That wheat is now being harvested, and it seems the danger has been averted. This week China's agriculture minister Han Changfu predicted a bumper harvest, saying that a long-term increase in the production base as well as irrigation efforts aided wheat output. But even as Han stood in Henan wheat field celebrating a problem successfully averted, other worries were emerging. Parts of central China, including the middle and lower reaches of the Yangtze River, are experiencing the lowest levels of rainfall in 50 years.

The parched areas also happen to include much of China's main rice producing regions, which are in the early stages of their growing season. So for the second time in a year, a major grain crop in China is now at risk due to a shortage of water. So far no warnings of the seriousness of the FAO's February declaration on winter wheat have been issued. But anecdotal reports indicate some worries. A story by the state-run Xinhua news service late last month said that rice farmers in Hunan and Hubei provinces, two major rice growing areas, anticipated lower yields because of the drought. At the same time, the acreage of planted rice may climb thanks to higher prices, the Ministry of Agriculture said recently. That may help avoid too sharp a drop in overall output.

Prices of some agricultural products heavily dependent on abundant water supplies have shot up recently, particularly cabbage, celery and bok choy, but the state press has emphasized that grain prices shouldn't jump due to the drought. Although China has grown to an economic colossus in recent decades, its deadly famines of the 20th century aren't forgotten.

"There are number of ways that this plays out," says Zeigler. "Assuming a significant drop in production, China could opt to only draw down part of its reserves and seek to make up the rest on world markets. The world rice market is very thin, and that could quickly rattle the market just given size of China."

"Perhaps many towns and cities have simply been a little lucky up until this year," Alex Sosnowski, senior meteorologist for Accuweather.com, told FoxNews.com. "This is a sign of what we may see on a more frequent, periodic basis as the weather pattern cycles through, as it has over years."

Some of the towns and cities that have been hit this year include Philadelphia; Minneapolis; Dallas; Oklahoma City, Oklahoma; Little Rock, Arkansas; Tuscaloosa, Alabama; Raleigh/Sanford, North Carolina; St. Louis, Missouri; Bristol, Viriginia; and Reading, Kansas. Most recently, an exceptionally unusual tornado struck Springfield, Massachusetts, killing at least three people.

The increase in deadly tornadoes is due to a number of factors. First of all, as the population grows and expands into more rural and suburban area, tornadoes cause more destruction in areas that once would have seen far less damage. The La Nina weather phenomenon has also been said to contribute to the recent rise in tornadoes in the US. La Nina, an ocean-atmospheric event that can cause anomalies in weather patterns, can contribute to stronger jet streams over Northern America.

The strength of the jet stream is a key factor in severe thunderstorms and tornado formation. "The stronger the jet stream, the more air is pulled up from the surface," Accuweather.com severe weather expert Henry Margusity said. "The jet stream acts as a vacuum cleaner by pulling air up from the surface." Another factor is the movement of these jet streams. This year, jet streams have moved farther east than where they are typically located. This causes severe thunderstorms and tornadoes in these densely populated areas.

The ruling was in response to a lawsuit filed by Christa and Danny Schultz. Their son is among those scheduled to participate in Saturday's graduation ceremony. The judge declared that the Schultz family and their son would "suffer irreparable harm" if anyone prayed at the ceremony.

Texas Attorney General Greg Abbott said the school district is in the process of appealing the ruling, and his office has agreed to file a brief in their support.

"Part of this goes to the very heart of the unraveling of moral values in this country," Texas Attorney General Greg Abbott told Fox News Radio, saying the judge wanted to turn school administrators into "speech police. I've never seen such a restriction on speech issued by a court or the government," Abbott told Fox News Radio. "It seems like a trampling of the First Amendment rather than protecting the First Amendment."

Judge Biery's ruling banned students and other speakers from using religious language in their speeches. Among the banned words or phrases are: "join in prayer," "bow their heads," "amen," and "prayer." He also ordered the school district to remove the terms "invocation" and "benediction" from the graduation program. "These terms shall be replaced with 'opening remarks' and 'closing remarks,'" the judge's order stated. His ruling also prohibits anyone from saying, "in [a deity's name] we pray."

The Texas attorney general called the ruling unconstitutional and a blatant attack from those who do not believe in God - "attempts by atheists and agnostics to use courts to eliminate from the public landscape any and all references to God whatsoever. This is the challenge we are dealing with here," he said. "(It's) an ongoing attempt to purge God from the public setting while at the same time demanding from the courts an increased yielding to all things atheist and agnostic."

The judge did grant students permission to make the sign of the cross, wear religious garb or kneel to face Mecca. But that's not good enough for some students at the high school. "It's just a big surprise that one kid can come in and change what's been a tradition since Medina Valley started," student Abigail Russell told KABB-TV.

But the Reverend Barry Lynn, executive director of Americans United for Separation of Church and State, hailed the judge's decision. "This is a high school graduation," he told Fox News Radio. "It is not a church service." Lynn was critical of the attorney general's allegation that the ruling was an attempt to purge Christianity from the public square. "Any attorney general worth his salt would know that's the issue and that this is not about promoting atheism," he said. "That's ludicrous."

The brief recovery in prices in 2009, spurred by government aid to first-time buyers, has now been entirely snuffed out, and the average American home now costs 33 per cent less than it did at the peak of the housing bubble in 2007. The peak-to-trough fall in house prices in the 1930s Depression was 31 per cent - and prices took 19 years to recover after that downturn.

The latest Case-Shiller house price index was just one of a slew of disappointing economic data from the US yesterday, which suggested ebbing confidence in the recovery of the world's largest economy. The Chicago PMI manufacturing index showed a sharp slowdown in the pace of expansion in May, missing Wall Street forecasts and sending the index to its lowest since November 2009.

Economists warned not to expect any immediate relief to the gloom from the housing market. Banks continue to demand high deposits from potential buyers and are pressing on with foreclosures against those who have fallen behind on mortgages, adding to the glut of unsold homes on the market. Prices are back to their 2002 levels, according to the Case-Shiller National House Price Index out yesterday.

Witnesses also reported a strong smell of ash and sulphur. A dozen small earthquakes were recorded before the eruption began. The officials have issued a red alert - the maximum warning level for the area. Evacuation orders were issued for some 3,500 people, the local authorities said.

So far there have been no reports of any injuries. However, ash clouds have drifted to neighbouring Argentina where officials have ordered residents to stay indoors. A regional airport in the Argentine city of Bariloche has been closed due to the volcanic ash. Eyewitness Juli Kessler told the BBC she saw "big black clouds hanging over the Andes" and ash dust lying on the road.

It is the first time since 1960 that the volcanic chain has erupted. Chile is one of the most volcanic countries in the world.

"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.