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1 Boom or Bust The U.S. economy hasn't had too many good weeks lately, but a torrent of good news made last week one of the best in a while: 3» The Conference Board's gauge of consumer confidence rose to its highest level of the year, with the index up to 83.8 from 81 in April. The part of the index that measures future expectations registered a 10-point jump. 3» The National Federation of Independent Business reported that capital investment may be rebounding. The share of small firms that plan to buy computers, machinery, or other equipment rose from 27 percent in March to 30 percent in April, according to the NFIB's survey. It was the first increase of the year in plans to buy the tools that fuel productivity growth. 3» Stock prices surged, with the Nasdaq-long in the doldrums-reaching its highest level since last summer. 3» Low interest rates continued to ignite the housing boom, with the National Association of Realtors reporting a 5.6 percent rise in existing home sales and the Commerce Department reporting a 1.7 percent increase in new home sales during April. Freddie Mac reported that mortgage rates hit a record low average of 5.34 percent. Will the good news continue? The prospect of a tax cut returning money to the private economy, which it will do beginning next month, helped spur some of the good numbers. But many economists warned that any upturn in interest rates down the road could make last week an exception instead of a new rule. 2 Target Iran? American officials turned the diplomatic screws on the Iranian government following the May 12 Riyadh bombings. They've accused the axis-of-evil state of harboring al-Qaeda operatives, including third-in-command Saif Al Adel, believed to be the mastermind of the Saudi Arabia attacks. Iranian foreign minister Kamal Kharrazi used state-run television to deny the charge, saying his country had arrested several al-Qaeda members since the bombings, and none of them were leaders. Washington swiftly countered that the Iranian government was not doing enough to paralyze the terrorist group's activity and had not handed over arrested suspects to Saudi Arabia or other authorities investigating the bombings. As the verbal parrying intensified, Reuters reported that Iran's Ayatollah Ali Khamanei said in a May 28 speech that America is seeking to dislodge the country's Islamic government: "The main goal of America in stepping up pressure on Iran is to make the people and government give in to its superpower will." He may be right about his government: White House officials plan to meet to reconsider U.S. policy toward Iran, and overthrowing its theocracy could be part of it. Washington awaits the International Atomic Energy Agency's report on Iran due June 16, which concerns the country's compliance with the nuclear Non-Proliferation Treaty. 3 Uttering the 'o' Word History provides more reasons to doubt that the latest peace overtures between the Israelis and the Palestinians will bear fruit. But for life-long hardliner Ariel Sharon, Israel's prime minister, to utter the word occupation when describing his military control of the West Bank and Gaza, that has to mean something. Last week, Mr. Sharon held a two-hour session with his ruling Likud members of the Knesset and laid down a challenge as he steered the Israeli government toward accepting the U.S. "road map" for peace: "You may not like the word, but what's happening is occupation. Holding 3.5 million Palestinians is a bad thing for Israel, for the Palestinians, and for the Israeli economy." In an interview with New York Times columnist William Safire, Mr. Sharon said he would not compromise Israeli security, but said at the same time he must assure that his country is not "looked upon as an obstacle to the search for peace." 4 Iraq Roundup Intelligence experts concluded that two trailers found in northern Iraq in late April and early May were mobile biological weapons plants. The findings, in a public report on May 28, concluded that the trailers provided "the strongest evidence to date that Iraq was hiding a biological warfare program." The month-long investigation by the Defense and Central Intelligence Agencies yielded no biological-weapons agents, but officials said the trailers' structure, and equipment closely matched an Iraqi chemical engineer's pre-war descriptions. Among the similarities between the source's report and the actual trailers were the existence of fermentors and gas cylinders used for production and exhaust collection. The report rules out the possibility that the trailers were for legitimate biological purposes such as water purification or vaccine production; had that been the case, the authors say, a system to capture exhaust gases would be unnecessary. The report also notes that the fermentor in the trailer found in late April was built last year; Iraqi officials did not obey UN resolutions requiring that they report its manufacture. At any rate, officials said both trailers were designed to have ambiguous uses and be easily concealed, not efficient. As coalition forces continue the search for weapons of mass destruction in Iraq, the latest evidence brought the United States a step closer to satisfying calls for a "smoking gun." 5 Culture and Heritage The European Union's summit is scheduled for June 20, and it's sure to include fireworks over the draft constitution, portions of which the EU's framers released over several days last week. One of the hot buttons includes the document's preamble, which gives a nod to the "cultural, religious, and humanist heritages of Europe," but pointedly makes no reference to God or Christianity. These approved heritages, the draft preamble says, were "nourished" by early Greek and Roman civilization and "by the philosophical currents of the Enlightenment." The government of Poland, the German Christian Democrats, and the Vatican (not an actual member of the EU) had pressed for an acknowledgment of God.