much of the manual labor will have to be brought in from abroad, as will the reactor components and the fuel. The U.A.E. electrical grid will also have to be substantially improved.

Officials in the U.A.E. said they were still discussing cooperation with the other bidders in areas like long-term fuel supply, investments and training.

The Korean group also includes Doosan Heavy Industries &&8; Construction, Hyundai Engineering &&8; Construction and Samsung C&&8;T. Korea Electric Power, owned by the South Korean government, operates 20 nuclear plants, generating about 40 percent of the country&S217;s electricity. The U.A.E. contract is its first big export deal.

&S220;We can now stand shoulder to shoulder with the U.S., Japan, France and Russia in our advance into the international market,&S221; the Yonhap news agency quoted Mr. Lee, the South Korean president, as saying.

Despite the nonproliferation agreement signed with Washington, there remains concern in some quarters about the security of nuclear facilities in the U.A.E., which lies in a volatile region just across the Gulf from Iran. The U.A.E. nuclear authorities are evaluating potential sites for the plants.

South Korea to Build Reactors in Middle East

NEW YORK – Looking for UGG boots? Or what about the last string of holiday lights or inflatable Santas to spruce up the lawn? You might be out of luck.

Some last-minute holiday shoppers are facing disappointment. Stores are running out of key holiday items — and not just Zhu Zhu pets, those robotic hamsters that have been hard to find since before Thanksgiving.

Even sparkly tops, skirts and scarves are running scarce at some stores. Bloomingdale's spokeswoman Anne Keating said that the upscale department store chain has sold out practically of "anything that sparkles" over the past week.

Of course, even ambitious shoppers who got a head-start faced some hurdles beyond the toy aisles. At Mall of America, the nation's biggest shopping center, an $85 wallet by popular designer Tory Burch in an array of colors — blue, gold and black — was sold out prior to Thanksgiving, before the mall had a chance to pull it from its holiday advertisments, according to Mall of America spokeswoman Bridget Jewell.

It's a switch from last year, when piles of holiday treasures were discounted up to 90 percent as a freefall in spending left merchants swimming in inventory.

But this year, stores cut inventories, willing to take a risk of running out of items rather than having to slash prices. The strategy is expected to boost fourth-quarter profits but may limit sales in the final days and even after Christmas.

Of course, shoppers who have a generic holiday list — a black sweater or a flat-panel TV in any brand — will find plenty to choose from. But slim pickings on key items are frustrating some shoppers, who appear to be delaying purchases more this year than last year.

"Stores need to have a good selection" for last-minute buyers, Laura Gurski, partner in the retail practice of A.T. Kearney, a global management consultant. She also wonders how stores will excite shoppers to come back after Christmas if leftovers are skimpy.

A look at what's hard to find:

CLOTHING AND ACCESSORIES: At Bloomingdales, Burberry down coats, Hunter's original Gloss Wellington rain boots, along with the socks that are sold separately, are sold out or almost sold out, Keating said payday loan companies.

She noted that the chain is getting regular shipments of UGG boots but they are selling out. Also scarce are denim leggins by Daddy Long Legs, she said.

Nordstrom's spokeswoman Brooke White reports limited quantities of the Wellington boots in pea green, violet or graphite, while the store has sold out of Bosca's magnetic money clips in dark brown leather and The North Face's women's fleece in colors like pink, black and white.

The upscale store has also sold out of charm necklaces with such messages as "Truth" and "Peace."

HOME DECOR: Most holiday decorations are gone at home-improvement chains Home Depot and Lowe's. Both say energy-efficient LED holiday lights have been gone for days.

Most inflatable lawn ornaments have sold out. Another key item that shoppers can't find is Home Depot's lighted reindeer and sleigh lawn decor.

Lowe's said the most popular inflatables were the least expensive — a 4-foot Santa and a 4-foot snowman, retailing each for $19.97, have sold out.

TOYS: Those who haven't gotten their hands on Zhu Zhu pets yet may have to wait until after Christmas.

Toys R Us spokeswoman Kathleen Waugh said that the toy retailer sold 1 million of them in the past week and is receiving a couple of hundred thousand more before Christmas. Wal-Mart Stores Inc. is getting about 20 to 60 per store per day through Wednesday, but the rodents sell out immediately.

Many of the hot toys are scarce, including Mattel Inc.'s Rocky the Robot and Mindflex which measures brain waves and uses them to push a ball through a course and Hasbro Inc.'s Chuck My Talking Truck.

Jim Silver, an analyst at Timetoplaymag.com, said there are more toy shortages this year than last year.

___

AP Retail Writer Mae Anderson contributed to this report.

Holiday stragglers find shortages of hot items

Hot News: State Street to Buy Securities Business of Italian Bank

LONDON, Dec. 19 (Xinhua) -- More than 2,000 people were trapped for hours inside the Channel Tunnel after four Eurostar trains broke down due to cold weather, according local news reports on Saturday.

The trains failed as they left the cold air in northern France and entered the warmer tunnel. The trains were coming from Brussels and Paris, and Eurostar said the change in the atmospheric conditions caused a problem with their electrics.

Eurostar said the four trains had been moved from the tunnel and passengers were being transferred to England.

"Four Eurostars broken down at one time -- it's absolutely unprecedented," said a spokesman from Eurotunnel, the operator of the Channel Tunnel.

"There's never actually been an evacuation of a Eurostar train in the 15 years that the tunnel has been opened and last night we evacuated two whole trains to get people off," he said.

Eurostar services have been cancelled until noon Saturday and will be severely disrupted at the weekend easy to get unsecured personal loans.

Heavy snowfall caused travel chaos, forced schools to close and cut off power supplies in parts of Britain on Friday. Meanwhile, more snow and freezing temperatures are expected for parts of Scotland and southeastern and eastern England.

Stranded passengers wait at St Pancras Station in London, capital of Britain, Dec. 19, 2009. More than 2,000 people were trapped for hours inside the Channel Tunnel after four Eurostar trains broke down due to cold weather, according to local news reports on Saturday. Eurostar services have been cancelled until noon Saturday and will be severely disrupted at the weekend. Eurostar said the four trains had been moved from the tunnel and passengers were being transferred to England. (Xinhua/Guo Rui)
Photo Gallery>>>

Cold snap traps four trains in Channel Tunnel

NEW YORK/SAN FRANCISCO (Reuters) – Hewlett-Packard Co (HPQ.N) struck a deal to buy network equipment maker 3Com Corp (COMS.O) for &&6;2.7 billion to step up competition against Cisco Systems Inc (CSCO.O) and expand into China.

HP said it would pay &&6;7.90 per share for 3Com, or a premium of 39 percent over its Wednesday closing price on Nasdaq.

The move comes amid a flurry of acquisitions by Cisco and other technology vendors trying to broaden their product portfolios and provide a one-stop shop for computing, networking and storage equipment.

"It gives HP additional scale within the low-to-mid tier wireless and networking market. It matches up with HP&&9;s switches that compete with Cisco," said Shannon Cross at Cross Research.

3Com, which has a large presence in China, has been pushing into the large enterprise market outside that country with its H3C brand, trying to take on giants like Cisco.

The company has been an acquisition target before. In 2008, Bain Capital Partners and China&&9;s Huawei Technologies (HWT.UL) tried to buy 3Com for &&6;2.2 billion but failed to win approval from a U.S. government security panel bad credit cash loan. Huawei is a privately held company set up by a former Chinese army officer.

Analysts said that by buying 3Com, HP will be competing head to head with Cisco in the networking equipment market. Cisco recently entered the server market, where HP is strong.

"HP has started to find success competing in the communication space. It has been competing with Cisco. To that degree, this is also something in that category," said Lou Miscioscia, analyst at Brigantine Advisors.

The terms of the deal were approved by the HP and 3Com boards of directors, but needs shareholder approval. The deal is expected to close in the first half of 2010.

HP also reported preliminary quarterly profit and revenue that beat analysts&&9; expectations, and raised its outlook for fiscal 2010.

3Com shares jumped 35 percent to &&6;7.66 in after-hours trading. HP shares edged 0.4 percent lower to &&6;49.80.

(Reporting by Sinead Carew, Ritsuko Ando and Gabriel Madway; Editing by Carol Bishopric, Bernard Orr)

HP to buy 3Com for $2.7 billion

Hot News: Macys Q4 forecast disappoints; shares fall

WASHINGTON (Reuters) – Bank regulators closed Gateway Bank of St. Louis, in St. Louis, Missouri, and Prosperan Bank, of Oakdale, Minnesota, on Friday, the 118th and 119th U.S. bank to fail this year.

The Federal Deposit Insurance Corp said Gateway Bank of St Louis had &&6;27.7 million in assets and &&6;27.9 million in deposits. The bank&&9;s sole office will reopen on Saturday as a branch of Central Bank of Kansas City, Missouri, which assumed Gateway&&9;s assets bad credit payday advance.

The FDIC entered into an agreement with Alerus Financial NA, of Grand Forks, North Dakota, to assume all of Prosperan&&9;s &&6;175.6 million in deposits and about &&6;173.9 million of its &&6;199.5 million in assets.

(Reporting by Charles Abbott; editing by Carol Bishopric)

U.S. regulators close Gateway Bank, Prosperan Bank

WASHINGTON &<51; The House Financial Services Committee voted on Thursday to create an agency to protect consumers from predatory lending, deceptive credit card terms and other abuses.

By a 39-to-29 vote, the panel moved regulatory legislation a crucial step forward on what was likely to be a long road toward final passage by the full Congress. President Obama, who has put financial regulation high on his domestic agenda, has said he wants a bill on his desk before the end of the year.

Barney Frank, the Massachusetts Democrat who heads the committee, said after the vote that he was optimistic of final passage either late this year or early in 2010. Mr. Frank said he was confident that the pillars of the legislation would remain intact.

&S220;No bill I&S217;ve ever had to share with anyone else has been everything I liked,&S221; Mr. Frank said, predicting that action in the House would create momentum in the Senate.

The House panel also approved, by voice vote, a provision to impose new regulations for credit cards by Dec. 1, instead of mid-February, after Democratic members complained that lenders had been raising interest rates in anticipation of the legislation.

Mr. Obama immediately issued a statement lauding the committee action. &S220;This bill has now passed a major hurdle, and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change,&S221; the president said.

&S220;They are doing what they always do &<51; descending on Congress, using every bit of influence they have to maintain the status quo that has maximized their profits at the expense of American consumers, despite the fact that recently those same American consumers bailed them out as a consequence of the bad decisions that they made.&S221;

Later, the White House issued a statement calling passage of the bill by year&S217;s end essential. &S220;And we think a central part of regulatory reform is a consumer finance protection agency that looks out for, in all of this, normal, everyday consumers,&S221; said Robert Gibbs, the president&S217;s chief spokesman pay day advance.

Mr. Gibbs said he understood that Senators Christopher J. Dodd of Connecticut and Richard C. Shelby of Alabama, the chairman and ranking Republican, respectively, of the Senate Banking Committee, were working &S220;quickly and expeditiously to ensure financial regulatory reform is something that happens and is written into law.&S221;

The House committee vote on creating a consumer financial protection agency was mostly along party lines. Two Democrats voted against the measure (Travis Childers of Mississippi and Walt Minnick of Idaho) and one Republican voted for it (Michael N. Castle of Delaware).

The vote came a day after the committee voted to give the federal government the power to block states from regulating large national banks in some circumstances. That vote came after committee members reached a compromise on how much authority state regulators should have.

The Obama administration opposed any efforts by the federal government to pre-empt state officials from imposing more rigorous banking standards. A group of Democrats with close ties to the banking industry sought a complete federal pre-emption, which would have the effect of sharply limiting any state regulation of banks.

Under the compromise offered by two House Democrats, Melvin Watt of North Carolina and Dennis Moore of Kansas, and approved by voice vote, the Office of the Comptroller of the Currency, which regulates national banks, would be able to override the states, but only if it found that the state law &S220;significantly&S221; interfered with federal regulatory policies.

On another issue that has been hotly debated for months, the House Agriculture Committee on Wednesday approved a measure to regulate derivatives, the arcane financial instruments that have been linked to the current financial crisis. The Financial Services Committee approved a similar measure last week. (The agriculture panel has jurisdiction because many derivatives involve trading in farm commodities.)

Vote Backs a Financial Oversight Body

Hot News: SEC mulls ways to shed light on dark pools

LONDON (AFP) – London stocks ended down on Tuesday as news of a 0.6 percent fall in wholesale prices across the Atlantic shook the market.

The FTSE 100 index dropped 0.72 percent to 5,243.40 points.

Barclays was the most traded stock with traders exchanging 168 million shares, followed by Royal Bank of Scotland which saw 164 million units switch hands.

Retailer Sainsbury was the session&&9;s star performer gaining 17.7 pence -- or 5.36 percent -- to finish at 347.8.

Pearson added 36.5 pence -- or 4.44 percent -- to stand at 858 american family insurance.5.

The top casualties were Autonomy Corp, falling 138 pence -- or 8.65 percent -- to finish at 1457. Barclays was down 18.3 pence -- or 4.79 percent -- to end at 363.75.

Sterling gained ground against both the euro and the dollar.

At 15:58, sterling was trading at $1.6427, up from $1.6423 at Monday&&9;s close. The pound climbed against the euro, rising to 1.1003, up from 1.0959 over the same period.

FTSE 100 down

The Chinese Ministry of Finance said Tuesday that it would issue 6 billion yuan worth of government bonds in Hong Kong, a major step to internationalize its currency at a time of concern about the dollar.

The yuan bond issue, worth about $879 million, will &S220;promote the RMB in neighboring countries,&S221; the Finance Ministry said on its Web site &S212; referring to the overall name of the Chinese currency, the renminbi &S212; &S220;and improve the yuan&S217;s international status.&S221;

&S220;The first step toward internationalization is regionalization,&S221; Shi Lei, a foreign currency analyst at Bank of China in Beijing, said in an interview. &S220;China wants to develop the offshore market in Hong Kong.&S221;

While domestic banks like Bank of China and the Export-Import Bank of China have issued yuan-denominated bonds in Hong Kong for a couple of years at the encouragement of Beijing, this is the first time that government bonds, the equivalent of U.S. Treasury securities, are to be issued. The sale is set for Sept. 28.

In July, the People&S217;s Bank of China started a program for local companies to settle trade in yuan, but it has so far spurred little trade.

Zhi Ming Zhang, an analyst at HSBC in Hong Kong, said the government bond issue might show foreign investors they could rely on the yuan.

&S220;If I&S217;m doing trade with China, where am I going to park this money?&S221; Mr. Zhi asked, referring to the yuan. The yuan-bond market needs security and liquidity to make such settlements attractive, he said, and government bonds will provide some security as well as a pricing benchmark instant payday loans.

Experts estimate that China holds about 75 percent of its $2 trillion in foreign reserves in dollar-denominated assets, but since the global financial crisis, that position has made Beijing uneasy. Since the beginning of 2007, the dollar has slipped more than 20 percent against the yen, and more than 12 percent against the yuan, and investors are concerned as the United States continues to pile up debt to finance its massive stimulus package.

In March, China&S217;s prime minister, Wen Jiabao, expressed concern about the dollar&S217;s slide and encouraged the United States to ensure its stability.

While the bond issue announced Tuesday is a step toward making the yuan a global currency, the size of the sale is small compared with those of bonds like Treasury securities, and the time it will take to establish the yuan internationally remains uncertain.

&S220;There is no timetable,&S221; said Mr. Shi, the Bank of China analyst, adding that developing the market would take &S220;at least three to five years.&S221;

In another move to make the yuan accessible to investors, BOC Suisse Fund Management, Bank of China&S217;s asset-management arm based in Geneva, said Friday that it had received approval from the Swiss financial regulator to create a new set of funds, nearly half of them denominated in the Chinese currency.

China to Issue Yuan-Denominated Bonds in Hong Kong

NEW YORK (Reuters) – Stocks fell on Monday after a sharp drop in Chinese equities called into question whether asset prices have raced ahead of an economic recovery.

The selling mainly hurt shares in industrial and natural resource companies as commodities prices slumped. But financial stocks were also dented on fears they may be over valued after a strong run-up and following bearish comments from Barron&&9;s.

Recent slides in Chinese stocks have caused jitters in global stock markets that have rallied strongly in recent months, with the S&P 500 up around 50 percent since March. A 6.7 percent dive in the Shanghai Composite Index (.SSEC) to a three-month closing low on Monday reignited those concerns.

"Investors in the United States felt it was important for China to help lead the path to economic recovery," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. "If their markets are going to misbehave, it opens the question of whether they are going to see a recovery."

The Dow Jones industrial average (.DJI) fell 79.88 points, or 0.84 percent, at 9,464.32. The Standard & Poor&&9;s 500 Index (.SPX) lost 10.65 points, or 1.04 percent, at 1,018.28. The Nasdaq Composite Index (.IXIC) fell 22.64 points, or 1.12 percent, at 2,006.13.

Chinese stocks recorded their second-biggest monthly loss in 15 years, and traders said the sell-off sparked a fall in the price of oil and other commodities on fears demand in the world&&9;s third economy may be weaker than thought.

Oil dropped more than 4 percent to below &&6;70 a barrel, and copper prices slid from 11-month highs.

In New York, shares in natural resource companies fell. Exxon Mobil Corp (XOM no fax payday loan.N) dropped 0.8 percent to &&6;69.51 while miner Freeport-McMoRan Copper & Gold Inc (FCX.N) Inc fell 3.4 percent to &&6;63.24. Caterpillar Inc (CAT.N) fell 2.6 percent to &&6;45.51.

Weighing on the financial sector, Barron&&9;s said the stock of American International Group Inc (AIG.N) was overpriced after soaring more than 50 percent last week and also recommended investors take profits in Citigroup Inc (C.N), which dropped 3 percent to &&6;5.07. AIG fell 6.5 percent to &&6;47.02.

Banc of America-Merrill Lynch cut its rating on the stock of Morgan Stanley (MS.N) to "neutral" from "buy," sending the shares down 3 percent to &&6;28.61.

The announcement of two large mergers failed to lift overall sentiment. Baker Hughes Inc (BHI.N), an oilfield services company, said it would buy smaller rival BJ Services Co (BJS.N) for &&6;5.5 billion, and Walt Disney Co (DIS.N) said it would buy Marvel Entertainment Inc (MVL.N) for &&6;4 billion.

Shares in Marvel, famous for its stable of characters such as Iron Man, Spider-Man and the Fantastic Four, rocketed 26 percent to &&6;48.71 while BJ Services added 7 percent to &&6;16.53.

A regional report that showed manufacturing in the U.S. Midwest was on the cusp of expansion did little to boost sentiment, with all three major indexes falling around 1 percent by mid-morning.

The Institute for Supply Management-Chicago said on Monday its index of Midwest business activity rose in August to 50.0 from 43.4 in July.

(Additional reporting by Leah Schnurr; Editing by Padraic Cassidy)

Wall Street slides as China equities, financials weigh

Afghan policeman (r) keeps watch as election workers shift ballot boxes at polling station in Kabul, 21 Aug 2009 An Afghan election monitoring group says Taliban insurgents have made good on their threat to chop off ink-stained fingers of voters. Meanwhile, international observers are rendering a tentative verdict on the electoral process, calling Thursday's balloting generally positive and democratic. Two voters in Afghanistan's Kandahar province, where there is a significant Taliban presence, had their ink-stained fingers chopped off by insurgents. The head of the country's Free and Fair Election Foundation, Nader Nadery, tells VOA his group's observers reported that the two men were attacked by the Taliban on Election Day. The report came as key international monitors are rendering a tentative assessment of the election process. The U.S.-based National Democratic Institute says aspects of the election "were in accordance with democratic principles." But there were serious flaws that must be addressed before future elections. NDI president Kenneth Wollack was asked if his organization, which has monitored 200 elections worldwide, could consider the elections in Afghanistan to have been free and fair."We have seen too many elections around the world and it is why we reserve a final assessment to an end of a process not as the process is still unfolding," he said.Allegations of voting irregularities are widespread and international monitors acknowledge they were not able to observe firsthand what took place in many provinces because of poor security. The European Union monitoring mission says the violence and intimidation prevented a free election in some parts of the country. It notes turnout was considerably higher in the North where challenger Abdullah Abdullah draws support from Tajiks, but particularly low in the South, a Pashtun stronghold of incumbent President Hamid Karzai.One of the American observers, former U.S. Senator Gary Hart, praises the millions of voters who defied what he calls " a small group of cowardly people in the shadows who hate democracy.""I know of few, if any, mature democracies in the world where faced with the threat of violence and violence itself that turnout for the voters would have been higher than it was here Thursday," he said.The election camps of both President Karzai and challenger Abdullah are claiming their candidates are heading to victory, capturing enough votes to avoid a runoff election. However election officials say tabulations have not been completed and are preliminary. Partial results will not be announced before Tuesday. It may be weeks before full, official voting totals are released. A successful and credible election - with the losers peacefully accepting the outcome - is deemed crucial for Afghanistan. The country is battling an insurgency with the help of 100 thousand foreign troops. Billions of dollars in aid have poured into Afghanistan since the U.S.-led invasion in 2001 ousted the Taliban from power.

Taliban Reportedly Cut Off Fingers of 2 Voters

Hot News: Starbucks Boosts Prices on Some Beverages

Filed at 2:31 a.m. ET

LONDON (AP) -- Lloyds Banking Group PLC, which is 43 percent owned by the British government, reported a half-year loss of 7.1 billion pounds ($12 billion) on Wednesday as bad loans rose to a record high.

However, it expressed confidence that the worst part of the bad debt burden was over.

In the first report as a merged company, the partly nationalized company reported that impairments rose from 2.5 billion pounds to 13.4 billion pounds -- 80 percent stemmed from Halifax/Bank of Scotland which was controversially taken over by Lloyds TSB.

And though the merged company's revenue was 7 per cent higher at 11 easy online payday loans.9 billion pounds, Lloyds posted a pro-forma loss -- a figure which analysts keyed on -- of 3.957 billion pounds.

"'Our first half loss was driven by the high levels of impairment. The core business delivered a resilient performance, despite the weak economy," said chief executive Eric Daniels.

------

On the Net: http://www.lloydsbankinggroup.com

Lloyds Banking Group Reports $12 Billion Loss

Hot News: Kraft Foods Second Quarter Profit Up 11 Percent

KANSAS CITY, Missouri (Reuters) – Federal Reserve Chairman Ben Bernanke traveled to the U.S. heartland to defend the central bank&&9;s actions and reaffirm his assessment of an improving, but still vulnerable, U.S. economy.

Taping a special that will air on television network PBS over three days this week on its program The NewsHour, Bernanke said a financial crisis that rivaled that of the 1930s needed decisive actions.

"I was not going to be the Federal Reserve Chairman who presided over the second Great Depression," Bernanke said.

"When you&&9;re in a situation like this, a perfect storm, sometimes you have to do things that are a little unorthodox, out of the box."

About 190 citizens from the Kansas City area, assembled by a nonpartisan civic group, were on hand for the taping at the Kansas City Fed, moderated by veteran news anchor Jim Lehrer.

Some two dozen peppered the chairman with questions ranging from the Fed&&9;s role in consumer protection actions, to efforts to stem foreclosures, to the outlook for the dollar.

Bernanke sought to demystify the role of the Federal Reserve, and especially debunk ideas that the Fed has almost unfettered power as an unelected fourth branch of government.

"I&&9;m answerable to the American people," Bernanke said.

PEDAL TO THE METAL

Bernanke said the Fed is doing all it can to turn the U.S. economy around, and that he was confident the nation would be back on a strong growth track within a few years.

"The Federal Reserve has been putting the pedal to the metal," he said, adding that "recessions happen," even though the current one is especially long and painful.

Bernanke&&9;s core message was similar to that he delivered last week in congressional testimony: that the recession should end soon, but that considerable risks remain -- especially relating to the labor market.

It takes GDP growth of about 2.5 percent to keep the jobless rate constant, Bernanke noted. But the Fed expects growth of only about 1 percent in the last six months of the year.

"So that&&9;s not enough to bring down the unemployment rate," he said.

Latest government data show the U.S. unemployment rate at 9.5 percent, the highest since 1983, and many forecasters expect the rate to keep climbing even after the recession technically comes to a end.

With unemployment high and factories producing well below capacity, inflation should not be a problem -- giving the Fed some breathing room on interest rates, Bernanke said.

"But once the economy starts to grow, and begins to move ahead, it will be very important for the Fed to start to unwind, to raise interest rates instant cash advance."

BRISTLING WITH EMOTION

Asked about his opinion on the dollar, a topic many Fed officials veer away from, Bernanke said the U.S. central bank, in general, supports a strong dollar policy.

"The best way to have a strong dollar is to have a strong economy," he added.

Mostly cool under fire, Bernanke bristled with emotion when asked about a measure before Congress to open the Fed&&9;s monetary policy decision-making to scrutiny by a congressional watchdog, the Government Accountability Office.

"I don&&9;t think the American people want Congress running monetary policy. That&&9;s exactly what (the bill) would do," he said.

Markets would likely assess that inflation would rise if Congress or the administration started to meddle with interest rate decisions, he added.

A group of about two dozen protesters picketed outside the Kansas City Fed building on Sunday night to call for more disclosure by the central bank.

As he did in testimony on Capital Hill last week, Bernanke suggested Congress get its own act together -- and form a plan to get massive budget deficits under control.

"It is very, very important for the Congress and the administration to develop a plan, to say, &&9;Here is how we&&9;re going to get back to fiscal sanity.&&9;"

DOWN TO EARTH

Retirees Elbert and Gloria Willingham of Overland Park, Kansas, who were among the studio audience, gave Bernanke two thumbs up.

"I&&9;m very impressed with Bernanke. I strongly hope that Obama sees fit to reappoint him -- it would be bad for the economy if he didn&&9;t," Elbert Willingham said.

"He&&9;s down to earth and believable. He&&9;s got the ideas, but also the practical understanding," his wife added. "He cares about the small businessman.

Bernanke&&9;s term as chairman ends in January and while his reappointment is seen as likely, it is not a given.

Sunday&&9;s event was the latest in a series of moves by Bernanke to communicate outside of the Fed&&9;s usual channels.

Bernanke recently spoke at the National Press Club in Washington, and last week outlined the Fed&&9;s likely "exit strategy" from its unconventional policy programs in an op-ed piece in the Wall Street Journal.

(Additional reporting by Mark Felsenthal in Washington; Editing by Andrea Ricci)

Fed's Bernanke takes his message to the heartland

Hot News: Report Sees Recovery for Global Tech Firms

HONG KONG &<51; The Chinese Health Ministry on Thursday ordered sharp restrictions on Internet access to medical research papers on sexual subjects. It is the latest move in what the ministry calls an antipornography campaign that many China experts see as a harbinger of a broader crackdown on freedom of expression and dissent.

In the past month, central government officials have cited a need to control pornography in ordering that filtering software be preinstalled on all new computers sold in China starting July 1.

They have also forced Google to disable a function that lets the search engine suggest terms and on Wednesday night even briefly blocked access nationwide to Google&S217;s main search engine and other services like Gmail. Some users were still having problems accessing Google sites on Thursday night.

In addition, Chinese bloggers say they have detected evidence of a concerted effort to stain Google&S217;s image. They say that someone in Beijing manipulated Google&S217;s software to make it more likely to suggest a pornographic search term during a state television broadcast.

At the same time, the government seems to have stepped up harassment of human rights advocates.

Liu Xiaobo, one of China&S217;s best-known dissidents, was formally arrested Tuesday on suspicion of subversion, six months after he was detained for joining other intellectuals in signing a document calling for democracy. This month, the authorities refused to renew the licenses of more than a dozen lawyers after they agreed to represent clients in human rights cases.

The same public security agencies charged with fighting pornography are responsible for suppressing illegal political activity, said Nicholas Bequelin, a researcher in Hong Kong for Human Rights Watch. The government&S217;s statistics for seizures of illegal publications tend to include both pornographic and political documents, he noted.

&S220;The two are closely associated,&S221; Mr. Bequelin said. &S220;These campaigns work hand in hand.&S221;

The emphasis on pornography echoes a similar crackdown in late 2005 and early 2006, rights advocates say.

At the time, seeking to allay official Chinese concerns about pornography, Google designed a new search engine for Google.cn, its Chinese service, that would not pull up references to politically delicate subjects like Falun Gong, the banned spiritual movement, or the 1989 killings in and around Tiananmen Square.

While denouncing pornography, propaganda officials reined in publications that were challenging government policies. This included the closing of Freezing Point, a popular journal of news and opinion, and the replacement of top editors at three other publications.

The Health Ministry posted regulations this week requiring medical information providers to restrict access to articles on sexual subjects. The penalty for violations is up to $4,400, with the potential for criminal prosecution for a pattern of uncorrected offenses.

At a news conference on Thursday, a Foreign Ministry spokesman, Qin Gang, was quick to criticize Google for allowing too many links to unseemly sites, saying, &S220;It is every government&S217;s responsibility to protect their teenagers from porn and vulgar information on the Internet.&S221;

On Wednesday, the American commerce secretary, Gary F. Locke, and Ron Kirk, the United States trade representative, sent a letter to Chinese officials protesting the country&S217;s proposal that all computers sold in the country be equipped with filtering software.

&S220;China is putting companies in an untenable position by requiring them, with virtually no public notice, to preinstall software that appears to have broad-based censorship implications and network security issues,&S221; Mr. Locke said in a statement. The United States government did not release the text of the letter.

Asked about the complaint on Thursday, a Chinese Foreign Ministry spokesman said only that he had previously defended the decision to require the software.

Google said Thursday that it was trying to limit access to pornography.

&S220;Google has been working to remove pornography from our search results in China, in accordance with our operating license there,&S221; the company said.

&S220;This has been a major engineering effort,&S221; the company said, &S220;and we believe we have addressed many of the problems identified by the government.&S221;

The government began stepping up pressure on Google last week. CCTV, the state-owned television monopoly, broadcast an interview in which the announcer typed the word &S220;son&S221; into a Google search engine and was dismayed that one of the search terms suggested in Chinese was an &S220;abnormal relationship between son and mother.&S221;

Google&S217;s software makes it possible to analyze the frequency and source of search terms. In a check on Thursday, Google&S217;s Web site showed that no one had entered the phrase &S220;abnormal relationship between son and mother&S221; in Chinese for months until it suddenly became a popular phrase entered only in Beijing in the days before the show, making it more likely that it would pop up as a suggested search term.

The same CCTV show included an interview with a young man, identified as a college student, who expressed horror at pornography on the Internet. Chinese bloggers have since identified the man as an intern for CCTV.

Many Chinese regulations ostensibly aimed at controlling illicit sexual activity could also be used to restrict political activity unacceptable to the authorities.

For example, Chinese law requires that karaoke bars, nightclubs and Internet cafes be monitored 24 hours a day by closed-circuit television cameras on the grounds that prostitutes may try to find clients at such locations. But according to security industry executives, China&S217;s anti-prostitution surveillance regulations are stricter on the Internet cafes.

While nightclubs and karaoke bars are required to store their video records on their premises, Internet cafes must be wired to the nearest police station and provide a continuous, instantaneous record of who is using which computer. If an e-mail message from a cafe&S217;s computer later catches the attention of investigators, the police can review the video records to see who was using the computer.

The last major crackdown on pornography and political expression lasted several months and began to ebb in February 2006, after a dozen former Communist Party officials and senior scholars issued a public letter denouncing the closing of a prominent news journal.

But by then, the government had won some major concessions. Not only had Google agreed to remove considerable political content from its Chinese service, but Microsoft had disabled some blogging activity critical of China, and Yahoo had handed over the identity of an e-mail user who had shared a propaganda directive; the user was sentenced to 10 years in prison.

Edward Wong contributed reporting from Beijing. Zhang Jing and Huang Yuanxi contributed research from Beijing, and Hilda Wang from Hong Kong.

Beijing Adds Curbs on Access to Internet

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TOKYO (MarketWatch) -- The dollar slipped against the euro in Asian trading Friday, but was a few ticks higher against its Japanese counterpart.

The dollar bought 95.88 yen, steady from 95.85 yen in late North American trading late Thursday.

The euro was changing hands at $1.4048, up from $1.3988 late Thursday. The British pound rose to $1.6492, compared with $1.6376 late Thursday.

On the data front, Japan's core consumer price index fell 1.1% in May from the same month a year earlier, according to government data released Friday, indicating risks that the nation might be slipping back into deflation. See Economic Report on Japan CPI.

The drop was in line with expectations of economists polled by Dow Jones Newswires and Nikkei. The core figure excludes volatile fresh food prices. Core CPI fell 0.1% on year in April.

The Bank of Japan "cannot rest assured and withdraw liquidity so long as consumer price declines persist," said Japan strategist at the Bank of Tokyo-Mitsubishi in a note to clients Friday.

Currencies: Dollar slips against euro, pound; steady vs. yen

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NEW YORK (MarketWatch) -- The dollar fell versus the euro and traded mixed against other major counterparts Thursday as a gauge of jobless claims buoyed hopes that the nation's labor market is showing signs of improvement.

The number of continuing claims filed for jobless benefits during the first week of June declined to the lowest since early May, government data showed.

And a pair of reports showed improvements in manufacturing in the Philadelphia region and in a national index of leading economic indicators, also serving to weigh on the U.S. currency.

"Continuing claims always stabilizes or declines near the end of a recession and today's report is a strong sign that the U.S. economy is turning around," said Kathy Lien, director of currency research at Global Forex Trading. "It appears that the prior disappointments in U.S. economic data are not a trend, which should help to drive equities higher and the dollar lower."

The euro rose to buy $1.3982, compared to $1.3948 in late North American trading Wednesday.

The dollar index , a measure of the greenback against a basket of major currencies, stood at 80.228, compared to 80.289 late Wednesday.

In recent months, the U.S. currency has been more correlated with equity markets, such that rising equities indicated more willingness among investors to take risks and less of a need for the safe-haven status of the dollar.

But some analysts expect that relationship to weaken and return to a more traditional focus on positive economic data being good for the dollar.

A key gauge of U.S. equities, the Standard & Poor's 500 Index rose 0.8%. See more on stock markets.

Signs that carry trade's back on

"Today's price action suggests that growing risk tolerance is bolstering equity and commodity prices, and drawing players back to the carry trade," said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon.

Carry trades are when traders borrow lower-yielding currencies, such as U.S. dollars and Japanese yen, and invest them in assets denominated in higher-yielding currencies, often the Australian and New Zealand dollars.

The strategy lost popularity as the financial crisis grew and traders, fearing losses, liquidated their positions. The return is also a symptom of rising risk appetite, with more carry trades being funded in yen, Woolfolk said.

The dollar edged up to 96.38 yen from 95.66 yen on Wednesday.

Data deemed encouraging

The dollar began turning lower after the Labor Department said continuing unemployment claims fell by 148,000 to 6.68 million during the week ended June 6, the lowest level in about a month.

Initial claims, meanwhile, rose slightly in the week ended June 13, up by 3,000 to a seasonally adjusted 608,000, very close to the median forecast of economists surveyed by MarketWatch. See more on jobless claims.

"This week's data, in conjunction with recent weeks, suggest that the trend in unemployment claims is ebbing. ... Not that we are out of the woods, but the worse of the contraction is behind, and possibly over," said Ray Stone, co-founder of Stone & McCarthy Research Associates.

Meanwhile, manufacturing firms in the Philadelphia region reported the best business conditions since September, a Federal Reserve Bank of Philadelphia survey showed. The Philly Fed index improved more than economists surveyed by MarketWatch predicted. See more on Philly Fed.

Further underscoring this trend, the Conference Board said that the recession is "losing steam" and that a slow recovery should begin by the end of the year.

The research organization based this conclusion on its index of leading economic indicators, which rose 1.2% in May for the second straight increase. The increase was in line with the MarketWatch consensus forecast of 1.1% increase. See more on leading indicators.

"Two consecutive months now of strong gains in the leading indicators is the strongest evidence to date supporting the 'green shoots' rally," Woolfolk said.

Traders are also tuned into Treasury Secretary Timothy Geithner's testimony to Congress on the regulatory-overhaul plan that the Obama administration announced Wednesday.

"He will be attacked by the right for smothering free markets and by the left for not reining in cowboy capitalists enough," T.J. Marta, chief strategist at Marta on the Markets, wrote in a note.

Swiss franc in the news

The Swiss franc fell Thursday after the Swiss National Bank made good on a threat to intervene in foreign-exchange markets to halt the currency's rise, traders and strategists said. See more on Swiss franc.

The euro erased earlier losses versus the Swiss unit to trade at 1.5140 francs in recent action, a gain of 0.5% on the day. The euro had traded as high as $1.5137.

Currencies: Dollar slides as data suggest U.S. recovery

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