YELLOW VOL. CCLXII NO. 82 ******* SATURDAY/SUNDAY, OCTOBER 5 - 6, 2013 HHHH $2.00 WSJ.com CONTENTS Cooking....................... D4,6 Corporate News.... B1-4 Design............................. D9 Heard on Street ..... B14 In the Markets........... B5 Markets Dashboard B6 Opinion................... A11-13 Sports............................ A14 Stock Listings.......... B13 Style & Fashion..... D1-3 Travel ........................... D7,8 Weather Watch...... B14 Weekend Investor B7-10 s Copyright 2013 Dow Jones & Company. All Rights Reserved What’s News i i i World-Wide O bama’s decision to skip two key Asian summits to tackle the U.S. shutdown could allow China to expand its regional influence. A9 n FEMA recalled employees furloughed by the shutdown as the Gulf Coast prepared for tropical storm Karen. A3 n Several governors criti- cized the Washington stand- off and warned of possible cutbacks in services. A5 n Egypt is planning popu- list economic measures that risk alienating foreign inves- tors. Protests left four dead and dozens injured. A1, A8 n Supporters of laws ad- justing the status of illegal immigrants plan to march in 90 U.S. cities Saturday. A5 n The search for bodies of African migrants who drowned off Italy was halted because of rough seas. A6 n Pakistan’s retiring army chief is seeking to hold on to a key defense role. A6 n Died: Gen. Vo Nguyen Giap, 102, was instrumental in forcing France and the U.S. out of Vietnam. A9 ... Abraham Nemeth, 94, de- signer of Braille Math Code. i i i n Twitter needs more users and sales staff to win more mass-market spending, ad buyers said. Confusion was blamed for a frenzy in shares of a similarly named stock, bankrupt Tweeter. B1, B4 n A prolonged U.S. shut- down could muddy economic data crucial to assessing the recovery’s progress. A5 n The impasse has boosted volume in the market for de- rivatives that pay off if the U.S. defaults on its debt. B5 n The Dow industrials posted a second straight weekly loss. The blue chips advanced 0.5% on Friday. B5 n Lockheed Martin plans to furlough around 3,000 em- ployees Monday as a conse- quence of the shutdown. B3 n Swiss regulators are probing several banks for possible foreign-exchange market manipulation. B1 n South Africa’s auto indus- try is losing around $60 mil- lion a day because of con- tinuing work stoppages. B3 n Alex Rodriguez sued Major League Baseball over alleged conduct aimed at destroying his career. A14 Business & Finance CAIRO—Amid an outburst of public anger at the Egyptian government that left four people dead on Friday, the country’s military-backed leaders are pre- paring a series of populist eco- nomic measures that risk alien- ating foreign donors and investors. The financial strains on ordi- nary Egyptians have been at the root of political discontent that has given Egypt three different governments since protesters drove longtime leader Hosni Mubarak from power in 2011 with cries of “Bread! Freedom! Social justice!” The current leadership on Fri- day confronted the largest anti- government demonstrations, in multiple cities, since the military forced President Mohammed Morsi from power in July. In one element of an effort to stem public anger, officials are moving to revive a law—first in- stituted as the country struggled to rebuild after World War II— that would allow the govern- ment to cut prices of fruits and vegetables by as much as 25%. The government has already passed a law to increase the mini- mum wage for government em- ployees—a move that would likely prevent the shrinking of Egypt’s budget deficit below 11% of gross domestic product. The government also said it would follow a court order to re- nationalize two companies that were taken private under the re- gime of President Hosni Mubarak. That is a populist move, too: Mr. Mubarak’s privatizations throughout the 1990s and 2000s were deeply unpopular and seen as a sop to international finan- cial institutions such as the In- ternational Monetary Fund. Officials in Mr. Morsi’s admin- istration fought pressure to re- assume state control of the com- panies, saying such moves would cost far more than the govern- ment could afford to spend. A Cairo court on Monday up- held a ruling sentencing Mr. Morsi’s prime minister, Hisham Qandil, to a year in jail for fail- ing to follow a court order to re- nationalize one of the compa- nies. The moves point to the in- terim government’s anxiety over popular unrest, three months af- ter mass protests, incited in part by concerns about Egypt’s with- ering economy, prompted the military to drive Mr. Morsi from office on July 3. Supporters of Mr. Morsi and the Muslim Brotherhood took to Please turn to page A8 BY MATT BRADLEY Egypt To Try Populist Tack WASHINGTON—Despite a week of budget wrangling that showed scant sign of abating, Wall Street investors shrugged off the fed- eral government shutdown, pre- suming that lawmakers will find a solution before the U.S. loses its borrowing ability. The Dow Jones Industrial Av- erage rose 76.10 points on Friday to 15072.58, snapping a two-day losing streak. The 30-stock aver- age declined just 1.2% during the week, despite the shutdown. Many investors say stocks re- main buoyant because they ex- pect the Federal Reserve to con- tinue its efforts to support the economy and because few expect the current clash to continue long enough to do lasting dam- age. Some corners of the bond markets show signs of concern over the next stage—a possible fight around mid-October over whether Congress will give per- mission for the U.S. to issue more debt. But many standard measures of market anxiety, such as the price of gold and the yields on long-term government bonds, aren’t yet flashing. The shutdown “doesn’t seem to be fazing the markets all that much,” said Brian Jacobsen, chief portfolio strategist for Wells Fargo Funds Management LLC, which manages $226 bil- lion. “The reason is, we’ve seen this coming from a mile away.” Friday brought an increas- ingly bitter series of volleys be- tween the protagonists and en- sured that the federal budget impasse would drag through the weekend. That makes next week a big test of whether the mar- ket’s calm holds up. Complicating matters, the lights remain off in the federal government’s key statistic agen- cies, preventing the release of economic data that would help inform investors about the state Please turn to page A5 BY JANET HOOK AND KATY BURNE Markets Shrug at Shutdown Even as Debt Battle Looms PACKWOOD, Wash.—Few energy sources are as pristine as the icy water tumbling into Burton Creek here, which falls 550 feet from a ridge that offers a breathtaking view of nearby Mount Rain- ier National Park. Investor Sam Perry is making a bet that Burton Creek will provide a breathtaking revenue stream, too. The Colorado investor acquired a derelict power plant when he bought the property last December for $150,000. Starting with this month’s rains, and through next spring’s runoff, he calculates Burton Creek will send 5,000 gallons of water per minute into a turbine at the base of the falls. That will generate kilowatts that Mr. Perry plans to sell for as much as $12,000 per month for as long as the river runs. “Your water flow is your cash flow,” says Mr. Perry. Out West, in a land legendary for rugged indi- vidualism, Mr. Perry is one of a small band of in- vestors combing the backwoods, looking for bar- gains in so-called mini-hydropower plants. Water power may not sound like one of the buzzy, high-tech renewable energies that politi- cians and environmentalists love to endorse. Yet it is America’s oldest power source, dating back to colonial towns that harnessed water currents to turn the millstones that ground grain into flour. Today, hydro accounts for about 7% of all electric- ity generated in the U.S. In three Northwest states—Oregon, Washington and Idaho—it is still the main source of power. While the big utilities control most of hydro’s might, dozens of mini-hydro plants dot the U.S.— Please turn to page A10 BY JOEL MILLMAN REVENUE STREAM Bargain Hydropower Plants Have Small Investors Chasing Waterfalls The nation spends an esti- mated $15 billion annually on salary bumps for teachers who earn master’s degrees, even though research shows the di- plomas don’t necessarily lead to higher student achievement. And as states and districts be- gin tying teachers’ pay and job security to student test scores, some are altering—or scrapping— the time-honored wage boost. Lawmakers in North Carolina, led by Republican legislators, voted in July to get rid of the au- tomatic pay increase for mas- ter’s degrees. Tennessee adopted a policy this summer that man- dates districts adopt salary scales that put less emphasis on advanced degrees and more on factors such as teacher perform- ance. And Newark, N.J., recently decided to pay teachers for mas- ter’s degrees only if they are linked to the district’s new math and reading standards. The moves come a few years after Florida, Indiana and Louisi- ana adopted policies that require districts to put more weight on teacher performance and less on diplomas. “Paying teachers on the basis of master’s degrees is equivalent Please turn to page A4 BY STEPHANIE BANCHERO Pay Raises for Teachers With Master’s Under Fire Note: For fiscal years ending Sept. 30 Source: Federal Energy Resources Commission The Wall Street Journal Power Surge Licenses issued for hydropower dams, by size 25 0 5 10 15 20 2010 ’11 ’12 ’13 Mini (1 mega- watt or less) Others DAY 4: Friday brought bitter words but little movement toward a resolution. John Boehner, left, heads to a meeting; Barack Obama breaks for lunch. Michael Reynolds/European Pressphoto Agency, Pete Marovich/Press Pool DRUMNADROCHIT, Scotland— Steve Feltham was surveying the shores of the Loch Ness last summer when his cellphone rang, breaking his concentration. A local reporter was calling to say she had just received a photo of the Loch Ness Mon- ster—its arched hump protrud- ing from the waters—and she wanted to run it by him before sending it to print. Mr. Feltham, a full-time mon- ster hunter for 22 years, studied the photo. “It is the best photograph I think I have ever seen,” he told the journalist at the Inverness Courier from his home, a van parked on the pebbled shores of Loch Ness. Many in Drumnadrochit, a vil- lage in northern Scotland, and throughout Britain, hailed the photo taken by George Edwards, a tour guide, as one of the most convincing monster pictures ever taken. It is the centerpiece of his tour company which oper- ates out of Nessieland, a Loch Ness tourism center. He sells postcards of his photos to pas- sengers for 50 pence (80 cents) apiece. But Mr. Feltham—who says a perfect day involves staring at the loch from dawn to dusk in search of the monster—now says his endorsement was a grave er- ror. He says he soon realized the Please turn to page A10 BY JENNY GROSS Latest Loch Ness ‘Sighting’ Causes a Monstrous Fight i i i Discredited Nessie Photo Emerges to Shake the Faith in Drumnadrochit The 1934 Hoax WEEKEND REVIEW Autumn Books 2013 REVIEW Menswear Fit for a Woman OFF DUTY Inside NOONAN A13 To Lead Is to Negotiate AUTUMN BOOKS.................................. C5-16 > More on the shutdown.... A4, A5 LCN # 1304-2079588 Lincoln Financial Group is the marketing name for Lincoln National Corporation and insurance company affiliates, including The Lincoln National Life Insurance Company, Fort Wayne, IN, and in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY. Variable products distributed by broker/dealer-affiliates. 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