Oil ended the week above $74 a barrel as Israel's army called up reservists and launched small-scale raids in Lebanon in an effort to stop Hizbollah rocket attacks.

The U.S. economy's health will get more scrutiny from Wall Street next week. A steady stream of reports will flow in, with the spotlight on existing home sales, consumer confidence, durable goods orders, new home sales and second-quarter gross domestic product.

"The story is going to continue to be earnings and the Middle East," said Fred Dickson, market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.

Dickson pointed out that "a few more than expected companies have been lifting earnings guidance, so that's providing an injection of some positive energy into the market."

But stocks fell on Friday, wrapping up a volatile week, after personal computer maker Dell Inc. warned of a shortfall in quarterly earnings and revenue. The fighting in the Middle East also cast a pall over the market's mood.

"We're seeing a high degree of investor sensitivity to the situation in the Middle East," Dickson said. "Very few clients seem interested in exploring stock bargains ... and they have not forgotten the market meltdown of 2000 and 2001. Their fear is the Middle East will trigger a similar selling pattern."

Thousands of Lebanese civilians fled their homes, fearing Israel will invade, while a massive evacuation of Americans and other foreign citizens from Lebanon to Cyprus and Turkey picked up steam.

The conflict between Israel and Lebanon, which began on July 12, has ratcheted up oil prices. U.S. crude oil for September delivery settled on Friday at $74.43 a barrel, up 16 cents.

A week ago, front-month U.S. crude futures briefly hit a record of $78.40 -- the highest price since the New York Mercantile Exchange began trading oil futures in 1983.

A RALLY'S FAST FADE-OUT

In testimony before the U.S. Senate Banking Committee on Wednesday, Federal Reserve Chairman Ben Bernanke said he believes core inflation will moderate in the coming quarters. His remarks suggested that the Fed may be nearly done with its two-year cycle of raising interest rates.

Bernanke's comments drove the major U.S. stock indexes up almost 2 percent on Wednesday, giving the blue-chip Dow average its second-best day of the year.

The euphoria didn't last long.

"The rally in the wake of Federal Reserve Chairman Bernanke's testimony reflected short covering that did not attract any follow-through buying," said Chris Burba, short-term market technician at Standard & Poor's in New York.

"In order for the market to achieve gains in the near term," Burba added, "institutions need to start accumulating and there are no signs of this right now."

On Thursday, the Fed released the minutes of its June policy meeting, which said members of the Federal Open Market Committee were uncertain about future interest-rate steps.

For the week, the Dow Jones industrial average rose 1.2 percent and the Standard & Poor's 500 Index gained 0.3 percent.

But the Nasdaq Composite Index fell 0.8 percent, marking its third losing week in a row.

EARNINGS OPTIMISM

Earnings expectations for the second quarter have climbed recently as Reuters Estimates now projects S&P 500 earnings grew 10 percent in the second quarter, up from an expectation of 9.2 percent last week.

"We're going to go back to watching the parade of earnings, and we'll hopefully see some companies guide a little bit better than Dell," said Todd Clark, director of stock trading at Nollenberger Capital Partners in San Francisco.

Next week, drugmakers Merck & Co., Schering-Plough Corp. and Bristol-Myers Squibb Co. are due to report quarterly results.

Investors may expect strong reports from the health-care sector after biotechnology giant Amgen's quarterly results trounced estimates this week, Dickson said.

The energy sector, buoyed by oil's recent run toward $80 a barrel, may lift the stock market in the coming week, when Exxon Mobil Corp., the world's largest publicly traded oil company, and rival ConocoPhillips are expected to report second-quarter results.

Investors will get a feel for the consumer's resilience in the face of high energy prices as earnings from Kraft Foods Inc., Amazon.com Inc. and General Motors Corp. are on deck. McDonald's Corp. said it tentatively plans to release second-quarter earnings on Tuesday; it reported preliminary results on July 17.

HOME SALES AND GDP

Wall Street, already concerned about the cooling of the once-hot housing sector, will take special note of the National Association of Realtors' report on existing home sales on Tuesday.

Economists polled by Reuters forecast that sales of existing homes fell in June to an annualized pace of 6.58 million units from an annual pace of 6.67 million in May.

On Tuesday, the Conference Board will release its consumer confidence index, expected to drop to 104.0 in July from 105.7 in June, according to the Reuters poll.

On Wednesday, the weekly mortgage data are due, as well as the Federal Reserve's "Beige Book" report, which offers a look at the regional economies in the areas served by the 12 Federal Reserve district banks.

On Thursday, the June new home sales report will give more evidence about the extent of the housing sector's slowdown. The Reuters forecast calls for new home sales to decline to a seasonally adjusted annual pace of 1.160 million units in June from 1.234 million units in May.

Thursday's data calendar includes U.S. durable goods orders for June, forecast to rise 1.8 percent in June after a drop of 0.2 percent in May, according to the Reuters poll.

On Friday, the Commerce Department will give its estimate on second-quarter gross domestic product, which is the output of all goods and services produced within U.S. borders.

Economists polled by Reuters expect the GDP report to show that the U.S. economy grew at an annual pace of 3.0 percent in the second quarter, down from the first quarter's growth rate of 5.6 percent.

Also on Friday's agenda: The University of Michigan will give its final reading on its July consumer sentiment index, forecast to slip to 83.0 from June's final reading of 84.9.

Analysts say a secretive strike in late 2002 by a U.S.-operated Predator adapted to fire a Hellfire missile, carried out against a vehicle in Yemen, was an early sign of things to come.

"The common vision is by the end of the next decade these (UCAVs) will be operating in the air forces of the world," said Piero Antonio Fantino, UCAV program manager at Italy's Alenia Aeronautica.

UCAVs can fly pre-programmed missions to attack targets or perform reconnaissance and then be instructed to strike.

They require ground station staffing, but industry officials say the technology is advancing quickly and some drones can already be programmed to take off, fly a mission and land without a ground-based pilot operating a joystick.

A key advantage is their use in dangerous tasks such as attacking or flying near surface-to-air missiles (SAM), deadly threats faced by aircrews in both Afghanistan and Iraq.

"No pilot wants to go beak to beak with a SAM site," said Rod Lekey, a business development manager involved with UCAVs work at Boeing. They are ideal for "dull, dirty and dangerous" missions, he said.

Air-to-air dogfights which fighter jets are famed for are largely a thing of the past, as long-range missiles mean pressing a button to fire on a plane well beyond sight.

Industry officials say UCAVs are instead being designed as precision bombers.

The X-45N which Boeing is offering the U.S. Navy can carry two JDAM (Joint Direct Attack Munition) 2,000-pound bombs or racks of 250-pound small-diameter bombs.

The Navy is expected to choose between the Boeing and Northrop's competing X-47B in the coming weeks, with the winner asked to demonstrate safe take-offs and landings from the deck of an aircraft carrier by 2011.

The U.S. Air Force has similar plans, and in Europe, France's Dassault Aviation is spearheading a multinational effort called Neuron aimed at mastering UCAV technologies by 2015.

Manufacturers say unmanned aircraft have rapidly gone from futurist experiments to tools that governments and militaries are clambering to use.

"Manned, unmanned, what's the ratio? That's the discussion right now," said one industry official regarding military fleet planning.

Britain's BAE Systems, Finmeccanica unit Alenia Aeronautica and Franco-German-Spanish company EADS are among those busy working on pilotless planes in Europe.

EADS is flying a model called the Barrakuda, photos of which were leaked earlier this year.

BAE's sleek Raven was also a secret program until very recently and has been undergoing flight testing in Australia.

Finmeccanica's Alenia has a technology demonstrator called Sky X flying in Sweden that is expected to feed technology into Europe's Neuron program.

Armed and unarmed drones are being developed in parallel, with the latter seen filling a wide set of roles, including monitoring security around oil pipelines, checking crops or spotting people lost at sea.

BAE revealed its Herti surveillance UAV to the public for the first time this week at Farnborough.

Its two cameras and data link are designed for military reconnaissance, but other possible roles, such as maritime search and rescue, are surfacing in flight testing, the company said.

"We flew it at 3,500 feet and told it to look for something that wasn't sea, and it spotted a lobster pot buoy about 10 inches wide," said BAE's Andy Wilson, director of sales for autonomous airborne systems. "Then people said, wait a minute, that's about the size of a human head."

UAVs don't simply film the ground; they use software that enables the user to input algorithms to find things or detect changes.

"We can give it parameters to find a white van or it'll tell us that boat wasn't there an hour ago," said BAE's Wilson.

The unmanned aircraft market ranges from models that are little more than camcorders with wings to large, flying wings with jet engines and bomb bays.

"After JSF there will be no fighter jets," said Alenia's Fantino. "This will be a large part of the market."

Four of the victims were flight attendants, Sanchez said.

Sanchez said the cause was still being investigated. A passenger, Don Yarbrough, told KUSA TV of Denver that investigators believed the victims reacted to a cleaning fluid containing ammonia that had been used on the plane after it arrived in Denver from Cancun, Mexico.

A United spokeswoman in Chicago, Robin Urbanski, said victims felt weak and nauseous but she had no other details.

There were 143 passengers and crew on the plane when it landed in Las Vegas.

Other officials said the theft, discovered early Monday, prevented them from transmitting observations and updates to Manila headquarters.

The 2,474-meter (8,118-foot) Mayon volcano came to life on July 14, spilling lava and red-hot boulders in a "mild and quiet" eruption. Volcanologists said Monday the lava flow has now reached about four kilometers (2.5 miles) from the crater, triggering ground vibrations.

Philvolcs reported Monday that Mayon released more than 7,000 tons of sulfur dioxide, indicating an imminent eruption.

"The probability for an explosive eruption to occur is still fair," they said in a statement.

Ed Laguerta of the Phivolcs station here, said the main lava flow in the Bonga gully has reached the 560-meter elevation which is about 4.0 aerial kilometers from the crater.

The volcano was monitored with ground vibrations with the continuous flowing of lava.

Phivolcs has warned residents in the villages of Bonga, Mabinit, Matanag in this city and Miisi in Daraga town especially if there is heavy down pour of rain to be extra watchful of the lava flows, rockfalls, small rocks avalanches and pyroclastic flows.

Laguerta said they have monitored 324 tremor episodes and eleven (11) volcanic earthquakes in the past 24 hours.

Residents from Sto. Domingo who fled from their houses Sunday due to the continuous ashfall are sheltered at the Bicol Evacuation Center in Sto. Domingo, Mayor Herbie Aguas of Sto. Domingo said.

The government has declared a no-go area for a six-kilometer (3.7-mile) zone around the crater, but several thousand still live and farm within the area and could not be forced out until there is a mandatory evacuation order.

Mayon, about 340 kilometers (210 miles) southeast of Manila, is one of the Philippines' 22 active volcanos. Its most violent eruption, in 1814, killed more than 1,200 people and buried a town in mud. A 1993 eruption killed 79 people.

The Dreamspace structure was divided into tunnels large enough to take people


Police said the women who died were taken to University Hospital in Durham. They had been on the inflatable with children.

The Dreamspace installation was designed by the internationally-renowned abstract artist, Maurice Agis. The 50m by 50m structure is made from thin PVC sheets forming 115 multi-coloured cells which are joined together and inflated allowing visitors to walk through.

People inside the 5m high exhibit take off their shoes and wear a coloured cape to "become part of the artwork", according to the Dreamspace website.

The installation was slashed by vandals when it was outside Liverpool Cathedral last month. Three of the units making up the sculpture were so badly damaged they had to be replaced.

A large section of the popular park on the outskirts of Chester-le-Street was cordoned off last night as police and Health and Safety Executive officers examined the scene.

One woman said her 23-year-old daughter had been enjoying a day at the park with her boyfriend when the incident happened. She said her daughter had suffered a punctured lung, broken ribs, and internal bleeding. "She's in the intensive care unit on a ventilator. It was just a day out enjoying the weather, and it's gone so badly wrong."

John Robson, from Durham Fire Brigade, said: "There were 400 to 500 people at the park, and when we first arrived it was chaos. We had to extricate a number of people from the structure. A number of people had fallen on top of each other."

Chief Superintendent Trevor Watson of Durham Police said police were keeping "an open mind" about the cause of the incident.

A spokesman for the North East Ambulance Service said the two women were treated by paramedics on the way to hospital but died. The three-year-old girl received severe crush injuries and was airlifted to Newcastle General Hospital.

At least 11 others were taken to hospitals across the area: three boys aged between eight and 11 years old who had suffered neck, leg and arm injuries; an 11-year-old girl with severe shock who was slipping in and out of consciousness and an elderly man and a woman who suffered heart attacks. A 13-year-old girl with minor injuries and three other people, described as walking wounded, were also taken to hospital.

Unilever, the world's biggest ice cream maker, says using its artificial equivalent allows it "to produce products with more intense flavour delivery, a wider range of novel textures and more intricate shapes."

Unilever also says it can improve the "healthiness" of the ice cream by cutting its fat and sugar content - a claim that particularly angers its critics, reported The Independent newspaper from the UK.

The scientists - Professor Malcolm Hooper, Emeritus Professor of Medical Chemistry at Sunderland University, Professor Joe Cummins, Emeritus Professor of Genetics at the University of Western Ontario, and geneticist Dr Mae-Wan Ho, director of the Institute of Science in Society - retort that it risks "letting off an immunological time bomb."

The company, which has been making ice cream for more than 70 years under such brands as Wall's, Magnum and Carte d'Or, and now owns Ben and Jerry's, has sold it with the protein in the United States for three years, and has approval to do so in Chile, Indonesia, Mexico and the Philippines.

It has also had the go-ahead in Australia and New Zealand despite objections by the health departments of the states of Victoria, Queensland and New South Wales and the New Zealand Food Safety Authority.

Now it has applied to the Food Standards Agency to be allowed to use it in "edible ices" sold in Britain, including sorbets, water ice, fruit ice, frozen desserts, iced smoothies - and ice cream.

The agency's Advisory Committee on Novel Foods and Processes is due to consider the plea at its next meeting.

If the committee gives it the green light, as is likely, it will then have to go to the European Union for approval, a lengthy process but one also expected to give it the go-ahead. The new products could go on sale in Britain in two years' time.

The key step in making the ice cream is getting hold of the ocean pout's secret, called an ice-structuring protein because rather than preventing freezing altogether, it lowers the temperature at which ice crystals grow, and changes their shape and structure so that they do less damage to living tissues.

In theory, Unilever could go out and catch loads of the fish - an eel-like species that lives on the ocean floor - extract the protein and add it to the ice cream like any other ingredient. But this would be expensive and, as the company, which has a good record in combating overfishing, points out, would cut the population of the fish, whose stocks are already declining.

So it has resorted to a GM process already widely used to produce vitamins and enzymes for food, including vegetarian cheese.

A synthetic gene for the protein is added by genetic modification to bakers' yeast, which is fermented to manufacture more. The protein is then extracted so that the final product does not contain any modified yeast cells. This has led to a semantic battle over whether the final product is "GM ice cream." Unilever says that it is not; the scientists maintain it is. "This is about as genetically modified a product as you can get," says Professor Cummins.

The more important debate is whether the end result is safe, particularly for children. Unilever accepts that the main danger is that people may prove allergic to the protein. But it points out that people have eaten its natural form in ocean pout for decades, and says that the artificial version is identical. It adds that extensive tests on the artificial protein for allergic effects gave it the all clear.

Unexpectedly perhaps, many of the most prominent anti-GM pressure groups, including Friends of the Earth, GM Freeze, and Genewatch, say, in effect, that they are not too bothered, and that it is well down their priority list. But the scientists, who have a record of GM scepticism, are deeply disturbed, as is The Soil Association.

The scientists insist that the protein is changed in the processing, and may pose a danger. Professor Hooper told The Independent recently: "This is a novel protein manufactured by genetically modified organisms and its characteristics have never been fully evaluated. It needs to be checked out before it is widely introduced into the human diet."

He and his colleagues also dispute the adequacy of Unilever's safety checks, not least because it checked the protein against the blood of people allergic to cod, not the pout fish,

The Soil Association calls the ice cream "a frivolous application of a dangerous and unwanted technology."

It adds: "Just because there won't be any traces of the GM material in the ice cream does not mean that the product is safe. It certainly should not be marketed as a 'healthier alternative' simply on the grounds that it is low fat."

The Soil Association says research shows that "genetic engineering produces a range of unpredictable biological side-effects." This includes, it is believed, "new toxins and allergens even if the original GM material is absent."

It points to a GM food supplement, L-tryptophan, which "killed over 37 people and disabled over 1,500 others" in the US in 1989 even though it also "did not contain any GM material in the final product."

Unilever responded to The Independent report saying: "This is an exciting new technology that has potential benefits for ice cream, including the possibility of increased fruit content and lower fat content. The process itself is widely used within the food industry, but the Food Standards Agency process is designed to solicit opinion from others and we would not want to influence that process whilst it is still running its course."

The row comes as the biotech industry is attempting a comeback with the help of the European Commission.

Modified products were swept from the shelves in the face of public refusal to buy them, and the EU instituted a six-year moratorium on approving new ones.

But this came to an end two years ago and biotech firms have jumped in. Adrian Bebb of Friends of the Earth says: "Their latest tactic is to swamp committees with dozens of applications for new GM foods. It is hard to imagine that the scientists working for these committees will be able to pay as much attention to their safety as they merit."

EU governments are deadlocked on the applications but, under the rules, the pro-GM European Commission then nods them through. Seven different types of GM maize have been approved for food in the past two years: applications for GM rice, sugar beet and potato are in the pipeline.

But there is no sign of them appearing on British supermarket shelves - because most still refuse to buy GM food.