WASHINGTON (Reuters) - The Federal Reserve will emphasize that the U.S. economy remains fragile in a policy statement later on Wednesday, as it talks down expectations for a rate hike this year and holds fire on expanding asset purchases.

WASHINGTON (Reuters) - A nationwide health insurance exchange that includes a Medicare-like government option could save $1.8 trillion more than if only private plans are offered, a prominent private U.S. health policy group said on Wednesday.

Reuters - The Federal Reserve will emphasize that the U.S. economy remains fragile in a policy statement later on Wednesday, as it talks down expectations for a rate hike this year and holds fire on expanding asset purchases.

Reuters - A nationwide health insurance exchange that includes a Medicare-like government option could save $1.8 trillion more than if only private plans are offered, a prominent private U.S. health policy group said on Wednesday.

AFP - Leading Chinese dissident Liu Xiaobo has been formally arrested for subversion, state media reported, six months after he was detained in the wake of signing a pro-democracy charter.

WASHINGTON (Reuters) - The outspoken head of a U.S. Congressional watchdog panel will strongly urge lawmakers on Wednesday to set up a new government agency to protect consumers from 'tricks and traps' set by banks.

BEIJING (Reuters) - China shares the region's 'serious concerns' about a nuclear North Korea and urged all parties to keep negotiating, a senior Chinese military officer said Wednesday after talks with Pentagon officials.

WASHINGTON (Reuters) - A nationwide health insurance exchange that includes a Medicare-like government option could save $1.8 trillion more than if only private plans are offered, a prominent private U.S. health policy group said on Wednesday.

AP - A conservative candidate in Iran's disputed presidential election said Wednesday that he was withdrawing his complaints about voting fraud for the sake of the country, state television reported.

AP - A transit operator on the job about three months in the nation's capital had just started her shift and took over an older train that federal safety officials had warned years earlier should be replaced.

AP - Even as President Barack Obama and the insurance industry move toward open confrontation over the role of government in health care, his administration is telling lawmakers to keep pushing for a bipartisan deal.

AP - A weakening Tropical Storm Andres hit Mexico's coast south of the tourist resort of Puerta Vallarta with rain and wind on Wednesday, before heading out into the Pacific and brushing past the tip of Baja California.

AP - Behind President Barack Obama's toughened but modulated response to the Iranian election crisis is a calculation that when the dust settles, the United States will still face an unpredictable adversary that gets closer every day to producing nuclear weapons.

AP - The Boston Globe and its largest union have reached a tentative agreement that will save the newspaper $10 million through salary and benefit cuts.

Reuters - The outspoken head of a U.S. Congressional watchdog panel will strongly urge lawmakers on Wednesday to set up a new government agency to protect consumers from 'tricks and traps' set by banks.

Reuters - China shares the region's 'serious concerns' about a nuclear North Korea and urged all parties to keep negotiating, a senior Chinese military officer said Wednesday after talks with Pentagon officials.

Reuters - A nationwide health insurance exchange that includes a Medicare-like government option could save $1.8 trillion more than if only private plans are offered, a prominent private U.S. health policy group said on Wednesday.

AFP - Iran faced mounting international pressure after US President Barack Obama raised 'significant questions' about the legitimacy of the presidential election and expressed outrage over the crackdown on opposition protesters.

AFP - Leading Chinese dissident Liu Xiaobo has been formally arrested for subversion, state media reported, six months after he was detained in the wake of signing a pro-democracy charter.

WASHINGTON (Reuters) - A severe U.S. recession will bottom out this year, but any recovery will be weak due to anemic markets and shrunken consumer wealth, the Organization for Economic Cooperation and Development said on Wednesday.

WASHINGTON (Reuters) - President Barack Obama has decided to return a U.S. ambassador to Syria after a four-year hiatus as talks between the two nations intensify, U.S. media reported Tuesday.

WANA, Pakistan (Reuters) - U.S. drones prowled the sky over Pakistan's South Waziristan on Wednesday, a day after one of the aircraft attacked a stronghold of Pakistani Taliban leader Baitullah Mehsud, killing about 70 militants.

AP - Iran says it is considering downgrading ties with Britain after days of rising tension over criticism of Iran's disputed presidential election.

Reuters - A severe U.S. recession will bottom out this year, but any recovery will be weak due to anemic markets and shrunken consumer wealth, the Organization for Economic Cooperation and Development said on Wednesday.

Reuters - U.S. drones prowled the sky over Pakistan's South Waziristan on Wednesday, a day after one of the aircraft attacked a stronghold of Pakistani Taliban leader Baitullah Mehsud, killing about 70 militants.

AFP - Prominent Chinese dissident Liu Xiaobo, a leading force behind a petition calling for democratic reforms, has been formally arrested for subversive activities, state media said Wednesday.

TEHRAN (Reuters) - Iran's Supreme Leader Ayatollah Ali Khamenei vowed on Wednesday he would not budge in response to protests over a disputed election that has sparked the biggest street demonstrations since the 1979 Islamic revolution.

BEIJING (Reuters) - China shares the region's 'serious concerns' about a nuclear North Korea, a senior Chinese military officer said after talks with Pentagon officials that also sought to ease friction at sea between the two big powers.

AP - Iran's supreme leader said Wednesday that the government would not give in to pressure over the disputed presidential election, effectively closing the door to compromise with the opposition.

AP - Federal investigators are going to test the automated system that is meant prevent train crashes like the one in Washington, D.C., that killed nine people.

AP - Health and Human Services Secretary Kathleen Sebelius told lawmakers Wednesday that President Barack Obama is willing to listen to suggestions on how to pay for a health care overhaul, as long as they don't increase the deficit.

AP - South Carolina Gov. Mark Sanford was expected back at work Wednesday after a five-day absence for what aides said was a hiking trip that turned into more of a fuss than he ever expected.

AP - (AP) — Top U.S. and Chinese military officials said Wednesday the countries will work together to avoid confrontations at sea that have sparked worries of a crisis in overall relations.

AP - Illinois' former first lady won't be queen of the jungle. Patti Blagojevich on Tuesday was voted off NBC's reality series 'I'm a Celebrity... Get Me Out of Here!' She lasted 23 days in the Costa Rican jungle as a replacement for her husband, who was barred by a judge from leaving the country amid his pending corruption charges.

AP - Second seeds Roger Federer and Serena Williams highlight Wednesday's second-round action at Wimbledon. Fourth seeds Elena Dementieva and Novak Djokovic are in the schedule, as are Maria Sharapova and American Mardy Fish.

Reuters - Iran's Supreme Leader Ayatollah Ali Khamenei vowed on Wednesday he would not budge in response to protests over a disputed election that has sparked the biggest street demonstrations since the 1979 Islamic revolution.

AFP - Iran's supreme leader warned on Wednesday that the regime would not back down in the face of opposition protests over the disputed presidential vote, amid soaring tensions between Tehran and the West.

AP - South Carolina Gov. Mark Sanford was in Argentina during a dayslong unexplained absence, not hiking the Appalachian Trail as his staff told the public when state leaders raised questions about his whereabouts, the governor told a newspaper.

AP - Iran's supreme leader said Wednesday that the government would not yield to demonstrators demanding the annulment of a disputed presidential election. The wife of the opposition leader said protesters would not buckle under a situation she compared to martial law.

AP - Citigroup Inc. is increasing base salaries for many of its employees as it restructures its compensation program amid new restrictions on bonus payments.

AP - The government says new U.S. home sales fell slightly last month, in another sign that the housing market's recovery is likely to be gradual and prolonged.

AP - A North Dakota woman accused of breast-feeding her 6-week-old baby while drunk has pleaded guilty to child neglect.

AFP - Afghan soldiers have killed 48 militants in two operations in southern Afghanistan aimed at clearing Taliban strongholds ahead of presidential elections in August, officials and the army said Wednesday.

TEHRAN (Reuters) - A group of over 200 Iranians gathered Wednesday in southern Tehran to protest against the presidential election result, a witness told Reuters, adding there were no clashes so far.

WASHINGTON (Reuters) - An unexpected jump in U.S. durable goods orders last month backed hopes that the economy was healing, but news from the hard-hit housing market remained mixed.

ATLANTA (Reuters) - South Carolina Governor Mark Sanford returned to the United States on Wednesday from a secret private trip to Argentina, ending days of speculation over his whereabouts and raising questions about his judgment.

AP - Gov. Mark Sanford told a newspaper he was in Argentina, not hiking the Appalachian Trail as his staff had told the public to explain his sudden absence. He said he 'wanted to do something exotic' to unwind after losing a fight over federal stimulus money.

AP - Health and Human Services Secretary Kathleen Sebelius on Wednesday defended President Barack Obama's call for a new public health insurance plan in the face of strong opposition from Republicans and fresh criticism from a powerful business group.

AP - Maria Sharapova won seven straight games during one stretch but let a late lead slip away Wednesday and lost to Gisela Dulko, 6-2, 3-6, 6-4 in the second round at Wimbledon.

Reuters - A group of over 200 Iranians gathered Wednesday in southern Tehran to protest against the presidential election result, a witness told Reuters, adding there were no clashes so far.

Reuters - An unexpected jump in U.S. durable goods orders last month backed hopes that the economy was healing, but news from the hard-hit housing market remained mixed.

Reuters - South Carolina Governor Mark Sanford returned to the United States on Wednesday from a secret private trip to Argentina, ending days of speculation over his whereabouts and raising questions about his judgment.

AFP - Iran's supreme leader warned on Wednesday that the regime would not back down in the face of opposition protests over the disputed presidential vote, amid soaring tensions between Tehran and the West.

AFP - A bomb tore through a vehicle in Afghanistan Wednesday and killed seven civilians while authorities reported that 54 people, mostly militants, were killed in other insurgency-linked violence.

ATLANTA (Reuters) - South Carolina Governor Mark Sanford returned to the United States on Wednesday from a secret private trip to Argentina, ending days of speculation over his whereabouts and raising questions about his judgment.

MARACAY, Venezuela (Reuters) - The United States and Venezuela will soon reinstate ambassadors expelled in a diplomatic spat last year, a sign of warmer relations between President Hugo Chavez and what he calls the U.S. 'empire.'

WASHINGTON (Reuters) - The U.S. government will send an ambassador to Syria after a four-year hiatus as President Barack Obama moves to improve ties between the two countries, a State Department official said on Wednesday.

AP - Protesters and riot police clashed in the streets around Iran's parliament Wednesday as hundreds of people converged on a Tehran square in defiance of government orders to halt demonstrations demanding a new presidential election, witnesses said.

AP - Iraqi officials have raised the casualty toll in a bombing in Baghdad's main Shiite district of Sadr City to at least 56 killed and more than 100 wounded.

AP - The Federal Reserve says the recession is easing, but the economy likely will remain weak and keep a lid on inflation.

AP - The Academy Awards are doubling the number of best-picture nominees from five to 10.

AP - A bird-bone flute unearthed in a German cave was carved some 35,000 years ago and is the oldest handcrafted musical instrument yet discovered, archaeologists say, offering the latest evidence that early modern humans in Europe had established a complex and creative culture.

AP - British homewares retailer Habitat apologized on Wednesday after ads for the store appeared on Twitter tagged with words linked to the Iranian election crisis.

AP - Maria Sharapova won seven straight games during one stretch but let a late lead slip away Wednesday and lost to Gisela Dulko, 6-2, 3-6, 6-4 in the second round at Wimbledon.

Reuters - South Carolina Governor Mark Sanford returned to the United States on Wednesday from a secret private trip to Argentina, ending days of speculation over his whereabouts and raising questions about his judgment.

Reuters - The United States and Venezuela will soon reinstate ambassadors expelled in a diplomatic spat last year, a sign of warmer relations between President Hugo Chavez and what he calls the U.S. 'empire.'

Reuters - The U.S. government will send an ambassador to Syria after a four-year hiatus as President Barack Obama moves to improve ties between the two countries, a State Department official said on Wednesday.

AFP - Riot police blocked protesters from gathering in Tehran on Wednesday, witnesses said, as Iran's supreme leader warned he will not back down in the face of unrest following the disputed presidential vote.

AFP - Fifty-five people were killed and 116 injured by a bomb in a crowded market in Baghdad's predominantly Shiite neighbourhood of Sadr City, an interior ministry official said on Wednesday.

ATLANTA (Reuters) - South Carolina Governor Mark Sanford, who has been seen as a potential candidate for the 2012 U.S. presidential election, tearfully admitted on Wednesday he had been unfaithful to his wife and resigned as chairman of the Republican Governors' Association.

WASHINGTON (Reuters) - The Federal Reserve on Wednesday held monetary policy steady and said the U.S. economic recession was easing, as it signaled its worries over a possible troubling downward spiral in prices were fading.

BAGHDAD (Reuters) - A bomb killed at least 61 people on Wednesday at a market in eastern Baghdad's Sadr City slum, police said, six days before U.S. combat troops are due to withdraw from Iraqi towns and cities.

CAMP LEATHERNECK, Afghanistan (Reuters) - The new commander of U.S. and NATO forces in Afghanistan said on Wednesday foreign troops need to make a 'cultural shift' away from conventional warfare and focus on winning the support of Afghans.

AP - After going AWOL for seven days, Gov. Mark Sanford admitted Wednesday that he'd secretly flown to Argentina to visit a woman with whom he'd been having an affair. He apologized to his wife and four sons and said he will resign as head of the Republican Governors Association.

AP - North Korea accused Washington of seeking to 'provoke a second Korean War' as the regime prepared to hold maritime military exercises off the eastern coast. U.S. and regional authorities were watching closely for signs that North Korea might fire short- or mid-range missiles during the June 25 to July 10 timeframe cited in a no-sail ban for military drills sent to Japan's Coast Guard.

AP - A bomb ripped through a crowded market in Baghdad's main Shiite district on Wednesday, killing at least 61 people and wounding more than 100 less than a week before a deadline for U.S. combat troops to leave Iraq's urban areas.

AP - Police say a 24-year-old man charged with murdering a prominent Iowa high school football coach was supposed to have been taken to a hospital psychiatric ward after leading police on a car chase.

AP - In the final game, a desperate Maria Sharapova lunged to hit one shot left-handed, and twice challenged calls but lost. Then she lost the match as well. Sharapova won seven consecutive games during one stretch but let a late lead slip away Wednesday and was beaten by Gisela Dulko, 6-2, 3-6, 6-4 in the second round at Wimbledon.

Reuters - South Carolina Governor Mark Sanford, who has been seen as a potential candidate for the 2012 U.S. presidential election, tearfully admitted on Wednesday he had been unfaithful to his wife and resigned as chairman of the Republican Governors' Association.

Reuters - The Federal Reserve on Wednesday held monetary policy steady and said the U.S. economic recession was easing, as it signaled its worries over a possible troubling downward spiral in prices were fading.

Reuters - A bomb killed at least 61 people on Wednesday at a market in eastern Baghdad's Sadr City slum, police said, six days before U.S. combat troops are due to withdraw from Iraqi towns and cities.

Reuters - The new commander of U.S. and NATO forces in Afghanistan said on Wednesday foreign troops need to make a 'cultural shift' away from conventional warfare and focus on winning the support of Afghans.

AFP - At least 62 people were killed by a bomb in a crowded market in Baghdad's sprawling slum neighbourhood of Sadr City on Wednesday, less than a week before US troops must pull out of Iraq's cities.

WASHINGTON (Reuters) - President Barack Obama on Wednesday signed into law a $106 billion measure to fulfill his plans to wind down the war in Iraq and ramp up operations in Afghanistan where fighting against militants is intensifying.

UNITED NATIONS (Reuters) - The U.N. human rights chief said on Wednesday the United States still had much to do to close the chapter of its Guantanamo Bay prison for terrorism suspects and should itself accept detainees for resettlement.

BAGHDAD (Reuters) - A bomb killed at least 72 people on Wednesday at a busy market in eastern Baghdad's Sadr City slum, police said, six days before U.S. combat troops are due to withdraw from Iraqi towns and cities.

WASHINGTON (Reuters) - The U.S. government will send an ambassador to Syria after a four-year hiatus as President Barack Obama moves to improve ties between the two countries, the State Department said on Wednesday.

AP - After going AWOL for seven days, Gov. Mark Sanford admitted Wednesday that he had secretly flown to Argentina to visit a woman with whom he was having an affair. Wiping away tears, he apologized to his wife and four sons and said he will resign as head of the Republican Governors Association.

AP - EDITOR'S NOTE: Iranian authorities have barred journalists for international news organizations from reporting on the streets and ordered them to stay in their offices. This report is based on the accounts of witnesses reached in Iran and official statements carried on Iranian media.

AP - President Barack Obama left the door open to a new tax on health care benefits Wednesday, and officials said top lawmakers and the White House were seeking $150 billion in concessions from the nation's hospitals as they sought support for legislation struggling to emerge in Congress.

AP - Investigators probing a deadly transit train crash are looking more closely at a stretch of track near the wreck site after finding abnormalities Wednesday in equipment that senses trains and transmits speed commands.

AP - A high school coach who helped launch several professional football careers was gunned down by a former player Wednesday morning in front of students taking part in an offseason workout, authorities said.

AP - One of the stars of Bravo's television series 'Real Housewives of New Jersey' went to court Wednesday to avoid getting a little more exposure than she wanted.

AP - Talk about an uninvited dinner guest. Diners at a restaurant in Prosser were startled Monday when a furry marmot wandered through the front door and settled into a corner. That was no surprise to city Administrator Charlie Bush, who said the big rodents have long been a problem in the central Washington wine town.

AP - Give Maria Sharapova credit for honesty. Before Wimbledon began, she acknowledged that a recent comeback from shoulder surgery made it too much to ask for her to contend seriously for a second title at the All England Club. Sharapova was right: She didn't even make it out of the second round. Playing poorly at the start and finish Wednesday, the 2004 Wimbledon champion lost 6-2, 3-6, 6-4 to 45th-ranked Gisela Dulko of Argentina.

Reuters - President Barack Obama on Wednesday signed into law a $106 billion measure to fulfill his plans to wind down the war in Iraq and ramp up operations in Afghanistan where fighting against militants is intensifying.

Reuters - The U.N. human rights chief said on Wednesday the United States still had much to do to close the chapter of its Guantanamo Bay prison for terrorism suspects and should itself accept detainees for resettlement.

Reuters - A bomb killed at least 72 people on Wednesday at a busy market in eastern Baghdad's Sadr City slum, police said, six days before U.S. combat troops are due to withdraw from Iraqi towns and cities.

AP - A sleepwalking episode led to a stabbing. The Kansas City Star reported on its Web site Wednesday that the 24-year-old victim suffered a stab wound to his face and shoulder. Police said the victim's girlfriend awoke around 1:30 a.m. Wednesday to find her boyfriend urinating in the closet. He was intoxicated when he arrived at his apartment several hours earlier.

AP - The world will surely take notice of this.

TEHRAN (Reuters) - Iran's reformist opposition leaders vowed to press on with legal challenges to an election they say was rigged, even as the hardline leadership appeared on Thursday to have largely crushed mass street protests.

WASHINGTON (Reuters) - The Federal Reserve on Wednesday stuck to its huge program of buying government and mortgage debt, which is designed to keep borrowing costs low and boost recovery, and said it saw signs that the deep U.S. recession was easing.

WASHINGTON (Reuters) - President Barack Obama on Wednesday renewed sanctions against North Korea, declaring that its nuclear program posed a national security risk to the United States and a danger to the Korean Peninsula.

LOS ANGELES/NEW YORK (Reuters) - California's controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can't quickly solve a $24 billion budget deficit, and the state's treasurer plans to tap a reserve fund to meet debt service costs.

Reuters - Iran's reformist opposition leaders vowed to press on with legal challenges to an election they say was rigged, even as the hardline leadership appeared on Thursday to have largely crushed mass street protests.

Reuters - The Federal Reserve on Wednesday stuck to its huge program of buying government and mortgage debt, which is designed to keep borrowing costs low and boost recovery, and said it saw signs that the deep U.S. recession was easing.

Reuters - President Barack Obama on Wednesday renewed sanctions against North Korea, declaring that its nuclear program posed a national security risk to the United States and a danger to the Korean Peninsula.

Reuters - California's controller said on Wednesday that he would have to issue IOUs in a week if lawmakers can't quickly solve a $24 billion budget deficit, and the state's treasurer plans to tap a reserve fund to meet debt service costs.

AP - After going AWOL for seven days, Gov. Mark Sanford admitted Wednesday that he had secretly flown to Argentina to visit a woman with whom he was having an affair. Wiping away tears, he apologized to his family and gave up a national Republican Party post, but was silent on whether he would resign.

AP - North Korea condemned a recent U.S. pledge to provide nuclear defense of South Korea, saying Thursday that the move boosts its justification to have atomic bombs and invites a potential 'fire shower of nuclear retaliation.'

AP - Federal Reserve Chairman Ben Bernanke likely will face hostile questions from a House committee investigating whether he and other government officials pressured Bank of America Corp. into a 'shotgun wedding' with Merrill Lynch that cost taxpayers $20 billion.

AP - LSU, which two years ago wasn't good enough to qualify for its conference tournament, is the best team in college baseball again.

AFP - Iranian opposition supporters were expected to go ahead with a ceremony to mourn protestors killed in recent violence, a day after riot police blocked demonstrators from gathering.

AFP - The United States said it was 'deeply disturbed' by the reported arrest of Chinese dissident Liu Xiaobo and called for his release amid a mounting chorus of condemnation.