SAN ANTONIO – A lengthy and contentious fight over Texas redistricting plans took a new twist Friday when the state and a minority group opposing the redrawn maps started negotiating over the disputed districts in hopes of preserving its April 3 primary.
The state attorney general's office told a three-judge panel in San Antonio that the goal should be to draw a temporary map to keep the primary, but minority groups signaled the discussions may have greater significance.
While hashing out a temporary map just for the 2012 elections would avoid Texas delaying its primary for a second time, it would leave unresolved a larger clash over minority representation. That separate battle has escalated all the way to the U.S. Supreme Court.
Texas is one of nine states with a history of racial discrimination that must ask the Washington federal court or the U.S. Department of Justice to pre-approve any changes to state election laws.
After a daylong hearing Friday in San Antonio, a three-judge panel said that if the two sides can't reach an agreement by Feb. 6, the primary will be pushed back.
That hearing came a day after testimony ended in Washington over whether parts of the new Republican-drawn map violate the Voting Rights Act. Closing arguments are set for Tuesday and judges have given no indication on when they might rule.
Negotiations between the state and minority groups were under way even before the court made its ruling late Friday. Democratic state Rep. Trey Martinez-Fischer, chairman of the Mexican American Legislative Caucus, said Texas Attorney General Gregg Abbott had approached his group to make a serious attempt to reach a compromise that would keep the state's April primary.
With that trial winding down, Martinez-Fischer said the strong case made by minority groups to the Washington court could be driving the state's readiness to talk about reaching a compromise on the maps that will be used in the upcoming election while the two court cases are resolved.
"What's significant is that there's never been any discussions. There are now," Martinez-Fischer said. "Something's motivating that."
Addressing the San Antonio court, Assistant Attorney General David Mattax characterized the discussions as purely geared toward getting a temporary map in place so the state could keep its primary. Anything agreed-upon, in other words, would not be final.
"An interim map for 2012. That's what we need to get done now," Mattax told the court.
But minority groups questioned if that was even still feasible after the Supreme Court ordered the San Antonio to take a second try at drafting temporary political maps for the 2012 election.
Even some Republicans weren't sold on the idea of a temporary map. An attorney for Republican U.S. Rep. Joe Barton, whose district could be affected by a new map, said the attorney general's office does not have the authority to negotiate map boundaries outside of what the Texas Legislature submitted.
"The state cannot advocate a map other than that which the policy-making body passed," said Joe Nixon, Barton's attorney. "That is why Congressman Barton chose to intervene to protect his interest. We're not in a situation where we can say what can we agree or not agree on."
Minority groups want congressional and legislative maps that reflect the increase in minorities living in Texas, something they say the Legislature's maps do not do. Republican lawmakers say they drew new maps to benefit their political party, not to discriminate against minorities.
The long-running dispute over the maps has volleyed between the San Antonio federal court which is considering the allegations of racial discrimination and the one in Washington which is checking to make sure the maps comply with the Voting Rights Act of 1965, which is intended to pre-empt discriminatory election laws from going into effect.
The San Antonio court had previously drawn interim maps while the Washington trial took place, but those were thrown out last week by the U.S. Supreme Court, which said the San Antonio court did not show enough deference to the map crafted by Texas lawmakers and adjusted parts of the map where there was no Voting Rights Act argument.
Abbott had asked the San Antonio court to quickly draw temporary maps so that Texas can still hold its primary on April 3. Minority groups, meanwhile, asked for more time to explain what they think the maps should look like.

At issue is how the maps, drawn last year by Republicans in the Legislature, treat minorities. Republican leaders say the maps merely benefit their party's candidates, but minority groups claim they discriminate by diluting minority voting power. Texas must redraw political districts every 10 years to adjust for population changes.

NEW YORK (Reuters) – Research in Motion's Thorsten Heins plans to waste no time in his new job. The BlackBerry maker's chief executive said he will present the board with his plan for company's future in just a matter of weeks.

The German-born executive, who took over from two longstanding co-CEOs on Saturday, said his plans for RIM would be "significant" though he did not divulge details in an interview with Reuters.

"I will have time with the board in two weeks to present my ideas and changes," Heins said.

But the executive, who was promoted from the role of chief operating officer, said he has already done groundwork to tackle his company's most pressing problem - persuading the U.S. market to covet the BlackBerry again.

While RIM is growing in other countries, Heins conceded that its U.S. business is in need of a major revival after losing out to rivals like Apple Inc's iPhone at U.S. service providers and corporations, where it once had a clear advantage among employees heavily dependent on its email service.

"In general I wouldn't consider RIM as a turnaround candidate. It is a turnaround candidate in the U.S.," he said. "We lost market share in this market quite substantially. That is something that we have to address."

While U.S. operators such as Verizon Wireless and AT&T Inc have helped BlackBerry with heavy advertising and promotions in the past, these operators have been much more focused in the last few years on devices like iPhone and smartphones based on the Google Inc operating system.

Heins' quest to regain ground with these operators has been complicated by the fact that RIM had to announce in December that it is delaying the launch of phones based on BlackBerry 10 - its next-generation software - until the later part of 2012 as it is awaiting the availability of a high-powered chip.

The executive would not say when exactly these phones would hit the market but implied that they would arrive in time for the year-end holiday-shopping season in the fourth quarter.

So in the meantime, Heins will concentrate on getting the most current BlackBerrys into more consumers hands. He noted that only 20 percent of U.S. BlackBerry users have the company's latest phones, which he says are competitive with rival smartphones.

The rest of RIM's U.S. customers have devices with older RIM software, some of which are "two generations behind," he said.

To overcome this, RIM has devised a new upgrade plan with U.S. operators to promote phones with the BlackBerry 7 system, which was launched in August last year.

"All the plans are ready. The carrier agreements are all ready. Now we have to get off the starting grid. Now we need to execute that upgrade program," Heins said.

While he did not want to disclose specifics about the new agreements, Heins said RIM could look at new ways of bundling different devices together or offering carriers smartphones with a package of pre-loaded applications.

He is also betting on the company's PlayBook tablet to compete with the Apple iPad tablet. This spring, Heins said that RIM will launch a version of the Playbook, with a high-speed wireless connection based on LTE - a technology that the top three U.S. operators are building into their networks.

Verizon Wireless and AT&T are already promoting LTE devices including smartphones and tablets from RIM's rivals. RIM's first smartphones with LTE connections will be in the company's BlackBerry 10 line-up, Heins said.

MOMENT OF SURPRISE

In his first presentation to Wall Street as CEO earlier this week, Heins said he did not think the company needed drastic change, causing some analysts to worry that the executive would not do enough to reverse the company's fortunes.


But the executive said on Friday that he was merely telling Wall Street that he does not want to change the core of RIM.


"Is RIM up for sale, is RIM up for a split-up?" He rejected those possibilities as "a drastic, seismic change because it would tear the company apart."


Heins, who has been with RIM for four years after spending over two decades at German engineering group Siemens, was became COO responsible for software and products seven months ago.


He explained that RIM had succession plans for co-CEOs Mike Lazaridis and Jim Balsillie in place for some time and that he had an inkling that he was being groomed to follow in their footsteps when he was named COO.


"The moment they tell you it's still a surprise," Heins said, smiling broadly and adding that he immediately said yes.


Lazaridis and Balsillie, who turned the BlackBerry maker into a global company and a household name, stepped down last week but will remain on the board.


Some analysts have worried whether these executives would have too much of a say in the future strategy of the company because of their position on the board.


Heins said, it would be an advantage to be able to tap into the experience and company knowledge of RIM founder Lazaridis, but he made it clear that he would be the one calling the shots.


"What I do with the company is my decision. The CEO runs the company."


(Reporting By Sinead Carew; Additional reporting by Alastair Sharp and Peter Lauria; Editing by Gary Hill)

ROY, Utah – The two teens had a detailed plot, blueprints of the school and security systems, but no explosives. They had hours of flight simulator training on a home computer and a plan to flee the country, but no plane.
Still, the police chief in this small Utah town said, the plot was real.
"It wasn't like they were hanging out playing video games," Roy Police Chief Gregory Whinham said Friday. "They put a lot of effort into it."
Dallin Morgan, 18, and a 16-year-old friend were arrested Wednesday at Roy High School, about 30 miles north of Salt Lake City, after a fellow student reported that she received ominous text messages from one of the suspects.
"If I tell you one day not to go to school, make damn sure you and your brother are not there," one message read, according to court records. "We ain't gonna crash it, we're just gonna kill and fly our way to a country that won't send us back to the U.S.," read another message.
While police don't have a motive, one text message noted they sought "revenge on the world."
The suspects say they were inspired by the deadly 1999 Columbine High School shootings in Littleton, Colo., and the younger suspect even visited the school last month to interview the principal about the shootings and security measures.
However, one suspect told authorities it was offensive to be compared to the Columbine shooters because "those killers only completed 1 percent of their plan," according to a probable cause statement.
The teens had so studied their own school's security system that they knew how to avoid being seen on the facility's surveillance cameras, authorities said.
Whinham said the "very smart kids" had spent at least hundreds of dollars on flight simulator programs, books and manuals, studying them in anticipation of carrying out their plan to bomb an assembly at the 1,500-student high school.
While authorities said the suspects believed they could pull it off, experts said, it would have been a long shot.
Royal Eccles, manager at the Ogden-Hinckley Airport, about a mile from the school, said it would have been nearly impossible for the students to steal a plane or get the knowledge to fly one using flight simulator programs.
"It's highly improbable," Eccles said. "That's how naive these kids are."
Whinham said authorities searched two homes and two cars and found no explosives, but added that police continue to search other locations. The chief said it appeared that "a key component of their plan was not developed."
"I wouldn't want to say that they don't have it or that they weren't ready for it," he said. "I'm just saying that we haven't found anything that says they were ready for it yet."
Whinham said it appeared the suspects, who have no criminal history, also had prepared alternate attack plans, but he declined to elaborate. He also declined to say whether any firearms were found during their searches.
"Most houses have firearms in them," he said. "This is the state of Utah."
While authorities have said they have not found any explosives, they charged Morgan on Friday with possession of a weapon of mass destruction.

The basis for the charge wasn't immediately clear, though one of the elements of that offense is conspiracy to use a weapon, not necessarily possessing one. Prosecutors say they are considering additional charges.

Morgan has been released on bond, pending a court hearing Wednesday. The 16-year-old, whom The Associated Press isn't naming because he's a minor, remained held pending further court hearings.

Whinham said he knew both suspects personally, given the small size of the suburban Utah town of roughly 36,000 people. He said he had met with both of the suspects' parents and they were "devastated."

The 16-year-old suspect's father declined comment Friday, and no one answered the door at Morgan's home.

The plot "was months in planning," said Whinham, who also noted Morgan told investigators the 16-year-old had previously made a pipe bomb using gun powder and rocket fuel.

In Colorado, Columbine Principal Frank DeAngelis confirmed Friday he met with the 16-year-old suspect on Dec. 12 after the teenager told him he was doing a story for his school newspaper on the shootings.

DeAngelis said he frequently gets requests from students doing research on the shootings, and the request from this one wasn't unusual.

"He asked the same questions I get from many callers and visitors asking about the shooting," DeAngelis said. He said the student wanted details about the shooting, the aftermath and the steps taken since then to protect the school.

Police said the student told them Roy school officials would not allow him to write the story.

DeAngelis said he was shocked when he got a call from Utah police on Wednesday asking if he had met with the youth. He said the interview raised no red flags but that he would do things differently with future requests.

"This was definitely a wake-up call. This is the first time this has happened," DeAngelis said.

Police credit the suspects' schoolmate with helping foil their plan, though Whinham said the school didn't have any assemblies set, and the suspects revealed no specific dates to pull off the attack.

Sophomore Bailey Gerhardt told The Salt Lake Tribune she received alarming text messages from one of the suspects and alerted school administrators.

"I get the feeling you know what I'm planning," read one of the messages, according to court records. "Explosives, airport, airplane."

___

Associated Press writer Steven K. Paulson in Denver contributed to this report.

WASHINGTON (Reuters) – Republican Senator John Hoeven is set to introduce legislation on Monday seeking to bypass President Barack Obama and empower Congress to approve the controversial Keystone XL pipeline, an aide said on Friday.

Obama put TransCanada's $7 billion Canada-to-Texas pipeline on ice last week, saying that the administration needed more time to review its environmental impacts.

Hoeven's bill would seek to put Congress effectively in control of the pipeline decision and take it away from the Obama administration.

But any such measure faces the steep hurdle of having to be approved by the Democratic-controlled Senate. And even if it did, it would have to be signed by the president in order to become law.

Environmentalists pushed for Obama to block the 1,700-mile (2,735-km) pipeline. They loathe the idea of increasing the flow of oil sands crude from Canada because of its bigger carbon footprint in the mining process.

Republicans say the pipeline would create jobs but environmentalists say the job-creation claims are inflated.

"We've been working with (the Republican) leadership in the Senate and all our colleagues, and we believe Senator Hoeven's bill has support from a lot of people in the Senate," said Ryan Bernstein, an energy advisor to Hoeven.

Bernstein declined to elaborate on how many other senators have signed on to sponsor the bill.

Republicans have made the pipeline and its construction jobs a key political issue in the run-up to the 2012 presidential election.

Lawmakers in the Republican-controlled House of Representatives also are considering legislation to advance the project, and have not ruled out attaching it to payroll tax cut legislation that needs to pass Congress by the end of February.

On the Senate side, the route for Keystone to advance to a vote is not yet clear.

"We'll introduce it and I'm sure we'll be looking at all options," Bernstein told Reuters.

(Reporting by Roberta Rampton; Editing by Sandra Maler and Christopher Wilson)

BEIRUT – Two days of bloody turmoil in Syria killed at least 74 people, including small children, as forces loyal to President Bashar Assad shelled residential buildings and fired on crowds in a dramatic escalation of violence, activists said Friday.
Video posted online showed the bodies of five small children, five women and a man, all bloodied and piled on beds in what appeared to be an apartment after a building was hit in the city of Homs. A narrator said an entire family had been "slaughtered."
Much of the violence was focused in Homs, where heavy gunfire hammered the city Friday in a second day of chaos. A day earlier, the city saw a flare-up of sectarian kidnappings and killings between its Sunni and Alawite communities, and pro-regime forces blasted residential buildings with mortars and gunfire, according to activists.
At least 384 children have been killed, as of Jan. 7, in the crackdown on Syria's uprising since it began nearly 11 months ago, the U.N. children's agency UNICEF said Friday. The count, based on reports from human rights groups, included children under age 18.
Most of the deaths took place in Homs and most of the victims were boys, UNICEF said. It said 380 children have been detained, including some under age 14. The United Nations estimates that more than 5,400 people have died in the turmoil.
The U.N. Security Council met in a closed-door session to discuss the crisis, which diplomats said was a step toward a possible U.N. resolution against the Damascus regime.
However, any resolution faces strong opposition from China and Russia, and both nations have veto power. Russian Deputy Foreign Minister Gennady Gatilov said Friday that Moscow will oppose any resolution because it does not exclude the possibility of outside military interference.
The Syrian uprising, which began last March with mostly peaceful protests, has become increasingly violent in recent months as army defectors clash with government forces and some protesters take up arms to protect themselves. The violence has inflamed the sectarian divide in the country, where members of Assad's Alawite sect dominate the regime despite a Sunni Muslim majority.
Activists said at least 35 people were killed in Homs on Thursday and another 39 people were killed across the country Friday.
The video posted Friday by activists showed the bodies of five young children, their faces bloodied, wrapped in orange plastic bags. It said the children were believed to be from two families, the Akras and the Bahadours. Brown cardboard placards with the children's names written in Arabic were placed on their chests, identifying them: Thanaa, Ali, Najm, Abdul-Ghani and Sidra.
The video could not be independently verified.
Hilal Khashan, a political science professor at the American University of Beirut, said the spike in violence was linked to increasing pressure from the international community, the Arab League and the United Nations.
"The regime is trying to finish the matter through military means as soon as possible," and for that reason the level of violence increased," he said.
On Tuesday, Syrian Foreign Minister Walid al-Moallem insisted that Damascus will continue its crackdown and said Syria would not accept any international interference in its affairs.
Assad's regime claims terrorists acting out a foreign conspiracy by the U.S., Israel and Gulf Arab countries are behind the uprising, not protesters seeking change.
The head of Arab League observers in Syria said in a statement that violence in the country has spiked over the past few days. Sudanese Gen. Mohammed Ahmed al-Dabi said the cities of Homs, Hama and Idlib have all witnessed a "very high escalation" in violence since Tuesday.
A "fierce military campaign" was also under way in the Hamadiyeh district of Hama since the early hours of Friday, according to the British-based Syrian Observatory for Human Rights and other activists. They said the sound of heavy machine-gun fire and loud explosions reverberated across the area.
Some activists reported seeing uncollected bodies in the streets of Hama.

Elsewhere, a car bomb exploded Friday at a checkpoint outside the northern city of Idlib, the Observatory said, citing witnesses. The number of casualties was not immediately clear.

Details of the wave of killings in Homs emerged Friday from an array of residents and activists

"There has been a terrifying massacre," Rami Abdul-Rahman, director of the Syrian Observatory for Human Rights, told the AP on Friday. He called for an independent investigation.

Thursday started with a spate of sectarian kidnappings and killings between the city's population of Sunnis and Alawites, a Shiite sect to which Assad belongs as well as most of his security and military leadership, said Mohammad Saleh, a centrist opposition figure and resident of Homs.

There was also a string of attacks by gunmen on army checkpoints, Saleh said. Checkpoints are a frequent target of dissident troops who have joined the opposition.

The Observatory said at least 11 people, including eight children, died when a building came under heavy mortar and machine-gun fire in the city's Karm el-Zaytoun neighborhood. Some residents spoke of another massacre that took place when shabiha — armed regime loyalists — stormed the district, slaughtering residents in an apartment, including children.

"They are killing people because of their sect," said one Sunni resident of Karm el-Zaytoun, speaking on condition of anonymity for fear of reprisal.

Thursday's death toll in Homs was at least 35, said the Observatory and the Local Coordination Committees, an umbrella group of activists. Both groups cite a network of activists on the ground in Syria for their death tolls.

The reports could not be independently confirmed. Syria tightly controls access to trouble spots and generally allows journalists to report only on escorted trips, which slows the flow of information.

Also Friday, Iran's official IRNA news agency said gunmen in Syria kidnapped 11 Iranian pilgrims traveling by road from Turkey to Damascus.

Iranian pilgrims routinely visit Syria — Iran's closest ally in the Arab world — to pay homage to Shiite holy shrines. Last month, seven Iranian engineers building a power plant in central Syria were kidnapped. They have not yet been released.

The Free Syrian Army, a group of army defectors fighting the regime, released a video on its Facebook page claiming responsibility for the kidnapping and saying the Iranians were taking part in the suppression of the Syrian people.

___

AP writer Elizabeth A. Kennedy contributed to this report from Beirut.

CANBERRA, Australia – A clash between protesters and Australian police that forced bodyguards to rush Prime Minister Julia Gillard out of an event appears to have been set off by information released by one of Gillard's own aides.
The aide has been fired. Gillard's office said Friday that a member of her media unit told someone that opposition leader Tony Abbott would be at Thursday's event in Canberra, the capital. A spokesperson said in a statement that the information was passed on to indigenous-rights protesters who were demonstrating nearby.
The protesters were angry about recent comments Abbott made about their movement, and about 200 of them surrounded the restaurant where he and Gillard were. Gillard stumbled as she was rushed out and lost a shoe, which the protesters picked up.
Gillard's office said that although the staff member had not suggested or encouraged violence or demonstration, the release of the information was "an error of judgment."
Abbott told Sky News on Saturday that Gillard must reveal exactly what the fired staffer said, and to whom. He called it a "serious security breach" and an apparent attempt to "trigger something potentially dire for political advantage."
"Trouble was triggered and it seems that someone from the prime minister's office had a very big hand in all of that," he said.
Michael Outram, national manager of protection for the Australian Federal Police, said police may file charges against some of the protesters. Protest leaders denied doing anything wrong, accused the police of manhandling protesters and said they planned to lodge a complaint against the officers involved.
About 200 indigenous-rights supporters marched on the nation's Parliament House on Friday, burning an Australian flag in front of a wall of police and carrying signs with messages such as "All cops are bastards." No one was hurt and the protesters left minutes later.
The restaurant where Thursday's clash occurred is close to the so-called Aboriginal Tent Embassy, where the protesters had demonstrated peacefully earlier in the day. That long-standing, ramshackle collection of tents and temporary shelters is a center point of protests against Australia Day, which marks the arrival of the first fleet of British colonists in Sydney on Jan. 26, 1788. Many Aborigines call it Invasion Day because the land was settled without a treaty with traditional owners.
The Tent Embassy celebrated its 40th anniversary on Thursday, and Abbott had earlier angered activists by saying it was time the embassy "moved on." Abbott said Friday that his comment had been misinterpreted, and that he never meant to imply the embassy should be torn down.
The blue suede shoe Gillard lost was handed to a security guard at Parliament House late Friday and taken to her office.

WASHINGTON, DC (Reuters) – In his final act before departing the Securities and Exchange Commission on Friday, the agency's inspector general, David Kotz, criticized how the agency analyzes the economic impact of some of its Dodd-Frank rules.

Kotz's criticism, contained in a report, could have ramifications for the SEC, which has lost several court battles over the years because of flaws in how it demonstrates that the benefits of a rule outweigh its costs.

"We found that the extent of quantitative discussion of cost-benefit analyses varied among rulemakings," Kotz wrote in his report. "Based on our examination of several Dodd-Frank Act rulemakings, the review found that the SEC sometimes used multiple baselines in its cost-benefit analyses that were ambiguous or internally inconsistent."

Last year, U.S. business groups successfully convinced a federal appeals court to overturn one of the SEC's Dodd-Frank rules that aimed to empower shareholders to more easily nominate directors to corporate boards.

In rejecting the rule, the court said the agency failed to properly weigh the economic consequences.

Some of the business groups, such as the U.S. Chamber of Commerce, have since raised similar concerns with other rulemakings pending before the SEC.

Congress passed the Dodd-Frank act in 2010 to more closely police financial markets and institutions after the 2007-2009 financial crisis. The legislation gives the SEC responsibility to write roughly 100 new rules.

Although the SEC is not subject to an express statutory requirement to conduct a cost-benefit analysis of its rules, other laws do require the agency to consider the effects of its rules on capital formation, competition and efficiency.

In addition, the SEC must also follow federal rulemaking procedures, such as providing the public with an opportunity to comment on its proposals.

This is the second report Kotz has issued looking at the quality of the SEC's cost-benefit analysis.

Both reports were issued after certain members of the Senate Banking Committee, including ranking Republican Richard Shelby, voiced concerns about whether regulators were adequately examining the economic impact of Dodd-Frank rules.

To determine how well the SEC is faring, Kotz's office retained Albert Kyle, a finance professor at the University of Maryland's Robert H. Smith School of Business, to help carry out the review.

Friday's report covered a sample of Dodd-Frank rulemakings, including a rule allowing shareholders a non-binding vote on compensation, several asset-backed securities rules and two proposals pertaining to the reporting of security-based swap data.

Kotz's report was critical of the agency in a number of areas.

In one instance, the report cites a memo in which former General Counsel David Becker gave his opinion that the SEC should do thorough cost-benefit analyses on rules that are not explicitly required by Congress.

Rules mandated by Congress, however, generally would not need the same level of cost-benefit research, the memo said.

The report suggested that the agency should reconsider these guidelines, or else it risks "not fulfilling the essential purposes of such analyses."

SEC management, in a written response to the report, disagreed with that point.


"We believe Professor Kyle's opinion fails to appreciate both the practical limitations on the scope of cost-benefit a regulator can conduct, and the distinct roles of Congress and administrative agencies," they said.


"We think it is entirely sensible ... for the staff to focus its attention and the commission's limited resources on matters that the commission has the authority to decide."


Kotz made other recommendations, including using a single consistent baseline in the cost-benefit analysis process and having economists provide more input.


SEC spokesman John Nester declined to comment beyond the SEC comments in the report.


(Reporting By Sarah N. Lynch; Editing by Steve Orlofsky, Gary Hill)

WASHINGTON – The American economy may not be truly healthy yet, but it's healing.
The 2.8 percent annual growth rate reported Friday for the fourth quarter was the fastest since spring 2010 and was the third straight quarter that growth has accelerated.
Experts cautioned, however, that the pace was unlikely to last and that it's not enough to sharply drive down the unemployment rate.
Unemployment stands at 8.5 percent — its lowest level in nearly three years after a sixth straight month of solid hiring. And Friday's Commerce Department report suggests more hiring gains ahead.
For the final three months of 2011, Americans spent more on vehicles, and companies restocked their supplies at a robust pace.
Still, overall growth last quarter — and for all of last year — was slowed by the sharpest cuts in annual government spending in four decades. And many people are reluctant to spend more or buy homes, and many employers remain hesitant to hire, even though job growth has strengthened.
The outlook for 2012 is slightly better. The Federal Reserve has estimated economic growth of roughly 2.5 percent for the year, despite abundant risk factors: federal spending cuts, weak pay increases, cautious consumers and the risk of a European recession.
Economists noted that most of the growth in the October-December quarter was due to companies restocking their supplies at the fastest rate in nearly two years. That pace is expected to slow.
"The pickup in growth doesn't look half as good when you realize that most of it was due to inventory accumulation," said Paul Ashworth, an economist at Capital Economics.
Ashworth expects annualized growth to slip below 2 percent in the current January-March quarter. Other economists have similar estimates.
Stocks opened lower after the government reported the growth figures. The Dow Jones industrial average closed down about 74 points. Broader indexes were mixed.
In a normal economy, roughly 3 percent growth is a healthy figure. It's enough to keep unemployment down — but not so much growth as to ignite inflation.
But coming out of a recession, much stronger growth is needed. By some estimates, the economy would have to expand at least 5 percent for a full year to drive down the unemployment rate by 1 percentage point.
In many ways, the economy did end 2011 on a strong note. Companies invested more in equipment and machinery in December.
People are buying more cars, and consumer confidence has risen. Even the depressed housing market has shown enough incremental gains to lead some economists to detect the start of a turnaround.
In the final three months of 2011, consumer spending grew at a 2 percent annual rate. That was up modestly from the July-September quarter. Consumer spending is critical because it fuels about 70 percent of the economy.
Much of the growth was powered by a 15 percent surge in sales of autos and other long-lasting manufactured goods.
Incomes, which have been weak because of still-high unemployment, grew ever so slightly, at a tepid 0.8 percent annual rate, following two straight quarterly declines. Unless pay picks up, consumers who have dipped into savings in recent months may pull back.

"Consumers don't have much income growth, and to even achieve a 2 percent growth rate in spending in the fourth quarter, they had to run down their saving rate," said Nigel Gault, chief economist at IHS Global Insight.

And government spending at all levels fell at an annual rate of 4.6 percent in the fourth quarter and 2.1 percent for the year — the sharpest drop since 1971. Defense cuts at the start and end of the year were a key factor. With Congress aiming to shrink budget deficits, the likelihood of further federal spending cuts could weigh on the economy.

Economic growth is measured by the change in the gross domestic product, or GDP. The GDP reflects the value of all goods and services — from machinery to manicures to hotel bookings to jet fighters — produced in the United States.

Friday's estimate of GDP growth was the first of three for the October-December quarter. The figure will be revised twice, in February and then in March.

Ian Shepherdson, an economist at High Frequency Economics, is among the more optimistic analysts. He said he thought business investment in capital goods would be stronger and consumer spending higher this year.

Many fear that a likely recession in Europe could cool demand for U.S. manufactured goods. Growth would slow. Without many more jobs and better pay, consumer spending could weaken.

The Fed signaled this week that a full economic recovery could take at least three more years.

Although things may not be good, they're getting better.

Gault predicts the economy will create an average of 150,000 jobs a month in 2012 based on his expectation that the year will be slightly stronger than 2011. Last year, the economy created an average 133,000 jobs a month.

"We are starting to see improvements in the housing market, and consumers are working down their debt levels," Gault said. "That is all good and will help us this year."

ATHENS (Reuters) – Greece and its private creditors head back to the negotiating table on Saturday to put together the final pieces of a long-awaited debt swap agreement needed to avert an unruly default.

After weeks of muddling through round after round of inconclusive talks, the negotiations appear to be in their final phase with both sides hoping to secure a preliminary deal before Monday's summit of euro zone leaders.

The debt swap, in which private creditors are to take a 50 percent cut in the nominal value of their Greek bond holdings in exchange for cash and new bonds, is a pre-requisite for the country to secure a 130-billion-euro rescue package.

Prime Minister Lucas Papademos told Reuters in an interview he expects the debt talks to be concluded within days.

"We made significant progress over the last few weeks and in the last few days in particular. We are trying to conclude the discussions as quickly as possible. I am quite optimistic an agreement will be reached in the coming days," he said.

Still, concern has grown that the deal may not do enough to get the country's debt reduction plan back on track, and that Greece's European partners will be forced to stump up funds to cover the shortfall.

Athens also faces problematic talks with the "troika" of foreign lenders - the European Commission, IMF and European Central Bank - who have warned it needs to do more to drive through painful reforms before they dole out any more money.

"There is a lot of work to be done because at the same time we have the negotiations for the new (bailout) program," a Greek finance ministry official said.

"It's all very dense, difficult and crucial. There is optimism because the country needs to survive and we need to protect its citizens because they have suffered a lot."

Athens and its creditors have broadly agreed that new bonds under the swap would probably have a 30-year maturity and a progressive interest rate. The deal is aimed at chopping 100 billion euros off Greece's crushing 350-billion-euro debt load.

But they have wrangled for weeks over the interest rate Greece must pay on the new bonds and pressure has grown in recent days on the European Central Bank and other public creditors to accept a cut in the value of their Greek bond holdings like the private sector creditors.

A debt deal must be sealed in about three weeks at the latest as Greece has to repay 14.5 billion euros of debt on March 20. Otherwise Greece will sink into an uncontrolled default that might spread turmoil across the euro zone.

Papademos promised on Friday this would not happen. "Greece will not default," he said.

Senior euro zone officials have also expressed optimism on the debt deal, though previous predictions of an imminent agreement have failed to become reality.

Greece is in its fifth year of recession, with hopes of a quick exit of the crisis receding rapidly due to squabbling politicians, rising social anger and an inability to get its debt load under control.

(Writing by Deepa Babington; editing by David Stamp)

LAGOS, Nigeria – A U.S. citizen kidnapped by gunmen in Nigeria's oil-rich southern delta has been freed after a week in captivity, the U.S. Embassy said.
U.S. Embassy spokeswoman Deb MacLean told The Associated Press on Friday that the man had been released after being kidnapped in Warri in Delta state on Jan. 20. MacLean declined to offer any other details, citing privacy rules. Delta state police spokesman Charles Muka said he had not been informed about the man's release, as his company refused to cooperate with local authorities.
The freed hostage was identified as William Gregory Ock, 50, of Bowdon, Georgia, by his sister, Dee Dee Patterson.
Patterson told the AP on Friday that the family had no details of his release.
"The only thing we know is that he is safe and he is in a secure location," Patterson said by telephone.
She had no information on when Ock would return home to Georgia.
It was not immediately clear whether a ransom had been paid to secure his release, though many companies working in the region carry kidnap insurance and simply pay a negotiated price to see their employees freed. Kidnappers had made contact with authorities previously and demanded a $333,000 ransom.
The attack Jan. 20 occurred outside a bank branch in Warri, one of the main cities in nation's Niger Delta, a region of mangroves and swamps where foreign oil companies pump 2.4 million barrels of crude oil a day. The gunmen attacked Ock as he came outside, shooting his police escort to death before abducting him, Muka said.
Investigators believe the gunmen trailed him for some time before the attack, Muka said.
Foreign firms have pumped oil out of the delta for more than 50 years. Despite the billions flowing into Nigeria's government, many in the delta remain desperately poor, living in polluted waters without access to proper medical care, education or work.
In 2006, militants started a wave of attacks targeting foreign oil companies, including bombing their pipelines, kidnapping their workers and fighting with security forces. That violence waned in 2009 with a government-sponsored amnesty program promising ex-fighters monthly payments and job training. However, few in the delta have seen the promised benefits and criminal gangs still roam the region, increasingly targeting middle-class Nigerians.
In 2011, there were five reported kidnappings of U.S. citizens in Nigeria, according to a recent U.S. State Department travel warning about the country. The most recent occurred in November when two U.S. citizens and a Mexican were kidnapped from a Chevron Corp. offshore oil field and held for about two weeks, the State Department said.
A German working in the city of Kano in north Nigeria was abducted Thursday by unknown gunmen, authorities have said.
___
Associated Press writer Russ Bynum in Savannah, Georgia, contributed to this report.
___
Jon Gambrell can be reached at http://www.twitter.com/jongambrellAP.

WASHINGTON – President Barack Obama met with former President George H.W. Bush and former Florida Gov. Jeb Bush in the Oval Office on Friday, joining in a bipartisan gathering in an election year.
The White House said the three men enjoyed a personal visit in the Oval Office as they have in the past when the former president is visiting Washington.
Obama is scheduled to speak Saturday at the Alfalfa Club dinner, an annual event for Washington's movers and shakers. The former president and his son planned to attend the dinner.
The 87-year-old former president used a wheelchair during the meeting. Bush spokesman Jim McGrath said Bush is in "fine health and he's not in any pain" but has become increasingly reliant upon using a wheelchair and a scooter. "His legs don't work the way he wants them to," McGrath said.
Obama, who succeeded President George W. Bush in the White House, has maintained good relations with the Bush family.
He awarded George H.W. Bush the Presidential Medal of Freedom, the nation's highest civilian honor for contributions to society. During the ceremony, Obama called Bush a "gentleman" and said the former president's life has been "a testament that public service is a noble calling."
Last March, Obama joined with Jeb Bush at a Miami high school to tout his education agenda, sounding themes of empowering teachers, demanding accountability and enticing states to raise their academic standards. The former Florida governor has been a champion of education reform.
The Bush family has been courted by Republicans seeking the nomination to challenge Obama. George H.W. Bush told the Houston Chronicle in December that he supported Mitt Romney, telling his hometown newspaper that the former Massachusetts governor exhibited "stability, experience and principles." Neither Jeb Bush nor George W. Bush has endorsed a Republican candidate.

YAKIMA, Wash. – In a Jan. 26 story about food labeling legislation, The Associated Press reported erroneously that Syngenta had announced plans to begin testing genetically modified wheat. Syngenta spokesman Paul Minehart said the company halted work on genetically modified wheat several years ago.

(Reuters) – Civil rights activist the Rev. Jesse Jackson on Friday urged Grammy organizers to reinstate 31 ethnic and minority musical categories that have been cut from the music industry's top awards.

In a letter to Recording Academy president Neil Portnow, sent three weeks before the February 12 Grammy Awards show, Jackson said the elimination of awards for Native American and Hawaiian musicians, and cuts in Latin Jazz, R&B and other categories were ill-considered and unfair.

Jackson said some of the categories dropped by the Recording Academy in a major overhaul last year "constitute the very heart of the music that nourishes and inspires minority communities."

Writing on behalf of the Rainbow Push Coalition of U.S. civil rights groups, Jackson called for an urgent meeting with Portnow to try and resolve the conflict that has spurred months of protests and a lawsuit by leading musicians.

Portnow said on Friday he was "receptive to meeting with the Rev. Jackson to explain how our nomination process works and to show the resulting diverse group of nominees it produced" for this year's Grammy Awards.

Paul Simon, Carlos Santana, Bonnie Raitt and Bobby Sanabria are among dozens of musicians who have protested the decision, announced last April, to slash the number of Grammy categories to 78 from 109 for the 2012 Grammy Awards.

Some categories, such as Hawaiian and Native American albums were dropped completely, while others including Latin music and R&B saw the number of award categories halved.

Portnow said at the time the changes were necessary to maintain "the prestige of the highest and only peer-recognized award in music."

Sanabria and three other Latin Jazz musicians filed a lawsuit in New York in August saying the cuts would harm their careers financially. They have also called for a boycott of the CBS network, which broadcasts the annual Grammy Awards show in Los Angeles.

The 2012 Grammy Awards take place on February12. Rapper Kanye West leads the field of contenders with seven nominations followed by British singer Adele, Bruno Mars and alternative rock band Foo Fighters.

(Reporting By Jill Serjeant; Editing by Bob Tourtellotte)

Corrects Jackson name in paragraph 1.

MIAMI (Reuters) – Newt Gingrich struggled to regain momentum in the Republican presidential race on Friday as two new polls showed him falling behind rival Mitt Romney, who was seen as the winner of the final debate before the Florida primary.

The White House contenders courted Florida's sizable Hispanic vote, many of them Cubans, with appearances on Friday at the Hispanic Leadership Network, where Romney received an unusually warm reception and the reaction to Gingrich was more sedate.

Bouncing back after losing the South Carolina primary to Gingrich on Saturday, Romney had an 8-percentage point lead over him in a Reuters/Ipsos poll released on Friday. A Quinnipiac University poll gave him a 9-percentage point edge.

The Reuters/Ipsos online poll gave Romney 41 percent and Gingrich 33 percent ahead of Saturday's contest.

That margin is similar to three polls released on Thursday that all showed Romney taking control of the battle in Florida, where the former Massachusetts governor enjoys a financial and organizational advantage over Gingrich.

Romney battered the former House of Representatives speaker in two debates this week, wounding him in the same format that has helped fuel Gingrich's campaign.

"With the debates now over, Gingrich will need some other way to reverse the tide that appears to be going against him," Quinnipiac University pollster Peter Brown said.

Tuesday's Florida primary is the fourth contest in the state-by-state battle for the Republican nomination to challenge President Barack Obama, a Democrat, in the November 6 U.S. election. Romney won in New Hampshire and former Senator Rick Santorum won the first contest in Iowa.

Romney repeatedly attacked Gingrich at Thursday's debate in Florida, scoring points on immigration, candidates' finances and even lunar exploration.

"That was Romney on Red Bull," Republican strategist Ron Bonjean said. "You could tell Newt was tired, he's carrying a heavy load. He was counting on pure momentum to carry him through Florida, and that momentum has stopped."

At a campaign event in Cape Canaveral, Florida, Romney reminded the crowd of his debate performance.

"How about that debate last night? Wasn't that fun?" Romney asked. "I've had the fun of two debates where I had to stand up and battle, and battling was fun."

'CUBA WILL BE FREE'

An energized Romney, whom Gingrich has described as the most anti-immigrant candidate in the Republican race, won several standing ovations from the Hispanic crowd in Miami earlier on Friday.

"There is a time coming soon when Cuba will be free," Romney told them, adding "America can't sit back" in dealing with the island nation off the coast of Florida.

Gingrich received a much quieter response, once again mocking Romney's call for "self-deportation" of illegal immigrants as "a fantasy. It's not a solution."

Gingrich said the concept might work for younger illegal immigrants who had been in the United States a short time, but not for older immigrants with deep family ties. They should be allowed to apply for citizenship through local councils similar to draft boards, he said.

A Florida win for Romney would put him in a strong position to capture the nomination as the primary map tilts in his favor in February with contests in seven states where he has the potential for strong showings.


Next up on February 4 is Nevada, where Romney won with 51 percent of the vote during his failed 2008 presidential bid. On February 7 Minnesota and Colorado hold caucuses and Missouri holds a primary. Gingrich did not make the ballot in Missouri.


Four of the states with February contests - Nevada, Maine, Colorado and Minnesota - use caucus systems, which often require greater organization to rally voter turnout. That could help Romney take advantage of his superior financial and staff resources.


On February 28, Michigan and Arizona hold primaries. Romney was raised in Michigan, where his father was a governor and car executive.


A new Gingrich television ad in Florida asked: "What kind of man would mislead, distort and deceive just to win an election?"


"This man would be Mitt Romney," the ad's narrator said.


Romney's camp said the sharp tone from Gingrich was a sign he was desperate to distract from his own record as House speaker, where he faced an ethics probe, and as a consultant with mortgage giant Freddie Mac.


"It is laughable to see lectures on honesty coming from a paid influence peddler who suffered an unprecedented ethics reprimand, was forced to pay a $300,000 penalty, and resigned in disgrace at the hands of his own party," Romney spokeswoman Andrea Saul said.


(Additional reporting by Ros Krasny; writing by John Whitesides; editing by Alistair Bell and Mohammad Zargham)

RENO, Nev. – A federal judge in Nevada who handed horse protection advocates a rare victory last fall has rejected their latest request to block government roundups of free-roaming mustangs in the West, saying they'll have to go to Congress if they think the animals are being treated inhumanely and need more protection.
U.S. District Judge Howard McKibben granted a temporary restraining order on Aug. 30 that cut short by a day a roundup near the Nevada-Utah line after he determined a helicopter flew too close to a horse in violation of the law.
But he said during a hearing in Reno Thursday that he was denying a new injunction request from the Texas-based Wild Horse Freedom Federation partly because the Bureau of Land Management has made some positive changes since then. He also said he can't issue injunctions based on speculation about future abuses.
"This court is really not in a position to be the overseer of the BLM," McKibben said. "This court is not going to police all gathers in the U.S. or even all gathers in the district of northern Nevada."
"This Court is not Congress, not an administrative agency. We are not the first branch of government. We are not the second branch. We're here to consider grievances," he said.
His ruling was a disappointment to horse protection advocates who were buoyed by his court order last fall when he took the BLM to task for its actions at the Triple B complex roundup near the Nevada-Utah line northwest of Ely, Nev.
"Your honor, you are the last vestige of hope here," said Gordon Cowan, a lawyer for the group. "Basically, there is no other accountability."
Erik Petersen, a Justice Department lawyer representing BLM, said the agency took McKibben's earlier order seriously and responded with its own internal review of the Triple B roundup "in great part in response to this court's ruling on the temporary restraining order."
The law already dictates the horses be treated humanely but the agency now has "a half dozen specific instructions" or guidelines for roundup contractors to follow, including prohibiting helicopters from flying too close to animals, Petersen said.
The BLM said in a formal review made public in December that some mustangs in the Triple B complex were whipped in the face, kicked in the head, dragged by a rope around the neck, and repeatedly shocked with electrical prods, but the agency concluded none of the mistreatment rose to the level of being inhumane. BLM Director Bob Abbey did, however, determine additional training is needed for the workers and contractors involved.
The government's wild horse program is intended to protect wild horse herds and the rangelands that support them. About 33,000 wild horses live in 10 Western states, of which about half are in Nevada. Under the program, thousands of horses are forced into holding pens, where many are vaccinated or neutered before being placed for adoption or sent to long-term corrals in the Midwest.
Animal rights advocates complain that the roundups are inhumane, but ranchers and other groups say they're needed to protect fragile grazing lands that are used by cattle, Bighorn sheep and other wildlife.
Petersen said the Triple B roundup ended the day after McKibben's previous order on Aug. 30. He said BLM has no plans to resume that roundup — the only one specifically targeted in the group's original lawsuit filed last year.
But Cowan said he said there's no question BLM eventually will return to the area for another roundup.
"They finished it to avoid your temporary restraining order," Cowan said. "They are coming back whether they say it or not. Triple B is not over," he said.
If that happens, McKibben said the issue will be ripe again for legal challenge. He repeated several times that he couldn't understand why the critics won't acknowledge BLM is taking steps to treat the horses more humanely.
"Is your position that absolutely nothing constructive has happened ... that everything done so far is basically meaningless?" he asked Cowan, who answered "yes" each time.
"I don't happen to agree," the judge said. "I think frankly that hurts your argument."

Cowan said that's the group's position because group Vice President Laura Leigh continues to observe abuse of horses at other gathers.

McKibben said the new BLM guidelines were an improvement.

"While they have not resulted in the embodiment of new rules or regulations, I see some positive things that happened between the time we were in court before and today," he said.

"I would strongly urge the Bureau of Land Management to proceed in that direction. But that's a decision that must be made by the first branch (Congress)."