You have
#fancy_hover :hover { .. }
Did you mean
#fancy_hover:hover { .. }
If you put the space before the :hover then it will target all elements' hover state inside of fancy_hover. Which is why you see a background when you hover the text
For line through http://jsfiddle.net/3gGY3/6/
#fancy_hover .news:hover{
text-decoration: line-through;
}