U.S. lawmakers to reconsider bank tax for regulation bill

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WASHINGTON (Reuters) - U.S. lawmakers negotiating the final regulation bill will meet later on Tuesday to find an alternative to taxing large financial firms to pay for the bill's implementation, two sources familiar with the matter said.

Lawmakers may propose using funds from the $700 billion bank bailout fund and banks' deposit insurance fees, one source said. If lawmakers agree to a proposal being crafted by Senator Christopher Dodd, the House will vote on the final regulation bill on Wednesday, another source said.

Lawmakers are expected to meet at 2 pm on Tuesday.

(Reporting by Kevin Drawbaugh, Kim Dixon, Karey Wutkowski, Rachelle Younglai, Editing by Chizu Nomiyama)

ECB seeks to calm markets as one-year drain looms

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By Crispian Balmer and Judy MacInnis

PARIS/MADRID (Reuters) - European Central Bank officials scrambled to reassure nervous markets on Tuesday that the expiry of nearly half a trillion euros of emergency loans would not hurt the banking system, though they acknowledged some individual banks might face strain.

"The ECB and Eurosystem will do what is necessary to make sure the liquidity is there," Christian Noyer, who heads the Bank of France, told Europe 1 radio.

"There are some banks that are in a less good situation that might eventually suffer, but we will make sure that there are no problems and everything goes OK."

On Thursday, 442 billion euros ($544 billion) of one-year loans extended by the ECB -- the first of three one-year tranches offered to commercial banks as emergency support at the height of the global financial crisis -- will expire.

To offset the burden that banks will face in paying back the money, the ECB has padded the date with extra borrowing opportunities for them, including an offer of unlimited three-month funds on Wednesday.

This is expected to prevent any funding squeeze in the euro zone banking system as a whole. But markets worry that some smaller, weaker banks may find it hard to cope with the shift from the security of borrowing 12-month money from the ECB to relying on loans in shorter maturities.

This concern helped push the euro to a lifetime low against the Swiss franc on Tuesday. The three-month Euribor rate , a major indicator for euro lending, rose to 0.761 percent, the highest level since last September, from 0.754 percent on the previous day.

DEPENDENCE

Over the last several months, banks in Spain, Portugal and Greece, countries which face sovereign debt crises, have been increasingly dependent on the ECB for funding as private institutions have become reluctant to lend to them.

But the ECB is determined to wind down its one-year loans as part of efforts to restore normal monetary policy. ECB Governing Council member Ewald Nowotny, responding to a Financial Times report that some Spanish banks were angry at this decision, insisted on Tuesday that one-year lending would not be extended.

"The ending of the 12-month tender is accompanied by a number of actions to ensure that there will be no liquidity squeeze," Nowotny said in Vienna.

Spanish Economy Minister Elena Salgado urged the ECB to be "aware of the needs of the Spanish financial system", though she did not go as far as asking the ECB to continue one-year lending. She said Spain's banking system was strong.

"We know the smaller Spanish banks have been frozen out of the repo market and have had recourse to the ECB for short-term funding," a top Spanish financial source told Reuters.

"They could feel the pinch now, but I very much doubt that either the Bank of Spain or the Spanish government would let any of those banks get into real funding trouble, particularly given the fact the weakest lenders, the savings banks, are immersed in merger processes which have been flagged as near completion and successful."

Overall liquidity supply in the euro zone banking system is set to exceed 900 billion euros for the first time ever just before Thursday's loan repayment, suggesting the money markets will have little trouble handling the outflow of funds.

"There's plenty of liquidity available to bridge the gap, and there's plenty of money on deposit" with the ECB, said Simon Maughan, banking analyst at MF Global in Britain.

For a graph of liquidity, click:

http://graphics.thomsonreuters.com/10/EZ_ECBLEN0610.gif

NEGATIVE SIGN

Nevertheless, individual banks could face losses on bonds held for trading if paying back the one-year money to the ECB forces them to sell those bonds to raise cash. Spanish banks, for example, might face losses on Spanish government bonds, which have slid in value over the last few months.

Most banks should be able to avoid taking such losses, at least for now, by borrowing unlimited three-month money from the ECB and holding on to the bonds.

A bigger threat to the markets, said Andrew Lim, analyst at Matrix Securities in London, is the risk that demand for three-month money could prove unexpectedly large at Wednesday's ECB tender.

Money market traders polled by Reuters expect banks to borrow 210 billion in the three-month operation, which would be a record high. The results are due soon after 0900 GMT on Wednesday.

Since three-month Euribor is far below the 1 percent rate at which the ECB will lend its money, very high demand at the operation would ring alarm bells. It would suggest that more banks than feared had lost access to private funding in the market, and would imply banks remained worried about the health of the financial system and were hoarding funds.

"If the amount borrowed is very large, it will send a bad signal to the market," said Lim.

One sign that banks are hoarding funds came on Tuesday when the ECB took bids for one-week deposits at the central bank, an operation designed to absorb the liquidity created by the ECB's emergency purchases of government bonds.

Banks showed little appetite to part with their money, depositing only 31.9 billion euros despite the relatively high risk-free interest rate of 0.54 percent which the ECB was offering. The take-up in the operation was well below the ECB's target of 55 billion euros.

Adding to uncertainty in the markets is the fact that European governments are expected by late July to begin announcing the results of their "stress tests" of banks.

The tests, which will model the impact of tough economic conditions on banks and eventually cover more than 100 institutions, are being undertaken in the hope they will reassure investors about the health of the financial system.

But there is concern that the tests could discover danger spots among, for example, Spain's small savings banks or Germany's regional banks.

Meanwhile, a smooth passage of Thursday's loan payback might simply focus markets' attention on the expiry of the ECB's two other one-year loan tranches in September and December, and on the prospect of the ECB eventually ceasing to provide unlimited amounts of money in its market operations.

At present, the ECB has pledged to lend banks as much as they want until mid-October, though this date may have to be extended to protect weak banks.

(Additional reporting by Boris Groendahl in Vienna, Sonya Dowsett in Madrid and Andrew Torchia in London; Writing by Krista Hughes; Editing by Andrew Torchia)

World stocks, euro slump as risk aversion grows

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By Herbert Lash

NEW YORK (Reuters) - World stocks, commodities and the euro all tumbled on Tuesday as risk aversion grew on concerns over funding for European banks that must repay almost half a trillion euros in emergency loans this week.

A sharp drop in U.S. consumer confidence also eroded risk appetite, pushing up the price of government debt on both sides of the Atlantic and helping firm other safe-haven assets, such as gold.

Yields on the benchmark U.S. 10-year Treasury fell below 3 percent for the first time since April 2009, while the euro hit an all-time low versus the Swiss franc and an 8-1/2-year trough against the yen.

Interbank euro funding costs rose to an eight-month high, and the price of German Bunds hit three-week highs, buoyed by the slide in U.S. Treasury yields.

"It is a return to risk aversion," said Eugen Weinberg, a commodity analyst at Commerzbank in Frankfurt.

Fears of a potential liquidity shortfall of more than 100 billion euros in the financial system stoked the aversion to risk as European banks were poised to repay 442 billion euros ($545.5 billion) to the European Central Bank on Thursday.

The Standard & Poor's 500 Index, a U.S. stock benchmark, slid to within 2 points of its 2010 low, a threshold that if broken, could trigger a further sell-off. The index was also on course to close at its lowest level since November.

European shares hit a three-week closing low, breaking a key technical support level. The FTSEurofirst 300 index of top European shares ended down 3 percent at 995.82 points, its lowest close since June 9.

The Euro STOXX 50 fell below a retracement level from its April high and May low, signaling more losses.

MSCI's all-country world index slid nearly 3 percent, and its emerging markets index fell 2.8 percent.

At 1 p.m. EDT (1700 GMT), the Dow Jones industrial average tumbled 236.85 points, or 2.34 percent, at 9,901.67. The Standard & Poor's 500 Index dropped 28.62 points, or 2.66 percent, at 1,045.95. The Nasdaq Composite Index slid 68.49 points, or 3.08 percent, at 2,152.16.

SHORT COVERING

Traders cited significant U.S. dollar short-covering overnight, further weighing on the euro.

The euro was down 0.69 percent at $1.2192, while the dollar was up against a basket of major currencies, with the U.S. Dollar Index adding 0.50 percent at 86.076.

The risk premium on southern European government bonds over benchmark German bunds widened and the cost of insuring their debt against default rose.

Banks were among the heaviest decliners as they prepared to pay back the ECB money that was borrowed a year ago at rock-bottom rates.

The STOXX Europe 600 banking index fell 4.2 percent, while Barclays Plc, BNP Paribas, Societe Generale and Credit Agricole SA were off between 6.3 percent and 7.9 percent.

Even though U.S. single-family home prices climbed unexpectedly in April from the previous month, signs of a sustained recovery have not yet emerged, according to Standard & Poor's/Case Shiller.

Its composite index of prices in 20 U.S. metropolitan areas rose 0.4 percent on a seasonally adjusted basis after a downwardly revised 0.2 percent drop in March.

U.S. light sweet crude oil fell $2.53 to $75.72 a barrel, while ICE Brent fell $2.42 to $75.17, and copper shed more than 4 percent on concerns about an economic recovery.

Benchmark 10-year notes traded 10/32 higher in price to yield 2.99 percent.

Gold advanced, and U.S. Treasuries rose, pushing two-year note yields to the lowest on record, as jitters over the euro zone debt crisis supported safe-haven demand.

Spot gold prices added $6.50 to $1,243.50 an ounce.

(Reporting by Angela Moon, Chris Reese in New York; Kirsten Donovan, Emelia Sithole-Matarise, Atul Prakash, Harpreet Bhal, Jan Harvey and Christopher Johnson in London; writing by Herbert Lash; editing by Jeffrey Benkoe)

U.S. consumer confidence drops, home prices climb

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By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. consumer confidence dropped in June after rising for three months, adding to the view the economic recovery is slowing, while single-family home prices unexpectedly climbed in April.

The report Tuesday from The Conference Board, an industry group, showed the drop in confidence came from worries about the labor market, which has been one of weakest areas of the U.S. economy.

The group's index of consumer attitudes fell to 52.9 in June from a downwardly revised 62.7 in May. The June figure was sharply below the median of forecasts from analysts polled by Reuters.

Assessment of the labor market also worsened, with the "jobs hard to get" index rising while the "jobs plentiful" index slipped.

"There remain a lot of questions around the sustainability of economic growth," said Sean Simko, fixed-income portfolio manager in Oaks, Pennsylvania.

The confidence report was at odds with last Friday's consumer sentiment data from the Thomson Reuters/University of Michigan Surveys of Consumers. That survey showed sentiment in June rose to its highest since January 2008.

Tuesday's report comes just days ahead of the government's monthly data on employment, one of the most widely watched economic indicators. The report this Friday is forecast to show non-farm payrolls fell in June, according to a Reuters survey.

President Barack Obama, in a wide-ranging Oval Office meeting, said he and Federal Reserve Chairman Ben Bernanke agree the economy is strengthening and is in recovery but that more needs to be done, particularly on the job front.

All three major stock indexes were down at least 2 percent after the confidence data, while the U.S. dollar was down against the Japanese yen and U.S. Treasury debt prices were higher.

In another report, Standard & Poor's/Case Shiller home price indexes showed a final sales push before tax credits expired drove single-family home prices up in April.

For a graphic on U.S. home prices, please see: http://link.reuters.com/qas74m

The S&P composite index of home prices in 20 metropolitan areas for April rose 0.4 percent on a seasonally adjusted basis after a downwardly revised 0.2 percent drop in March, compared with a 0.1 percent decline forecast in a Reuters survey. March prices were previously reported as unchanged.

On an unadjusted basis, prices gained 0.8 percent in April following March's 0.5 percent drop. A 0.2 percent rise was forecast in a Reuters poll.

Home sales have fallen since the April 30 end of tax credits. The housing market has yet to show signs of a sustained recovery.

"Inventory data and foreclosure activity have not shown any signs of improvement," David Blitzer, chairman of S&P's index committee, said in a statement.

(Additional reporting by Lynn Adler, John Parry and Wanfeng Zhou, Editing by Chizu Nomiyama)

Democrats return to drawing board on Wall St bill

Democrats return to drawing board on Wall St bill

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By Rachelle Younglai and Kevin Drawbaugh

WASHINGTON (Reuters) - U.S. Democrats on Tuesday considered stripping out a controversial tax from their landmark financial-reform bill in order to win the swing votes needed to pass it in Congress.

With crucial Republican moderates threatening to withdraw their support for the bill, Democrats were weighing alternative ways to fund the most sweeping rewrite of the Wall Street rulebook since the 1930s, multiple sources said.

Democrats planned to reopen negotiations on the bill at 2 p.m. (1800 GMT), sources said.

Until Sunday, the bill had been expected to pass both chambers of Congress and be signed into law by President Barack Obama by July 4.

But Democrats are now two votes short of the 60 needed to clear a Republican procedural hurdle in the Senate. Democratic Senator Robert Byrd died on Monday morning, depriving his party of a needed vote, and Republican Senator Scott Brown said on Tuesday he would withdraw his support unless Democrats strip out $19 billion in taxes that would apply to large financial institutions.

The tax was added during a final all-night negotiating session last week.

"It is especially troubling that this provision was inserted in the conference report in the dead of night without hearings or economic analysis," Brown wrote in a letter to the Democrats who are handling the bill. "This new provision takes real money away from the economy, making it unavailable for lending on Main Street, and gives it to Washington."

Other moderate Republican senators who have previously supported the bill have also expressed reservations over the new tax.

For a graphic on the Senate vote: FinReg cloture, please see: http://link.reuters.com/hef64m (Additional reporting by Kim Dixon, Corbett Daly and Andy Sullivan; writing by Andy Sullivan; editing by Dan Grebler)

Cricketers may be England's 'golden generation'

MANCHESTER: England's footballers may have failed to live up to their "golden generation" tag but their much less heralded cricket counterparts may be closer to justifying the label.

While Fabio Capello's men were getting knocked out of the World Cup with a crushing 4-1 loss to Germany in the last 16 in Bloemfontein on Sunday, the England cricket team were in the process of winning the third one-day international (ODI) against Australia at Old Trafford, albeit by one wicket.

But the result gave England an unbeatable 3-0 lead in the five-match series.

It also meant they had beaten Australia in their last three meetings in all of cricket's international formats, after their win in last month's World Twenty20 final in Barbados and the 2009 Ashes Test series triumph.

England off-spinner Graeme Swann, man-of-the-match at Old Trafford with four wickets for 37 runs, has been central to all those successes.

And while he was saddened by the football team's failure, Swann told reporters here on Monday: "It would be nice to think that we are the golden generation rather than the footballers but we all wanted England to do well in the World Cup and that was a big let-down."

England have enjoyed a rapid resurgence under the leadership of captain Andrew Strauss and coach Andy Flower.

In last year's corresponding one-day series they were beaten 6-1 by Australia but victories at The Oval and Lord's this week would extend their run of ODI wins to 10 in a row.

England started to show signs of taking their one-day cricket seriously, following a team meeting called by Flower, with a run to the semi-finals of last year's Champions Trophy in South Africa that ended with a thumping defeat by eventual winners Australia.

Nevertheless, a change in approach had happened and Swann explained former Zimbabwe batsman Flower had been instrumental in altering the team's mindset.

"The great thing Andy Flower had done is to instil a confidence in everyone to back their natural ability on the big stage, like they do in the county games," said Swann.

"That was exemplified in the (World) Twenty20. It was the way we went out, not with carefree abandon but certainly almost a joyous approach - compared with how England teams have approached Twenty20 the previous three years."

He added: "The satisfying thing for us is that we sat down 18 months ago and said we want to be number one in all formats, and asked how are we going to do it?

"We have plotted our way to this point, and everything has gone well.

"We have won the Ashes, won the World Twenty20 and won this series after just three games - which you might expect against some teams, but possibly not Australia.

"That is testament to the way we are playing."

England though have not won a Test series 'Down Under' since Mike Gatting's men swept all before them on their tour of Australia back in 1986/87.

Strauss has been at pains to stress how the result of this series should not be used as a guide to the Ashes and Swann was in full agreement with his captain, saying: "The Ashes is a different game. When you look in our changing room there are only three, four or five players involved in the Test team.

"For us to win this series is great but once November 25 comes round it will not matter if it is 5-0 in this series. When that first ball is bowled in Brisbane it is a whole new ball game."

Bollinger says whitewash would be 'devastating'

Australia quick Doug Bollinger admits being on the wrong end of a 5-0 one-day international series clean sweep by England would be "devastating".

The left-arm paceman nearly helped bowl Australia to a spectacular victory in the third one-day international at Old Trafford on Sunday.

England, who defend the Ashes in Australia later this year, were cruising to victory but lost six wickets for 18 runs before Tim Bresnan saw the side to a one-wicket win with five balls to spare.

That gave England an unbeatable 3-0 lead in the five-match series and meant they'd got the better of arch-rivals Australia in all of their most recent meetings in all three international formats, having beaten their oldest cricket foes in last month's World Twenty20 final after regaining the Ashes last year.

Now England, who haven't enjoyed such ascendancy over Australia since their 'grand-slam' Ashes winning tour in 1986/87, will be looking to move nearer a whitewash of the world champions when the fourth one-day international takes place at The Oval here on Wednesday.

"We'd love to stop them, 5-0 would be devastating," Bollinger told reporters at Australia's hotel here on Monday.

"But we've just got to go out there and do everything properly and hopefully win the next two; 3-2 would still be disappointing but it would be two good wins," the 28-year-old New South Wales paceman added.

"It isn't the start we wanted being 3-0 down but there isn't much we can do. Everyone went out and played their guts off and sometimes it just doesn't work out. We can't whinge about it, we just have to try and finish well in these two one-dayers before the T20s and Tests against Pakistan."

One consolation for Australia in their defeat at Old Trafford was the form of fast bowler Shaun Tait, who took three wickets for 28 runs in his first one-day international since February 2009.

"Shaun came in and bowled really fast," said Bollinger. "He bowled really well. He got three for 28 and bowled well for the team, and that gave us a massive boost.

"For me he can have a massive effect on the series. If he keeps bowling well then he'll take a lot of wickets - and I hope he does.

"He's a great guy to have in the dressing room too, so to have him available is like a breath of fresh air."

Lanka cricketers banned from playing abroad

Sri Lanka has imposed a temporary ban on its cricketers playing in foreign leagues to help it select a squad for next year's World Cup, an official said.

Brian Thomas, Sri Lanka Cricket media manager, said the ban affected 76 players, who are set to be sent away to a camp so they can be assessed by national selectors.

"All contracted players have been told not to take part in any overseas leagues," Thomas said yesterday.

Former captain Sanath Jayasuriya and seam bowler Chaminda Vaas, who currently are playing for English counties Worcestershire and Northamptonshire respectively, are among the players expected to return home.

Sri Lanka is one of the co-hosts of the World Cup starting next February, along with India and Bangladesh, and will be looking to repeat its tournament success in 1996.

Former batsman Aravinda de Silva was recently appointed as chief selector.

New Zealand batsman Ross Taylor will have a unique dilemma in this year's Champions League Twenty20 with the New Zealand batsman having qualified for

New Zealand batsman Ross Taylor will have a unique dilemma in this year's Champions League Twenty20 with the New Zealand batsman having qualified for as many as three teams for the September 10-26 event.

At least another six cricketers have qualified for two teams and would have to make a choice before the CLT20 starts with a Mumbai Indians-Highveld Lions match at the Wanderers in Johannesburg, which will also host the final.

Taylor became the first player in CLT20's short history to qualify for three teams after his home province Central Stags made it to the event, along with his 'away' teams Victorian Bushrangers and Royal Challengers Bangalore.

As was the case in 2009, an 'away' team would have to pay USD 200,000 to the 'home' team to avail the service of such a player. 'Away' teams, however, are not eligible for compensation if a player chooses to play for his 'home' team.

Already, six players have qualified for two teams and they are Jacques Kallis (Warriors, Royal Challengers Bangalore), Mark Boucher (Warriors, Royal Challengers Bangalore), Makhaya Ntini (Warriors, Chennai Super Kings), Kieron Pollard (South Australian Redbacks, Mumbai Indian), Dwayne Bravo (Victorian Bushrangers, Mumbai Indian) and Cameron White (Victorian Bushrangers, Royal Challengers Bangalore).

And if Trinidad & Tobago emerge as champions of the West Indies Cricket Board's domestic Twenty20 competition, Pollard and Bravo will also join Taylor with three options for the tournament.

Meanwhile, the organisers of the tournament on Tuesday announced that while Wanderers would host the first match and the final of the tournament, Durban and Centurion will host the semifinals on September 24 and 25 respectively.

The 10 competing teams -- including three from India - have been divided into two groups of five for a round robin phase before the top two teams from each group progress to the semifinals.

Mumbai and the Highveld Lions have been drawn in Group B alongside South Australia's Redbacks, Royal Challengers Bangalore and West Indies' representative which will be determined in late-July.

Group A includes MS Dhoni's Chennai Super Kings, Victoria, Warriors, Wayamba and Central Stags.

"With 100 international stars qualified to participate through one ¿ or more ¿ of their Twenty20 teams, fans will be treated to daily battle between the world's best cricketers," CLT20 Chairman Shashank Manohar said.

"Fans attending any of the matches throughout the tournament will be entertained by the highest quality Twenty20 cricket featuring South Africa's home grown heroes and world cricket's biggest and brightest stars," he added.

BCCI scraps IPL media rights deal with WSG

Mumbai: The Indian cricket board has scrapped all its IPL media rights agreements with Mauritius-based World Sport Group, claiming that MSM Satellite (Singapore) Pvt Ltd was the rightful owner of all media rights relating to the Twenty20 event.

The BCCI has invalidated all its deals with WSG following revelations that the latter received USD 80 million (Rs 425 crore) as "facilitation fee" from MSM for getting back the Indian sub-continent media rights of IPL in March 2009, according to Board sources.

The deals with WSG were scrapped by BCCI after MSM had last week agreed to pay it Rs 300 crore plus the remaining amount of Rs 125 crore, which it has already paid to WSG, after initiating legal action against the Mauritius firm.

None of the BCCI's top brass was available for comment as they were currently attending the International Cricket Council's (ICC) annual conference in Singapore.

None from WSG's Mumbai office was also available for reacting to BCCI's move of terminating all the deals with it. Last week the BCCI's Governing Council meeting approved an amended Media Rights Agreement with MSM, which had agreed to pay Rs 425 crore "facilitation fee" to WSG on March 25, but the Board later contended that the money rightfully belonged to it.

Buzz Up Windies A beat India A by 166 runs in tri-series

ndia A started their cricket tri-series campaign on a disastrous note as they slumped to a humiliating 166-run defeat at the hands of West Indies A side in the opening match at the County Ground.

Sent into bat, West Indies piled up a mammoth 329 for six in their 50 overs yesterday, thanks to captain Devon Smith's breezy 98-ball 104 and Andre Fletcher's 88.

Chasing the huge target, the Indians batsmen never got into the act and lost wickets at regular intervals to ultimately skittle out for a paltry 163 in 33.2 overs with Jaskaran Singh top-scoring with a 45-ball 51.

Openers Abhinav Mukund (12) and Ajinkya Rahane (23) failed to provide India a blistering start, which was required to chase down the stiff target, while hard-hitter Manish Pandey (14) also disappointed at the one-down position.

Skipper Cheteshwar Pujara tried to resurrect the Indian innings with a patient 31 off 51 balls before Jaskaran came out with a gutsy display.

But once Jaskaran, who cracked three fours and as many sixes, was dismissed Imran Khan (1/16), the end was inevitable for India.

Anthony Martin was the pick of the West Indian bowlers, scalped three wickets for 47 runs, while Lionel Baker bagged two for 32.

Earlier, the West Indian opening duo of Smith and Fletcher gave a solid start to their innings by producing a 193-run partnership. Smith cracked 14 fours during his three-digit score while Fletcher adorned his 93-ball innings with 11 fours.

West Indies lost their first wicket when pacer Abhimanyu Mithun (1/49) removed Fletcher in the 31st over and then Jaskaran, who scalped two wickets for 73 runs, dismissed Kirk

Edwards (2) cheaply in the next over.

Then two run outs in quick succession saw Smith and Assad Fudadin (10) departing back to the pavilion.

However, Kevin Stoute (52 not out) and Andre Russell (42) added 71 runs for the sixth wicket before the latter fell prey to Jaidev Unadkat (1/73).

Yardy wants more from England

London: England left-arm spinner Michael Yardy insists the team can play better despite going an unbeatable 3-0 up in their One-day series against Australia.

The hosts' run has prompted talk of a clean sweep ahead of the fourth of their five-match series with the Aussies here at the Oval on Wednesday. Yardy, a member of the England team that beat Australia in last month's World Twenty20 final in Barbados, was adamant the team's current success was in no way diminished by Australia having come to England without injured first-choice quicks Mitchell Johnson, Peter Siddle and Ben Hilfenhaus.

"They are a very competitive nation and they are still ranked as the best team in the world," Yardy told reporters on Tuesday.

"The most important thing is to concentrate on the things we've been doing well in the series. There are things to improve on and make sure the focus is on what we do well. I think that's been the big thing this series; we haven't worried too much about Australia and more about what we do and our plans. So far they have worked pretty well."

He added: "Obviously 5-0 would be nice but we have to deal with this game first. We still have a few areas top improve on and we'll be hoping to do that tomorrow (Wednesday).

"It's nice to be 3-0 against the Australians, who are ranked as the top team in the world, and 3-0 is fantastic but we're still trying to keep improving and moving things forward."

Wimbledon|Venus Williams|Vera Zvonareva|Kim Clijsters|All England Club|Tsvetana Pironkova LONDON: Five-time champion and second seed Venus Williams

Wimbledon|Venus Williams|Vera Zvonareva|Kim Clijsters|All England Club|Tsvetana Pironkova

LONDON: Five-time champion and second seed Venus Williams was stunned 6-2, 6-3 by Bulgaria's Tsvetana Pironkova in the quarter-finals of Wimbledon on Tuesday.

Williams, whose loss meant she failed to reach the final for the first time since 2006, was outplayed from the outset by the world number 82 and went down in an hour and 25 minutes on Court One.

"It's like a dream, coming here I never thought I'd play that well and come this far in the tournament," Pironkova said. "I think I played pretty well today, I'm very happy with my game."

"I have one win over her and thought I could win and I was going for it," said the 22-year-old who scored a three-set win over Venus at the Australian Open four years ago.

Williams saved two match points serving at 2-5 in the second set but Pironkova made no mistake on her own serve and sealed victory when a Williams forehand drifted wide.

She rolled onto her back in disbelief and covered her face with her hands before walking to the net after becoming the first Bulgarian woman to reach a grand slam semi-final since tennis turned professional.

Pironkova, the lowest ranked player left in the women's draw, will play either Belgium's Kim Clijsters or Russian Vera Zvonareva for a place in Saturday's final.

Sepp Blatter apologizes for World Cup howlers

Tags:Mexico|England|Frank Lampard|Diego Maradona|FIFA|Sepp Blatter|Carlos Tevez|goal line technology

JOHANNESBURG: FIFA president Sepp Blatter on Tuesday apologzised to England and Mexico over refereeing errors during their World Cup last 16 matches and pledged to review the case for the introduction of goal-line technology.

The Swiss was reacting to two incidents on Sunday when England's Frank Lampard had a goal disallowed even though it was clearly over the line in the clash with Germany which would have made it 2-2. The Germans went on to win 4-1.

Mexico were also left aggrieved when Argentinian striker Carlos Tevez was clearly offside when he scored their first goal and it was made worse when the incident was shown on the big screen.

Referee Roberto Rosetti was unable to disallow the goal as he is forbidden to take into account such evidence. Argentina went on to win 3-1.

"Personally I deplore it when you see evident referee mistakes but it's not the end of a competition or the end of football, this can happen," said Blatter.

"The only thing I can do is yesterday I have spoken to the two federations (England and Mexico) directly concerned by referees' mistakes.

"I have expressed to them apologies and I understand they are not happy and that people are criticising.

"I apologized to England and Mexico. The English said 'thank you' and accepted that you can win (some) and you lose (some), and the Mexicans bowed their head and accepted it.

Blatter said that the only technology that would be discussed would be goalline technology which would have made no difference to the Mexican game or indeed to the incident when Thierry Henry's handball set up what proved to be the crucial goal in the France vs Ireland World Cup play-off last November.

"The only principle we are going to bring back for discussion is goal-line technology," said Blatter.

"Football is a game that never stops and the moment there was a discussion if the ball was in or out, or there was a goal-scoring opportunity, do we give a possibility to a team to call for replays once or twice like in tennis?

"For situations like the Mexico game you don't need technology.

"Its obvious that that after what we have experienced so far it would be a nonsense not to reopen the technology topic in July (21-22) in Cardiff."

Blatter also said that FIFA in October or November would unveil a new global plan to improve refereeing at competitions under its purview.

"We want to improve the match control," he said.

"How to do it? After World Cup 1990, we created a task force called football 2000.

"We made some amendments like the back pass to goal keeper. It's not today we have just started. It's an ongoing process. We'll come out in October/November with a new model how to improve high level refereeing.

"I cannot disclose more of what we are doing but something has to be changed."

FIFA have consistently rebuffed all demands to resort to video technology to resolve contentious refereeing decisions despite it being successfully implemented in other sports such as tennis, cricket and rugby union claiming that it would disrupt the free-flowing movement of the game.

But international pressure grew following the Henry handball outcry and Sunday's two glaring incidents have brought the issue back into the full glare of the spotlight.

Tags:Japan|world cup|Paraguay|Lucas Barrios|Carlos Bonet PRETORIA: Paraguay beat Japan 5-3 on penalties following a 0-0 draw to reach the World Cup

Tags:Japan|world cup|Paraguay|Lucas Barrios|Carlos Bonet

PRETORIA: Paraguay beat Japan 5-3 on penalties following a 0-0 draw to reach the World Cup quarterfinals for the first time in their history on Tuesday.

Substitute Oscar Cardozo scored the decisive spot-kick at the Loftus Versfeld stadium after Japan's Yuichi Komano had smashed his penalty against the crossbar.

Paraguay will play either Spain or Portugal, who meet later Tuesday, in the quarter-finals on Saturday.

The shoot-out was needed after 90 minutes of regulation time and 30 minutes of extra time failed to separate the two teams in a tense affair of few chances.

Yoshito Okubo had an early chance for the Asian side but shot well wide while at the other end Edgar Benitez couldn't keep his header down from Roque Santa Cruz's inviting cross.

The game briefly exploded into life on 21 minutes as Paraguay striker Lucas Barrios sneaked in behind the defence with a lovely little drag back but then he prodded his shot straight at goalkeeper Eiji Kawashima.

Less than 60 seconds later Daisuke Matsui ran onto a loose ball and tried his luck from distance only to see his curler crash against the Paraguay crossbar.

On 29 minutes Manchester City striker Santa Cruz should have done better when the ball dropped to him 12 yards out, but he rushed his left foot volley and dragged the ball wide.

Japan star Keisuke Honda set his sights five minutes from the break but his left-foot effort from 20 yards drifted wide.

At the start of the second period Nestor Ortigoza opened up the Japanese defence to create a shooting opportunity but Yuto Nagatomo slid in to make a goal-saving block.

Yuji Nakazawa was next to dive in and stop a goalbound effort from Benitez as Paraguay started to turn the screw.

Cristian Riveros then met a Claudio Morel cross with a firm header which went straight at Kawashima.

Five minutes into extra-time, Barrios's header from Morel's cross landed in Kawashima's arms before Nelson Valdez turned sharply on the edge of the box to create a half chance that Kawashima smothered.

At the other end Paraguay captain and keeper Justo Villar palmed away a fizzing Honda free-kick.

Japan had a late opportunity on the counter attack but after Shinji Ozakazi's backheel released Keiji Tamada the Nagoya Grampus Eight forward opted to cross instead of shoot and the chance went begging.