YELLOW

* * * * * * FRIDAY, JANUARY 18, 2013 ~ VOL. CCLXI NO. 15 WSJ.com HHHH $ 2 .0 0

ceptable,” Chairman Jan du Ples-sis said. “We are also deeply dis-appointed to have to take afurther substantial write-down inour aluminum businesses.” RioTinto’s shares fell 1.5% to close at64.60 Australian dollars(US$68.29) in Sydney.

At least 20 mining CEOs havestepped down in the past year un-der mounting pressure from in-vestors and boards, who blamethe executives for costly miningprojects that were conceived dur-ing the commodities boom and

Please turn to the next page

countability for all aspects of thebusiness rests with the CEO,” saidthe 55-year-old engineer.

The bulk of the write-down,between $10 billion and $11 bil-lion, relates to aluminum assetsacquired in 2007 that have sockedthe Anglo-Australian company be-fore. The remaining $3 billion isfor Mozambique coal operationsacquired only two years ago.

“A write-down of this scale inrelation to the relatively recentMozambique acquisition is unac-

Rio Tinto Chief Executive TomAlbanese agreed to step downThursday, the latest in a string ofleaders toppled by shifting for-tunes at the world’s biggest min-ing companies.

The New Jersey native endedhis six-year tenure as the com-pany said it would write offroughly $14 billion in the value ofvarious assets—among the largestcharges ever in an industry in-creasingly rocked by runawaycosts.

Mr. Albanese, who was behindtwo large, ill-timed acquisitions atthe world’s second-biggest miningcompany, took responsibility forthe hit. “I fully recognize that ac-

CONTENTSBooks............................... D7Corporate News... B2-7Global Finance........... C3Heard on the Street C8In the Markets.......... C4Movies............................. D5

Opinion.................. A13-15Sports........................... D10Television...................... D6Theater........................... D8U.S. News................. A2-6Weather Watch........ B7World News.......... A8-11

DJIA 13596.02 À 84.79 0.6% NASDAQ 3136.00 À 0.6% NIKKEI 10609.64 À 0.1% STOXX 600 287.35 À 0.5% 10-YR. TREAS. g 14/32 , yield 1.873% OIL $95.49 À $1.25 GOLD $1,690.40 À $7.70 EURO $1.3377 YEN 89.87

s Copyright 2013 Dow Jones & Company. All Rights Reserved

Vital Signs

Builders broke groundfor more new houses inDecember. Residentialconstruction rose 12% fromNovember and 37% from ayear ago to an annual rateof 954,000 units. That is thehighest level since 2008, butbelow the 1.4 million-unitpace seen before therecession. The number ofbuilding permits issued alsorose, indicating future gainsin construction. A2

Housing starts, seasonallyadjusted at an annual rate(in millions)

Source: Commerce Department

'09 '10 '11 '12’08’070

0.3

0.6

0.9

1.2

>

The FAA approved theDreamliner for service in

2011 partly based on data gen-erated by Boeing that indicatedthe plane’s novel battery sys-tems had safeguards that ren-dered them nearly foolproof. B1

n BofA and Citigroup postedearnings that underscored thelingering illnesses afflictingsome large U.S. banks, whileresults from regional lendersshowed comparative health. C1n Wells Fargo plans to startits own aircraft-leasing firm,the latest bid by a big bank toseek new revenue sources. C3

n China’s economic growthaccelerated in the fourth quar-ter, GDP data showed, confirm-ing a rebound after a morethan two-year slowdown. A9

n Rio Tinto CEO Tom Alba-nese agreed to step down, asthe world’s No. 2 mining com-pany said it would take roughly$14 billion in charges. A1

n Financial markets are sig-naling that they think the eurozone’s debt crisis is fading, eventhough Europe’s economiesshow few signs of recovery. C1

n Stocks rallied amid encour-aging news on the U.S. econ-omy and potential progresson the debt ceiling, with theDow gaining 84.79 points. C4

n Intel’s quarterly profit fell27%, the latest sign that per-sonal-computer demand re-mains weak despite new hard-ware and software offerings. B3

n A potential $23 billion dealfor Dell is spurring hope amongbanks, private-equity firms andinvestors that the LBO machinewill get cranking again. C1

n BlackRock marked its bestquarter ever, reporting net in-come of $690 million, as in-vestors continued to pileinto exchange-traded funds. C3

n AT&T warned that it wouldrecord a $10 billion charge onan accounting shift relatedto its pension- and postre-tirement-benefit plans. B2

n Geithner, in his final daysas Treasury secretary, saidthe U.S. economy is “resil-ient” and defended the re-sponse to the financial crisis. A2

n Chrysler is close to strik-ing a deal with Spanish lenderBanco Santander to set upan in-house financing armthrough a joint venture. B2

n GE Capital is expected toaccount for nearly half of itsparent’s 2012 profit, despiteGE’s promise to reduce reli-ance on the finance unit. B1

n American Express andCapital One said provisionsfor loan losses and expensesincreased in the fourth quar-ter, weighing on earnings. C2

n A former superintendentat the Massey coal mine thatwas the site of a deadly 2010explosion was sentenced to21 months in prison. A4

n Moody’s said it wouldprobably rate securitiesbacked by rental paymentson single-family homes atjust above “junk” status. C3

n An Algerian raid to free for-eign hostages left some dead.Most governments with citi-zens at the site said they wereunable to offer fatality num-bers or account for their miss-ing, including what U.S. offi-cials said could be as many aseight Americans. The U.S., U.K.and Japan said they hadwarned the Algerians not toresort to force to free some 40hostages taken by militants ata natural-gas complex. A1

The drama focuses interna-tional attention on alQaeda in the Islamic Magh-reb and related groups.

n The U.S. and EU agreed toprovide new support for thefight against Malian rebels asFrench and Malian soldiersmoved to confront militants. A8n Somali militants said theyexecuted a French hostage to“avenge” France’s rescue mis-sion and operations in Mali. A8

n Obama’s job approval isstrong, but Americans re-main downbeat about theeconomy, a Wall Street Jour-nal/NBC News poll found. A6n Most Americans favorstricter laws for firearm sales,but blame parents and a lack ofmental-health care for recentshootings, the poll said. A6

n Armstrong admitted in aninterview with Oprah Winfreythat he used performance-en-hancing drugs during his sevenTour de France title races. A3

n House Republicans areweighing a proposal to approvea short-term increase in thedebt limit to give them time tolater win spending cuts. A6

n Iraqi insurgents unleasheda string of bombings mainlytargeting Shiite pilgrims, kill-ing at least 26 people. A9

n A top NATO officer saidmilitary commanders haven’tbeen asked to assess the im-pact of a complete pullout oftroops from Afghanistan. A11n Afghanistan detained sev-eral Western employees ofthe U.S. military’s main foodsupplier in a tax dispute. A11

n Pakistan reached a dealwith a Muslim cleric to endfour days of antigovernmentprotests by his supporters. A11

n Gadhafi’s son appeared incourt on charges of harmingstate security and trying to es-cape, Libyan media said. A11

n A former ATF official whohelped oversee an effort tostem gun trafficking is beingprobed for allegedly conduct-ing a private firearms trade. A4

n Tens of thousands of Kurdsgathered in Turkey’s south-east for a tribute to three Kur-dish women killed in Paris. A9

n The Czech governmentsurvived a no-confidencevote over an amnesty forthousands of prisoners. A10

n Genetic information storedanonymously in databasesdoesn’t always stay that way,a new study revealed. A3

n Died: Pauline Phillips, 94,counseled millions of readersfor decades as Dear Abby. A4

Business & Finance World-Wide

Follow the news all day at WSJ.com

TOMORROWIN

WSJWEEKEND

THEMAGAZINE

W

DRebecca Hall’s Worldly Charm

ACulinary Empire in Lyon

South Africa’s UntappedWine Country

Rediscovering Old Rangoon

GOINGPLACES

winter escapes

MANSIONRenting—

For $500,000A Month

What’s News–i i i i i i

Algeria’s military launched araid Thursday to free about 40foreigners held by militants at aremote natural-gas complex—leaving some hostages dead, sur-prising and angering several gov-ernments and putting leadersacross the world at a loss to de-termine the fate of their citizens.

The U.S., U.K. and Japan,whose nationals were amongthose held, said they had urgedthe Algerians not to resort toforce to free the hostages, whowere taken Wednesday by mili-tants with suspected ties to alQaeda’s regional affiliate. TheU.S. and U.K. received no warningthat the raid was beginning, offi-cials from the countries said.

“Before the raid began, weurged the Algerians to be cau-tious and strongly encouragedthem to make the safety of thehostages their top priority,” anObama administration officialtold The Wall Street Journal.

Some foreign hostages werekilled when forces raided thesoutheast Algerian natural-gas fa-cility, called In Amenas, an Alge-rian government official con-firmed. He didn’t elaborate.Algerian officials have told theirAmerican and European counter-parts that news reports of thenumber of hostages killed at thesite were vastly exaggerated, say-ing the number was likely closeto 11 or 12, according to U.S. andWestern officials.

The Algerian official said onlythat at least four engineers hadbeen freed. An Irish hostage issafe and has made contact withhis family, the Irish governmentsaid.

By late Thursday, with detailssparse and often contradictory,most governments with citizensat the site said they were unableto offer casualty numbers or ac-count for their missing.

U.S. officials said they believeas many as eight Americans were

Please turn to page A8

By David Gauthier-Villars,Cassell Bryan-Lowand Adam Entous

RescueRaidTurnsDeadlyAlgeria OperationTo Free HostagesStuns U.S., U.K.

By John W. Miller,Alex MacDonald

and Robb M. Stewart

Miner Rio Tinto Ousts CEOAs Bad Bets Cost Billions

IN SEARCH OF HIGH GROUND: Rains have led to extensive flooding in Jakarta, killing at least four people andforcing thousands from their homes. Many of the capital’s roads and railways turned into rivers Thursday. A11

Xinh

ua/Z

uma

Pres

s

Wardrobe Dysfunction: InauguralPuts Button-Down Town in Tizzy

i i i

Soirees Renew Quadrennial QuandaryIn Washington; Bow Ties, Botox

WASHINGTON—LobbyistsLena Moffitt and Dalal Aboul-hosn worked the racks last Fri-day at a temporary boutique setup by Rent the Runway, a NewYork-based fashion-rental firm. Their mis-sion: Find inauguralball gowns that defiedWashington’s button-down standard.

Sipping complimen-tary wine, they perusedstrappy, spangly andsexy. They consideredsuper-short, a risk rec-ommended by their of-fice’s sole fashionista.The two women, whowork for the SierraClub, an environmental group,wound up in solid-color, floor-sweeping gowns—in otherwords, stolid political assets thatgave away nothing.

After all, sighed Ms. Moffitt,

D.C. style is “less skin…moreblazers.”

Many in Washington, the epi-center of political power, seehigh fashion as not only irrele-vant, but downright suspect.Workaholics take a certain pride

in looking like theyslept in their clothes. Arakish fedora and cape,by contrast, recallsJack Abramoff, the dis-graced lobbyist. A dar-ing dress means D.C.Madam.

Yet every four yearsit’s Inauguration Day,when posh receptionsand black-tie balls setthe city’s gray suits atwar with themselves.Do stripes convey suffi-

cient solidity? To sequin or notto sequin? Is hair gel only forthe shallow?

“The beauty of D.C. is the cul-ture,” said makeup artist Erwin

Please turn to page A12

Stylist April Yvonne

BY ELIZABETH WILLIAMSON

Floods Swamp Indonesia’s Capital

When Edward Kennedy Jr. launched MarwoodGroup more than a decade ago, he named it afterthe Maryland estate his grandfather, JosephKennedy, lived in when he was the first chairmanof the Securities and Exchange Commission in the1930s.

Now, the SEC has issued subpoenas to Mar-wood, asking for emails and other documents thatshow how the political research firm was able towarn its Wall Street clients that regulators mightdelay approving a promising drug in the fall of2010.

The scrutiny doesn’t mean any accusations ofimpropriety will follow, against Marwood or any-one else. But emails subpoenaed in the inquiry,

some of them reviewed by The Wall Street Jour-nal, open a rare window into a burgeoning busi-ness known as political intelligence, in whichfirms gather information and analysis about activ-ities in Congress, the White House and federalagencies and sell these insights to investors look-ing for an edge.

A look at Marwood shows how one leadingplayer in this field—an industry that operateswith little regulatory oversight—managed to dis-tribute prescient information about a future gov-ernment decision that ended up sharply moving astock.

Food and Drug Administration approval of thedrug at issue, one for diabetes, was widely ex-pected in 2010. But Marwood, after weighing the

Please turn to page A12

BY BRODY MULLINS AND SUSAN PULLIAM

Buying ‘Political Intelligence’Can Pay Off Big for Wall Street

Attacks in Africa U.S. and Europe pledge new

support in Mali fight......... A8 ‘The One-Eyed’: Jihadist

suspected in kidnappings... A8

Heard on the Street: Rio has$14 billion reasons to change... C8

4G speeds not available everywhere. ©2013 AT&T Intellectual Property. Service provided by AT&T Mobility.All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. All other marks containedherein are the property of their respective owners.

1 . 866 .MOB I L I T Y – ATT.COM/NETWORK – V I S I T A STORE

What’s more?

It’s not complicated.More is better.

Thenation’slargest network.

C M Y K CompositeCompositeMAGENTA CYAN BLACK

P2JW018000-6-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,WEBGN,BMT,BRX,CCA,CHR,CKP,CPD,CXT,DNV,DRG,HAW,HLD,KCS,LAG,LAT,LKD,MIA,MLJ,NMX,PAL,PHI,PVN,SEA,TDM,TUS,UTA,WOK

P2JW018000-6-A00100-1--------XA