The first two are not natural English. The third and fourth are both acceptable. I think that the fourth is more likely.
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YankeeI would also prefer the fourth. I'd say that's because that word order suggests that 'having breakfast' is the primary activity and that 'reading the newspaper' is something that happens during the primary activity.When 'having breakfast' is the primary activity, then isn't it more likely that 'reading the newspaper' will be descri