Wall Street erases earlier losses; M&A news, data support

NEW YORK (Reuters) - Stocks erased earlier losses to trade flat by late morning on Thursday as a flurry of M&A deals and better-than-expected jobs data fed optimism to the market, although signs of economic weakness in Europe and Japan curbed appetite for risky assets.

Among the M&A announcements, shares of H.J. Heinz Co jumped 20 percent to $72.50 after it said Warren Buffett's Berkshire Hathaway and 3G Capital will buy the company for $72.50 a share, or $28 billion including debt.

Also supporting the market, U.S. data showed the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. But data out of Europe showed a contraction of 0.6 percent in gross domestic product in the euro zone, the steepest for the bloc since the first quarter of 2009. Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.

"The only reason a company buys another company is because they see an upside. Even though we are at multiyear highs, this kind of activity shows that there is more room for a rally, feeding optimism to the market," said Randy Frederick, director of trading and derivatives at Charles Schwab.

"The jobless claims numbers were solid, and with the European market closing, the news out of Europe is pretty much done for the day."

But Frederick added the market would have to see small corrections before breaking above current levels, where indexes have been hovering for almost two weeks. The S&P 500 is up more than 6 percent so far this year, near its highest level since November 2007.

The Dow Jones industrial average <.dji> was down 1.20 points, or 0.01 percent, at 13,981.71. The Standard & Poor's 500 Index <.spx> was up 0.03 points, or 0.00 percent, at 1,520.36. The Nasdaq Composite Index <.ixic> was down 2.65 points, or 0.08 percent, at 3,194.23.

Constellation Brands soared more than 35 percent to $43.26 after terms of its takeover of Mexican brewer Grupo Modelo were revised, granting it perpetual rights to distribute Corona and other Modelo brands in the United States. AB InBev ADRs gained 5.5 percent to $93.08.

American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 2.4 percent to $14.31.

Shrinking European economies translated to a 5-percent drop in revenue from the region for Cisco Systems , which nonetheless beat estimates as it reported its results late Wednesday. The company's shares slid 1.4 percent to $20.84.

General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. The stock was off 0.8 percent at $28.42.

(Reporting By Angela Moon; Editing by Nick Zieminski)

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Kenyan economy likely to grow up to 6 pct in 2013: IMF

NAIROBI (Reuters) – The International Monetary Fund expects the Kenyan economy to grow at least 5.5 to 6 pct this year from an estimated 4.5 to 5 percent in 2012, assuming elections in March go smoothly, a senior fund official said.

“Kenya has stayed the course of its economic reforms and this has worked quite well,” Domenico Fanizza, who has been leading a mission to Kenya under the IMF’s Extended Credit Facility, told a news conference on Thursday.

Kenya has forecast 5 percent plus growth this year.

Fanizza said the presidential election set for March 4 was a risk but said the new constitution could help the country to go through the election peacefully.

“It (2013 growth forecast) is predicated on a smooth election. Given the relative strength of the economy before election, if voting goes without major incidents, I expect investments to pick up,” he said.

The east African country could vote in a president accused of crimes against humanity, posing a diplomatic headache for Western capitals and raising the spectre of sanctions. Fanizza said although it was unclear what foreign governments would do in such a case, the economy could still do well.

If presidential hopeful Uhuru Kenyatta wins the poll, Kenya will become the second country after Sudan to have a sitting president facing trial at the International Criminal Court in The Hague.

“Kenya has continued to grow despite the global economic and financial crises like in the Euro Zone,” Fanizza said, adding the growth was driven by domestic factors.

The outcome of the last election in 2007 was disputed and the vote was followed by tribal violence which killed more than 1,200 people and displaced about 350,000 from their homes.

The post-election violence convulsed the economy and sent the shilling spiralling lower against the dollar.

Fanizza cited domestic consumption due to growth of the middle class, as well as robust ICT and financial sectors.

He said the government had maintained fiscal discipline while the policy stance had remained cautious.

“Inflationary pressures have been tamed and interest rates have been declining supporting economic activities,” he said.

The mission welcomed the Central Bank of Kenya‘s (CBK) continued vigilance in easing its policy stance by closely monitoring inflation.

CENTRAL BANK VIGILANCE

Kenya’s year-on-year inflation rate rose for the first time in thirteen months in January and analysts said it could rise further in the coming months on currency weakness and election-related spending. Inflation rose to 3.67 percent in January from 3.20 percent in December.

The rate of inflation in January was still well within the government’s medium-term target of 5 percent, plus or minus two percentage points.

The central bank began cutting the country’s high interest rates last July after inflation tumbled from a November 2011 peak of just under 20 percent. The policy lending rate now stands at 9.5 percent.

The IMF recommended that the CBK should continue to build up its hard currency reserves to create a buffer.

The central bank has been using up Kenya’s hard currency reserves in the run-up to the poll to support the under-pressure shilling.

“Fiscal policy should remain geared towards lowering the public debt-to-GDP ratio further,” Fanizza said.

At end 2012 it was slightly below 44 percent, he said in reference to the debt-to-GDP ratio. He said that can be achieved through expenditure control and improvement of tax collections.

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The Tax Deductions You Shouldn’t Overlook

The good thing about taxes is they’re only filed once a year. The bad thing is it’s almost impossible to remember which tax deductions you qualify for each year.

“Credits come and go. It’s hard to remember,” says Bob Wheeler, a certified public accountant in Santa Monica, Calif.

While the IRS does all it can to help taxpayers determine which itemized deductions to apply to their taxes, there are enough possible tax deductions that it’s easy to miss some, experts say.

The good news is that for most people who haven’t had major life changes — having a child, losing a job, buying a house, getting married, etc. — filing taxes shouldn’t be too hard, says Mark Steber, chief tax officer at Jackson Hewitt Tax Service.

“The bottom line for most taxpayers is that 2012 should mostly represent 2011, because there weren’t many tax law changes,” Steber says.

Here are some of the tax deductions you don’t want to overlook:

Medical costs. These include health insurance premiums, dental care, glasses, counseling, therapy, and miles driven to medical appointments, Wheeler says. The medical expenses must add up to more than 7.5% of your adjusted gross income (AGI) for 2012 taxes. In 2013, that figure rises to 10% of AGI, he says. Long-term care insurance is deductible, subject to specific dollar amounts depending on age, says Gail Rosen, a CPA in Martinsville, N.J. Weight-loss programs are deductible if undertaken as treatment for a disease diagnosed by a physician, she says.

[Related Article: 5 Ways Taxes Can Affect Your Credit]

Housing. Deducting mortgage interest is a no-brainer, but other costs when buying a house can be deducted from taxes, including private mortgage insurance, points paid on an original mortgage, and energy credits. “Once you get past a mortgage and a W-2, it just gets a whole lot more complicated,” says Wheeler.

Education. Student loan interest is commonly missed, Steber says. Parents contributing to a child’s college education can choose to take a tuition and fee deduction of up to $ 4,000, or can take tax credits, he says. The American Opportunity Tax Credit is for up to $ 2,500 per student for the first three years of college, and the Lifetime Learning Credit is for up to $ 2,000 per family for every additional year of college or graduate school, Rosen says.

Non-cash charitable contributions. Deducting a cash contribution to a charity is easy enough, but too often people don’t accurately value non-cash contributions such as clothes, Steber says. Determine fair-market value and don’t value them for less than they’re worth, he recommends. Other charitable deductions include expenses paid of behalf of a charity, and donating appreciated stock, Rosen says.

Retirement. The American Taxpayer Relief Act of 2012 allows taxpayers to roll over funds from a regular 401(k) retirement account into a Roth account under the same plan. For people with IRAs, some miss the opportunity to contribute to it and don’t realize that it’s a deduction that doesn’t need to be funded by Dec. 31 of the tax year, says Neil Johnson, a CPA in Northbrook, Ill., who blogs about taxes at TheTaxDude.com. Taxpayers have until April 14 of the following year to fund their IRA.

[Related Article: What You Need to Know About Tax Identity Theft]

Job hunting. Qualifying expenses are deductible even if they didn’t result in a new job being offered or accepted, Rosen says. These costs include resumes, postage, job counseling, employment agency fees, telephone charges, and travel for interviews that isn’t reimbursed by the prospective employer. They must exceed 2% of your AGI. To be deductible, you must be looking for work in the same trade or business that you’ve been in, she says, adding that job hunting expenses when looking for a job in a new field aren’t deductible.

Bad debt. Ever loan someone money and not get repaid? You could qualify for the non-business bad debt tax deduction for individuals, says Anisha Bailey of A.C. Bailey Tax Solutions in Beavercreek, Ohio. Individuals and married couples can claim the deduction and get a loss of up to $ 3,000 per year when they loan someone money and aren’t repaid, Bailey says. “This non-business bad debt loss is deducted as a short-term capital loss and they can carry forward any amounts they are not able to claim in the current year and reduce their taxable income in future years,” she wrote in an email.

However you prepare your tax returns — with a computer program, hired professional or by yourself — it’s important not to rush through the process, Rosen says.

“So many people just drop off their stuff at an accountant,” she says. “Just like anything, taxes take a lot of time — whether it’s a professional or you’re doing it yourself.”

More from Credit.com

This article originally appeared on Credit.com.

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Olympian Oscar Pistorius charged with murder

PRETORIA, South Africa (AP) — Paralympic superstar Oscar Pistorius was charged Thursday with the murder of his girlfriend who was shot inside his home in South Africa, a stunning development in the life of a national hero known as the Blade Runner for his high-tech artificial legs.

Reeva Steenkamp, a model who spoke out on Twitter against rape and abuse of women, was shot four times in the predawn hours in the house, in a gated community in the capital, Pretoria, police said.

Hours later after undergoing police questioning, Pistorius left a police station accompanied by officers. He looked down as photographers snapped pictures, the hood on his gray workout jacket pulled up, covering most of his face. His court hearing was originally scheduled for Thursday afternoon but has been postponed until Friday to give forensic investigators time to carry out their work, said Medupe Simasiku, a spokesman for the prosecution.

South Africans were shocked at the killing. But while Pistorius captured the nation's attention with his Olympic quest, police said there was a recent history of problems involving him. Police spokeswoman Brigadier Denise Beukes said the incidents included "allegations of a domestic nature."

"I'm not going to elaborate on it but there have been incidents (at Pistorius' home)," Beukes said. Police in South Africa do not name suspects in crimes until they have appeared in court but Beukes said that the 26-year-old Pistorius was at his home at the time of the death of Steenkamp and "there is no other suspect involved."

Pistorius' father, Henke, declined to comment when contacted by The Associated Press, only saying "we all pray for guidance and strength for Oscar and the lady's parents."

Neither Pistorius' agent Peet van Zyl nor coach Ampie Louw could be reached while Pistorius' own cellphone went straight to voicemail.

Pistorius' former coach, Andrea Giannini, said he hopes it was "just a tragic accident." Giannini said he believed that Pistorius had been dating Steenkamp for "a few months."

"No matter how bad the situation was, Oscar always stayed calm and positive," Giannini told the AP in Italy. "Whenever he was tired or nervous he was still extremely nice to people. I never saw him violent."

Yet Pistorius had troubles in his personal life. In February 2009, he crashed a speed boat he was piloting on South Africa's Vaal River. Witnesses said he had been drinking before the crash and officers found alcoholic beverages in the wreckage, though they acknowledged at the time they hadn't conducted a blood test on the athlete. Pistorius broke his nose, jaw and several ribs in the crash, as well as damaged his eye socket and required some 180 stitches to his face.

In November, Pistorius also found himself in an altercation with a local coal mining millionaire over a woman, South African media reported. Eventually, the two men involved the South African Police Service's elite Hawks investigative unit before settling the matter.

Pistorius owned firearms and posted a photograph of himself at a shooting range in November 2011 to the social media website Twitter, bragging about his score.

"Had a 96% headshot over 300m from 50shots! Bam!" he tweeted.

Police said that earlier reports that Steenkamp may have been mistaken for a burglar by Pistorius did not come from the police. Several local media outlets initially reported that the shooting may have been accidental.

Capacity Relations, a talent management firm, earlier named model Steenkamp as the victim of the shooting. Police spokeswoman Lt. Col. Katlego Mogale told the AP that officers received a call around 3 a.m. after the shooting.

A 9 mm pistol was recovered and a murder case opened against Pistorius.

Pistorius enjoyed target shooting with his pistol and an online advertisement featuring him for Nike read: "I am a bullet in the chamber." An article in January 2012 in The New York Times Magazine described him talking about how he pulled a pistol to search his home when his alarm went off the night before an interview. At Pistorius' suggestion, he and the journalist went to a nearby target range where they fired at targets with a 9 mm pistol. At one point, Pistorius told the writer: "If you practiced, I think you could be pretty deadly."

Asked how often he went target shooting, Pistorius replied: "Just sometimes when I can't sleep."

Police have still not released the name of the woman, but the publicist for Steenkamp confirmed in a statement that the model was dead.

"We can confirm that Reeva Steenkamp has passed away," Steenkamp's publicist Sarit Tomlinson said. "Our thoughts and prayers go to the Steenkamp family, who have asked to have their privacy respected during this difficult time, everyone is simply devastated. She was the kindest, sweetest human being; an angel on earth and will be sorely missed."

Tomlinson said Steenkamp, known simply as Reeva, was one of FHM's (formerly For Him Magazine) 100 Sexiest Women in the World for two years running, appeared in countless international and national advertisements and was one of the celebrity contestants on the reality show "Tropika Island of Treasure," filmed in Jamaica.

She and Pistorius were first seen publicly together in November at an awards ceremony in Johannesburg. Later, she began mentioning the athlete in public messages on Twitter.

She also tweeted messages urging women to stand up against rape as well as her excitement about Valentine's Day. "What do you have up your sleeve for your love tomorrow?" she tweeted. "It should be a day of love for everyone."

Pistorius made history in London last year when he became the first double-amputee track athlete to compete in the Olympic Games, propelling him to the status of an athletics superstar.

Having had both his legs amputated below the knee before his first birthday because of a congenital condition, he campaigned for years to be allowed to compete against able-bodied athletes. Having initially been banned because of his carbon fiber blades — which critics said gave him an unfair advantage — he was cleared by sport's highest court in 2008 and allowed to run at the top events.

He competed in the 400 meters and on South Africa's 4x400 relay team at the London Games, making history when his selection for South Africa's team was confirmed at the very last minute. He also retained his Paralympic title in the 400 meters in London.

South Africa's Sports Confederation and Olympic committee released a statement on Thursday saying they had been "inundated" with requests for comment but were not in a position to give out any details of the shooting. The International Paralympic Committee also said it wouldn't comment in detail apart from offering its condolences to the victim's family.

South Africa has some of the world's highest murder rates, with nearly 50 people killed each day in the nation of 50 million. It also has high rates of rape, other assaults, robbery and carjackings.

U.N. statistics show South Africa has the second highest rate of shooting deaths in the world, second only to Colombia.

"The question is: Why does this story make the news? Yes, because they are both celebrities, but this is happening on every single day in South Africa," said Adele Kirsten, a member of Gun Free South Africa. "We have thousands of people killed annually by gun violence in our country. So the anger is about that it is preventable."

___

Imray reported from Cape Town, South Africa. Associated Press writer Michelle Faul contributed to this report from Johannesburg.

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Africa 'must think big for its children'

Children at school in the Mukuru kwa Njenga slum in Nairobi, Kenya.

STORY HIGHLIGHTS

• New report shows that policies across Africa are helping children's development


• But laws must improve to help children reach potential, says Catherine Mbengue


• Scrapping fees in Malawi saw entry to primary school jump from under 50% to 99%


• At secondary level, education in much of the region is deeply limited, Mbengue says

Editor's note: Catherine Mbengue is a Trustee of the African Child Policy Forum (ACPF) and former senior UNICEF Official. Here, she writes about a new report -- "Children's Chances: How Countries Can Move from Surviving to Thriving," released by Harvard University Press on 13 February 2013.

(CNN) -- Africa has always been a continent of contrasts. And the latest findings from an amazing team of international researchers show that when it comes to providing our children with the best chances in life, Africa once more presents a very mixed picture.

In a new report, never-before-available comparative data on laws and public policies in 191 countries, covering poverty, discrimination, education, health, child labor, child marriage and parental care, reveals how millions of children across the world face conditions that limit their opportunities to thrive and reach their full potential because of governments failure to act.

This new research aims to broaden global attention from solely survival to children's full and healthy development. It comes at a critical time as the global community is looking to set new goals and agree on what all the world's nations will strive for in the so-called "post-2015" agenda following more than a decade of efforts focused around the Millennium Development Goals (MDGs).

Catherine Mbengue

Children's opportunities are not just shaped by parents and families, but also by national action in the form of laws and public policies.

This may involve removing tuition fees, ensuring inclusive education for children with disabilities, enforcing minimum age requirements for labor, age restrictions for marriage so girls might have a better chance to stay in education, or assisting parents to be able to earn enough to support their children and have the time off from work they need to care for their children's health and education.

Read more: Africa grows, but youth get left behind

And as the new analysis confirms, marked strides have been made across sub-Saharan Africa in areas central to our children's healthy development.

Primary education is tuition free across the majority of the region (in 36 of the 41 countries with available figures) and 13 countries have removed charges for secondary education.

In addition, virtually all sub-Saharan African countries (45 of the 46 countries with data) guarantee paid maternity leave (although of these 23 provide less than the 14-week minimum established by the ILO), and 41 of 45 countries have recognized the need to provide income support during periods of unemployment (although this largely does not cover the informal economy).

And progress in improving children's chances does not necessarily rely on the ability to open large purses. Some low and middle-income countries have made impressive advances for children.

Kenya, for example, makes education compulsory for 12 years, longer than all other countries in the region, including those with a higher GDP, and it has a higher minimum age for full-time work than its neighbors.

Elimination of schools fees in Malawi in the 1990s has led to a jump in primary school enrollment from under 50% in 1991 to 99% in 1999.

Read more: Elite boarding school aims to create Africa's future leaders

Madagascar provides not only paid maternal leave, but also paid leave for children's health and family needs. Progress is clearly possible when there is political will.

There remains substantial room for policy advances to transform the lives of older children, youth and the poorest.
Catherine Mbengue, Trustee of the African Child Policy Forum

But there remains substantial room for policy advances to transform the lives of older children, youth and the poorest. At secondary level, educational opportunities in much of the region are deeply limited -- and limiting. A greater proportion of countries in sub-Saharan Africa than in other regions -- some 61% -- begin charging tuition fees before the end of secondary school.

When we look beyond the issue of accessibility to the quality of education our children receive -- after all it should be fit for purpose -- the region has among the lowest education requirements for teachers, with 50% of countries requiring lower secondary school teachers to have completed no higher than a secondary education (so teachers have barely more education that their students).

Plus, while policies in the formal economy are relatively strong in terms of supporting families, those in the informal economy remain unprotected.

Despite the fact that many countries have set a minimum wage, in 6 countries this wage is just $2 per day or less -- and in 20 others is between $2 an $4, leaving even a family of one adult and one dependent under the $2 poverty line. How can we expect children to thrive given this reality?

What this kind of comparative data and analysis allows us to do is see more clearly where progress is and isn't occurring.

It is only when we begin to call out country's names -- the leaders and the laggards -- that we'll see all children count on having a childhood where they can go to school and not labor full-time, a childhood free of marriages that require them to parent before they have grown up themselves, getting the education they need to find work that will lift them out of poverty, and not facing discrimination based on their gender or ethnicity.

Africa should be a region that has high ambitions for its children and demand that the post-2015 development agenda is one that thinks big for our children and their chances.

Read the report and stay up to date on Twitter #kidschances.

The opinions expressed in this commentary are soley those of Catherine Mbengue

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Lady Gaga suffering from joint inflammation, postpones shows

LOS ANGELES (Reuters) – Pop star Lady Gaga said on Tuesday she was suffering from a severe inflammation of the joints that left her temporarily unable to walk, forcing her to postpone a handful of upcoming shows on the North American leg of her world tour.

“I am completely devastated and heartsick. I’ve been hiding this injury and pain from my staff for a month, praying it would heal, but after last night’s performance, I could not walk,” the singer said in a statement.

Her condition is called synovitis, an inflammation that sometimes follows a sprain, strain or injury.

Gaga posted a similar message in a series of tweets to her 34 million Twitter followers.

“I will hopefully heal as soon as possible and be at 500 percent again, which is what you deserve,” she said.

“The Edge of Glory” singer postponed shows in Chicago on Wednesday and Thursday, in Detroit on Saturday and in Hamilton, Ontario, on Sunday.

Lady Gaga, 26, has been on the road for two years on her “Born This Way Ball” world tour. Her website showed tour dates through March 20.

The 200-plus date tour has taken the singer across six continents and was ranked as the sixth top-grossing tour of 2012 by Billboard magazine.

(Reporting By Piya Sinha-Roy, editing by Jill Serjeant and Cynthia Osterman)

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Wall Street flat, S&P 500 touches November 2007 high

NEW YORK (Reuters) - Stocks were little changed on Wednesday after the S&P 500 index hit a November 2007 intraday high, but volume was low and investors stayed cautious with indexes near multi-year closing highs.

The benchmark index got a boost from Comcast Corp when the cable company said it will buy the rest of NBC Universal for $16.7 billion from General Electric Co .

Equities have been strong performers until recently, buoyed largely by healthy growth in corporate earnings, which helped the S&P 500 to rise 6.5 percent so far this year. The Dow industrials are about 1 percent away from an all-time intraday high, reached in October 2007.

Those gains could leave the market vulnerable to a pullback as investors take profits amid a dearth of new catalysts. While analysts see an upward bias in stocks, recent daily moves have been small and trading volumes light with indexes at multi-year highs.

"I was expecting a 12-15 percent return on the S&P for the whole year of 2013, and we have done about half of that in just 5-6 weeks," said Jack De Gan, principal at Harbor Advisory in Portsmouth, New Hampshire.

"We will hit resistance, but the fundamentals and micro picture are looking good, so if there is a correction it's going to be a brief one."

The Dow Jones industrial average <.dji> was down 52.99 points, or 0.38 percent, at 13,965.71. The Standard & Poor's 500 Index <.spx> was down 0.61 points, or 0.04 percent, at 1,518.82. The Nasdaq Composite Index <.ixic> was up 3.35 points, or 0.11 percent, at 3,189.85.

Economic data proved no catalyst giving investors direction. The government said retail sales rose 0.1 percent in January, as expected. Tax increases and higher gasoline prices restrained spending.

The S&P 500 was well over its 50-day moving average of 1,460.92, a sign the market could be overbought.

Comcast agreed late Tuesday to buy General Electric Co's remaining 49 percent stake in NBC Universal for $16.7 billion. Comcast jumped 6.2 percent to $41.40 as the S&P's top percentage gainer while Dow component GE was up 3 percent to $23.26.

Deere & Co reported earnings that beat expectations and raised its full-year profit outlook. After initially rallying in premarket trading, the stock fell 2.3 percent to $91.80.

According to the latest Thomson Reuters data, of the 353 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Industrial and construction shares were lower even though in his State of the Union address President Barack Obama called for $50 billion in spending to create jobs by rebuilding degraded roads and bridges.

The Dow Jones Home Construction index <.djushb> was off 0.2 percent.

(Reporting By Angela Moon; Editing by Kenneth Barry)

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Marriott Marquis Deal Could Cost Taxpayers $344.9 Million, Audit Says

Robert Caplin for The New York Times

Marriott’s 1998 lease with New York City lets it buy the land under the Marriott Marquis for $ 19.9 million, far below its value now, the city comptroller said. He attacked other terms, too.

The Marriott Marquis, the 50-story convention hotel in Times Square, sits atop some of the most valuable land in all of New York City, if not the world.

But because of a lease signed by the Giuliani administration in 1998, Marriott can buy the property from the city for only $ 19.9 million, one-tenth of its current $ 193 million value, according to a new audit by the city comptroller, John C. Liu.

Mr. Liu said the terms of the 1998 lease could end up costing taxpayers $ 344.9 million in lost rent and proceeds from the sale of the property.

Marriott, whose Marquis Times Square generates more revenue than any other hotel in its worldwide portfolio, also owes the city $ 3.6 million and failed to keep adequate records that would enable the city to determine whether it has received all the money that it is due, according to the audit.

“Even in 1998, it’s hard to imagine that property values would slump so badly,” Mr. Liu said. “There is an opportunity here to renegotiate this deal in a way that could bring millions back for taxpayers.”

Marriott and the Bloomberg administration sharply disputed the audit’s conclusions.

“The comptroller’s office did not understand the Marriott Marquis hotel deal, and its audit report is wrong on all counts,” Marriott said in a statement.

On Twitter, Julie Wood, a spokeswoman for Mayor Michael R. Bloomberg, issued a sarcastic response to the audit: “Looks like @JohnCLiu has run out of things to audit, now rummaging thru Giuliani files. Shocker: Times Sq turnaround didn’t happen by itself.”

But Mr. Liu stood by his report, saying the audit relied on Marriott’s lease, prior audits and internal memos at the city’s Economic Development Corporation.

Randy Levine, who as deputy mayor in the Giuliani administration negotiated the 1998 agreement, said he could not recall its specifics. Mr. Levine is now president of the New York Yankees.

The audit’s most striking finding is that the city appears to have far undervalued the land.

The hotel, with more than 1,900 rooms, a ballroom, exhibition and meeting space, shops and a theater, sits on the west side of Broadway, between 45th and 46th Streets. It is the flagship for Marriott’s 33 hotels in New York City under nine brands.

“Times Square is a unique market in which the sky may be the limit for land,” said Daniel F. Sciannameo, president of Albert Valuation Group, an appraiser. “Recent prices are off the charts.”

In the early 1980s, the city and the state were desperate to redevelop Times Square, then a district of T-shirt and X-rated shops and shuttered theaters that many New Yorkers avoided. With Times Square considered a risky location, the government provided a menu of tax breaks and other incentives to encourage redevelopment projects by Marriott and others.

The city and the state signed a 75-year lease with Marriott in 1982 that was intended to ease the hotel’s financial burden by setting a low initial rent, a portion of which was deferred until the lease expired in 2057.

Under its original 1982 lease, Marriott had the option to buy the land for “fair market value,” after paying all deferred rent and repaying a low-interest federal loan. The lease stipulated that each side would hire an appraiser to establish the price.

Sixteen years later, in 1998, Marriott asked the Giuliani administration to revise the terms of its lease, so it could comply with requirements for forming a real estate investment trust.

By then, Times Square was beginning to thrive.

Marriott agreed to pay $ 54 million to cover some deferred rent and to repay the federal loan. The city, in turn, changed the rent calculation and amended the purchase price, inserting a formula that effectively reduced it to $ 19.9 million, according to the audit.

Marriott contends that it does not owe the $ 3.6 million cited by the comptroller because the original sum had been paid in 1998.

As for the purchase option, Marriott said the annual rent payments it had made to the city should be deducted from the purchase price.

But the comptroller’s office points out that nowhere in the original lease does it say that there would be a deduction for rent payments.

The revised 1998 lease eliminated the requirement for appraisers and instead set a price. According to the audit, the Economic Development Corporation failed to do a comparative analysis to establish whether the revised lease was in the best interests of the city.

According to internal city documents, Marriott offered to buy the property in 2010 for $ 10.7 million, even less than what was stipulated in the revised lease, although nothing came of it.

This article has been revised to reflect the following correction:

Correction: February 12, 2013

An earlier version of this article misstated the number of years that elapsed between the Marriott Marquis’s original lease and Marriott’s request to revise its terms.  It was 16 years, not 17 years.

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IOC President Rogge to meet with wrestling leader

LAUSANNE, Switzerland (AP) — IOC President Jacques Rogge will meet with the head of wrestling's governing body to discuss ways the sport can fight to save its place in the 2020 Olympics.

The IOC executive board removed wrestling from the program of the 2020 Games on Tuesday, cutting it from the list of 26 sports at last year's London Olympics.

The decision, which still must be ratified by the full IOC in September, has been widely criticized by wrestling organizations around the world.

Rogge said Wednesday he's been contacted by Raphael Martinetti, the president of international wrestling federation FILA, and was encouraged by the sport's determination to remain in the games.

"We agreed we would meet at the first opportunity to have discussions," Rogge said at a news conference at the close of a two-day board meeting. "I should say FILA reacted well to this disheartening news for them.

"They vowed to adapt the sport and vowed to fight to be eventually included in the 2020 slot."

Wrestling, which remains on the program for the 2016 Olympics in Rio de Janeiro, still has a chance to stay on the list for 2020 — if it manages to convince the IOC to reverse the board's decision.

Wrestling now joins seven other sports in applying for one opening on the 2020 program: a combined bid from baseball and softball, karate, squash, roller sports, sport climbing, wakeboarding and the martial art of wushu.

The IOC executive board will meet in May in St. Petersburg, Russia, to decide which sport or sports to propose for 2020 inclusion. The final vote will be made at the IOC general assembly in September in Buenos Aires, Argentina.

IOC officials said it's possible the board could decide to put forward three sports for consideration, including wrestling.

"The vote of yesterday is not an elimination of wrestling from the Olympic Games," Rogge said. "Wrestling will participate in the games in Rio de Janeiro. To the athletes who train now, I say, 'Continue training for your participation in Rio. Your federation is working for the inclusion in the 2020 Games.'"

Rogge was asked whether Tuesday's decision marked an end to wrestling in the Olympics.

"I cannot look into a crystal ball into the future," he said. "We have established a fair process by which the sport that would not be included in the core has a chance to compete with the seven other sports for the slot on the 2020 Games."

Rogge said he was fully aware of the backlash to the decision against wrestling, a sport which dates back to the ancient Olympics and featured in the inaugural modern games in 1896.

The head of the Russian Olympic Committee said Wednesday he would write to Rogge to appeal the IOC board's decision. Wrestling has been one of Russia's strongest sports: Soviet and Russian wrestlers have won 77 gold medals.

"We knew even before the decision was taken whatever sport would not be included in the core program would lead to criticism from the supporters of that sport," Rogge said.

The board voted after reviewing a report by the IOC program commission that analyzed 39 criteria, including TV ratings, ticket sales, anti-doping policy and global participation and popularity. With no official rankings or recommendations contained in the report, the final decision by the 15-member board may have included political and sentimental factors.

Modern pentathlon — a five-sport discipline dating back to the 1912 Games — had been widely expected to face removal from the program but lobbied successfully to save its status.

Juan Antonio Samaranch Jr., the son of the former IOC president, is a vice president of the International Modern Pentathlon Union and a member of the IOC board.

FILA said Tuesday it was "greatly astonished" by the decision, adding that the federation "will take all necessary measures to convince the IOC executive board and IOC members of the aberration of such decision against one of the founding sports of the ancient and modern Olympic Games."

The last sports removed from the Olympics were baseball and softball, voted out by the IOC in 2005 and off the program since the 2008 Beijing Games. Golf and rugby will be joining the program at the 2016 Games in Rio.

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Why pope will long be remembered

Tim Stanley says Pope Benedict will be seen as an important figure in church history.

STORY HIGHLIGHTS

• Timothy Stanley: Benedict XVI's resignation is historic since popes usually serve for life


• He says pope not so much conservative as asserting church's "living tradition"


• He backed traditionalists, but a conflicted flock, scandal, culture wars a trial to papacy, he says


• Stanley: Pope kept to principle, and if it's not what modern world wanted, that's world's problem

Editor's note: Timothy Stanley is a historian at Oxford University and blogs for Britain's The Daily Telegraph. He is the author of "The Crusader: The Life and Times of Pat Buchanan."

(CNN) -- Journalists have a habit of calling too many things "historic" -- but on this occasion, the word is appropriate. The Roman Catholic Church is run like an elected monarchy, and popes are supposed to rule until death; no pope has stepped down since 1415.

Therefore, it almost feels like a concession to the modern world to read that Benedict XVI is retiring on grounds of ill health, as if he were a CEO rather than God's man on Earth. That's highly ironic considering that Benedict will be remembered as perhaps the most "conservative" pope since the 1950s -- a leader who tried to assert theological principle over fashionable compromise.

Timothy Stanley

The word "conservative" is actually misleading, and the monk who received me into the Catholic Church in 2006 -- roughly a year after Benedict began his pontificate -- would be appalled to read me using it. In Catholicism, there is no right or left but only orthodoxy and error. As such, Benedict would understand the more controversial stances that he took as pope not as "turning back the clock" but as asserting a living tradition that had become undervalued within the church. His success in this regard will be felt for generations to come.

Opinion: Why pope will be remembered for generations

He not only permitted but quietly encouraged traditionalists to say the old rite, reviving the use of Latin or receiving the communion wafer on the tongue. He issued a new translation of the Roman Missal that tried to make its language more precise. And, in the words of one priest, he encouraged the idea that "we ought to take care and time in preparing for the liturgy, and ensure we celebrate it with as much dignity as possible." His emphasis was upon reverence and reflection, which has been a healthy antidote to the 1960s style of Catholicism that encouraged feverish participation bordering on theatrics.

Nothing the pope proposed was new, but it could be called radical, trying to recapture some of the certainty and beauty that pervaded Catholicism before the reforming Vatican II. Inevitably, this upset some. Progressives felt that he was promoting a form of religion that belonged to a different century, that his firm belief in traditional moral theology threatened to distance the church from the people it was supposed to serve.

If that's true, it wasn't the pope's intent. Contrary to the general impression that he's favored a smaller, purer church, Benedict has actually done his best to expand its reach. The most visible sign was his engagement on Twitter. But he also reached out to the Eastern Orthodox Churches and spoke up for Christians persecuted in the Middle East.

Opinion: Huge challenges await next pope

In the United Kingdom, he encouraged married Anglican priests to defect. He has even opened up dialogue with Islam. During his tenure, we've also seen a new embrace of Catholicism in the realm of politics, from Paul Ryan's nomination to Tony Blair's high-profile conversion. And far from only talking about sex, Benedict expanded the number of sins to include things such as pollution. It's too often forgotten that in the 1960s he was considered a liberal who eschewed the clerical collar.

The divisions and controversies that occurred under Benedict's leadership had little to do with him personally and a lot more to do with the Catholic Church's difficult relationship with the modern world. As a Catholic convert, I've signed up to its positions on sexual ethics, but I appreciate that many millions have not. A balance has to be struck between the rights of believers and nonbelievers, between respect for tradition and the freedom to reject it.

As the world has struggled to strike that balance (consider the role that same-sex marriage and abortion played in the 2012 election) so the church has found itself forced to be a combatant in the great, ugly culture war. Benedict would rather it played the role of reconciler and healer of wounds, but at this moment in history that's not possible. Unfortunately, its alternative role as moral arbiter has been undermined by the pedophile scandal. Nothing has dogged this pontificate so much as the tragedy of child abuse, and it will continue to blot its reputation for decades to come.

Opinion: Echoes of past in pope's resignation

For all these problems, my sense is that Benedict will be remembered as a thinker rather than a fighter. I have been so fortunate to become a Catholic at a moment of liturgical revival under a pope who can write a book as majestic and wise as his biography of Jesus. I've been lucky to know a pope with a sense of humor and a willingness to talk and engage.

If he wasn't what the modern world wanted -- if he wasn't prepared to bend every principle or rule to appease all the people all the time -- then that's the world's problem rather than his. Although he has attained one very modern distinction indeed. On Monday, he trended ahead of Justin Bieber on Twitter for at least an hour.

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The opinions expressed in this commentary are solely those of Timothy Stanley.

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