Chinese Hackers Infiltrate New York Times Computers

SAN FRANCISCO — For the last four months, Chinese hackers have persistently attacked The New York Times, infiltrating its computer systems and getting passwords for its reporters and other employees.

The New York Times published an article in October about the wealth of the family of China's prime minister, Wen Jiabao, in both English and Chinese

After surreptitiously tracking the intruders to study their movements and help erect better defenses to block them, The Times and computer security experts have expelled the attackers and kept them from breaking back in.

The timing of the attacks coincided with the reporting for a Times investigation, published online on Oct. 25, that found that the relatives of Wen Jiabao, China’s prime minister, had accumulated a fortune worth several billion dollars through business dealings.

Security experts hired by The Times to detect and block the computer attacks gathered digital evidence that Chinese hackers, using methods that some consultants have associated with the Chinese military in the past, breached The Times’s network. They broke into the e-mail accounts of its Shanghai bureau chief, David Barboza, who wrote the reports on Mr. Wen’s relatives, and Jim Yardley, The Times’s South Asia bureau chief in India, who previously worked as bureau chief in Beijing.

“Computer security experts found no evidence that sensitive e-mails or files from the reporting of our articles about the Wen family were accessed, downloaded or copied,” said Jill Abramson, executive editor of The Times.

The hackers tried to cloak the source of the attacks on The Times by first penetrating computers at United States universities and routing the attacks through them, said computer security experts at Mandiant, the company hired by The Times. This matches the subterfuge used in many other attacks that Mandiant has tracked to China.

The attackers first installed malware — malicious software — that enabled them to gain entry to any computer on The Times’s network. The malware was identified by computer security experts as a specific strain associated with computer attacks originating in China. More evidence of the source, experts said, is that the attacks started from the same university computers used by the Chinese military to attack United States military contractors in the past.

Security experts found evidence that the hackers stole the corporate passwords for every Times employee and used those to gain access to the personal computers of 53 employees, most of them outside The Times’s newsroom. Experts found no evidence that the intruders used the passwords to seek information that was not related to the reporting on the Wen family.

No customer data was stolen from The Times, security experts said.

Asked about evidence that indicated the hacking originated in China, and possibly with the military, China’s Ministry of National Defense said, “Chinese laws prohibit any action including hacking that damages Internet security.” It added that “to accuse the Chinese military of launching cyberattacks without solid proof is unprofessional and baseless.”

The attacks appear to be part of a broader computer espionage campaign against American news media companies that have reported on Chinese leaders and corporations.

Last year, Bloomberg News was targeted by Chinese hackers, and some employees’ computers were infected, according to a person with knowledge of the company’s internal investigation, after Bloomberg published an article on June 29 about the wealth accumulated by relatives of Xi Jinping, China’s vice president at the time. Mr. Xi became general secretary of the Communist Party in November and is expected to become president in March. Ty Trippet, a spokesman for Bloomberg, confirmed that hackers had made attempts but said that “no computer systems or computers were compromised.”

Signs of a Campaign

The mounting number of attacks that have been traced back to China suggest that hackers there are behind a far-reaching spying campaign aimed at an expanding set of targets including corporations, government agencies, activist groups and media organizations inside the United States. The intelligence-gathering campaign, foreign policy experts and computer security researchers say, is as much about trying to control China’s public image, domestically and abroad, as it is about stealing trade secrets.

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BlackBerry 10 said to be inadequate for helping RIM overcome its ‘demons’

After hitting a seven-year low of $ 6.22 this past summer, shares of Research in Motion (RIMM) have rebounded and climbed more than 100% in the past six months. The company that was previously written off by Wall Street investors has seen a significant boost in recent months as anticipation grows for its BlackBerry 10 operating system. But while a number of analysts have voiced their support for RIM, not everyone is convinced.

[More from BGR: Apple’s 128GB iPad shows the world exactly what Apple does best]

Jan Dawson of Ovum explained, per Benzinga, that RIM continues to “face the twin demons of consumer-driven buying power and a chronic inability to appeal to mature market consumers,” and he believes BlackBerry 10 won’t change this. The analyst said that due to a strong user base of 79 million subscribers and profitability still in the black, the company will remain for years to come. He was quick to note, however, that its glory days are in the past and “it is only a matter of time before it reaches a natural end.”

[More from BGR: Apple unveils new 128GB iPad]

Dawson previously wrote that RIM’s strategy seems to be focused on building the best devices for current BlackBerry users “rather than something that will necessarily win converts from other platforms.”

“The points of differentiation RIM has focused on in teasers for the new platform confirm this – better multitasking, productivity, email, contacts and calendar applications and so on, rather than a better gaming, content consumption or social networking experience,” he said.

Shares of RIM are down more than 6% on Monday, a day before the company is set to unveil its BlackBerry 10 operating system.

This article was originally published on BGR.com

Gadgets News Headlines – Yahoo! News

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Ashley Judd Splits from Husband Dario Franchitti

01/29/2013 at 08:05 PM EST

Ashley Judd and Dario Franchitti

Robin Marchant/Wireimage

Ashley Judd and Dario Franchitti are splitting after more than a decade of marriage.

"We have mutually decided to end our marriage. We'll always be family and continue to cherish our relationship based on the special love, integrity, and respect we have always enjoyed," Judd, 44, and Franchitti, 39, tell PEOPLE exclusively in a statement on Tuesday.

After being engaged for about two years, the Missing star and the racecar driver tied the knot in a highly private ceremony in Scotland in 2001.

Judd's sister, Wynonna Judd, served as maid of honor, while the groom's brother Mario was the best man. – Julie Jordan

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Soldier with new arms determined to be independent

BALTIMORE (AP) — After weeks of round-the-clock medical care, Brendan Marrocco insisted on rolling his own wheelchair into a news conference using his new transplanted arms. Then he brushed his hair to one side.

Such simple tasks would go unnoticed in most patients. But for Marrocco, who lost all four limbs while serving in Iraq, these little actions demonstrate how far he's come only six weeks after getting a double-arm transplant.

Wounded by a roadside bomb in 2009, the former soldier said he could get by without legs, but he hated living without arms.

"Not having arms takes so much away from you. Even your personality, you know. You talk with your hands. You do everything with your hands, and when you don't have that, you're kind of lost for a while," the 26-year-old New Yorker told reporters Tuesday at Johns Hopkins Hospital.

Doctors don't want him using his new arms too much yet, but his gritty determination to regain independence was one of the chief reasons he was chosen to receive the surgery, which has been performed in the U.S. only seven times.

That's the message Marrocco said he has for other wounded soldiers.

"Just not to give up hope. You know, life always gets better, and you're still alive," he said. "And to be stubborn. There's a lot of people who will say you can't do something. Just be stubborn and do it anyway. Work your ass off and do it."

Dr. W.P. Andrew Lee, head of the team that conducted the surgery, said the new arms could eventually provide much of the same function as his original arms and hands. Another double-arm transplant patient can now use chopsticks and tie his shoes.

Lee said Marrocco's recovery has been remarkable, and the transplant is helping to "restore physical and psychological well-being."

Tuesday's news conference was held to mark a milestone in his recovery — the day he was to be discharged from the hospital.

Next comes several years of rehabilitation, including physical therapy that is going to become more difficult as feeling returns to the arms.

Before the surgery, he had been living with his older brother in a specially equipped home on New York's Staten Island that had been built with the help of several charities. Shortly after moving in, he said it was "a relief to not have to rely on other people so much."

The home was heavily damaged by Superstorm Sandy last fall.

"We'll get it back together. We've been through a lot worse than that," his father, Alex Marrocco, said.

For the next few months, Marrocco plans to live with his brother in an apartment near the hospital.

The former infantryman said he can already move the elbow on his left arm and rotate it a little bit, but there hasn't been much movement yet for his right arm, which was transplanted higher up.

Marrocco's mother, Michelle Marrocco, said he can't hug her yet, so he brushes his left arm against her face.

The first time he moved his left arm was a complete surprise, an involuntary motion while friends were visiting him in the hospital, he said.

"I had no idea what was going through my mind. I was with my friends, and it happened by accident," he recalled. "One of my friends said 'Did you do that on purpose?' And I didn't know I did it."

Marrocco's operation also involved a technical feat not tried in previous cases, Lee said in an interview after the news conference.

A small part of Marrocco's left forearm remained just below his elbow, and doctors transplanted a whole new forearm around and on top of it, then rewired nerves to serve the old and new muscles in that arm.

"We wanted to save his joint. In the unlucky event we would lose the transplant, we still wanted him to have the elbow joint," Lee said.

He also explained why leg transplants are not done for people missing those limbs — "it's not very practical." That's because nerves regrow at best about an inch a month, so it would be many years before a transplanted leg was useful.

Even if movement returned, a patient might lack sensation on the soles of the feet, which would be unsafe if the person stepped on sharp objects and couldn't feel the pain.

And unlike prosthetic arms and hands, which many patients find frustrating, the ones for legs are good. That makes the risks of a transplant not worth taking.

"It's premature" until there are better ways to help nerves regrow, Lee said.

Now Marrocco, who was the first soldier to survive losing all four limbs in the Iraq War, is looking forward to getting behind the wheel of his black 2006 Dodge Charger and hand-cycling a marathon.

Asked if he could one day throw a football, Dr. Jaimie Shores said sure, but maybe not like Baltimore Ravens quarterback Joe Flacco.

"Thanks for having faith in me," Marrocco interjected, drawing laughter from the crowd.

His mother said Marrocco has always been "a tough cookie."

"He's not changed that, and he's just taken it and made it an art form," Michelle Marrocco said. "He's never going to stop. He's going to be that boy I knew was going to be a pain in my butt forever. And he's going to show people how to live their lives."

___

Associated Press Chief Medical Writer Marilynn Marchione in Milwaukee and AP writer David Dishneau in Hagerstown, Md., contributed to this report.

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Wall Street advances as defensive stocks extend rally

NEW YORK (Reuters) - Stocks advanced on Tuesday, led by defensive sectors, in a sign the cash piles recently moving into the market are being put to use by cautious investors to pick up more gains.

The S&P 500 is on track to post its best monthly performance since October 2011 and its best January since 1997 as investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record. [ID:nL1N0AX45Q] The Dow Jones industrial average has been flirting with 14,000, a level it hasn't seen since October 2007.

Shares of Amazon.com jumped nearly 7 percent in extended trade after the world's largest Internet retailer posted fourth-quarter revenue that jumped 22 percent to $21.27 billion. The stock closed down 5.7 percent at $260.35 in regular trading.

Among rising defensive shares, which are companies relatively immune to economic swings, were drugmaker Pfizer , up 3.2 percent to $27.70 after posting earnings and AT&T , 1.6 percent higher at $34.68.

"Cyclical were moving very nicely, now you see balance with some of the defensive. Many managers use that as an internal hedge in equity portfolios," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

She said the market is cautious ahead of Wednesday's statement following the Federal Reserve's two-day meeting. In addition, defensive stocks would hold up better if Friday's payrolls report surprises on the downside.

The S&P hovered near 1,500, and market technicians say the benchmark is at an inflection point which will determine the overall direction in the near term.

"The public is pouring in now," said Carter Worth, chief market technician at Oppenheimer & Co in New York. "It reflects complacency and that typically leads to hubris, and hubris leads to trouble. Everyone's buying."

The top performing sectors on the S&P 500 were healthcare <.spxhc> and telecom services <.splrcl>, so-called defensive sectors, both up more than 1 percent.

The energy sector also advanced, on the back of strong earnings from Valero Energy Corp and a hedge fund move to break up Hess Corp to boost investor returns.

Valero shares jumped 12.8 percent to $43.77 and Hess gained 9 percent to $68.11.

The equity gains have largely come on a strong start to earnings season, though results were mixed on Tuesday with Pfizer rising but Ford Motor Co down after its report.

Both companies reported profits that topped expectations, but Ford also forecast a wider loss in its European segment. Ford dropped 4.6 percent to $13.14 as one of the biggest percentage losers on the S&P 500.

The Dow Jones industrial average <.dji> was up 72.49 points, or 0.52 percent, at 13,954.42. The Standard & Poor's 500 Index <.spx> was up 7.66 points, or 0.51 percent, at 1,507.84. The Nasdaq Composite Index <.ixic> was down 0.64 points, or 0.02 percent, at 3,153.66.

Thomson Reuters data showed that of the 174 companies in the S&P 500 that have reported earnings this season, 68.4 percent have been above analyst expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

Disappointing outlooks from Seagate Technology and BMC Software pressured their shares. Seagate lost 9.4 percent to $33.91 and BMC fell 6.3 percent to $41.71.

D.R. Horton Inc's quarterly profit more than doubled as it managed to sell more homes at higher prices, leading the No. 1 U.S. homebuilder to forecast a good spring selling season. The stock jumped 11.8 percent to $23.82.

U.S. home prices rose in November to rack up their best yearly gain since the housing crisis began, a further sign that the sector is on the mend, but consumer confidence fell to its lowest level in more than a year in the wake of higher taxes for many Americans.

(Reporting By Angela Moon; Editing by Nick Zieminski)

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Boeing Aware of Battery Ills Before the Fires

Toru Hanai/Reuters

All Nippon Airways, the biggest operator of 787s, is holding jets at Haneda airport in Tokyo.

Even before two battery failures led to the grounding of all Boeing 787 jets this month, the lithium-ion batteries used on the aircraft had experienced multiple problems that raised questions about their reliability.

Officials at All Nippon Airways, the jets’ biggest operator, said in an interview on Tuesday that it had replaced 10 of the batteries in the months before fire and smoke in two cases caused regulators around the world to ground the jets.

The airline said it told Boeing of the replacements as they occurred but was not required to report them to safety regulators because no flights were canceled. National Transportation Safety Board officials said Tuesday that the battery replacements were now part of their inquiry.

The airline also, for the first time, explained the extent of the previous problems, which underscore the volatile nature of the batteries and add to concerns about whether Boeing and other plane manufacturers will be able to use the batteries safely.

In five of the 10 replacements, All Nippon said that the main battery showed an unexpectedly low charge. An unexpected drop in a 787’s main battery also occurred on the All Nippon flight that had to make an emergency landing in Japan on Jan. 16.

The airline also revealed that in three instances, the main battery failed to start normally and had to be replaced along with the charger. In other cases, one battery showed an error reading and another, used to start the auxiliary power unit, failed. All the events occurred from May to December of last year. And all the batteries were returned to their maker, GS Yuasa.

Kelly Nantel, a spokeswoman for the National Transportation Safety Board, said investigators had only recently heard that there had been “numerous issues with the use of these batteries” on 787s. She said the board had asked Boeing, All Nippon and other airlines for information about the problems.

”That will absolutely be part of investigation,” she said.

Boeing, based in Chicago, has said repeatedly that any problems with the batteries can be contained without threatening the planes and their passengers.

But in response to All Nippon’s disclosures, Boeing officials said the airline’s replacement of the batteries also suggested that safeguards to prevent dangerous overheating of the batteries might have kicked in.

Boeing officials also acknowledged that the new batteries were not lasting as long as they were meant to. But All Nippon said that the batteries it replaced had not expired.

A GS Yuasa official, Tsutomu Nishijima, said battery exchanges are part of the normal operations of a plane but would not comment further.

The Federal Aviation Administration decided in 2007 to allow Boeing to use the lithium-ion batteries instead of older, more stable types as long as it took safety measures to prevent or contain a fire. But once Boeing put in those safeguards, it did not revisit its basic design even as more evidence surfaced of the risks involved, regulators said.

In a little-noticed test in 2010, the F.A.A. found that the kind of lithium-ion chemistry that Boeing planned to use — lithium cobalt — was the most flammable of several possible types. The test found that that type of battery provided the most power, but could also overheat more quickly.

And in 2011, a lithium-ion battery on a Cessna business jet started smoking while it was being charged, prompting Cessna to switch to traditional nickel cadmium batteries.

The safety board said Tuesday that it had still not determined what caused a fire on Jan. 7 on a Japan Airlines 787 that was parked at Logan Airport in Boston. The fire occurred nine days before an All Nippon jet made its emergency landing when pilots smelled smoke in the cockpit.

Federal regulators said it was also still possible that flaws in the manufacturing process could have gone undetected and triggered the recent incidents.

The batteries’ maker X-rays each battery before shipping them to look for possible defects.

Matthew L. Wald contributed reporting.

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Yahoo revenue rises on search advertising

(Reuters) – Yahoo Inc posted a 4 percent gain in net revenue to $ 1.22 billion in the fourth quarter, when an increase in search advertising sales offset weakness in the Web portal’s display ad business.

The company forecast net revenue — which excludes fees shared with partner websites — of $ 1.07 billion to $ 1.1 billion in the current quarter, trailing the $ 1.1 billion that Wall Street analysts expect on average.

Shares in Yahoo, which is trying to stave off declines across much of its business and revive growth, were up 1.5 percent in after hours trade. They had risen 4.5 percent before the revenue projections were disclosed on an analysts’ conference call.

“We got the revenue acceleration we were hoping for. Display was down, but search is doing better” said Sameet Sinha, an analyst at B. Riley Caris.

“As long as in the near-term things are not bad, I think the stock will generally act positively while we wait for Marissa Mayer to deliver,” said Sinha.

The company said on Monday its fourth-quarter net income was $ 272.3 million, or 23 cents per share, versus $ 295.6 million, or 24 cents per share in the year-ago period.

Excluding certain items, Yahoo said it had earnings per share of 32 cents, versus the average analyst expectation of 28 cents according to Thomson Reuters I/B/E/S.

Chief Executive Marissa Mayer is moving to revive the company’s fortunes after several years of declining revenue. Yahoo’s stock has risen roughly 30 percent since she became CEO, reaching its highest levels since 2008.

Yahoo said it repurchased $ 1.5 billion worth of shares during the fourth quarter. Shares in the company were up 1.5 percent at $ 20.61 in extended trading from a close of $ 20.31 on the Nasdaq.

(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz)

Tech News Headlines – Yahoo! News

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Soldier who lost 4 limbs has double-arm transplant

On Facebook, he describes himself as a "wounded warrior...very wounded."

Brendan Marrocco was the first soldier to survive losing all four limbs in the Iraq War, and doctors revealed Monday that he's received a double-arm transplant.

Those new arms "already move a little," he tweeted a month after the operation.

Marrocco, a 26-year-old New Yorker, was injured by a roadside bomb in 2009. He had the transplant Dec. 18 at Johns Hopkins Hospital in Baltimore, his father said Monday.

Alex Marrocco said his son does not want to talk with reporters until a news conference Tuesday at the hospital, but the younger Marrocco has repeatedly mentioned the transplant on Twitter and posted photos.

"Ohh yeah today has been one month since my surgery and they already move a little," Brendan Marrocco tweeted Jan. 18.

Responding to a tweet from NASCAR driver Brad Keselowski, he wrote: "dude I can't tell you how exciting this is for me. I feel like I finally get to start over."

The infantryman also received bone marrow from the same dead donor who supplied his new arms. That novel approach is aimed at helping his body accept the new limbs with minimal medication to prevent rejection.

The military sponsors operations like these to help wounded troops. About 300 have lost arms or hands in Iraq or Afghanistan.

Unlike a life-saving heart or liver transplant, limb transplants are aimed at improving quality of life, not extending it. Quality of life is a key concern for people missing arms and hands — prosthetics for those limbs are not as advanced as those for feet and legs.

"He was the first quad amputee to survive," and there have been four others since then, Alex Marrocco said.

The Marroccos want to thank the donor's family for "making a selfless decision ... making a difference in Brendan's life," the father said.

Brendan Marrocco has been in public many times. During a July 4 visit last year to the Sept. 11 Memorial with other disabled soldiers, he said he had no regrets about his military service.

"I wouldn't change it in any way. ... I feel great. I'm still the same person," he said.

The 13-hour operation was led by Dr. W.P. Andrew Lee, plastic surgery chief at Johns Hopkins. It was the seventh double-hand or double-arm transplant done in the United States.

Lee led three of those earlier operations when he worked at the University of Pittsburgh, including the only above-elbow transplant that had been done at the time, in 2010.

Marrocco's "was the most complicated one" so far, Lee said in an interview Monday. It will take more than a year to know how fully Marrocco will be able to use the new arms.

"The maximum speed is an inch a month for nerve regeneration," he explained. "We're easily looking at a couple years" until the full extent of recovery is known.

While at Pittsburgh, Lee pioneered the immune-suppression approach used for Marrocco. The surgeon led hand-transplant operations on five patients, giving them marrow from their donors in addition to the new limbs. All five recipients have done well, and four have been able to take just one anti-rejection drug instead of combination treatments most transplant patients receive.

Minimizing anti-rejection drugs is important because they have side effects and raise the risk of cancer over the long term. Those risks have limited the willingness of surgeons and patients to do more hand, arm and even face transplants.

Lee has received funding for his work from AFIRM, the Armed Forces Institute of Regenerative Medicine, a cooperative research network of top hospitals and universities around the country that the government formed about five years ago. With government money, he and several other plastic surgeons around the country are preparing to do more face transplants, possibly using the new immune-suppression approach.

Marrocco expects to spend three to four months at Hopkins, then return to a military hospital to continue physical therapy, his father said. Before the operation, he had been fitted with prosthetic legs and had learned to walk on his own.

He had been living with his older brother in a specially equipped home on New York's Staten Island that had been built with the help of several charities. Shortly after moving in, he said it was "a relief to not have to rely on other people so much."

The home was heavily damaged by Superstorm Sandy last fall.

Despite being in a lot of pain for some time after the operation, Marrocco showed a sense of humor, his father said. He had a hoarse voice from the tube that was in his throat during the long surgery and decided he sounded like Al Pacino. He soon started doing movie lines.

"He was making the nurses laugh," Alex Marrocco said.

___

Associated Press Writer Stephanie Nano in New York contributed to this report.

___

Online:

Army regenerative medicine:

http://www.afirm.mil/index.cfm?pageid=home

and http://www.afirm.mil/assets/documents/annual_report_2011.pdf

___

Follow Marilynn Marchione at http://twitter.com/MMarchioneAP .

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Asian shares up, cautious before Fed, U.S. data

TOKYO (Reuters) - Asian shares rose on Tuesday after solid U.S. data, but investors remained cautious ahead of more U.S. economic reports and a Federal Reserve policy decision later in the week that may offer clues to the Fed's stimulus plans.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.3 percent.

Australian shares <.axjo> rallied 0.8 percent to a fresh 21-month high led by shares in the financials sectors as the U.S. S&P 500 index closed above 1,500 for the first time since 2007. Australian markets were closed on Monday for a holiday.

South Korean shares <.ks11> opened up 0.3 percent after touching an 8-week low the day before.

The benchmark Standard & Poor's 500 Index <.spx> eased slightly on Monday after an eight-day winning run but held above 1,500, after closing above it on Friday for the first time in more than five years.

Risk appetite has been improving overall with U.S. earnings generally solid. A rise in a gauge of planned U.S. business spending in December added to a recent run of positive global economic data, and signs of easing financial stress in the euro zone. Euro zone blue chips touched fresh 18-month peaks on Monday.

More solid U.S. growth indicators would, however, fuel speculation the Fed may mull pulling back on aggressive easing stimulus. The Fed ends a two-day policy meeting on Wednesday. The first estimate of U.S. fourth-quarter gross domestic product will be released on Wednesday, followed by non-farm payrolls on Friday.

"Ahead of key events, markets are likely to stay in ranges. But with yields on U.S. Treasury and German government bonds inching higher, one might say investors may be shifting funds to riskier assets from safe-havens," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

"That's part of the reason why the euro has stayed firm," he said. Saito said while a rise in U.S. yields underpins the dollar against the yen, they were likely to be capped with end-month selling from exporters and options lined up between 90.50 and 91.50 yen.

The benchmark U.S. 10-year note briefly pierced 2 percent on Monday for the first time since last April.

Japan's Nikkei stock average <.n225> opened down 0.7 percent after striking a fresh 32-month high above 11,000 on Monday. <.t/>

The dollar fell 0.3 percent to 90.53 yen after touching 91.32 on Monday, its highest level since June 2010, while the euro also eased 0.3 percent to 121.75 yen from Monday's high of 122.91, its highest point since April.

(Editing by Eric Meijer)

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Protests Grow on Fifth Day of Unrest in Egypt

Tara Todras-Whitehill for The New York Times

Egyptians in Port Said mourned on Monday for people killed in clashes with the police a day earlier.

PORT SAID, Egypt — The police fired indiscriminately into the streets outside their besieged station, a group of protesters arrived with a crate of gasoline bombs, and others cheered a masked man on a motorcycle who arrived with a Kalashnikov.

The growing chaos along the vital canal zone showed little sign of abating on Monday as President Mohamed Morsi called out the army to try to regain control of three cities along the Suez Canal whose growing lawlessness is testing the integrity of the Egyptian state.

In Port Said, street battles reached a bloody new peak with a death toll over three days of at least 45, with at least five more protesters killed by bullet wounds, hospital officials said.

Such violence has flared across Egypt with increasing frequency since President Hosni Mubarak was forced out by the revolution two years ago.

President Morsi had already declared a monthlong state of emergency here and in the other canal towns of Suez and Ismailia, applying a Mubarak-era law that virtually eliminates due process protections against abuse by the police. Angry crowds burned tires and hurled rocks at the police. And the police, with little training and less credibility, hunkered down behind barrages of tear gas, birdshot and occasional bullets.

The sense that the state was unraveling may have been strongest here in Port Said, where demonstrators have proclaimed their city an independent nation. But in recent days the unrest has risen in towns across the country and in Cairo as well. In the capital on Monday, a mob of protesters managed to steal an armored police vehicle, drive it to Tahrir Square and make it a bonfire.

After two years of torturous transition, Egyptians have watched with growing anxiety as the erosion of the public trust in the government and a persistent security vacuum have fostered a new temptation to resort to violence to resolve disputes, said Michael Hanna, a researcher at the New York-based Century Foundation who is now in Cairo. “There is a clear political crisis that has eroded the moral authority of the state,” he said.

And the spectacular evaporation of the government’s authority here in Port Said has put that crisis on vivid display, most conspicuously in the rejection of Mr. Morsi’s declarations of the curfew and state of emergency.

As in Suez and Ismailia, tens of thousands residents of Port Said poured into the streets in defiance just as a 9 p.m. curfew was set to begin. Bursts of gunfire echoed through the city for the next hours, and between 9 and 11 p.m. hospital officials raised the death count to seven from two.

When two armored personnel carriers approached a funeral Monday morning for some of the seven protesters killed the day before, a stone-throwing mob of thousands quickly chased them away. And within a few hours the demonstrators had resumed their siege of a nearby police station, burning tires to create a smoke screen to hide behind amid tear gas and gunfire.

Many in the city said they saw no alternative but to continue to stay in the streets. They complained that the hated security police remained unchanged and unaccountable even after Mr. Mubarak had been ousted. They saw no recourse in the justice system, which is also unchanged; they dismissed the courts as politicized, especially after the acquittals of all those accused of killing protesters during the revolution. Then came the death sentences handed down Saturday to 21 Port Said soccer fans for their role in a deadly brawl. The death sentences set off the current unrest here.

Nor, they said, did they trust the political process that brought to power Mr. Morsi and his Islamist allies in the Muslim Brotherhood. He had vowed to usher in the rule of law as “a president for all Egyptians.” But in November he used a presidential decree to temporarily stifle potential legal objections so that his Islamist allies could rushed out a new Constitution. His authoritarian move kicked off a sharp uptick in street violence leading to this weekend’s Port Said clashes.

“Injustice beyond imagination,” one man outside the morning funeral said of Mr. Morsi’s emergency decree, before he was drowned out a crowd of others echoing the sentiment.

“He declared a curfew, and we declare civil disobedience,” another man said.

“This doesn’t apply to Port Said because we don’t recognize him as our president,” said a third. “He is the president of the Muslim Brotherhood only.”

Kareem Fahim contributed reporting from Cairo.

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