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YELLOW ****** WEDNESDAY, SEPTEMBER 3, 2014 ~ VOL. CCLXIV NO. 54 WSJ.com HHHH $2.00 DJIA 17067.56 g 30.89 0.2% NASDAQ 4598.19 À 0.4% NIKKEI 15668.60 À 1.2% STOXX 600 342.75 g 0.03% 10-YR. TREAS. g 20/32 , yield 2.418% OIL $92.88 g $3.08 GOLD $1,263.70 g $22.10 EURO $1.3134 YEN 105.10 TODAY IN PERSONAL JOURNAL Fashion Puts on a Bigger Show PLUS A Tech Makeover for Traditional Toys Fa CONTENTS Careers..........................B6,9 Corp. News............ B2-5,8 Global Finance ............. C3 Heard on Street ....... C14 Home & Digital ...... D1-3 In the Markets.............C4 Leisure & Arts ............. D5 Opinion.....................A11-13 Property Report...C8-11 Sports................................D6 U.S. News...................A2-5 Weather Watch....... B10 World News.......A6-9,14 s Copyright 2014 Dow Jones & Company. All Rights Reserved > What’s News i i i World-Wide n Islamic State posted a video purporting to show the be- heading of U.S. journalist Ste- ven Sotloff. Obama authorized 350 more troops to protect U.S. facilities in Baghdad. A1, A7 n Relatives of Iraqi soldiers killed in a battle with Islamic State stormed parliament to protest Baghdad’s failure to account for those who died. A6 n Syria’s Nusra Front will free 45 U.N. peacekeepers if it is dropped from the list of rebel groups under sanctions, a military official said. A7 n Saudi Arabia arrested 88 people on suspicion of plan- ning terrorist attacks both in the kingdom and abroad. A6 n Ukraine’s president is fac- ing the choice between con- cessions to Russia-backed sep- aratists or fighting a defensive war as his army retreats. A1 n EU officials are weighing more sanctions against Russia over the Ukraine conflict. A8 n A U.S. airstrike targeted an area in Somalia where al-Sha- baab’s leader was believed to be, the Pentagon said. A9 n Maryland Gov. O’Malley plans to enter the presidential race even if Clinton runs, Dem- ocratic fundraisers said. A4 n A third U.S. missionary has been infected with Ebola while working in Liberia. A3 n Venezuela’s Maduro re- placed the nation’s oil minis- ter, his top economic adviser, in a cabinet shake-up. A9 n A new poll in Scotland showed a surge in support for independence. A14 i i i B anks are making less of their money from cus- tomer-account fees than at any time in decades due to tougher rules and online banking. A1 n The dollar has climbed as shifting approaches by cen- tral banks around the world have caused new gyrations in currency markets. C1 n Apple denied its online system had been breached after a leak of nude celebrity photos, a week before the debut of its new iPhone. B1 n Home Depot is working with banks and law enforce- ment to probe a potential breach of customer data. B1 n A Credit Suisse probe of chat rooms and alleged inap- propriate employee behavior has roiled the bank’s Euro- pean stock-trading desk. C1 n Halliburton agreed to pay $1.1 billion to settle liability claims stemming from the 2010 Gulf Coast oil spill. B2 n Dollar General raised its offer for Family Dollar and said it could try a hostile bid if its rival doesn’t agree to talks. B3 n Private trading venue IEX plans within a week to seek U.S. regulatory approval to become a stock exchange. C1 n U.S. stocks closed mostly lower, pulling back from Au- gust gains. The Dow industrials fell 30.89 points to 17067.56. C4 n U.S. manufacturing ex- panded in August, a purchas- ing managers survey said. A2 n California regulators want PG&E to pay $1.4 billion in pen- alties over a fatal 2010 blast. B3 Business & Finance Tatyana Zenkovich/European Pressphoto Agency CASTLE DONINGTON, Eng- land—The greatest emotional trigger at any auto-racing event is the noise. In Nascar, it is the earthshaking growl of V8 Amer- ican muscle. In Formula One, it is the chest-rattling wail of 15,000 rpm. To some the sound is repellent. To others it is like an opera. But what if there is no sound at all? Welcome to the quiet world of For- mula E, a global racing series for elec- tric cars, which debuts this month in Bei- jing. It has the look of Formula One (many of the drivers and mechanics are veterans), the schedule of a billionaire jet-set- ter (Malaysia to Miami to Monte Carlo), and all the noise of a blender from Sears. “That’s a little bit eerie to start with,” said Karun Chand- hok, an ex-F1 driver who will race for the Mahindra Racing Formula E outfit this season. On a recent Formula E test day here, the pit lane had to be equipped with a piercing siren to let mechanics know cars were coming. Though the cars can reach speeds of up to 140 miles an hour, what little noise they make sounds somewhere between a kitchen appliance and a sci-fi movie special effect. Whatever it is, it doesn’t scream like any race car you’ve ever heard. And it is definitely not loud. “The sound is futuristic, which you don’t expect. It’s very light and high,” said Virgin Racing driver Jaime Al- guersuari, who raced in 46 F1 Grands Prix between 2009 and 2011. “At a certain speed, you hear just the wind. You hear the car. I miss the noise of the V10 engine, but I don’t miss the modern Formula One car.” Fans and drivers of Formula One have also been twitchy Please turn to page A9 BY JOSHUA ROBINSON If New Race Series Makes a Big Noise, It Won’t Be Because of the Engines i i i Electric Cars in Formula E Quietly Get Ready to Roll; Warning Siren for Pit Crews Formula E electric race car Loved ones say goodbye to a wounded Ukrainian soldier in Kiev being transported to Germany for treatment. BAGHDAD—The extremist group Islamic State posted a video purporting to show the beheading of American journalist Steven Sot- loff, bringing calls for the U.S. to more forcefully confront the mili- tants in both Iraq and Syria. If verified, it would be the group’s second publicized killing of a captured American journalist in two weeks. Islamic State, also known as ISIS and ISIL, said the American was killed in retribution for U.S. airstrikes on its positions in Iraq. The video appeared days after U.S. airstrikes helped break a two-month siege by the Sunni militants on the Shiite town of Amirli north of Baghdad. “Obviously destroying ISIL is the goal of not just the United States but many countries around the world,” State Department spokeswoman Jen Psaki said Tuesday. “We want to do it as quickly as possible, but we’re not naive about their capabilities.” On Tuesday evening, the White House said President Barack Obama authorized 350 additional military personnel to protect U.S. diplomatic facilities in Baghdad, but said the troops won’t play a combat role. Earlier, Rep. Ed Royce (R., Ca- lif.), chairman of the House For- eign Affairs Committee, called for more aggressive action against Is- lamic State, saying the threat from the group seems to grow daily. “Working with key allies, the Please turn to page A7 BY MATT BRADLEY Militant Video Claims Second Beheading Apparent Killing of Another American Boosts Calls for Action Against Islamists Islamic State’s stunning suc- cess this summer as it swept across northern Iraq and Syria flows from a highly organized structure controlled by a tight- knit cadre led by an Islamist zealot who learned from the mistakes of his al Qaeda prede- cessors. Blending familiar terrorist acts such as car bombings with conventional military tactics, the group bolsters its strength with local tribal connections and the skills of former generals in Sad- dam Hussein’s army, said West- ern and Middle Eastern officials tracking the extremist move- ment. Thrown into the mix is an ef- fective recruitment strategy— join us or die, some young men in captured areas are told— along with wealth from the ex- tortion of local businessmen and the appeal to religious funda- mentalists of having a new Is- lamic “caliphate” on occupied land. To its supporters, Islamic State has effectively portrayed the quest for territory as an ex- istential fight for Sunni Muslims world-wide. The result is a new breed of terror organization. “They have just improved on what al Qaeda has done, and they have done it on a much larger scale,” said Bruce Hoffman, a terrorism spe- cialist at Georgetown University. The organization is led by a core group of leaders who have known each other for years, with Please turn to page A6 By Siobhan Gorman, Nour Malas and Matt Bradley BRUTAL EFFICIENCY Disciplined Cadre Runs Islamic State MARIUPOL, Ukraine—With his army in retreat amid an influx of Russian soldiers and heavy weap- ons, Ukrainian President Petro Po- roshenko is facing a tough choice between making concessions to Kremlin-backed separatists or fighting a bloody defensive war. The dilemma seemed unthink- able until last week, when what Western officials describe as an in- cursion from Moscow turned the tide of a five-month conflict that Ukrainian officials said they were close to winning. Now the Ukrainian army is re- treating across much of the Do- netsk and Luhansk regions after suffering hundreds of casualties. The separatists and Russian forces have opened a new front, threaten- ing the southern port of Mariupol. Russia ramped up its rhetoric Tuesday, calling on the U.S. to push Kiev into giving up its mili- tary campaign and negotiating a political deal even as President Ba- rack Obama headed to Europe to reassure nervous allies in the Bal- tics and to attend a North Atlantic Treaty Organization summit in the U.K. “It is imperative to moderate the ‘party of war’ in Kiev, and the only one who can really do that is the U.S.,” Foreign Minister Sergei Lavrov said at a briefing. But the kind of deal Russian President Vladimir Putin appears to have in mind would be political suicide for Mr. Poroshenko, who was elected just over three months ago promising to hold the country together. On Sunday, Mr. Putin called for talks on statehood for eastern Ukraine, although his spokesman later clarified that he meant more independence from Kiev. Just entering negotiations with Please turn to page A8 BY JAMES MARSON Russian Muscle Turns Tide, Leaving Kiev Few Options Ukrainian volunteer recounts deadly Russian ambush ........... A8 EU weighs more sanctions..... A8 Saudi Arabia arrests 88 on terrorist charges ........................... A6 Protests by soldiers’ families shut down Iraqi parliament.... A6 Banks are making less of their money from customer-account fees than at any time in the past seven decades as strict govern- ment rules and changing con- sumer behavior squeeze a major source of revenue. After peaking in 2009, the an- nual account fees collected at U.S. commercial banks have de- clined markedly, even as the vol- ume of bank deposits has swelled, according to the Federal Deposit Insurance Corp. The fees have dropped nearly 21% to $32.5 billion last year from $41.1 billion in 2009. The total fees had climbed every year since 1942, when the FDIC started col- lecting the data. As a result, such fees are mak- ing up a smaller share of profits. As a percentage of total nonin- terest income, deposit-account fees dropped to 14.1% in 2013, the lowest level since 1942, ac- cording to the FDIC data. From 2000 through 2009, those fees accounted for an average of 17% of such income. The turnaround is an example of the ways the regulatory clampdown that began after the financial crisis, as well as the fast-growing popularity of online and mobile banking, are chang- ing behavior at U.S. banks, bank- ers and analysts say. The upshot is that banks no longer see these account charges as an easy way to boost their bottom lines. “I don’t see any- body looking at fees as a way of growing their business,” said Jef- ferson Harralson, a banking ana- lyst at Keefe, Bruyette & Woods. Bouncing a check used to get customers kicked out of their Please turn to the next page BY JAMES STERNGOLD Banks’ Fee Bonanza Dries Up Slain journalist focused on Syrian conflict................................. A7 Proposed liquidity rules could crimp banks’ earnings................. C1 As Summer Wanes, There’s No Escaping First Grade BACK TO SCHOOL: Henry Anderson arrives to start first grade Tuesday at Fine Arts Elementary in Racine, Wis. Associated Press C M Y K Composite Composite MAGENTA CYAN BLACK P2JW246000-6-A00100-1--------XA CL,CN,CX,DL,DM,DX,EE,EU,FL,HO,KC,MW,NC,NE,NY,PH,PN,RM,SA,SC,SL,SW,TU,WB,WE BG,BM,BP,CC,CH,CK,CP,CT,DN,DR,FW,HL,HW,KS,LA,LG,LK,MI,ML,NM,PA,PI,PV,TD,TS,UT,WO P2JW246000-6-A00100-1--------XA
