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Vital Signs

America’s service sectorexpanded last month. TheInstitute for Supply Manage-ment’s index of nonmanu-facturing businesses, whichmeans mostly service busi-nesses, rose to 54.7 in No-vember from 54.2 in Octo-ber. Readings over 50indicate expansion. At thesame time, an index ofemployment in the servicesector dropped to 50.3 from54.9 in October.

Nonmanufacturing Index

Source: Institute for SupplyManagement

20122011

48

50

52

54

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C itigroup set out plans tocut 11,000 jobs, close 84

branches and retreat fromconsumer banking in a hand-ful of countries, underliningCEO Corbat’s determinationto crack down on costs. C1nA government study’s en-dorsement of exporting someof the U.S.’s abundant naturalgas has the potential to reshapeglobal energy markets. A1n The EU levied fines total-ing $1.92 billion on a groupof global electronics firms foroperating price-fixing cartels inTV and computer displays. B1n U.S. stocks rose, with theDow industrials gaining 82.71points to 13034.49, theirhighest close since Nov. 6. C4n John Paulson is poised toturn a tidy profit on the real-estate rebound after havingmade a fortune betting on thecollapse of U.S. home prices. C1n An analysis found unusualnumbers of stocks beatingthe market on the last day ofmost quarters, suggestingdeliberate efforts to tempo-rarily drive up their value. A1n U.K. retailer Tesco is setto leave the U.S. after spend-ing five unprofitable yearsand $1.6 billion on an ill-timed American gambit. B1n U.S. securities regulatorsare investigating allegationsthat Deutsche Bank hid billionsof dollars of paper lossesduring the financial crisis. C10nFreeport-McMoRan’s $9 bil-lion acquisition of two oil-and-gas companies marks amajor bet by the miner on en-ergy exploration in the U.S. B2nAirbus parent EADS said itsFrench and German ownersagreed on a new shareholdingstructure that potentially re-duces political influence. B3n Operations resumed atthe ports of Los Angeles andLong Beach after a deal on acontract ended an eight-daystrike by clerical workers. B3n The Starz pay-TV channelplans to begin discussionswith potential buyers as soonas it is spun off from LibertyMedia in early January. B2n A consortium of biddershas offered onetime photog-raphy icon Eastman Kodakmore than $500 million for atrove of digital patents. B2n The Senate moved towarda measure to boost Ameri-can trade with Russia, evenas the EU warned Moscowover protectionist policies. A12n The Nasdaq said it erro-neously postponed the initialpublic offering of White-Horse Finance, marking an-other bungled IPO launch. C3n Ocwen agreed to installan outside monitor who willensure the mortgage-loanprocessor makes promisedbusiness-practice changes. C3n Ten drug firms and 23 uni-versities are joining to createone of theworld’s largest repos-itories of adult stem cells. B4

n Egyptian Islamists andtheir foes clashed in Cairo.Tens of thousands of support-ers and opponents of Presi-dent Morsi hurled rocks andMolotov cocktails, in the larg-est violent battle since lastyear’s revolution. The con-frontation started after Isla-mist protesters moved tobreak up a demonstration bythe president’s opponents out-side the presidential palace. A1Morsi’s administration hassent out confused mes-sages about how the con-flict could be resolved.nObama hardened his posi-tion that Congress shouldraise the U.S. borrowing limitwithout preconditions, in aspeech to corporate chiefs. A4nA cap on tax breaks de-signed by an ex-Reagan aide isdrawing attention after Boeh-ner floated it as an option. A4n Britain said growth wasweaker than expected and anausterity plan would continuelonger than planned. A9n Ireland detailed a toughbudget to cut its deficit under adeal with bailout creditors. A9n The U.S. and its allies areintensifying their efforts toweaken Syrian rebels be-lieved linked to al Qaeda andother extremist groups. A12n The FBI is pursuing for-eign hackers who targetedthe computers of Adm. MikeMullen, the former head ofthe Joint Chiefs of Staff. A3nWomen who extendedtreatment with tamoxifen im-proved their chances of sur-viving breast cancer and re-duced its risk of recurring. A3nThe Philippines struggledto cope with the devastationfrom a typhoon that left hun-dreds dead ormissing. A10nAfghanistan plansmajor taxbreaks and incentives for in-vestors ahead of U.S.-led forces’pullout at the end of 2014. A11nAn appeals court heard ar-guments challenging the ex-tent of presidential power tomake recess appointments. A5n Federal prosecutors are in-vestigating New Orleans ex-Mayor Ray Nagin as part of anongoing corruption probe. A6nThe European countrieshardest hit by the euro-zonedebt crisis were rated amongthemost corrupt in the EU. A13n Japan’s LDP, the main oppo-sition party, appears likely toreturn to power in the comingelections, polls showed. A12nGuatemalan police arrestedMcAfee for illegal entry. Belizewanted to question the soft-ware guru about a killing. A11n A cybercrime ring that al-legedly used bogus ads todupe Americans out of over$3 million was broken up. A6n Died: Dave Brubeck, 91,celebrated jazz pianist andcomposer…Dame ElisabethMurdoch, 103, philanthropistand Rupert Murdoch’s mother…Oscar Niemeyer, 104, archi-tect of the U.N. building. A8

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What’s News–i i i i i i

The stock of Iridex Corp., a maker of lasers usedto treat visual ailments, had been hovering around$3.43 all day on June 29. At 3:55 p.m., five minutesbefore the market close, it took off.

It moved to $3.65, then $3.80. Less than a halfsecond before the trading day and calendar quar-

ter ended, Iridex jumped 4% to$4.17, capping a nearly 22% risefor the day.

Scott Shuda, a managing direc-tor at BlueLine Partners, an invest-ment firm in Danville, Calif., andIridex’s largest shareholder, saw

the stock jump. “Is it unusual for these little com-panies to move a lot?” he asks. “No. Is the timingsuspect? Yes. I saw it and I thought, ‘Somebodywants to move this stock up today.’ ”

The next trading day, July 2, Iridex dropped10%—and it didn’t hit $4 again until late October.

What happened to Iridex isn’t unusual. A WallStreet Journal analysis of daily trading in roughly10,000 stocks since 2004 found that on the finaltrading day of each quarter, there was a sharp in-crease in the number of stocks that beat the mar-ket by at least five percentage points, then trailedit by three points or more the next trading day.

The Journal’s analysis compared the perform-ance of those 10,000 stocks to the one-day returnof the Standard & Poor’s 500-stock index. On daysthat didn’t end the quarter, an average of 217stocks beat that index by at least 5 percentagepoints then trailed it by at least three the nextday. But on the final trading days of quarters, anaverage of 280 stocks did.

Regulators and market analysts have an expla-nation for the unusual pattern. They say somemoney managers wait until the waning momentsof the quarter to bid aggressively for more sharesof a stock they already own, which drives up the

PleaseturntopageA14

BY JASON ZWEIG AND TOM MCGINTY

Fund Managers Lift ResultsWith Timely Trading Sprees

From Cache to Cachet: LandlordsRepurpose Classic Bank Vaults

i i i

New Combination of Bars, ShopsCompounds Interest; Intimate ‘Atmosphere’

At the Kelvin Arms, a Scottishpub in Houston, the back room isthe place to be. Its main attrac-tion isn’t the comfy leatherchairs, the electric fireplace orthe towering knight’s armor thatguards the space.

It’s what the room once was.“It is cool

drinking in a re-furbished vault,”said Monica Ar-zola, a collegestudent relaxingat the pub oneevening. On herprevious visitthere, she andfriends took pho-tos by the open vault door andposted them on Facebook.

The classic bank vault—withits captain’s wheel, imposingsteel door and prison bars at theentrance—is fast becoming arelic as older bank branches

close down.But there is something about

these confined, windowlessspaces that continues to capti-vate people. The fascination isgiving the anachronistic vault anew lease on life, spawning freshuses its creators could neverhave imagined.

People are shopping forclothes and an-tiques in formervaults. They arethrowing holidayparties in vaults.Some are cele-brating birthdaysand even gettingmarried there.

“Once I sawthat space, I

knew that our wedding was go-ing to be different,” says TovaWilliams, who walked down theaisle a few weeks ago in thevault of the former Williams-burgh Savings Bank in Brooklyn.

PleaseturntopageA14

Vault at Kelvin Arms

BY CRAIG KARMIN

Shipping some of the newlyabundant U.S. natural gas over-seas would benefit the nation’seconomy more than keeping it allat home, according to a long-awaited government study thathas the potential to reshape theglobal energy market.

The endorsement could turnthe tide in a politically sensitiveissue. Gas producers are eager toexport more, while big consum-ers including manufacturers andchemical companies are leerythat exports could raise domesticprices. Environmental groups,meanwhile, fear that allowing ex-

ports would encourage more nat-ural-gas production.

The administration had said thestudy would be central to its deci-sion on approving exports. It ana-lyzedmore than a dozen scenariosfor U.S. production and exports ofnatural gas. It found that “acrossall these scenarios, the U.S. wasprojected to gain net economicbenefits” from liquefying and thenexporting natural gas.

The looming prospect of theU.S.’s becoming a major exporterof natural gas underscores howthe energy revolution is trans-forming the nation’s economicprospects. Just a few years ago,many energy companies wereplanning to build facilities to im-

port liquefied natural gas intothe U.S.

But thanks to technologicaladvances, combining hydraulicfracturing and horizontal drill-ing, the U.S. has in a short timebecome a gas-producing power-house. The glut of cheap gas hashelped underpin a revival inmanufacturing and helped lowerelectricity costs for consumers.

Most of the companies seek-ing permission to liquefy andthen ship gas overseas have beenawaiting the report. The Depart-ment of Energy had said itwouldn’t issue permits for ex-ports to countries lacking a free-trade agreement with the U.S.

PleaseturntopageA6

BY KEITH JOHNSONAND TENNILLE TRACY

U.S.GasExports ClearHurdleStudy Citing Benefits Could Hasten Approvals From Obama Administration

COUNTING LOSSES: Residents salvaged belongings from their wrecked home Wednesday in New Bataan,Philippines, a day after the deadly Typhoon Bopha left thousands homeless in the country’s poor south. A10

Typhoon Leaves Path of Devastation, Hundreds Dead

>

DARKMARKETS

Output BoomU.S. production of natural gas1980-2040

Source: Energy Information AdministrationThe Wall Street Journal

40 trillion cubic feet

0

1980 ’90 ’00 ’10 ’20 ’30 ’40

10

20

30

FORECAST

23.02011

33.12040

AgenceFrance-Presse/Getty

Images

CAIRO—Tens of thousands ofsupporters and opponents ofEgypt’s president clashedWednesday, hurling rocks andMolotov cocktails and brawlingin Cairo’s streets, in the largestviolent battle between Islamistsand their foes since the country’srevolution early last year.

The confrontation started inthe evening after Islamist protest-ers marching in support of Presi-dent Mohammed Morsi, a formerleader of the Muslim Brother-hood, moved to break up a dem-onstration by the president’s non-Islamist opponents outside thepresidential palace in Cairo,where Mr. Morsi has his offices.

Supporters of the rival camps,spurred by public defiance by in-fluential figures on each side,waged back-and-forth battles inside streets outside the palacewalls as night fell, shutting downmajor thoroughfares. Aroundmidnight, police formed a barrierbetween the camps, with thou-sands of demonstrators on eachside, as gunshots rang out andeach side accused the other offiring live rounds.

Those allegations couldn’t beconfirmed. More than 120 peoplewere wounded, Egyptian medicssaid late Wednesday. The MuslimBrotherhood said at least one ofits supporters had been killed,while opposition officials saidtwo of their supporters had died.A local television channel, ONTV,showed images of two people itsaid were killed in the clashes,and said violence was spreadingelsewhere in Cairo.

The Obama administration ex-PleaseturntopageA12

BY CHARLES LEVINSONAND MATT BRADLEY

Egypt SeesLargestClash SinceRevolution

personalJournal.

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