March 06, 2017
 

North Korea fired four ballistic missiles into the sea off Japan's northwest on Monday, angering South Korea and Japan, days after it promised retaliation over U.S.-South Korea military drills it sees as a preparation for war.

South Korea's military said the missiles were unlikely to have been intercontinental ballistic missiles (ICBM), which can reach the United States. The missiles flew on average 1,000 km (620 miles) and reached a height of 260 km (160 miles).

Some of the missiles landed in waters as close as 300 km (190 miles) from Japan's northwest coast, Japan's Defence Minister Tomomi Inada said in Tokyo.

Japanese Prime Minister Shinzo Abe said "strong protests" had been lodged with nuclear-armed North Korea, which has carried out a series of nuclear and missile tests in defiance of U.N. resolutions.

"The launches are clearly in violation of Security Council resolutions. It is an extremely dangerous action," Abe told parliament.

South Korea's acting President Hwang Kyo-ahn condemned the launches as a direct challenge to the international community and said Seoul would swiftly deploy a U.S. anti-missile defense system despite angry objections from China.

The missiles were launched from the Tongchang-ri region near the reclusive North's border with China, South Korean military spokesman Roh Jae-cheon told a briefing. It was too early to say what the relatively low altitude indicated about the types of missiles, he said.

Joshua Pollack, editor of the U.S.-based Non-Proliferation Review, said it did not appear the North had launched an ICBM.

"It sounds like a field exercise involving deployed missiles, probably ones we've seen before," Pollack said.

U.S. officials, speaking on condition of anonymity, also told Reuters there were no indications so far that North Korea had tested an ICBM.

 

The U.S. military said it detected and tracked what it assessed was a North Korean missile launch, but it did not pose a threat to North America.

Chinese Foreign Ministry spokesman Geng Shuang said at a daily news briefing that China, which is holding its annual meeting of the National People's Congress, had noted North Korea's latest action.

"All sides should exercise restraint and not do anything to irritate each other to worsen regional tensions," Geng said, referring to both the missile launch and U.S.-South Korean military exercises.

 

JOINT DRILLS

North Korea had threatened to take "strong retaliatory measures" after South Korea and the United States began annual joint military drills on Wednesday that test their defensive readiness against possible aggression from the North.

North Korea criticizes the annual drills and has previously conducted missile launches to coincide with the exercises.

Last year, North Korea fired a long-range rocket from Tongchang-ri that put an object into orbit. That launch was condemned by the United Nations for violating resolutions that ban the use of ballistic missile technology.

 

North Korea test-fired a new type of missile into the sea early last month, and has said it would continue to launch new strategic weapons.

Last month's test was the first since the election of U.S. President Donald Trump, who has vowed to rein in North Korea and its young leader, Kim Jong Un.

Trump's national security deputies have reviewed in recent meetings a range of options to counter the North's missile threat, the New York Times reported. Options include direct missile strikes on the North's launch sites and the possibility of reintroducing nuclear weapons to the South, the Times said.

Those options would soon be presented to Trump and his top national security aides, the report said, quoting U.S. administration officials.

The United States withdrew nuclear weapons from South Korea in 1991 before the rival Koreas signed a declaration on denuclearization of the Korean peninsula. North Korea has since walked away from the agreement, citing the threat of invasion by the United States.

"The claim that we should redeploy nuclear weapons here, 20 years after they were withdrawn, is total nonsense," said Woo Sang-ho, floor leader of South Korea’s main opposition Democratic Party.

"I am formally asking the United States not to bring this issue up for consideration," Woo said in a party meeting.

North Korea conducted its fifth and most powerful nuclear test last September, following what the United States said was an "unprecedented" level of activity in its banned nuclear and missile programs.

State media said after that test Pyongyang had used a nuclear warhead small enough to mount on a ballistic missile.

The United States has about 28,500 troops and equipment stationed in the South, and plans to roll out the Terminal High Altitude Area Defense (THAAD) anti-missile defense system by the end of the year.

Japan also plans to reinforce its ballistic missile defenses and is considering buying either THAAD or building a ground-based version of the Aegis system that is currently deployed on ships in the Sea of Japan.

 

(Additional reporting by Christine Kim and James Pearson in SEOUL, Tim Kelly in TOKYO, Ben Blanchard in BEIJING and Phil Stewart in WASHINGTON; Writing by Jack Kim; Editing by Lincoln Feast and Paul Tait)

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March 06, 2017
 

The FBI is investigating 300 people who were admitted into the United States as refugees as part of 1,000 counterterrorism investigations involving Islamic State or individuals inspired by the militant group, congressional sources told Reuters on Monday, citing senior administration officials.

Department of Homeland Security officials did not provide details of the investigations or the current immigration status of those 300 individuals during a briefing with congressional staffers, according to the sources, who requested anonymity.

 

(Reporting by Patricia Zengerle; Writing by Doina Chiacu; Editing by Chizu Nomiyama)

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March 06, 2017
 

U.S. stocks opened lower on Monday amid losses across sectors as investors' appetite for risk was curbed by geopolitical tensions in Asia and President Donald Trump's accusation that his predecessor, Barack Obama, wiretapped him.

Some investors worried that the accusation could distract Trump from his economic agenda of introducing tax cuts and simplifying regulations, which have powered a record-setting rally on Wall Street since the election.

However, the lack of detail on Trump's proposals and setbacks in filling his Cabinet have made investors jittery amid lofty market valuations.

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The CBOE Volatility index .VIX, also dubbed Wall Street's fear gauge, rose for the first time in four days.

"The market is susceptible to short-term swings and choppy behavior predicated on something Trump says," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

"Most investors are positive about the Trump administration. However, there is caution that something could be said by the administration that could derail the enthusiasm."

The S&P 500 is trading at about 18 times forward earnings estimates against the long-term average of 15 times, according to Thomson Reuters data.

Rising geopolitical tensions in East Asia after North Korea fired four ballistic missiles also weighed on global stock markets.

At 9:40 a.m. ET (1440 GMT), the Dow Jones Industrial Average .DJI was down 71.65 points, or 0.34 percent, at 20,934.06, the S&P 500 .SPX was down 11.79 points, or 0.49 percent, at 2,371.33 and the Nasdaq Composite .IXIC was down 29.37 points, or 0.50 percent, at 5,841.39.

All of the 11 major S&P sectors were lower. Financials .SPSY, which gained the most in the post-election rally, took the biggest hit.

Among stocks, Netflix (NFLX.O) rose 2.3 percent to $142.4 after UBS upgraded the stock to "buy" from "neutral".

Albemarle (ALB.N) was the biggest percentage loser on the S&P, with a 5 percent decline after Citigroup downgraded the lithium producer's stock to "neutral" from "buy".

Tyson Foods (TSN.N) was down 3.2 percent at $61.52 after a strain of bird flu was detected in a chicken breeder flock on a Tennessee farm contracted with the company.

Declining issues outnumbered advancers on the NYSE by 2,224 to 469. On the Nasdaq, 1,873 issues fell and 521 advanced.

The S&P 500 index showed five new 52-week highs and one new low, while the Nasdaq recorded 23 new highs and 19 new lows.

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March 06, 2017
 

The U.S. Supreme Court avoided a ruling on transgender rights by sending a closely watched case involving bathroom access at a Virginia high school back to a lower court on Monday after President Donald Trump rolled back protections for transgender students.

Lawyers for a transgender student named Gavin Grimm, who was born female and identifies as male, had asked the justices to decide the case despite of the Trump administration's Feb. 22 action. The court previously had set arguments in the case for March 28.

The brief court order said that the case was sent back to the Richmond, Virginia-based 4th U.S. Circuit Court of Appeals, which last year ruled in favor of Grimm, "for further consideration in light of the guidance document" issued by the Trump administration.

Grimm sued the Gloucester County School Board to win the right to use the public school's boys' bathroom, saying the school's refusal violated federal anti-discrimination law and the U.S. Constitution's guarantee of equal protection under the law.

The 4th Circuit in April 2016 sided with Grimm based on the Obama administration's interpretation of the anti-discrimination law. It now gets a second chance to rule on the dispute, with its earlier decision wiped off the books.

The Trump administration rescinded landmark protections for transgender students ordered by former President Barack Obama last year that had permitted them to use bathrooms that matched their gender identity.

Obama's guidance said that transgender students were protected under a federal law barring sex discrimination in education. The Trump administration's move left the decision to the states.

The law involved in the case is Title IX of the Education Amendments of 1972, which applies to federally funded schools. The question of whether it covers transgender students remains unresolved and is likely to reach the high court at some time.

The case, which the justices in November had agreed to hear, would have been the Supreme Court's first case on discrimination against transgender people. It was among the most important cases the justices were due to hear during their current term, which ends in June.

The issue of allowing transgender people to use public bathrooms that correspond to their gender identity rather than their birth gender has become the latest flashpoint in the long U.S. battle over lesbian, gay, bisexual and transgender rights.

The matter heated up after North Carolina passed a Republican-backed law last year that required people to use bathrooms that corresponded to their gender at birth in government buildings and public schools. The North Carolina law also blocked local measures protecting lesbian, gay, bisexual and transgender people from discrimination.

The Obama administration in May 2016 issued its nationwide guidance telling public schools that transgender students should be allowed to use the bathroom of their choice, and indicated that states could lose education funding if they did not comply.

That action infuriated many conservatives and prompted a Republican-led legal effort to fight it. A total of 23 states sued to block the guidance. That lawsuit was dropped after Trump rescinded the guidance.

In the Virginia case, the Supreme Court in July 2016 voted 5-3 to temporarily block the appeals court decision from going into effect, a move that prevented Grimm from using the boys' bathroom when the new school year began in September while the case remained under appeal by the school district.

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March 06, 2017
 

President Donald Trump will remove Iraq from a list of countries targeted in a U.S. travel ban when he signs a new executive order expected on Monday after his controversial first attempt was blocked in the courts, a White House source said.

The senior White House official said the new executive order would keep a 90-day ban on travel to the United States by citizens of six Muslim-majority nations - Iran, Libya, Syria, Somalia, Sudan and Yemen.

Iraq was taken off the list in the original order, issued on Jan. 27, because the Iraqi government had imposed new vetting procedures, such as heightened visa screening and data sharing, and because of its work with the United States in countering Islamic State militants, the White House official said.

While the first order imposed restrictions immediately, the new directive will have an implementation delay to limit the disruptions that created havoc for some travelers, the White House official said.

The new order will take effect on March 16, White House spokeswoman Sarah Huckabee Sanders said on Monday.

Thousands of Iraqis have fought alongside U.S. troops for years or worked as translators since the U.S.-led invasion in 2003. Many have resettled in the United States after being threatened for working with U.S. troops.

The White House official said the new executive order, which the Republican president was expected to sign on Monday, also ensures that tens of thousands of legal permanent residents in the United States - or green card holders - from the listed countries would not be affected by the travel ban.

More than two dozen lawsuits were filed in U.S. courts against the original travel ban, and the state of Washington succeeded in having it suspended by the 9th Circuit court of Appeals by arguing that it violated constitutional protections against religious discrimination.

Trump publicly criticized judges who ruled against him and vowed to fight the case in the Supreme Court, but then decided to draw up a new order with changes aimed at making it easier to defend in the courts.

Refugees who are "in transit" and already have been approved would be able to travel to the United States.

Trump's original order barred travelers from the seven nations from entering for 90 days and all refugees for 120 days. Refugees from Syria were to be banned indefinitely but under the new order they are not given separate treatment.

"This executive order has scrapped that division and the indefinite suspension and has collapsed them into a single category of a 120-day suspension," the official said.

 

SECURITY CONSIDERATIONS

During the presidential election campaign last year, Trump called for a temporary ban on all Muslims entering the United States. He said his initial executive order issued a week after he took office was needed to head off Islamist militant attacks.

The White House official said the new order was based on national security concerns and had nothing to do with religion.

"It is substantially different from the first order yet it will do the same thing in this important way: It will protect the country and keep us safe," the official said. The administration would reset the clock on the 90-day travel ban.

The FBI is investigating 300 people admitted into the United States as refugees as part of 1,000 counter-terrorism probes involving Islamic State or individuals inspired by the militant group, congressional sources told Reuters on Monday, citing senior administration officials.
 

The White House official said U.S. government agencies would determine whether Syria or other nations had made sufficient security improvements to be taken back into the refugee admissions program.

The new order launches a 90-day period for the Department of Homeland Security (DHS) to define a new series of requirements for countries to have full participation in U.S. entry programs.

For countries that do not comply, the U.S. State Department, the DHS and intelligence agencies can make recommendations on what, if any, restrictions should be imposed.

"It's not an all-or-nothing scenario," the official said.

The new order spells out detailed categories of people eligible to enter the United States, such as for business or medical travel, or people with family connections or who support the United States.

"There are a lot of explicit carve-outs for waivers and given on a case-by-case basis," the official said.

Many of Trump's supporters approved of the initial ban but critics said it was unjustified and discriminatory.

U.S. technology firms who had employees affected by the executive order also complained, and some members of Trump's Cabinet urged him to remove Iraqis and green card holders from the list of those affected.

The White House was widely criticized for not working with the State Department, the Justice Department, the Department of Homeland Security and allies in Congress in drawing up the initial ban.

The confusion that caused led to a weekend of chaos, legal wrangling and protests in cities and at major airports across the United States.

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February 03, 2017
 

Much of the criticism of the executive order signed by President Trump has focused on foreigners prevented from entering the country, but a court filing in the legal battle over the travel ban reveals a far broader impact, imperiling the residency status of tens of thousands of immigrants — everyone from asylum seekers to students and technology workers — already living in the United States.

Amid a storm of protest, Mr. Trump on Thursday continued to stick by the ban as essential to the safety of the nation, saying that in the “coming days, we will develop a system to help ensure that those admitted into our country fully embrace our values of religious and personal liberty.”

“We want people to come into our nation, but we want people to love us and to love our values, not to hate us and to hate our values,” Mr. Trump said at the National Prayer Breakfast.

Now, the Department of Homeland Security’s internal auditor has entered the fray. The office of the department’s inspector general announced late Wednesday that it would review how the agency carried out the executive order, which suspended the entry of all refugees for 120 days and blocked for 90 days citizens from seven predominantly Muslim countries: Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. The auditor said the review was a response to requests from Congress, whistle-blowers and to complaints received on a hotline.

Continue reading the main story

In addition to reviewing how the Department of Homeland Security carried out the executive order, the inspector general’s office said it would review the agency’s adherence to court orders and allegations of individual misconduct. The inspector general’s office, which did not say how long its review would take, said it could look into other issues as well.

Following Mr. Trump’s order, the State Department went even further than prohibiting those outside the country from entering: It issued an internal memorandum revoking the visas of all nationals from those countries, without notifying them, even those who are legally studying, working and living in the United States.

“They aren’t just seeking to prevent people from entering,” said Greg Chen, director of advocacy for the American Immigration Lawyers Association. “They are excluding people who have been here for a long time once they leave.”

Some immigration lawyers said they feared that the State Department’s cancellation of visas could expose immigrants and other legal foreign residents to deportation, but officials at the State Department and the Department of Homeland Security said those in the United States were not affected.

“This does not apply to individuals who were in the country on a valid visa at the time the order was signed,” said Gillian Christensen, a spokeswoman for the Department of Homeland Security.

Only a case-by-case exemption deemed in the national interest “on the basis of a determination made by the secretaries of state and homeland security,” restore the visas while the policy remained in place, the department said. The visas were revoked “provisionally,” according to the memo, and could be reinstated once a new policy is formulated.

But for now, the loss of their visas means that anyone from those countries who leaves the United States — even for funerals or family health emergencies — would be unable to return without getting a new visa, a lengthy process that cannot begin until the Trump administration has completed its review of the visa program.

Unlike the refugee ban, which was announced with much fanfare, the canceled visas came to light only as a result of court filings by government lawyers defending the ban on travelers from the seven countries against litigation.

Trump administration officials said they had chosen those seven countries based on concerns expressed by Obama administration officials, who in 2016 required anyone passing through the seven countries to get a visa. But those involved in the Obama administration effort said that the countries had largely been chosen by Congress as part of immigration legislation passed in 2015 and that the visa reviews were intended to catch Islamic State fighters and not to ban or inconvenience all of those countries’ citizens.

“My parents still live in Iran,” said Mahsa Rouhi, an Iranian who holds a green card and is a research fellow at the Belfer Center for Science and International Affairs at Harvard’s Kennedy School. “My dad is 82, and if my parents are in need of urgent care, I could face a choice of my job and my life here and caring for my parents. I was advised — most universities and institutions are advising people in my situation — not to travel, not to take the risk.”


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January 30, 2017
 

AN FRANCISCO — Facebook’s virtual reality effort, including its big bet on the virtual reality goggles maker Oculus VR, has a new leader.

Mark Zuckerberg, Facebook’s chief executive, said in a post on Wednesday that Hugo Barra, a former executive at Google and the Chinese phone maker Xiaomi, was joining Facebook to lead its virtual reality business. The move puts to rest questions about who would assume direction of the efforts after Oculus ran into several hurdles, including an intellectual-property lawsuit and leadership changes.

“Hugo shares my belief that virtual and augmented reality will be the next major computing platform,” Mr. Zuckerberg wrote in the post. “Hugo is going to help build that future.”

Facebook paid $2 billion to acquire Oculus almost three years ago, with Mr. Zuckerberg proclaiming virtual reality the next big thing. While Oculus has released its virtual reality goggles and there is interest in the field, sales of the headsets are sluggish, and even Mr. Zuckerberg has said Facebook will probably need to invest an additional $3 billion in content and development over the next few years in hopes of seeing virtual reality take off.

Facebook’s desire to have a major stake in the technology undergirding virtual reality partly reflected the fact that it was not able to do so in mobile, even though it has managed to profit handsomely from mobile advertising. But the most capable virtual reality headsets are expensive and require powerful personal computers to support them. Breakout applications, including video games, have not materialized because developers have been reluctant to pour resources into an uncertain market.

While Facebook does not provide sales figures for the $599 Oculus Rift headset, which was released to the public last year, analysts believe they are slow. One research firm, SuperData Research, estimated the company sold only about 355,000 by the end of last year.

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January 30, 2017
 

AN FRANCISCO — Facebook’s virtual reality effort, including its big bet on the virtual reality goggles maker Oculus VR, has a new leader.

Mark Zuckerberg, Facebook’s chief executive, said in a post on Wednesday that Hugo Barra, a former executive at Google and the Chinese phone maker Xiaomi, was joining Facebook to lead its virtual reality business. The move puts to rest questions about who would assume direction of the efforts after Oculus ran into several hurdles, including an intellectual-property lawsuit and leadership changes.

“Hugo shares my belief that virtual and augmented reality will be the next major computing platform,” Mr. Zuckerberg wrote in the post. “Hugo is going to help build that future.”

Facebook paid $2 billion to acquire Oculus almost three years ago, with Mr. Zuckerberg proclaiming virtual reality the next big thing. While Oculus has released its virtual reality goggles and there is interest in the field, sales of the headsets are sluggish, and even Mr. Zuckerberg has said Facebook will probably need to invest an additional $3 billion in content and development over the next few years in hopes of seeing virtual reality take off.

Facebook’s desire to have a major stake in the technology undergirding virtual reality partly reflected the fact that it was not able to do so in mobile, even though it has managed to profit handsomely from mobile advertising. But the most capable virtual reality headsets are expensive and require powerful personal computers to support them. Breakout applications, including video games, have not materialized because developers have been reluctant to pour resources into an uncertain market.

While Facebook does not provide sales figures for the $599 Oculus Rift headset, which was released to the public last year, analysts believe they are slow. One research firm, SuperData Research, estimated the company sold only about 355,000 by the end of last year.

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January 30, 2017
 

TOKYO — Ill-fated investments in nuclear power projects by Toshiba of Japan have already precipitated an embarrassing accounting scandal at the company. Now the company is selling its most valuable business to try to undo the damage.

Toshiba, one of Japan’s oldest and proudest technology conglomerates, said on Friday it would spin off its microchip division. The business makes the information-storing “brains” inside millions of smartphones, digital cameras and other devices, and it has been the biggest contributor to Toshiba’s profits in recent years.

The move is evidence of Toshiba’s desperation for cash after the punishing nuclear-related losses came to light last month.

In another effort to put the costly chapter aside, Nikkei reported Saturday that the company’s chairman, Shigenori Shiga, was ready to resign to take responsibility for the losses. Mr. Shiga, who has been chairman since June, is in charge of Toshiba’s nuclear power division.

In December, Toshiba warned it was preparing to write off “several billion U.S. dollars” because of ballooning expenses at its American nuclear subsidiary, Westinghouse. That followed Toshiba’s admission in 2015 that it had inflated its earnings by $1.2 billion over seven years — a scandal that company investigators attributed in part to nuclear-project managers, who they said had disguised faltering revenues and cost overruns.

Toshiba is expected to detail the extent of its write-downs next month. Analysts have suggested they could amount to $4 billion to $7 billion, enough to put Toshiba’s future at risk. Banks have indicated they will keep lending money so the company can pay its bills, but without that lifeline, Toshiba, a 140-year-old business, could collapse.

Toshiba said it had not yet decided what form the semiconductor spinoff would take, or how much of the business it would sell to outsiders. But there is not much time to figure it out; the company said it wanted to complete the process by March 31, the end of its fiscal year.

Analysts estimate the semiconductor business could be worth between 1.5 trillion and 2 trillion yen, or $13 billion to $17 billion, if Toshiba sold all of it. One option would be to sell shares to the public, though a private sale to another technology company would be quicker and easier to arrange, particularly if Toshiba chose to keep part of the company.

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January 30, 2017
 

SAN FRANCISCO — On Friday morning, Silicon Valley was largely ambivalent about President Trump. The software programmers, marketing experts and chief executives might not have voted for him, but they were hopeful about finding common ground with the new administration.

By Saturday night, much of that optimism had yielded to anger and determination.

Mr. Trump’s executive order late on Friday temporarily blocked all refugees while also denying entry to citizens of Iran, Iraq and five other predominantly Muslim countries. The directives struck at the heart of Silicon Valley’s cherished values, its fabled history and, not least, its embrace-the-world approach to customers. Two worldviews collided: the mantra of globalization that underpins the advance of technology and the nationalistic agenda of the new administration.

In response, a significant part of the tech community went to the barricades.

Netflix’s chief executive, Reed Hastings, wrote on Facebook that Mr. Trump’s actions “are so un-American it pains us all” and that “it is time to link arms together to protect American values of freedom and opportunity.”

Brian Chesky, the chief executive of Airbnb, made the same point. “We must stand with those who are affected,” he wrote on Twitter.

Sergey Brin, a Google founder who immigrated from the Soviet Union when he was 6, seemed to take that suggestion literally, attending an impromptu protest on Saturday evening at San Francisco International Airport. When some of the demonstrators realized that the 10th-richest man in America was with them, they asked for selfies. He good-naturedly obliged.

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