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Vital Signs

Orders for manufacturedgoods rose in December,largely because of highermilitary spending linked toconcerns about potentialcutbacks. The value of neworders for the monthclimbed 1.8% to $484.76 bil-lion, the Commerce Depart-ment said. But excluding de-fense, orders increased just0.3%. Demand for nonde-fense capital goods exclud-ing aircraft fell 0.3%.

U.S. factory orders, in billions

Source: Commerce Department

'09 '10 '11 '12’08’07

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Turmoil returned to Eu-rope’s markets as the con-

fluence of a political scandalin Spain and a banking scan-dal in Italy sparked a flightfrom bonds and stocks in theContinent’s southern nationsand pummeled the euro. C1TheDow industrials postedtheir first triple-digit drop thisyear, losing 129.71 points amidweakness in tech shares. C4n The Justice Departmentfiled civil charges againstS&P, alleging that the firm ig-nored its own standards inratingmortgage bonds that im-ploded in the financial crisis.A1nMichael Dell is close to fin-ishing a $23 billion deal to takeprivate the computer firm hefounded, in an effort to remakeDell Inc. for a post-PC era. A1nConflicts of interest amongthe possible new SEC chairmanand other top agency officialscould make it harder to ap-prove enforcement cases. C1n The SEC is gathering dataon a broad number of trades bycorporate executives in sharesof their own firms, expanding ahigh-profile investigation. C3nU.S. aviation regulators ap-peared poised to approve someBoeing 787 flight tests as partof investigations into the causeof battery fires on the planes.B1n U.S. banks reportedstronger demand for busi-ness, home and auto loansduring the winter, in a posi-tive sign for the economy. A3nThe average U.S. householdpaid an estimated $2,912 forgasoline last year, sucking upnearly 4% of the average house-hold income before taxes. A4nU.K. banksmay have to raisebillions in new capital as partof a review by regulators intohow the lenders assess the riskof the assets on their books.C3n The Super Bowl attractedan average of 108.4 millionviewers, the third-largest au-dience for a television eventon record, CBS said. B3n Oracle will acquire AcmePacket in a $1.7 billion deal,its biggest move yet into themarket for equipment thattransports Internet data. B3n Yum, whose KFC unit wasthe target of a Chinese probeinto antibiotics use in poultry,said it expects earnings pershare to decline in 2013. B4n The EU will propose newcybersecurity rules that wouldrequire a range of businessesto report disruptions to gov-ernment authorities. B3n A group of hedge-fundcreditors sent J.C. Penney anotice alleging that the re-tailer violated the terms ofbonds held by the group. B4n Bridgewater will launch anew All Weather fund. Theworld’s largest hedge-fundfirm also said it sold a staketo an outside investor. C3n CME Group plans to closethe grain-trading pits at theKansas City Board of Trade,ending a 157-year run for thewheat-futures exchange. C4

nAfghanistan, Pakistan set atarget for a Taliban accord.The two countries’ leaders, af-ter talks hosted in Britain byCameron, agreed on a six-month timeline to reach apeace settlement with the Tal-iban, the latest effort in a pushto end the Afghan war. A focusof the meetings was a plan toopen a Taliban office in Qatar,which could serve as the basefor peace talks with Kabul.The Afghan Taliban’s leader-ship is based in Pakistan. A10With U.S.-led forces set towithdraw, the West wantsa compromise with the Tal-iban to prevent a civil war.n France pursued Islamistmilitants in north Mali withfighter jets and special forcesand pressedWest African na-tions to send more troops. A8n Iran’s president andspeaker accused each otherof blackmail, corruption andother crimes during a publicparliamentary session. A9n Bulgaria plans to release areport blaming Hezbollah andits ally Iran for a terroristbombing last summer thatkilled five Israeli tourists. A11nThe U.S. military suspendedits blacklisting of Kam Air af-ter Kabul promised a probe ofdrug allegations against theprivate Afghan airline. A10nHundreds of soccer gamesworld-wide have been fixedby international crime rings,Europol officials said. A8nMyanmar and ethnic rebels,following talks in China, agreedto ease military tensions afterweeks of intense fighting. A10n Efforts to develop a newTB vaccine stumbled when themost advanced experimentalinoculation failed to protectinfants in a clinical study. A2nA Vietnam court sentenced22 dissidents to prison termsranging from 10 years to life ina continuing governmentcrackdown on dissent. A11nMexico’s attorney generalblamed an accumulation ofgas, possibly methane, for theblast at state oil company Pe-mex that killed at least 37. A11n The Bolshoi Ballet directoris heading to Germany in a bidto save his vision after an acidattack and said he knows whowas behind the assault. A10nGay-rights activists gath-ered at Boy Scouts headquar-ters, urging the group to dropits ban on gay members. A3n Investigators are probingwhether human error or me-chanical failure caused adeadly California bus crash. A4nGreek police are investigat-ing a death threat after the fi-nance ministry received a bul-let and warning note. A10nTurkey said it suspected thegroup that bombed theU.S. Em-bassy was planning an attack,but didn’t knowwhere or when.nAnAlabama hostage dramaendedwhen FBI agents killedthe abductor and freed the 5-year-old boy hewas holding.A2

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TOPEKA, Kan.—Even if he doesn’t enter therace himself, this state’s Republican governor, SamBrownback, is determined to play a starring role

in the next presidential election.How? By turning Kansas into what

he calls Exhibit A for how sharp cutsin taxes and government spending cangenerate jobs, wean residents off pub-lic aid and spur economic growth.

“My focus is to create a red-statemodel that allows the Republicanticket to say, ‘See, we’ve got a differ-ent way, and it works,’ ” Mr. Brown-back said in a recent interview.

Coming off the largest tax cut in state historyon Jan. 1, Kansas is now on the leading edge of agrowing but still largely untested quest among

conservative governors to create growth by dra-matically revamping state tax codes.

The Brownback experiment is stirring bothpraise and anxiety among Kansas conservativeseven as it helps spark similar overhaul proposalsin the GOP-led states of Indiana, Louisiana, Ne-braska, North Carolina, Ohio and Oklahoma.

The focus on fiscal innovations in the heartlandcomes as conservatives nationally seek ways to re-vive the GOP’s standing in the aftermath of itsstinging election losses last year. Bruised by thecontinuing budget battles in Washington, wheredivided government has led to near-gridlock, topRepublicans nationally are holding up Kansas andother GOP-dominated states as examples of whatthe party might accomplish if left to its own de-vices.

Mr. Brownback recounts how Senate MinorityPleaseturntopageA12

The Justice Department suedStandard & Poor’s Ratings Serv-ices late Monday, alleging the firmignored its own standards to ratemortgage bonds that imploded inthe financial crisis and cost inves-tors billions, according to peoplefamiliar with the matter.

The civil charges by U.S. Attor-ney General Eric Holder againstthe New York company, one of thebond-rating industry’s three gi-ants, are the first federal enforce-ment action against a credit-rating

firm over the crisis. Several stateattorneys general are likely to join.

S&P said in a statement earlierMonday that the government suitwould be “entirely without factualor legal merit,” and denied wrong-doing.

After The Wall Street Journalreported Monday afternoon that

the government intended tolaunch the civil case, S&P con-firmed the expected lawsuit andsaid the rating firm was beingpunished unfairly by the U.S. gov-ernment for “failing to predict”the housing meltdown or financialcrisis.

The two sides have discussed apossible settlement for about fourmonths, according to people closeto the negotiations, but S&Pbalked over concerns that a dealcould sink the company.

The government was seekingpenalties of more than $1 billion,another person close to the talkssaid, which would be the biggestsanction imposed on a firm re-lated for its actions in the crisis.

S&P officials also were rattledthat the government was pushingthe company to admit wrongdoingthat could leave it more vulnera-ble to pending or new lawsuits by

Pleaseturntothenextpage

By Jean Eaglesham,Jeannette Neumann

and Evan Perez

U.S. Sues S&P Over RatingsJustice Department Says Endorsements of Risky Mortgage Bonds Fueled Crisis

Michael Dell is close to finish-ing a risky $23 billion deal totake private the computer com-pany he founded nearly 30 yearsago, in an effort to remake DellInc. for a post-PC era.

Late Monday, Mr. Dell was intalks with Microsoft Corp. andprivate-equity firm Silver LakePartners to offer shareholders be-tween $13.50 and $13.75 a share,said people familiar with thematter, about a 25% premium toDell’s stock price in January be-fore the possibility of a deal be-came public.

The buyout, if approved byshareholders, would be the larg-est such deal since the financialcrisis.

It also would be an admissionby Mr. Dell that he wasn’t able topull off the changes needed toimprove his company’s revenueand profit under Wall Street’sglare. The buyout would give Mr.Dell the largest stake in the com-pany, ensuring that the 47-year-old is the one who gets to over-see any changes.

The Round Rock, Texas, firmonce boasted a market capitaliza-tion above $100 billion as theworld’s largest PC maker. But thecompany’s market share has sincedwindled to third behind Hewl-ett-Packard Co. and LenovoGroup Ltd. as tablets and smart-phones became more popular.

Mr. Dell has also had to endurecritical comparisons of the finan-cial performance of his companyand Apple Inc., a matter of par-ticular frustration, according topeople familiar with the matter.

Interviews with current andformer Dell executives, plus otherpeople who know the CEO, painta picture of a man who appearedincreasingly worried about hislegacy. These people said it hasbeen years since Mr. Dell showed

PleaseturntopageA6

BY BEN WORTHENAND ANUPREETA DAS

Dell Nears$23 BillionDeal to GoPrivate

BY NEIL KING JR. AND MARK PETERS

Party Eyes ‘Red-StateModel’To Drive Republican Revival

BARED BONES: English researchers said the skeleton found under a parking lot is Richard III, slain 500 yearsago. DNA and a curved spine, Shakespeare’s ‘lump of foul deformity,’ marked it as the controversial king. A10

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Leicester/AssociatedPress

Moving an Octogenarian Is Tough,Especially One That Put Down Roots

i i i

APlan to Relocate Florida’s Largest Rain TreeFor Towers Has Fans Shaking Like a Leaf

FORT LAUDERDALE, Fla.—De-veloper Asi Cymbal thinks hisproposed residential project hereis just what this city needs toliven up a derelict stretch of itsriverfront downtown.

The futuristic, three-tower complex wouldinclude about 1,000rental units, three res-taurants and a marina.

There’s just oneproblem: The treestanding right whereone of the towers issupposed to sprout up.And not just any tree. Itis a roughly 80-year-old, six-story-tall raintree, the largest of itskind in Florida. Mr. Cymbal hasan elaborate plan, involving con-sultants and a mover of giant fa-mous trees, to relocate it about800 feet away at the entrance ofthe property and build a park

around it.Even though Mr. Cymbal

wants to save it and not chop itdown, some of the city’s treelovers are upset. They believethat if the tree is moved, its daysmight be numbered. “It will die aslow, agonizing death,” says

Charles Livio, an ar-borist in nearby Oak-land Park.

He and others op-posed to the relocationurged the BrowardCounty Commission topass a measure thatwould have declared thetree historic, an effortthat failed in December.Now, they have turnedtheir attention to theCity Commission, which

has the authority to prevent thetree’s relocation because a 1987ordinance declares it protected.The commission is expected totake up the matter in the spring.

PleaseturntopageA12

Asi Cymbal

BY ARIAN CAMPO-FLORES

‘Bloody Thou Art, Bloody Will Be Thy End’

THERIGHTWAY?FIRST INA SERIES

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