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News Wrap: International Monetary Fund Urges Europe to Deal with Debt Crisis

October 11, 2012 at 12:00 AM EDT

HARI SREENIVASAN: Some new data on jobs offered signs of encouragement today.

The Labor Department reported first-time claims for unemployment benefits fell to the lowest level in more than four years. That suggests slightly improved hiring.
Wall Street rose on the news at first, then gave up those gains. The Dow Jones industrial average ended with a loss of 18 points to close at 13,326. The Nasdaq dipped two points to close at 3049.

The International Monetary Fund warned today that European leaders still aren’t moving fast enough to deal with their debt crisis. At the same time, the fund cautioned against forcing too much austerity on deeply indebted Greece and Spain. Just yesterday, Standard & Poor’s cut Spain’s credit rating to just above junk status.
But the Spanish government complained today that move will only make things worse.

SORAYA SAENZ DE SANTAMARIA, Spanish Deputy Prime Minister (through translator): What everybody needs to have in mind is that political stability is also listed on the stock exchange, and there are a lot of everyday questions for government and citizens that depend on political stability.

When some actions or decisions generate political instability, it is much harder to get financing. I am not only talking about financing for public administration, but also for individuals and companies.

HARI SREENIVASAN: Meanwhile, the government of Greece reported unemployment reached a record of more than 25 percent in July. The rate among young people, 15- to 24-years old, is double that, 54 percent.

An outbreak of fungal meningitis in the U.S. has now claimed 14 lives. The Centers for Disease Control reported the latest count today. It said a total of 170 people have been infected across 11 states. The outbreak has been linked to steroid injections for back pain that came from a specialty pharmacy in Massachusetts. Roughly 14,000 people received the shots.

In Pakistan, a 14-year-old activist was still fighting for her life today, in critical condition, after being shot by a Taliban gunman. Malala Yousafzai was moved by helicopter to a military hospital in Rawalpindi. The teenager had advocated education for girls and was attacked as she left her school on Tuesday.

Elsewhere in Pakistan, officials said a U.S. drone strike killed 10 militants near a village in the northwest tribal region. At least 15 others were wounded.

A masked gunman in Yemen has assassinated a Yemeni security official working at the U.S. Embassy there. The drive-by shooting happened near the man’s home in the capital city of Sanaa as he headed to work. Officials said the attack bore the hallmarks of al-Qaida. The victim worked for the embassy for 11 years. Yemeni officials said he was investigating a recent assault on the compound. But the U.S. State Department said that wasn’t the case.