2014 05 29 cmyk na 04online.wsj.com/public/resources/documents/pageone052914.pdf · excessivewait...

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YELLOW ****** THURSDAY, MAY 29, 2014 ~ VOL. CCLXIII NO. 124 WSJ.com HHHH $2.00 DJIA 16633.18 g 42.32 0.3% NASDAQ 4225.07 g 0.3% NIKKEI 14670.95 À 0.2% STOXX 600 344.29 g 0.1% 10-YR. TREAS. À 22/32 , yield 2.440% OIL $102.72 g $1.39 GOLD $1,259.30 g $6.10 EURO $1.3591 YEN 101.84 Getty Images TODAY IN PERSONAL JOURNAL One Size Fits (Almost) All PLUS Phones That Phone Home CONTENTS Corp. News................ B2-4 Global Finance ............. C3 Heard on Street..........C8 In the Markets.............C4 Leisure & Arts............. D4 Opinion.................... A13-15 Small Business........... B6 Sports................................D6 Style & Travel ...... D1-3,5 Technology..................... B5 U.S. News...................A2-6 Weather Watch.......... B6 World News..... A8-11,16 s Copyright 2014 Dow Jones & Company. All Rights Reserved > What’s News i i i World-Wide n Obama outlined in a West Point commencement speech a foreign policy that focuses on diplomacy, targeted mili- tary operations and aid. A1 n A VA watchdog’s report found systemic problems at the agency’s health-care fa- cilities, increasing pressure on Secretary Shinseki. A1 n Hackers apparently based in Iran have mounted a three- year campaign of cyberespio- nage against high-ranking U.S. and international officials. A2 n The U.S. dispatched 1,000 Marines to the Mediterranean and urged Americans to leave Libya due to unrest. A11 n Putin will meet Western leaders for the first time since annexing Crimea when he at- tends D-Day ceremonies. A8 n Ukraine’s incoming leader asked for time before commit- ting to a major economic and political deal with the EU. A8 n Protesters in Abkhazia demanded the resignation of the breakaway Georgian re- gion’s pro-Russian leader. A8 n A Pakistan Taliban faction broke away and condemned violence, a move that weakens the militant group. A11 n The birthrate among high-school-age girls in the U.S. fell 13% last year to the lowest level on record. A6 n An appeals court threw out the murder conviction of Bulger’s FBI handler. A3 n Died: Maya Angelou, 86, “people’s poet” and activist. A6Malcolm Glazer, 85, bil- lionaire sports-team owner. B3 i i i A pple is buying Beats for $3 billion, a deal that will bring a music-streaming ser- vice, high-end headphones and music-industry connec- tions to the tech giant. A1 n A GM engineer at the center of the controversy over the handling of a deadly ignition- switch defect has met with congressional investigators. B1 n Potential buyers lined up to make a bid for the L.A. Clippers even as owner Don- ald Sterling vowed to fight a sale of the basketball team. B1 n Accounting rule makers un- veiled changes that will over- haul the way businesses re- cord revenue on their books. B1 n Valeant raised its Allergan bid to $49.4 billion and sold rights to some products to smooth antitrust concerns. B3 n Investors are returning to emerging markets that suffered big losses as re- cently as last winter. C1 n Government bonds rallied, pushing yields to their lowest level in nearly a year, on uncer- tainty over global growth. C1 n Stocks fell after two record closes for the S&P 500, which lost 2.13 points to 1909.78. The Dow shed 42.32 to 16633.18. C4 n U.S. banks’ net dropped 7.6% last quarter from a year ago on a decline in mortgage ac- tivity and financial trading. C1 n Proxy adviser ISS urged the ouster of most Target direc- tors, citing the data breach. B2 n The Ziffs are winding down the hedge funds that manage their family’s fortune. C1 Business & Finance World Cup to Soccer Fans: Bring In the Funk, Not the Noisemaker i i i Despite ‘Official’ Status and Praise From Brazil’s President, Caxirola Gets Banned SÃO PAULO—It has been lik- ened to a hand grenade with brass knuckles, ridiculed as a “glorified rattle,” and dismissed by one British sportswriter as “rubbish.” Meet the caxirola, Brazil’s answer to the vuvuzela, the elon- gated plastic horn that sounded like a belli- cose water buffalo and was unleashed on mankind’s eardrums during the 2010 World Cup in South Africa. “If you thought vu- vuzelas were bad, wait until you hear the cax- irola,” groused the Guardian newspaper in Britain. Many people, it turns out, won’t. Despite the noisemaker being blessed by some, including Bra- zil’s President Dilma Rousseff, and an endorsement by FIFA, soccer’s world governing body, federal officials have barred the caxirola from all 12 of the Brazil- ian soccer grounds where World Cup matches will be played. Ostensibly, the instrument was kicked out of play for safety reasons. And yet the ban hasn’t stopped the caxirola (pronounced ka-shee-role-ah) from making a noise in the marketplace. The World Cup’s official marketers are busily selling the caxi- rola online as one of “10 Must Have” items for the well-equipped fan. Since it can still be used outside stadiums, and in general World Cup revelry, it is available Please turn to page A12 BY REED JOHNSON Caxirola CAIRO—The dramatic shift in popular opinion that is expected to lift a former army chief to pres- ident of Egypt traces, in part, to an incident out- side a TV station last year. One night last June, long before Field Marshal Abdel Fattah Al Sisi was seen as presidential mate- rial here, the news directors of six satellite news channels huddled in an office to discuss growing protests outside by backers of Mohammed Morsi, the Muslim Brotherhood leader elected president after the Arab Spring uprising. The news directors say they were terrified. Isla- mists enraged at the stations’ criticisms of Mr. Morsi had surrounded the office park that housed their TV offices, intimidating reporters who came and went. The news directors made a decision: From then on, their stations would refer to Muslim Brother- hood supporters as “terrorists.” The protesters “were saying ‘We will kill you.’ They started throwing Molotov cocktails at the gate. So this was terrorism,” said Albert Shafik, news director of a channel called OnTV. “So we explained this every day on air.” The language in broadcasts watched by mil- lions proved a pivot point in Egypt’s circuitous de- velopment after the Arab Spring, from nascent de- mocracy to a new embrace of leadership by former generals. Mr. Morsi, elected in 2012 in the first free and fair presidential election Egypt had held in de- cades, now sits in prison, facing capital murder charges. Mr. Sisi, who as army chief removed Mr. Morsi from office last July and then oversaw a crack- down on his supporters from behind the scenes, is on his way to being elevated to the presidency af- Please turn to page A12 BY MATT BRADLEY CHANGE IN TONE Off Camera, Egyptian TV Shaped a New Government Apple Inc. wants to regain the beat in its music business, which is under assault from a stream of upstarts. The tech giant said on Wednesday it is buying Beats Electronics LLC for $3 billion to bolster a music business that has lost some of its mojo, as streaming-music services en- croached on the downloads dom- inated by Apple’s iTunes service. In Beats, Apple is getting a mu- sic-streaming service, high-end headphones and music-industry connections. Beats’ co-founders, rap star Dr. Dre and music mogul Jimmy Iovine, will join Apple. The deal will make Apple “cool” again by uniting Mr. Io- vine’s feel for “the culture of young people” with Apple’s “many millions of young peoples’ credit cards,” said Sony Music En- Please turn to the next page BY HANNAH KARP AND ALISTAIR BARR Apple Taps Tastemakers To Regain Music Mojo Goldman’s Forecast: Bank picks Brazil to win World Cup ........... C3 WEST POINT, N.Y.—President Barack Obama sought on Wednesday to define how to project American power: Not necessarily by major deploy- ments of American forces, but rather through targeted opera- tions, diplomacy and aid. Mr. Obama’s address to gradu- ating cadets at the U.S. Military Academy at West Point marked the start of his campaign to counter critics of his foreign pol- icy doctrine and blunt charges, chiefly by political opponents, that what his critics call his gun- shy approach has diluted Ameri- can influence on the world stage. “U.S. military action cannot be the only—or even primary—com- ponent of our leadership in every instance,” Mr. Obama said. “Just because we have the best ham- mer does not mean that every problem is a nail.” The president sought to artic- ulate a doctrine that applies to an era of substantial shifts in the foreign-policy landscape, mark- ing the end of post-Sept. 11 wars, the rise of unexpected challenges from Russia, tensions in Asia, the evolving threat of terrorism and the persistent volatility of the Middle East. Amid the turmoil, Mr. Obama said, “The U.S. is the one indis- pensable nation.” He previewed two upcoming policy changes: a deeper U.S. in- volvement in the Syrian civil war, Please turn to page A10 BY CAROL E. LEE Obama Defends U.S. Policy Based Less on Military Might President Barack Obama, speaking at West Point’s graduation Wednesday, said the U.S. should use resources for diplomacy and counterterrorism. Spencer Platt/Getty Images A watchdog’s report found systemic problems at Department of Veterans Affairs health-care fa- cilities, including improper proce- dures for scheduling patient ap- pointments and efforts to hide excessive wait times, increasing the pressure on embattled VA Secretary Eric Shinseki. The interim report by the VA’s independent inspector general focuses on the Phoenix VA Health Care System in Arizona, where wait times for patient ap- pointments were improperly re- ported, but also points to wide- spread scheduling problems throughout the VA health-care system. “Our reviews at more VA medical facilities…have con- firmed that inappropriate sched- uling practices are systemic,” the report said. The inspector general said it had identified po- tential criminal and civil viola- tions, and is coordinating efforts with the Justice Department. The report led to new calls in Congress for Mr. Shinseki to step down. A senior administration of- ficial said President Barack Obama’s recent comments indi- cate Mr. Shinseki is on proba- tion—and that hasn’t changed. Mr. Shinseki didn’t comment on his plans Wednesday, but in the past has said he doesn’t plan to leave office. Release of the report sparked an immediate bipartisan outpour- Please turn to page A4 BY BEN KESLING As Report Faults VA, Shinseki Feels Heat Thai Protesters Oppose Military Clampdown COUP CRITICIZED: A protester at an anticoup demonstration in Bangkok, as fears of a broader media clampdown escalated. A9 Associated Press Copyright © 2013, Oracle and/or its affiliates. All rights reserved. More Enterprise SaaS Applications Than Any Other Cloud Services Provider Oracle Cloud Applications ERP Financials Procurement Projects Supply Chain HCM Human Capital Recruiting Talent CRM Sales Service Marketing C M Y K Composite Composite MAGENTA CYAN BLACK P2JW149000-6-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO P2JW149000-6-A00100-1--------XA

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Page 1: 2014 05 29 cmyk NA 04online.wsj.com/public/resources/documents/pageone052914.pdf · excessivewait times,increasing the pressureonembattled VA SecretaryEric Shinseki. Theinterim report

YELLOW

* * * * * * THURSDAY, MAY 29, 2014 ~ VOL. CCLXIII NO. 124 WSJ.com HHHH $2 .00

DJIA 16633.18 g 42.32 0.3% NASDAQ 4225.07 g 0.3% NIKKEI 14670.95 À 0.2% STOXX600 344.29 g 0.1% 10-YR. TREAS. À 22/32 , yield 2.440% OIL $102.72 g $1.39 GOLD $1,259.30 g $6.10 EURO $1.3591 YEN 101.84

Getty

Images

TODAY IN PERSONAL JOURNAL

One Size Fits (Almost) AllPLUS Phones That Phone Home

CONTENTSCorp. News................B2-4Global Finance.............C3Heard on Street..........C8In the Markets.............C4Leisure & Arts.............D4Opinion....................A13-15

Small Business...........B6Sports................................D6Style & Travel......D1-3,5Technology.....................B5U.S. News...................A2-6Weather Watch..........B6World News.....A8-11,16

s Copyright 2014 Dow Jones & Company.All Rights Reserved

>

What’sNews

i i i

World-Widen Obama outlined in a WestPoint commencement speecha foreign policy that focuseson diplomacy, targeted mili-tary operations and aid. A1nA VAwatchdog’s reportfound systemic problems atthe agency’s health-care fa-cilities, increasing pressureon Secretary Shinseki. A1nHackers apparently basedin Iran have mounted a three-year campaign of cyberespio-nage against high-ranking U.S.and international officials. A2n The U.S. dispatched 1,000Marines to the Mediterraneanand urged Americans to leaveLibya due to unrest. A11n Putin will meetWesternleaders for the first time sinceannexing Crimea when he at-tends D-Day ceremonies. A8nUkraine’s incoming leaderasked for time before commit-ting to a major economic andpolitical deal with the EU. A8n Protesters in Abkhaziademanded the resignation ofthe breakaway Georgian re-gion’s pro-Russian leader. A8nA Pakistan Taliban factionbroke away and condemnedviolence, a move that weakensthe militant group. A11n The birthrate amonghigh-school-age girls in theU.S. fell 13% last year to thelowest level on record. A6n An appeals court threwout the murder conviction ofBulger’s FBI handler. A3nDied: Maya Angelou, 86,“people’s poet” and activist.A6…Malcolm Glazer, 85, bil-lionaire sports-team owner. B3

i i i

Apple is buying Beats for$3 billion, a deal that will

bring a music-streaming ser-vice, high-end headphonesand music-industry connec-tions to the tech giant. A1nA GM engineer at the centerof the controversy over thehandling of a deadly ignition-switch defect has met withcongressional investigators. B1n Potential buyers lined upto make a bid for the L.A.Clippers even as owner Don-ald Sterling vowed to fight asale of the basketball team. B1nAccounting rulemakers un-veiled changes that will over-haul the way businesses re-cord revenue on their books. B1nValeant raised its Allerganbid to $49.4 billion and soldrights to some products tosmooth antitrust concerns. B3n Investors are returningto emerging markets thatsuffered big losses as re-cently as last winter. C1nGovernment bonds rallied,pushing yields to their lowestlevel in nearly a year, on uncer-tainty over global growth. C1nStocks fell after two recordcloses for the S&P 500, whichlost 2.13 points to 1909.78. TheDow shed 42.32 to 16633.18. C4nU.S. banks’ net dropped 7.6%last quarter from a year agoon a decline in mortgage ac-tivity and financial trading. C1n Proxy adviser ISS urged theouster of most Target direc-tors, citing the data breach. B2n The Ziffs are winding downthe hedge funds that managetheir family’s fortune. C1

Business&Finance

World Cup to Soccer Fans:Bring In the Funk, Not the Noisemaker

i i i

Despite ‘Official’ Status and PraiseFromBrazil’s President, Caxirola Gets Banned

SÃO PAULO—It has been lik-ened to a hand grenade withbrass knuckles, ridiculed as a“glorified rattle,” and dismissedby one British sportswriter as“rubbish.”

Meet the caxirola,Brazil’s answer to thevuvuzela, the elon-gated plastic horn thatsounded like a belli-cose water buffalo andwas unleashed onmankind’s eardrumsduring the 2010 WorldCup in South Africa.

“If you thought vu-vuzelas were bad, waituntil you hear the cax-irola,” groused the Guardiannewspaper in Britain.

Many people, it turns out,won’t.

Despite the noisemaker beingblessed by some, including Bra-zil’s President Dilma Rousseff,

and an endorsement by FIFA,soccer’s world governing body,federal officials have barred thecaxirola from all 12 of the Brazil-ian soccer grounds where WorldCup matches will be played.

Ostensibly, the instrumentwas kicked out of playfor safety reasons.And yet the banhasn’t stopped thecaxirola (pronouncedka-shee-role-ah) frommaking a noise in themarketplace.

The World Cup’sofficial marketers arebusily selling the caxi-rola online as one of“10 Must Have” itemsfor the well-equipped

fan. Since it can still be usedoutside stadiums, and in generalWorld Cup revelry, it is available

PleaseturntopageA12

BY REED JOHNSON

Caxirola

CAIRO—The dramatic shift in popular opinionthat is expected to lift a former army chief to pres-ident of Egypt traces, in part, to an incident out-side a TV station last year.

One night last June, long before Field MarshalAbdel Fattah Al Sisi was seen as presidential mate-rial here, the news directors of six satellite newschannels huddled in an office to discuss growingprotests outside by backers of Mohammed Morsi,the Muslim Brotherhood leader elected presidentafter the Arab Spring uprising.

The news directors say they were terrified. Isla-mists enraged at the stations’ criticisms of Mr.Morsi had surrounded the office park that housedtheir TV offices, intimidating reporters who cameand went.

The news directors made a decision: From thenon, their stations would refer to Muslim Brother-

hood supporters as “terrorists.”The protesters “were saying ‘We will kill you.’

They started throwing Molotov cocktails at thegate. So this was terrorism,” said Albert Shafik,news director of a channel called OnTV.

“So we explained this every day on air.”The language in broadcasts watched by mil-

lions proved a pivot point in Egypt’s circuitous de-velopment after the Arab Spring, from nascent de-mocracy to a new embrace of leadership by formergenerals.

Mr. Morsi, elected in 2012 in the first free andfair presidential election Egypt had held in de-cades, now sits in prison, facing capital murdercharges.

Mr. Sisi, who as army chief removed Mr. Morsifrom office last July and then oversaw a crack-down on his supporters from behind the scenes, ison his way to being elevated to the presidency af-

PleaseturntopageA12

BY MATT BRADLEY

CHANGE IN TONE

Off Camera, Egyptian TVShaped a New Government

Apple Inc. wants to regain thebeat in its music business, whichis under assault from a streamof upstarts.

The tech giant said onWednesday it is buying BeatsElectronics LLC for $3 billion tobolster a music business thathas lost some of its mojo, asstreaming-music services en-croached on the downloads dom-inated by Apple’s iTunes service.

In Beats, Apple is getting a mu-sic-streaming service, high-endheadphones and music-industryconnections. Beats’ co-founders,rap star Dr. Dre and music mogulJimmy Iovine, will join Apple.

The deal will make Apple“cool” again by uniting Mr. Io-vine’s feel for “the culture ofyoung people” with Apple’s“many millions of young peoples’credit cards,” said Sony Music En-

Pleaseturntothenextpage

BY HANNAH KARPAND ALISTAIR BARR

Apple TapsTastemakersTo RegainMusic Mojo

Goldman’s Forecast: Bank picksBrazil to win World Cup........... C3

WEST POINT, N.Y.—PresidentBarack Obama sought onWednesday to define how toproject American power: Notnecessarily by major deploy-ments of American forces, butrather through targeted opera-tions, diplomacy and aid.

Mr. Obama’s address to gradu-

ating cadets at the U.S. MilitaryAcademy at West Point markedthe start of his campaign tocounter critics of his foreign pol-icy doctrine and blunt charges,chiefly by political opponents,that what his critics call his gun-shy approach has diluted Ameri-can influence on the world stage.

“U.S. military action cannot bethe only—or even primary—com-

ponent of our leadership in everyinstance,” Mr. Obama said. “Justbecause we have the best ham-mer does not mean that everyproblem is a nail.”

The president sought to artic-ulate a doctrine that applies toan era of substantial shifts in theforeign-policy landscape, mark-ing the end of post-Sept. 11 wars,the rise of unexpected challenges

from Russia, tensions in Asia, theevolving threat of terrorism andthe persistent volatility of theMiddle East.

Amid the turmoil, Mr. Obamasaid, “The U.S. is the one indis-pensable nation.”

He previewed two upcomingpolicy changes: a deeper U.S. in-volvement in the Syrian civil war,

PleaseturntopageA10

BY CAROL E. LEE

Obama Defends U.S. PolicyBased Less onMilitaryMight

President Barack Obama, speaking at West Point’s graduation Wednesday, said the U.S. should use resources for diplomacy and counterterrorism.

SpencerPlatt/Ge

ttyIm

ages

A watchdog’s report foundsystemic problems at Departmentof Veterans Affairs health-care fa-cilities, including improper proce-dures for scheduling patient ap-pointments and efforts to hideexcessive wait times, increasingthe pressure on embattled VASecretary Eric Shinseki.

The interim report by the VA’sindependent inspector generalfocuses on the Phoenix VAHealth Care System in Arizona,where wait times for patient ap-pointments were improperly re-ported, but also points to wide-spread scheduling problemsthroughout the VA health-caresystem.

“Our reviews at more VAmedical facilities…have con-firmed that inappropriate sched-uling practices are systemic,”the report said. The inspectorgeneral said it had identified po-tential criminal and civil viola-tions, and is coordinating effortswith the Justice Department.

The report led to new calls inCongress for Mr. Shinseki to stepdown. A senior administration of-ficial said President BarackObama’s recent comments indi-cate Mr. Shinseki is on proba-tion—and that hasn’t changed. Mr.Shinseki didn’t comment on hisplans Wednesday, but in the pasthas said he doesn’t plan to leaveoffice.

Release of the report sparkedan immediate bipartisan outpour-

PleaseturntopageA4

BY BEN KESLING

As ReportFaults VA,ShinsekiFeels Heat

Thai Protesters Oppose Military Clampdown

COUP CRITICIZED: A protester at an anticoup demonstration inBangkok, as fears of a broader media clampdown escalated. A9

AssociatedPress

Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

More Enterprise SaaS ApplicationsThan Any Other Cloud Services Provider

Oracle CloudApplications

ERPFinancialsProcurementProjectsSupply Chain

HCMHuman CapitalRecruitingTalent

CRMSalesServiceMarketing

CM Y K CompositeCompositeMAGENTA CYAN BLACK

P2JW149000-6-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WEBG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO

P2JW149000-6-A00100-1--------XA