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Global markets rally on US Federal Reserve’s economic stimulus

Stock markets worldwide boosted on news that US interest rates are to be frozen for the next two years Stock markets around the world rallied after the US Federal Reserve said US interest rates would be frozen for the next two years, and hinted at more economic stimulus to stave off a global recession. The FTSE 100 in London climbed 64 points to 5229 in early trading, up 1.25%, This added to Tuesday’s gains, when the index rose 96 points or 1.9%, its first increase in eight days, in anticipation of Fed measures designed to prevent the US economy sliding back into recession. The Dow Jones industrial average surged nearly 430 points to 11239.77, a gain of almost 4%, on Tuesday, a day after suffering its worst point decline since 2008. Asian markets also rose, with Japan’s Nikkei climbing 94.26 points, or 1.05%, to 9038.74 while Hong Kong’s Hang Seng added 495.16 points, or 2.56%, to 19,825.86. The Fed lowered interest rates near zero in response to the financial crisis in 2008. Since then, it had been saying that rates would stay low for an “extended period”. On Tuesday, it modified that statement to say that this would continue until at least mid-2013, as the economy was expected to stay weak for two more years. America’s central bank said it expected “a somewhat slower pace of recovery over coming quarters than it did at the time of the previous meeting”. It added that it had discussed “the range of policy tools” it could use to boost the economy. There is speculation that this could include a fresh round of bond-buying, known as quantitative easing, or QE3. “If there is such a thing as an aggressively dovish approach that’s the route the Fed chose yesterday,” said Gary Jenkins, head of fixed income research at Evolution Securities. Paul Dales, senior US economist at Capital Economics, said: “The US Fed’s decision to pledge to keep interest rates exceptionally low for much longer than previously is largely a symbolic gesture designed to reassure the financial markets rather than boost the real economy. More interesting is that the Fed considered other forms of policy stimulus, perhaps even QE3. The chances of QE3 have increased a bit, but the rebound in core inflation and the growing division at the Fed mean it is more likely to come next year than this year.” US economy Economics Stock markets Quantitative easing Interest rates Financial crisis Global recession Bonds United States Julia Kollewe guardian.co.uk

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Democrats fall short in heated Wisconsin recall elections

Republicans in Wisconsin clung on to control of the state senate after a hotly-contested series of recall elections Republicans snatched a narrow victory in the battleground of Wisconsin politics on Tuesday night, hanging onto four out of six recall elections held as Democrats fought to overturn their majority in the state senate. Six seats were up for re-election after Democrats had successfully organised recall ballots against the group of incumbent Republican state senators, in the wake of the controversial anti-union measures supported by Republican governor Scott Walker. Democrats needed to win at least three of the six seats held by Republicans to take control of the state senate. But after a campaign that saw an estimated $35m spent by both sides – many times above the sums usually spent on local elections – the Democrats could only take two of the seats on offer. The campaign had energised Democrats, who went to great lengths with get-out-the-vote efforts, but the final result came down to a tight race between Republican Alberta Darling of River Hills, who held off Democratic state representative Sandy Pasch of Whitefish Bay by a 5,000 vote margin. Republican senators Sheila Harsdorf of River Falls, Rob Cowles of Allouez and Luther Olsen of Ripon also held on to their seats. Democrats vowed to continue their efforts next year, and launch recall efforts against Walker himself, as well other Republican state senators who may be vulnerable after Tuesday night’s results. For Walker – talked of as a possible Republican presidential candidate in 2016 – the result means he can continue unimpeded, with both houses of Wisconsin’s legislature controlled by Republicans. Wisconsin’s bitter political battle caught international attention earlier this year after Democratic senators fled the state for three weeks in an attempt to stop Walker from passing a bill to strip 175,000 government workers of almost all collective bargaining rights. Both Democrats and Republicans regard Wisconsin as a swing state in the 2012 presidential election. Although Obama carried the state easily in 2008, the 2010 midterm elections swept the Republicans back into power and unseated Democratic US senator Russ Feingold. Wisconsin US politics Republicans Democrats United States Richard Adams guardian.co.uk

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China’s first aircraft carrier launches amid regional tensions

Sea trials of former Soviet craft underline China’s naval ambitions and fuel concerns about growing military strength China’s first aircraft carrier swept through fog-shrouded waters on Wednesday to launch open sea trials that underline the country’s big naval ambitions and fuel concerns about its growing military strength amid regional territorial disputes. The ship is a former Soviet craft that China acknowledged a month ago it was rebuilding for research and training, in a strong indication it plans to start building aircraft carriers of its own. China has been investing heavily in modernising its military for at least the last decade, and having its own carrier will add prestige to that expansion, which has accompanied a rise in nationalism in the country. The carrier left Dalian port in north-east Liaoning province early Wednesday, the official Xinhua news agency reported. Xinhua said the first sea trial was in line with the country’s schedule to rebuild the carrier. China has spend the better part of a decade refurbishing the former Soviet aircraft carrier Varyag after it was towed from Ukraine in 1998, the report said, citing unnamed military sources. China’s carrier ambitions have sparked concern among neighbours amid heightened tensions over territorial disputes around Taiwan and in the South China Sea. Over the past year, China has seen a flare-up in territorial spats with Japan, the Philippines and Vietnam and had its relations strained with South Korea – all of which have sought support from Washington, long the pre-eminent naval power in Asia. Xinhua said refitting and test work would continue on the carrier when it returns from its short sea trial. The Varyag, yet to be officially renamed, was towed from Ukraine as an empty shell without engines, weapons systems or other crucial equipment. Defence experts say China plans up to four carriers in all, with preparations under way at a Shanghai shipyard. The Xinhua report did not say how long the sea trial would last. But a statement posted on the website of the Liaoning Maritime Safety Authority said “all vessels will be barred from entering” a small section of the sea off Dalian until 6pm (10am GMT) on Sunday. There had been earlier online reports in China that the test was set to start last weekend, but it may have been delayed by a tropical storm that swept through the area. China US foreign policy guardian.co.uk

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Rise in UK childbirth deaths from underlying illnesses

Doctors are failing to identify underlying health issues such as asthma and diabetes, say specialists Increasing numbers of women are dying in

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South Korea returns fire on North in disputed waters

South Korean forces retaliate after North Korea fires three artillery shells in latest clash in Yellow Sea South Korean forces returned fire after North Korean artillery shells fell into waters near the tense maritime line that separates the two rivals, according to a South Korean official. North Korea fired three shells near the Northern Limit Line in the Yellow Sea on Wednesday, prompting the South to fire back three shells, said the defense ministry spokesman, Kim Min-seok. South Korean forces have been on high alert in the area since a North Korean artillery attack killed four people in November on South Korea’s Yeonpyeong island . Wednesday’s shooting took place nearby. Violence often erupts in the contested waters there. Boats routinely jostle for position during crab-catching season, and three deadly naval clashes since 1999 have taken dozens of lives. Kim said one North Korean artillery shell is believed to have fallen south of the maritime line, citing a preliminary analysis of the trajectory of the shell. The line separating the countries was drawn at the close of the Korean war in 1953 and is still a fierce point of dispute. The countries remain technically at war. North Korea argues the line should run farther south. Seoul believes accepting such a line would endanger fishing around five South Korean islands and hamper access to its port at Incheon. The November attack marked a new level of hostility along the contested line. Two civilians and two marines died, and many houses were gutted in the shelling. South Korea North Korea guardian.co.uk

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US drone strike kills 21 suspected militants in Pakistan

Local Taliban and al-Qaida militants and foreigners among dead after house in border region North Waziristan hit by drone A US drone fired two missiles into Pakistan’s North Waziristan tribal region on the Afghan border on Wednesday, killing at least 21 suspected militants including foreigners, local officials said, in one of the biggest attacks in weeks. The drone targeted a house 3km (two miles) east of Miranshah, the main town of the region, known to be a hotbed for Taliban and al-Qaida militants. “The dead included local Taliban as well as some Arabs and Uzbek nationals,” one intelligence official in North Waziristan said, speaking on the condition of anonymity. It was not immediately known if any high-profile militants were among the dead. Militants often dispute official account of such strikes. Initial reports said five militants were killed in the attack, but officials said the toll had gone up to 21 after more bodies were found from the rubble of the house. Drone strikes have been a major source of friction between the United States and Pakistan, with ties at their worst since US Special Forces killed al-Qaida chief Osama bin Laden in a secret raid in a Pakistani garrison town in May. While Pakistan publicly opposes the strikes, it has privately allowed them and has co-operated with the United States determining targets. But since the May commando raid, which Pakistan considers a grievous breach of sovereignty, the powerful head of the army, General Ashfaq Kayani, has called for a halt. Washington appears determined to press forward with drone attacks, which its sees as an effective tool to stem cross-border attacks by militants on foreign forces in Afghanistan. Pakistan US foreign policy Unmanned drones Taliban Afghanistan United States guardian.co.uk

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UK riots: day four aftermath live

• Serious disorder in Manchester and west Midlands • Murder inquiry launched in Birmingham after car hits three men • Calm night in London as police maintain control • Send us your footage of the riots • Upload photos to our Flickr group and see others’ pictures • Read our latest summary of events • Read our latest news story 8.21am: Our correspondent Paul Lewis and video journalist Mustafa Khalili have been in Gloucester overnight, and have just filed their report. It seems that the disorder has shocked Gloucester, a picturesque cathedral city near the Welsh border, and a place that you wouldn’t associate with this kind of trouble. Teenagers were still taking pictures of the smouldering debris on Gloucester’s Barton Road at 5am on Wednesday, wide-eyed in disbelief. None had thought that television pictures of riots in major cities such as London, Birmingham, Manchester and Liverpool would spread to their quaint home town near the Welsh border . Looking dazed, Nathan Phillips, 17, described the moment he realised Gloucester would be next. “We were stood outside our friends house. A person with a balaclava came out, and then he walked away. He came back with his friends, and they had hoods pulled tight over their heads. Then they chucked three bricks at the police car.” The officer inside, he said, was struck by one brick. “He just turned on the engine and sped off.” What followed, according to witnesses still around to relay events as dawn broke, was a series of running battles with the police along Gloucester’s narrow terraced streets. Riot police were drafted in alongside officers on horseback as they tried to quell the violence. The disorder in Gloucester, which began around 9.30pm on Tuesday, and continued into the early hours of the morning, was smaller in scale than the widespread looting and running battles elsewhere in England. Witnesses said the crowd of rioters consisted of around fifty youths, from young teenagers to men in their twenties. Unlike far larger cities such as Nottingham, which appears to have seen hundreds of shops targeted overnight, In Gloucester there were attempts to break into less than a dozen local stores and glass-fronted betting shops. There was an unconfirmed report that a petshop was targeted. But the reaction through the night to the news to a blazing fire and rioting in Gloucester suggested that while smaller than elsewhere, the disturbance heralded something symbolic: evidence that the spreading violence could take hold in a cathedral city with a population of less than 150,000. As one policewoman said guarding the burned out shell of a derelict building set on fire on Brunswick Road: “It’s madness. No-one can understand it.” 8.15am: Casey Rain, a songwriter from Birmingham, has been live blogging the situation overnight on Tumblr. He has collected some pictures of the trouble in the city, and he also has a name for one of the men who died in what appears to have been hit-and-run incident in the city in the early hours. Thanks agin to Rob Stickler for pointing me to this. 8.05am: One commenter, Rob Stickler asks about Wolverhampton and points to a report by local paper, the Express and Star, which says shops in the town were attacked. Here’s an extract from the Express and Star’s report : Shopkeepers in Wolverhampton have been left counting the cost after yobs hit Queen Street, Dudley Street, Wulfruna Street, Princess Street and Market Street. Thousands of pounds of damage has been caused by the rioting, which started after youths congregated in Queen Square shortly after 4.30pm. Up to 300 youths gathered there as riot police formed blockades in an attempt to cut off nearby Dudley Street. A thunder flash was let off causing dozens to scatter and a man who appeared to be hurt was led away by police. But within minutes windows had been smashed at stores across the city centre, including the Job Centre in Queen Street and Burton’s menswear. The shutter at No 1 Pizza, in Market Street, was also torn, leaving shopkeepers unable to close the building. Large groups of people played cat and mouse with riot police, who kept them on the move. 7.58am: If you have any reliable information, eyewitness reports, pictures or video, or you want to point me to anything in particular, please email me – matt.wells@guardian.co.uk 7.37am: My colleague Sam Jones has been totallig up the number of arrests overnight. He makes it 479: with 81 in London, 108 in greater Manchester, 109 in the west Midlands, 90 in Nottingham, 13 in Leicester, 19 in Bristol, 9 in Gloucester, 35 on Merseyside and 15 in the Thames Valley force area. 7.33am: More on the disturbances in Nottingham , in case you missed them. Canning Circus police station was firebombed by a group of 30 to 40 men at around 10pm, as the community office was closing for the evening. At least eight people were arrested in connection with the incident, which did not result in any injuries. Meadows Police station was also attacked by a gang of between 15-20 males and a police car was set alight outside. Elsewhere in the city, A fire broke out Clarendon College in Sherwood Rise following a fire bomb attack. Groups of youths using masks and hoods to hide their identities congregated around parts of the city setting light to cars and attacking businesses, pubs and community centres. Leicestershire police said officers had arrested 13 people following disturbances in Leicester city centre. 7.24am: There has been a second night of violence in Liverpool . The Press Association reports that around 200 youths gathered to the south of the city as they roamed from Toxteth to Wavertree causing disorder and damage Trouble also spread to Birkenhead with reports of up to 100 youths wrecking vehicles in the Park Road South area. Merseyside Police have now arrested 50 people since Monday night for incidents of disorder in Liverpool and the Wirral. A spokeswoman for Greater Manchester Police said the number of arrests for disorder in Manchester city centre and Salford had risen to 108. Police in Gloucester have arrested nine men. 7.19am: West Midlands ambulance service has been giving more details of the incident that led to the deaths of three men. Crews of paramedics found around 80 people at the scene of the incident, close to the Jet filling station on Dudley Road in Winson Green. Two of the men were pronounced dead soon after arriving at hospital, while a third died later. 7.11am: A third victim of the collision in Winson Green, Birmingham , has died in hospital. Two other men died at the scene when they were hit by a car. A spokesman for the ambulance service said the man had received treatment at City Hospital for several hours before dying from his “significant” injuries. 7.00am: Good morning and welcome to our coverage of the aftermath of another night of disorder around the UK. You can read our overnight coverage here . Here is a summary of events so far. • There has been serious disorder in a number of towns and cities across England, including Manchester, Birmingham, West Bromwich, Gloucester and Birmingham. A police station in Nottingham was as violence also hit Liverpool, Leicester, Bristol, Leeds and Gloucester. Garry Shewan, assistant chief constable of Greater Manchester police, said: “This has been senseless on a scale I have never witnessed before in my career.” •  West Midlands police have launched a murder inquiry after a car hit three men on Dudley Road in Birmingham, killing two of them. The men are believed to have been protecting their neighbourhood, although it remains unclear if the collision was related to the disturbances in other parts of the city. • London has been relatively calm overnight, with the 16,000 police officers deployed in the capital succeeding in maintaining order. There were a number of minor clashes as groups of vigilantes sought to maintain order. In Enflield, there was a racial undertone to the scenes as a large group of men roamed the area, chanting “England, England”. • Scotland Yard ssays 768 arrests have been made in connection with violence, disorder and looting in London in recent days. By midnight, police in Manchester had arrested 47 people. • The Independent Police Complaints Commission has announced there is no evidence that Mark Duggan, whose death in a police shoot-out led to the London riots, fired on police before he was killed. However, a loaded handgun was recovered from the scene. This is all consistent with the account of the officers on the scene, who never claimed Duggan fired first. The officer who fired the shot is believed to have acted because he feared for his life. Police Crime UK riots Manchester Birmingham Bristol Liverpool Matt Wells guardian.co.uk

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The CEO whose son and girlfriend died under suspicious circumstances within a week of each other thanked shareholders for their support and promised to be back to business as usual soon, reports People . “We have undertaken some tragedies, some losses, that one couldn’t imagine experiencing in a lifetime,” Jonah Shacknai…

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If PETA has taught us nothing else, it is that we have completely messed up our own planet with our insistence on wearing fur, eating meat, and racing goldfish . But there’s a light at the end of the tunnel: Mars. The animal rights organization is lobbying for the planet to…

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Three down, nine to go. Harry Reid made his three picks for the bipartisan “super committee” that will try to come up with $1.2 trillion of cuts in about 3 months. Reid picked Patty Murray, who will serve as co-chair with a yet-to-be-named Republican, along with John Kerry and…

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