Evening Edition

Adoption of the wide-ranging plan, which includes deep cuts to regional subsidies, family tax benefits and top-tier pensions, came just ahead of the hotly awaited release of results from stress tests on 91 European banks.

Italy has been swept by uncertainty on the markets in recent days and the central bank warned that if high long-term borrowing rates persist this would have “considerable costs” for public finances and risks for the economy.

The European Banking Authority, the EU’s London-based regulator for the financial sector, has carried out assessments on 91 banks representing 65 percent of the sector and will publish its findings at 1600 GMT on Friday.

The purpose is “to assess the resilience of European banks to severe shocks and establish a common, conservative stress testing benchmark,” the EBA said on Wednesday. However, no default is assumed in the tests.

More than 28 movements had called for the rallies to pressure the Supreme Council of the Armed Forces (SCAF) — which took power when president Hosni Mubarak was toppled — to respond to their demands.

In Cairo, thousands of demonstrators crowded into Tahrir Square, the epicentre of the protest movement that overthrew Mubarak in February and where hundreds have been staging a sit-in for a week.

“My child is starving but I cannot feed him,” said Kafia Ali, cradling her son at the Korane camp in the Somali capital Mogadishu, crowded with some 3,700 families seeking food and shelter.

“I fled from the Southern Gedo region in order to save my two children from the killer drought.”

The group, transferred to Iraqi custody on Thursday morning, were among 206 high-value detainees still being held by American forces ahead of a US military pullout due by the end of the year.

“We received the final 206 Iraqi prisoners being held by US forces, including five senior officials from the former regime,” said justice ministry spokesman Haidar al-Saadi. “They (the five officials) will be executed within one month.

As an FBI investigation spread the crisis to the United States, Murdoch abandoned his very public attempts to protect his flame-haired lieutenant from attacks by politicians, and finally accepted her resignation.

Murdoch had until now weathered the firestorm, closing down the shamed News of the World tabloid where Brooks was once the editor and scrapping a buy-out of British satellite broadcaster BSkyB, but refusing to sack Brooks.

Frenchman Thomas Voeckler, of Europcar, retained the race leader’s yellow jersey after arriving with the main peloton and all the favourites seven and a half minutes later.

On the second of three consecutive days in the Pyrenees there were no changes to the overall standings.

“I have watched with sorrow from New York as the News of the World story has unfolded,” Hinton, who also served as publisher of the Wall Street Journal, wrote in his resignation letter.

“That I was ignorant of what apparently happened is irrelevant and in the circumstances I feel it is proper for me to resign from News Corp, and apologize to those hurt by the actions of the News of the World,” he added.

Moving to get ahead of a scandal washing over his global business, the U.S.-based magnate made a personal apology to the parents of a murdered schoolgirl in what appeared to be an admission that the News of the World, then edited by Brooks, had in 2002 hacked into the voicemails of their missing daughter.

It was that damning allegation, in a rival newspaper 10 days ago, which reignited a five-year-old scandal that has forced Murdoch to close the News of the World, Britain’s best-selling Sunday paper, and drop a $12 billion plan to buy full control of highly profitable pay-TV operator BSkyB.

Western nations said they also planned to increase the military pressure on Gaddafi’s forces to press him to give up power after 41 years at the head of the North African state.

Recognition of the rebels, announced by Secretary of State Hillary Clinton at a meeting in Turkey of the international contact group on Libya, is an important diplomatic step which could unlock billions of dollars in frozen Libyan funds.

Republicans in the House of Representatives said they would vote next week on a bill to raise the debt ceiling by the $2.4 trillion Obama has requested as long as Congress adopts a balanced budget amendment — an unlikely prospect. The measure will consume much of next week.

The vote could placate conservatives and give House Speaker John Boehner more leeway to work out a final compromise with the White House.

Credit losses dropped 35 percent at the third-largest U.S. bank, which allowed it to dip into money previously set aside to cover bad loans. The bank’s revenue from securities underwriting and merger advisory jumped 61 percent.

But many Citigroup businesses suffered. The bank’s main continuing businesses, known as Citicorp, posted a 2 percent decline in net income. The only Citicorp business to boost profit was retail banking, which benefited mainly from lower credit costs in the United States.

While S&P had already made clear it could downgrade the United States’ sovereign credit rating, the Friday move struck directly at the heart of the financial system, raising the prospect of knock-on effects should the country exhaust its ability to borrow to pay bills.

The Treasury took the last available step Friday to try and extend that borrowing capacity.

The European Banking Authority said five banks in Spain, two in Greece and one in Austria flunked the “stress test,” which made 90 lenders reveal for the first time their profit forecasts, a breakdown of their sovereign bond holdings and funding costs.

Expectations were for five to 15 banks to fall short and need to raise 10 billion euros or more in capital, prompting analysts to question how credible the test was.

Worries about stubbornly high unemployment pushed the Thomson Reuters/University of Michigan’s index of consumer sentiment to 63.8, the lowest since March 2009, a report showed on Friday. Economists had expected the index to climb to 72.5 from 71.5 in June.

Separate data from the Federal Reserve showed manufacturing output stagnated last month partly due to supply disruptions in the auto sector related to the earthquake in Japan.

The possibility, according to these persons, emerged after the bank disclosed on Friday that it is the target of a criminal investigation by U.S. federal authorities over its offshore banking activities.

Credit Suisse said in a statement from its Zurich headquarters that it had “received a letter notifying it that it is a target” of a U.S. Justice Department investigation concerning “historical private banking services provided on a cross-border basis to U.S. persons.”

Icahn’s offer of $76.50 per share represents a 12 percent premium to the stock’s Thursday closing price and a 15.5 percent premium to its price in February, before Icahn announced his stake in the company.

In a letter to Clorox Chief Executive Donald Knauss, Icahn said he was confident the company could get “numerous superior bids” from large consumer products companies.

Despite the apocalyptic warnings blaring from local television – or perhaps because of them – traffic appeared to be lighter than usual on Interstate 405 and other major freeways.

A 10-mile stretch of the 405 connecting the west side of the city with the San Fernando Valley was scheduled to close for 53 hours beginning Friday night.

Interstate 405, a freeway normally so clogged that locals like to joke that its name is shorthand for “traffic that moves no faster than 4 or 5 miles an hour,” is closing for 53 hours for a major construction project.

As crews worked feverishly to get the freeway open in time for Monday morning’s rush-hour, residents have been making plans for weeks to stay off local roads, lest they trigger what officials dubbed “Carmageddon.”

The scandal has knocked billions off the value of Murdoch’s News Corp., scuttled his ambitions to take control of lucrative British Sky Broadcasting, withered his political power in Britain – and is threatening to destabilize his globe-spanning business.

The controversy claimed its first victim in the United States as Les Hinton, chief executive of the Murdoch-owned Dow Jones & Co. and publisher of the Wall Street Journal, announced he was resigning, effective immediately.

The decision, which declared Libyan leader Moammar Gadhafi’s regime no longer legitimate, will potentially free up cash that the rebels fighting Libyan forces urgently need.

The front lines in the Libyan civil war have largely stagnated since the popular uprising seeking to oust Gadhafi broke out in February. Rebels, backed by NATO’s air force bombings, control much of the country’s east and pockets in the west. But Gadhafi controls the rest from his stronghold in Tripoli, the capital.

Instead, lawmakers embarked on competing fallback plans as a critical Aug. 2 deadline neared, a House Republican version given little chance of success, even by some supporters, and a bipartisan Senate approach holding out more promise to avert what Obama called financial “Armageddon.”.

Late Friday, the Treasury Department announced it was resorting to the final steps in an unusual series designed to avoid exceeding the current $14.3 trillion debt limit. Numerous officials have cautioned that a default will occur if the limit is not increased by Aug. 2, warning also of a calamitous effect on a national economy struggling to recover from the worst recession in decades..

Absent a deal by then, the government would find itself tight on cash and unable to borrow – and have to start deciding which of the 80 million bills due in August it should pay and which it should put off.

Tough decisions would come immediately: On Aug. 3, some $23 billion in Social Security benefit payments are due to be processed. On Aug. 4, the Treasury Department must pay $87 billion to investors to redeem maturing Treasury securities. On Aug. 15, more than $30 billion in interest payments come due.

While Romney’s $12.6 million in the bank far outdistanced a spread-out GOP field, dollars don’t always translate to votes. The chasm between Romney and his rivals suggested many Republican donors are waiting on the sidelines, watching the topsy-turvy campaign foment and the candidates finally start to engage one another.

“It’s a little unsettling that people have so underperformed expectations,” said Dave Carney, an adviser to Texas Gov. Rick Perry who is weighing joining the race. “Clearly, there’s some … concern about either economics or about the candidates. I don’t know the reason.”

“We think it hit bow first because the bowsprit is broken off, but the rest of the ship looks pretty nice,” undersea explorer Jim Kennard said Friday.

Kennard and fellow shipwreck enthusiasts Dan Scoville and Roland Stevens located the 129-foot-long vessel using side-scan sonar in 2009. They confirmed the find and captured images of it in early July using a remotely operated submersible.