Stories Making Headlines Christmas Eve Morning

WORLD MARKETS
    UPDATE: European markets open lower

    HONG KONG (AP) - Except for key indices in Australia, Taiwan and Singapore, international markets lost ground again today after downbeat data about the U.S. economy showed the recession is deepening.
    One analyst says investors are being hit with the reality of how poor the U.S. economy is.
    Many investors found little reason to buy after reports released in the U.S. showed no signs of a turnaround in the world’s largest economy.
    The government said third-quarter gross domestic product fell and the hard-hit housing sector also continued to deteriorate.
    European markets were lower in early trading and most Asian markets fell.
    Wall Street futures point to a flat opening today. U.S. markets will close early for the Christmas holiday.

FINANCIAL MELTDOWN
    Economic data expected to show more weakness

    WASHINGTON (AP) - Look for more evidence today that consumers are spending less and companies are cutting jobs in the face of a deepening recession.
    Wall Street economists forecast that a November report on consumer spending will show a drop of 0.7 percent. That would be the fifth straight month of decline.
    The Labor Department’s tally of initial applications for unemployment benefits last week is expected to rise slightly.
    And the Commerce Department is expected to report that durable goods orders fell by 3 percent in November, after a 6.2 percent drop in October.
    Tuesday, the government said the gross domestic product shrank at a 0.5 percent annual rate in the third quarter. GDP is the broadest measure of the economy.

ILLINOIS GOVERNOR-OBAMA
    Obama, 2 aides meet with federal invetigators

    WASHINGTON (AP) - President-elect Barack Obama and two top aides have met with federal investigators in the Rod Blagojevich (blah-GOY’-uh-vich) corruption probe.
    Obama spoke with prosecutors last week, ahead of yesterday’s release of an internal transition team report. That report supported Obama’s insistence that there had been no inappropriate contact with the governor’s office by Obama or his staff.
    The report from Obama lawyer Greg Craig says incoming chief of staff Rahm Emanuel was the only team member to speak with Blagojevich, and his talks were innocent and appropriate. Craig says the president-elect had no contact with Blagojevich or his aides.
    Blagojevich is accused of trying to swap Obama’s Senate seat for cash or a lucrative job.

OBAMA-GRANDMOTHER’S MEMORIAL
    Obama attends memorial for his grandmother, ‘Toot’

    HONOLULU (AP) - President-elect Barack Obama gathered with family and friends on Tuesday for a private memorial service for the beloved grandmother who helped raise him.
    Madelyn Payne Dunham, known to her friends as “Toot”, died Nov. 2, two days before Obama won election to become the nation’s first African-American president. She was 86.
    Obama did not speak to reporters at the small home that had been converted into the First Unitarian Church in the neighborhood of Nuuanu. Aides said Obama’s half-sister, Maya Soetoro-Ng, and her husband, Konrad Ng, also were present.
    Following the ceremony, Obama drove to cliffs east of Honolulu. He and about 20 members of his family climbed over a stone wall and down onto rocky ledges to scatter Dunham’s ashes at Lanai Lookout.
    Obama earlier this year left flowers at the same cliffs, in memory of his mother.

BOY HOSTAGE
    Gunman may have been boy’s father

    LOS ANGELES (AP) - Authorities say a man shot and killed by California police after a two-hour standoff in which he held a 6-year-old boy hostage had been wanted for the 2004 murder of his girlfriend.
    The Los Angeles County Sheriff’s Department says in a statement Wednesday that the man killed in the Los Angeles suburb of El Monte is 38-year-old Manuel Benitez.
    Authorities had been seeking Benitez since the slaying of Stephanie Spears more than four years ago in Hawthorne, California. He was profiled on the television show “America’s Most Wanted” earlier this year.
    The 6-year-old boy held by Benitez during Tuesday’s standoff suffered a gunshot wound to the thigh but is expected to survive.

WINTER WEATHER
    More deaths pinned to miserable Midwest weather

    CHICAGO (AP) - At least 12 traffic deaths in the Midwest are blamed on icy and rain-slicked roads as holiday travelers struggle to reach their destinations.
    The deaths are reported in Missouri, Kentucky, Ohio, and Indiana. Motorists elsewhere also found it tough going.
    But it’s air and train travel that are especially snarled by snowstorms and Arctic cold. More than 500 flights have been canceled at Chicago’ O’Hare Airport, and there are lots of delays.
    At Chicago’s Union Station, some Amtrak passengers waited almost a full day to board their trains. Each train delay caused a ripple effect, and several trains were canceled.
    Passengers were especially upset with their treatment. It was so cold in Union Station that people could see their breath.

ISRAEL-PALESTINIANS
    New rocket fire reported

    JERUSALEM (AP) - Palestinian militants in the Gaza Strip have been bombarding southern Israel with mortars and rockets, hampering diplomatic efforts to revive a truce that expired over the weekend.
    No injuries have been reported.
    Hamas, the Islamic militant group that rules Gaza, says the attacks are in response to the deaths of three of its fighters in a clash with Israeli troops late Tuesday. Israel says the militants were planting explosives in northern Gaza along the border fence.
    Before the violence resumed, Israel was set to open cargo crossings with Gaza, allowing for a limited amount of food, medicines and fuel to make its way in. But a military spokesman now says the crossings will remain closed.

SOMALIA
    New Somali PM resigns over power struggle

    MOGADISHU, Somalia (AP) - A Somali official appointed prime minister a week ago is resigning over a power struggle between two factions of the country’s tottering government.
    Somalia’s President Abdullahi Yusuf appointed Mohamed Mohamud Guled as prime minister on Dec. 16 after the president unilaterally fired Prime Minister Nur Hassan Hussein. Parliament refused to back the president, leaving it unclear which prime minister was in charge.
    Guled told reporters Wednesday he was resigning in an effort to end the infighting among Hussein’s and Yusuf’s factions in the government.
    The feuding has weakened the U.N.-backed administration as Islamic insurgents have been grabbing more territory.

CALIFORNIA BUDGET
    Schwarzenegger, Dems try to find budget compromise

    SACRAMENTO, Calif. (AP) - Democratic leaders say they’re inching toward a compromise with California Gov. Arnold Schwarzenegger on a midyear fix for California’s exploding budget deficit.
    Both sides will take a two-day break for Christmas and resume talks Friday. The goal is to have an agreement by the end of the week.
    California’s deficit is projected to hit $42 billion over the next 18 months. Monday the state controller warned the state will run out of cash within 70 days if lawmakers don’t act quickly.
    Tax increases seem certain, but Republicans, who aren’t included in the negotiations, are dead-set against that idea. So lawmakers are trying to tiptoe around a law that says a two-thirds majority is needed to raise taxes.

TAINTED TOYS
    Ho, ho, no: Toymakers say lead law harms workshops

    SAN FRANCISCO (AP) - Worries over lead paint in mass-market toys made the holidays a little brighter for handcrafted toy makers last year.
    But the federal government’s response to the scare has some workshops fearful that this Christmas might be their last.
    Without changes to strict new safety rules, they say, mom-and-pop toy makers and retailers could be forced to conduct testing and labeling they can’t afford, even if they use materials as benign as unfinished wood, organic cotton and beeswax.
    Under the law, all children’s products must be tested for lead and other harmful substances. Toy makers are required to pay a third-party lab for the testing.
    Julia Chen’s shop in Palo Alto, California, specializes in wooden and organic playthings. She says it’s ironic that companies which never violated the public trust are now being threatened. She and other small retailers are hoping Congress will grant an exemption.