SAN FRANCISCO/QUITO (Reuters) – Thousands of people fled their homes along the Pacific coast of North and South America on Friday as a tsunami triggered by Japan's massive earthquake reached the region but spared it from major damage.

The giant wall of water lost much of its energy as it roared thousands of miles (km) across the Pacific Ocean, although many governments took no chances, ordering large-scale evacuations of coastal areas, ports and refineries.

The West Coast and Alaska Tsunami Warning Center downgraded the situation in California from a tsunami "warning" to an "advisory," and fears of a catastrophe proved unfounded.

Despite the power of Japan's biggest-ever earthquake that killed at least 1,300 people, the tsunami waves were relatively benign as they rolled into the Americas, causing only isolated flooding.

"Mexico is no longer in danger," Mexican President Felipe Calderon said in a post on his official Twitter account.

Ecuador's Galapagos Islands, a wildlife sanctuary and popular tourist spot, suffered some damage to infrastructure. and several California harbors were hit. Chile, which was hit by a magnitude 8.8 quake and ensuing tsunamis a year ago that killed more than 500 people, appeared to be unscathed.

Residents in northern Chile said the coast was calm some time after waves had been expected to make landfall.

Peru, which evacuated thousands, was also largely unaffected.

About 35 boats and most of the harbor docks were damaged in Crescent City near the California border with Oregon, where waves were more than 6 feet. Santa Cruz south of San Francisco sustained about $2 million in damages to docks and vessels, emergency management officials said.

Rescue services were searching for a 25-year-old man who was swept out to sea while standing on a sandbar at the mouth of the Klamath River in California.

The port of Brookings-Harbor, the busiest recreation port on the Oregon coast, was largely destroyed, said operations manager Chris Cantwell. "Right now we are in the middle of a big mess," he said. "The surge pulled some (boats) out to sea, about a dozen sank and we've got boats everywhere sitting on top of one another and all over the place."

SIRENS BLARE, OIL ON HOLD

In Hawaii, 3,800 miles from Japan, the main airports on at least three of the major islands -- Maui, Kauai and the Big Island of Hawaii -- were shut down as a precaution, and the U.S. Navy ordered all warships in Pearl Harbor to remain in port to support rescue missions as needed.

Civil defense sirens blared statewide, starting shortly before 10 p.m. local time, and police with bullhorns urged residents near shore to seek higher ground.

No injuries or property damage were reported after a series of four tsunami waves hit the Hawaiian island of Oahu, said John Cummings, a spokesman for emergency management in Honolulu. The tsunami warning for Hawaii was later downgraded.

President Barack Obama, a native of Hawaii, was notified of the massive Japanese quake at 4 a.m./0900 GMT and instructed the Federal Emergency Management Agency to be prepared to help affected U.S. states and territories, the White House said.

Ecuador took extreme precautions after President Rafael Correa declared a state of emergency across the Andean nation on national television and urged residents to move inland.

Oil firm Petroecuador also halted production, but navy officials said on Friday night that the risk of danger had passed.

Many ports along Mexico's western coast closed, including Los Cabos and Salina Cruz in southern Oaxaca, the only oil-exporting terminal on the country's Pacific side.

Mexican officials said high waves had hit the northwestern Pacific coast but there were no reports of damage.

Authorities in Canada's British Columbia advised residents to evacuate marinas, beaches and other low-lying areas, but officials there said the waves were minimal.

(Additional reporting by Jeremy Pelofsky in Washington, Braden Reddall and Peter Henderson in San Francisco, Suzanne Roig and Jorene Barut in Honolulu, Steve Gorman in Los Angeles, Simon Gardner in Santiago; Anahi Rama, Cyntia Barrera Diaz, Mica Rosenberg and Lizbeth Diaz in Mexico; Writing by Frances Kerry, Ross Colvin and Robin Emmott; Editing by Peter Cooney)

NEW YORK (Reuters) – Energy companies with operations along the Pacific coast of North and South America were on alert on Friday for the possibility of a tsunami set off by a massive earthquake off Japan.

Chile, hit by an 8.8 magnitude quake last year, upgraded a tsunami alert for its coastline and the remote Easter Island and said it would evacuate flood-prone areas along the mainland coast.

By midday, the tsunami passed Hawaii by and Chevron Corp said there was no impact to operations at its 54,000 barrel per day refinery in Honolulu, Hawaii which contained to make products.

Tesoro Corp which owns Hawaii's other refinery - a 93,500 bpd refinery in Kapolei, said earlier it closed a few retail stations in some low lying areas of Hawaii as a precaution and was monitoring operations at its refineries in Hawaii, Alaska, California and Washington.

Tidal surges in the Hawaiian island chain were generally little higher than normal, officials said, and there were no reports of injuries or severe inland property damage.

The island state of Hawaii had ordered evacuations of its coastal areas and braced for a tidal wave hours after the massive 8.9 earthquake in Japan, 3,800 miles away, triggered the tsunami warning across most of the Pacific basin, including northern California and Oregon.

An Obama administration official said Hawaii appeared to be out of danger, but some risk remained for the U.S. West Coast.

The U.S. Federal Emergency Management Administration (FEMA) said it was coordinating with local officials on the U.S. West Coast and in Hawaii on a response if needed.

Shipping operations at California ports were restricted.

The Port of Los Angeles suspended transfer of hazardous material ahead of a suspected 12 to 18-inch (30-46-cm) surge.

Beaches near the port have been closed off.

The port of San Francisco suspended oil and hazardous materials transfer as it expected a 3-foot surge.

The port of San Diego, located in the southern part of California, said it expects no impact from the tsunami.

In Mexico, state-run oil company Pemex evacuated 300 workers from its only oil port on the Pacific coast after a tsunami warning rippled down Latin America.

Further south in Ecuador, state oil company Petroecuador declared a precautionary force majeure on its oil exports but expected exports to return to normal by Saturday. Petroecuador produces about 145,000 bpd.

OPS NORMAL, TSUNAMI MONITORED

Valero Energy Corp, which operates a two refineries in California, said it was monitoring reports regarding the tsunami alert but had not altered production at its refineries.

BP Plc said it was monitoring the situation at its West Coast refineries while Shell said operations were normal at their plants.

Nuclear power plant operator PG&E Corp said it declared an unusual event at its Diablo Canyon power plant in California due to the tsunami warning, which is normal operating procedure at the California but both reactors there were operating normally.

Southern California Edison, a unit of Edison International, said workers would be monitoring "unusual small waves" that were likely to hit the coast.

"The San Onofre plant was designed with a 30-foot (9-meter) tsunami protective wall," company spokesman Gil Alexander said in response to a question on what safety measures the plant would be undertaking.

Both reactors at San Onofre plant were operating normally, he added.

(Reporting by Reuters America Energy Reporters and Bangalore Energy Desk, writing by Janet McGurty; Editing by Marguerita Choy)

DETROIT (Reuters) – Kia Motors Corp is recalling more than 70,000 Optima sedans because the shift cable may have been installed incorrectly and cause parked vehicles to roll away.

There have been no reported injuries related to this defect, Kia said in a notice to the National Highway Transportation Safety Administration posted on Friday.

The recall affects model year 2006 through 2008 Optima cars produced from September 2005 to June 2007. In all, the recall affects 70,115 vehicles.

(Reporting by Deepa Seetharaman; Editing by Bernard Orr)

TUCSON, Arizona (Reuters) – Wounded Representative Gabrielle Giffords, recovering from being shot at a community event in January, plans to attend the launch of her astronaut husband's space shuttle mission next month, an aide said on Thursday.

"The plan is for her to attend," said C.J. Karamargin, the Arizona Democrat's spokesman, adding that changes in her medical condition and other factors ultimately will determine whether Giffords is present.

"That it is a goal that we are working toward, and we certainly hope that she'll be there."

Her husband, Mark Kelly, a three-time space shuttle veteran, is commander of the Endeavour mission due for lift-off from Cape Canaveral, on April 19 on what is currently scheduled to be NASA's final shuttle flight.

Doctors are expected to give an update on Gifford's condition at a Houston news conference on Friday. She is undergoing rehabilitation at the Memorial Hermann-Texas Medical Center there.

Giffords has not been seen in public since she was shot in the head January 8 when a lone gunman opened fire on a crowd of people gathered for a "Congress on Your Corner" event outside a grocery store. Six people were killed and 13 others, Giffords among them, were wounded in the shooting spree.

The accused assailant, Jared Loughner, a 22-year-old college dropout, pleaded not guilty on Wednesday to 49 charges stemming from the rampage.

(Reporting by Tim Gaynor; Writing by David Schwartz; Editing by Steve Gorman and Jerry Norton)

MADISON (Reuters) – Republicans in the Wisconsin state Senate approved sweeping curbs on collective bargaining by public employees on Wednesday in an abrupt and accelerated vote that caught many Democrats by surprise.

The move added to the already bitter political atmosphere in Wisconsin over the fight, and dozens of protesters flooded the Capitol in the evening following the vote, ignoring announcements from police that the building was closed.

The ground floor and first floor appeared nearly as full as they were during the first days of the demonstrations more than three weeks ago, and protesters stayed in the Capitol defiantly chanting "recall" and "Whose house? Our house!"

Outside the Assembly chamber, House Minority Leader Peter Barca allowed protesters to fill out forms listing themselves as witnesses to a violation of the state's open meetings laws stemming from the Republicans' earlier conference committee meeting.

The move by the Wisconsin Senate will increase the anxiety of union workers nationwide, who face similar efforts to roll back public employee power in a number of other states.

The bill, which also increases the health care and pension costs for workers and was the most controversial part of newly elected Governor Scott Walker's emergency budget repair bill, now heads for the Republican-controlled state Assembly, where quick passage as early as Thursday is all but assured.

By stripping out the sections of Walker's bill that involved appropriating funds, the Senate Republicans were able to work around the legislative roadblock their 14 Democratic colleagues threw up three weeks ago when they fled the state to deny the Republicans a quorum.

In an 18-to-1 vote, the Senate approved the curbs on collective bargaining by public employees.

Republican Walker insists the limits are needed to help the state's cash-strapped municipalities deal with a projected $1.27 billion drop in aid over the next two years from the state, struggling to close its own $3.6 billion budget gap.

The measure has prompted massive demonstrations in the state capital by the bill's opponents and triggered a wave of recall campaigns targeting both the governor's supporters and opponents in the legislature.

What began a month ago as a Republican effort in one small U.S. state to balance the budget has now turned into a confrontation with unions that could be the biggest since then President Ronald Reagan fired striking air traffic controllers nearly 30 years ago.

If the plan is approved as expected in Wisconsin, a number of other states where Republicans swept to victory in the 2010 elections could follow. Legislatures including those in Ohio, Indiana, Iowa, Idaho, Tennessee, and Kansas have already been working on union curbs of their own.

The stakes are high for labor because more than a third of U.S. public employees such as teachers, police and civil service workers belong to unions while only 6.9 percent of private sector workers are unionized. Unions are the biggest single source of funding for the Democratic party.

Walker, 43, applauded the move, which came despite signs, including public opinion polls, that a growing number of Wisconsinites don't back the measure.

Walker never mentioned the proposal on his official campaign website nor debated it during his two-year campaign. It reverses long-standing policy in Wisconsin, among the first states to give public employees union rights.

"The Senate Democrats have had three weeks to debate this bill and were offered repeated opportunities to come home, which they refused," Walker said in a statement.

'OUTRAGE'

But Wisconsin Democrats blasted the move, whose speed seemed to surprise the missing Senators.

"In 30 minutes, 18 state senators undid 50 years of civil rights in Wisconsin. Their disrespect for the people of Wisconsin and their rights is an outrage that will never be forgotten," Senate Minority Leader Mark Miller said.

Miller and other Senate members said they would now be coming back to the state and continuing the fight.

"We have no reason to remain away and when the Assembly acts on the bill tomorrow we will be back in the state within a matter of hours," Democratic Senator Jim Holperin told Reuters in a telephone interview.

"We did what we could to delay the bill so people could know what was in it and to try to negotiate something less than the complete elimination of workers' rights."

Democrats say Walker is taking advantage of the state's current financial problems to attack organized labor -- traditionally a strong supporter of the Democratic Party and a critical player in any effort by Democrats to recover from the setbacks they suffered in the midterm elections last fall and to keep President Barack Obama in the White House in 2012.

Immediately upon being sworn as governor in this January, Walker convened a special session of the legislature to pass what he called a budget repair bill. Buried inside were the provisions slashing public employee union rights.

By stripping out the fiscal fixes in the bill and considering just the collective bargaining portions, the Senate Republicans were able to pass the measure on Wednesday without the absent Democrats.

The Senate measure requires public workers to pay health care premiums and contribute to their pensions -- concessions the workers had signaled they would accept if the collective bargaining restrictions were removed.

A conference committee made up of Republican members of the legislature on Wednesday separately approved a revised budget repair bill over the objections of Assembly Minority Leader Peter Barca, who called the meeting a violation of state law.

(Reporting by Jeff Mayers and David Bailey; Writing by James B. Kelleher; Editing by Jerry Norton)

TUCSON, Ariz (Reuters) – Tucson shooting rampage suspect Jared Loughner pleaded not guilty on Wednesday to an expanded, 49-count indictment that set the stage for prosecutors to decide whether to seek the death penalty.

The plea came shortly before the federal judge presiding over the case sided with prosecutors in ordering Loughner to undergo a psychiatric evaluation to determine whether he is mentally competent to stand trial.

U.S. District Judge Larry Burns set a May 25 hearing date on competency despite objections from defense lawyer Judy Clarke, who said such a proceeding was premature and could interfere with her ability to build trust with her client.

The 22-year-old college dropout is accused of opening fire with a semiautomatic pistol on U.S. Representative Gabrielle Giffords and a crowd of bystanders attending a political event outside a grocery store in January.

Six people, including a federal judge, were killed and 13 were wounded including Giffords, an Arizona Democrat, who was shot through the head.

In asking for a mental evaluation, prosecutors cited widely publicized accounts of erratic, paranoid behavior by Loughner in the months before the shooting rampage, including homemade videos posted to YouTube in which Loughner talks about mistrust of the government and mind control.

"I am convinced by the government's argument that there is reasonable cause to believe the defendant may not understand the proceedings," Burns said.

DRESSED IN PRISON JUMPSUIT

Earlier in the hearing, Clarke asked the court to enter a plea of not guilty on behalf of her client, who stood by her side as the charges were read.

Wearing shackles and dressed in a tan prison jumpsuit, Loughner entered the courtroom with a slight smile on his face, sporting sideburns and his formerly shaved hair grown out.

Asked in court if his name was Jared Loughner, he replied "Yes it is."

Burns also granted a request by media organizations to release the bulk of search warrant records in the case, now that a grand jury investigation had been completed.

But he deferred a decision on a defense motion seeking to bar prison officials from furnishing the FBI with psychological records about Loughner and reports on his behavior while he is incarcerated.

Loughner is accused as the lone gunman in a shooting spree that turned an outdoor "Congress on Your Corner" gathering for Giffords on January 8 into a bloodbath. Giffords, described by prosecutors as Loughner's primary target, remains hospitalized at a rehabilitation center in Houston.

The return of the new, expanded indictment against Loughner launched a formal U.S. Justice Department review of the case to decide whether to seek the death penalty or life in prison.

The 28-page document, unsealed last Friday, contains 49 charges, including two counts of first-degree murder of a federal employee for the deaths of a judge and a Giffords aide. Loughner also is charged with causing the deaths of four others who were "participants at a federally provided activity."

Those charges as well as additional counts of first-degree murder through the use of a firearm are all capital offenses.

Judge John Roll, the chief federal judge in Arizona, and Gabe Zimmerman, the Democratic congresswoman's director of community outreach, were also killed.

(Editing by Steve Gorman, Jerry Norton and Philip Barbara)

PITTSBURGH (Reuters) – Fire engulfed a farmhouse in Pennsylvania, killing seven children while their mother milked cows in a nearby barn and their father was out driving a milk delivery truck, police said on Wednesday.

One child survived the blaze at the two-story home in Loysville in Perry County, according to Pennsylvania State Police Lieutenant Myra Taylor. Police had earlier said the fire was in Blaine.

The father left the house shortly before the fire began for his job as a milk delivery truck driver.

The mother was alerted to the fire by the couple's 3-year-old daughter, who ran to the barn a few hundred feet from the house. Police said the mother tried to enter the house unsuccessfully before calling 911 from a neighbor's house.

Firefighters extinguished the blaze and entered the house, where they found the bodies of the seven children, including six girls -- from 7 months to 11 years old -- and a 7-year-old boy. The Perry County coroner said their deaths were caused by smoke inhalation.

State police fire marshals were investigating the cause of the fire, Taylor said in a statement.

Police did not disclose the names of the family members.

(Reporting by Daniel Lovering; Editing by Barbara Goldberg and Jerry Norton)

CHICAGO (Reuters) – The Idaho state legislature approved a bill on Tuesday to strip public school teachers of many of their collective bargaining rights while protesters in six states rallied against Republican efforts to curb union power.

The Idaho bill, which excludes issues like class size and workloads from negotiations for the state's 12,000 unionized teachers, was given final approval by the Republican-led House and is expected to be signed by Republican Governor Butch Otter.

The bill also eliminates teacher tenure, limits the duration of teacher labor contracts to one year and removes seniority as a factor in determining the order of layoffs.

Idaho is one of several U.S. states to take up Republican plans for sweeping restrictions on public sector unions in what has become a growing national debate over labor union power.

Republicans say the proposals are needed to rescue recession-battered budgets from deficits, but Democrats and union supporters say they are an attack on organized labor that could linger as an issue into the 2012 presidential elections.

Most national attention has focused on the stalemate in Wisconsin over Republican Governor Scott Walker's proposal to curb union rights, which sparked large protests in the capital Madison.

Wisconsin Senate Democrats have fled the state to block a vote on Walker's proposal, but e-mails released on Tuesday showed Walker has indicated he may be willing to compromise on elements of his plan.

The e-mails, released following a Freedom of Information Act request from the Milwaukee Journal Sentinel newspaper, show Senate Democrats and a senior Walker aide discussed some flexibility on issues such as his demand for annual votes to keep unions in existence.

Protests against Walker's plan continued in Madison on Tuesday. Similar Republican plans to curb public union rights and benefits sparked new protests in Indiana, Ohio, Michigan, Iowa and Florida.

DEATH OF THE MIDDLE CLASS

In Indianapolis, where most Indiana House Democrats remain out of state to block a vote on a bill they say is anti-worker, union protesters staged a mock "funeral" for the middle class with a New Orleans-style musical procession in honor of Mardi Gras.

In Ohio, Republican Governor John Kasich touted a plan that passed the state Senate last week to curb collective bargaining rights of public employees and ban them from going on strike.

In his "State of the State" speech, Kasich said the bill, which still must be passed by the Ohio House, was necessary to give local governments more flexibility in their budgets.

"Frankly, folks, the provisions of collective bargaining reform are examples of what we want to do to allow people to control their costs," said Kasich, setting off cat-calls from the gallery in the legislative chamber.

Pro-union demonstrators packed the Capitol rotunda after the speech, shouting, "Kill the bill."

In Michigan's state capital Lansing, hundreds of pro-union protesters jammed the rotunda and gathered outside the Capitol to oppose a bill to give emergency authority to break labor contracts to revive failing schools and cities. The state's largest school district of Detroit is under emergency management.

The Michigan House approved the measure in February. A final vote in the Senate, where Republicans hold a 26-12 majority, is expected on Wednesday.

In Iowa, hundreds of union workers crowded the state House chamber to protest a bill that would prevent negotiations on healthcare benefits for government workers and forbid union workers from negotiating layoff schedules.

The measure will be debated in the Republican-led Iowa House on Wednesday. It is expected to run into trouble in the Democratic-majority state Senate.

In Florida, facing a $3.6 billion budget deficit, union supporters held events in a number of cities as lawmakers returned to state capital Tallahassee to begin the 2001 legislative session.

In Tallahassee several hundred union backers took up positions across the street from the capitol building, where a few hundred conservative Tea Party members and their supporters held a counter rally. The two factions are expected to play major roles as lawmakers deal with the deficit.

Republican Governor Rick Scott has called for significant tax cuts on businesses and property owners while asking lawmakers to require state employees to pay 5 percent of their salaries toward their retirement plan. Florida now does not require an employee contribution.

Scott also wants new employees funneled into a 401(k)-type retirement plan instead of the traditional pension now offered to members of the Florida Retirement System.

(Additional reporting by Kay Henderson, David Bailey, Andrew Stern, Jim Leckrone, Susan Guyett, Laura Zuckerman and Michael Peltier; Editing by John Whitesides)

NEW YORK (Reuters) – The biggest Wall Street insider trading criminal case in a generation goes to trial on Wednesday, when prosecutors open their case against Galleon Group founder Raj Rajaratnam whose arrest 16 months ago shook the hedge fund world.

A jury of New Yorkers will hear prosecutors outlining how they believe Sri Lankan-born Rajaratnam broke the law by designing a complex web of stock tippers who helped him reap $45 million in illicit profit between 2003 and March 2009.

For the first time, the jury and observers of the high-profile case will be given an insight into the defense trial strategy, which faces seemingly overwhelming evidence of leaked corporate secrets, tapped telephones and friends-turned-government witnesses.

"The defense doesn't really get to show the whole picture until the trial and then it really can be quite different and end up with surprising results," said Stuart Gasner, securities fraud defense lawyer at Keker & Van Nest law firm in San Francisco and a former prosecutor.

The selection of a jury of 12 and six alternates began on Tuesday and is expected to be completed on Wednesday.

Presiding U.S. District Judge Richard Holwell sent prospective jurors home with a warning not to read anything about the highly-publicized case. He then told prosecutors and Rajaratnam's multimillion dollar defense team that opening statements would go ahead "for sure" on Wednesday.

Since arresting 53-year-old U.S. citizen Rajaratnam in October 2009 and announcing criminal charges against 26 former traders, executives and lawyers, the U.S. government has pressed ahead with what it calls the biggest probe of insider trading in the $1.9 trillion hedge fund industry.

Nineteen people have pleaded guilty in the Galleon case. It stands apart from past insider trading investigations because of the government's wide-scale use of phone taps. As many as 173 audio recordings will be played to the jury during the two-month long trial.

Rajaratnam was mobbed by photographers and TV crews when he walked into the courthouse on Tuesday morning and as he left at the end of the day. Dressed in a brown coat and a suit, he said nothing on both occasions.

Chief defense lawyer John Dowd has argued in court papers that prosecutors have broadened the definition of insider trading. He said a money manager's liberty should not be at risk because he trades on a stock while knowing something about the company.

The burden of proof is on prosecutors to convince the jury that their evidence shows Rajaratnam knew he was trading on confidential information provided by someone who had a fiduciary duty not to disclose it.

In the week before the trial, U.S. market regulators and prosecutors uncorked allegations against Rajaratnam's friend and former Goldman Sachs Group Inc director Rajat Gupta. They described phone calls in which he tipped Rajaratnam about confidential Goldman information before it became public.

Gupta faces a civil proceeding brought by the U.S. Securities and Exchange Commission but he has not been criminally charged. Lloyd Blankfein and David Viniar -- the Goldman Sachs chief executive and chief financial officer -- were on a list of people who might testify or be mentioned during the trial.

The case is USA v Raj Rajaratnam, U.S. District Court for the Southern District of New York, No. 09-01184.

(Reporting by Grant McCool, editing by Andrew Marshall)

MADISON, Wisconsin (Reuters) – Wisconsin Gov. Scott Walker dismissed as "ridiculous" a request on Monday from the leader of absent Senate Democrats to meet and negotiate a compromise in their standoff over Republican plans to limit public sector union powers.

At a news conference in Madison, the new Republican governor who has sparked nationwide protests with his efforts to strip public sector unions of most collective bargaining rights, showed no signs of backing down.

The Wisconsin state Assembly has approved Walker's plan but all 14 Wisconsin Senate Democrats left the state for Illinois on February 17 rather than allow a quorum to vote on the measure. There has been a stalemate ever since.

Walker blasted the leader of Senate Democrats, Mark Miller, as an obstacle to getting a deal for some of the Democrats to return and vote on the proposal.

"We had progress and we thought we had the framework of a pathway home for those 14 Senate Democrats, but again, Senator Miller stood in the way," Walker said.

The proposals have touched off weeks of pro-union rallies at the Capitol Building in Madison and around the country to protest the changes which Walker said are needed to fix a state budget deficit.

Miller's letter had appealed to Walker and Senate Majority Leader Scott Fitzgerald to sit down and reach a bipartisan solution to the differences.

But the Republicans were defiant, saying again that they would not change the core of the proposal to curtail public sector union powers. Areas of compromise would only be considered on matters to do with the state's budget for fiscal 2012 and 2013, they said.

Walker wants public sector unions to make increased payments for health care and pension benefits. But the most controversial proposal would limit public sector union bargaining to wages, and only up to the rate of inflation. Unions also would have to allow a vote of their membership every year to continue to represent workers.

On Friday, Walker issued notices warning state workers of mass layoffs in early April if Democrats do not approve the measures to curtail public sector union powers.

Most opinion polls show that while most Americans, and Wisconsin voters, believe that government workers should contribute more toward pensions and health care, they support collective bargaining rights for unions.

Wisconsin has become the center of national attention because labor unions fear approval of the restrictions could lead to other state doing so.

Ohio's Senate last week approved restrictions on public sector unions, and similar measures are under consideration in several other states including Tennessee, Indiana, Kansas and Idaho.

(Writing by David Bailey, Editing by Greg McCune).

WASHINGTON (Reuters) – The Supreme Court let stand a ruling that drug companies can pay rivals to delay production of generic drugs without violating federal antitrust laws.

The justices refused to review a federal appeals court ruling that upheld the dismissal of a legal challenge to a deal between Bayer AG and Teva Pharmaceutical Industries Ltd's Barr Laboratories. Bayer paid Barr to prevent it from bringing to market a version of the antibiotic drug Cipro.

The deal, involving Bayer's 1997 settlement of patent litigation with Barr, was challenged by a number of pharmacies, which appealed to the Supreme Court. More than 30 states and various consumer groups supported the appeal.

The Federal Trade Commission has opposed such deals, saying they violate antitrust law and cost consumers an estimated $3.5 billion a year in higher prescription drug prices. It has supported legislation pending in Congress to prohibit such settlements, which it says have increased in recent years.

The New York-based appeals court, in its ruling last year, cited its similar 2005 decision involving the drug Tamoxifen, used to treat breast cancer, infertility and other conditions. The Supreme Court declined to review that case.

In the Cipro case, the Supreme Court rejected the appeal by the pharmacies without comment.

The Supreme Court case is Louisiana Wholesale Drug Co v. Bayer AG, No. 10-762.

(Reporting by James Vicini; Editing by Gerald E. McCormick and John Wallace)

NEW YORK (Reuters) – Wells Fargo & Co will by mid-May hire more than 1,000 people for its retail banking operations in the mid-Atlantic region, ahead of a planned fall rebranding of its Wachovia locations.

The staff will be hired at Wachovia locations in Virginia, Maryland and Washington D.C., Wells Fargo said on Monday.

Wells Fargo has hired nearly 600 people for similar positions in the region since its purchase of Wachovia at the end of 2008.

The $12.5 billion acquisition more than doubled the size of Wells Fargo, which has the biggest retail branch network in the United States.

Wells Fargo is the nation's fourth-largest bank by assets, and according to its website employs about 280,000 people.

JPMorgan Chase & Co, the second-largest U.S. bank by assets, also plans to expand in retail banking. Last month, it said it plans to add at least 1,000 new branches in the next three years and could add up to 2,000 within five years. It said it would focus the growth in California and Florida.

Wells Fargo has $1.3 trillion in assets. Its shares were down 0.5 percent at $31.74 in early afternoon trading on the New York Stock Exchange.

(Reporting by Clare Baldwin and Jonathan Stempel; and Andre Grenon)

NEW YORK (Reuters) – Muslims, activists and supporters demonstrated in Times Square on Sunday to protest a Congressional hearing on radicalization of U.S. Muslims.

Holding placards that read "Today I am a Muslim, too," a few hundred gathered at the interfaith protest, decrying what they said was the bigotry and ignorance behind anti-Muslim sentiments in the United States.

Imam Feisal Abdul Rauf, until recently the leader of the controversial plan to build a mosque and cultural center near the former World Trade Center site, said he was concerned this week's scheduled hearing by Representative Peter King on radicalization of U.S. Muslims would only alienate them.

"My concern is the perception among the youth here that Muslims are under attack ... by their own government.

"This helps radicalize people, and we need to reverse that cycle of radicalization," Rauf said.

King, a New York Republican who chairs the House Homeland Security Committee, said on CNN Sunday that while "the overwhelming majority of Muslims are outstanding Americans ... there is an effort to radicalize efforts within the Muslim community."

The protest was organized by an interfaith coalition of community and political leaders and activists, including priests, rabbis and imams.

Hip hop mogul Russell Simmons, who heads the Foundation for Ethnic Understanding, also attended.

"The whole premise of the hearings is absolutely discriminatory" and would only foster fear," Simmons said.

Organizers said inclement weather likely kept attendance down.

A small group of counter-protesters from the Liberty Alliance gathered a few blocks away, while New York City Councilman Daniel Dromm earlier hosted a group opposing King's hearings.

No incidents were reported at either gathering, police said.

(Reporting by Chris Michaud; Editing by Jerry Norton)

WASHINGTON (Reuters) – Rain and snow were due to strike much of the East on Sunday and overnight, affecting states from Tennessee and North Carolina through New England, with the Northeast especially hard hit, forecasters said.

Low visibility amid fog in the New York metropolitan area caused delays of about 75 minutes on arriving flights at LaGuardia airport and up to two-and-a-half hours at John F. Kennedy International.

Delays averaging two hours were reported at Newark Liberty International.

Forecasters were calling for one to two inches of rain in the New York City area.

"A moisture-packed storm will batter the Northeast today through early on Monday," meteorologist Bill Deger wrote on the AccuWeather website.

He said the storm could bring up to three inches of flooding rain in some areas, and more than a foot of wet snow in others.

"By this evening, an all-out snowstorm will be underway from northern Pennsylvania through northern New York," Deger said.

The National Weather service showed flood watches in effect for much of the Mid-Atlantic region, while the Weather Channel site said "heavy rainfall will be possible in the Northeast and may result in some flooding problems."

Colder air coming in behind the storm "would change rain to snow across the interior of the Northeast," it said.

"Some rain and snow will linger into (Monday) morning across New England and eastern parts of New York, and into the evening hours in northern Maine," Weather Channel lead meteorologist Mark Avery wrote on the Channel's site.

In Philadelphia about an inch of rain was expected, with a forecast of wet roads and possible minor flooding in low-lying areas.

Flash flood warnings and flood advisories remained in effect across Tennessee after heavy daylong rain moved through the middle of the state on Saturday and was heading to the eastern portion on Sunday. Snowflakes were reported in the higher elevations.

A flood watch was in effect for the Oconee Mountains in northwest South Carolina, along with portions of northeast Georgia and western North Carolina. Greenville County, South Carolina, received 3 inches of rain overnight, according to the National Weather Service.

Elsewhere in the nation, the Great Plains were dry on Sunday, but heavy snowfall was expected across the region this week.

Up to two inches of snow are expected Monday in eastern Nebraska, then a lull before the storm dumps to six inches of heavy, wet snow in the Omaha area Tuesday and Wednesday.

(Additional reporting by Dave Warner in Philadelphia, Tim Ghianni in Nashville, David Hendee in Omaha, Chris Michaud in New York and Harriet McLeod in Charlotte; Writing by Jerry Norton; Editing by Lauren Keiper)

LAS VEGAS (Reuters) – When Harry Reid, the veteran Democratic senator from Nevada, brought up the idea last month of abolishing prostitution in the state, he did so almost as an aside -- a few lines in an eight-page speech.

But his remarks touched a nerve in Nevada, the only state with legal brothels, and the resulting debate has reverberated through the Las Vegas mayor's race.

Nevada allows brothels in counties with fewer than 400,000 residents. That leaves out Clark County and its main city, Las Vegas, a popular gambling and resort center with a reputation as "Sin City."

The state has been home to legal brothels since the early 1970s, currently numbering two dozen.

But Reid, the Senate majority leader, complained that legalized prostitution lent the wrong image to businesses interested in relocating to Nevada, a potential loss of jobs the state can ill afford.

"Nevada needs to be known as the first place for innovation and investment -- not as the last place where prostitution is still legal," Reid said, adding his concern was prompted by a visit by a technology firm to rural Storey County.

Within days, Las Vegas Mayor Oscar Goodman headed in the opposite direction, repeating an idea he has floated more than once in his nearly 12 years in office -- make prostitution legal in the city and create a Wild West version of Amsterdam.

Candidates in the June election to replace Goodman, who cannot run again because of term limits, quickly weighed in.

Larry Brown, now a Clark County commissioner, said, "My position is I'm against it."

'A NEW LAS VEGAS'

"We're trying to create a new Las Vegas here -- there are more important priorities," he said. "Legalized prostitution is not an image we want to put forward."

Bradley Mayer, spokesman for Carolyn Goodman, the mayor's wife and a candidate to replace him, said of prostitution, "The only reason it's being talked about is because Oscar Goodman talked about it."

She is concerned about teenage prostitutes and human trafficking but her campaign is focusing on other issues, he said.

As for the state Legislature, where Reid originally spoke, state Senator Ruben Kihuen, head of the Economic Development and Employment Committee, said there was not much appetite for tackling the issue.

"I don't think the Legislature is going to take on the issue. Most (lawmakers) think it should be left up to local municipalities," Kihuen said.

As to the suggestion that legalized brothels sully the state's image, Kihuen said: "I've heard people say, 'If we didn't have the image of sex, more companies would want to come to Nevada.' But others say that it's why people come here."

Historian Michael Green said the fallout from Reid's remarks showed the love-hate relationship" Nevada has with its image.

"We can resent it, but the day it changes is the day no one comes here," he said.

(Editing by Dan Whitcomb and Ellen Wulfhorst)

MADISON, Wisconsin (Reuters) – Thousands of union supporters protested Gov. Scott Walker's budget proposals on Saturday at the state capital, a day after the state's chief executive followed through on his threat to issue layoff warning notices to unions representing state workers.

Joining the crowd was liberal filmmaker Michael Moore, who praised the protesters gathered in the battle over union bargaining rights as joining the history of the American labor movement.

Walker, a Republican, has proposed increased payments for health care and pension benefits for public workers and stripping their unions of most of their collective bargaining rights, a move he says is necessary to address a budget gap of $3.6 billion for the coming two years.

The warning notices, sent on Friday to at least 13 unions, do not represent actual layoffs for the state's 300,000 public employees but take the war of words between the newly elected governor and state Democrats to a new level.

Moore told the crowd, which was smaller than it has been the last two weekends of the ongoing protests, that the nation was awash in wealth, concentrated in the hands of a few, but the public has been cowed into not standing up for itself.

"Madison is only the beginning," Moore said. "The rich have overplayed their hand.

"There was no revolt, until now here in Wisconsin," he added.

The crowd estimate was put at about 12,000 people, smaller than previous crowds that numbered in the tens of thousands.

Democratic U.S. Rep. Tammy Baldwin reminded the rally of the 1965 voting rights march from Selma to Montgomery.

"What they did was change the course of history," she said. "That is what you are doing today."

Supporting Walker's proposals, meanwhile, the Americans for Prosperity organization was in the midst of a bus tour due to conclude on Sunday in Madison. The tour started on Thursday in Kenosha, with the aim of hitting 10 cities.

Walker's bill remains stalled in the Wisconsin Senate where all 14 Democrats fled to neighboring Illinois two weeks ago to deny the measure the quorum it needs to pass in the chamber.

Dave Hansen, one of the 14, issued a statement on Friday saying: "it has become increasingly apparent that Governor Walker is not interested in compromise, but instead appears intent on prolonging the impasse."

Behind-the-scenes negotiations have failed to produce a compromise. Just one Democrat is needed for a quorum.

The absent Democrats have been threatened with $100-a-day fines and the prospect of being arrested and taken to the Senate if they return to Wisconsin.

With no action expected on the bill, Walker said he will be forced to send out layoff notices to 1,500 state employees, saving some $30 million.

(Editing by Ellen Wulfhorst and Tim Gaynor)