Business and Finance

House Speaker John Boehner publicly blessed a Republican deficit-reduction plan Tuesday that would raise $300 billion in additional tax revenue while overhauling the IRS code, bucking opposition by some GOP presidential hopefuls and colleagues wary of violating a longstanding point of party orthodoxy.

Boehner, the top Republican in Congress, spoke as time grew perilously short for agreement by the deficit-fighting “supercommittee.” The panel has until a week from Wednesday to vote on any compromise, but several officials said that in reality, perhaps as little as 48 or 72 hours are available to the six Republicans and six Democrats.

While Boehner’s voice is important, his endorsement does not mean all Republicans will follow him or that a deal is in sight. Republicans have been unified for two decades in opposition to higher taxes, while Democrats on the supercommittee insist on additional revenue before they will agree to cuts in benefit programs like Medicare as part of a compromise.

The speaker said that the plan, outlined a week ago to Democrats on the committee, was “a fair offer.” Adding tax reform would generate economic growth, he said, speaking as the supercommittee groped uncertainly for a compromise to reduce red ink by $1.2 trillion or more over a decade.

Any deal must be certified by the nonpartisan Congressional Budget Office as meeting the $1.2 trillion target, circulated to lawmakers and then posted publicly before the committee takes formal action. Failure to act would trigger $1.2 trillion in automatic deficit cuts in 2013 that both sides say they want to avoid.

The full committee hasn’t met in several days, but various subgroups have been in near constant contact.

More than deficit reduction is at stake, one year into an era of divided government.

Democrats are hoping to add elements of President Barack Obama’s jobs legislation to any deficit-cutting deal, including extensions of a Social Security payroll tax cut and unemployment benefits that are due to expire at the end of the year. A comprehensive rewrite of farm programs may hang in the balance, too, and lawmakers also must pass legislation to assure sufficient funds to reimburse doctors who treat Medicare patients.

As the pace of private talks intensifies, the two sides vie publicly for the high ground in public opinion.

“I am still hopeful that a few Republicans will put their country first and come to us with a credible offer with real revenue,” Sen. Patty Murray, D-Wash., co-chair of the supercommittee, told reporters as she emerged from a late-afternoon meeting.

Earlier, the Republican Senate leader, Mitch McConnell of Kentucky, said GOP members on the committee outlined a proposal several days ago and have yet to receive a response from Democrats. “It’s been a long week, waiting for a counter-proposal,” he said.

The twin issues of taxes and benefit programs have long been stumbling blocks in budget negotiations.

In negotiations last summer, according to numerous officials, President Barack Obama and Boehner were considering sizeable cuts to benefit programs as well as an overhaul of the tax code that would have raised as much as $800 billion in additional revenue _ money that Republicans said at the time would have come from economic growth pay day loan lenders. The talks ultimately failed.

In his comments Tuesday, Boehner cited the importance of tax overhaul in the proposal that Sen. Pat Toomey, R-Pa., made to supercommittee Democrats last week.

“It’s important for us to, in my opinion, reform the tax code. And we’ve got the highest business tax rate in the world. We’ve got a personal tax system that’s so complicated it costs Americans about $500 billion a year to comply with the current tax code,” he said.

Boehner asserted that the changes would “make America more competitive and produce more economic growth. And so I do believe that reforming the code is a step in the right direction. The details of how we get there, frankly, I think are yet to be worked out.”

Republican officials have said the offer made by Toomey envisions an overhaul that would drop the top tax rate on personal income to 28 percent from the current 35 and shave or eliminate some itemized deductions that are commonly used. The top corporate rate would also fall.

The result would be an estimated $250 billion in additional revenue over a decade, they estimate.

Despite Boehner’s comments _ and Toomey’s credentials as an opponent of tax increases _ GOP presidential contenders Newt Gingrich and Rick Perry said they were prepared to oppose a plan along the lines of the one under consideration. Another candidate, Mitt Romney, brushed aside a question on the subject.

Supercommittee Republicans also support a proposal that would replace the current measurement of inflation used to adjust income tax brackets and cost-of-living increases with another, less generous one. They estimate it would result in an estimated $50 billion in higher tax revenue and reduce spending by roughly three times that amount.

Obama backed a similar plan last summer in his talks with Boehner. More recently, Democrats on the supercommittee included it in an offer, although liberals made clear their unhappiness and it was subsequently jettisoned.

Both Boehner and Rep. Jeb Hensarling of Texas, the GOP co-chair of the supercommittee, explained the Republican proposal to members of the rank-and-file at a closed door meeting.

According to numerous officials who attended, Hensarling displayed charts that sought to place the offer in the context of other scenarios that might occur if there is no agreement. Among them are increases in tax rates that would occur beginning on Jan. 1, 2013, if all of the cuts enacted when President George W. Bush was in office expire as currently scheduled.

“They haven’t thrown me out, so I guess I got a good reception,” Hensarling later said of his reception.

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The press likes to cast itself as society’s guardian. On Monday, the judge leading the investigation into Britain’s deepening phone hacking scandal vowed to find an answer to the question: Who guards the guardians?

For years, the British media’s answer has been that it mainly looks after itself. But following explosive allegations of pervasive criminality at Rupert Murdoch’s News of the World tabloid, Lord Justice Brian Leveson suggested it was time for a change.

“Guarding the guardians is not an optional add-on,” he said.

Britain’s phone hacking inquiry was set up by Prime Minister David Cameron shortly after the scandal boiled over in July, pulling the lid off illegal spying at the nation’s best-selling Sunday newspaper and exposing police corruption.

It’s one of several investigations spurred by public anger over unethical practices at the now defunct paper. The long-running scandal has threatened Murdoch’s global media empire, which includes the Wall Street Journal and dozens of other properties.

Parallel inquiries launched by police, prosecutors and parliamentarians have called Murdoch to Britain for dramatic testimony before lawmakers, led to more than a dozen arrests and the resignation of several top-ranking Murdoch executives, including News International CEO Rebekah Brooks and The Wall Street Journal publisher Les Hinton.

The first part of Leveson’s inquiry seeks to go beyond assigning blame to individual journalists or newspapers to evaluate the media’s wider role: Is the press above the law? Is it too close to police and politicians? Does society’s guardian need a powerful guardian of its own? These are some of the questions on his agenda.

Although the News of the World has few defenders, editors and broadcast bosses have publicly voiced concern that recommendations from any inquiry could leave Britain’s press less aggressive _ and less free. Few if any want more government regulation _ especially since Britain’s press already labors under strict libel laws and contentious new privacy rules.

While inquiry counsel Robert Jay said that the importance of a free press was “almost self-evident,” he warned that the media may not necessarily like the solutions the inquiry finds for tricky ethical issues.

“These solutions will not necessarily have been the solutions which the press themselves would have devised,” he said.

Leveson said he hoped to have the first part of his inquiry wrapped up by the end of 2012.

He’s expected to recommend either scrapping or radically reforming the Press Complaints Commission, the self-regulatory body whose failure to get to grips with the hacking scandal has been roundly criticized. The scope of his inquiry’s recommendations will hinge in part on whether illegal behavior is found to have been limited largely to the News of the World or whether it was practiced more widely.

There seemed to be plenty of evidence that shady practices were widespread at Monday’s hearing.

Jay told the inquiry _ whose proceedings were broadcast live over the Internet _ that it appeared that illegal interception of voicemails went beyond the News of the World. He said that the inquiry had seen the names of no fewer than 28 News International employees in the notes kept by Glenn Mulcaire, the private investigator which the News of the World paid to illegally eavesdrop on its victims.

The words “The Sun” _ a possible reference to the News of the World’s sister-title _ also cropped up in Mulcaire’s notes, Jay said. So, too, did a name linked to the Daily Mirror, the Sun’s left-wing rival.

Jay said that the evidence on phone hacking pointed to what he described as “at the very least, a thriving cottage industry.”

The inquiry was briefly disrupted when David Sherborne, a lawyer for phone hacking victims, said that a Trojan, or data-stealing virus, had been found on his computer _ raising the possibly that he was being hacked.

The otherwise cool and clinical Leveson briefly seemed speechless.

“I’m not often thrown, but Mr. Sherborne has managed to do that,” he said. Sherborne later said the problem was being dealt with.

Sherborne was one of several dozen lawyers and journalists packed into a room at London’s neo-gothic Royal Courts of Justice, with more in a spillover tent pitched into a nearby courtyard.

A handful of members of the public came to watch the proceedings as well _ among them Bob Dowler, whose daughter Milly had her phone hacked by the News of the World at the height of the media frenzy over her disappearance in 2002.

Dowler’s case was the first to arouse broad public anger when it was reported by the Guardian newspaper in July, though several celebrities had earlier won settlements from News International. Among the people who will be legally represented at the hearings are “Harry Potter” author J.K. Rowling, singer Charlotte Church, actor Hugh Grant and actress Sienna Miller.

Katriona Ormiston, a 21-year-old journalism student, said she was there to see media history being made.

“Obviously it’s got quite a big impact on the future,” she said.

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World stock markets were mostly higher Friday following signs of progress in debt-plagued Europe _ a successful bond sale in Italy and the naming of a new leader in Greece.

Benchmark oil rose to $98 per barrel while the dollar slipped against the euro and the yen.

European shares posted gains in early trading. Britain’s FTSE 100 rose 0.6 percent at 5,472.80. Germany’s DAX rose 0.9 percent at 5,919.99 while France’s CAC-40 added 0.8 percent to 3,087.77.

Wall Street was also poised for gains, with Dow Jones industrial futures 0.1 percent higher at 11,869 and S&P 500 futures rising 0.2 percent to 1,239.30.

The gains in Europe were in line with trading earlier in the day in Asia.

Japan’s Nikkei 225 index closed up 0.2 percent to 8,514.47, a day after the index fell to a five-week closing low of 8,500.80.

Hong Kong’s Hang Seng gained 0.9 percent to 19,137.17 and South Korea’s Kospi added 2.8 percent to 1,863.45. Australia’s S&P/ASX 200 rose 1.2 percent to 4,296.50. Mainland China’s Shanghai Composite Index rose marginally to 2,481.08.

Investors were calmed by news that Greece _ which is struggling to pull back from the brink of bankruptcy _ had named Lucas Papademos, a respected economist, as its new prime minister on Thursday.

Another sign of stability came after Italy was able to borrow $6.8 billion at lower interest rates than analysts expected. On Wednesday, Italy’s 10-year bond yields shot up alarmingly, stoking panic in financial markets that the country was heading toward a Greece-style debt crisis.

Confidence was also boosted by the prospect of economist Mario Monti replacing Italian Premier Silvio Berlusconi, who has been viewed as an obstacle to meaningful economic reform.

“Europe still dominates and there are still huge concerns, but Greece has a new prime minister and Italy has a new prime minister in the wings, and everyone is much more aware of the seriousness of the nature of what is confronting Europe,” said Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong.

Traders have fretted that debt troubles in Italy and Greece could blow up into a massive liquidity crisis and lead to a global financial meltdown.

The European Union warned Thursday that the grouping of 17 nations that use the euro common currency could slip back into recession next year. The European Commission predicted the euro countries will grow a barely perceptible 0.5 percent in 2012 _ much less than its earlier forecast of 1.8 percent.

Europe has already bailed out Greece, Portugal and Ireland _ but Italy is a much larger economy and its mountain of debt _ $2 faxless cash advance.6 trillion (euro1.9 trillion) _ is far too massive for the continent to cover.

Sullivan said economic data next week on the world’s No. 1 economy will be closely watched.

“If any of that data comes out bad, it’s probably going to put Asia into more of a downturn. If there’s bad data out of the U.S. and more out of Europe, we can see Asia taking another step down,” Sullivan said.

Hong Kong-based ERA Mining Machinery Ltd. shot up 19.7 percent after U.S.-based Caterpillar Inc. said it was seeking to buy the Chinese maker of mining machinery for as much as $886 million. ERA designs, builds, sells and supports equipment for underground coal mining in China.

In Seoul, technology shares jumped. LG Electronics gained 6.4 percent and Samsung Electronics was up 5.1 percent. Shares of SK Telecom Co., South Korea’s top mobile carrier, rose 3.1 percent after the company offered to buy a controlling stake in Hynix Semiconductor, Yonhap News Agency reported.

India’s privately owned Kingfisher Airlines dropped 12.7 percent after the carrier was forced to cancel dozens of flights as pilots and crew called in sick after their October salaries were delayed.

In New York on Thursday, the Dow Jones industrial average rose 1 percent to close at 11,893.86. It plunged 389 points Wednesday after Italy’s borrowing rates soared and talks in Greece to name a new prime minister broke down.

Positive economic data from the U.S. also boosted hopes that the world’s No. 1 economy would avoid a new recession.

The Labor Department reported that the number of people applying for unemployment benefits in the U.S. fell to 390,000 last week _ the fewest since April. The data suggested layoffs are easing and that the economy grew slightly better over the summer than estimated.

The S&P 500 index gained 0.9 percent to 1,239.70. The Nasdaq rose 0.1 percent to 2,625.15.

In currency trading, the euro rose to $1.3653 from $1.3581 late Thursday in New York. The dollar fell to 77.34 yen from 77.66 yen.

Benchmark oil was up 30 cents at $98.08 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.04, or 2.1 percent, to finish at $97.78 on Thursday.

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Kellwood is channeling an edgy rock ‘n roll spirit for its newest brand called Lamb & Flag, which is set to launch later this week.

Its promotional materials quote from Jack Kerouac (”Here’s to the crazy ones. The misfits. The rebels.”) and encourage its target audience of 18 to 25 years olds to “join the beautiful rebellion.”

The brand’s e-commerce site — LambandFlag.com — goes up on Friday. And three 3,500-square foot stores, which will sell both the namesake label as well as other third-party brands, will open in Southern California in the coming months.

Michael Kramer, the company’s chief executive, has big hopes for the brand. He told Women’s Wear Daily that if the first stores are successful, he wants to open 20 to 30 more stores in 2013. And one day, he said, he could envision 700 to 800 of them.

This is the Town and Country-based apparel company’s second in-house brand it has launched in recent years. Earlier this year, it also rolled out Blk Dnm, a premium denim line by designer Johan Lindeberg absolutely free credit score.

The company has also been in acquisition mode in the last year or so, buying up brands such as Scotch & Soda, Zobha, and Rebecca Taylor.

Lamb & Flag is named after an English pub near Oxford. The brand will be driven by denim, but will also include off-the-shoulder knits, cinched dresses, logo’d tees, striped hoodies and more. Its prices will range from $56 to $98 for denim, $22 for $68 for tees and $48 to $128 for outerwear. It will also have related fragrances.

Most of Kellwood’s business is in women’s apparel. But Lamb & Flag is aimed equally at men and women.

The first mall-based Lamb & Flag store will open in December in Brea, Calif. It will be followed in January by two more locations in Mission Viejo and Cerritos.

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It sounded like a can’t-miss proposition: Buy the winners, drop the losers.

Developing countries from Brazil to China are expanding much faster than aging economies in the U.S. and Europe, where borrowing during the boom years has been a drag on growth. So the smart money bought stocks in emerging markets, expecting that rapid economic expansion there would provide better rewards. This year, that bet hasn’t worked out.

The broadest measure of U.S. stocks, the Standard & Poor’s 500 index, is down just 0.4 percent this year. Markets in Brazil, China and the like have lagged far behind, even though their economies are still growing faster than the U.S.

“If you were anywhere in the world other than in the S&P 500 this year, you got crushed,” said Greg Peterson, director of research at Ballentine Partners, an investment advisory firm.

The main reason emerging market stocks have suffered deeper losses isn’t because their economies are suddenly sluggish. Analysts say it’s because people have been worried about the European debt crisis and a possible recession in the U.S. It may seem unfair, but when fear of another financial crisis strikes money managers, they tend to flee emerging markets and stay closer to home.

This summer, panicked money managers dropped the most risky investments first. That meant bonds from deeply indebted countries like Italy and Portugal, small companies in the U.S and emerging market stocks got hit the hardest. Even gold, an asset normally considered safe, dropped as traders shifted money into dollars.

“There was a globalization of fear,” says Nathalie Wallace, a senior portfolio manager at Batterymarch Financial Management.

The same thing happened when the U.S. financial crisis hit in 2008. The S&P 500 fell 38.5 percent for the year. But the MSCI Emerging Market index, made up of countries where the banks didn’t peddle subprime mortgage bonds, plummeted 47.3 percent.

“Anytime you see risk and fear coming, you see emerging markets get hit a bit more,” Wallace says. “It doesn’t mean the underlying fundamentals of the economy have changed.”

Consider the collection of emerging-market rising stars known as the BRICs, which stands for Brazil, Russia, India and China. All have economies whose growth exceeds the U.S.

_ Brazil: The economy has expanded 3.1 percent over the past year. The benchmark Bovespa has lost 15.3 percent.

_ Russia: Economic growth of 5.1 percent. The Micex has dropped 11.1 percent this year even after a 10 percent rebound in the past month.

_ India: Economic growth of 7.7 percent. The BSE Sensex index is down 14.4 percent.

_ China: Economic growth of 9.1 percent. The Shanghai Composite has slumped 10 percent this year.

By contrast, the U.S. economy has expanded 1.6 percent over the past 12 months. That’s sluggish compared to the developing world’s stars. And worries that the U.S. could slip into a recession, or that Europe’s debt crisis could tip it into one, have weighed on investors for months. Even after those fears dragged down stocks nearly 20 percent in a month, the S&P 500 outshines indexes in nearly all of the world’s fastest growing economies.

In fact, if you rank the U.S. against emerging markets this year, it places ahead of 20 countries and behind just one, Indonesia.

China and other emerging markets long relied on shipping toys, timber and other goods to consumers in the U.S. and Europe. Trade helped them grow. But that has a downside, says Tim Morris, a portfolio manager at J.P. Morgan’s asset management unit. When a small country hitches its fortunes to U.S. shoppers, it’s bound to suffer when the U.S. economy slows down.

A related problem for many emerging market countries is that they’re dominated by energy and material producers, the type of companies most vulnerable to a global slowdown. Todd Henry, an emerging markets equity specialist at T. Rowe Price, points to Brazil, a country that isn’t as dependent on exports for growth. “It’s a relatively closed economy,” Henry says. “But commodity and energy companies make up a large part of their stock market. So if the world is slowing down, that gets priced in.”

The largest company in Brazil’s stock index is the oil giant Petrobras. When the U.S. economy looks weak, the price of oil falls and the companies that sell oil fall, too. That pushes down Petrobras, which tugs on the Bovespa. In other words, when the U.S. has the sniffles, Brazil’s stock market still catches a cold.

“Americans tend to think our problems are limited to the U.S.,” says Richard Bernstein, chief executive officer of Richard Bernstein Advisors LLC. “But our problems are their problems, too.”

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Europe failed to get the leaders of the world’s wealthiest economies to help out with its debt troubles, but everyone left a G-20 summit Friday relieved that at least they forced the Greek prime minister not to hold the world hostage with a bailout vote.

It took a public berating of Greek Prime Minister George Papandreou, and Greece’s politics are in upheaval as a result, but the shaky bailout plan appears back on track for now.

Investors had been hoping the Group of 20 nations would lend the struggling eurozone a helping hand _ but the G-20 leaders said Europe needs to help itself first. They said the International Monetary Fund could be beefed up to help more, but not for at least three more months.

The debt crisis that rocked the 17-nation currency union for the past two years has reached a new high and now threatens to push the world economy into a second recession.

Despite the political firepower at the summit _ which included the leaders of Europe, China, Russia, Brazil, India and the United States, among others _ meeting was overshadowed by political turmoil in Greece and worries about Italy, which accepted IMF supervision of its reform efforts.

The IMF move was an highly unusual intervention into the affairs of one of the world’s leading economies.

Europe’s own rescue efforts, cobbled together at several crisis meetings last week, left open many important questions, making cash-rich countries like China, Russia or Brazil reluctant to commit more than just words.

“It’s important that the IMF sees its resources reinforced,” Jose Manuel Barroso, the president of the European Commission, told reporters. However, any decisions on how to reinforce the IMF were left until February.

The lack of detail disappointed markets, with stocks, bonds and the euro falling. Italy’s borrowing rates, in particular, hit worrying new highs.

With their own finances already stretched from bailing out Greece, Ireland and Portugal _ and traditional allies like the United States wrestling with their own problems _ eurozone countries were looking to the IMF to use its financial reserves and rescue experience to help prevent the debt crisis from spreading to its larger economies, such as Italy and Spain.

The most likely way the eurozone could still get additional financing is through a special account under the auspices of the IMF, into which individual countries could make payments. Those investments in turn could then be used to boost the currency union’s own bailout fund, the euro440 billion ($606 billion) European Financial Stability Facility.

But German Chancellor Angela Merkel and IMF chief Christine Lagarde both said that at the two-day meeting not a single country made a firm commitment that it would participate payday loans with no fax.

The broader increase of the IMF’s resources, which also remained vague, is designed to help countries around the world, not just the eurozone.

Barroso said several countries had indicated they would provide bilateral loans to the IMF _ which would give it more funds without collecting money from reluctant members like the U.S.

The G-20 final statement also said the IMF should somehow issue more special drawing rights, or SDRs, the fund’s own reserve currency that can be exchanged for cash with central banks around the world. SDRs can just be created and do not require new commitments from IMF member states.

Finance ministers will now have to work out the details of these measures. French President Nicolas Sarkozy said the G-20 would next deal with the topic in February.

The lack of progress on the debt crisis troubled some countries that would be hard hit by another recession in the eurozone.

“Every day that the eurozone crisis continues, every day it isn’t resolved, is a day that has a chilling effect on the rest of the world economy,” said British Prime Minister David Cameron. “We are ready to do our part to help stabilize the world economy. … But you can’t ask the IMF or other countries to substitute for the action that needs to be taken within the eurozone itself.”

The G-20 announcements show how dramatically the powers have shifted within the IMF.

Until two years ago, the IMF _ dominated by the traditional powers in Europe and the U.S. _ mostly applied its painful financial adjustment programs to poor and emerging economies in Asia, Latin America and Africa.

Now, it’s growing powers like China, Brazil and South Africa that have to decide whether helping Europe is a worthy investment.

In an effort to do just that, Italy, the eurozone’s third largest economy with a debt load of 120 percent of gross domestic product, asked the IMF for help monitoring promised budgetary and structural reforms on a quarterly basis.

The country’s borrowing rates have risen sharply this week _ and jumped further on Friday _ on fears that Prime Minister Silvio Berlusconi does not have the political strength to implement the reforms.

Lagarde said the IMF hopes to start checking whether Italian measures promised to the eurozone are actually implemented by the end of November, to target “a lack of credibility.”

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Two European Union leaders have called on the upcoming G-20 summit of wealthy and developing countries to build on EU plans to stabilize the debt-burdened eurozone and further boost the global recovery.

EU Council President Herman Van Rompuy and Commission President Jose Manuel Barroso wrote in a letter to G-20 leaders that there was “continued need for joint action” to get the world economy back on track.

A three-pronged deal reached last Thursday by the EU appears to have met expectations for some kind of major action, and stock markets rallied in Europe and around the world in response. The EU plan retools the eurozone’s underpowered bailout fund, calls on banks to take 50 percent losses on Greek bonds, and orders them to raise euro106 billion ($150 billion) in new capital by June.

The buoyant mood could be shortlived if G-20 leaders do not use their summit in Cannes, France, on Thursday and Friday to build on those achievements, the two leaders said in their letter payday loans online.

“Whilst we in Europe will play our part, this cannot alone ensure global recovery and rebalanced growth. There is a continued need for joint action by all G20 partners,” the letter, sent out on Saturday, said.

“More needs to be done at the global level. Many of the distortions underlying the large pre-crisis imbalances are still to be addressed,” the two warned.

U.S. President Barack Obama has already said the European plan to tackle the its debt crisis would have an impact on the U.S. economy, but stopped short of saying whether it would be enough to prevent another global recession.

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MetLife Inc. says its net income increased tenfold in the third quarter, boosted largely by its acquisition of Alico last year.

The nation’s biggest life insurer says it earned $3.55 billion, or $3.33 per share, in the three months ended Sept. 30. That’s compared with $286 million, or 32 cents per share, in the year-ago period.

Excluding one-time items, the company earned $1.11 per share. Analysts had forecast a profit of $1.05 per share, according to FactSet.

The New York company said total international sales more than doubled as a result of its acquisition of American Life Insurance, or Alico, from American International Group Inc. last year.

Alico operates in more than 50 countries and was expected to help MetLife expand in Japan, Europe and Latin America.

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Forecasters say Tropical Storm Rina has formed in the Caribbean Sea off the coasts of Honduras and Nicaragua and could become a hurricane by Tuesday.

The U.S. National Hurricane Center reports Monday that the storm’s center is located about 190 miles (305 kilometers) southwest of Grand Cayman.

It has maximum sustained winds of 45 mph (72 kph) and is moving northwest near 6 mph (9 kph).

Forecasters expect Rina to gain strength in the next two days and say it could become a hurricane by Tuesday night. The storm is forecast to bring at least an inch of rain along the northeast coast of Honduras and at least 2 inches of rain over the Cayman Islands.

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