"It was a C-minus week for the economy," said David Sowerby, a Bloomfield Hills, Michigan-based money manager at Loomis Sayles & Co, which oversees more than $150 billion. "These are the kind of weeks that remind investors stocks don't just go straight up. There was enough data this week to begin to connect the dots that uncertainty remains." Labor Department figures showed payrolls increased by 54,000 last month, falling short of the median forecast in a Bloomberg News survey that called for a rise of 165,000. The jobless rate climbed to 9.1 percent.

The biggest decline in the S&P 500 since August is creating a buying opportunity for investors, according to Blackstone Group LP's Byron Wien. The price-to-earnings ratio for the S&P 500 has fallen close to its lowest level in 2011, according to Bloomberg data. The index currently trades at 14.8 times earnings, near this year's low of 14.7 when it fell in March after Japan's earthquake.

"Investors should be looking for buying opportunities," said Wien, the vice chairman of Blackstone Advisory Partners, whose parent, New York-based Blackstone Group LP, is the world's largest private-equity firm. "The economy is not as bad as it looks right now. Corporate profits will be good, very good. People are asking me, 'Do you still think the market can get to 1,500 by the end of the year?' I do."

The Pope was warmly welcomed in the staunchly Catholic nation, leading a prayer vigil for thousands in Zagreb. Pope Benedict said it was "logical, just and necessary" that Croatia join the European Union, given its history. "From its earliest days, your nation has formed part of Europe, and has contributed in its unique way to the spiritual and moral values that for centuries have shaped the daily lives and the personal and national identity of Europe's sons and daughters," he said after arriving at Zagreb's airport.

The Pope acknowledged, in comments to reporters onboard his papal plane, that many in Croatia feared its national identity could be lost within such a large bloc. He said he understood "a fear of an overly strong centralised bureaucracy", but urged Croatians to make it their "mission" to fight against this.

The Vatican has long supported Croatia's EU entry; it's keen to welcome in another Catholic nation. Croatia's government, struggling with wavering support for the EU among its voters, will hope this visit persuades the doubters. For ordinary Croats, he will be warmly welcomed. When Croatia was still part of Yugoslavia, religion distinguished the different national groups: Croats were mostly Catholic, Serbs Orthodox. And so Catholicism goes to the very heart of the Croat identity and this Papal visit will be a celebration of that.

When the European common currency was first conceived, there were plenty of skeptics. Without further integration of budgetary policy among countries belonging to the currency union, they said, the euro was doomed. The ongoing European debt crisis would appear to have lent credence to the naysayers - and on Thursday, European Central Bank head Jean-Claude Trichet proposed the establishment of a European finance minister with veto power over the budgets of debt-stricken countries.

"Would it be too audacious to imagine a European Union that not only has a unified market, a common currency and a common central bank, but also a common Finance Ministry?" Trichet said during his acceptance speech of the prestigious International Charlemagne Prize for distinguished service on behalf of European integration.

In his talk, Trichet outlined an EU future in which a European Finance Ministry would have the power to veto the budgetary plans of euro-zone member states in certain situations. He emphasized that such a veto would only come after aid of the type received by Portugal, Greece and Ireland had failed. "The basis for this idea is that of striking a balance between national sovereignty on the one hand and the interdependence of member-state actions on the other, particularly in exceptional situations," he said.

Activists and residents said thousands of people marched in the northwestern province of Idlib, the Kurdish northeast, several Damascus suburbs, the central city of Homs and in Hama to the north, the towns of Madaya and Zabadani west of Damascus and near to the border with Lebanon, and in the southern Hauran Plain, where several towns and villages are surrounded by tanks.

Earlier, troops shelled the home in the south of Sanaa of Sheikh Hamid al-Ahmar, a brother of the tribal leader whose supporters they are fighting. Thousands meanwhile attended a funeral for 50 people killed in the violence. The United States has sent an envoy to the Gulf to discuss ways of stopping the violence, which has brought Yemen to the brink of civil war.

More than 350 people have been killed since the uprising started in January, but least 135 of them have died in the past 10 days. Western and regional powers have been urging President Saleh to sign a Gulf Co-operation Council-brokered deal that would see him hand over to his deputy in return for an amnesty from prosecution. He has agreed to sign on several occasions, but then backed out.

The Congressional Research Services released a report last month, a copy of which Fox News exclusively obtained, showing that in fiscal year 2010, the latest year that data was available, the US handed out a total of $1.4 billion to 16 foreign countries that held at least $10 billion in Treasury securities, including China ($27.2 million), Brazil ($25 million), Russia ($71.5 million), India ($126.6 million), Mexico ($316.7 million) and Egypt ($255.7 million).

China is the largest holder of US Treasury bonds with $1.1 trillion as of March, according to the Treasury Department. Brazil held $193.5 billion, Russia had $127.8 billion, India owned $39.8 billion, Mexico held $28.1 billion and Egypt had $15.3 billion.

Senator Tom Coburn, Republican for Oklahoma, who requested the report, sounded the alarm. "Borrowing money from countries who receive our aid is dangerous for both the donor and recipient," Coburn said in a written statement. "If countries can afford to buy our debt, perhaps they can afford to fund assistance programs on their own. At the same time, when we borrow from countries we are supposedly helping to develop, we put off hard budget choices here at home," he added. "The status quo creates co-dependency and financial risk at home and abroad."

But while suspicion has fallen on raw tomatoes, cucumbers and lettuce as the source of the germ, researchers have been unable to pinpoint the food responsible for the frightening illness, which has killed at least 18 people, sickened more than 1,600 and spread to least 10 European countries.

"This is a unique strain that has never been isolated from patients before," Hilde Kruse, a food safety expert at the World Health Organization, told The Associated Press. The new strain has "various characteristics that make it more virulent and toxin-producing" than the many E. coli strains people naturally carry in their intestines.

Elsewhere in Europe, Russia extended a ban on vegetables from Spain and Germany to the entire European Union to try to stop the outbreak spreading east, a move the EU quickly called disproportionate and Italy's farmers denounced as "absurd." No deaths or infections have been reported in Russia.

Previous E. coli outbreaks have mainly hit children and the elderly, but this one is disproportionately affecting adults, especially women. Kruse said there might be something particular about the bacteria strain that makes it more dangerous for adults. Other experts said women tend to eat more produce. Nearly all the sick either live in Germany or recently traveled there. British officials announced four new cases, including three Britons who recently visited Germany and a German on vacation in England.

Goldman is also being investigated by the Securities and Exchange Commission (SEC) and the Justice Department. An April Senate report said Goldman had encouraged investors to buy mortgage-based products it knew would fail. The report said that Goldman had shifted risk from its own balance sheet onto investors, while deceiving them about the bank's own positions.

A Goldman Sachs spokesman said that the company always cooperated with subpoenas but would not comment on specific legal issues. Goldman Sachs shares ended the day down 1.3% and have fallen by 20% so far this year. The request for information is an early stage in an investigation, but it does not necessarily mean that any charges will be filed.

Goldman Sachs agreed to pay $550 million (336 million pounds) last summer to settle civil fraud charges from the SEC, which claimed it had misled buyers of mortgage-related securities. Goldman did not admit to breaking the law, although it conceded that some information had been left out of the information provided to buyers.

The US risks default if Congress does not authorise more borrowing by August. A downgrade would increase borrowing costs, slowing the economic recovery. The US runs a $1.5 trillion (916.8 billion pounds) deficit and is already about $14.3 trillion in debt. The country reached its debt ceiling last month, but the US treasury department has begun taking extraordinary measures to avoid breaching the limit. Leaders of both parties agree to the need to trim the budget in the face of massive budget overruns, but Republicans have refused to allow tax increases, while Democrats have vowed to protect costly social programmes.

The White House argues the United States would face "catastrophic" consequences if Congress does not raise the cap on total US government borrowing by 2 August. Republicans and Democrats have engaged in a flurry of negotiations led by Vice-President Joseph Biden, but on Thursday no solution seemed imminent. And US President Barack Obama, who has called for Congress to raise the debt limit without conditions, has held meetings with congressional leaders of both parties.

In a statement on Thursday, Moody's warned that if Congress does not act to increase borrowing authority in the coming weeks, it could downgrade the AAA rating on US government debt "due to the very small but rising risk of a short-lived default". Such a move would increase borrowing costs, hindering the already struggling economic recovery.

"This E. coli is a new strain of bacteria that is highly infectious and toxic," said the scientists at the Beijing Genomics Institute in Shenzhen city in southern China. They said in a press release on Thursday the bacterium was closely related to another E. coli strain, called EAEC 55989, which was previously isolated in central Africa and known to cause serious diarrhoea.

Authorities are still hunting for the source of the new bacteria, which is believed to have contaminated raw vegetables. The E.coli outbreak has so far killed at least 17 people and made more than 1,500 others ill in eight European countries. University Medical Centre Hamburg-Eppendorf, one of the largest hospitals in Hamburg, treated many of the infected patients from north Germany and found they did not respond to some of the antibiotics used, the Chinese scientists said.

"The analysis further showed that this deadly bacterium carries several antibiotic resistant genes, including resistance to aminoglycoside, macrolides and Beta-lactam antibiotics: all of which makes antibiotic treatment extremely difficult," the scientists said. This new strain of also bore the hallmarks of other E. coli strains that are known to cause symptoms such as bloody diarrhoea, or hemorrhagic colitis, and hemolytic-uremic syndrome, which affects the kidneys.

Health experts are recommending strict hygiene measures such as hand washing and thorough cleaning and cooking of food.

According to the CIA report, ongoing street protests in crisis-hit Greece could turn into escalated violence and a rebellion and the Greek government could lose control, said Bild. The newspaper said the CIA report talks of a possible military coup if the situation becomes more serious and uncontrolled.

Greece is under immense pressure owing to public debt that has swollen to 340 billion euros. The EU, IMF and European Central Bank are pressing Greece to step up a privatization program and get all political parties to approve more austerity and reform measures that have sparked violent protests, but emergency talks called by the president on Friday failed to make any headway, AFP reported.

Opposition parties have mostly refused to support the government in its quest to cut spending by trimming an overblown civil service and the sweeping privatization drive announced this week has attracted even stronger protests. Meanwhile, the Dutch finance minister said his country, Germany, Finland and other EU members won't give Greece any more bailout money, if the debt-laden country fails to adopt further austerity measures.

The labour department will tell us on Friday whether the jobs situation improved in May, but there has been no sign of a surge in hiring. Nor in wages. Average hourly earnings of production and non-supervisory employees - who make up 80 per cent of non-government workers - dropped to $8.76 in April. Adjusted for inflation, that's lower than they were in the depths of the recession.

Meanwhile, housing prices continue to fall. They are now 33 per cent below their 2006 peak. That is a bigger drop than recorded in the Great Depression. Homes are the largest single asset of the American middle class, so as housing prices drop many Americans feel poorer. All of this is contributing to a general gloominess. Not surprisingly, consumer confidence is also down.

The recovery has stalled. It is unlikely that America will find itself back in recession but the possibility of a double dip cannot be dismissed. The problem is not on the supply side of the ledger. Corporate profits are still healthy. Big companies continue to sit on a cash hoard. Large and middle-sized companies can easily borrow more, at low rates. The problem is on the demand side. American consumers, who constitute 70 per cent of the total economy, cannot and will not buy enough to get it moving.

They justifiably worry that they will not be able to pay their bills, or afford to send their children to college, or to retire. Banks, with equal justification, are reluctant to lend to them. But as long as consumers hold back, companies remain reluctant to hire new workers or raise the wages of current ones, feeding the vicious cycle.

Washington's paralysis in the face of a stalled recovery is bad news - not just for average Americans but for the world. Ironically, it also worsens America's future budget crisis because it postpones the day when the debt begins to shrink as a proportion of GDP. Yet as the 2012 campaign season looms, the prospects for sensible policy seem to decrease by the day.

The images of children killed in a government crackdown on protests are circulating widely among Syrians on YouTube and Al-Jazeera, Facebook and opposition websites. And they are stoking even more fury against a regime the opposition says has lost all legitimacy.

Syria's government tried to blunt the anger with promises Wednesday to investigate the killing of 13-year-old Hamza al-Khatib, whose tortured and mutilated body turned him into a symbol of the Syrian uprising. But protesters deride that and other government concessions, including an amnesty that freed political prisoners on Wednesday and a committee to prepare for national dialogue, as nothing more than a ploy to buy time for President Basher Assad. They say at least 25 children are among more than 1,000 dead, with government crackdowns that increase the toll almost daily.

The deaths of two girls - a 12-year-old killed Saturday when her school bus came under fire, and an 11-year-old shot to death Tuesday while her town was being shelled - appeared certain to inflame tensions. Already, a Syrian opposition page refers to the older girl, Hajar Tayseer al-Khatib, as "the flower of Syria's martyrs."

Military operations in southern and central Syria killed at least 33 people Tuesday and Wednesday, even as the government released hundreds of political prisoners. The government claims the revolt is the work of Islamic extremists and armed gangs.

"We need to find real yield and real returns on these assets. You see bad data, you see Treasurys rally, you see all bonds and all fixed-income rally and then the people who are betting against the US economy start getting bearish on stocks. That's a huge mistake." Stocks extended losses after the manufacturing sector fell below expectations in May and the private sector added only 38,000 jobs during the month.

"Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything," Yastrow said. "We're on the verge of a great, great depression. The [Federal Reserve] knows it."

Russia banned fresh imports from Spain and Germany on Monday, warning that the sanction could soon cover all EU nations if there was still no explanation on the source of the disease and how it is being spread. Researchers are still not able to pinpoint the cause of the outbreak that has hit Germany and other European nations, leaving some 1,500 people infected.

No fatalities or infections have yet been reported in Russia.