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March 5, 2013 at 11:38 AM
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Dow surges and tests record

NEW YORK, March 5 (UPI) -- The Dow Jones industrial average quickly pulsed above its all-time closing high Tuesday morning in New York, grabbing 144 plus points when only 38 was needed.

The blue-chip index, a select listing of 30 of the country's trend-setting corporations, closed at an all-time peak of 14,164.53 on Oct. 9, 2007.

On Monday, the Dow ended the day with its second highest close on record at 14,127.82 points.

The Dow was pushed Tuesday by solid gains in Asia and Europe and a report on U.S. services oriented businesses that showed growth in January, albeit at a slower pace than December.

In late morning trading, the Dow added 148.07 points or 1.05 percent to 14,275.89. The Standard and Poor's 500 index added 16.24 points or 1.06 percent to 1,541.44. The Nasdaq composite, however, set the pace, gaining 39.64 points or 1.25 percent to 3,221.67.

The 10-year U.S. treasury note fell 6/32 to yield 1.901 percent.

Against the dollar the euro was lower at $1.3017 from Monday's $1.3026. Against the yen, the dollar was down to 93.42 yen from 93.48 yen.

In Tokyo, the Nikkei 225 rose 0.27 percent on a gain of 31.16 points, to 11,683.45.

China plans 8 percent foreign trade growth

BEIJING, March 5 (UPI) -- China plans to increase foreign trade volume by about 8 percent this year, an official report said Tuesday, while warning export prospects remain grim.

Blaming slow global economic recovery and rising trade protectionism, a draft report prepared by the National Development and Reform Commission said, "China's export prospects remain grim."

The report was presented at Tuesday's opening session of China's Parliament.

China is the world second largest economy after the United States and the world's largest exporter.

Last year, Chinese foreign trade increased 6.2 percent to $3.87 trillion, yielding a trade surplus of $231.1 billion, official data indicated. Last year's growth, however, was much smaller than the 10 percent growth targeted by the government.

Officials said economic problems in European Union, the United States and other major trading partners led to the target to be missed.

In its projection for 2013, the report said: "World economic growth will continue to be slow. Overall demand of major economies will remain weak. All forms of protectionism are clearly reasserting themselves."

The report urged the government to implement a more active opening-up strategy and putting in place new competitive advantages, the official Xinhua news agency reported.

21 convicted in Kabul Bank scandal

KABUL, Afghanistan, March 5 (UPI) -- A court in Afghanistan convicted 21 people in a fraud case that involved bankers with political connections that go to the top of the country's hierarchy.

Investigators discovered the Kabul Bank, which was declared insolvent in August 2010, was little more than a Ponzi scheme that served well-connected customers.

The New York Times reported Tuesday 92 percent of the bank's loans, about $861 million, went to only 19 individuals or companies. The sum is equal to about 5 percent of the country's gross domestic product.

Those borrowers, the Times said, were not expected to pay back the loans, but none has been charged. Western investigators said they should at least be charged with conspiracy to defraud the public.

One of the more prominent borrowers is Mahmood Karzai, the president's brother.

It cost $825 million to bail out the bank, a sum equal to the government's annual revenues, the Times said.

Bank founder Sherkhan Farnood was given a 5-year sentence and ordered to repay $280 million in ill-gotten gains. Former Chief Executive Officer Khalilullah Frozi was also given a 5-year sentence and ordered to repay $530 million.

Both have personal and financial connections that include President Hamid Karzai and other top ranked Afghan officials.

Some of those convicted were regulators who were charged with neglecting their duties, but some said they were being punished for uncovering the fraud. The trial itself was a show for Western countries that threatened to hold off on billions of dollars of aid if the legal system did not take a stand against corruption, which is rampant in Afghanistan.

Some Western officials say the corruption benefits insurgent Taliban forces

Sri Lankan railway gets Chinese loan

COLOMBO, Sri Lanka, March 5 (UPI) -- The Sri Lankan government says China will provide a $278.2 million loan for a rail extension project on the island country's Southern province.

The loan will be used to extend the railway line from Matara to Kataragama, an announcement on a government website stated. The 71-mile extension will be in three phases, from Matara to Beliatta, from Beliatta to Hambantota and from Hambantota to Kataragama. Officials said it should be completed by the end of 2014.

The loan will come through the Export-Import Bank of China, the Sri Lankan Finance and Planning Ministry announced. Terms include an annual interest of 2 percent with repayment over 20 years, including a 5-year grace period.

The project will involve constructing bridges over rivers, viaducts required over the Nilwala River flood plain, railroad crossings, road diversions, four railway stations and ground treatment.

The government said it expects demand for rail transport between the Southern and other provinces of the country to increase due to rapid development and operations at the Hambantota port and a new airport coming up.

The Hambantota port, opened in 2010, was built with Chinese assistance.

The rail project will help provide clean, efficient and economical transport service to facilitate commuter and cargo transport between Colombo and Kataragama, the report said.

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