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URGENT: Video shows beheading of second American journalist

DUBAI (Reuters) - The Islamic State militant group released a video purporting to show the beheading of U.S. hostage Steven Sotloff, the SITE monitoring service reported on Tuesday. A masked figure in the video also issued a threat against a British hostage, a man the group named as David Haines, and warned governments to back off "this evil alliance of America against the Islamic State", the monitoring service said. (Reporting by William Maclean, Editing by Angus MacSwan)

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Indiana's Daniels to give Republican State of Union response

Daniels speaks at the Conservative Political Action conference (CPAC) dinner in Washington
Daniels speaks at the Conservative Political Action conference (CPAC) dinner in Washington

By Susan Guyett

INDIANAPOLIS (Reuters) - Indiana Governor Mitch Daniels, who last year opted not to run for president in 2012, will deliver the Republican response to President Barack Obama's State of the Union address to Congress next week, congressional Republicans said on Thursday.

Daniels, a budget director in the administration of former President George W. Bush, has built a reputation as a fiscal conservative. Republicans touted his record of effective government and fiscal responsibility and called him well-suited to deliver the party's response after Obama's January 24 address.

"It's an honor to be asked. I hope to do the assignment justice," said Daniels, who was elected governor in 2004 and re-elected in 2008. He is limited to two terms by Indiana law.

"Mitch Daniels is a fierce advocate for smaller, less costly, and more accountable government, and has the record to prove it," House of Representatives Speaker John Boehner said in a statement.

"As Indiana's governor, Mitch Daniels helped improve his state's economy by fostering an environment to create jobs," Senate Republican Leader Mitch McConnell of Kentucky added.

Last May, Daniels said he had decided not to seek the Republican presidential nomination to face Obama, a Democrat, in the November 6 presidential election, citing family considerations.

(Editing by Will Dunham)