Stock futures edge higher, Deere jumps after outlook

NEW YORK (Reuters) - Stock index futures edged higher on Wednesday, suggesting the market would continue a recent advance that lifted benchmark indexes to multi-year highs.

While the long-term trend in markets should remain positive, some investors may take profit at current levels, analysts said, with the S&P near its highest since November 2007. Recent daily moves have been small and trading volume light as investors search for fresh impetus to drive stocks higher.

Equities have been strong performers of late, buoyed largely by healthy growth in corporate earnings, with the S&P 500 gaining 6.5 percent so far this year. The Dow is about 1 percent from an all-time intraday high, reached in October 2007.

"This is a market that refuses to go down, and the trend suggests that we'll not only hit a new high on the Dow, but move well beyond it," said Adam Sarhan, chief executive of Sarhan Capital in New York.

Sarhan noted that the S&P 500 was well over its 50-day moving average of 1,460.92, which he said was a sign the market was overbought.

"A light-volume pullback should be expected and embraced at these levels," he said.

Industrial and construction shares will be in focus a day after President Barack Obama's State of the Union address, during which he called for a $50 billion spending plan to create jobs by rebuilding degraded roads and bridges. He also backed higher taxes for the wealthy.

Retail sales data for January is scheduled for release at 8:30 a.m. ET and are seen up 0.1 percent as consumer paychecks shrank following a recent tax increase. Sales rose 0.5 percent in December.

Investors have cheered strength in recent company results, even as economic data, including recent reads on gross domestic product, have indicated some weakness.

Deere & Co jumped 2.1 percent to $95.99 in premarket trading after the farm equipment maker reported results and raised its full-year profit outlook.

S&P 500 futures rose 2.9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 19 points and Nasdaq 100 futures rose 7.25 points.

Comcast Corp agreed late Tuesday to buy General Electric Co's remaining 49 percent stake in NBC Universal for $16.7 billion. Comcast jumped 8 percent to $42.10 in premarket trading while Dow component GE was up 3.2 percent to $23.31.

Yahoo Inc Chief Executive Marissa Mayer said Tuesday the company's search partnership with Microsoft Corp was not delivering the market share gains or the revenue boost that it should.

Companies scheduled to report quarterly results on Wednesday include MetLife Inc , Applied Materials and Whole Foods Market .

According to the latest Thomson Reuters data, of 353 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Also in economic news, business inventories are seen rising 0.3 percent in December, a repeat of the November increase. The data is due at 10:00 a.m. ET

Stocks closed modestly higher Tuesday as investors awaited President Barack Obama's State of the Union address.

(Editing by Bernadette Baum)

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Player regrets getting entangled with match-fixing

ZAGREB, Croatia (AP) — Soccer player Mario Cizmek thought it would just be one match. Ease up and let the other team win, he told himself, then collect the payoff and start paying off your debts.

But the broke and desperate athlete soon learned that one match wouldn't do it. He would have to throw another game, then another, then another.

And so it went until, in what he described as his "worst moment," he was arrested at his home in front of his two daughters on charges of match-fixing, frantically dialing his wife to take the children because police were hauling him off to jail.

"Twenty years of hard work I destroyed in just one month," he said.

___

EDITOR'S NOTE: This story is part of a six-month, multiformat AP examination of how organized crime is corrupting soccer through match-fixing.

___

The Croatian midfielder was the perfect target for fixers: He was nearing the end of his career, his financially unstable club hadn't paid him a regular salary for 14 months, and he owed money on back taxes and his pension.

Cizmek's story is typical of how the world's most popular sport is increasingly becoming a dirty game — sullied by criminal gangs like the one that bribed Cizmek, and by corrupt officials or others cashing in on the billion-dollar web of match-fixing.

An examination of Cizmek's case turns up contrasting portraits of the 36-year-old with quick feet and an engaging smile.

One is of a victim — a player forced into match-fixing by an unscrupulous club and preyed upon by a shadowy former coach convicted of bribery, fraud and conspiracy in a Croatian match-fixing case and banned for life from soccer by FIFA, the world soccer body. That's the picture painted by FIFPro, the global players' union, which has used Cizmek's story to warn players.

Croatian prosecutors, armed with reams of phone calls and text messages from police wiretaps, have a different take. At a match-fixing trial at the County Court of Zagreb, they portrayed Cizmek as the ringleader who got several FC Croatia Sesvete players to throw six games and tried to fix a seventh in spring 2010. The authorities said he organized the players, handed out sealed blue envelopes of euros, and promised that they could stop whenever they wanted.

Cizmek readily admits he delivered the payments but says it was only because his apartment was closest to the fixer. Looking back, he says, he realizes he was manipulated.

"Now I see that he didn't want to be seen handing over the money," he said in an interview with The Associated Press.

___

Cizmek joined FC Zagreb on a junior scholarship, signed at 18, and played there for eight years.

"Those were the best years. All my dreams came true," he said. "I signed a professional contract and was among the better players. They thought highly of me. I was even a captain of this club."

After stints in Israel and Iceland, he returned home to play for FC Croatia Sesvete in the country's second league. In 2008, Cizmek scored the goal that sent his team into the top division. That goal benefited every player on the team and lined the pockets of the club's owner, Zvonko Zubak.

But the team fell on hard times, especially with the European economic downturn.

The entire FC Croatia Sesvete locker room was in an uproar for months, with players trying to make ends meet, Cizmek said. A study by the FIFPro union reported that more than 60 percent of Croatian players do not get paid on time.

"We had no money, and we no longer spoke about training or football, but only about how we were going to survive," Cizmek said.

"Every other day we would ask whether we would be paid, and they would say 'Yes, on Monday.' Then we say, 'OK, on Monday,'" he said. But there would be no pay on Monday — only a promise to be paid Wednesday — and then no money that day either.

"It would go on for weeks," Cizmek said, shaking his head.

One man who hung around the players offering advice and sympathy — and loans to those short on cash — was Vinko Saka, a former assistant coach for Dinamo Zagreb, the soccer powerhouse that has won Croatia's national title every year since 2006.

Saka was always somewhere around the field or at the bars where the players gathered, Cizmek said.

A flashy figure in his 50s who drove a BMW X6, he promised to introduce young players to the dozens of foreign coaches and clubs he said he knew.

"He was always offering presents," Cizmek said. "I had known Vinko for years. We were kind of friends. He was someone who was related to sports, whom I was seeing at the matches. He coached junior teams."

Midfielder Dario Susak, then 22, testified that Saka suggested he could help him get a contract with a foreign club, then loaned him $2,550 at a high interest rate. Once he owed the money, Susak testified, Saka told him he would have to lose matches.

Unbeknownst to any of them, Croatian police were already running a wiretap on Saka after being tipped off by German investigators.

Croatian prosecutors said Saka bribed up to 10 people on Cizmek's team, and another five tied to either FC Varteks or FC Medimurje.

Saka ended up being convicted of fraud, bribery and conspiracy and going to jail. His lawyer confirmed the plea bargain but wouldn't discuss the case.

___

The deal involving Cizmek came together at Fort Apache, a steakhouse on the truck route between Zagreb, the Croatian capital, and Slovenia. Cizmek and his goalkeeper met there with Saka and two associates on March 25, 2010, to fix a game with FC Zadar two days later, according to players' testimony and police transcripts.

Six players would get $24,220, although the money was not divided equally. One of the unwritten rules of match-fixing is that the goalkeeper gets the biggest share because his statistics suffer the worst blow; defenders get the next-biggest, midfielders get less and strikers often are not even included in the fix.

The result: Zadar won 2-1 as Cizmek, one of the best players, stayed on the bench. After the game, he said, he collected $2,550, bought his kids a bunk bed and stashed the rest away, saving up to pay an overdue tax bill.

Cizmek saw himself as a Robin Hood-sort of figure: stealing money from crooks to put food on the table for his teammates and their families who were being crushed by an unjust system.

The match-fixing train had begun rolling, and it would prove difficult to stop.

The stakes were raised for an April 3 match against FC Slaven Belupo, according to players' testimony. This time it was $51,000 for eight players. They not only had to lose, but to do so by at least three goals. That enabled those in on the deal to win two bets in one match.

Cizmek's team lost 4-0. Saka, however, delivered only $43,300, eight Croatia Sesvete players testified in court. Cizmek said Saka did not explain why.

The demands for an April 14 game against FC Rijeka were even greater: $51,000 to trail at halftime, a final score that included more than three goals, with the team losing by at least two goals, Cizmek testified.

Player Ante Pokrajcic testified that he was happy to have scored a goal until the team's owner stormed into the locker room, cursing about the 1-1 halftime score. Only then did Pokrajcic realize the game had been fixed.

The team lost 4-2, but Saka delivered only about half of what was promised, according to players' testimony.

The players were furious. In the next game, they won 3-1 against Inter Zapresic.

But another unwritten rule of match-fixing soon became clear to Cizmek: Once a player has fixed a game, he is trapped forever.

The criminal gang usually has enough evidence to get a player thrown out of the sport for life. Plus, the shame alone will keep him silent, and the fixer's demands will keep escalating until the player quits, retires or gets caught. Some implicated in match-fixing have even committed suicide.

When Cizmek approached the goalkeeper and a midfielder about fixing an April 17 game against FC Lokomotiva, they refused. He handed the money back to Saka two hours before the game, he said.

"If I was really the ringleader, I could have made them do it," he told the AP. "But I couldn't do it. ... We told them, 'No more.'"

Saka exploded in anger but made sure not to bet, Cizmek said. FC Lokomotiva won 2-1 anyway, and Cizmek said he scored a goal "just for pride" in the second half.

For the last three games of the season, Saka went above the players' heads to fix the game, according to players' testimony. Those involved now included the coach and one of the owner's sons — both of whom were convicted in the case.

"Saka came to me and said, 'I have arranged everything higher up. If you want you can check with the son,'" Cizmek said.

Cizmek said he refused to deliver that message to the other players, making the son talk individually with each athlete. Other players confirmed his account in court. Cizmek said the fixer made sure not to involve the owner's other son, a young player on the team.

With substantial bribes now going to the coach, the payouts for the players grew meager: $22,300 for seven players in the last game, according to testimony.

Overall, Cizmek earned $26,130 from match-fixing, not as much as goalkeeper Ivan Banovic ($37,600), defender Jasmin Agic ($35,000) or coach Goran Jerkovic ($33,000), according to the findings of the court in its sentencing document.

___

The season ended in early May but police did not come knocking until June 8.

Cizmek was arrested at his home and taken to Zagreb's Remetinec jail, where he stayed until July 15. His wife handed police the $20,000 he had been saving for his tax bill. The bunk beds were all he had to show for his money.

He went on trial for match-fixing with 14 others.

With the wiretaps, prosecutors had a very strong case. Cizmek made a full confession, pleaded guilty and gave testimony to the players' union against match-fixing. But he and the coach still got the longest sentence — 10 months.

The goalkeeper, the owner's son and three others were given nine months; two players got eight months; and the youngest member of the team, a 20-year-old midfielder, got a seven-month suspended sentence.

They are now free, awaiting the result of their appeal.

Saka cut a plea bargain with prosecutors in which he was convicted of fraud, bribery and conspiracy to commit a crime against the public order and sentenced to one year in prison. The Zagreb court ordered him to pay back $58,800 of the $844,000 it estimated his fixing operation made in Croatia.

Saka served his time in jail and then went to Italy to be questioned in a match-fixing investigation there. His lawyer in Italy, Kresimir Krsnik, said prosecutors have six months to decide whether to press charges.

"Saka will answer any call from the court. He has given his statement there and returned home," Krsnik told the AP.

Saka is back living in an affluent Zagreb neighborhood, driving around in his BMW.

___

Cizmek is trying hard not to be bitter.

Chain-smoking Marlboros at a Zagreb coffee bar, he dreads going back to jail.

"I was in there already, with murderers and rapists and drug addicts," he said. "It was a scary place."

He is angry that Saka got a much better plea deal than the players and doesn't hold out hope for his appeal, which is pending.

He says his club still owes him salary but went bankrupt in 2012 and dissolved.

He works on his family's organic farm, peddling jams and berry tea at farmers' markets, but is just scraping by. In one of his last interviews with the AP, Cizmek mentioned his recent divorce, and worry lines around his eyes seemed deeper.

He mourns for his lost soccer career and doesn't know what he will do with the rest of his life.

"I should have just taken my football shoes and hung them on the wall and said: 'Thank you, guys' and gone on to do something else," Cizmek said.

Still, he knows what he did was wrong.

"Everything I lost is my fault. I need to take the responsibility. I don't blame anyone, not even Saka," he said. "No one made me do this."

He cited an old Balkan expression: "The one who confesses, half their sins will be forgiven."

"I have opened my soul to you," he said. "I hope it will pay me back in karma for being so honest."

___

Norman-Culp is AP's Assistant Europe Editor in London. Prior to that, she covered FIFA for AP in Zurich. Follow her at snormanculp(at)twitter.com

EDITOR'S NOTE: This story is part of a six-month, multiformat AP examination of how organized crime is corrupting soccer through match-fixing.

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Africa 'must think big for its children'

Children at school in the Mukuru kwa Njenga slum in Nairobi, Kenya.

STORY HIGHLIGHTS

• New report shows that policies across Africa are helping children's development


• But laws must improve to help children reach potential, says Catherine Mbengue


• Scrapping fees in Malawi saw entry to primary school jump from under 50% to 99%


• At secondary level, education in much of the region is deeply limited, Mbengue says

Editor's note: Catherine Mbengue is a Trustee of the African Child Policy Forum (ACPF) and former senior UNICEF Official. Here, she writes about a new report -- "Children's Chances: How Countries Can Move from Surviving to Thriving," released by Harvard University Press on 13 February 2013.

(CNN) -- Africa has always been a continent of contrasts. And the latest findings from an amazing team of international researchers show that when it comes to providing our children with the best chances in life, Africa once more presents a very mixed picture.

In a new report, never-before-available comparative data on laws and public policies in 191 countries, covering poverty, discrimination, education, health, child labor, child marriage and parental care, reveals how millions of children across the world face conditions that limit their opportunities to thrive and reach their full potential because of governments failure to act.

This new research aims to broaden global attention from solely survival to children's full and healthy development. It comes at a critical time as the global community is looking to set new goals and agree on what all the world's nations will strive for in the so-called "post-2015" agenda following more than a decade of efforts focused around the Millennium Development Goals (MDGs).

Catherine Mbengue

Children's opportunities are not just shaped by parents and families, but also by national action in the form of laws and public policies.

This may involve removing tuition fees, ensuring inclusive education for children with disabilities, enforcing minimum age requirements for labor, age restrictions for marriage so girls might have a better chance to stay in education, or assisting parents to be able to earn enough to support their children and have the time off from work they need to care for their children's health and education.

Read more: Africa grows, but youth get left behind

And as the new analysis confirms, marked strides have been made across sub-Saharan Africa in areas central to our children's healthy development.

Primary education is tuition free across the majority of the region (in 36 of the 41 countries with available figures) and 13 countries have removed charges for secondary education.

In addition, virtually all sub-Saharan African countries (45 of the 46 countries with data) guarantee paid maternity leave (although of these 23 provide less than the 14-week minimum established by the ILO), and 41 of 45 countries have recognized the need to provide income support during periods of unemployment (although this largely does not cover the informal economy).

And progress in improving children's chances does not necessarily rely on the ability to open large purses. Some low and middle-income countries have made impressive advances for children.

Kenya, for example, makes education compulsory for 12 years, longer than all other countries in the region, including those with a higher GDP, and it has a higher minimum age for full-time work than its neighbors.

Elimination of schools fees in Malawi in the 1990s has led to a jump in primary school enrollment from under 50% in 1991 to 99% in 1999.

Read more: Elite boarding school aims to create Africa's future leaders

Madagascar provides not only paid maternal leave, but also paid leave for children's health and family needs. Progress is clearly possible when there is political will.

There remains substantial room for policy advances to transform the lives of older children, youth and the poorest.
Catherine Mbengue, Trustee of the African Child Policy Forum

But there remains substantial room for policy advances to transform the lives of older children, youth and the poorest. At secondary level, educational opportunities in much of the region are deeply limited -- and limiting. A greater proportion of countries in sub-Saharan Africa than in other regions -- some 61% -- begin charging tuition fees before the end of secondary school.

When we look beyond the issue of accessibility to the quality of education our children receive -- after all it should be fit for purpose -- the region has among the lowest education requirements for teachers, with 50% of countries requiring lower secondary school teachers to have completed no higher than a secondary education (so teachers have barely more education that their students).

Plus, while policies in the formal economy are relatively strong in terms of supporting families, those in the informal economy remain unprotected.

Despite the fact that many countries have set a minimum wage, in 6 countries this wage is just $2 per day or less -- and in 20 others is between $2 an $4, leaving even a family of one adult and one dependent under the $2 poverty line. How can we expect children to thrive given this reality?

What this kind of comparative data and analysis allows us to do is see more clearly where progress is and isn't occurring.

It is only when we begin to call out country's names -- the leaders and the laggards -- that we'll see all children count on having a childhood where they can go to school and not labor full-time, a childhood free of marriages that require them to parent before they have grown up themselves, getting the education they need to find work that will lift them out of poverty, and not facing discrimination based on their gender or ethnicity.

Africa should be a region that has high ambitions for its children and demand that the post-2015 development agenda is one that thinks big for our children and their chances.

Read the report and stay up to date on Twitter #kidschances.

The opinions expressed in this commentary are soley those of Catherine Mbengue

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Obama to Republicans: Can we just move on?

President Obama highlighted numerous parts of his agenda during his State of the Union Address. AP White House Correspondent Julie Pace reports, the tough part will be turning words into action. (Feb. 13)

WASHINGTON -- President Barack Obama used his State of the Union address on Tuesday night to try to push past the fiscal battles that plagued his first term - and still threaten his second - as he laid out an agenda he hopes will shape his legacy.

Obama's overarching message was that other things matter beside the Republicans' seemingly all-consuming drive for deficit cutting, embodied in a looming showdown just three weeks away over automatic across-the-board spending cuts.

Those other things, he told Congress, include some traditionally liberal causes, like raising the federal minimum wage and pursuing climate initiatives, and some that have gained bipartisan support, such as immigration reform and curbing gun violence.

"Most of us agree that a plan to reduce the deficit must be part of our agenda," Obama said. "But let's be clear: deficit reduction alone is not an economic plan."

But with Washington so deeply divided, Obama's speech appeared unlikely to go far in helping the Democratic president and his Republican opponents find common ground to ease the ideological gridlock. He offered no tangible new concessions of his own.

Still, Obama's sense of urgency and frustration was almost palpable. He alternately scolded and cajoled lawmakers while expanding on his vision for a more activist government so loathed by conservatives, the same theme he struck in his second inauguration address on January 21.

"The American people don't expect government to solve every problem. They don't expect those of us in this chamber to agree on every issue. But they do expect us to put the nation's interests before party," he said, pressing Republicans to resolve budget and fiscal differences without drama.

Obama - whose first-term promise to become a transformational, post-partisan president failed to materialize in part because of struggles over the deficit - knows the clock is ticking.

The consensus among Washington insiders is that he has a limited window, possibly as little as a year and a half, to take advantage of the Republicans' post-election disarray and push through his congressional priorities before being reduced to lame-duck status.

SETTING PRIORITIES

Just three weeks after staking out a decidedly liberal philosophy at his inauguration, Obama used his State of the Union address to start fleshing out and prioritizing his goals for the rest of his presidency.

He made clear that job creation and bolstering the middle class would top the list, but he also gave due attention to immigration reform and gun control, which have moved to the forefront at the start of his second term.

Obama's renewed emphasis on pocketbook issues that dominated the 2012 campaign appears to reflect the view that advancing other legacy-shaping initiatives could hinge on how he fares with unfinished economic business from his first four years.

Many of the economic plans he presented in his State of the Union address were familiar to listeners as proposals that Republicans have blocked before, including new investment in modernizing infrastructure, boosting manufacturing, creating construction jobs and helping to ease homeowners' mortgage woes.

There is ample reason to doubt that these ideas - even in repackaged form - will gain much traction in a still-divided Congress where Republicans control the House of Representatives and will oppose almost any new spending Obama proposes.

But the biggest red flags for Republicans may be Obama's call for a hike in the federal minimum wage to $9 an hour, a traditional liberal idea, and his demand that Congress pursue a "market-based solution" to climate change - with a warning that if lawmakers do not act soon, "I will."

Obama's call for a nationwide program to expand pre-school education for the low-income families - another progressive cause - is also expected to run into Republican opposition.

There is little doubt the president is aware that many of these proposals, especially those with spending attached, may be dead-on-arrival in Congress.

But he may be counting on being able to accuse Republicans of obstructionism in the 2014 midterm elections - as he did with some success in the 2012 campaign - as his Democrats seek to win back the House.

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Pope asks for support after decision to resign, says strength diminishing

VATICAN CITY (Reuters) - Pope Benedict, in his first public comments since he announced that he would become the first pontiff in centuries to resign, on Wednesday said he was fully aware of the gravity of his decision but confident that it would not hurt the Church.

"Continue to pray for me, for the Church and for the future pope," he said in unscripted remarks at the start of his weekly general audience, one of his last public appearances before he resigns on February 28.

The pope, who looked and sounded strong, was interrupted several times by thunderous applause from the some 8,000 faithful and tourists who packed the vast audience hall.

In brief, prepared remarks that mirrored those he read to stunned cardinals when he announced his decision on Monday, the pope said God would continue to guide the Church because it was much more than its earthly leader.

"I took this decision in full freedom for the good of the Church after praying for a long time and examining by conscience before God," he said.

He said he was, "well aware of the gravity of such an act but at the same time aware of not being able to carry out my (papal) ministry with the physical and spiritual force that it requires".

Benedict said he was sustained by the "certainty that the Church belongs to Christ, who will never stop guiding it and caring for it".

He said that "he felt almost physically" the affection and kindness he had received since he announced the decision.

Later on Wednesday, an Ash Wednesday Mass that was originally scheduled to have taken place in a small church in Rome, has been moved to St Peter's Basilica so more people can attend.

Unless the Vatican changes the pope's schedule, it will be his last public Mass.

(Reporting By Philip Pullella; editing by Barry Moody)

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Yen steady, euro dips after G7 urges against FX war

LONDON (Reuters) - The yen hovered near three-year lows against the dollar and the euro fell on Tuesday after the G7 nations urged countries to refrain from competitive devaluations and a U.S. official backed Japan's new anti-deflation policies.

The Group of Seven industrialized nations published a statement saying it remained committed to "market-determined" exchange rates, reacting to weeks of concern that Japan's monetary easing policy, which has also weakened its currency, could trigger far-reaching currency wars.

"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," the group said.

Japan's Finance Minister Taro Aso welcomed the G7 statement, saying it showed the group recognized Japan's new anti-deflation policy was not aimed at affecting foreign exchange markets.

By 5:30 a.m. ET the yen was close to a three-year low of 94.31 to the dollar. The euro was down 0.2 percent versus the dollar and 0.5 percent lower at 125.90 yen after rising over 2 percent on Monday.

Treasury Undersecretary Lael Brainard said on Monday the United States supported Japanese efforts to end deflation, but also noted the G7 has long been committed to exchange rates determined by market forces.

The euro, the main riser among major currencies over the last few months as confidence in the euro zone has rebounded and the yen has slumped, was back at $1.3405 following the G7 statement.

It had risen briefly earlier after ECB Vice President Vitor Constancio said the bank's employment growth and inflation forecasts next month were likely to be close to the December figures.

The comments doused rate cut hopes, only re-kindled last week by the head of the bank, Mario Draghi, who said it was looking to see whether the euro's recent rise risked pushing inflation below its comfort zone.

SPAIN FOCUS

Having started the day down 0.2 percent, European shares were almost level again by 5:30 a.m. ET as London's FTSE 100 <.ftse> and Paris's CAC-40 <.fchi> recovered, though Frankfurt's DAX <.gdaxi> remained down 0.2 percent.

In the bond market, Spanish and Italian bonds inched up as domestic buyers took advantage of a recent sell-off, but the recovery looked fragile given political uncertainty in both countries.

Spain sold 5.6 billion euros ($7.5 billion) of 6- and 12-month Treasury bills, beating the top end of the target amount, but paid a higher yield on the longer-term paper as a political corruption scandal weighed on shaky confidence.

The ECB's Draghi is due to address Spanish lawmakers later on Tuesday to explain and defend the ECB's current monetary policy strategy against a backdrop of heightened concerns about the strong euro.

Draghi is also expected to meet Prime Minister Mariano Rajoy, but the market does not expect them to discuss whether Madrid might need financial aid, which would trigger the ECB's bond purchase scheme.

Financial markets showed a muted reaction, meanwhile, to the news that North Korea has conducted a nuclear test.

The nuclear test monitoring agency said the blast was double the size of its 2009 test. NATO condemned the move, calling it an "irresponsible act" that posed a grave threat to world peace.

"The test was not something that makes your heart pound as much as a pressing situation between Iran and Israel," said Kaname Gokon, research manager at brokerage Okato Shoji, referring to the threat of possible military action to prevent Iran from developing nuclear weapons.

Brent oil dipped to just under $118 a barrel, copper was flat, while spot gold stayed near a one-month low.

(Editing by Will Waterman)

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IOC drops wrestling from 2020 Olympics

LAUSANNE, Switzerland (AP) — IOC leaders dropped wrestling from the Olympic program on Tuesday, a surprise decision that removes one of the oldest Olympic sports from the 2020 Games.

The IOC executive board decided to retain modern pentathlon — the event considered most at risk — and remove wrestling instead from its list of 25 "core sports."

The IOC board acted after reviewing the 26 sports on the current Olympic program. Eliminating one sport allows the International Olympic Committee to add a new sport to the program later this year.

Wrestling, which combines freestyle and Greco-Roman events, goes back to the inaugural modern Olympics in Athens in 1896.

"This is a process of renewing and renovating the program for the Olympics," IOC spokesman Mark Adams said. "In the view of the executive board, this was the best program for the Olympic Games in 2020. It's not a case of what's wrong with wrestling, it is what's right with the 25 core sports."

Adams said the decision was made by secret ballot over several rounds, with members voting each time on which sport should not be included in the core group. IOC President Jacques Rogge did not vote.

Wrestling was voted out from a final group that also included modern pentathlon, taekwondo and field hockey, officials familiar with the vote told The Associated Press. They spoke on condition of anonymity because the voting details were not made public.

The board voted after reviewing a report by the IOC program commission report that analyzed 39 criteria, including television ratings, ticket sales, anti-doping policy and global participation and popularity. With no official rankings or recommendations contained in the report, the final decision by the 15-member board was also subject to political, emotional and sentimental factors.

The international wrestling federation, known by the French acronym FILA, is headed by Raphael Martinetti and is based in Corsier-sur-Vevey, Switzerland. Calls to the federation for comment were not immediately returned.

Wrestling featured 344 athletes competing in 11 medal events in freestyle and seven in Greco-Roman at last year's London Olympics. Women's wrestling was added to the Olympics at the 2004 Athens Games.

Wrestling will now join seven other sports in applying for inclusion in 2020. The others are a combined bid from baseball and softball, karate, squash, roller sports, sport climbing, wakeboarding and wushu. They will be vying for a single opening in 2020.

The IOC executive board will meet in May in St. Petersburg, Russia, to decide which sport or sports to propose for 2020 inclusion. The final vote will be made at the IOC session, or general assembly, in September in Buenos Aires, Argentina.

It is extremely unlikely that wrestling would be voted back in so soon after being removed by the executive board.

"Today's decision is not final," Adams said. "The session is sovereign and the session will make the final decision."

The last sports removed from the Olympics were baseball and softball, voted out by the IOC in 2005 and off the program since the 2008 Beijing Games. Golf and rugby will be joining the program at the 2016 Games in Rio de Janeiro.

Previously considered under the closest scrutiny was modern pentathlon, which has been on the Olympic program since the 1912 Stockholm Games. It was created by French baron Pierre de Coubertin, the founder of the modern Olympic movement, and combines fencing, horse riding, swimming, running and shooting.

Klaus Schormann, president of governing body UIPM, lobbied hard to protect his sport's Olympic status and it paid off in the end.

"We have promised things and we have delivered," he said after Tuesday's decision. "That gives me a great feeling. It also gives me new energy to develop our sport further and never give up."

Modern pentathlon also benefited from the work of Juan Antonio Samaranch Jr., the son of the former IOC president who is a UIPM vice president and member of the IOC board.

"We were considered weak in some of the scores in the program commission report but strong in others," Samaranch told the AP. "We played our cards to the best of our ability and stressed the positives. Tradition is one of our strongest assets, but we are also a multi-sport discipline that produces very complete people."

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Why pope will long be remembered

Tim Stanley says Pope Benedict will be seen as an important figure in church history.

STORY HIGHLIGHTS

• Timothy Stanley: Benedict XVI's resignation is historic since popes usually serve for life


• He says pope not so much conservative as asserting church's "living tradition"


• He backed traditionalists, but a conflicted flock, scandal, culture wars a trial to papacy, he says


• Stanley: Pope kept to principle, and if it's not what modern world wanted, that's world's problem

Editor's note: Timothy Stanley is a historian at Oxford University and blogs for Britain's The Daily Telegraph. He is the author of "The Crusader: The Life and Times of Pat Buchanan."

(CNN) -- Journalists have a habit of calling too many things "historic" -- but on this occasion, the word is appropriate. The Roman Catholic Church is run like an elected monarchy, and popes are supposed to rule until death; no pope has stepped down since 1415.

Therefore, it almost feels like a concession to the modern world to read that Benedict XVI is retiring on grounds of ill health, as if he were a CEO rather than God's man on Earth. That's highly ironic considering that Benedict will be remembered as perhaps the most "conservative" pope since the 1950s -- a leader who tried to assert theological principle over fashionable compromise.

Timothy Stanley

The word "conservative" is actually misleading, and the monk who received me into the Catholic Church in 2006 -- roughly a year after Benedict began his pontificate -- would be appalled to read me using it. In Catholicism, there is no right or left but only orthodoxy and error. As such, Benedict would understand the more controversial stances that he took as pope not as "turning back the clock" but as asserting a living tradition that had become undervalued within the church. His success in this regard will be felt for generations to come.

He not only permitted but quietly encouraged traditionalists to say the old rite, reviving the use of Latin or receiving the communion wafer on the tongue. He issued a new translation of the Roman Missal that tried to make its language more precise. And, in the words of one priest, he encouraged the idea that "we ought to take care and time in preparing for the liturgy, and ensure we celebrate it with as much dignity as possible." His emphasis was upon reverence and reflection, which has been a healthy antidote to the 1960s style of Catholicism that encouraged feverish participation bordering on theatrics.

Nothing the pope proposed was new, but it could be called radical, trying to recapture some of the certainty and beauty that pervaded Catholicism before the reforming Vatican II. Inevitably, this upset some. Progressives felt that he was promoting a form of religion that belonged to a different century, that his firm belief in traditional moral theology threatened to distance the church from the people it was supposed to serve.

If that's true, it wasn't the pope's intent. Contrary to the general impression that he's favored a smaller, purer church, Benedict has actually done his best to expand its reach. The most visible sign was his engagement on Twitter. But he also reached out to the Eastern Orthodox Churches and spoke up for Christians persecuted in the Middle East.

In the United Kingdom, he encouraged married Anglican priests to defect. He has even opened up dialogue with Islam. During his tenure, we've also seen a new embrace of Catholicism in the realm of politics, from Paul Ryan's nomination to Tony Blair's high-profile conversion. And far from only talking about sex, Benedict expanded the number of sins to include things such as pollution. It's too often forgotten that in the 1960s he was considered a liberal who eschewed the clerical collar.

The divisions and controversies that occurred under Benedict's leadership had little to do with him personally and a lot more to do with the Catholic Church's difficult relationship with the modern world. As a Catholic convert, I've signed up to its positions on sexual ethics, but I appreciate that many millions have not. A balance has to be struck between the rights of believers and nonbelievers, between respect for tradition and the freedom to reject it.

As the world has struggled to strike that balance (consider the role that same-sex marriage and abortion played in the 2012 election) so the church has found itself forced to be a combatant in the great, ugly culture war. Benedict would rather it played the role of reconciler and healer of wounds, but at this moment in history that's not possible. Unfortunately, its alternative role as moral arbiter has been undermined by the pedophile scandal. Nothing has dogged this pontificate so much as the tragedy of child abuse, and it will continue to blot its reputation for decades to come.

For all these problems, my sense is that Benedict will be remembered as a thinker rather than a fighter. I have been so fortunate to become a Catholic at a moment of liturgical revival under a pope who can write a book as majestic and wise as his biography of Jesus. I've been lucky to know a pope with a sense of humor and a willingness to talk and engage.

If he wasn't what the modern world wanted -- if he wasn't prepared to bend every principle or rule to appease all the people all the time -- then that's the world's problem rather than his. Although he has attained one very modern distinction indeed. On Monday, he trended ahead of Justin Bieber on Twitter for at least an hour.

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The opinions expressed in this commentary are solely those of Timothy Stanley.

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Hadiya's dad: 'Thanking God that these two guys are off the streets'

Two reputed gang members were out for revenge from a previous shooting when they opened fire on a group of students in a South Side park last month, killing 15-year-old Hadiya Pendleton in a heartbreaking case that has brought national attention to Chicago's rampant gun violence, police said.

Michael Ward, 18, and Kenneth Williams, 20, were each charged with first-degree murder, attempted murder and aggravated battery with a firearm in the Jan. 29 attack that also left two teens wounded.

Ward confessed to police that he and Williams mistook a Pendleton companion for rivals who had shot and wounded Williams last July, police Superintendent Garry McCarthy said at a news conference Monday night at the Area Central police headquarters.

Ward told police that he and Williams got out of their car, crept up on the group and opened fire in Harsh Park, McCarthy said. Williams then drove them from the scene, he said.

"The offenders had it all wrong. They thought the group they shot into included members of a rival gang. Instead it was a group of upstanding, determined kids who, like Hadiya, were repulsed by the gang lifestyle," said McCarthy, flanked by two dozen detectives and gang investigators who worked the case.

Detectives arrested the two Saturday night as the suspects were on their way to a suburban strip club to celebrate a friend's birthday, McCarthy said. Pendleton had been buried only hours earlier in a funeral attended by first lady Michelle Obama.

"I don't even know what to say about that," McCarthy said. "They were going out to celebrate at a strip club."

Williams did not confess and police have not recovered a weapon, McCarthy said. Both are due in bond court Tuesday.

Hadiya's father, Nathaniel Pendleton, said Monday night that news of the charges marked the first time since his daughter's slaying that he had a "legitimate" smile on his face.

"I'm ecstatic that they found the two guys," he told the Tribune during a brief telephone interview from Washington, D.C., where he and wife Cleopatra Cowley-Pendleton will attend the State of the Union address Tuesday as guests of President Barack Obama. "(I'm) thanking God that these two guys are off the streets, so that this doesn't happen to another innocent person."

Danetria Hutson, 15, who held Hadiya in her arms after she was shot, said she and others in the group have had nightmares since the shooting.

In addition to waking up in the middle of the night, Hutson, also a sophomore at King, said she and other in that group also haven't been able to bring themselves to hang out at parks since that day.

"A lot of us were actually paranoid because the guys were still out there," Hutson said in a telephone interview. "They knew where we went to school."

On Monday night, Hutson was a little frustrated because of the "ignorance" portrayed in social media, where some people are suggesting that Ward and Williams weren't involved in Hadiya's slaying. But Hutson felt a sigh of relief today when charges were announced against them.

"I just want to see how her family reacts," she said. "It gave me some closure, but I don't think (Hadiya's) family will get closure."

McCarthy said that two days before the killing, police had stopped Ward in his Nissan Sentra as part of a routine gang investigation. That information wound up being the starting point for detectives when witnesses in the shooting described seeing a similar car driving away from the shooting scene, he said.

Through surveillance and interviews — including several fruitful interviews with parolees in the neighborhood — detectives were able to home in on Ward and Williams, McCarthy said. On Saturday night, the decision was made to stop the two if they were spotted. Police watched as they departed in a caravan of cars headed to the strip club in Harvey. They were stopped near 67th Street and South King Drive and taken in for questioning.

McCarthy said Williams was shot July 11 at 39th Street and South Lake Park Avenue, and an arrest was made. But that gunman was let go after Williams refused to cooperate, McCarthy said.

McCarthy also noted that at the time of Hadiya's slaying, Ward was on probation for a weapons conviction. McCarthy said weak Illinois gun laws allowed Ward to avoid jail time because of the absence of mandatory minimum sentences.

"This incident did not have to occur," McCarthy said. "And if mandatory minimums existed in the state of Illinois, Michael Ward would not have been on the street to commit this heinous act."

In announcing the charges, McCarthy praised the "meticulous" detective work that led to the arrests, but he also expressed frustration that despite a $40,000 reward for information in the shooting, no one who had knowledge of the crime came forward.

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China joins U.S., Japan in condemning North Korea nuclear test

SEOUL (Reuters) - North Korea conducted its third nuclear test on Tuesday in defiance of existing U.N. resolutions, drawing condemnation from around the world, including from its only major ally, China, which summoned the North Korean ambassador to protest.

The reclusive North said the test was an act of self-defense against "U.S. hostility" and threatened further, stronger steps if necessary.

It said the test had "greater explosive force" than the 2006 and 2009 tests. Its KCNA news agency said it had used a "miniaturized" and lighter nuclear device, indicating that it had again used plutonium which is more suitable for use as a missile warhead.

North Korean leader Kim Jong-un, the third of his line to rule the country, has presided over two long-range rocket launches and a nuclear test during his first year in power, pursuing policies that have propelled his impoverished and malnourished country closer to becoming a nuclear weapons power.

China, which has shown signs of increasing exasperation with the recent bellicose tone of its neighbor, summoned the North Korean ambassador in Beijing and protested sternly, the Foreign Ministry said.

Foreign Minister Yang Jiechi said China was "strongly dissatisfied and resolutely opposed" to the test and urged North Korea to "stop any rhetoric or acts that could worsen situations and return to the right course of dialogue and consultation as soon as possible".

China is a permanent member of the Security Council.

U.S. President Barack Obama labeled the test a "highly provocative act" that hurt regional stability and pressed for new sanctions.

"The danger posed by North Korea's threatening activities warrants further swift and credible action by the international community. The United States will also continue to take steps necessary to defend ourselves and our allies," Obama said in a statement.

The Security Council will meet on Tuesday to discuss its reaction to the test, although North Korea is already one of the most heavily sanctioned states in the world and has few external economic links that can be targeted.

Japanese Prime Minister Shinzo Abe said the test was a "grave threat" that could not be tolerated. U.N. Secretary-General Ban Ki-moon said the test was a "clear and grave violation" of U.N. Security Council resolutions.

Russian Foreign Minister Sergei Lavrov urged North Korea to abandon its nuclear arms program and return to talks. NATO condemned the test as an "irresponsible act" that posed a grave threat to world peace.

The test "was only the first response we took with maximum restraint", an unnamed spokesman for the North Korean Foreign Ministry, which acts as Pyongyang's official voice to the outside world, said in a statement carried by the official KCNA news agency.

"If the United States continues to come out with hostility and complicates the situation, we will be forced to take stronger, second and third responses in consecutive steps."

North Korea often threatens the United States and its "puppet", South Korea, with destruction in colorful terms.

North Korea told the U.N. disarmament forum in Geneva that it would never bow to resolutions on its nuclear program and that prospects were "gloomy" for the denuclearization of the divided Korean peninsula because of a "hostile" U.S. policy.

South Korea, still technically at war with the North after the 1950-53 civil war ended in a mere truce, also denounced the test.

The magnitude was roughly twice as large as that of 2009, Lassina Zerbo, director of the international data centre division of the Vienna-based Comprehensive Nuclear-Test Ban Treaty Organization, said. The U.S. Geological Survey said that a seismic event measuring 5.1 magnitude had occurred.

"It was confirmed that the nuclear test that was carried out at a high level in a safe and perfect manner using a miniaturized and lighter nuclear device with greater explosive force than previously did not pose any negative impact on the surrounding ecological environment," KCNA said.

Despite China's strong response, the test is likely to be a major embarrassment for Beijing, the North's sole major economic and diplomatic ally.

"The test is hugely insulting to China, which now can be expected to follow through with threats to impose sanctions," said Mark Fitzpatrick of the International Institute for Strategic Studies think tank.

North Korea trumpeted the announcement on its state television channel to patriotic music against the backdrop of an image of its national flag.

It linked the test to its technical prowess in launching a long-range rocket in December, a move that triggered the U.N. sanctions, backed by China, that Pyongyang said prompted it to take Tuesday's action.

The North's ultimate aim, Washington believes, is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could hit the United States. North Korea says the program is aimed merely at putting satellites in space.

North Korea used plutonium in previous nuclear tests and prior to Tuesday there had been speculation it would use highly enriched uranium so as to conserve its plutonium stocks as testing eats into its limited supply of the material that could be used to construct a nuclear bomb.

"VICIOUS CYCLE"

Despite its three nuclear tests and long-range rocket tests, North Korea is not believed to be close to manufacturing a nuclear missile capable of hitting the United States.

South Korea's Yonhap news agency said Pyongyang had informed China and the United States of its plans to test on Monday, although this could not be confirmed.

When North Korean leader Kim, 30, took power after his father's death in December 2011, there were hopes the he would bring reforms and end Kim Jong-il's "military first" policies.

Instead, the North, whose economy is smaller than it was 20 years ago and where a third of children are believed to be malnourished, appears to be trapped in a cycle of sanctions followed by further provocations.

"The more North Korea shoots missiles, launches satellites or conducts nuclear tests, the more the U.N. Security Council will impose new and more severe sanctions," said Shen Dingli, a professor at Shanghai's Fudan University. "It is an endless, vicious cycle."

But options for the international community appear to be in short supply.

Tuesday's action appeared to have been timed for the run-up to February 16 anniversary celebrations of Kim Jong-il's birthday, as well as to achieved maximum international attention.

Significantly, the test comes at a time of political transition in China, Japan and South Korea, and as Obama begins his second term. He will likely have to tweak his State of the Union address due to be given on Tuesday.

Japanese Prime Minister Shinzo Abe is bedding down a new government and South Korea's new president, Park Geun-hye, prepares to take office on February 25.

China too is in the midst of a once-in-a-decade leadership transition to Xi Jinping, who takes office in March. Both Abe and Xi are staunch nationalists.

The longer-term game plan from Pyongyang may be to restart talks aimed at winning food and financial aid. China urged it to return to the stalled "six-party" talks on its nuclear program, hosted by China and including the two Koreas, the United States, Japan and Russia.

Its puny economy and small diplomatic reach mean the North struggles to win attention on the global stage - other than through nuclear tests and attacks on South Korea, last made in 2010.

"Now the next step for North Korea will be to offer talks... - any form to start up discussion again to bring things to their advantage," said Jeung Young-tae, senior research fellow at the Korea Institute for National Unification in Seoul.

The European Union's foreign policy chief, Catherine Ashton, urged North Korea to refrain from further provocation.

EU member Denmark called on China to step up to the plate and use its influence to rein in its ally.

"This deserves only one thing and that is a one-sided condemnation," said Foreign Minister Villy Sovndal. "North Korea is likely the most horrible country on this planet."

(Additional reporting by Jack Kim, Christine Kim and Jumin Park in SEOUL; Linda Sieg in TOKYO; Louis Charbonneau at the UNITED NATIONS; Fredrik Dahl in VIENNA; Michael Martina and Chen Aizhu in BEIJING; Mette Fraende in COPENHAGEN; Adrian Croft, Charlie Dunmore and Justyna Pawlak in BRUSSELS; Editing by Nick Macfie)

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