Wall Street extends rally on bank rescue hopes

NEW YORK — Wall Street extended a huge rally Friday as investors stormed back into the market, relieved that the government plans to restore calm to the financial system by rescuing banks from billions of dollars in bad debt. The Dow Jones industrials rose about 370 points, giving them a massive gain of about 780 over two days, and Treasurys fell as money flowed into equities.

The plan to rescue banks from billions of dollars in soured debt has reassured investors who worried that a continuum of bad bets on mortgages would hobble more financial companies and cause even further damage to the banking system and the overall economy.

Biggest bailout since Depression

WASHINGTON — Struggling to stave off financial catastrophe, the Bush administration on Friday laid out a radical bailout plan with a jawdropping price tag — a takeover of a half-trillion dollars or more in worthless mortgages and other bad debt held by tottering institutions.

Relieved investors sent stocks soaring on Wall Street and around the globe. The Dow-Jones industrials average rose 368 points after surging 410 points the day before on rumors the federal action was afoot.

McCain says Fed should not bail out financial institutions

GREEN BAY, Wis. — Republican John McCain said Friday the Federal Reserve needs to stop bailing out failed financial institutions. The Republican presidential hopeful said the Fed should get back to “its core business of responsibly managing our money supply and inflation” and he laid out several recommendations for stabilizing markets in the financial crisis that has rocked Wall Street and commanded the dialogue in the presidential campaign.

McCain made little mention of the massive proposal being crafted by Treasury Secretary Henry Paulson that could amount to a $1 trillion taxpayer bailout of the mortgage industry. McCain said simply that leaders should put aside partisan differences and “any action should be designed to keep people in their homes and safeguard the life savings of all Americans.”

Clinton opens a broad outreach to supporters

MINNEAPOLIS — Hillary Rodham Clinton stepped up her efforts Friday to swing her supporters behind Democratic presidential candidate Barack Obama, her former rival for the nomination.

In an outreach dubbed “Hillary Sent Me,” the New York senator invited her primary-season partisans to get involved directly in Obama’s campaign and to donate to it. As part of that, she urged them to travel to a specific battleground state each weekend, beginning with New Hampshire on Sept. 27, when she will be campaigning for Obama in Michigan.

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China’s food safety scandal now includes liquid milk, Singapore bans all China dairy products

SHIJIAZHUANG, China (AP) — China’s food safety crisis widened Friday after the industrial chemical melamine was found in milk produced by three of the country’s leading dairy companies — prompting stores, including Starbucks, to yank milk from their shelves. The recalls come as evidence is mounting that adding chemicals to watered-down milk was a widespread practice in China’s dairy industry.

Sipping from a carton of milk at a news conference, the chief financial officer of one of the companies, Mengniu, apologized for the tainted milk. But he insisted only a small portion of the company’s inventory had been contaminated and that the tainted milk came from small-scale dairy farmers.

“Large-scale milk farms are very disciplined. They won’t take the risk to do something like that,” Yao Tongshan told reporters in Hong Kong.

The crisis was initially thought to have been confined to tainted milk powder, used to make baby formula that has been blamed in the deaths of four infants and for sickening 6,200 other children.

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Investigator: Palin probe to end before election, but without witnesses who refused to testify

ANCHORAGE, Alaska (AP) — The Alaska lawmaker directing an abuse-of-power investigation of Gov. Sarah Palin promised Friday the probe will be finished before the election, despite refusals by key witnesses to testify, including the governor’s husband.

After waiting 35 minutes for Todd Palin and two state administrative employees to appear under subpoena before the state Senate Judiciary Committee, Sen. Hollis French condemned their refusal to testify and the attorney general’s broken promise that seven other witnesses would testify who were not subpoenaed.

French said the retired prosecutor hired by the Alaska Legislature to investigate Palin, Stephen Branchflower, will conclude his investigation by Oct. 10. Still, that report will not include testimony from the Republican vice presidential nominee, her husband or most of the top aides Branchflower hoped to interview.

Sarah Palin’s allies hoped the investigation would be delayed past the election to spare her any troublesome revelations — or at least the distraction — before voters have made their choice. Palin’s reputation as clean-government advocate who takes on entrenched interests is central to her appeal as Republican John McCain’s running mate, and possibly at risk in the probe.

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Waves from Ike reveal shipwreck on Ala. beach that could be Civil War schooner

FORT MORGAN (AP) — When the waves from Hurricane Ike receded, they left behind a mystery — a ragged shipwreck that archeologists say could be a two-masted Civil War schooner that ran aground in 1862 or another ship from some 70 years later. The wreck, about six miles from Fort Morgan, had already been partially uncovered when Hurricane Camille cleared away sand in 1969.

Researchers at the time identified it as the Monticello, a battleship that partially burned when it crashed trying to get past the U.S. Navy and into Mobile Bay during the Civil War.

After examining photos of the wreck post-Ike, Museum of Mobile marine archaeologist Shea McLean agreed it is likely the Monticello, which ran aground in 1862 after sailing from Havana, according to Navy records.

“Based on what we know of ships lost in that area and what I’ve seen, the Monticello is by far the most likely candidate,” McLean said. “You can never be 100 percent certain unless you find the bell with ‘Monticello’ on it, but this definitely fits.”

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Lawyers confirm that Yankees star Alex Rodriguez and his wife have reached a divorce settlement

MIAMI (AP) — It’s over for A-Rod and his wife of more than five years. With a prenuptial agreement in place, lawyers for the couple confirmed Friday that a settlement was reached less than three months after Cynthia Rodriguez first filed for divorce from New York Yankees star Alex Rodriguez. Terms were not disclosed, but attorneys for both sides said the paramount concern was the welfare of the couple’s two daughters — 3-year-old Natasha and 5-month-old Ella.

“This was and remains a personal family matter for both of them,” said Maurice Kutner, attorney for Cynthia Rodriguez, reading from a statement approved by the couple. “All of their decisions were based upon and guided by the best interests of their daughters.”

Allegations of repeated infidelity were at the root of Cynthia Rodriguez’s divorce filing. Not mentioned in the legal papers but hovering over the matter was an alleged liaison between A-Rod and pop star Madonna, both having denied a romance.

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Wisconsin man convicted of robbing 2-year-old’s piggy bank gets 6 years in prison

SHEBOYGAN, Wis. (AP) — A man convicted of stealing $20 from a toddler’s piggy bank has been sentenced to six years in prison.

Four-time convicted burglar Ryan Mueller was convicted Thursday of felony burglary as a repeat offender in a Sheboygan, Wis., court.

Prosecutors say the 31-year-old Mueller broke into a home in August 2007 and stole money from a 2-year-old girl’s piggy bank while she slept. They say the girl’s mother walked into the room and caught Mueller in the act.

Mueller also was sentenced to five years’ probation. His is to serve his sentence consecutively to a six-year prison sentence he was handed in June for a separate burglary conviction.