European shares retreat on corporate worries, growth outlook

LONDON (Reuters) - European shares edged down on Thursday as concerns grow over the outlook for growth and corporate earnings, while oil prices gained support after Islamist militants attacked an Algerian gas field.

Worries about the global economic outlook have revived since the World Bank cut its 2013 forecast for global growth to 2.4 percent from its previous estimate of 3 percent, citing the prospect of poor performance across the developed world.

A massive $14 billion writedown at global mining giant Rio Tinto amid fears weak growth in the fourth quarter of 2012 will result in poor corporate results has further undermined investor confidence.

"The market will remain predominantly in a consolidation mood following a cautious outlook on earnings. I think European companies will disappoint a bit," said Christian Stocker, equity strategist at UniCredit in Munich.

The FTSEurofirst 300 index <.fteu3> of top European shares slipped nearly 0.1 percent to 1,159.00 points in early trade. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were flat to 0.3 percent lower.

"There's been a mixed bag on the earnings front so far," said Darren Easton, director of trading at Logic Investments.

"In the short-term, we're in the bear camp," he added.

MSCI's broadest index of Asian shares outside Japan <.miapj0000pus> fell 0.2 percent, extending declines for a third consecutive session.

The falls were led by a slump in Chinese stocks as investors retreated ahead a slew of key economic data due on Friday including fourth-quarter GDP, December industrial output, retail sales and house prices.

Oil prices, which are under pressure from the prospects of weaker demand in 2013, gained support from concerns about supplies being affected by military activity in Algeria and Mali.

Islamist fighters seized dozens of Western and Algerian hostages in a dawn raid on a natural gas facility deep in the Sahara on Wednesday and demanded France halt a new offensive against rebels in neighboring Mali.

Brent added 2 cents to $109.70 a barrel, though U.S. oil slipped 10 cents to $94.14.

In the debt market, yields on safe-have German bonds were creeping lower as equity markets softened, but investors were reluctant to make big bets before a Spanish debt sale.

Spain plans to tap the market for up to 4.5 billion euros in short and long-term bonds and is expected to see good demand and sharply lower yields as the European Central Bank's promise to support the debt of struggling nations has encouraged investors.

The dollar and the euro were choppy, as both currencies pared back some of their recent big gains against the yen after a Japanese official this week expressed concerns about excessive yen weakness.

The yen is expected to remain on a weakening trend amid expectations for bolder BOJ monetary easing measures at its January 21-22 policy meeting as part of the new government's push to drive Japan out of years of deflation and economic slump.

The dollar rose 0.25 percent to 88.60 yen, off its peak since June 2010 of 89.67 touched on Monday, while the euro gained 0.4 percent to 117.95 yen, after surging to its highest since May 2011 of 120.13 yen on Monday.

"The BOJ will probably disappoint to some degree. They'll deliver what the market expects but no more than that," said Gareth Berry, G10 FX strategist for UBS in Singapore.

(Reporting by Richard Hubbard; Editing by Will Waterman)

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Manti Te'o girlfriend's death apparently a hoax

SOUTH BEND, Ind. (AP) — Not long before Notre Dame played Michigan State last fall, word spread that Fighting Irish linebacker Manti Te'o had lost his grandmother and girlfriend within hours of each other.

Te'o never missed a practice and made a season-high 12 tackles, two pass breakups and a fumble recovery in a 20-3 victory against the Spartans. His inspired play became a stirring story line for the Fighting Irish as they made a run to the national championship game behind their humble, charismatic star.

Te'o's grandmother did indeed die. His girlfriend, Lennay Kekua, never existed.

In a shocking announcement Wednesday night, Notre Dame said Te'o was duped into an online relationship with a woman whose "death" from leukemia was faked by perpetrators of an elaborate hoax. The goal of the scam wasn't clear, though Notre Dame said it used an investigative firm to dig into the details after Te'o disclosed them three weeks ago.

The hoax was disclosed hours after Deadspin.com posted a lengthy story, saying it could find no record that Kekua ever existed. The story suggests a friend of Te'o may have carried out the hoax and that the football player may have been in on it — a stunning claim against a widely admired All-American who led the most famed program in college football back to the championship game for the first time since 1988.

"This is incredibly embarrassing to talk about, but over an extended period of time, I developed an emotional relationship with a woman I met online," Te'o said in a statement. "We maintained what I thought to be an authentic relationship by communicating frequently online and on the phone, and I grew to care deeply about her. "

However, he stopped short of saying he had ever met her in person or correcting reports that said he had, though he did on numerous occasions talk about how special the relationship was to him.

"To realize that I was the victim of what was apparently someone's sick joke and constant lies was, and is, painful and humiliating," he said. "In retrospect, I obviously should have been much more cautious. If anything good comes of this, I hope it is that others will be far more guarded when they engage with people online than I was."

Word of the hoax spread quickly and raised questions about whether the school somehow played a role in pushing the tale.

Notre Dame athletic director Jack Swarbrick said at a news conference that Te'o told coaches on Dec. 26 that he had received a call from Kekua's phone number while at an awards ceremony during the first week of December.

"When he answered it, it was a person whose voice sounded like the same person he had talked to, who told him that she was, in fact, not dead. Manti was very unnerved by that, as you might imagine," Swarbrick said.

Swarbrick said the school hired investigators and their report indicated those behind the hoax were in contact with each other, discussing what they were doing.

The investigators "were able to discover online chatter among the perpetrators that was certainly the ultimate proof of this, the joy they were taking," Swarbrick said. "The casualness among themselves they were talking about what they accomplished."

Swarbrick said for Te'o "the pain was real."

"The grief was real. The affection was real," he said. "That's the nature of this sad, cruel game."

Swarbrick added: "Nothing about what I have learned has shaken my faith in Manti Te'o one iota."

Swarbrick said Notre Dame did not take the matter to the police, saying that the school left it up to Te'o and his family to do so. He added that Notre Dame did not plan to release the findings of its investigation.

"We had no idea of motive, and that was really significant to us. ... Was somebody trying to create an NCAA violation at the core of this? Was there somebody trying to impact the outcome of football games by manipulating the emotions of a key player? Was there an extortion request coming? When you match the lack of sort of detail we lacked until we got some help investigating it with the risk involved, it was clear to me until we knew more we had to just to continue to work to try to gather the facts," Swarbrick said.

The Deadspin report changed all that.

Friends and relatives of Ronaiah Tuiasosopo told Deadspin they believe he created Kekua. The website said Te'o and Tuiasosopo knew each other. Attempts by The Associated Press to reach Tuiasosopo by telephone were unsuccessful.

As for Kekua, Deadspin said she does not have a death certificate. Stanford, where she reportedly went to school, has no record of anybody by that name, the website said. Deadspin said a record search produced no obituary or funeral announcement. There is no record of her birth in the news.

There are a few Twitter and Instagram accounts registered to Lennay Kekua, but the website reported that photographs identified as Kekua online and in TV news reports are pictures from the social-media accounts of a 22-year-old California woman who is not named Lennay Kekua.

Te'o talked freely about their relationship after her supposed death and how much she meant to him.

In a story that appeared in The South Bend Tribune on Oct. 12, Manti's father, Brian, recounted an anecdote about how his son and Kekua met after Notre Dame had played at Stanford in 2009. Brian Te'o also told the newspaper that Kekua had visited Hawaii and met with his son. Brian Te'o told the AP in an interview in October that he and his wife had never met Manti's girlfriend but they had hoped to at the Wake Forest game in November. The father said he believed the relationship was just beginning to get serious when she died.

The Tribune released a statement saying: "At the Tribune, we are as stunned by these revelations as everyone else. Indeed, this season we reported the story of this fake girlfriend and her death as details were given to us by Te'o, members of his family and his coaches at Notre Dame."

The week before Notre Dame played Michigan State on Sept. 15, coach Brian Kelly told reporters when asked that Te'o's grandmother and a friend had died. He said Kekua had told Te'o not to miss a game if she died. The linebacker turned in one of his best performances of the season and his playing through heartache became a prominent theme during the Irish's undefeated regular season. He finished second in Heisman voting.

"It further pains me that the grief I felt and the sympathies expressed to me at the time of my grandmother's death in September were in any way deepened by what I believed to be another significant loss in my life," Te'o said in his statement.

"I am enormously grateful for the support of my family, friends and Notre Dame fans throughout this year. To think that I shared with them my happiness about my relationship and details that I thought to be true about her just makes me sick. I hope that people can understand how trying and confusing this whole experience has been."

Te'o and the Irish lost the title game to Alabama, 42-14 on Jan. 7. He has graduated and was set to begin preparing for the NFL combine and draft at the IMG Academy in Bradenton, Fla., this week.

"Fortunately, I have many wonderful things in my life," he said in his statement, "and I'm looking forward to putting this painful experience behind me as I focus on preparing for the NFL draft."

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Scientology ad crossed the line

The Church of Scientology is also at fault for thinking the advertorial would survive The Atlantic readers' scrutiny, Ian Schafer says.

STORY HIGHLIGHTS

• The Atlantic published and pulled a sponsored Scientology "story"


• Ian Schafer: On several levels, the ad was a mistake


• He says the content was heavy-handed and comments were being moderated


• Schafer: Experimenting to raise revenue makes sense, but standards should be clear

Editor's note: Ian Schafer is the founder and CEO of a digital advertising agency, Deep Focus, and the alter ego of @invisibleobama. You can read his rants on his blog at ianschafer.com.

(CNN) -- "The Atlantic is America's leading destination for brave thinking and bold ideas that matter. The Atlantic engages its print, online, and live audiences with breakthrough insights into the worlds of politics, business, the arts, and culture. With exceptional talent deployed against the world's most important and intriguing topics, The Atlantic is the source of opinion, commentary, and analysis for America's most influential individuals who wish to be challenged, informed, and entertained." -- The Atlantic 2013 media kit for advertisers

On Monday, The Atlantic published -- and then pulled -- a story titled "David Miscavige Leads Scientology to Milestone Year." This "story" went on to feature the growth of Scientology in 2012.

Ian Schafer

Any regular reader of The Atlantic's content would immediately do a double-take upon seeing that kind of headline, much less the heavy-handed text below it, shamelessly plugging how well Scientology's "ecclesiastical leader" Miscavige has done in "leading a renaissance for the religion."

This "story" is one of several "advertorials" (a portmanteau of "advertising" and "editorials") that The Atlantic has published online, clearly designated as "Sponsor Content." In other words, "stories" like these aren't real stories. They are ads with a lot of words, which advertisers have paid publications to run on their behalf for decades. You may have seen them in magazines and newspapers as "special advertising sections."

The hope is that because you are already reading the publication, hey, maybe you'll read what the advertiser has to say, too -- instead of the "traditional" ad that they may have otherwise placed on the page that you probably won't remember, or worse, will ignore.

There's nothing wrong with this tactic, ethically, when clearly labeled as "sponsored" or "advertising." But many took umbrage with The Atlantic in this particular case; so many, that The Atlantic responded by pulling the story from its site -- which was the right thing to do -- and by apologizing.

At face value, The Atlantic did the right thing for its business model, which depends upon advertising sales. It sold what they call a "native" ad to a paying advertiser, clearly labeled it as such, without the intention of misleading readers into thinking this was a piece of journalism.

But it still failed on several levels.

The Atlantic defines its readers as "America's most influential individuals who wish to be challenged, informed, and entertained." By that very definition, it is selling "advertorials" to people who are the least likely to take them seriously, especially when heavy-handed. There is a fine line between advertorial and outright advertising copywriting, and this piece crossed it. The Church of Scientology is just as much at fault for thinking this piece would survive The Atlantic readers' intellectual scrutiny. But this isn't even the real issue.

Bad advertising is all around us. And readers' intellectual scrutiny would surely have let the advertorial piece slide without complaints (though snark would be inevitable), as they have in the past, or yes, even possibly ignored it. But here's where The Atlantic crossed another line -- it seemed clear it was moderating the comments beneath the advertorial.

As The Washington Post reported, The Atlantic marketing team was carefully pruning the comments, ensuring that they were predominantly positive, even though many readers were leaving negative comments. So while The Atlantic was publishing clearly labeled advertiser-written content, it was also un-publishing content created by its readers -- the very folks it exists to serve.

It's understandable that The Atlantic would inevitably touch a third rail with any "new" ad format. But what it calls "native advertising" is actually "advertorial." It's not new at all. Touching the third rail in this case is unacceptable.

So what should The Atlantic have done in this situation before it became a situation? For starters, it should have worked more closely with the Church of Scientology to help create a piece of content that wasn't so clearly written as an ad. If the Church of Scientology was not willing to compromise its advertising to be better content, then The Atlantic should not have accepted the advertising. But this is a quality-control issue.

The real failure here was that comments should never have been enabled beneath this sponsored content unless the advertiser was prepared to let them be there, regardless of sentiment.

It's not like Scientology has avoided controversy in the past. The sheer, obvious reason for this advertorial in the first place was to dispel beliefs that Scientology wasn't a recognized religion (hence "ecclesiastical").

Whether The Atlantic felt it was acting in its advertiser's best interest, or the advertiser specifically asked for this to happen, letting it happen at all was a huge mistake, and a betrayal of an implicit contract that should exist between a publication of The Atlantic's stature and its readership.

No matter how laughably "sales-y" a piece of sponsored content might be, the censoring of readership should be the true "third rail," never to be touched.

Going forward, The Atlantic (and any other publication that chooses to run sponsored content) should adopt and clearly communicate an explicit ethics statement regarding advertorials and their corresponding comments. This statement should guide the decisions it makes when working with advertisers, and serve as a filter for the sponsored content it chooses to publish, and what it recommends advertisers submit. It should also prevent readers from being silenced if given a platform at all.

As an advertising professional, I sincerely hope this doesn't spook The Atlantic or any other publication from experimenting with ways to make money. But as a reader, I hope it leads to better ads that reward me for paying attention, rather than muzzle my voice should I choose to interact with the content.

After all, what more could a publication or advertiser ask for than for content to be so interesting that someone actually would want to comment on (or better, share) it?

(Correction: An earlier version of this article incorrectly said native advertising accounts for 59% of the Atlantic's ad revenue. Digital advertising, of which native advertising is a part, accounts for 59% of The Atlantic's overall revenue, according to the company.)

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Ian Schafer.

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Man killed after high school game ends in melee

The Simeon and Morgan Park High School basketball teams ended their game at Chicago State University with a melee between players on the court. (Nuccio DiNuzzo/Chicago Tribune)

Staff report

12:17 a.m. CST, January 17, 2013

A 20-year-old man was shot and killed outside a Chicago Public Schools high school basketball game at Chicago State University Wednesday night after a melee broke out in a handshake line after the game.

The man was taken in serious condition to Advocate Christ Medical Center, according to the Chicago Fire Department.

The shooting happened about 9:20 p.m. outside the campus gymnasium near 95th Street and King Drive, said police News Affairs Officer Daniel O’Brien. He was pronounced dead at Christ hospital Wednesday night.

Chicago State Police put out a quick message to nearby officers, asking them to watch for a jeep that was pulled over east of the school a short time later, police said, citing early reports. Two people were taken into custody and police found a gun inside the jeep.

The game was between Simeon Career Academy and Morgan Park High School, both schools located on Vincennes Avenue about 30 blocks apart, at 81st and 111th Streets.

An argument in a handshake line after the game preceeded the shooting, police said. The gym was tense and word spread through the gym that someone had been shot.

Police said the argument spilled into the parking lot and someone pulled out a weapon and shot the 20-year-old.

Each team was held for longer than normal in the locker rooms after the game. Nothing outside ordinary bumps and physical contact happened during the game.

Chicago police responded to the scene but are not involved with the investigation, O'Brien said.

Chicago State Police refused to comment about the incident and city police referred inquiries to them and Illinois State Police, who said they were not involved in the investigation.

Check back for details.

Contributor Mike Helfgot and Tribune reporters Peter Nickeas, Rosemary Regina Sobol and Jeremy Gorner contributed to this story.

chicagobreaking@tribune.com
Twitter: @chicagobreaking

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Sahara hostage siege turns Mali war global

ALGIERS/BAMAKO - (Reuters) - Islamist fighters have opened an international front in Mali's civil war by taking dozens of Western hostages at a gas plant in the Algerian desert just as French troops launched an offensive against rebels in neighboring Mali.

More than 24 hours after gunmen stormed the natural gas pumping site and workers' housing before dawn on Wednesday, little was certain beyond a claim by a group calling itself the "Battalion of Blood" that it was holding 41 foreign nationals, including Americans, Japanese and Europeans, at Tigantourine, deep in the Sahara.

British Foreign Secretary William Hague confirmed one Briton had been killed and "a number" of other British citizens were being held. Algerian media said an Algerian was killed in the assault. Another local report said a Frenchman had died.

The precise number and nationalities of foreign hostages could not be confirmed.

The militants said seven Americans were among their hostages - a figure U.S. officials said they could not confirm. Norwegian oil company Statoil said nine of its Norwegian staff and three Algerian employees were captive. Japanese media said five workers from Japanese engineering firm JGC Corp. were held.

"This is a dangerous and rapidly developing situation," Britain's Hague told reporters in Sydney on Thursday.

"We have sent a rapid deployment team from our Foreign Office in order to reinforce our embassy and consulate staff there. The safety of those involved and their co-workers is our absolutely priority and we will work around the clock to resolve this crisis."

U.S. Defense Secretary Leon Panetta said: "I want to assure the American people that the United States will take all necessary and proper steps that are required to deal with this situation."

Japan's Prime Minister Shinzo Abe, in Vietnam on the first leg of a Southeast Asian tour, told reporters that "Japan will never tolerate such an act", according to the Jiji news agency. His government held an emergency meeting and said it was working with other countries to free Japanese citizens.

One thing is clear: as a headline-grabbing counterpunch to this week's French buildup in Mali, it presents French President Francois Hollande with stark choices and spreads fallout from Mali's war against loosely allied bands of al Qaeda-inspired rebels far beyond Africa, challenging Washington and Europe.

Led by an Algerian veteran of guerrilla wars in Afghanistan, the group demanded France halt its week-old intervention in Mali, an operation endorsed by Western and African allies who fear that al Qaeda, flush with men and arms from the defeated forces of Libya's Muammar Gaddafi, is building a desert haven.

Hollande, who won wide praise for ordering air strikes and sending troops to the former French colony Mali last week, said little in response. In office for only eight months, he has warned of a long, hard struggle and now faces a risk of attacks on more French and other Western targets in Africa and beyond.

The Algerian government ruled out negotiating and the United States and other Western governments condemned what they called a terrorist attack on a facility, now shut down, that produces 10 percent of Algeria's gas, much of which is pumped to Europe.

The militants, communicating through established contacts with media in neighboring Mauritania, said they had dozens of men armed with mortars and anti-aircraft missiles at the base, near the town of In Amenas close to the Libyan border.

They said they had repelled a raid by Algerian forces after dark on Wednesday. There was no government comment on that. Algerian officials said earlier about 20 gunmen were involved.

LIVES AT RISK

The militants issued no explicit threat but made clear the hostages' lives were at risk: "We hold the Algerian government and the French government and the countries of the hostages fully responsible if our demands are not met and it is up to them to stop the brutal aggression against our people in Mali," read one statement carried by Mauritanian media.

They condemned Algeria's secularist government for letting French warplanes fly over its territory to Mali. They also accused Algeria of shutting its border to Malian refugees.

The group also said its fighters had rigged explosives around the site and any attempt to free the hostages would lead to a "tragic end."

Algerian Interior Minister Daho Ould Kablia said the raid was led by Mokhtar Belmokhtar, who fought Soviet forces in Afghanistan in the 1980s and recently set up his own group in the Sahara after falling out with other local al Qaeda leaders.

A holy warrior-cum-smuggler dubbed "The Uncatchable" by French intelligence and "Mister Marlboro" by some locals for his illicit cigarette-running business, Belmokhtar's links to those who seized towns across northern Mali last year are unclear.

French media said the militants were also demanding that Algeria, whose government fought a bloody war against Islamists in the 1990s, release dozens of prisoners from its jails.

The head of a French catering company said he had information from a manager who supervises some 150 Algerian employees at the site. Regis Arnoux of CIS Catering told BFM television the local staff was being prevented from leaving but was otherwise free to move around inside and keep on working.

"The Westerners are kept in a separate wing of the base," Arnoux said. "They are tied up and are being filmed. Electricity is cut off, and mobile phones have no charge.

"Direct action seems very difficult. ... Algerian officials have told the French authorities as well as BP that they have the situation under control and do not need their assistance."

Norway's Statoil operates the gas field in a joint venture with Britain's BP and the Algerian state company Sonatrach.

"Our total focus is on fixing this situation and returning our colleagues home," Statoil CEO Helge Lund told a news conference in Stavanger, western Norway. "Family, friends and colleagues are waiting for news from them."

Lund will travel later Thursday to Bergen, western Norway, to a crisis centre set up in a hotel by the company where some relatives of the hostages are gathering.

Japan's JGC Corp. said in a statement it was cooperating with the government but would not comment the number of its employees kidnapped.

INTERNATIONAL SUPPORT

French forces, which began air strikes against the Mali rebels last Friday, were hours from a ground attack on Wednesday, army chief Edouard Guillaud said.

Mali residents said a column of some 30 French Sagaie armored vehicles had set off toward rebel positions from the town of Niono, 300 km (190 miles) from the capital, Bamako.

Many inhabitants of northern Mali have welcomed the French attacks, although some also fear being caught in the cross-fire.

Hollande has sent hundreds of paratroopers and marines to fight the Mali rebels who seized Timbuktu and other oasis towns in northern Mali last year and imposed Islamic law, including public amputations and beheading.

The rebels include fighters from al Qaeda's mainly Algerian-based North African wing AQIM as well as home-grown Malian groups Ansar Dine and MUJWA. Islamists have warned Hollande that he has "opened the gates of hell" for all French citizens.

Panetta said Washington was still studying legal and other issues before providing more help to France in the war in Mali.

The United Nations has authorized an African force to fight the rebels. It was expected to start only in September, but the French intervention speeded the timetable; about 2,000 troops from Nigeria, Chad, Niger and other states are expected soon.

Chad's foreign minister, Moussa Faki Mahamat, told Radio France International his country alone would send 2,000 troops, suggesting plans for the regional force were already growing.

A Malian military source said French special forces units were taking part in the operation. Guillaud said France's strikes, involving Rafale and Mirage jet fighters, were being hampered because militants were sheltering among civilians.

Hollande said on Tuesday that French forces would remain in Mali until stability returned to the West African nation.

The conflict, in a landlocked state of 15 million twice the size of France, has displaced an estimated 30,000 people and raised concerns across mostly Muslim West Africa of a radicalization of Islam in the region.

But many who have lived for many months under harsh and violent Islamist rule said they welcomed the French.

"There is a great hope," one man said from Timbuktu, where he said Islamist fighters were trying to blend into civilian neighborhoods. "We hope that the city will be freed soon."

(Additional reporting by Pascal Fletcher and Andrew Callus in London, Balazs Koranyi in Oslo, Laurent Prieur in Nouakchott, Daniel Flynn in Dakar, John Irish, Catherine Bremer and Nick Vinocur in Paris, David Alexander in Rome, Andrew Quinn in Washington, Jane Wardell in Sydney and Kaori Kaneko in Tokyo; Writing by Alastair Macdonald; Editing by Peter Graff)

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World shares slip as growth concerns re-emerge

LONDON (Reuters) - World shares slipped while safe-haven bonds and gold firmed on Wednesday as poor economic data from Europe rekindled investors' caution about the health of the global economy.

The euro was under pressure following weak German GDP figures on Tuesday and a warning from the chairman of the euro zone finance ministers' group, Jean-Claude Juncker, that the common currency was now "dangerously high".

Germany's economy shrank at the fastest pace in almost three years in the final part of 2012, and data on Wednesday showed demand for new cars in Europe fell in December to the lowest level since 1995.

"Following the German growth numbers yesterday there is simply a realization the recession in the euro zone in the fourth quarter will be much bigger than the previous consensus and that is pushing up German (bond) yields and putting downward pressure on equities," said Daiwa Securities economist Tobias Blattner.

The MSCI world equity index <.miwd00000pus> was down 0.3 percent at around 349 points, while Europe's FTSE Eurofirst 300 index <.fteu3> of top shares dipped roughly 0.2 percent in choppy early trade to 1,158.52 points.

London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were flat to 0.3 percent lower.

Following the data and Juncker's comments, the euro was roughly 0.2 percent lower against the dollar at $1.3283 by 0815 GMT down 1 percent against the yen at 116.95 yen.

The yen - which had been sharply sliding against the dollar in recent weeks on expectations of aggressive Japanese policy easing under new Prime Minister Shinzo Abe - rose for a second day after a Japanese cabinet minister warned of the possible harm of excessive yen weakness.

Bond markets in Europe were largely quiet before Germany's first sale of the year of benchmark 10-year bonds.

Bund yields, which have risen to attractive levels compared with recent months, are expected to draw in buyers. Yields rose as much as 23 basis points during early January before retracing slightly as buyers re-emerged.

Wall Street posted modest gains on Tuesday after encouraging retail sales data although futures prices point to it giving back some of those gains on Wednesday.

Asian markets largely struggled, with Japan's benchmark Nikkei stock average <.n225> shedding 2.6 percent in its largest daily fall in eight months.

Assets traditionally viewed as offering protection against risk have been boosted this week as U.S. political wrangling has begun again over raising its self-imposed debt limit.

Spot gold was up 0.2 percent to $1,681.55 an ounce, underpinned by the jitters, and the benchmark gold futures contract on the Tokyo Commodity Exchange hit a record high for a third consecutive session.

U.S. crude was up 0.2 percent to $93.44 a barrel while Brent was up 0.3 percent to $110.61.

(editing by David Stamp)

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Anti-doping officials want Armstrong under oath

A televised confession by Lance Armstrong isn't enough.

Anti-doping officials want the disgraced cyclist to admit his guilt under oath before considering whether to lift a lifetime ban clouding his future as a competitive athlete. That was seconded by at least one former teammate whom Armstrong pushed aside on his way to the top of the Tour de France podium.

"Lance knows everything that happened," Frankie Andreu told The Associated Press on Tuesday. "He's the one who knows who did what because he was the ringleader. It's up to him how much he wants to expose."

Armstrong has been in conversations with U.S. Anti-Doping Agency officials, touching off speculation that he may be willing to cooperate with authorities there and name names.

Interviewer Oprah Winfrey didn't say if the subject was broached during the taping Monday at a downtown Austin hotel. In an appearance on "CBS This Morning," she declined to give details of what Armstrong told her, but said she was "mesmerized and riveted by some of his answers."

Asked whether the disgraced cyclist appeared genuinely contrite after a decade of fierce denials, Winfrey replied, "I felt that he was thoughtful, I thought that he was serious, I thought that he certainly had prepared for this moment. I would say that he met the moment."

She was promoting what has become a two-part special, Thursday and Friday, on her OWN network.

Around the same time, World Anti-Doping Agency officials issued a statement saying nothing short of "a full confession under oath" would cause them to reconsider Armstrong's lifetime ban from sanctioned events.

The International Cycling Union also urged Armstrong to tell his story to an independent commission it has set up to examine claims that the sport's governing body hid suspicious samples from the cyclist, accepted financial donations from him and helped him avoid detection in doping tests.

The ban was only one of several penalties handed to Armstrong after a scathing, 1,000-page report by USADA last year. The cyclist was also stripped of his seven Tour de France titles, lost nearly all of his endorsements and was forced to cut ties with the Livestrong cancer charity he founded in 1997.

The report portrayed Armstrong as the mastermind of a long-running scheme that employed steroids, blood boosters such as EPO, and a range of other performance-enhancers to dominate the tour. It included revealing testimony from 11 former teammates, including Andreu and his wife, Betsy.

"A lot of it was news and shocking to me," Andreu said. "I am sure it's shocking to the world. There's been signs leading up to this moment for a long time. For my wife and I, we've been attacked and ripped apart by Lance and all of his people, and all his supporters repeatedly for a long time. I just wish they wouldn't have been so blind and opened up their eyes earlier to all the signs that indicated there was deception there, so that we wouldn't have had to suffer as much.

"And it's not only us," he added, "he's ruined a lot of people lives."

Armstrong was believed to have left for Hawaii. The street outside his Spanish-style villa on Austin's west side was quiet the day after international TV crews gathered there hoping to catch a glimpse of him. Nearby, members of his legal team mapped out a strategy on how to handle at least two pending lawsuits against Armstrong, and possibly a third.

The AP reported earlier Tuesday that Justice Department officials were likely to join a whistleblower lawsuit against Armstrong by former teammate Floyd Landis, citing a source who works outside the government and requested anonymity because he was not authorized to speak on the record about the matter.

The lawsuit by Landis, who was stripped of the 2006 Tour de France title after testing positive, alleges that Armstrong defrauded the U.S. government by repeatedly denying he used performance-enhancing drugs. The deadline to join the False Claims Act lawsuit, which could require Armstrong to return substantial sponsorship fees and pay a hefty penalty, is Thursday.

Landis is hardly the only one seeking money back from Armstrong.

During his long reign as cycling champion, Armstrong scolded some critics in public, didn't hesitate to punish outspoken riders during the race, and waged legal battles against still others in court.

The London-based Sunday Times has already filed a lawsuit to recover about $500,000 it paid Armstrong to settle a libel case, and Dallas-based SCA Promotions, which tried to deny him a promised bonus for a Tour de France win, has threatened to bring another lawsuit seeking to recover more than $7.5 million awarded by an arbitration panel.

In Australia, the government of the state of South Australia said it will seek the repayment of several million dollars in appearance fees paid to Armstrong for competing in the Tour Down Under in 2009, 2010 and 2011.

"We'd be more than happy for Mr. Armstrong to make any repayment of monies to us," South Australia Premier Jay Weatherill said.

___

Litke reported from Chicago, Vertuno from Austin, Texas. Pete Yost in Washington and John L. Mone in Dearborn, Mich., also contributed to this report.

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EPA changed course after oil company protested

WEATHERFORD, Texas (AP) — When a man in a Fort Worth suburb reported his family’s drinking water had begun “bubbling” like champagne, the federal government sounded an alarm: An oil company may have tainted their wells while drilling for natural gas.

At first, the Environmental Protection Agency believed the situation was so serious that it issued a rare emergency order in late 2010 that said at least two homeowners were in immediate danger from a well saturated with flammable methane. More than a year later, the agency rescinded its mandate and refused to explain why.

Now a confidential report obtained by The Associated Press and interviews with company representatives show that the EPA had scientific evidence against the driller, Range Resources, but changed course after the company threatened not to cooperate with a national study into a common form of drilling called hydraulic fracturing. Regulators set aside an analysis that concluded the drilling could have been to blame for the contamination.

For Steve Lipsky, the EPA decision seemed to ignore the dangers in his well, which he says contains so much methane that the gas in water pouring out of a garden hose can be ignited.

“I just can’t believe that an agency that knows the truth about something like that, or has evidence like this, wouldn’t use it,” said Lipsky, who fears he will have to abandon his dream home in an upscale neighborhood of Weatherford.

The case isn’t the first in which the EPA initially linked a hydraulic fracturing operation to water contamination and then softened its position after the industry protested.

A similar dispute unfolded in west-central Wyoming in late 2011, when the EPA released an initial report that showed hydraulic fracturing could have contaminated groundwater. After industry and GOP leaders went on the attack, the agency said it had decided to do more testing. It has yet to announce a final conclusion.

Hydraulic fracturing — often called “fracking” — allows drillers to tap into oil and gas reserves that were once considered out of reach because they were locked in deep layers of rock.

The method has contributed to a surge in natural gas drilling nationwide, but environmental activists and some scientists believe it can contaminate groundwater. The industry insists the practice is safe.

Range Resources, a leading independent player in the natural gas boom, has hundreds of gas wells throughout Texas, Pennsylvania and other mineral-rich areas of the United States. Among them is a production site — now owned by Legend Natural Gas — in a wooded area about a mile from Lipsky’s home in Weatherford, about a half-hour drive west of Fort Worth.

State agencies usually regulate water and air pollution, so the EPA’s involvement in the Texas matter was unusual from the start. The EPA began investigating complaints about the methane in December 2010, because it said the Texas Railroad Commission, which oversees oil and gas drilling, had not responded quickly enough to the reports of bubbling water.

Government scientists believed two families, including the Lipskys, were in danger from methane and cancer-causing benzene and ordered Range Resources to take steps to clean their water wells and provide affected homeowners with safe water. The company stopped doing that after state regulators declared in March 2011 that Range Resources was not responsible. The dispute between the EPA and the company then moved into federal court.

Believing the case was headed for a lengthy legal battle, the EPA asked an independent scientist named Geoffrey Thyne to analyze water samples taken from 32 water wells. In the report obtained by the AP, Thyne concluded from chemical testing that the gas in the drinking water could have originated from Range Resources’ nearby drilling operation.

Meanwhile, the EPA was seeking industry leaders to participate in a national study into hydraulic fracturing. Range Resources told EPA officials in Washington that so long as the agency continued to pursue a “scientifically baseless” action against the company in Weatherford, it would not take part in the study and would not allow government scientists onto its drilling sites, said company attorney David Poole.

In March 2012, the EPA retracted its emergency order, halted the court battle and set aside Thyne’s report showing that the gas in Lipsky’s water was nearly identical to the gases the Plano, Texas-based company was producing.

“They said that they would look into it, which I believe is exactly what they did,” Poole said. “I’m proud of them. As an American, I think that’s exactly what they should have done.”

The EPA offered no public explanation for its change in thinking, and Lipsky said he and his family learned about it from a reporter. The agency refused to answer questions about the decision, instead issuing a statement by email that said resolving the Range Resources matter allowed the EPA to shift its “focus in this case away from litigation and toward a joint effort on the science and safety of energy extraction.”

Rob Jackson, chairman of global environmental change at Duke University’s Nicholas School of the Environment, reviewed Thyne’s report and the raw data upon which it was based. He agreed the gas in Lipsky’s well could have originated in a rock formation known as the Barnett shale, the same area where Range Resources was extracting gas.

Jackson said it was “premature” to withdraw the order and said the EPA “dropped the ball in dropping their investigation.”

Lipsky, who is still tied up in a legal battle with Range Resources, now pays about $ 1,000 a month to haul water to his home. He, his wife and three children become unnerved when their methane detectors go off. Sometime soon, he said, the family will have to decide whether to stay in the large stone house or move.

“This has been total hell,” Lipsky said. “It’s been taking a huge toll on my family and on our life.”

The confidential report relied on a type of testing known as isotopic analysis, which produces a unique chemical fingerprint that sometimes allows researchers to trace the origin of gas or oil.

Jackson, who studies hydraulic fracturing and specializes in isotopic analysis, acknowledged that more data is needed to determine for certain where the gas came from. But even if the gas came from elsewhere, Range Resources’ drilling could have contributed to the problem in Lipsky’s water because gas migrates, he added.

The company insists the gas in Lipsky’s water is from natural migration and not drilling. Range Resources’ testing indicates the gas came from a different rock formation called Strawn shale and not the deeper Barnett shale, Poole said.

In addition, he said, isotopic analysis cannot be used in this case because the chemical makeup of the gases in the two formations is indistinguishable. A Range Resources spokesman also dismissed Thyne and Jackson as anti-industry.

Range Resources has not shared its data with the EPA or the Railroad Commission. Poole said the data is proprietary and could only be seen by Houston-based Weatherford Laboratories, where it originated. It was analyzed for Range Resources by a Weatherford scientist, Mark McCaffrey, who did not respond to requests for an interview.

Gas has always been in the water in that area, Poole said. And years before Range Resources began drilling, at least one water well in the neighborhood contained so much methane, it went up in flames.

At another home with dangerously high methane levels in the water, the company insisted the gas had been there since the well was first dug many years ago. The homeowner was not aware of anything wrong until Range Resources began drilling in 2009.

Jackson said it was “unrealistic” to suggest that people could have tainted water and not notice.

“It bubbles like champagne or mineral waters,” he said. “The notion that people would have wells and have this in their water and not see this is wrong.”

___

Associated Press writers Nomaan Merchant in Dallas, Allen Breed in Raleigh, N.C., and Michael Rubinkam in Allentown, Pa., contributed to this report.

___

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP

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Give Lance another chance?

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

Lance Armstrong over the years

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STORY HIGHLIGHTS

• Mike Downey: I haven't a smidgen of sympathy for the dope "pedaler"


• Randy Cohen: If many cycling fans are right, most of the top riders engaged in doping


• Jeff Pearlman: Lance racing again is not truly an option anyway -- he's almost 42


• John Hoberman: Any lifting of his lifetime ban should be based on his total cooperation

(CNN) -- CNN asked for views on whether disgraced cyclist Lance Armstrong deserves another chance in light of his apologies to his charity, Livestrong, and his soon-to-be-aired interview with Oprah Winfrey, in which it's widely reported he admitted he used performance-enhancing drugs. Armstrong is banned from professional cycling for life and was stripped of his seven Tour de France titles.

Mike Downey: No sympathy for the dope "pedaler"

I was at the Champs-Elysees finish line on July 27, 1986, when the bike of Greg LeMond whizzed by, making him the first American to win the Tour de France. It was a monumental achievement: 210 cyclists, 23 grueling days, long and winding roads, treacherously steep hills.

Mike Downey

Equally hard had to be the abuse LeMond endured in retirement after publicly decrying the sport's hypocrisies and daring to suggest that seven-time winner Lance Armstrong, the All-American boy himself, had not been on the up-and-up. Vilified and disdained, LeMond was treated like a tobacco company's insider who blew the whistle on the industry's methods or like Carl Lewis speculating that his rival Ben Johnson had not won foot races fairly and squarely. As if he had an ax to grind.

I haven't a smidgen of sympathy for Armstrong now that he is exposed for the dope-pedaler -- that's pedal, not peddle -- he truly was. He played the Jean Valjean part of the persecuted man for every franc that it was worth. Let us resist the magnanimous gesture to forgive, forget and give Lance a second (eighth?) chance. He was caught, unlike certain baseball players who have been merely suspected or accused, and has, evidently, confessed. Seven strikes and you're out.

Professional athletes do exist who 'fess up, serve a suspension, then are welcomed back. They, as with the ballplayers, did disgrace their life's work, yet none single-handedly won their sport's championship with their chicanery. None stood apart as Armstrong did and hogged credit for being a champion, a hero. None won a championship by compelling teammates to also cheat, at risk of being shunned, smeared or dropped from the team.

I say we say goodbye for good to Monsieur Armstrong, farewell, adieu. Off to Elba and exile with you, you rogue. Vive LeMond.

Mike Downey is a former columnist for The Los Angeles Times and Chicago Tribune.

Randy Cohen: All big-time cyclists who doped should confess

The important ethical question isn't whether Lance deserves a second chance. Chance to do what? Cheat in seven more Tours? Lie about it seven more times? Bully seven more teammates into doping? He behaved badly and is rightly censured.

Randy Cohen

But that should be the beginning, not the end, of this disheartening story. There's a lot more blame to go around. Cycling's governing bodies also have an ethical duty, and that's to provide a setting in which honest athletes can participate.

If many cycling fans are right, most of the top riders engaged in doping. You simply can't compete against them without doing the same. What was Lance to do? Quit the sport? And who inherits his Tour titles? Some other cheat?

It would be thrilling if one by one, they declined in a Spartacus moment -- an honest, I-am-drugged-Spartacus moment. This is a community problem; it demands community solutions. Unless those who run big-time cycling institute real reforms, Lance's fall will be merely a celebrity scandal, and there's little good in that.

Randy Cohen wrote The Ethicist column in The New York Times Magazine till 2011, and he is a former writer for "Late Night With David Letterman." His latest book is "Be Good: How to Navigate the Ethics of Everything."

Jeff Pearlman: He's almost 42, forget about it

Back when I was 8 or 9, my parents took me to my first trip to Disney World. I remember Space Mountain, and I remember Mickey Mouse's enormous head. For some reason, though, what I remember most is a sign posted within the borders of Epcot. It read: If you can dream it, you can do it.

"Dad," I said, "I dream of being 8-feet tall. But that'll never happen ..."

"Well, son ..."

Jeff Pearlman

"And, Dad, I dream of being able to fly just like Superman. But that'll never happen ..."

"Son, the thing is ..."

"And Dad, I'd really like to win an Olympic gold medal for my Joanie Cunningham impersonation, but ..."

"Son," my father said, "It's a sign. It's just a damn sign."

Sigh.

Throughout Lance Armstrong's recent fight to prove he hadn't cheated, and throughout the plights of Barry Bonds and Roger Clemens and Mark McGwire and the alleged PED abuses of dozens upon dozens of others, I've often thought about that day at Disney and, specifically, of that sign.

As a boy, it spoke to me as a kid longing for greatness. Maybe, just maybe, I can accomplish anything. Maybe ...

As a sportswriter who has chronicled much of the past two decades, however, it strikes me as foolish nonsense. As Armstrong's recent admission shows, the words must be altered to -- if you can dream it, you can do it -- as long as you leave your ethics at the door and cheat your ass off and don't mind throwing your supporters under a bus.

That, now, is the sad, pathetic legacy of men such as Armstrong and Bonds. Once upon a time, they dreamed of doing wonderful things: Of hitting baseballs 500 miles; of speeding down the largest mountains; of being special. Then, however, they learned (as we all do) that we are bound by the confines of humanity. Within the rules and regulations, there is only so strong. There is only so fast. There is only so big. Hence, one can either accept his lot in life and put out the best possible effort, or he can cheat and lie and enjoy the temporary fruits while trying to avoid the inevitable plummet.

Do I think he should be allowed to race again? No. Lance Armstrong racing again is not truly an option anyway -- he's almost 42.

Just the same, I am thrilled that he has -- at long last -- begun to come clean. There are lessons to be learned here, beyond those pertaining to cycling. And day's end, when the cheering has stopped, there is something to be said for trying your best, even if your best doesn't result in triumph.

There is empowerment in knowing you gave your all. There is satisfaction in achieving your own PR. There is the sense of community and camaraderie that comes in the aftermath of a sporting event. Cold beers, casual conversation, sore muscles -- bliss.

Armstrong and Bonds forgot that long ago. For them, it was all -- and only --about winning. They got lost in a corrupt world of enhancers and boosters and had their heads turned by the fame and accolades and money.

Now, though, they are outcasts. They are the tombstones of long-ago dreams.

Jeff Pearlman is the author of "Sweetness: The Enigmatic Life of Walter Payton." He blogs at jeffpearlman.com. Follow him on Twitter.

Wayne Norman: Like a convenience store robbery that goes wrong

Lance knows that a quick mea culpa is not enough -- otherwise, he would have admitted to doping long ago. Instead, he made a calculated gamble that he could preserve his reputation and brand by lying, defrauding corporate sponsors, impugning the authorities pursuing him and actively slandering and suing honest whistle-blowers who stood in his way.

Wayne Norman

That bet has not paid off.

Like a convenience store robbery that goes wrong and leads to a hostage-taking and a high-speed chase, Lance's doping is by far the least of his transgressions. A highly calculated confession about the doping still looks like Lance gambling to advance his interests. Former fans will need contrition and a sense that he genuinely regrets the gamble. Those he slandered and defrauded should demand even more.

Lance cannot get another chance as an athlete at this point. That would make a mockery of all sporting rules and their enforcement. When you've been that blatantly dishonest, it won't be easy to convince people to trust you again.

Wayne Norman is the Mike & Ruth Mackowski professor of ethics at Duke University.

John Eustice: Armstrong can make a deal and get leeway

What Lance has, the U.S. Anti-Doping Agency wants, and Lance is not going to give it to them unless he gets his (athletic) life back. USADA knows that Lance stands at the nexus of two distinct cultures, two completely different mindsets: The ideals and dreams of Olympic sport and the harsh, ratings-driven business of the professional game.

John Eustice

They view this conquest of Lance as their great chance to have the Olympic vision triumph over the cynicism of the pros. But they need his cooperation to win.

Despite the admitting of pros into the Olympic Games, in truth, the two cultures do not mesh. Pro sports are businesses where talent, ratings and the subsequent cash flows from them, must be protected just as in any other entertainment business.

USADA needs to understand how the professional mentality has "infected" the Olympic movement, and Lance is the key. Was he protected by the International Cycling Union? Was the Tour de France involved? Did it go even higher that that?

USADA makes deals. If Lance can provide them with information on the underground system that fuels athletes worldwide, and explain, for example, how of the 6,000 drugs tests given at the London Games, only one came back positive, allowing him to participate in some triathlons seems a very small price to pay.

Cycling analyst John Eustice was one of the pioneer Americans to break into the world of European pro cycling. He co-founded and captained the first American team to race in the Tour of Italy, and is a two-time United States Professional Champion.

John Hoberman: Is it possible to acquire a conscience overnight?

The report that Lance Armstrong choked up during his apology to Livestrong Foundation employees earlier this week would seem to mark an abrupt departure from the cold, calculating and manipulative personality he has displayed throughout his celebrated athletic career.

Having closely followed the Armstrong saga as a doping researcher, I have come to doubt whether this is man is capable of genuine contrition. One can only imagine the apologetic telephone calls he has been making to the former teammates and other victims he persecuted, threatened, bullied and slandered over so many years.

John Hoberman

Is it really possible to acquire a conscience overnight? Can a person who has long-demonstrated reckless self-assertion, a lack of empathy, coldheartedness, egocentricity, superficial charm and irresponsibility suddenly repent after months of hostile intransigence?

One is tempted to say no, since this ensemble of traits bears a disturbing similarity to the psychopathic personality. Let us hope that Armstrong is capable of leaving his old self behind and building a healthier personal identity.

Any lifting of his lifetime ban from officially recognized competitions should be made contingent on his absolute and total cooperation with the United States Anti-Doping Agency and the World Anti-Doping Agency. Armstrong must demonstrate some good faith by revealing everything he knows about the illicit trade in doping drugs as well as the cynical and opportunistic doctors who have profited from these corrupt arrangements.

John Hoberman teaches at the University of Texas at Austin and is the author of "Mortal Engines: The Science of Performance and the Dehumanization of Sport." He was a consultant in 2005 for the SCA Promotions of Dallas, the insurance company demanding that Lance Armstrong repay a total of $7.5 million it paid to him in Tour de France bonuses.

Shawn Klein: If he cooperates, maybe the lifetime ban could be reduced

After years of adamant denials and protestations of his innocence, Lance Armstrong has reportedly come forward to admit his use of prohibited performance enhancing drugs. If Armstrong is sincerely contrite and forthright in his apology, most people, including myself, will forgive him for his use of prohibited drugs.

Shawn Klein

He cheated in a sport known for its widespread cheating; that doesn't justify his use but it does put his actions into an understandable context that makes it easier to excuse the use. Further, if Armstrong cooperates with the U.S. Anti-Doping Agency, his lifetime ban from cycling ought to be reduced to something more reasonable.

The more troubling aspects of the Armstrong case are the allegations that he harassed and intimidated team members and potential whistle-blowers. Violating the arbitrary rules of a sport shows a character flaw and poor judgment, but it is hard to see who else is truly harmed by such actions. But to threaten, intimidate and coerce others (either to use performance enhancing drugs themselves or to cover up his team's use) causes real harm.

Even if only some of these reports are accurate, Armstrong will have to do more than sit on Oprah's couch to earn forgiveness.  Shawn Klein teaches at the Department of Philosophy and Center for Ethics and Entrepreneurship at Rockford College in Illinois and writes the Sportsethicist blog.

What do you think? Comment below and join us on Friday for a live chat on Twitter @CNNOpinion about Lance Armstrong.

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of the authors.

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Japanese airlines ground Boeing 787s after emergency landing

TOKYO (Reuters) - Japan's two leading airlines grounded their fleets of Boeing 787s on Wednesday after one of the Dreamliner passenger jets made an emergency landing, the latest in a series of incidents to heighten safety concerns over a plane many see as the future of commercial aviation.

All Nippon Airways Co said instruments aboard a domestic flight indicated a battery error, triggering emergency warnings to the pilots. Shigeru Takano, a senior safety official at the Civil Aviation Bureau, said a second warning light indicated smoke.

Wednesday's incident, described by a transport ministry official as "highly serious" - language used in international safety circles as indicating there could have been an accident - is the latest in a line of mishaps - fuel leaks, a battery fire, wiring problem, brake computer glitch and cracked cockpit window - to hit the world's first mainly carbon-composite airliner in recent days.

"I think you're nearing the tipping point where they need to regard this as a serious crisis," said Richard Aboulafia, a senior analyst with the Teal Group in Fairfax, Virginia. "This is going to change people's perception of the aircraft if they don't act quickly."

ANA, which said the battery in the forward cargo hold was the same lithium-ion type as one involved in a fire on another Dreamliner at a U.S. airport last week, grounded all 17 of its 787s, and Japan Airlines Co suspended its 787 flights scheduled for Wednesday and Thursday. ANA and JAL said they would decide on Thursday whether to resume Dreamliner flights the following day. ANA and JAL operate around half of the 50 Dreamliners delivered by Boeing to date.

COMPREHENSIVE REVIEW

The 787, which has a list price of $207 million, represents a leap in the way planes are designed and built, but the project has been plagued by cost overruns and years of delays. Some have suggested Boeing's rush to get planes built after those delays resulted in the recent problems, a charge the company strenuously denies.

Both the U.S. Federal Aviation Administration (FAA) and the National Transportation Safety Board (NTSB) said they were monitoring the latest incident as part of a comprehensive review of the Dreamliner announced late last week.

ALARM TRIGGERED

ANA flight 692 left Yamaguchi in western Japan shortly after 8 a.m. local time (2300 GMT Tuesday) bound for Haneda Airport near Tokyo, a 65-minute flight. About 18 minutes into the flight, at 30,000 feet, the plane began a descent, cutting its altitude to 20,000 feet in about four minutes. It made an emergency landing 16 minutes later, according to flight-tracking website Flightaware.com.

A spokesman for Osaka airport authority said the plane landed at Takamatsu at 8:45 a.m. All 129 passengers and eight crew evacuated via the plane's inflatable chutes. Chief Cabinet Secretary Yoshihide Suga said five people were slightly injured.

At a news conference - where ANA's vice-president Osamu Shinobe bowed deeply in apology - the carrier said a battery in the forward cargo hold triggered emergency warnings to the pilots, who decided on the emergency action. "There was a battery alert in the cockpit and there was an odd smell detected in the cockpit and cabin, and (the pilot) decided to make an emergency landing," Shinobe said.

Passengers leaving the ANA flight told local TV there was an odor like burning plastic on the plane as soon as it took off. "There was a bad smell as soon as we started and before we made the emergency landing there was an announcement and the stewardess' voice was shaking, so I thought this was serious," one passenger told TBS TV.

Another man told a local broadcaster: "There was a strong, burning smell, but the smoke appeared after they opened the emergency doors, after we landed."

Marc Birtel, a Boeing spokesman, told Reuters: "We've seen the reports, we're aware of the events and are working with our customer."

Robert Stallard, analyst at RBC Capital Markets, said lost revenue at the Japanese airlines could prompt compensation from Boeing. "What started as a series of relatively minor, isolated incidents now threatens to overhang Boeing until it can return confidence, and this looks to be a near-term challenge given the media's draw to all things 787," he said.

UNDER REVIEW

In Asia, only the Japanese and Air India have the Dreamliner in service, but other airlines are among those globally to have ordered around 850 of the new aircraft.

Australia's Qantas Airways said its order for 15 Dreamliners remained on track, with its Jetstar subsidiary due to take delivery of the first of the aircraft in the second half of this year.

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