Stocks advance on Microsoft, Countrywide

NEW YORKWall Street closed an erratic week with strong gains on Friday as strong earnings from Microsoft Corp. and an optimistic outlook from Countrywide Financial Corp. outweighed investor concerns about the economy.

Housing market news over the week was glum; oil prices surged to record highs. And though corporate earnings have so far been mixed, investors have been heartened by good news for individual companies.

Friday’s report from Countrywide that it expects to return to profitability soon, despite a big third-quarter loss, gave investors hope that the problems in the housing market are contained and that U.S. consumers still have spending power. Thursday night’s strong report from Microsoft inspired strong buying throughout the technology sector.

“The market is higher for just two reasons — Countrywide and Microsoft,” said Peter Boockvar, equity strategist at Miller Tabak. “You take those two stocks out of the equation and there is no reason for the market to be higher. Microsoft single-handedly is driving the Nasdaq.”

Mixed profit reports and data showing economic weakness has made investors uncertain whether the market is overvalued. However, earnings will be pushed aside next week as the main focus of investor attention — and taking it place will be the Federal Reserve‘s rate-setting meeting on Tuesday and Wednesday.

The Dow Jones industrial average rose 134.78, or 0.99 percent, to 13,806.70.

Broader stock indicators also gained. The Standard & Poor’s 500 index rose 20.88, or 1.38 percent, to 1,535.28, and the technology-dominated Nasdaq composite index advanced 53.33, or 1.94 percent, to 2,804.19.

For the week, the Dow rose 2.11 percent, the Nasdaq was up 2.90 percent, and the S&P 500 jumped 2.31 percent. The gains were welcome after all three indexes posted losses in the previous week.

High oil prices didn’t dampen investors’ spirits either. After spiking above $92 a barrel in Asian trading overnight, December crude futures rose $1.40 to settle at $91.86 a barrel on the New York Mercantile Exchange.

“Because oil prices are so high, our nation’s oil bill has gone up. We’re exporting dollars to pay for oil and our counterparties are reinvesting those dollars back in our markets — the so-called petrodollars finding their way back,” said Tom McManus, investment strategist with Banc of America Securities.

Even as stocks advanced, investors poured money into commodities markets as a hedge against a falling dollar, which hit another record low against the euro. Gold futures rose $16.50 to close at $787.50 an ounce, the highest price since January 1980. Energy, metals and agriculture futures all moved higher.

Treasury bonds turned lower as stocks barreled higher. The yield on the 10-year Treasury note, which moves inversely to the price, rose to 4.39 percent from 4.38 percent late Thursday.

Friday’s stock gains were fueled by company-specific news, according to Robert Pavlik, portfolio manager at Oaktree Asset Management.

“Trading today is sort of choppy, but stocks are moving up based on strong earnings from Microsoft,” he said. “You’re also getting a pop from Countrywide’s strong guidance going forward. All this is bring some attention back to the stock market.

Countrywide posted a wide loss of more than $1 billion in the third quarter, but the beleaguered mortgage lender, whose stock has plummeted due to rising subprime mortgage defaults, said it will be profitable in the fourth quarter and next year. The shares jumped $4.23, or 32.36 percent, to $17.30.

Microsoft’s reported that its profit jumped 23 percent, thanks to brisk sales of the new Halo 3 video game, Windows and Office. Microsoft shares rose $3.04, or 9.50 percent, to end at $35.03.

Financial stocks were solidly higher Friday, but the sector continues to show signs of uneasiness following the summer’s credit market problems. The New York Times reported that after Merrill Lynch & Co. posted its sharp third-quarter loss Wednesday, the investment bank’s chairman and chief executive floated the idea of a merger with Wachovia Corp. Merrill shares rose $5.19, or 8.52 percent, to close at $66.09.

Advancing issues outnumbered decliners by nearly 3 to 1 on the New York Stock Exchange, with 1.41 billion shares traded, up from 1.38 billion on Thursday.

The Russell 2000 Index of smaller companies rose 15.28, or 1.90 percent, to 821.39.

Stock markets overseas advanced.

In Asian trading, Japan’s Nikkei stock average rose 1.36 percent, and Hong Kong’s Hang Seng index rose 1.84 percent. In Europe, Britain’s FTSE 100 rose 1.29 percent, Germany’s DAX index rose 0.21 percent, and France‘s CAC-40 rose 0.60 percent.

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Italian mobsters in widespread decline

NEW YORK – In early 2004, mob veteran Vincent Basciano took over as head of the Bonanno crime family. The reign of the preening, pompadoured Mafioso known as Vinny Gorgeous lasted only slightly longer than a coloring dye job from his Bronx hair salon.

Within a year, the ex-beauty shop owner with the hair-trigger temper was behind bars — betrayed by his predecessor, a stand-up guy now sitting down with the FBI.

It was a huge blow to Basciano and the once-mighty Bonannos, and similar scenarios are playing out from coast to coast. The Mafia, memorably described as “bigger than U.S. Steel” by mob financier Meyer Lansky, is more of an illicit mom-and-pop operation in the new millennium.

The mob’s frailties were evident in recent months in Chicago, where three senior-citizen mobsters were locked up for murders committed a generation ago; in Florida, where a 97-year-old Mafioso with a rap sheet dating to the days of Lucky Luciano was imprisoned for racketeering; and in New York, where 80-something boss Matty “The Horse” Ianniello pleaded to charges linked to the garbage industry and union corruption.

Things are so bad that mob scion John A. “Junior” Gotti chose to quit the mob while serving five years in prison rather than return to his spot atop the Gambino family.

At the mob’s peak in the late 1950s, more than two dozen families operated nationwide. Disputes were settled by the Commission, a sort of gangland Supreme Court. Corporate change came in a spray of gunfire. This was the mob of “The Godfather” celebrated in pop culture.

Today, Mafia families in former strongholds like Cleveland, Los Angeles and Tampa are gone. La Cosa Nostra — our thing, as its initiates called the mob — is in serious decline everywhere but New York City. And even there, things aren’t so great: Two of New York’s five crime families are run in absentia by bosses behind bars.

Mob executions are also a blast from the past. The last boss whacked was the Gambinos’ “Big Paul” Castellano in 1985. New York’s last mob shooting war occurred in 1991. And in Chicago, home to the 1929 St. Valentine’s Day massacre, the last hit linked to the “Outfit” went down in the mid-1990s.

The Mafia’s ruling Commission has not met in years. Membership in key cities is dwindling, while the number of mob turncoats is soaring.

“You arrest 10 people,” says one New York FBI agent, “and you have eight of them almost immediately knocking on your door: `OK, I wanna cut a deal.'”

The oath of omerta — silence — has become a joke. Ditto for the old world “Family” values — honor, loyalty, integrity — that served as cornerstones for an organization brought to America by Italian immigrants during the era of Prohibition.

“It’s been several generations since they left Sicily,” says Dave Shafer, head of the FBI organized crime division in New York. “It’s all about money.”

Which doesn’t mean the Mafia is dead. But organized crime experts say the Italian mob is seriously wounded: shot in the foot by its own loudmouth members, bloodied by scores of convictions, and crippled by a loss of veteran leaders and a dearth of capable replacements.

___

The Bonannos, along with New York’s four other borgatas (or families), emerged from a bloody mob war that ended in 1931. The Mafia then became one of the nation’s biggest growth industries, extending its reach into legitimate businesses like concrete and garbage carting and illegal pursuits like gambling and loan-sharking. The mob always operated in the black.

Things began to change in the mid-1980s, when the Mafia was caught in a crossfire of RICO, rats and recorded conversations. The Racketeer Influenced and Corrupt Organizations act handed mob prosecutors an unprecedented tool, making even minor crimes eligible for stiff prison terms.

The 20-year sentences gave authorities new leverage, and mobsters who once served four-year terms without flinching were soon helping prosecutors.

“A good RICO is virtually impossible to defend,” insists Notre Dame law professor G. Robert Blakey, who drafted the law while serving as counsel to Sen. John McClellan in 1970. The results proved him right.

The first major RICO indictment came in 1985, with the heads of three New York families and five other top level Mafiosi eventually convicted. It took nearly two decades, but the heads of all five New York families were jailed simultaneously in 2003.

Authorities around the country were soon using Blakey’s statute and informants against Italian organized crime in their cities.

• In Philadelphia, where the mob was so widespread that Bruce Springsteen immortalized the 1981 killing of Philip “Chicken Man” Testa in his song “Atlantic City,” one mob expert estimates the Mafia presence is down to about a dozen hardcore “made” men. Their number was once about 80.

• The New England mob claims barely two dozen remaining made members — about half the number involved 25 years ago. The Boston underboss awaits trial.

• In Chicago, home of Al Capone, the head of the local FBI office believes fewer than 30 made men remain. That figure stood at more than 100 in 1990. The city’s biggest mob trial in decades ended recently with the convictions of three old-timers for murders from the 1970s and ’80s.

• In Los Angeles, there’s still a Mafia problem — “La Eme,” the Mexican Mafia. An aging leadership in the Italian mob, along with successful prosecutions, left most of the local “gangsters” hanging out on movie sets.

• The Florida family dominated by Santos Trafficante, the powerful boss linked to assassination plots targeting President John F. Kennedy and Cuban leader Fidel Castro, is gone. The beachfront Mafia of the 21st century is mostly transplanted New Yorkers, and money generated by the local rackets isn’t kicked up the chain of command as in the past.

“You have guys running around doing their own thing,” says Joe Cicini, supervisor of the FBI‘s South Florida mob investigations. “They don’t have the work ethic or the discipline that the older generation had.”

The decline of “Family values” is nothing new. Back in January 1990, a government bug caught no less an expert than Gambino boss John Gotti wondering if the next generation of mobsters was equal to their forebears.

“Where are we gonna find them, these kind of guys?” Gotti asked. “I’m not being a pessimist. It’s getting tougher, not easier!”

During the same conversation, Gotti questioned the resumes of a half-dozen candidates for made man: “I want guys that done more than killing.”

Even harder, it would turn out, was finding guys who could keep their mouths shut.

___

“Mob informant” was once an oxymoron, but today the number of rats is enormous — and growing with each indictment. And the mob’s storied ability to exact retribution on informants is virtually nonexistent.

“There is no more secret society,” says Matthew Heron, the FBI’s Organized Crime Section Chief in Washington.

“In the past, you’d start out with the lowest level and try to work your way up,” Heron continues. Now “it’s like playing leapfrog. You go right over everybody else to the promised land.”

Basciano, 48, the one-time owner of the “Hello Gorgeous” beauty parlor, faces an upcoming trial for plotting to kill a federal prosecutor. The case was brought after his old boss, “Big Joey” Massino, wore a wire into a jailhouse meeting where the alleged hit was discussed.

By the time Massino went public with his plea deal in June 2005, another 50 Bonanno associates had been convicted in three years. The number of colleagues who testified against them, going right up to Massino, was in double digits. Basciano now faces the rest of his life in prison.

The Bonanno family is now led by the inexperienced “Sal The Ironworker” Montagna, just 35 years old, according to the FBI. Montagna shares one trait with his family’s founder: He, too, is a Sicilian immigrant.

The mob of the 21st century still makes money the old-fashioned way: gambling, loan-sharking, shakedowns. Three Genovese family associates were busted this month for extorting or robbing businessmen in New York and New Jersey, making off with $1 million.

There are other, more modern scams: The Gambino family collected $230 million in fraudulent credit card fees linked to pornographic Web sites. Another crooked plan grossed more than $420 million when calls made to “free” phone services triggered unauthorized monthly fees on victims’ phone bills.

After getting busted, mobsters are quick to offer advice to the FBI about allocating the agency’s investigative resources.

“I can’t tell you how many times we’ve gone to arrest people, and the first thing a wiseguy says is, `You should be going after the terrorists,” said Seamus McElearney, head of the FBI’s Colombo crime family squad in New York. “They say it all the time: `You should be doing that.’

“And leaving them alone.”

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Testimony: Mob discussed Giuliani hit

 

NEW YORK – The bosses of New York’s five Mafia families discussed killing Rudy Giuliani in 1986 when he was a mob-busting federal prosecutor, according to testimony Wednesday in the murder trial of a former FBI agent.The details about the plot — which never took shape — were given to ex-FBI agent Roy Lindley DeVecchio by the late Gregory Scarpa Sr., a capo-turned-informant, according to the testimony of FBI agent William Bolinder.DeVecchio is accused of forming an illicit alliance with Scarpa that lead to at least four slayings. He has denied the allegations.Before Giuliani became New York mayor, he had a track record of high-profile mob prosecutions. In 1986, Giuliani indicted the heads of the five families. That same year, the mobsters purportedly discussed the hit.Giuliani, a Republican, is now running for president. A telephone message seeking comment from a Giuliani’s campaign spokeswoman was not immediately returned Thursday.In testimony Wednesday, Bolinder said that DeVecchio’s 1987 debriefing report stated Scarpa told him the late Gambino crime boss John Gotti was for ordering the hit, and had the support of the leader of the Colombo crime family.However, Bolinder said, the heads of the Bonanno, Lucchese and Genovese groups were against the idea, and it never materialized.Scarpa had a colorful history, and it wouldn’t be the first time that outlandish stories followed him: He purportedly helped the FBI solve the 1964 murders of three civil-rights workers in Mississippi by strong-arming a Ku Klux Klan member.DeVecchio, 66, has pleaded not guilty in state Supreme Court in Brooklyn to four counts of murder in what prosecutors have billed as one of the worst law enforcement corruption cases in U.S. history.At his request, the trial is being heard by a judge and not a jury.Prosecutors say Scarpa showered DeVecchio with cash, stolen jewelry, liquor — and even prostitutes — in exchange for confidential information, according to an indictment.Scarpa used the inside tips about the identities and whereabouts of suspected informants and rivals to rub out at least four victims in the late 1980s and early 1990s, authorities said.

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“DUMBLEDORE IS GAY”

NEW YORK – With author J.K. Rowling’s revelation that master wizard Albus Dumbledore is gay, some passages about the Hogwarts headmaster and rival wizard Gellert Grindelwald have taken on a new and clearer meaning.

The British author stunned her fans at Carnegie Hall on Friday night when she answered one young reader’s question about Dumbledore by saying that he was gay and had been in love with Grindelwald, whom he had defeated years ago in a bitter fight.

‘”You cannot imagine how his ideas caught me, Harry, inflamed me,'” Dumbledore says in “Harry Potter and the Deathly Hallows,” the seventh and final book in Rowling’s record-breaking fantasy series.

The news brought gasps, then applause at Carnegie Hall, the last stop on Rowling’s brief U.S. tour, and set off thousands of e-mails on Potter fan Web sites around the world. Some were dismayed, others indifferent, but most were supportive.

“Jo Rowling calling any Harry Potter character gay would make wonderful strides in tolerance toward homosexuality,” Melissa Anelli, webmaster of the fan site http://www.the-leaky-cauldron.org, told The Associated Press. “By dubbing someone so respected, so talented and so kind, as someone who just happens to be also homosexual, she’s reinforcing the idea that a person’s gayness is not something of which they should be ashamed.”

“‘DUMBLEDORE IS GAY’ is quite a headline to stumble upon on a Friday evening, and it’s certainly not what I expected,” added Potter fan Patrick Ross, of Rutherford, N.J. “(But) a gay character in the most popular series in the world is a big step for Jo Rowling and for gay rights.”

Gellert Grindelwald was a dark wizard of great power, who terrorized people much in the same way Harry’s nemesis, Lord Voldemort, was to do a generation later. Readers hear of him in the first book, “Harry Potter and the Sorcerer’s Stone,” in a reference to how Dumbledore defeated him. In “Deathly Hallows,” readers learn they once had been best friends.

“Neither Dumbledore nor Grindelwald ever seems to have referred to this brief boyhood friendship in later life,'” Rowling writes. “However, there can be no doubt that Dumbledore delayed, for some five years of turmoil, fatalities, and disappearances, his attack upon Gellert Grindelwald. Was it lingering affection for the man or fear of exposure as his once best friend that caused Dumbledore to hesitate?”

As a young man, Dumbledore, brilliant and powerful, had been forced to return home to look after his mentally ill younger sister and younger brother. It was a task he admits to Harry that he resented, because it derailed the bright future he had been looking forward to.

Then Grindelwald, described by Rowling as “golden-haired, merry-faced,” arrived after having been expelled from his own school. Grindelwald’s aunt, Bathilda Bagshot, says of their meeting: “The boys took to each other at once.” In a letter to Grindelwald, Dumbledore discusses their plans for gaining wizard dominance: “‘(I)f you had not been expelled we would never have met.'”

Potter readers had speculated about Dumbledore, noting that he has no close relationship with women and a mysterious, troubled past.

“Falling in love can blind us to an extent,” Rowling said Friday of Dumbledore’s feelings about Grindelwald, adding that Dumbledore was “horribly, terribly let down.”

Dumbledore’s love, she observed, was his “great tragedy.”

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NYC ‘Preppie Killer’ in Drug Sting

NEW YORK (AP) — The so-called “Preppie Killer,” who served 15 years in prison for strangling a woman in Central Park, was arrested Monday for selling drugs and resisting arrest.

Robert Chambers’ arrest stemmed from an undercover operation in which drugs, including cocaine, were purchased from him at his residence in Manhattan’s Upper East Side, police said. They said he struggled with officers during his arrest.

It was not immediately clear whether Chambers had an attorney.

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