Wednesday, 24 September 2014

TOP TRENDING NEWS: #BLNtrending #BBCtrending What happened to #BringBackOurGirls?

In April more than 200 girls were seized from a boarding school in northern Nigeria by Boko Haram fighters.



The incident sparked one of the biggest social media campaigns of the year - under the hashtag #BringBackOurGirls - which called on the authorities to do more to free the girls.



Five months on, the hashtag is still trending, and has now been used more than five million times. BBC Trending looks at how the hashtag has developed over time.



Produced by Greg Brosnan and Ravin Sampat You can follow BBC Trending on Twitter @BBCtrending.

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EXCLUSIVE NEWS: Should 16-year-olds get the vote following referendum?

More than 100,000 teenagers registered to vote in the Scottish referendum.

Scottish First Minister Alex Salmond has called for the voting age in UK elections to be lowered to 16 by the 2015 general election. Labour leader Ed Miliband has said his party would give all 16 and 17-year-olds the vote.

So should the voting age be lowered?
Speaking in the Scottish parliament for the first time since Scotland rejected independence, Mr Salmond said 16 and 17-year-olds had shown themselves to be "serious, passionate and committed citizens" in the referendum and there was an "overwhelming, unanswerable" case for giving them the vote in all future elections in Scotland and across the UK.

"There is not a shred of evidence for arguing now that 16 and 17-year-olds should not be allowed to vote.

"All parties in parliament should make a vow to urge Westminster to make it happen in time for the next general election," he said.

Speaking at the Labour conference, Mr Miliband also addressed the issue, saying: "It's time to hear the voice of young people in our politics." He pledged to give 16 and 17-year-olds the vote if elected.

There has been a long-standing debate on lowering the voting age to 16 - which would affect more than 1.5 million teenagers in the UK.

Teenagers can join the British army at 16

The Lib Dems promised the change in their 2010 manifesto. The Conservative Party has historically opposed the move.

Proponents of the reduction argue 16-year-olds can live on their own, get married, pay taxes and join the British army.

They point to countries such as Austria, Germany, Norway, Argentina and Brazil where voting at 16 is common practice.

Others argue there has been a generational shift in terms of slowing down the development of young people. People are going to school for longer, joining the workforce at an older age and getting married later.

They also point to figures that suggest turnout tends to be lower among younger voters.

Scottish referendum first-time voter Ivy Hare, aged 17, shows off her polling card

It's too early to know exactly how many 16 and 17-year olds voted in the Scottish referendum.

There were 109,533 youngsters aged 16 and 17 registered to vote - but the number who turned out on the day hasn't been tallied up yet.

Nor do we know how they voted.
A snap poll by Lord Ashcroft the day after the referendum - when Scotland voted against independence by 55% to 45% - found that 71% of that age group voted "Yes". But the sample size was only 14.

There simply isn't any reliable data on how that age group - who were expected to make up about 2.5% of the electorate - voted because surveys that have been conducted so far won't have had a big enough sample size, according to polling expert Prof John Curtice, from Strathclyde University.
However, he says it's not surprising that Mr Salmond has called for change following the referendum.

"If you are looking for evidence to support the supposition that 16-year-olds should vote, you are going to do it when there's a high turnout - and this was the highest turnout in Scottish national history.

"But what would happen in the UK government elections - when turnout is normally about 60% - is debatable," he says.

Dr Jan Eichhorn, from Edinburgh University's School of Social and Political Science, agrees it's too early to take any lessons from the Scottish referendum results.

Fireworks are for sale only to over-18s
But he says there are definitely signs things can be learned from the process.
"There was a suggestion 16 and 17-year-olds would vote differently, be governed by national identity and ideology, but surveys ahead of the vote showed the most important thing to them was exactly the same thing that was most important to adults - the economy," he says.

Some of the other criticisms - that young people would simply copy their parents - also didn't materialise.
"More than 40% of 16 to 17-year-olds had a different view to their parents - young people made up their own minds," he says.

He also credits the 16-year-old vote with increasing engagement among adults. "Young voters learned about the issues at school and went home and talked to their parents - it was dinner-time conversation," he argues.

However, Philip Cowley, professor of parliamentary government at the University of Nottingham, thinks people should be very wary of trying to draw lessons from the Scottish referendum.

"What we had in Scotland was very high-octane, very simple, an existential system where the stakes were incredibly high on both sides. You don't get that in general elections," he says.
He also argues 18 is a "main indicator" in the UK. "You can't buy a firework until you are 18, you can't buy cigarettes until you are 18 - things are being nudged upwards rather than downwards."

Cowley says he understands why it would be "a bit strange" to deny 16 and 17-year-olds a vote in the 2016 Scottish parliament election now, but argues it would be "bizarre" to make a UK-wide decision based on what's going on in Scotland.

"There are 10 times more people in the rest of the UK than Scotland - the momentum is clearly growing but I cannot think of a better example of the tail wagging the dog," he says.

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SHOCKING NEWS: French hostage Herve Gourdel beheaded in Algeria

Media caption

Francois Hollande told the UNGA that Herve Gourdel's killing was a "cowardly assassination"

France has confirmed that an Algerian jihadist group linked to Islamic State (IS) militants has beheaded tourist Herve Gourdel, seized on Sunday.

Jund al-Khilafa killed Mr Gourdel, 55, after its deadline for France to halt air strikes on IS in Iraq ran out.

French President Francois Hollande condemned the killing as a "cruel and cowardly" act.

He said that French air strikes which began on IS targets in Iraq last week would continue.

Speaking at the UN general assembly, Mr Hollande said that Mr Gourdel's abduction and decapitation was a barbaric act of terrorism which presented a problem not only for the region but also for the world.

He said the fight against terrorism should know no borders and that France was now in mourning.

"It is not weakness that should be the response to terrorism but force," he said.
Jund al-Khilafa posted a video of Mr Gourdel being killed which was entitled "Message of blood for the French government".

Police are guarding Herve Gourdel's home in Nice, south-eastern France

Posters in support of Herve Gourdel were put up in the village of Saint-Martin-Vesubie, south-eastern France, on Tuesday

The Kabylie region is a rugged and mountainous area of Algeria
IS itself has beheaded three Western hostages since August: US journalists James Foley and Steven Sotloff, and British aid worker David Haines. Their deaths were all filmed and posted online.

The group has also threatened to kill Alan Henning, a taxi driver from the UK, who was seized while on an aid mission to Syria in December.

On Sunday, it warned it would target Americans and other Western citizens, "especially the spiteful and filthy French".

'Odious ultimatum'
Mr Gourdel worked as a mountain guide in the Mercantour national park north of Nice, his home town.

He had also been organising treks through the Atlas Mountains of Morocco for some 20 years, AFP news agency reports.

The mayor of Nice, Christian Estrosi, said it was difficult to contain the "deep sadness" he felt.

"Today a war was declared on France," he said. "We've been turning a blind eye to what's happening in our back yards. And this is where it has led us."
The BBC's Lucy Williamson in Paris says news of Mr Gourdel's killing has hit France hard.

Our correspondent says that it is the first time that France has lived through the threat and brutality of this kind of killing.

The fact that Mr Groudel was a tourist in a region popular with French holiday-makers has added to the sense of shock, our correspondent says.

In the video posted by his killers, he is shown on his knees with his hands behind his back in front of four masked, armed militants.

He is allowed briefly to express his love for his family before one of the militants reads out a speech in which he denounces the actions of the "French criminal crusaders" against Muslims in Algeria, Mali and Iraq.

The beheading, the spokesman says, is to "avenge the victims in Algeria... and support the caliphate" proclaimed by IS in Iraq and Syria.

Jund al-Khilafa (Soldiers of the Caliphate) pledged allegiance to IS on 14 September.

Until then it had been known as part of al-Qaeda in the Islamic Maghreb (AQIM), which grew out of an Algerian militant group and is now active across North and parts of West Africa.

Who are Jund al-Khilafa?
Previously part of al-Qaeda in the Islamic Maghreb (AQIM), which grew out of Algerian Islamist groups involved in 1990s civil war

Carried out numerous attacks in Kabylie region - in April, ambushed an army convoy, leaving 11 soldiers dead
Many residents have fled the region's forests and mountains in recent years because of insecurity Group said to be led by Abdelmalek Gouri, known as Khaled Abou Slimane, 37 On 14 September, pledged allegiance to Islamic State

The group claimed Toulouse gunman Mohamed Merah, a French citizen of Algerian origin, as a member after he killed seven people in south-western France in March 2012, French radio reports.

The militants said that they were responding to the IS call to attack citizens involved in strikes on Iraq and would kill Mr Gourdel unless France ended its military operation.

France's public position is that it does not negotiate with militant groups but there have been reports of French citizens being released in West Africa after ransoms have been paid.

Four Frenchmen kidnapped in Niger were freed in October 2013 amid reports of a 20m-euro (£16m; £25m) ransom being paid. The government in Paris denied that was the case.

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CAPITAL ONE CUP: ManCity 7-0 Sheff Wed

Full Time 90' +4
HT 0-0
CAPITAL ONE CUP
Date: Wednesday, 24th September
Kick off: 19:45
Venue: Etihad Stadium
Key events
Manchester CityGoal
Lampard 47'
Manchester CityGoal
Dzeko 53'
Manchester CityGoal
Jesús Navas 54'
Sheffield WednesdayDismissal
Zayatte 59'
Manchester CityPenalty
Y Touré 60' (pen)
Manchester CityGoal
Dzeko 77'
Manchester CityGoal
Pozo 88'
Manchester CityGoal
Lampard 90' +3
Close Match details


Holders score all seven goals in the second half

Lampard takes tally to three goals in four days

Home side's first win since 25 August
Spanish teenager Pozo nets debut goal
Holders Manchester City produced a ruthless second-half display to start their Capital One Cup defence with a thumping win over Sheffield Wednesday.

Frank Lampard tucked in James Milner's cross soon after the restart before Edin Dzeko swept in a pass from Jesus Navas, who added a ferocious drive.

Yaya Toure converted a penalty after Lampard was tripped by Kamil Zayatte.
He was sent off as Dzeko's header, Jose Angel Pozo's debut goal and another Lampard strike sank the Owls' 10 men.

Few would have predicted a seven-goal scoreline at the break after Championship side Wednesday held their own in a tight first half.

Premier League champions City put on a sluggish first-half display, but were a completely different proposition after the break as they swept aside the unfortunate visitors.

Once ex-England midfielder Lampard converted at the near post, City's hopes of a morale-boosting win never looked in doubt.

Draws against Arsenal and Chelsea, punctured by defeats against Stoke and Bayern Munich, have seen Manuel Pellegrini's side stutter in recent weeks.

So the home tie against the Yorkshire side presented the opportunity to restore some belief - which they duly achieved.

Manchester City boss Manuel Pellegrini claimed his first trophy in English football by lifting last season's Capital One Cup. Goals from Yaya Toure, Samir Nasri and Jesus Navas sealed a 3-1 win against Sunderland in March.

Many top-flight sides field weakened teams in the early rounds of the League Cup, but Pellegrini named a strong starting XI as City searched for their first win since beating Liverpool on 25 August.

Toure captained a side packed with internationals, including the likes of Lampard, Dzeko, Navas and Milner, who impressed again with his energy and quality in the final third.

The Owls are sixth in the Championship after losing only one of their opening 10 matches in all competitions and played with an air of confidence in the first half.

They were not afraid to commit players forward when they sensed the opportunity but were unable to seriously test home keeper Willy Caballero.

And that proved costly as City scored three goals in seven minutes after the restart to put the game beyond them.

Lampard opened the scoring with a timely arrival at the near post, then Dzeko lost his marker to collect Navas's cross and drill into the far corner.

That was quickly followed by Navas's thumping finish from inside the Owls area, before Zayatte was dismissed after he clumsily felled Lampard in the penalty area, with Toure finding the bottom corner with the spot-kick.

With the game won, Pellegrini introduced 18-year-old Spanish striker Pozo, who arrived from Real Madrid's academy two years ago.

But City refused to take any mercy on Wednesday's depleted side. Dzeko netted his second with a towering header from left-back Aleksandar Kolarov's perfect cross, before Pozo slotted in another Navas pass.

And Lampard netted his third goal in four days, after equalising against former club Chelsea on Sunday, to send City into the last 16.

Manchester City boss Manuel Pellegrini:

"I think it was very important for Frank Lampard to score again. He's a very important player.

"I said after the game against Chelsea that he's an important player for our team.

"Maybe he's now 36 years old and he can't play three games in a row but he's a top player."

Sheffield Wednesday manager Stuart Gray:
"We had a seven-minute mad period where they scored three goals. It just shows the gulf between the Championship and a top-four Premier League team.

"They're world-class players and every mistake we made in that seven-minute period we got punished.

"I think two of the goals we were probably in their half and gave a sloppy pass away.

"After the sending off it was damage limitation."

Edin Dzeko's brace means the Bosnian has scored 10 goals in 11 League Cup games for City

Spanish teenager Jose Angel Pozo sweeps home the sixth goal on his City debut

Stuart Gray watched his Sheffield Wednesday side lose only their second match of the season

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CAPTAIN ONE CUP: Chelsea 2-1 Bolton

Full Time: 90' +6
HT 1-1
CAPITAL ONE CUP
Date: Wednesday, 24th September
Kick off: 19:45
Venue: Stamford Bridge

Key events
Chelsea

Goal Zouma 25'

Bolton Wanderers

Goal Mills 31'

Chelsea
Goal Oscar 55'

Close Match details


Brazil's Oscar is surrounded his Chelsea team-mates after scoring the winner


Oscar's second-half winner handed Chelsea a Capital One Cup fourth-round tie against League two side Shrewsbury at the expense of Bolton Wanderers.


French centre-back Kurt Zouma put Chelsea ahead on his debut when he fired high into the net after Bolton had failed to clear a corner.


The Trotters were level six minutes later when Matt Mills headed home.


But Chelsea, who had 28 shots to Bolton's three, deservedly won when Oscar hit a low drive into the corner.
German midfielder Andre Schurrle also had several chances for the Blues, while Bolton goalkeeper Andrew Lonergan was in excellent form to restrict the Premier League side.

Defender Kurt Zouma (far right) has played at youth level for France
Chelsea wasted opportunities to take the lead against the Championship club in the first quarter of the match.


Schurrle's inswinging free-kick was saved by Lonergan, before the World Cup-winner made a mess of his header from Mohamed Salah's cross.


The Bolton keeper then prevented Oscar from scoring, before Mohammed Salah and striker Loic Remy missed from close range.


Schurrle went close, twice more, before the Premier League leaders finally went ahead, from a corner.
After Gary Cahill's header from the delivery was blocked, Remy nodded the ball back into the six-yard area where Zouma was on hand to convert.


But the Trotters hit back soon after the restart.


Troy Deeney's deep free-kick from the right found Mills on the edge of the hosts' box. The defender leapt highest to direct his header in from 16 yards.


Chelsea picked up the pace again. Schurrle fired off target, Nathan Ake was denied from 25 yards by Lonergan, who then saved a header from Oscar.


The Brazil midfielder did, however, find the net when he drilled in the loose ball from Remy's blocked shot.


Chelsea keeper Petr Cech saved from Bolton substitute Lee Chung-yong five minutes from time.


Chelsea assistant Steve Holland:
"It's nice not to have extra-time. We don't have any new injuries, we've progressed to the next round of the competition.


"Several of our players who probably needed a game now have 90 minutes under their belts heading into two or three important fixtures. It's a good situation to be in."


Bolton manager Dougie Freedman:
"When I saw the team-sheet that I knew their manager treated this competition with respect and the opposition with respect. They were taking it very seriously.


"We were going to have to ride our luck a little bit and our goalkeeper was fantastic. They hit the bar but in the last 10, 15 minutes we gave it a right good go, played a bit more expansive.
"A little bit more quality would have taken it to extra-time."

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ENTERTAINMENT and Arts NEWS: Art show Exhibit B called off after racism protests

From the section Entertainment & Arts

The Barbican said the show aimed to "confront the objectification of human beings" in the colonial era
A controversial art performance featuring black actors in a recreation of a "human zoo" has been called off after protests at its opening night.

Exhibit B, staged by The Barbican at The Vaults venue in London, was to have involved actors in chains and cages.

The Barbican said it confronted "the abhorrent historical attitudes to race during the colonial era" but protesters said the work was offensive and racist.

The Barbican issued a statement saying the five-day run had been called off.

It said "the extreme nature of the protest" outside the venue on Tuesday had led to a "serious threat to the safety of performers, audiences and staff".

The show was described as "both unbearable and essential" when it was seen in Edinburgh in August
"We find it profoundly troubling that such methods have been used to silence artists and performers and that audiences have been denied the opportunity to see this important work," it said.

"Exhibit B raises, in a serious and responsible manner, issues about racism; it has previously been shown in 12 cities, involved 150 performers and been seen by around 25,000 people with the responses from participants, audiences and critics alike being overwhelmingly positive."

The statement added it was "disturbed at the potential implications this silencing of artists and performers has for freedom of expression".

Performer Stella Odunlami: "We were terrified"

A spokesperson for the Metropolitan Police said: "Police were called at 18:34 to reports of a fight at a demonstration in Leake Street, SE1. Officers attended and no arrests were made."

Protest organiser Sara Myers said there was no violence. "We did shut the door and stood outside the door and drummed and chanted and blew our whistles and blew our horns," she said. "There was absolutely no fighting at all."

She said she was "extremely pleased" about the eventual cancellation.

'Complicit racism'

"I'm actually quite sad that it took us protesting outside the opening night for them to decide to cancel it, because we had been trying to negotiate with them for the last month [saying] that this is offensive and we don't like it," she said.

"We also tried to explain to them why it's racist. They kept saying, 'No it's not.'"

Almost 23,000 people signed Ms Myers' petition calling the show "an outrageous act of complicit racism".
"We are deeply offended yet not surprised that the colonialism this piece purports to expose does nothing more than reinforce how effective it was and remains as a caging instrument of white supremacists," the petition said.

"We charge the Barbican with exhibiting institutional racism for agreeing to stage this poison."

In response, a statement from The Barbican said: "We state categorically that the Barbican is not neutral on the subject of racism; we are totally opposed to it and could not present a work that supported it.

'Confronting' inequality
Exhibit B, it went on, "aims to confront the objectification of human beings and the abhorrent historical attitudes to race during the colonial era, and to question how far society has moved on".

It added: "Engaging with these subjects in a work of art is always likely to be controversial and difficult, and we understand that people may be upset by the way in which the issues are portrayed in Exhibit B."

Exhibit B is intended to be a modern response to the "human zoo", in which Africans were put on show for the curiosity of the 19th and early 20th Century Westerners.

Visitors walk through a room in which black actors portray both historical human exhibits as well as modern-day asylum-seekers.

The work was created by white South African theatre-maker Brett Bailey, and was seen in Edinburgh in August.

In her five-star review from Edinburgh, The Guardian's theatre critic Lyn Gardner described the results as "both unbearable and essential", while The Edinburgh Reporter declared it "hugely powerful, deeply unsettling, but vital viewing".

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TOP NEWS Islamist fighters advance in Syria despite U.S. strikes

By Kinda Makieh and Jonny Hogg

DAMASCUS/MURSITPINAR Turkey (Reuters) - U.S. planes pounded Islamic State positions in Syria for a second day on Wednesday, but the strikes did not halt the fighters' advance in a Kurdish area where fleeing refugees told of villages burnt and captives beheaded.

U.S. President Barack Obama, speaking at the United Nations, asked the world to join together to fight the militants and vowed to keep up military pressure against them.

"The only language understood by killers like this is the language of force, so the United States of America will work with a broad coalition to dismantle this network of death," Obama said in 40-minute speech to the U.N. General Assembly.

British Prime Minister David Cameron recalled Parliament to vote on Friday on whether to join the air strikes. He said in an address at the U.N. that a comprehensive strategy was needed to combat Islamic State.

"Our strategy must work in tandem with Arab states, always in support of local people, in line with our legal obligations and as part of a plan that involves our aid, our diplomacy and, yes, our military," Cameron said at the U.N.

"We need to act and we need to act now," he said.

Syrian Kurds said Islamic State had responded to U.S. attacks by intensifying its assault near the Turkish border in northern Syria, where 140,000 civilians have fled in recent days in the fastest exodus of the three-year civil war.

Washington and its Arab allies killed scores of Islamic State fighters in the opening 24 hours of air strikes, the first direct U.S. foray into Syria two weeks after Obama pledged to hit the group on both sides of the Iraq-Syria border.

However, the intensifying advance on the northern town of Kobani showed the difficulty Washington faces in defeating Islamist fighters in Syria, where it lacks strong military allies on the ground.

"Those air strikes are not important. We need soldiers on the ground," said Hamed, a refugee who fled into Turkey from the Islamic State advance.

Mazlum Bergaden, a teacher from Kobani who crossed the border on Wednesday with his family, said two of his brothers had been taken captive by Islamic State fighters.

"The situation is very bad. After they kill people, they are burning the villages.... When they capture any village, they behead one person to make everyone else afraid," he said. "They are trying to eradicate our culture, purge our nation."

Fighting between Islamic State militants and Kurds could be seen from across the border in Turkey, where the sounds of sporadic artillery and gunfire echoed around the hills.

FRENCH HOSTAGE KILLED

Islamist militants in Algeria boasted in a video they had beheaded a French hostage captured on Sunday to punish Paris for joining air strikes against Islamic State in Iraq. French President Francois Hollande confirmed the execution.

"My determination is total and this aggression only strengthens it," Hollande said. "The military air strikes will continue as long as necessary."

The United States said it was still assessing whether Mohsin al-Fadhli, a senior figure in the al Qaeda-linked group Khorasan, had been killed in a U.S. strike in Syria.

A U.S. official earlier said Fadhli, an associate of al Qaeda founder Osama bin Laden, was thought to have been killed in the first day of strikes on Syria. The Pentagon said any confirmation could take time.

Washington describes Khorasan as a separate group from Islamic State, made up of al Qaeda veterans planning attacks on the West from a base in Syria.

As Obama tried in meetings in New York to widen his coalition, Belgium said it was likely to contribute warplanes in the coming days, and the Netherlands said it would deploy six F-16s to support U.S.-led strikes.

The initial days of U.S. strikes suggest one aim is to hamper Islamic State's ability to operate across the Iraqi-Syrian frontier. On Wednesday U.S.-led forces hit at least 13 targets in and around Albu Kamal, one of the main border crossings between Iraq and Syria, after striking 22 targets there on Tuesday, said the Syrian Observatory for Human Rights, a body which monitors the conflict in Syria.

The U.S. military confirmed it had struck inside Syria northwest of al Qaim, the Iraqi town at the Albu Kamal border crossing. It also struck inside Iraq west of Baghdad and near the Iraqi Kurdish capital Arbil on Wednesday.

An Islamist fighter in the Albu Kamal area reached by phone said there had been at least nine strikes on Wednesday by "crusader forces". Targets included an industrial area.

U.S. officials said air strikes under way in Syria late on Wednesday targeted oil infrastructure controlled by Islamic State, a move that appeared aimed at the militants' cash flow.

Perched on the main Euphrates valley highway, Albu Kamal controls the route from Islamic State's de facto capital Raqqa in Syria to the front lines in western Iraq and down the Euphrates to the western and southern outskirts of Baghdad.

Islamic State's ability to move fighters and weapons between Syria and Iraq has provided an important tactical advantage for the group in both countries: fighters sweeping in from Syria helped capture much of northern Iraq in June, and weapons they seized and sent back to Syria helped them in battle there.

France, which has confined its air strikes to Iraq, said it would stay the course despite the killing of hostage Herve Gourdel, 55, a mountain guide captured on vacation in Algeria on Sunday by a group claiming loyalty to Islamic State.

In a video released by the Caliphate Soldiers group entitled "a message of blood to the French government", gunmen paraded Gourdel's severed head after making him kneel, pushing him on his side and holding him down.

DAMASCUS: CAMPAIGN GOES "IN RIGHT DIRECTION"

The campaign has blurred the traditional lines of Middle East alliances, pitting a U.S. coalition comprising countries opposed to Syrian President Bashar al-Assad against fighters that form the most powerful opposition to Assad on the ground.

The attacks have so far encountered no objection, and even signs of approval, from Assad's Syrian government. Syrian state TV led its news broadcast with Wednesday's air strikes on the border with Iraq, saying "the USA and its partners" had launched raids against "the terrorist organisation Islamic State."

U.S. officials say they informed both Assad and his main ally Iran in advance of their intention to strike but did not coordinate with them.

Jordan, Bahrain, the United Arab Emirates, Qatar and Saudi Arabia have joined in the strikes. All are ruled by Sunni Muslims and are staunch opponents of Assad, a member of a Shi'ite-derived sect, and his main regional ally, Shi'ite Iran.

But some of Assad's opponents fear the Syrian leader could exploit the U.S. military campaign to rehabilitate himself in the eyes of Western countries, and that strikes against Islamic State could solidify his grip on power.

ISLAMIC STATE ADVANCES ON KURDS

Even as Islamic State outposts elsewhere have been struck, the fighters have accelerated their campaign to capture Kobani, a Kurdish city on the border with Turkey. Nearly 140,000 Syrian Kurds have fled into Turkey since last week, the fastest exodus of the entire three-year civil war.

An Islamic State source, speaking to Reuters via online messaging, said the group had taken several villages to the west of Kobani. Footage posted on YouTube appeared to show Islamic State fighters using weapons including artillery as they battled Kurdish forces near Kobani. The Islamists were shown raising the group's black flag after tearing down a Kurdish one.

A Turkish official, speaking on condition of anonymity, said the advance had been rapid three days ago but was slowed by the U.S.-led air strikes.

But Ocalan Iso, deputy leader of Kurdish forces defending Kobani, said more militants and tanks had arrived in the area since the coalition began air strikes on the group.

"Kobani is in danger," he said.

More than 190,000 people have died in the Syrian conflict and millions have fled their homes. Gun battles, bombings, shelling and air strikes regularly kill over 150 people a day.

(Additional reporting by Arshad Mohammed, Steve Holland, Michelle Nichols and Louis Charbonneau at the United Nations, Phil Stewart in Washington, Patrick Markey in Tunis, Tom Perry, Sylvia Westall, Mariam Karouny, Laila Bassam, Alexander Dziadosz in Beirut, Suleiman al-Khalidi in Amman, Anthony Deutsch in The Hague; Writing by Peter Graff and Alexander Dziadosz; Editing by David Stamp, Chizu Nomiyama and Ken Wills)



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TOP NEWS U.S. new home sales at six-year high, but outlook challenging

WASHINGTON (Reuters) - Sales of new U.S. single-family homes surged in August to their highest level in more than six years, a sign the housing recovery remains on course.

The recovery, however, will likely remain gradual against a backdrop of relatively high unemployment and sluggish wage growth, which are sidelining first-time buyers and keeping many young adults from seeking their own accommodation.

"This is welcome news in an otherwise mixed outlook," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "We are still a long way from the housing market recovering from the bust."

New home sales jumped 18.0 percent to a seasonally adjusted annual rate of 504,000 units, a second straight monthly gain that took them to the highest level since May 2008, the Commerce Department said on Wednesday.

Though new home sales account for only about 9 percent of the market, the increase helped allay fears of renewed weakness after a surprise decline in home resales last month.

"We expect some of this buoyancy to be reversed in the coming month, but continue to believe that the underlying fundamentals of the housing sector remain favorable," said Millan Mulraine, deputy chief economist at TD Securities in New York.

U.S. financial markets were little moved by the data, but housing shares tumbled after home builder KB Home (KBH.N) reported earnings that missed Wall Street's expectations.

KB Home shares fell 5.7 percent, while Pulte Group (PHM.N) slipped 0.6 percent and Toll Brothers (TOL.N) dropped 0.9 percent. The overall housing market index (.HGX), however, was up marginally in mid-afternoon, tracking broader indexes.

CHALLENGING ENVIRONMENT

The National Association of Realtors said on Monday that sales of previously owned homes fell in August for the first time in four months as the investors who had been supporting the market stepped away.

Economists hope their departure will leave an opening for first-time buyers, but worry still-high unemployment and sluggish wage growth will continue to constrain sales.

The share of first-time buyers in the home resale market has been stuck around 29 percent, well below the 40 percent to 45 percent considered as ideal by economists and real estate agents.

"It's still a challenging environment for those buyers," said Guy Berger, an economist at RBS in Stamford, Connecticut. "You can make a good case for a slow, gradual improvement."

In a separate report, the Mortgage Bankers Association said applications for loans to purchase homes fell last week as mortgage rates crept up. New loan applications are well off peaks seen early last year.

With average hourly earnings up only 2.1 percent over the past year, many Americans are opting to rent, while some of those who have recently graduated from college are moving back home or staying with friends, weighing on home sales.

According to government data released last week, 492,000 households were formed last year, well below the one million economists say would be consistent with a healthy market.

"Household formation, a major driver of new construction, is falling asleep at the wheel," said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts.

Despite the rise in sales in August, the stock of new houses on the market hit its highest level in four years, giving buyers more choices.

At August's sales pace it would take 4.8 months to clear the supply of houses on the market, down from 5.6 months in July. A six months' supply is normally considered a healthy balance between supply and demand.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)



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TOP NEWS Exclusive: Syrian minister says U.S.-led strikes going in 'right direction'

By Kinda Makieh



DAMASCUS (Reuters) - A Syrian government minister said U.S.-led air strikes against militants are going in the "right direction" because the government had been informed before they started and they were not hitting civilians or Syrian military targets.



Syria is still watching all developments with caution, Ali Haidar, minister for national reconciliation, told Reuters on Wednesday after U.S. warplanes pounded Islamic State positions in a second day of attacks.



"As for the raids in Syria, I say that what has happened so far is proceeding in the right direction in terms of informing the Syrian government and by not targeting Syrian military installations and not targeting civilians," he said.



"Notification of the Syrian government happened," he said. "Confirmation that they would not target Syrian military installations, and confirmation they would not target civilians happened."



The United States said on Tuesday that Washington's envoy to the United Nations had told her Syrian counterpart air strikes would take place, but it has ruled out coordinating with Assad, whom Washington sees as part of the problem.



The Syrian foreign minister said last month that Damascus was ready to cooperate in any international effort to fight Islamic State.



Despite welcoming the strikes, Haidar said fighting militants would take more than such military action.



"The war on terror does not only come through air strikes, which are not the only means to fight terrorism," he said, adding that military action could go on for some time.



The Syrian government has described all insurgent groups in Syria as "terrorists", from the Western-backed rebel opposition to Islamic State fighters who have seized tracts of territory in the country and in neighboring Iraq.



(Reporting by Kinda Makieh, editing by John Stonestreet)





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TOP NEWS Warplane attacks Libya's Benghazi port after threats by ex-general

By Ayman al-Warfalli

BENGHAZI Libya (Reuters) - A war plane attacked a port in Benghazi on Wednesday in a strike claimed by forces loyal to former general Khalifa Haftar, bringing their battle against Islamists to the heart of the eastern Libyan city.

A Reuters reporter near the port, which is not an oil installation, saw a warplane open fire several times, although it was unclear whether any harbor facilities were hit.

The port is the main gateway for wheat and fuel imports into eastern Libya, a country struggling with anarchy three years after the ousting of Muammar Gaddafi.

Saqer al-Jouroushi, head of Haftar's air defense unit, has said an umbrella group of Islamist fighters, Majlis al-Shura, was using the port to bring in supplies and weapons.

"We warned the port manager that we will not allow ships to dock to supply Majlis al-Shura with weapons," said Jouroushi, whose unit controls several planes from Libya's air force.

He said the plane had deliberately missed the quay and had been issuing a final warning, but added that it would hit next time if another ship tried to offload weapons. Clashes in Benghazi have so far been mainly limited to the suburbs.

"We are in a state of war and Ansar al-Sharia and its allies are using the port to ship in arms against out troops," he said, referring to an Islamist group blamed by Washington for an attack on the U.S. consulate in the city in 2012, during which the U.S. ambassador to Libya was killed.

Three years after Gaddafi died during an uprising against his rule, Libya is divided. The government and elected parliament have relocated to Tobruk in the far east since losing control of the capital, Tripoli, where a rival government has been created by forces from the western city of Misrata.

Haftar has emerged as a renegade commander fighting Islamists and has recently entered into a frail alliance with the government in Tobruk.

Libya depends on foreign imports of food and consumer goods as the desert country does not have any large industry outside the key oil sector. However, shippers have become more reluctant to deal with Libya, some traders have said, and the attack on Benghazi port is only likely to heighten their concerns.

(Reporting by Ayman al-Warfalli; Writing by Ulf Laessing; Editing by Crispian Balmer)



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TOP NEWS Two victims identified in shooting at UPS facility in Alabama

By Sherrel Wheeler Stewart



BIRMINGHAM Ala. (Reuters) - Authorities on Wednesday released the names of the victims killed a day earlier in a murder-suicide at a UPS facility in Alabama, where police said an employee who had been fired shot dead two supervisors before turning the gun on himself.



The victims in the Tuesday shooting in Birmingham were Doug Hutcheson, 33, and Brian Callans, 46, the Jefferson County Medical Examiner's Office said.



The men were at work on Tuesday morning when Kerry Joe Tesney, 45, a 21-year employee of the shipping company who had been fired and recently learned he had lost an appeal to be reinstated, drove to the bay area of the large brick facility, police said.



Wearing a brown UPS work uniform, Tesney got out of his Honda SUV, entered the office area where Hutcheson and Callans were working, and shot them, police said.



He then killed himself, using a handgun recovered at the scene, police said.



Hutcheson, a driver supervisor who lived in Odenville, about 25 miles northeast of Birmingham, had been with UPS 15 years, the company said.



  Callans, a UPS business manager who lived in Birmingham, had worked at the company for 26 years, the company said.



Tesney, who police said had been terminated within the past month but had appealed in the hopes of getting his job back, was a resident of Trussville, a suburb east of Birmingham.



Police are continuing to investigative the incident, said Birmingham Police Lieutenant Sean Edwards.



(Editing by Jonathan Kaminsky)





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TOP NEWS German police raid flats, mosque over suspected Islamic State ties

BERLIN (Reuters) - German authorities raided a mosque, an Islamic community center and radical Islamists' flats in cities across Germany on Tuesday on suspicion of having connections to militants in Syria.

The suspects, belonging to the ultra-conservative Salafist movement, are aged between 23 and 36 and police believe they were planning a violent attack although they made no arrests.

"We will not stand by and watch as the terrorist Islamic State death squads in Syria and Iraq get support from Germany," Joachim Herrmann, interior minister for the southern state of Bavaria, told reporters after detailing the raids.

The raids took place as the United States and Arab allies launched air strikes against Islamic State and al Qaeda militants in Syria.

More than 400 German citizens have traveled to Syria to join Islamic State and the Berlin government this month outlawed the organization, making IS propaganda, symbols and activities illegal.

In Tuesday's raids, police seized computers, hard drives and electronic data from a flat in Fuerth and three flats in Nuremberg in southern Germany, where they also raided a mosque and Islamic center. They also searched a flat in Bonn in west Germany and two flats in Weyhe in the north.

Investigators believe the suspects had raised money to send an ambulance from Germany to Syria. Once in Syria the vehicle was converted for military use with a mounted gun. The suspects also helped send vehicles to Syria for use by Islamic State, Herrmann said.

Salafists make up only a tiny proportion of Germany's Muslim population of 4 million but have clashed with police and far-right groups. German intelligence says the number of Salafists grew to 5,500 in 2013 from 4,500 the year before and it is keeping tabs on them.

Last Friday German Muslims at more than 2,000 mosques condemned the actions of Islamic State in a nationwide day of prayer and vowed to stem the tide of youngsters heading to join radical militants in Syria and Iraq.

Germany is also set to prosecute at least 30 suspected jihadists who have returned to Germany over their activities in Syria.

(Reporting by Thorsten Severin, Writing by Alexandra Hudson, Editing by Angus MacSwan)



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EXCLUSIVENEWS: Ex-BBC DJ Dave Lee Travis convicted of indecent assault

LONDON (Reuters) - Dave Lee Travis, one of Britain's best-known radio DJs in the 1970s and 1980s who counted Myanmar's Aung San Suu Kyi among his fans, was found guilty on Tuesday of indecently assaulting a television researcher.

The 69-year-old is the latest ageing British celebrity to be convicted of sex crimes following police investigations launched in the wake of revelations that the late Jimmy Savile, one of the BBC's top TV presenters, had sexually abused hundreds of victims over decades.

Travis, a former BBC Radio 1 DJ, had been cleared in February of a string of sexual offences against women over three decades, but the jury at Southwark Crown Court had failed to reach verdicts on two indecent assault charges and prosecutors decided he should be re-tried.

Travis, appearing under his real name of David Griffin, was convicted of assaulting the researcher in 1995.

"David Griffin...indecently assaulted a young woman by touching her in a way that was not only deeply invasive but also against the law," said Deputy Chief Crown Prosecutor Jenny Hopkins.

"The prosecution of sexual offences is often difficult and complex, perhaps even more so when the allegations are from some years ago," she added in a statement after the verdict.

Travis was cleared of the other indecent assault charge.

He will be sentenced on Friday.

Travis had denied all the accusations, describing himself as a "big, hairy, cuddly bear" who was tactile but not a sexual predator. He accused the women of making up the claims to make money.

Among his fans was Nobel Peace Prize winner Suu Kyi, who singled out his weekly show on the BBC World Service for making her world "much more complete" during her 15 years under house arrest between 1989 and 2010.

Travis is the latest celebrity to have faced criminal charges after London police launched "Operation Yewtree" in the wake of the 2011 death of Savile, one of Britain's biggest TV stars in the 1970s and 1980s.

Detectives said hundreds of people had contacted them with allegations about famous figures after revealing that Savile had sexually assaulted some 300 victims, mainly children, at BBC premises and hospitals over six decades of abuse.

In July, 84-year-old entertainer Rolf Harris, a household name in his native Australia and adopted home Britain, was jailed for almost six years for abusing young girls some as young as seven or eight over two decades.

The country's best-known publicist, Max Clifford, was found guilty in May of indecently assaulting teenage girls some 30 years ago as part of the investigation and sentenced to eight years in prison.

Critics have asked why the BBC and police failed to take action years ago, but some commentators have also voiced concern the investigation had become a "witch-hunt" against high-profile figures of the past.

(Reporting by Michael Holden, Editing by Angus MacSwan)



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TECHNOLOGY EU member states agree to deregulate voice markets

By Julia Fioretti and Francesco Guarascio

BRUSSELS (Reuters) - EU regulators are set to remove limits on the prices that leading telecoms firms such as Orange and Telecom Italia can charge smaller operators for accessing their networks, a European Commission source said on Tuesday.

The European Union's member states approved the measure on Tuesday, the source said, paving the way for its formal adoption by mid-October.

The move will be welcomed by big industry players, while the smaller firms say it will hurt their margins and lead to price increases for consumers.

The EU's existing "recommendation on relevant markets" defines the telecommunications markets that are subject to regulation at the EU level to ensure that there is enough competition among operators. If national regulators can show that a particular market is not dominated by one player, however, then they can deregulate it.

Under the new recommendation, given that the expansion of new services such as Skype has slashed prices and enhanced competition, national regulators do not need to provide proof to remove limits on wholesale prices.

Incumbent telecoms operators said this move would boost investment in broadband infrastructure and help them catch up with their peers in the United States, where the rolling-out of network infrastructure is more advanced than in Europe.

"Competition from alternative platforms and over-the-top service competition are today well established, and this recommendation is the right instrument to adapt regulation to the new market reality," said ETNO, a telecoms lobbying group.

ETNO members include Deutsche Telekom, Orange, KPN, Telefonica, Telecom Italia and TeliaSonera.

REVENUES ERODED

Years of falling prices for calls and text messages have eroded operators' revenues as consumers have switched to services such as Skype and WhatsApp, which allow them to call and text over an Internet connection.

In 2012, revenues from fixed telephony at major telecoms companies dropped by 5 billion euros ($6.5 billion) to 59 billion euros, according to ETNO data.

Under the new recommendation, the final decision on whether to open a market rests with the national regulators. The German regulator, for example, signaled in July that it would continue to regulate prices for fixed calls.

Opening up the wholesale market could hurt margins for smaller players that must rent capacity on networks from incumbents to allow their customers to make fixed-line calls.

Their view, shared by the EU's group of national telecoms regulators, BEREC, is that such deregulation is still premature and that price hikes will be passed onto consumers.

"In the vast majority of member states, end-users will have very little choice – often only one, the incumbent - if fixed voice regulation is removed," said ECTA, a telecoms lobbying group representing TalkTalk, Wind and E-Plus, among others.

"Such premature deregulation will harm competition and thus ultimately the users, be they consumers or businesses."

(editing by Jane Baird)



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TECHNOLOGY Rocket Internet prices shares to value firm around $8 billion

By Emma Thomasson

BERLIN (Reuters) - Germany's Rocket Internet, a venture capital group that has launched dozens of online start-ups, expects to raise almost double the amount it initially targeted from its initial public offering, pricing shares to value the firm at some $8 billion.

The Rocket flotation comes hot on the heels of the blockbuster listing of China's Alibaba and amid strong demand for the shares of Zalando, a European fashion site that Rocket helped found that is set to list next week.

The Berlin-based company on Tuesday set the price in a range of 35.50 to 42.50 euros per share and said it expected gross proceeds of about 1.477 billion euros, assuming it places the maximum number of shares at the mid-point of the price range, corresponding to a market capitalization of 6.2 billion euros.

That is almost double the 750 million euros it said it expected to raise when it announced its listing plans 13 days ago.

The expected proceeds include 582.5 million euros from cornerstone investors, who along with existing shareholders have committed to a 12-month lock-up period. The free float after lock-ups will be 24 percent.

Founded in 2007 by brothers Oliver, Alexander and Marc Samwer, Rocket Internet has set up e-commerce sites and online marketplaces for everything from taxis to meal deliveries in more than 100 countries that made revenue of $1 billion in 2013.

Rocket wants to replicate the success of Amazon.com Inc and Alibaba in markets that the U.S. and Chinese groups have yet to dominate such as Africa, Latin America, Russia and other parts of Asia.

"We believe Rocket has a unique opportunity to participate in the growth of Internet commerce in emerging markets," Rocket Internet Chief Executive Oliver Samwer said in the statement on Tuesday. "Through our operating platform, we are building and scaling the Internet giants of tomorrow."

Zalando has attracted strong demand so far for shares in its planned initial offering, which could value it at up to 5.6 billion euros.

The flotations, set to be Germany's biggest technology listings since the bursting of the dot.com bubble a decade ago, will make billionaires of the three Samwer brothers, who own 52.3 percent of the Rocket stock as well as a stake in Zalando.

Rocket, which also announced it had elected a new nine-member supervisory board, said the offer period would start on Sept. 24 and end on Oct. 7 with a listing on the Frankfurt stock exchange planned for Oct. 9.

Rocket said the proceeds would be used to fund the launch of new companies, finance existing firms and consolidate Rocket's stakes in some of its more established companies.

Rocket, which had only previously released minimal financial details, said in its prospectus that its top 11 ventures including Russian fashion site Lamoda and Indian online store Jabong had generated aggregated net losses of 442 million euros in 2013.

"Nearly all of our companies have limited operating histories, are significantly loss-making, have a negative operating cash flow, require significant capital expenditure and may never be profitable or cash generating," it said, in language that is standard for an e-commerce prospectus.

"DISRUPTIVE TECHNOLOGY"

The Rocket group's own revenues, which it makes by charging consultancy fees to the companies it sets up, rose 43 percent to 47 million euros in the first half of 2014, while it made a net loss of 13.3 million as expenses rose.

Rocket says it can launch a company within 100 days by drawing on expertise at its Berlin head office in areas such as finance, communications, marketing and business intelligence, helping it start an average of three to six new firms a year.

Rocket said it expected revenues from its companies to keep rising in the second half of 2014, when earnings before interest, tax, depreciation and amortization of its home and living sites should improve, but deteriorate or remain stable for its other top sites due to investment in growth.

It also flagged the possibility that its Lamoda site could be hurt by sanctions imposed on Russia.

The cornerstone investments include 350 million from Baillie Gifford & Co. and 100 million from JP Morgan.

"We have a clear strategy to invest in disruptive use of technology on a global basis," said Baillie Gifford partner James Anderson, who has also invested in Alibaba and Amazon.

Rocket reiterated that no existing shareholders would sell any shares in the offering.

Sweden's Kinnevik, which holds an 18 percent stake, said in a separate statement that the indicative price range suggested that the book value of its shares in Rocket could be 5.3-6.7 billion Swedish crowns ($742-938 million) higher than previously reported.

Berenberg, JP Morgan and Morgan Stanley are joint coordinators of the offer, while BofA Merrill Lynch, Citigroup and UBS are joint bookrunners.

(Editing by Jonathan Gould and Jane Baird)



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FOOTBALL UPDATE: Captain One Cup LIVERPOOL 2-2 MIDDLESBROUGH in 120minutes of play

There were 20 consecutive penalties scored in the shootout before Albert Adomah's decisive miss

Penalty shootout goes to 30th kick
Adomah misses vital kick for Boro
Both goalkeepers score in shootout
20 penalties scored in a row Liverpool won a record-equalling penalty shootout 14-13 to progress to the fourth round of the Capital One Cup at Middlesbrough's expense.

After the match ended 2-2, it took 30 penalties before Boro winger Albert Adomah missed to send the Reds through.

Liverpool had taken the lead through debutant Jordan Rossiter but Boro equalised when Adam Reach headed in.
In extra-time, Suso drilled home for the Reds but Patrick Bamford's last-minute penalty forced a shootout.

Then came the real drama as the joint-highest scoring spot-kick contest in English professional football unfolded in front of a barely believing Kop.

Simon Mignolet saved Boro's first penalty from Bamford only for Raheem Sterling to miss Liverpool's fifth and send the shootout to sudden death.

Amazingly, the next 20 penalties were all scored as player after player from each side - including both goalkeepers - handled the pressure with aplomb, with several scoring twice.

But when Adomah pushed his kick wide, Liverpool could finally celebrate victory.

The result will relieve Liverpool boss Brendan Rodgers, whose side have lost three of their first five league matches and face Everton in the Merseyside derby on Saturday.

Boro, in contrast, will be devastated to have come so close to recording their first win at Anfield since 1976 after more than matching the Reds over 120 minutes of a pulsating cup tie.

With captain Steven Gerrard rested, 17-year-old academy product Rossiter was given his debut at the base of the Reds midfield, and he only took 10 minutes to make his mark.

After a long ball caused chaos in the Boro defence, debutant goalkeeper Jamal Blackman saved sharply from Rickie Lambert. But the ball fell kindly to Rossiter, who swept a low shot past Blackman's flailing legs before wheeling away in delight.

Boro scored a deserved equaliser on the hour after Mamadou Sakho was penalised for handling a cross.

Grant Leadbitter's free-kick from the right flank eluded the Liverpool defence and invited Reach to apply the headed finish from inside the six-yard box.

Rodgers introduced Mario Balotelli for the ineffective Lambert, but still Boro threatened.

And with five minutes remaining, Lee Tomlin's superb reverse pass sent Clayton clear, but his strike cannoned off Mignolet's near post.

In extra-time, Blackman saved long-range strikes from Jose Enrique and Sterling before substitute Suso put the Reds in front with his first Liverpool goal.

Adam Lallana and Enrique linked up well down the left and when Balotelli's effort was only half cleared, the Spanish forward picked his spot from 12 yards.

But there was still time for another twist as Boro were awarded a penalty in the last-minute of extra-time.

After Sterling had given the ball away, Kolo Toure fouled Bamford, and the Boro substitute stepped up to beat Mignolet and take the tie to penalty kicks.

Middlesbrough manager Aitor Karanka:
"These are the kind of games where you have to be very proud of your players, your group, your club, everything.

"I think we have shown everybody what kind of club Middlesbrough are. I don't have many words to explain my feelings right now.

"We have played against a Champions League team at Anfield and you know how difficult this is for us - and we have played face to face against them.

"Although we have lost, our players should enjoy this."

Adomah's miss brought a 19-minute shootout to an end Liverpool have won the League Cup a record eight times
Suso's goal in extra time was his first for Liverpool Jordan Rossiter has been likened to captain Steven Gerrard
Adam Reach scored a deserved equaliser for Middlesbrough

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FOOTBALL UPDATE: Captain One Cup Southampton are now unbeaten in six matches after losing their opening league game to Liverpool

Southampton continued their fantastic start to the season by coming from behind to beat Arsenal in a gripping Capital One Cup third-round tie.

Alexis Sanchez's superb free-kick opened the scoring for an Arsenal side featuring 10 changes from the weekend.

But Southampton hit back soon after as Dusan Tadic scored a penalty given for a foul on debutant Sadio Mane.

A stunning strike from Nathaniel Clyne gave the Saints a deserved lead, which they protected in a lively second half.

Ronald Koeman's side continue to make a mockery of the pre-season suggestions that they were en route to mediocrity following the summer exodus of their manager and five key players.

In contrast to the changes made by opposite number Arsene Wenger, Koeman made five alterations to his starting XI and was rewarded with a coherent display consistent with the quick counter-attacking style they have showcased this campaign.

They had to show resolve to come from behind after Sanchez had put Arsenal ahead by curling a superb free-kick over the wall and into the top corner from 25 yards.

It took them six minutes to respond as Mane, playing his first game since obtaining a work permit, drew a trip out of Tomas Rosicky in the box and Tadic side-footed his penalty down the middle to equalise.

Clyne's goal to give them the lead and ultimately the win was as brilliant as it was unexpected. The defender picked up the ball following a cleared corner, took a touch and smashed a shot that swerved past Arsenal's debutant keeper David Ospina and into the roof of the net.

Arsenal strove for an equaliser in the second half but they were unable to break down the visitors, who could easily have added to their lead but for some wayward shooting.

None of the players Wenger drafted in did much to stake a claim for a first-team place.

Rosicky covered ground but provided relatively little, Lukas Podolski and Joel Campbell were largely anonymous, while Abou Diaby, making his first start since March 2013, was understandably off the pace.

That the midfielder managed over an hour after such a lengthy period out with yet another injury is the most positive development Wenger can take away from the evening.

Arsenal manager Arsene Wenger:
"It's disappointing because we had a good start and we made two unneeded errors on the two goals - and big ones.

"We lacked a bit of experience at the back, but overall they did well. We gave a lot and it's frustrating not to be able to score in the second half.

"When you look at the amount of possession we had, we have to give credit to Southampton, they played well and were well organised.

"They abused a bit the fouls in the middle of the park, but they are a good side and they played well tonight. Overall it is frustrating because we gave a lot."

Southampton manager Ronald Koeman:
"I'm very proud, because winning away against Arsenal, that means a lot.
"Everybody spoke about the changes of the Arsenal team. I think they made some changes but they took it very seriously.

"I think the game was on a very high level, with high tempo, and I enjoyed it.
"We tried to press and tried to play attractive, offensive, and that's not easy, because they have a great team, great players."

Sanchez has now scored four goals for Arsenal since his summer move from Barcelona

Tadic scored from the penalty spot to claim his first goal as a Southampton player

Clyne's fourth goal for Southampton was an absolute screamer from over 35 yards

Arsenal boss Arsene Wenger made 10 changes from the team that beat Aston Villa 3-0 on Saturday.

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TOP NEWS Breaking with tradition, Philips splits off lighting

By Anthony Deutsch and Thomas Escritt

AMSTERDAM (Reuters) - Philips (PHG.AS), the Dutch conglomerate that started life making light bulbs 123 years ago, is splitting off its lighting business in a bold step to expand its higher-margin healthcare and consumer divisions.

Putting the lighting business in a separate company is part of a wider strategy that began with Philips' move out of less profitable consumer electronics and into fast-growing healthcare markets, largely in emerging Asian markets.

The decision to split the company in two marks a definitive break from its origins in the southern Dutch town of Eindhoven, where Gerard Philips and his father Frederick founded one of the earliest makers of incandescent light bulbs in 1891.

Philips, which invented the audio cassette and compact disc, grew into a world-leading electronics company by the 1960s but it has always been ruthless about moving out of less profitable businesses, such as audio and video, vinyl records and TVs.

Unveiling the split on Tuesday, Philips Chief Executive Frans Van Houten said it was not clear whether the lighting business would be sold off to investors, or listed on the stock exchange, but the move would bring better returns for investors.

"I do appreciate the magnitude of the decision we are taking, but the time is right to take the next strategic step for Philips," Van Houten said.

"Great companies need to reinvent themselves, we can do that, we can stay relevant, we can grow and we can stay successful. It takes courage but it's a path we've been preparing for carefully."

Van Houten declined to comment on whether either new company could become a takeover target: "Our decision is not driven by fear of what other companies may do."

The Philips split will take up to 18 months and would make it easier for both companies to raise money and invest, he said.

The new structure should save 100 million euros ($128.5 million) next year and 200 million euros in 2016. It expects restructuring charges of 50 million euros from 2014 to 2016.

LED BOOM

The Philips move is another example of companies overhauling long-standing structures. Last week, Germany's Bayer said it was spinning off its plastics business to focus on its more profitable life-science operations.

German engineering giant Siemens (SIEGn.DE) spun off its light bulb maker and Philips competitor Osram (OSRn.DE) last year.

Philips shares, which have underperformed the broader market and are down 9 percent this year, rose 2.4 percent to 24.07 euros in trading in Amsterdam.

Splitting the company would be good for valuations, said Rabobank analyst Hans Slob: "It will eliminate the conglomerate discount, I always used a 5 percent discount for the sum of the parts valuation."

Philips said in July it would combine its light-emitting diode (LED) and car lights division in a stand-alone firm to focus on an LED boom as the world switches from incandescent bulbs to more efficient and durable lights.

"The entire dynamics of the lighting market are changing," Van Houten said on Tuesday. "Value is moving toward systems and services," including, for example, managing cities' and companies' complete lighting systems.

But a price war for LED bulbs is hurting profits, leaving Philips and Osram (OSRn.DE) scrambling to develop new technology and seek out new market segments.

Philips has a history of building up and spinning off successful businesses, among them chip equipment maker ASML (ASML.AS), which is now larger than Philips, and Polygram, the music label and film company that was merged with Universal.

Philips said its latest move would create two market-leading companies, HealthTech, with sales of 15 billion euros, and Lighting, with both companies using the Philips brand.

Philips said it would move the 7-billion euro lighting business into a separate legal structure and consider various options for "alternative ownership structures with direct access to capital markets."

In a revised outlook, Philips said adjusted earnings before interest, taxes, depreciation, and amortization (EBITA) in the second half of 2014 were expected to be slightly lower than the same period a year earlier.

In the healthcare business, core profit in the second half of 2014 is also now expected to be lower than the reported core profit in the second half of 2013.

(Editing by David Clarke)



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TOP NEWS China September factory activity edges up but employment shrinks

By Jake Spring

BEIJING (Reuters) - China's manufacturing sector unexpectedly picked up some momentum in September even as factory employment slumped to a 5-1/2-year low, a potential source of worry for Communist leaders who prize social stability above all else.

Signs of a weakening labor market reinforced expectations that China would further relax financing conditions in coming weeks, but stop short of cutting interest rates or loosening the reserve requirement for all banks to support the economy.

The HSBC/Markit Flash China Purchasing Managers' Index (PMI) rose to 50.5 in September from August's final reading of 50.2.

Economists polled by Reuters had expected factory growth to stall at 50.0, the mark which separates expansion from contraction, citing deteriorating business confidence and the growing drag from the cooling property market.

"We believe liquidity conditions will be easy," said Ting Lu, an economist at Bank of America-Merrill Lynch. "But we don't expect a universal cut in interest rates or the reserve requirement ratio."

Instead, policymakers are likely to lower select lending rates such as mortgage rates, and the central bank may extend more loans to big banks with the cash being re-lent to businesses under a "re-lending" exercise, Lu said.

Economists' bets that there would be no overt policy easing are in line with remarks by senior leaders such as Finance Minister Lou Jiwei, who said over the weekend that China would not dramatically alter its policy based on any one indicator.

But the government's promises to desist from ramping up credit supply are increasingly being tested by a run of data showing that the world's second-biggest economy is sliding into a deeper slowdown.

Tuesday's PMI showed a measure of employment shed more than a point to drop to 46.9, its lowest since February 2009 during the global financial crisis, when a collapse in exports threw tens of millions of Chinese out of work.

A hefty drop in employment could raise alarm bells for the government, which has indicated it will tolerate slower economic growth below 7.5 percent for the year as long as employment is not affected.

"The real estate risk is already materializing," said Dariusz Kowalczyk, an economist at Credit Agricole Corporate and Investment Bank in Hong Kong.

"This will keep gross domestic product growth at a depressed level of around 7 percent year-on-year this quarter."

Still, Asian markets found consolation in the PMI poll that China's economy was not faring as badly as some feared. Stock markets and the Australian dollar AUD=D4 clawed back some of their early losses, while Shanghai stocks (.CSI300) rose.

NO AGGRESSIVE MEASURES

China's urban unemployment rate was nearly 4.1 percent at the end of June, though many economists believe the real number may be much higher given its army of migrant workers.

The employment index aside, other measures in the PMI poll fared better, which could temper Beijing's policy response for now.

Total new orders rose, and new export orders also climbed to their highest level since March 2010.

The overall output level remained flat on the month, while output prices fell to a six-month low.

The final HSBC/Markit manufacturing PMI for the month is due on Sept. 30, with the official reading on Oct. 1.

The HSBC survey largely covers small- to medium-sized companies, which are facing tighter credit conditions and greater stresses than the larger, state-owned firms which the official report tends to focus on. Smaller firms account for about 60 percent of gross domestic product and 75 percent of the new jobs created in the country.

A dramatic increase in reliance on state support starkly illustrates the industrial weakness that is weighing on the economy. Subsidies accounted for four-fifths of the profits reported by Chinese steel companies in the first half of this year, according to a Reuters analysis of corporate financial statements.

"We still expect some more measures to support growth, such as stimulating infrastructure investment, relaxing property market policies and some more monetary easing steps," said Louis Kuijs, an economist at RBS in Hong Kong.

"However, the recent signs of policymakers suggest to us that they will not resort to more significant and higher profile measures unless growth takes another turn for the worse."

GRADUAL SLOWDOWN

Export growth has been unsteady, and the cooling housing market is undermining already softening domestic demand. Recent data showed factory output grew at the weakest pace in nearly six years in August.

Prices for Chinese steel and iron ore futures have slumped to record lows, while oil, copper, rubber and other raw materials have also skidded on fears of slowing China demand, which is rapidly leaving the United States as the only major driver of world economic growth.

Chinese leaders have publicly ruled out another massive stimulus program this year like the one launched during the global financial crisis, but are prepared to take targeted measures supporting the most vulnerable sectors.

Further measures are already being rolled out even as leaders publicly advise caution.

The central bank last week injected money into the country's top banks in a bid to help support the economy by keeping borrowing costs down, and media have reported this week that the "Big Four" banks plan to ease rules on mortgage lending in a move orchestrated by regulators.

"The economy still faces significant headwinds, particularly from the property sector, and our base scenario remains a gradual slowdown in the coming months," Capital Economics said in a note to clients.

(Editing by Kim Coghill and Jacqueline Wong)



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