Turkey ends search for survivors, toll nears 600 (Reuters)

ERCIS, Turkey (Reuters) – The death toll from last week's earthquake in southeast Turkey rose to 596 Sunday, the day after authorities stopped searching for survivors and focused on helping thousands of homeless families in crisis.

In Ercis, the town hit hardest by the 7.2 magnitude quake that devastated Van province on October 23, some shops reopened on Sunday, electricity was switched back on in parts of town and one bank's ATM started working.

But with barely any of Ercis's nearly 100,000 residents ready to return to their damaged homes with strong aftershocks still rattling the area, life is anything but normal. One aftershock Sunday morning registered at magnitude 5.3.

Winter is fast approaching, temperatures plunge at night, and young and old in particular are falling sick in tent encampments set up by relief agencies on the outskirts of town.

The government's disaster management website said more than 43,000 tents had been handed out in Van. Officials say that is more than needed because people whose homes are not so badly damaged are demanding tents as they feel safer under canvas.

"Our house is in good shape but we live in a tent due to fear. We will go back once the aftershocks are gone and the government says our house is safe," said Fadli Kocak, owner of a bakery in Ercis, who hopes to be back in business in a week.

Many people were queuing to register for tents Sunday, a first step to having an inspection done of their home, as authorities say they will hand them out only after verifying that a building is too risky to live in.

"The problem here is that you can't give 100,000 tents in a town whose population is equal to that," Yalcin Mumcu, who coordinated search and rescue operations in Ercis, told Reuters.

"Our people need to the trust the government, too. Everybody is asking for tents. They need to be patient, if the Prime Minister says they are going to build a new, better Van, I am sure they will," he said.

The relief operation is politically sensitive as the southeast is where most of Turkey's Kurdish minority lives, and the army has been fighting a separatist insurgency there that has cost more than 40,000 lives since it first erupted in 1984.

After criticism in the first days of the disaster, state authorities cranked up relief operations, asking for foreign help providing tents, containers and prefabricated houses.

Hoardes of people in provincial capital Van have also clamored for tents even though far fewer buildings collapsed there. Villagers in surrounding hills are seen as more in need because most of their primitively built houses were destroyed and they would be caught in the open if there is early snow.

"Most of us sleep outside. The village has received coal and blankets but no tents," said Mehmet Siddik Demirtas, headman at Yukari Isikli village, about 10 km (6 miles) from Ercis.

"We go every day to the city of Ercis to ask for tents but they tell us to wait," he said.

(Writing by Simon Cameron-Moore; Editing by Louise Ireland)

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HP nears PC spinoff, $10 billion Autonomy buy: sources (Reuters)

NEW YORK/SAN FRANCISCO (Reuters) – Hewlett-Packard Co is close to a deal to buy British software company Autonomy for $10 billion and will announce on Thursday a long-rumored spinoff of its PC division, the world's largest, two sources familiar with the company's plans said.

Shares in HP, a storied Silicon Valley icon that dominates the personal computing industry, reversed course to gain more than 3 percent when the news was first reported by Bloomberg, citing unnamed sources. But the stock quickly backtracked and was down more than 4 percent at $30 in afternoon trade.

A spinoff of HP's PC arm would confirm speculation that has swirled for months that HP was no longer keen on keeping a business struggling with low growth and single-digit margins.

The company plans to announce the spinoff after the market's close, the sources told Reuters on condition of anonymity.

HP and Autonomy were not available for comment.

HP Chief Executive Leo Apotheker, a former chief of European software giant SAP AG, had been expected to drive an expansion of the company's relatively small but very profitable software division -- including through major acquisitions.

Cambridge-based Autonomy counts Procter & Gamble Co among a long list of major corporate customers that use its software to search and organize unstructured data like emails. Last month, it posted a 16 percent jump in quarterly sales-driven demand for Internet-based cloud computing.

(Additional reporting by Victoria Howley in London and Edwin Chan in Los Angeles; Editing by Lisa Von Ahn and Richard Chang)

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Analysis: Kurds serve warning as U.S. withdrawal nears (Reuters)

KIRKUK, Iraq (Reuters) – When Iraq's northern Kurdish region sent a division of troops to surround Kirkuk in February, it may have been a signal of the delicate balancing act to come when U.S. forces leave the disputed oil city.

Officially, the 10,000 or so peshmerga fighters were there to protect Kirkukis from any violence associated with nationwide protests. But their presence sparked a furious diplomatic offensive by the United States to calm tensions between the central government in Baghdad and Arbil, the Kurdish capital.

The deployment may have been a trial balloon, analysts said, to test Prime Minister Nuri al-Maliki and to warn Baghdad and Washington that U.S. troops are needed as a buffer in the disputed northern territories claimed by both capitals.

"The Kurdish military maneuver in Kirkuk in February was both a message to the U.S. to keep its troops on the ground beyond 2011 - which is a Kurdish interest - and a way of testing the resolve of the Baghdad government," said Joost Hiltermann, an analyst with International Crisis Group.

It took a month to persuade semi-autonomous Kurdistan, comprised of three northern provinces, to withdraw the unit.

"It was a lot of diplomacy in saying 'look this isn't right. It's upsetting the area. It doesn't lead to stability,'" said Colonel Michael Pappal, commander of the U.S. Devil Brigade in Kirkuk. "It showed to me that a third party was necessary for that to happen."

Eight years after the United States ousted Saddam Hussein, Iraq is still building its police and army to battle a lethal Sunni Islamist insurgency and Shi'ite militias within, as well as defending against external threats.

As violence ebbs, Kirkuk and other disputed northern areas are considered potential flashpoints for future conflict in a country hobbled by ethnic, religious and political strife.

The late February incursion was no spur-of-the-moment decision and prompted a quick response from the Americans, who told Kurdish commanders their soldiers would not be allowed into Kirkuk, U.S. military officials said.

"You don't send a division across a border without a lot of planning and preparation ... it takes a while to put an army on the road and that's what they did," said Lieutenant Colonel Joe Holland, a U.S. commander in Kirkuk.

The unit was 12,000 strong, a Kurdish official told Reuters, while the U.S. military estimated it at 8,000-9,000. Sources said the Kurds had AK-47s, artillery and armored vehicles.

CLOSE TO BLOWS

Holland said it was the third time in 20 years the Kurds had moved into the Kirkuk area; the first in 1991 after the invasion of Kuwait and the second in 2003 when Saddam was ousted.

Maliki's government demanded the peshmerga withdraw and the Kurdistan Regional Government at first refused, escalating tensions. Iraqi and Kurdish troops have come close to blows in the past two years as Baghdad tightened its grip on Kirkuk.

Iraqi officials said the incursion was illegal. Officially, the city -- which by some estimates sits atop 4 percent of the world's oil reserves -- is secured by central government forces.

"The effect was a significant schism in the relationship between us and the Kurds," Holland said.

Kirkuk has suffered huge population upheavals in recent decades, from Saddam's "Arabization" campaigns to more recent moves by Kurds to reclaim parts of the city.

"They were sending a message to the central government, saying 'we can enter Kirkuk any time and you cannot stop us,'" a senior Iraqi Defense Ministry official told Reuters.

The official said the KRG would not invade Kirkuk after the U.S. leaves but would seek to displace Arabs. He said the Kurd population had soared from 150,000 to 350,000 since 2003.

The peshmerga, however, represent a formidable challenge to the Iraqi army. The Kurds have 100,000 troops, better weaponry and experienced leaders, the official said.

"After 2003, they captured the former Iraqi army tanks. About 4,000 tanks left by the former Iraqi army in the streets and cities disappeared, and our investigations indicate that the Kurds have most of them and Iran got the rest," he said.

The peshmerga deployment served notice that without the neutral buffer of U.S. forces, the Kurdish region might "feel compelled to use military muscle to defend its interests," said Wayne White, an analyst with the Middle East Institute.

"So, while a signal that the KRG will not tolerate any perceived trampling of its interests in Kirkuk, this deployment also was meant as a reminder to both Washington and Baghdad that greater consideration should be given to the prolongation of a more meaningful U.S. presence," he said.

But because Maliki, perhaps calculating that the Americans would pressure their Kurdish allies to withdraw, did not offer a serious challenge, the deployment was not an effective trial run for securing Kurdish control of Kirkuk, Hiltermann said.

"This will have to wait till the time when U.S. troops will no longer be there," he said. "At that point, all bets are off and tensions could easily escalate, intentionally or inadvertently, to a bigger conflict, at least as long as the dispute between Baghdad and Arbil remains unsettled."

(Additional reporting by Suadad al-Salhy; Editing by Jon Hemming)

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Europe nears agreement on Greek crisis bailout (AP)

BRUSSELS – Greece would get some relief on part its massive debts and a Europe-wide rescue fund would gain new powers to swiftly aid other debt-stricken countries under a sweeping deal being negotiated by eurozone leaders Thursday.

Though the deal would likely trigger a temporary default by Greece — the first ever by a euro state — it could also help the ailing country emerge from its debt hole in the longer term and shake up Europe's way of handling the crisis, by making it more proactive.

Stocks, bonds and the euro rallied sharply on hopes that the deal will be a turning point in the eurozone's 18-month debt crisis. Growing market panic has weighed on the single currency and forced already bailed out Greece, Portugal and Ireland as well as struggling Spain and Italy to make billions of euros in cuts.

A draft of the deal seen by The Associated Press said that banks and other private investors that own Greek bonds have agreed to contribute to the rescue of the country — language indicating that they will accept being paid back more slowly or at lower interest rates.

This could happen through banks trading their current bonds to Greece for new ones that mature years later. The banks could also sell their bonds back to Greece at a loss.

Ratings agencies have long warned that such measures would be seen as a form of Greek default on its loans, a first for a eurozone country and a potential cause of devastating loss of confidence in the other heavily indebted nations.

Markets appeared to be seeing the draft measures as less harmful than expected, however, fueling the rally.

"Greece is in a uniquely grave situation. This is the reason why it requires an exceptional solution," the draft says.

The draft deal, if approved, would also radically overhaul a bailout fund created last year after Greece was bailed out with euro110 billion ($156 billion) in rescue loans by the other eurozone countries and the International Monetary Fund. Like Greece, Ireland and Portugal have since found themselves increasingly unable to sell bonds with sharply higher rates demanded by investors frightened that their struggling economies would leave them unable to repay their debts.

But so far the European Financial Stability Facility could only be tapped once a country was on the brink of financial collapse and after it agreed to huge cuts and changes to the way its economy is run.

The deal would now allow the EFSF to intervene pre-emptively, before a country is in full-blown crisis mode.

For instance, countries could be given a "precautionary program," likely some form of credit line. That might allow states under stress, like Spain, to continue raising money on the markets, giving an extra assurance to investors, and could also make it easier for Ireland and Portugal to re-enter the markets once their bailout programs expire.

Money from the EFSF could also be used in some situations to recapitalize banks in countries that have not yet been bailed out, the draft says.

On top of that, the draft says, the EFSF could be authorized to buy up bonds of troubled countries on the open market, maintaining the prices of the bonds and keeping their interest rates from skyrocketing in the face of pressure from worried investors.

A eurozone official told The Associated Press that the draft was "definitely not final" and that "anything can change," speaking on condition of anonymity because of the sensitivity of the negotiations.

Even though initial market reaction to the draft deal was positive, the euro traded up 0.8 percent at $1.4371 after it had slumped earlier in the day, analysts warned that it won't constitute a turning point in the eurozone's debt travails.

"From what we can see, there are still couple of major shortcomings," Jonathan Loynes, chief European economist at Capital Economics in London, said in a note. The deal would reduce Greece's near-term financing needs, but won't significantly lower the overall debt burden, Loynes said, adding that "there is no 'shock and awe'," that would boost market confidence in the eurozone as a whole.

A major fear about a potential Greek bond default has been the potential for massive disruption to the Greek banking system. Greek banks use Greek government bonds that they own as collateral for short-term loans they receive from the European Central Bank.

That money funds the banks' day-to-day operations, including short-term loans to private businesses.

A default would render the bonds useless as collateral, causing that funding to dry up and wreaking havoc on the Greek economy.

To prevent that, the eurozone could provide some form of repayment guarantee or collateral for the new Greek bonds banks would take on, the draft says.

According to the draft, the eurozone and the International Monetary Fund are also ready to give new rescue loans to Greece, without providing a number.

Eurozone leaders also plan to ease the loan conditions for their part of the bailout, by doubling the average loan maturity for Greece to at least 15 years from 7 1/2 years currently and reduce the interest rate to 3.5 percent.

Those softer loan conditions would also apply to Ireland and Portugal.

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L.A.'s "Carmageddon" that never was nears early end (Reuters)

LOS ANGELES (Reuters) – Construction work along a closed Los Angeles freeway was finished sooner than expected on Sunday and officials said they would reopen the road later in the day, bringing an early end to the city's much-hyped "Carmageddon" traffic crisis.

"Anything that lets us give the freeway back to the motorists is a dream come true," said Judy Gish, a spokeswoman for the California Department of Transportation.

A 10-mile section of Interstate 405 between two of the nation's busiest freeway interchanges was shut down on Friday night to allow for demolition of a bridge as part of a $1 billion freeway widening project.

The unprecedented closure originally was scheduled to last until about 6 a.m. on Monday, a schedule that likely would have wreaked havoc on much of the city's morning commute.

But Gish said demolition work was completed early and transit crews were cleaning up debris before final inspections of the work were conducted. She said a gradual reopening of the I-405, including its ramps and connector roads, could begin on Sunday as early as 11 a.m., but that time could slip into the afternoon.

Mayor Antonio Villaraigosa planned a news conference for that hour near the site of construction work in the Sepulveda Pass, the stretch of freeway that has been closed.

The 405 shutdown forced motorists to find alternate routes for one of L.A.'s most heavily traveled north-south corridors. It had been expected to bring gridlock to the surrounding area and backups to nearly a dozen other freeways in a region tightly woven by high-speed traffic.

But motorists largely heeded warnings from public officials and public service announcements from celebrities urging drivers to avoid L.A.'s Westside, averting the anticipated epic traffic jam residents had prospectively dubbed "Carmageddon."

Perhaps the biggest transportation drama on Saturday, the first full day of the closure, was a race between a group of bicyclists and JetBlue Airways, which offered $4 flights between Burbank and Long Beach as a special weekend promotion.

The cyclists made the one-way trip in less than an hour and a half. The JetBlue flight they were racing took just 12 minutes, but one airline passenger who left his home at the same time as the cyclists started their trip, arrived an hour later at the finish line, due to the added time of commuting to the airport, checking in, going through security and getting lost in a cab.

JetBlue called for a rematch.

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Lawmakers snipe, Bernanke warns as deadline nears (AP)

By JIM KUHNHENN and NANCY BENAC, Associated Press Jim Kuhnhenn And Nancy Benac, Associated Press – 30?mins?ago

WASHINGTON – Fuming lawmakers pointed fingers at one another and President Barack Obama on Thursday as negotiations over raising the national debt limit entered a perilous endgame. Federal Reserve Chairman Ben Bernanke warned of economic damage, and an anxious Wall Street envisioned catastrophe if the U.S. defaulted on its obligations.

Obama and congressional leaders were meeting again late in the day at the White House. But the president's blunt declaration that "enough is enough" as the previous evening's talks ended did nothing to quell the rancor as a new day of positioning and posturing played out.

Senate Majority Leader Harry Reid stood on the Senate floor Thursday and sniped that House Majority Leader Eric Cantor shouldn't even be part of the talks anymore, noting that the Virginia Republican has been called "childish." Not long after, Senate Republican Leader Mitch McConnell stood to serve notice that the debt problem belonged squarely in Obama's lap.

"Republicans will not be reduced to being the tax collectors for the Obama economy," McConnell said. "Don't expect any more cover from Republicans on it than you got on health care. None."

Federal Reserve Chairman Ben Bernanke, testifying on Capitol Hill, warned legislators that failing to raise the debt limit in time to avoid default would only end up increasing the federal deficit, calling that a "self-inflicted" wound.

He said default would drive up interest costs on the $14.3 trillion debt and reduce government revenues by slowing economic growth.

None of the back-and-forth was a promising prelude to negotiations scheduled to resume at the White House, less than three weeks before an Aug. 2 deadline for increasing the government's borrowing authority. Thursday's talks were to focus on the touchy matters of how to cut spending on Medicare and Medicaid and raise more tax revenue.

Behind the scenes, meanwhile, legislators and White House officials continued to work on a backup plan offered by McConnell.

Obama is demanding that budget negotiators find common ground by week's end, as the financial world watches with growing jitters.

"No one can tell me with certainty that a U.S. default wouldn't cause catastrophe and wouldn't severely damage the U.S. or global economy," Jamie Dimon, CEO of JPMorgan Chase & Co., told reporters Thursday. "And it would be irresponsible to take that chance."

Already, Moody's Investors Service is reviewing the government's credit rating, saying there is a small but rising risk that it will default on its debt. If Moody's were to lower the rating, the consequences could ripple through the economy, pushing up rates for mortgages, car loans and other debts. A Chinese rating agency, Dagong Global Credit Rating Co., also warned of a possible downgrade.

Reid sketched the potential consequences of default in dire terms, saying Social Security checks, veterans' benefits and paychecks for troops would stop. "Millions of Americans could lose their jobs," he added.

A Reid spokesman later clarified that Social Security benefits "could" stop, as Obama previously had warned, but it wouldn't be a certainty.

Republicans have called such statements scare tactics.

In the cauldron of the White House Cabinet Room, Obama and top lawmakers bargained for nearly two hours late Wednesday. Obama curtly ended the session when Cantor, R-Va., urged him to accept a short, monthslong increase in debt instead of one that would last through next year's presidential election.

"Enough is enough. ... I'll see you all tomorrow," Obama said, rising from the negotiating table and leaving the room, according to several officials familiar with the session.

Reid said that while other Republican leaders were willing to negotiate in good faith, Cantor "has shown he shouldn't even be at the table."

The United States hit its current $14.3 trillion debt ceiling in May and the Obama administration says the government will default on its obligations if the debt limit is not increased by Aug. 2. For a new debt ceiling to last to the end of 2012 would require raising it by about $2.4 trillion.

Republicans, in control of the House of Representatives in part because of the support of tea party activists, say they will not vote to raise the limit if Obama doesn't agree to at least an equal amount of deficit reductions over 10 years.

Obama and the top eight House and Senate leaders met for the fourth time in as many days Wednesday, and, despite the tense ending, agreed to meet again Thursday.

A congressional aide said the White House discussed with lawmakers the possibility of moving talks this weekend to the presidential retreat at Camp David in Maryland. But a spokesman for House Speaker John Boehner said the Ohio Republican told the White House he saw no need for that. And Obama aides later said they planned to continue holding meetings at the White House for the next few days.

Despite McConnell's assertions that the debt problem belongs to Obama, fresh polling from Quinnipiac University suggested voters would be more apt to hold Republicans responsible than Obama, by 48 percent to 34 percent, if the debt limit is not raised. The same survey showed voters were about evenly split on whether they're more concerned about raising the limit and increasing government debt, or seeing the government go into default and damaging the economy.

"The American people aren't very happy about their leaders, but President Barack Obama is viewed as the best of the worst, especially when it comes to the economy," said Peter Brown, assistant director of Quinnipiac's Polling Institute.

That helps explain why McConnell put forward a plan that would give Obama new powers to overcome Republican opposition to raising the debt ceiling.

The proposal would place the burden on Obama to win debt ceiling increases up to three times, provided he was able to override congressional vetoes — a threshold Obama could manage to overcome even without a single Republican vote and without massive spending cuts. Conservatives promptly criticized the plan for giving up the leverage to reduce deficits. But the plan raised the prospect of combining it with some of the spending cuts already identified by the White House in order to win support from conservatives in the House.

In an interview with radio talk-show host Laura Ingraham, McConnell described his plan in stark political terms, warning fellow conservatives that failure to raise the debt limit would probably ensure Obama's re-election in 2012. He predicted that a default would allow Obama to argue that Republicans were making the economy worse.

"You know, it's an argument he has a good chance of winning, and all of a sudden we (Republicans) have co-ownership of a bad economy," McConnell said. "That's a very bad positioning going into an election."

Sen. Charles Schumer, D-N.Y., said that while the president and other Democrats would still prefer a larger agreement, McConnell's plan was an acceptable option — especially if some consensus spending cuts were added. He said McConnell and Reid were discussing the idea.

Democratic officials said that even as Obama confronted Cantor and Boehner in Wednesday's meeting, he commended McConnell.

"Sen. McConnell at least has put forth a proposal," a Democratic official quoted the president as saying. "It doesn't reduce the deficit and that's what we have to do. It just deals with the debt limit. Now Sen. McConnell wants me to wear the jacket for that."

The officials said Obama went on to say they all had a responsibility to find a compromise.

____

Associated Press writers Dave Espo, Laurie Kellman, Ben Feller, Julie Pace, Martin Crutsinger and Erica Werner in Washington and Pallavi Gogoi in New York contributed to this report.

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Antitrust fixes loom as D.Boerse/NYSE vote nears (Reuters)

NEW YORK (Reuters) – Complex antitrust questions hang over Deutsche Boerse AG and NYSE Euronext just weeks before shareholders decide whether to endorse a blockbuster exchange merger, though no significant regulatory fixes are expected.

If investors back the $9 billion deal next month, they will have no further say as the two companies sit down at the bargaining table with European regulators in what are expected to be delicate negotiations through the end of the year.

Based on informal discussions so far in Brussels, the exchange operators do not expect to have to accept "structural remedies" such as divesting businesses to seal the deal, two sources familiar with the transaction said, though less severe "behavioral remedies" -- on pricing, for example -- may be required.

At issue is the strangle-hold Deutsche Boerse and NYSE Euronext would have on Europe's exchange-based futures market and, significantly, on clearing those trades.

Shareholders and analysts say it is very difficult to predict how the European Commission will react to the near-monopoly, what demands it could make, and whether the companies will ultimately be able to create the world's largest market operator as planned.

"We're going to vote for the deal hoping it happens. What we don't know how to handicap is the European regulatory process -- we just can't do that," said Timothy Hoyle, director of research at Pennsylvania-based Haverford Trust Co, which owns 1.2 million shares of NYSE Euronext, parent of the New York Stock exchange.

"In our conversations with the NYSE, they've led us to believe that they believe they'll gain regulatory approval with minimal concessions," he said.

Though merger votes are common before regulators sign off on deals, the stakes are high since antitrust and political concerns thwarted two exchange takeovers this year: Singapore Exchange's $8 billion purchase of Australia's ASX Ltd, and an unsolicited bid for NYSE Euronext from Nasdaq OMX Group and IntercontinentalExchange Inc.

ACCEPTABLE BEHAVIOR

NYSE Euronext shareholders vote on July 7, while Deutsche Boerse shareholders have until July 13 to tender shares to the deal. NYSE needs majority support; Deutsche Boerse needs 75 percent.

The next hurdle is in Brussels, where European Union Competition Commissioner Joaquin Almunia set the stage in March when he promised a "deep" antitrust probe, and later said he was concerned about Deutsche Boerse's "vertical silo" business model, in which it controls trading and clearing of contracts.

Together, Deutsche Boerse's Eurex and NYSE Euronext's Liffe platforms would dominate futures and options on European bonds, shares and rates -- stoking concern among banks and traders over the prospect of monopoly pricing.

Yet the two sources, who requested anonymity because of the sensitivity of the matter, said the companies do not expect to have to make significant concessions.

It is unlikely there is any legal justification for "significant structural remedies," though the exchanges are expecting "possibly some behavioral remedies," said a source involved in the antitrust discussions in Brussels.

Behavioral remedies "would likely revolve around the pricing of products or terms and conditions on which you make products available to customers," the source said.

So far, the informal talks between regulators and the companies have revolved around clarifying the trading and clearing businesses, said the source.

The exchanges, which announced their deal in February, expect to make a formal filing with the EC in the next couple of weeks, the two sources said. That will kick off a likely two-phase process over some six months in which lawsuits and politics could slow things down.

The deal also needs approval from the U.S. Justice Department and national regulators in Europe, but those reviews are seen as less of a threat.

Deutsche Boerse and NYSE Euronext declined to comment.

REPUTATIONS

NYSE Euronext CEO Duncan Niederauer, who would head the combined company, and Deutsche Boerse CEO Reto Francioni, who would be chairman, have in recent weeks been careful not to presuppose any EC demands.

Niederauer, addressing a New York conference alongside Francioni on June 10, said selling off a major business would be a "remote, or very, very unlikely" outcome of the European review.

In the months to come, the CEOs may have to decide whether divestitures or restrictions demanded by regulators amount to a "substantial detriment" to their respective companies. If so, either can back out, according to the merger deal.

"In that situation, you would hope they're responsible managers of the shareholders' capital and would do what's in the best interest of the shareholders," said Chris Allen, analyst at Evercore Partners.

Barclays Capital, in a research note, said regulators could push for a business model in which rivals can more easily launch alternatives or even have better access to Deutsche Boerse-NYSE Euronext's clearinghouse -- outcomes that could crimp the combined company's trading and clearing fees.

Ironically, Chicago-based CME Group Inc's nascent push into European clearing and futures trading could help make the antitrust case for Deutsche Boerse and NYSE Euronext. And CME itself overcame a similar, albeit U.S., regulatory review when it bought the Chicago Board of Trade in 2007.

For now, NYSE Euronext shares are about 3.5 percent lower than the implied value of Deutsche Boerse's offer, suggesting a long but manageable road to completing the deal.

(Reporting by Jonathan Spicer; editing by John Wallace)

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