Ashows energy failures nationwide that the department blames on climate change, conveniently mapped out to emphasize where they hit home. The map includes outages suffered by power plants and petroleum producers in the Northeast caused by the megastorm that hit the region in October 2012. Also on the list: the derecho that hit a vast swath of the countryincluding Washingtonin June of last year.

The report also uses less recent hurricanes to show climate change's damage, including Isaac, Katrina, Rita, and 2004's Jeanne.

Reps. Glenn Thompson, R-Pa., and Louise Slaughter, D-N.Y., last week introduced legislation to correct what they see as a " a gross inequity in the way grant formulas are calculated" for school districts with disadvantaged children. The current formula is a complex system that combines the sheer numbers of economically disadvantaged students in a specific area with the percentage of disadvantaged students. The math winds up favoring more heavily populated regions over the smaller student populations, even if students in the sparser regions have a high poverty rate. A more thorough explanation of the problem is .

The legislation provides mechanism for transitioning to a different formula. It also has bipartisan support. Its only problem is that there is no more federal education money to be distributed, so someone is going to lose out if it gets enacted.

Thompson could offer the legislation as an amendment to the No Child Left Behind reauthorization that could be on the floor as early as this week. (The House has fallen behind on its schedule for floor debates, which could delay the debate until later in the month.) When the debate finally starts, the proposed new Title I formula might attract opponents who lose out on the deal, which could complicate the politics. But at the very least, the potential for a floor vote gives Slaughter and Thompson the opportunity to educate their colleagues on the inner workings of Title I.

Are Thompson and Slaughter right that the current weighting formula under Title I is grossly flawed? Can it be fixed without hurting other kids? Is this the biggest problem for rural schools? What else should policymakers be considering? How severe is the current formula's impact on rural areas? What about urban areas? When it comes to rural and urban districts, are the barriers to educating disadvantaged students fundamentally the same? Or are there significant differences?

Netanyahu offered greetings for the Muslim holy month of Ramadan, his office said, adding that he told Abbas: "I hope we will have the opportunity to speak with one another not only during festivals, and will start negotiating. It's important."

Direct talks broke down in 2010 over Israel's settlement of the occupied West Bank, which Palestinians want as part of their future state. U.S. Secretary of State John Kerry has in recent months mounted shuttle visits in the hope of reviving negotiations.

"I hope Secretary of State Kerry's efforts will show results," Netanyahu said, according to the Israeli statement.

(Writing by Dan Williams; editing by Andrew Roche)

NEW YORK (Reuters) - Next week marks the first big week of second-quarter earnings, and it is sure to bring both joy and misery to Wall Street.

Investors will concentrate on market fundamentals after weeks when Federal Reserve policies have dominated the market. If they see companies are still struggling, stocks could take a fall.

Even after Fed Chairman Ben Bernanke scared markets in June by telling investors the Fed is likely to reduce monetary stimulus in coming months, stocks have recovered, with both the Dow and S&P 500 climbing to all-time highs. In an appearance earlier this week, the Fed chairman said monetary policy was likely to be accommodative for some time.

"We're in the terminal stages of a Bernanke-driven bubble," said Walter Zimmerman, technical analyst at United-ICAP in Jersey City, New Jersey. "While a lot of damage has been done to the bear case, eventually bad news like weak earnings growth will start to bear fruit."

To be sure, the Fed, which has shown a much friendlier face to investors lately, will not be out of the picture. Bernanke will appear before congressional committees on Wednesday and Thursday to deliver the semiannual testimony about monetary policy. However, few surprises are expected.

The S&P's 17.8 percent advance in 2013 is largely attributable to the central bank's accommodative policies. The major indexes made impressive gains in the week: the Dowup 2.1 percent, the S&P3 percent higher and the Nasdaqup 3.5 percent. It was the third straight week of gains for all three, and the best week for the S&P and Nasdaq since early January.

"The Fed has been able to prevent a big selloff so far, but eventually the economy will have to catch up to the market or the market will fall back to match the economy," said Scott Armiger, who helps oversee $5.6 billion as portfolio manager at Christiana Trust in Greenville, Delaware.

MORE FOCUS ON EARNINGS

That analysts are now turning their focus to earnings, believing the Fed's power to buoy stocks is waning, may not be a positive if the rally is going to continue.

Earnings are seen growing 2.8 percent in the second quarter, according to Thomson Reuters data, a far cry from the 8.4 percent growth forecast by analysts on January 1. Revenue is now seen growing 1.5 percent.

For every company that has said it expects positive earnings, 6.5 have lowered their forecasts, the worst positive-to-negative ratio since the first quarter of 2001.

United Parcel Service Inc , the world's largest package delivery company, tumbled on Friday after giving a weak profit outlook, citing economic conditions as one reason.

Companies can appear to look good when they beat a lowered earnings bar, but signs of weakness will hurt a market that is hovering near all-time highs and seeking new catalysts to spur further gains.

POSITIVE RISK/REWARD

"The second quarter wasn't particularly robust, and estimates seem to still be too high," said Barry Knapp, managing director of equity research at Barclays Capital in New York.

"We don't really see any sector where there is a positive risk/reward, just places where there are more likely to be negative surprises."

Next week about 70 S&P 500 companies will report results. If the results indicate that companies' earnings are still weak despite intervention by the world's major central banks, shares could slump.

General Electric , Verizon , Johnson & Johnsonand UnitedHealthare among the biggest names, as are tech giants Microsoft Corp , Intel Corp , Google Incand IBM .

Financial companies may be the most in view as investors look to reports from Bank of America , Citigroup , Goldman Sachsand Morgan Stanley , among others. The sector is seen posting profit growth of 19.6 percent in the quarter, by far the highest among S&P groups.

"Since they have the highest growth expectations, it will be especially important for the market that they live up to those expectations," said Sam Stovall, chief investment strategist for Standard & Poor's Equity Research Services in New York. "Those results will be pivotal."

Early results from financial companies were mixed. Wells Fargo & Coand JPMorgan Chase & Coposted profits that beat forecasts, though JPMorgan said it might be forced to accelerate cost-cutting because of difficult market conditions.

Among economic reports, June retail sales will be released on Monday, with consumer prices and housing starts, both for June, will be released later in the week. The July Philadelphia Fed survey of manufacturers is due on Thursday.

(Editing by Kenneth Barry)

WASHINGTON (Reuters) - A manager from a U.S. Internal Revenue Service office in Cincinnati where staffers have been accused of unfairly subjecting conservative groups to extra scrutiny has said his agents were not influenced by any political agenda.

John Shafer, who described himself as "a conservative Republican," told congressional investigators he flagged the first application for tax-exempt status from a Tea Party-aligned group that he and a lower-level agent came across in February 2010 because it was a new, high-profile issue.

Asked if the lower-level agent sought to elevate the case to Washington because he disagreed with Tea Party politics, Shafer said that was not the case.

"We never, never discussed any political, personal aspirations whatsoever," he said, according to a transcript of his testimony reviewed by Reuters on Tuesday.

The Shafer transcript was released by the top Democrat on the House of Representatives committee leading a probe of the IRS, Representative Elijah Cummings, who said it debunked the Republican "conspiracy theories" that Washington political figures played a role in the IRS scrutiny of the conservative groups.

James Sallah, an attorney for Shafer, said his "testimony speaks for itself. It is clear that Mr. Shafer was carrying out his job without any political motivation."

The IRS controversy erupted on May 10 when a Washington IRS official apologized at a conference for the handling of tax-exemption applications submitted to the IRS by non-profit conservative groups between early 2010 and early 2012.

The furor has led to the ousting of the IRS chief by President Barack Obama, an FBI investigation and a congressional investigation.

Danny Werfel, named by Obama as the new IRS commissioner, is expected to testify to a congressional committee next week on how the agency plans to respond to the matter.

Leaks from the congressional investigation, now in its sixth week, have neither clearly supported allegations by Republicans of undue influence by Washington officials or the White House, nor ruled them out.

Some material has undermined the allegations by suggesting that the screeners - some of whom were managed by Shafer at the Cincinnati processing hub - acted largely on their own. Shafer said the application screeners on his staff knew when an issue could be difficult and might need to be evaluated by superiors.

'WELL AWARE'

"They were folks that had a lot of experience," he said. "So as they would be reviewing these initial applications, they would be well aware of things that they may not have seen before."

Shafer said he was in charge of the tax agency's first look at all tax-exemption applications sent to Cincinnati. Forms that needed a closer look were sent to another unit, he said.

"On an annual basis there would be upwards to 70,000 applications" submitted to the Cincinnati office, he said. "On a monthly basis there would be 4,000 to 5,000 applications that would go through my group."

Shafer said he did not recall ever discussing Tea Party cases at the manager level from February to May 2010.

After more than half a dozen lengthy interviews with IRS staff, the panel leading the probe, the Oversight and Government Reform Committee in the U.S. House of Representatives, aims to interview dozens more people in coming months, aides said.

Representative Darrell Issa, the Republican chairman of the committee, has released excerpts from some interviews with IRS workers, but resisted calls to release the full transcripts.

Issa's staff said Shafer played an early role in the Tea Party screening activities, so he was not aware of what happened once interaction with Washington began.

A Cincinnati official in another unit, Liz Hofacre, initially created a "Be on the Lookout" (BOLO) list containing the terms "Tea Party," "Patriot" and others. She said she was asked to do that by another Cincinnati superior, according to her transcript, also reviewed by Reuters.

(This story has been fixed to change to half a dozen interviews, from a dozen, in paragraph 16)

(Editing by Peter Cooney)

NEW YORK (Reuters) - Stocks rose sharply on Friday after robust jobs data pointed to economic growth and investors overcame concerns that the Federal Reserve may begin scaling back its stimulus efforts as soon as September.

After choppy trading through much of the session, which was marked by light volume, stocks extended gains in late afternoon, pushing the benchmark S&P 500 indexto close above the its 50-day moving average for the first time since June 19.

The government's report on non-farm payrolls showed employers added 195,000 jobs in June, exceeding expectations of 165,000. Job growth in previous months also was revised higher.

For the holiday-shortened week, the Dow rose 1.5 percent, the S&P 500 was up 1.6 percent and the Nasdaq composite advanced 2.2 percent.

At first some investors saw the jobs data as increasing chances the Fed would cut its stimulus efforts sooner than expected. But the market recovered smartly as investors took the view that the data was a positive sign for the economy, with sectors tied to the pace of growth leading the way upward.

Whether the jobs report "will stop the FOMC from the onset of its tapering process remains to be seen. However, we are trying, at the suggestion of the Federal Reserve, to ignore the latest single data point" and take a longer view about the economy, said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York.

The Dow Jones industrial averagewas up 147.29 points, or 0.98 percent, at 15,135.84. The Standard & Poor's 500 Indexwas up 16.48 points, or 1.02 percent, at 1,631.89. The Nasdaq Composite Indexwas up 35.71 points, or 1.04 percent, at 3,479.38.

Small-cap shares and banks rallied, giving credence to the idea that investors were viewing the strong payroll figures positively.

The S&P Small Cap 600 indexrose 1.5 percent to hit a new all-time high of 568.15 while the S&P 500 financial sector indexgained 1.8 percent.

"The jobs report this morning is a sign that the economy is growing and the private sector is hiring, and that bodes well for growth-oriented industries," said Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

Bank of America Corprose 1.8 percent to $13.06 while Citigroup Incgained 1.8 percent to $48.53. Large banks benefit when interest rates rise because higher rates increase their net interest margin.

Interest rates rose sharply on Friday in anticipation that the Fed will start cutting its monthly $85 billion in bond buying, which was a major factor in the stock market's rally this year, as early as September.

Volume was light, with many traders still away after the Independence Day holiday on Thursday. About 4.9 billion shares changed hands on U.S. exchanges, compared to a daily average of about 6.4 billion shares this year.

Annaly Capital Management , a real estate investment trust that invests in mortgage-backed securities, slid 5.1 percent to $11.51 as the yield on the benchmark 10-year U.S. Treasury note jumped above 2.7 percent. Annaly Capital was the fourth most-traded stock on the New York Stock Exchange.

Gold tumbled 3 percent, extending earlier losses as the dollar gained strength. Newmont Miningwas the S&P 500's worst performer, falling 4.3 percent to $27.78.

On the NYSE, advancers beat decliners 1,708 to 1,309 while on the Nasdaq, advancers outperformed decliners 1,815 to 662.

(Reporting by Angela Moon; Editing by Kenneth Barry)

TAIPEI (Reuters) - HTC Corp may not sustain sales growth into the third-quarter as the glow around the Taiwanese smartphone maker's flagship model is likely to be eclipsed by new products from bigger rivals Apple Inc and Samsung Electronics Co Ltd.

Strong sales of the latest version of the HTC One, as well as the colorful Butterfly range, boosted HTC's second-quarter net profit surged to T$1.25 billion ($41.63 million) from a record low in the previous quarter when a shortage of camera components delayed its product launch.

The profit figure, however, lagged forecasts and analysts said the sales growth was likely to be short-lived. Sales for the July-September quarter are expected to remain little changed from the previous quarter and few new products are in the pipeline.

The company has also cut back on component orders for the quarter, which traditionally sees higher sales, several analysts said. BNP Paribas, in a recent research note, said it expected overall third-quarter orders to remain flat from the second-quarter.

"HTC may have new products in Q3, but competition from Apple and other Chinese brands are fierce," said Taipei-based analyst Peter Liao of Nomura Securities. "It'll be hard to keep the growth."

Analysts said the almost 25 percent drop in HTC's June sales compared to the same year-ago period also boded ill for the next quarter.

"The big drop on June sales likely proves the HTC One sales momentum slowdown and 3Q may be only flattish as is the market expectation," Goldman Sacks analyst Michael Shieh said.

Growth in sales for smartphone market leader Samsung Electronics has also started to wane. The South Korean firm missed already modest expectations for its quarterly earnings guidance, deepening worries that its smartphone business may have peaked.

HTC has embarked on a marketing campaign to boost its brand image, a strategy it said in May would squeeze operating margins for the rest of the year.

The company is expected to launch the One Mini phone, which features a 4.3-inch screen and is targeted at the mid-market, in August, a month before both heavyweights Samsung and Apple are likely to release new and upgraded offerings.

In addition to the intense competition, HTC has seen several executives leave the company this year, including Chief Product Officer Kouji Kodera. Company sources say the departures were related to a disappointing product launch and a 40 percent drop in total sales in 2012.

HTC was the world's 10th-biggest smartphone maker by shipments in the fourth quarter 2012, according to IT research firm Gartner, jostling in a crowded field behind Samsung and Apple.

(Reporting by Clare Jim; Editing by Miral Fahmy)

Security sources said Shater, a wealthy businessman seen as the movement's main political strategist, was taken into custody on suspicion of incitement to violence. He was arrested at his apartment in Cairo.

Among the Brotherhood's best known public figures, Shater was the latest of several of its leaders to be taken in since President Mohamed Mursi was overthrown by the army on Wednesday.

Mursi was propelled into the presidential campaign last year when Shater was disqualified on the grounds of a past criminal conviction.

(Reporting by Shadia Nasralla; Editing by Alastair Macdonald)

RELATED:

On Friday morning, FoodBeast's Elie Ayrouth unleashed an investigation into . In the accompanying video, Ayrouth attempts to order the burgers from an In-N-Out drive-thru, only to be told that In-N-Out doesn't offer them at any of its locations. Here's where things get weird. The video cuts to a "top secret" screen with scrambled voices; we're led to believe that some top secret source has provided our guide a box full of the mythical burgers. 

RELATED:

RELATED:

However, in the video you can clearly see that the burgers are Monkey Style-less as they're handed to Ayrouth:

RELATED:

RELATED:

And here:

And yet he somehow ends up with this:

On Tuesday afternoon, In-N-Out stepped forward to debunk the myth: Carl Van Fleet, the chain's vice president of planning and development, , "There is no such thing. It seems to be a story that originated somewhere in cyberspace. For a variety of reasons, we're unable to prepare burgers in the manner that a few websites have described as 'Monkey Style'."

So, did Ayrouth, who also happens to be FoodBeast's publisher, draw up this hoax to get attention? He didn't respond to when , but if he did then the plan's working. The Monkey Style burger story and video fooled several outlets, including LAist, the , and the . Meanwhile, the rest of us can take solace in the fact that Monkey Style burgers are, well, really just Double Doubles stuffed with Animal Style fries, which you can make for yourself with a couple of napkins. No trolling required.

LOS ANGELES (Reuters) - Steve Carell has inhabited many different roles, from a 40-year-old virgin, a bumbling office manager and a Vegas magician, but it is an evil villain in animated film "Despicable Me 2" where he finds a close connection as a real-life dad.

Carell, 50, who appears again as Gru in "Despicable Me 2," and as a dysfunctional dad in independent comedy "The Way, Way Back," both out in theaters this week, is also exploring new challenges in his career with the hopes of more dramatic roles.

The actor talked to Reuters about his similarities to Gru, not getting pigeon-holed and donning suits for "Anchorman 2."

Q: Now that he's a dad, was there any fear that Gru wasn't going to be quite as despicable as the first film?

A: I feel like you still see that dark side of him and when push comes to shove, he is an evil mastermind and he always will be. He's reformed, he can't be that anymore because he has kids. His career has to change but his sense of self doesn't really.

Q: Which part of Gru's story did you relate to in this film?

A: I have two little kids so I don't really relate to him as a super spy, but I do relate to him as a dad for sure, and the fact that he has a daughter that's getting to the age that she's interested in boys and dating, I have a daughter that is just on the verge of that age, so I think I related to that most of all.

Q: Are your priorities changing in your career now that you're getting older and your kids are getting older?

A: I've been doing some more dramatic work, I'm writing something now and eventually I might direct something. I've got some other things in the fire, but that's just to keep it interesting and exciting.

It's interesting how this movie mirrors what a lot of parents go through when they have kids, because initially, when you have kids, the focus becomes the kids. I know that became the case with my wife and I, almost at the expense of everything else, it became all about our kids. Which is fine, but within that, you can't lose your sense of self, you can't lose your career and what motivates you and what nourishes you. I think that's the character of Gru, he's at odds with himself, so he needs to find something that's not being a villain but is equally satisfying.

Q: Were you ever concerned you could get pigeonholed into a certain character from your comedy roles?

A: I've done big commercial movies and little independent movies, and I've played jerks and suicidal Proust scholars, and I feel like I've been really lucky to play all the different types of characters I play, so no, I don't worry about that. If I do get pigeonholed, it's nothing I can really control.

Q: You recently returned to "The Office" for the finale in May, was it difficult saying goodbye second time round?

"I feel like I really said goodbye to it the first time. When I came back, it was primarily to honor the show and out of respect for all of my friends and the people who created it, I just wanted it to be a simple tip of the hat to the show and not to take away from the goodbye and the farewell that all of those people were having, because I felt like I already had mine and I didn't want to step on their moments."

Q: Your upcoming film "Anchorman 2" has been getting a lot of attention. How is it getting back into the suits?

A: So much fun. It felt the same. The first time around, none of us knew what we were doing or whether it would be funny. We thought it would be funny, but you never know...if it's going to work or why it works necessarily, but that one we all felt like it could be really funny, and this, we have the same feeling about. It was just fun to do, it was ridiculous, we laughed until we cried everyday.

Q: How do you pay homage to the first film and also take the storyline forward with a sequel?

A: I think if you like the first one, you'll like this one as much. I don't want to oversell it, I don't want to hype it too much, I haven't seen it, I've just shot it. But based on what we've filmed, it seems like it's going to be a truly funny movie.

(Reporting by Piya Sinha-Roy, editing by Paul Casciato)