Chinese hackers infiltrate five energy firms

Attacks said to target oil and gas exploration documents

Hackers working in China broke into the computer systems of five multinational oil and gas companies to steal bidding plans and other critical proprietary information, the computer security firm McAfee Inc (MFE.N: Quote) said in a report.

The report, which named the attacks Night Dragon, declined to identify the five known companies that had been hacked and said that another seven or so had also been broken into but could not be identified.

"It ... speaks to quite a sad state of our critical infrastructure security. These were not sophisticated attacks ... yet they were very successful in achieving their goals," said Dmitri Alperovitch, McAfee's vice president for threat research.

The three largest U.S.-based oil companies, Exxon Mobil, Chevron and ConocoPhillips, all declined to comment on whether they had been targeted, citing policies not to speak about their security measures.

The attacks are the latest computer-based invasions directed at western companies, and come a year after Internet giant Google and more than 100 companies were targeted by hackers that were traced to China.

Stock market owner NASDAQ OMX reported over the weekend that hackers appeared to have breached its systems, and new legislation was introduced in the U.S. Senate that would strengthen cyber security. [ID:nN10161724]

In the attacks against the oil companies, the hackers got into the computers either through their public websites or through infected emails sent to company executives.

During the last two years -- and up to four years -- the hackers had access to the computer networks, focusing on financial documents related to oil and gas field exploration and bidding contracts, said Alperovitch.

They also copied proprietary industrial processes.

"That information is tremendously sensitive and would be worth a huge amount of money to competitors," said Alperovitch.

The hack was traced back to China via a server leasing company in Shandong Province that hosted the malware, another term for malicious software, and to Beijing IP addresses that were active from 9 a.m. to 5 p.m. Beijing time (0100-0900 GMT).

McAfee's report did not identify who was behind the hacking.

"We have no evidence that this is government sponsored in any way," said Alperovitch.

McAfee provided the data to the Federal Bureau of Investigation, which did not respond to requests for comment.

"This is normal business practice in China. It's not always state sponsored. And they do it to each other," said Jim Lewis, a cyber expert with the Center for Strategic and International Studies think tank.

Asked if Beijing normally agreed to arrest hackers, Lewis responded: "It's not impossible, but it hasn't happened very often."

The Chinese government often says their country is also a victim of hacking. But Foreign Ministry spokesman Ma Zhaoxu told reporters at a regular press briefing on Thursday in Beijing that he was unaware of this case.

"I really have no grasp of this situation, but we frequently hear about these types of reports," Ma said.

Western governments and companies have long been concerned about corporate espionage based in China.

"We are aware of these types of threats, but we can't comment specifically about what's in the Night Dragon report," said FBI spokeswoman Jenny Shearer.

Washington believes that hacking attacks on Google Inc (GOOG.O: Quote) that briefly prompted the company to pull out of China were orchestrated by two members of the country's ruling body, according to U.S. diplomatic cables released by Wikileaks.

The French government is looking into a possible Chinese role in spying on carmaker Renault SA's (RENA.PA: Quote) and Nissan's electric vehicle program.

In 2007, a Chinese student working at car parts maker Valeo (VLOF.PA: Quote) was sentenced to prison for obtaining confidential documents from the automaker. A French tribunal stopped short of an industrial espionage verdict, instead finding that she had "abused trust." (Additional reporting by Michael Martina in Beijing and Matt Daily in New York; Editing by Andre Grenon, Yoko Nishikawa and Bernard Orr)

Egypt protests mount as US presses Mubarak

CAIRO (AFP) - – Galvanised by the biggest day of protest since their campaign to oust Hosni Mubarak's regime began, Egyptian pro-democracy campaigners attempted to blockade parliament Wednesday.

As speakers blared "Do not be tired. Do not be tired. Freedom isn't free," thousands of protesters remained camped under plastic sheets and the tracks of tanks, clinging to their "liberated" enclave on Cairo's Tahrir Square.

Around a thousand marched on parliament to demand its member's resignation. The protest was peaceful, and government troops secured the building, but the marchers swore they would not leave until the body was dissolved.

The night before they had been joined by several hundred thousand supporters for the biggest night of rallies yet in the two-week-old drive to topple their autocratic president and replace his 30-year-old regime. Timeline: Latest events in Egypt

"There can be no negotiation until he leaves. After he leaves we can talk about all sorts of things," said Essam Magdi, a 35-year-old lawyer, who has slept under an army tank since January 28 to prevent it from moving.

Egypt's 82-year-old president has deputised his vice president and former intelligence chief Omar Suleiman to draw selected opposition groups into negotiations on democratic reform before elections in September.

Some parties have joined the talks, but the crowds in Tahrir insist that Mubarak must go before they will halt the protest. Suleiman, however, warns that the transition must be slow and orderly if there is not to be chaos.

"A clear road map has been put in place with a set timetable to realise a peaceful and organised transfer of power," he said Tuesday on state television.

Afterwards, however, he told Egyptian editors that he would not allow "uncalculated and hasty steps" and warned "there will be no ending of the regime, nor a coup, because that means chaos."

The United States is watching events in the biggest country in the Arab world with great concern, hoping the transition to elected rule can take place without a descent into violence or an Islamist or military takeover.

On Tuesday, US Vice President Joe Biden renewed an appeal for "immediate" and "irreversible" political change in a phone call to Suleiman, including a wider national dialogue with the opposition, a White House statement said.

He also renewed US calls for Egypt to immediately rescind an emergency law, which was renewed for two years last May and which Washington says gives the government sweeping powers to restrict basic freedoms. Focus: Egypt revolt takes toll on economy

The vice president has begun meeting representatives of some opposition parties -- including the powerful Muslim Brotherhood, but not some of the street protest groups -- to draw up plans for a democratic transition.

But opposition groups say any vote to replace Mubarak would not be fair under Egypt's current constitution.

The presence of the Brotherhood at the protests has caused some in Western capitals to fear the movement might be hijacked by Islamists, but the demonstrators insist their goal is free elections open to all.

"We didn't want a military state or a religious state. We want a state of institutions and elections," said 34-year-old Atif Awad, a carpenter and a member of the Muslim Brotherhood.

The demonstrators plan to hold the square until Mubarak falls, and have been joined daily by supporters bringing food and staging street rallies. Tuesday's were the biggest yet, packing the area in defiance of a nightly curfew.

An Iraqi Al-Qaeda front group, the so-called Islamic State of Iraq, urged the Egyptian protesters to turn their backs on the "ignorant deceiving ways" of secularism, democracy and "rotten pagan nationalism."

Instead, it argued, they should launch a jihad for an Islamic state -- an idea that has long been rejected out of hand by the opposition movement, a motley coalition of leftists, secularists, Islamists and liberals. Focus: Activists chart legal path for Egypt revolt

The groups in the square have been inspired and mobilised by young Egyptian cyberactivists like Google executive Wael Ghonim, who promoted protest on his Facebook page and was held for 12 days blindfolded by authorities.

Freed on Monday, he was given a hero's welcome in the square at Tuesday night's protest, and he and others insist the revolt is a popular uprising.

"We are all Egyptians, Christian and Muslim, anybody who says differently is trying to divide us, make us scared of one another. That's the regime's idea," said Abdelrahman Sami, a 24-year-old doctor. Focus: Arab regimes struggle against revolt spread

On Tuesday, Russia called for the UN Security Council to launch a mission to the Middle East to unblock the peace process between Israel and the Palestinians and to assess the turmoil in Egypt and other countries.

The Security Council has not visited the troubled region for more than three decades. Russia's UN ambassador Vitaly Churkin said council envoys should go to Israel, the Palestinian territories, Syria, Egypt and Lebanon.

Mubarak met Wednesday in Cairo with Russia's Middle East envoy Alexander Sultanov, but no details of the discussions emerged.

Cisco Earnings to Weigh on Sentiment

Cisco's steep after hours decline can't help but spill into Thursday morning trading.

The tech bellwether reported better-than-expected earnings of $0.37 per share, below last year's $0.40 per share. But its revenue forecast was lighter than expected, and it was that and margin pressures that investors focused on in late Wednesday trading. The stock was down more than 9 percent. (Get latest after-hours quote here.)

The question is whether Cisco [CSCO  18.919    -3.121  (-14.16%)   ] will hit tech broadly or investors will treat it as an isolated story. Nasdaq futures were lower Wednesday evening.

"I think the market's looking for a bit of a breather here," even without Cisco, said John O'Donoghue, who heads Cowen's trading desk.

Any pull back, however, would be relatively small. "Nothing of major consequence..Look at what happened when Egypt blew up. The market was down for one day," he said.

Stocks Wednesday turned in a mixed performance, with the Dow up 6 at 12,239, and the S&P 500 down 3 at 1320. The Nasdaq fell 7 to 2789. If the Dow ends higher again on Thursday, it would be the 9th consecutive daily gain and the longest streak since a 10-day run in November, 1996.

O'Donnell noted that the Dow is now up more than 5.7 percent year-to-date, and he expects to see the market end the year another 10 percent higher. He said the market's orderly climb may have to do with investors putting new money into stock mutual funds. "There's a slow steam higher but on no volume," he said.

Investors Thursday will be watching weekly jobless claims at 8:30 a.m., wholesale inventories at 10 a.m. and the January budget statement at 2 p.m. Earnings reports are expected from Pepsico, Credit Suisse, Philip Morris International, Thomson Reuters, Molson Coors, Noble Energy, Alcatel-Lucent, and International Flavors and Fragrances. After the bell reports are expected from Kraft Foods, Blue Nile, Cephalon and Expedia.

Investors will also watch for any further reaction to the NYSE Euronext/Deutsche Boerse merger talks, announced Wednesday. The deal talks and an announced deal between Toronto's TMX and the LSE sent exchange shares flying on speculation of more consolidation. One of those companies, CBOE, reports earnings early Thursday morning and holds an 8:30 a.m. conference call.

At 1 p.m., the Treasury will auction $16 billion in 30-year bonds. The Treasury Wednesday sold $24 billion in 10-year notes at a yield of 3.665 percent, lower than many analysts expected after the recent run up in yields.

Indirect bidders, which include foreign central banks, bought 71 percent of the auction, the largest percent ever bought by that group. The average has been running at just under 45 percent.

Jefferies Treasury strategist John Spinello said the 10-year's performance should not have a bearing on the outcome of the 30-year auction.

"It was obviously an institution covering a significant short or someone finding 3.66 extraordinarily attractive, which I doubt would be the case. I think it was a short-based play," he said. The 10-year finished the day with a yield of 3.65 percent, after nearing 3.75 Wednesday.

Spinello said Fed Chairman Ben Bernanke did not really deliver anything new in his testimony before Congress Wednesday. Bernanke warned Congress against overly steep budget cuts. He defended the Fed's quantitative easing program and repeated that the rise in commodities prices is being driven by global demand, not the Fed's programs.

After the close, Brian Sack, executive vice president of the New York Fed's Markets Group, spoke in Philadelphia. Like Bernanke, he said the rise in Treasury yields does not appear to reflect inflation concerns but greater optimism about the economic outlook.

Sack also said the bond purchases have had a helpful effect on financial conditions. He also said the Fed has not "lost any momentum" in its preparations to end the easing policy. The Fed's quantitative easing program is expected to end by the end of June. According to Reuters, Sack said 500 firms have registered for the Fed's term deposit facility, and the New York Fed has 58 money market funds ready to serve as counterparties for reverse repurchase agreements. 

Egypt awaits Mubarak departure

Across the political spectrum, many wondered whether that posture had shifted.

“We’re excited and nervous,” said Ahmed Sleem, an organiser with an opposition group led by Mohamed ElBaradei, a Nobel laureate. “If Mubarak and Suleiman leave, it would be a great thing. A six-month deadline for elections would be suitable.”

Asked about the possibility of a military takeover, he said he was not afraid. “We know how to force them to step down. We know the way to Tahrir Square.”

The prospect of a military takeover was also raised by Badrawy.

“That’s an option,” he said. “That can happen. I don’t like it. I’d like to see a civil structure for the state. I would like to see the army do its part to keep the country safe until we go back to normal and not military rule.”

The military’s supreme council held a meeting on Thursday. A spokesman read a statement that the council was in permanent session to explore “what measures and arrangements could be made to safeguard the nation, its achievements and the ambitions of its great people.”

“Today, Thursday the 10th of February of the year 2011, a meeting was held to discuss the developments of the situation.. It is decided that a meeting will convene continuously to look into what measures and procedures to be taken to maintain the homeland and the achievements and the aspirations of the great people of Egypt,” it said.

Even before the military stepped in, support seemed to be crumbling for Mubarak within his own ruling party and government, as protesters called for the biggest demonstrations on Friday since the uprising began on January 25. Hossam Badrawy, the newly appointed secretary-general of the ruling National Democratic Party, said Mubarak appeared to accept his call to peacefully transfer power to the vice president.

He said he expected the president to speak Thursday night.

“I hope he would say that he has respect for the people and that he has asked for a constitutional amendment that guarantees a peaceful transfer of power and that he will give authority as president to the vice president. I hope this heads to early elections for the presidency so the state and people can move to another era. That is what I hope he says. That is what I’ve requested him to do,” Badrawy said.

He called Mubarak “very accommodating.”

“I know it is difficult for him,” he said. But he added, “I think I convinced him to do that as soon as possible.”

The dramatic developments came on the 17th day of the Egypt uprising, bolstered by strikes and protests among professional groups in Cairo and workers across the country. A senior official in Mubarak’s embattled government was quoted as saying the army would “intervene to control the country” if it continued to devolve into chaos.

As tension built ahead of Friday’s planned mass protests, thousands of chanting lawyers in black robes and physicians in white laboratory coats marched into Tahrir Square to join the clamour for Mubarak’s ouster.

Engineers and journalists also headed for the square on Thursday as the numbers there began to swell once again into the thousands. The army has also deployed tanks and reinforcements across the city, setting up a narrow access point to the square.