Market rally loses steam despite drop in US claims

LONDON (AP) — Higher-than-expected Chinese inflation figures on Thursday gave some investors a chance to cash in recent gains on the world's financial markets in spite of more good news from the U.S. with another fall in weekly jobless claims.

Nonetheless, many of the world's stock indexes remained within touching distance of their recent record highs after the 4,000 fall in U.S. claims to a new five-year low of 327,000.

"The latest reading continues to come in below forecast and so provides a positive surprise," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

However, the claims figures, coming on top of last week's surprisingly strong monthly nonfarm payrolls data for April, failed to help European stocks recover earlier losses or and give an early boost to U.S. trading.

In Europe, Germany's DAX, which has set a series of record highs, was up a further 0.16 percent at 8,262. The CAC-40 in France ended Thursday 0.7 percent lower at 3,942 while the FTSE 100 index of leading British shares dropped slightly, 0.02 percent, to 6,581, broadly unaffected by the expected decision by the Bank of England to keep its monetary policy unchanged.

Trading in many parts of Europe was light as many countries were on a public holiday, though markets remained open.

In the U.S., the Dow Jones industrial average was down 0.05 percent at 15,1097 while the broader S&P 500 index fell 0.2 percent to 1,628.

The claims figures helped shore up the dollar, which was making another attempt to breach the 100 yen mark. Several attempts over the past few weeks have just fallen short. It was 0.4 percent higher at 99.34 yen, while the euro was trading 0.4 percent lower at $1.3104.

Earlier, government figures showing China's consumer price index rose 2.4 percent in the year to April, up from 2.1 percent the previous month and ahead of expectations of a more modest advance to 2.2 percent, had given the markets a soft tone.

Many reasons have been cited for the recent strength of stock markets around the world, including hopes over the U.S. economy, a seeming easing in Europe's debt crisis and an aggressive new monetary policy from the Bank of Japan.

Earlier, Japan's Nikkei 225 index dropped 0.7 percent to 14,191.48 — a modest retreat after a strong run that's sent the Nikkei up to five-year highs.

Another aspect of the Bank of Japan's massive monetary stimulus has been to weaken the yen dramatically. That feeds through into stocks as a lower currency makes the country's exports relatively cheaper.

Elsewhere in Asia, Hong Kong's Hang Seng fell 0.1 percent to 23,211.48 after the Chinese inflation figures. However, mainland Chinese shares were mixed with the Shanghai Composite Index down 0.6 percent to 2,232.97 while the smaller Shenzhen Composite Index gained 0.2 percent to 967.69.

South Korea's Kospi index was also in focus as it jumped 1.2 percent to 1,979.45 after the Bank of Korea lowered its benchmark interest rate for the first time in seven months. In announcing that it was lowering the rate by a quarter percentage point to 2.5 percent, the Bank of Korea became the latest central bank to take steps to boost flagging economic growth.

Oil prices drifted lower following recent strong gains — the benchmark New York contract was down 83 cents at $95.79 a barrel.

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Venezuela wrestles over truth of bombing claims

CARACAS, Venezuela (AP) — Hours after barely winning Venezuela's presidential election, the ruling party started to flood state media with accusations that opposition provocateurs were firebombing Cuban-run neighborhood health clinics across the country in revenge.

More than a week later, a national dispute is raging as the opposition wages a remarkably successful media counteroffensive showing the claims to be seriously exaggerated and in some cases entirely false. With meticulously dated amateur photos of undamaged clinics, opposition supporters have vividly illustrated how cell-phone cameras, Twitter and Facebook can help even the playing field against a government that came to dominate broadcast media during the late Hugo Chavez's 14-year presidency.

The fight is fueling tension in a country that's deeply polarized and almost exactly divided between supporters of the government and an opposition that claims the April 14 election was stolen. The chief of national prisons, Iris Varela, declared Tuesday that she was preparing a cell for opposition candidate Henrique Capriles for allegedly directing the purported clinic attacks and other violence against government buildings and supporters.

Chavez had a history of making claims he never substantiated, denouncing dozens of alleged assassination plots before succumbing to cancer in March. His heir, Nicolas Maduro, has shown himself prone to even more grave accusations, including repeatedly claiming in the week before his election that Salvadoran and Colombian mercenaries had entered Venezuela to wreak havoc. The government hasn't presented any evidence to back up those claims.

Tinedo Guia, president of Venezuela's largest journalists association, said the government does not appear to fully grasp that people distrustful of state-controlled media can increasingly rely on Internet-driven grassroots reporting.

Internet use in Venezuela soared from 4.6 percent of the population in 2001 to 40.2 percent in 2011, according to the World Bank. Mobile phone subscriptions more than doubled from 47 to 98 percent between 2005 and 2010, and the number of mobile broadband subscriptions grew from less than 1 percent to more than a quarter of the population over the same period.

"It's evident they are mistaken in thinking the people are stupid," Guia said of the government.

Health ministry officials did not respond to requests for comment but other government ministers have alleged the clinics were repaired faster than the damage could be documented. Some accused skeptics of questioning the government's claims simply because they opposed the ruling Chavista movement.

Information Minister Ernesto Villegas wrote last week on Twitter that "the media and non-governmental organizations are uniting in complicity with the attacks on doctors and patients."

On April 16, two days after the election, Maduro announced that an unspecified number of Comprehensive Diagnostic Medical Centers had been burned by thugs operating on direct orders from Capriles. Information Minister Ernesto Villegas said eight clinics had been attacked. The number grew in subsequent accountings by government officials, with then-Health Minister Eugenia Sader saying by Saturday that 25 clinics had been burned. She was replaced in a Cabinet shuffle this week.

But no sooner had the first accusations been made than Capriles supporters rushed to at least five of the clinics and took photos of their undamaged facades. Amateur photographers were careful to hold up editions of that morning's newspaper so there would be no doubt the images were captured after the purported attacks. Then they posted the photographs on Twitter and Facebook.

The images spread quickly and were published in opposition newspapers such as El Nacional and El Universal. A website that specializes in political satire, Chiguire Bipolar, posted an article headlined "Maduro denounces the opposition's burning, repair, painting and resupplying of 11 Comprehensive Diagnostic Medical Centers." It was tweeted at least 4,200 times and posted even more frequently on Facebook.

Despite earlier insistence from some officials that the damage couldn't be documented, a government-linked group published 10 photos Wednesday that it said revealed evidence of the attacks on public buildings, most showing minor damage to the interiors, such as scorch marks on walls or a splintered wooden door. One exterior shot showed several streaks of fire damage above a white building, another revealing minor burns along the bottom of a health clinic sign on an otherwise untouched wall.

The 561 clinics opened by Chavez are a potent symbol of Venezuela's effort to alleviate deep poverty by transforming the country with the world's largest oil reserves into a socialist economy with deep ties to Cuba. Under an agreement between Chavez and Cuba's Fidel Castro, thousands of Cuban doctors have moved to slums and remote villages to attend to the poor. Venezuela, meanwhile, props up Cuba with billions of dollars in oil.

Cuban government officials did not immediately respond to a request for comment, but Communist Party newspaper Granma reported last week that island doctors would continue their work in Venezuela despite what it called "aggressive protests" at some Cuban-run health facilities. Granma said no one had been hurt, and did not mention any damage.

Cuban state-run news agency AIN later said clinics had taken precautionary security measures due to "provocative actions by some people." AIN added that more than 32,000 medical workers are currently serving in Cuba's medical mission to Venezuela, which observed its 10-year anniversary this year.

During the campaign, Capriles had indicated he wanted to end subsidized oil aid to Cuba, saying he no longer wanted to "give" the resource.

The purported burning of the Cuban-run clinics, in turn, became "the perfect symbolic vehicle for the government's case against the opposition," which officials have attempted to portray as "antidemocratic, inhumane, and as a threat to the social policy gains of recent years," said David Smilde, a Venezuela expert at the University of Georgia.

Provea, an independent group that is one of Venezuela's most prominent human rights organizations, compiled images of the five unharmed clinics and included them in an April 18 report that cast deep doubt on the government claims.

"No clinic in the country showed signs of having been burned or vandalized to the intensity suggested in the allegations so widely distributed by official media and high-ranking government spokesmen," the brief report said.

In an unintended echo of the parody article, Gabriela Ramirez, Venezuela's top official charged with investigating human rights violations, said Saturday that an unspecified number of clinics had indeed been hit by firebombs but were repaired overnight a day after the April 14 election.

Maduro mentioned at least two allegedly burned clinics in the capital's Baruta district by name. Ramirez said on April 20 that one in the southwestern state Barinas had been 90 percent burned.

AP reporters visited one of the Baruta clinics on April 16 and one in Barinas the next day and found no visible signs of fire or smoke damage on their facades. Neighbors of both clinics said they had not seen either damaged.

Villegas, the information minister, accused Provea of calling the government's claims into question solely because the group's director secretly opposes the government and the Chavista movement, a charge director Marino Alvarado denies.

"This type of behavior stimulates the fascists," Villegas said. "I'm very surprised how anti-Chavez sentiment has completely taken hold of him."

Alvarado, the head of Provea, noted how Chavez once accused Provea of lying about rights violations by military personnel following deadly 1999 mudslides that killed thousands in the coastal state of Vargas, then acknowledged weeks later that activists had been right and called for an investigation that found bodies had been tossed into an unmarked grave.

He suggested that authorities should try to regain lost credibility by admitting they were mistaken or misinformed about the purported clinic attacks.

"We hope this government has the capacity to correct its position on the accusations," Alvarado said.

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Associated Press writers Christopher Toothaker, Frank Bajak and Jorge Rueda in Caracas and Peter Orsi in Havana contributed to this report.

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Vivian Sequera on Twitter: http://twitter.com/VivianSequera

Michael Weissenstein on Twitter: http://twitter.com/mweissenstein

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Video claims Nigeria sect holds 7 French hostages

LAGOS, Nigeria (AP) — A video posted online Monday apparently shows seven French hostages kidnapped from northern Cameroon, with a masked militant claiming the radical Islamic group Boko Haram from neighboring Nigeria holds them.

The video, posted to YouTube and mentioned on a jihadist website, shows one of two French men reading a statement, with a woman in between them. Four children sit on the ground near them, flanked by two masked militants wearing camouflage uniforms and holding rifles.

A masked militant in front says in the video that Boko Haram kidnapped the French hostages, a family of three adults and four children who were taken from outside a national park in Cameroon's Far North Region on Feb. 19. A black banner in the background, bearing the images of the Quran flanked by two Kalashnikov assault rifles, also resembles a symbol previously used by Boko Haram.

The man says the kidnappings came due to the French military intervention in northern Mali, where its troops have fought with Malian soldiers against Islamic extremists who took over the north in the months following a coup last year. The man also threatens the Nigerian and Cameroonian government, calling on them to release their imprisoned members.

"Let the French president know that he has launched war against Islam and we are fighting him everywhere," the man says in Arabic. "Let him know that we are spread everywhere to save our brothers."

The man threatens to kill the French hostages if group's demands are not met.

The Associated Press could not immediately confirm the video's authenticity Monday, though it shares similarities with some Boko Haram propaganda videos published in the past.

However, in this video, the man speaks entirely in Arabic, while other Boko Haram videos have its leader Abubakar Shekau also speaking the Hausa language of Nigeria's predominantly Muslim north. Boko Haram has not published a video featuring hostages before. The video appears to have been filmed outside, as prayer mats hung in the background sway in a breeze.

French Foreign Minister Laurent Fabius said in a statement that "for us, these images are horribly shocking. They show cruelty without limits." He said France is fully mobilized to free the hostages but "verifications needed in these circumstances" are under way.

Prime Minister Jean-Marc Ayrault of France told journalists his country's intelligence services are analyzing the video and "examining the nature of the demands."

The French gas group GDF Suez last week identified the captives as an employee working in Yaounde, the Cameroon capital, and his family. The group was vacationing in the north, a company statement said without elaborating. Cameroonian and Nigerian soldiers continue to search for them in the arid, rural border region the two countries share in West Africa.

Waza Park, a natural wildlife reserve in Cameroon's Far North Region attracts mainly foreign tourists. But the area often suffers from raids by bandits lurking in Cameroon, Chad and neighboring Nigeria, who abduct locals for ransom. A local witness told the AP he saw gunmen on motorcycles abduct the tourists on Feb. 19.

Boko Haram — which means "Western education is sacrilege" — has launched a guerrilla campaign of bombings and shootings across Nigeria's predominantly Muslim north. It is blamed for at least 792 killings last year alone, according to an AP count. It is known to have ties to al-Qaida in the Islamic Maghreb, or AQIM, an Algerian-based group that opened a front in Mali.

The sect, which typically speaks to journalists in telephone conference calls at times of its choosing, could not be immediately reached for comment Monday.

Boko Haram remains highly fragmented, without a clear command-and-control structure. One splinter organization launched from Boko Haram appears to be Ansaru, which has claimed the recent north Nigeria kidnappings of a British citizen, a Greek, an Italian, three Lebanese and one Filipino, all employees of a Lebanese construction company called Setraco. The group earlier claimed the kidnapping in December of a French national working on a renewal energy project in Nigeria's northern Katsina state.

However, the video claiming the kidnapping comes after supposed Boko Haram leaders denied this weekend that they took part in the kidnapping of the seven French citizens — leading to more questions about who actually remains in control of the group. Shekau hasn't been seen in a video since late November.

A total of 15 French citizens are currently being held in western Africa. In addition to the seven kidnapped in Cameroon, there is one other in Nigeria and seven thought to be in northern Mali.

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Associated Press writers Maamoun Youssef in Cairo and Sylvie Corbet in Paris contributed to this report.

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Jon Gambrell can be reached at www.twitter.com/jongambrellAP .

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