the problem is due to your highlightning settings and the fact that the top level and first menu item are linked to the news.html page:
<li class="parent"><span><a href="news.html">News</a></span>
<ul class="level-1">
<li><span><a href="news.html">Recent News</a></span></li>
<li><span><a href="newsletter.html">Newsletters</a></span></li>
</ul>
</li>
the top level highlighting uses the value for the ancchor tag:
<li class="parent"><span><a href="news.html">News</a></span>
to select which menu item is highlighted.
since the first child link goers to the same page:
<li><span><a href="news.html">Recent News</a></span></li>
it gets highlighted too.