Drugs group Lundbeck's shares hit by profit warning

COPENHAGEN (Reuters) - Shares in Danish drugs firm Lundbeck fell to their lowest level in over 12 years on Wednesday after it cut its profits forecast for the next two years as European sales slow and spending on new products rise to combat generic competition.
The company has already warned that earnings would stall until 2015 due to cheap generic competition for its existing drugs, meaning new products will be vital for future earnings.
But Chief Executive Ulf Wiinberg said on Wednesday that the negative impact on revenue from healthcare reforms in Europe had also been bigger than expected in the last two years and that slowing European sales and generic competition were hurting.
As a result the company said operating profits would fall further than previously forecast in 2014 as it increases investments in its late-stage drugs development pipeline and product launches.
Lundbeck is working to find new drugs to replace lost revenue from products coming off patent protection such as its antidepressant Cipralex, which is sold as Lexapro in the United States and Japan, and Alzheimer's drug Ebixa.
Wiinberg said 2014 would be the company's peak investment year for the new products pipeline, offering it a solid foundation for growth starting in 2015.
"You only get one chance to launch a product and we have to do it well," Wiinberg said at a briefing for investors.
He was commenting after the company warned in a statement that it now expects revenue in 2014 of about 14 billion Danish crowns ($2.5 billion) and an operating profit of between just 0.5 billion and 1 billion crowns.
Analysts have on average been forecasting a profit of over 2.5 billion crowns for 2014 on turnover of over 14.7 billion crowns, according to Thomson Reuters I/B/E/S Estimates.
Two years ago Lundbeck predicted its annual revenues over the period 2012-2014 would exceed 14 billion crowns a year while earnings before interest and tax (EBIT) would exceed 2 billion crowns a year.
Next years' revenue is now forecast to be in the range of 14.1 billion and 14.7 billion crowns to produce an operating profit of 1.6 billion to 2.1 billion crowns, with no change to the company's forecast for 2012.
Analysts' forecasts for this year are for operating profit to drop 41 percent to 1.99 billion crowns on revenue down 8 percent at 14.7 billion crowns, while for 2013 they predict a profit of 2.26 billion crowns on revenue of 14.5 billion crowns.
Lundbeck's shares were trading down 17 percent at 79.90 crowns at 12.44 p.m. British time, dropping below 80 crowns for the first time since April 2000.
"In the short term, earnings are under pressure," Sydbank analyst Soren Hansen said.
Lundbeck said that it expects a dividend payout ratio of about 35 percent of net profits in the 2012-14 period. Last year it paid 3.49 crowns on basic earnings per share of 11.64 crowns, a payout ratio of 30 percent.
Analysts have been predicting a 27-30 percent cut this year to 2.53-2.28 crowns, according to Thomson Reuters StarMine data.
But a number of analysts doubt that revenue from new products will be enough to secure revenue growth in 2015, compensating for lost revenue from Cipralex, Lexapro and Ebixa which together accounted for about 70 percent of group revenue in 2011.
Lundbeck is working on new products such as antidepressant Brintellix in Europe and the United States for launch at the end of next year or start of 2014, as well as alcohol dependency treatment Selincro in Europe in mid 2013.
"It is difficult to see revenue from the smaller products compensating for the large products," said Hansen.

Read More..

New Mauritius Hotels posts 25 pct drop in full-year profit

PORT LOUIS (Reuters) - Luxury hotels group New Mauritius Hotels (NMH) reported a 25 percent fall in full-year pretax profit, citing higher finance costs and fewer tourists, and forecast a 15 percent drop in first-quarter earnings.
Ranked among the Indian Ocean island's most-traded stocks, NMH said on Wednesday that pretax profit for the year to September 30 fell to 603 million Indian rupees, with earnings per share down 20 percent at 3.60 rupees.
The hotels group said that it won't pay a dividend this year, given the difficult conditions in the local tourism industry. Last year it paid a dividend of 2.50 rupees per share.
Shares in the group, which owns eight hotels in Mauritius and one in the Seychelles, closed unchanged at 52 rupees before its results were released.
Tourism, a traditional cornerstone of the Mauritius economy, has been forecast to account for 7.9 percent of domestic product in 2012, down from 8.4 percent last year. The downturn in tourism has been caused largely by economic turmoil in the euro zone - the sector's key source market.

Read More..

FedEx: cost plan can counter sluggish growth

NEW YORK (AP) — FedEx is more pessimistic about the U.S. economy than it was three months ago, but more assured of its own ability to grow earnings.
The world's second-largest package delivery company lowered its economic forecast for the U.S., saying that there remains a lot of uncertainty for the company and the country.
Its forecast for the current quarter, which incorporates the critical holiday season, falls short of Wall Street expectations.
But FedEx maintained its forecast for the full fiscal year ending in May, counting on a massive cost reduction plan and a slightly more optimistic view of growth overseas. Shares rose 2.6 percent in afternoon trading.
FedEx Corp. posted earnings of $438 million, or $1.39 per share for the quarter that ending in November, compared with $497 million, or $1.57 per share, a year ago. That was below the $1.41 per share that Wall Street was expecting, according to a poll of analysts by FactSet.
Revenue rose to $11.1 billion from $10.6 billion previously, as the company scaled back its operation to better match demand and some of its raised rates. Analysts forecast revenue of $10.84 billion.
Growth in the company's freight and ground operations boosted results, but FedEx reported "persistent weakness" in its core express network. Operating income in that segment fell 33 percent. FedEx and its larger rival UPS Inc. have both seen consumers and businesses opt for slower shipping options to cut costs.
FedEx said on Wednesday that it expects earnings will be between $1.25 and $1.45 per share in the third quarter. Analysts that follow the company were predicting per-share earnings of $1.45.
The company, based in Memphis, Tenn., also said it expects to earn between $6.20 and $6.60 per share for the year ending in May, excluding any charges from the company's buyout plan. Wall Street is looking for $6.34.
Earlier this month FedEx said it will offer some employees up to two years pay to leave, starting next year. The voluntary program is part of an effort to cut annual costs by $1.7 billion within three years. The plan also includes cutting aircraft and underused assets.

Read More..

Different challenges in Central African Rep., Mali

BANGUI, Central African Republic (AP) — Two land-locked, desperately poor African countries are gripped by rebellions in the north that have left huge chunks of both nations outside of government control. Neighboring countries are rushing troops into Central African Republic only a few weeks after rebels started taking towns but Mali's government is still awaiting foreign military help nearly one year after the situation there began unraveling. Here's a look at why there's been quick action in one country, and not in the other.
___
THE INSURGENTS
The simple answer lies in the vastly different challenges faced by intervention forces. Northern Mali is home to al-Qaida-linked militants who are stocking weapons and possess stores of Russian-made arms from former Malian army bases as well as from the arsenal of toppled Libyan leader Moammar Gadhafi. The local and foreign jihadists there are digging in and training forces in preparation for jihad and to repel an invasion. Central African Republic, by contrast, is dealing with home-grown rebels who are far less organized and have less sophisticated weapons.
The numbers of troops being sent to Central African Republic are relatively small — Republic of Congo, Cameroon and Gabon are each sending about 120 soldiers. The rebels stopped their advances toward the capital on Dec. 29, perhaps at least in part because of the presence of the foreign troops who have threatened to counterattack if the rebels move closer to Bangui, the capital. In Mali, it will take far more than the 3,000 African troops initially proposed for a military operation to be successful in ousting the militants, analysts say.
___
THE MISSION
The military objectives are also a stark contrast. In Central African Republic, neighboring nations have a mandate to help stabilize the region between rebel-held towns and the part of the country that is under government control. The intervention force will fire back if fired upon, but so far are not being asked to retake the towns already in rebel hands.
The mission in Mali that foreign forces are slowly gearing up for is far more ambitious. It involves trying to take back a piece of land larger than Texas or France where militants are imposing strict Islamic law, or Shariah. Making things even more complicated there: A military coup last year that created chaos and enabled the rebels to more easily take territory has left the country with a weak federal government and the country's military with a broken command-and-control structure, and with its leaders reluctant to give real power to the civilians.
"In Mali you have a very undefined mission. What does it mean to retake the country and give it back to government forces that were not able to hold it in the first place?" noted Jennifer Cooke, director of the Africa program at the Washington-based Center for Strategic and International Studies.
Central African Republic's situation "is a more limited, defined and frankly somewhat easier mission in the military sense," she said.
___
THE TERRAIN
Northern Mali is a scorching desert that is unfamiliar to many of the troops who would be coming from the West African regional bloc of countries known as ECOWAS. By contrast, Central African Republic's neighbors already have been pulled into past rebellions in the country.
Chadian forces helped propel President Francois Bozize into power in 2003 and they have assisted him in putting down past rebellions here.
"These forces — particularly the Chadians — have been there before," Cooke said. "They know the players, they have an interlocutor in Bozize however fragile he is. This is familiar territory to them."
The Economic Community of Central African States, or ECCAS, also already had established a peacekeeping force in Central African Republic known as MICOPAX.
"From the beginning, they knew that they needed to have troops on the ground. MICOPAX was already there, had already been deployed there. There was already a structure in place," said Thierry Vircoulon, project director for Central Africa at the International Crisis Group.
___
DIFFERING MOTIVATIONS
The rebels in Central African Republic are made up of four separate groups all known by their French acronyms — UFDR, CPJP, FDPC and CPSK. They are collectively known as Seleka, which means alliance in the local Sango language, but have previously fought one another. For instance, in September 2011 fighting between the CPJP and the UFDR left at least 50 people dead and more than 700 homes destroyed. Insurgent leaders say a 2007 peace accord allowing them to join the regular army wasn't fully implemented and are demanding payments to former combatants among other things. Rebel groups also feel the government has neglected their home areas in the north and particularly the northeast, said Filip Hilgert, a researcher with Belgium-based International Peace Information Service.
In northern Mali, the Islamist rebels are motivated in large part by religion. Al-Qaida fighters chant Quranic verses under the Sahara sun , displaying deep, ideological commitment. They consider north Mali as "Islamic territory" and say they will fight to the death to defend it. They also want to use the territory to expand the reach of al-Qaida-linked groups to other countries. This would seem to make other countries more motivated to intervene in Mali than in Central African Republic, but the challenges are so steep and convoluted that an intervention mission is still on the drawing board.

Read More..

EU says Iran not responded to nuclear talks proposal

 The European Union has proposed a time and place for further talks on Iran's nuclear program, but Iran has yet to respond, an EU spokesman said on Friday.
Iran said earlier on Friday it had agreed to resume talks in January with six major powers - represented by the EU - but the EU spokesman said Tehran had not yet replied to proposals made on December 31.
"We offered dates and a venue, but we are still waiting to hear back from Iran," said Michael Mann, spokesman for EU foreign affairs chief Catherine Ashton, who leads negotiations on behalf of the United States, Russia, France, Britain, Germany and China.
Mann declined to say which dates and venue the EU had proposed.
The countries involved in the talks - particularly in the West - want to rein in Iran's uranium enrichment work - which Tehran says is for peaceful purposes only but which produces material which, if processed further, can be used to make nuclear bombs.
There was no breakthrough in three rounds of talks since April 2012. But neither side has been willing to break off totally, partly because of concerns this could lead to war if Israel attacks Iran - something it has threatened to do if the Islamic Republic looks close to getting nuclear weapons

Read More..

Pakistani girl shot by Taliban leaves UK hospital

LONDON (AP) — Three months after she was shot in the head for daring to say girls should be able to get an education, a 15-year-old Pakistani hugged her nurses and smiled as she walked out of a Birmingham hospital.
Malala Yousufzai waved to a guard and smiled shyly as she cautiously strode down the hospital corridor talking to nurses in images released Friday by the Queen Elizabeth Hospital Birmingham.
"She is quite well and happy on returning home — as we all are," Malala's father, Ziauddin, told The Associated Press.
Malala, who was released Thursday, will live with her parents and two brothers in Britain while she continues to receive treatment. She will be admitted again in the next month for another round of surgery to rebuild her skull.
Experts have been optimistic that Malala, who was airlifted from Pakistan in October to receive specialized medical care, has a good chance of recovery because the brains of teenagers are still growing and can better adapt to trauma.
"Malala is a strong young woman and has worked hard with the people caring for her to make excellent progress in her recovery," said Dr. Dave Rosser, the medical director for University Hospitals Birmingham. "Following discussions with Malala and her medical team, we decided that she would benefit from being at home with her parents and two brothers."
The Taliban targeted Malala because of her relentless objection to the group's regressive interpretation of Islam that limits girls' access to education. She was shot while returning home from school in Pakistan's scenic Swat Valley on Oct. 9.
Her case won worldwide recognition, and the teen became a symbol for the struggle for women's rights in Pakistan. In an indication of her reach, she made the shortlist for Time magazine's "Person of the Year" for 2012.
The militants have threatened to target Malala again because they say she promotes "Western thinking," but a security assessment in Britain concluded the risk was low in releasing her to her family. British police have provided security for her at the hospital, but West Midlands Police refused to comment on any security precautions for Malala or her family going forward.
Pakistani doctors removed a bullet that entered her head and traveled toward her spine before Malala's family decided to send her to Britain for specialized treatment. Pakistan is paying.
Pakistan also appointed Malala's father as its education attache in Birmingham for at least three years, meaning Malala is likely to remain in Britain for some time.
Hospital authorities say Malala can read and speak, but cited patient confidentiality when asked whether she is well enough to continue her education in Britain.
While little has been made public about Malala's medical condition, younger brains recover more fully from trauma because they are still growing. Dr. Anders Cohen, chief of neurosurgery at the Brooklyn Hospital Center in New York, estimated she might recover up to 85 percent of the cognitive ability she had before — more than enough to be functional.
"She'd be able to move on with life, maybe even become an activist again," said Cohen, who is not involved in Malala's treatment.
In the Swat Valley, people reacted with joy at the news of her release. Family and friends handed out sweets to neighbors in Malala's hometown of Mingora.
"Obviously we all are jubilant over her rapid recovery, and we hope that she will soon fully recover and would return back to her home town at an appropriate time," said Mahmoodul Hasan, Malala's 35-year-old cousin. Like Malala's father, he runs a private school in Mingora.
But the Swat Valley remains a tense place. Only last month, several hundred students in Mingora protested plans to have their school named after Malala, saying it would make the institution a target for the Taliban.
Malala's father vowed to return to Pakistan with his family once Malala is fully recovered.
"I thank the whole of Pakistan and all other well-wishers for praying for her and our family," he said. "What I am doing here is all temporary, and God willing we all will return to our homeland.

Read More..

Why so much secrecy around Chávez's health? Venezuela's not alone.

The government of Hugo Chávez has, for the first time, characterized the Venezuelan leader’s health condition as “severe” following his Dec. 11 surgery in Cuba for a recurrence of cancer.
But the announcement Thursday night is unlikely to put an end to the rumor mill that has swirled in the past three weeks in the Andean country.
While everyone is worked up over President Chávez's health status, his administration is not necessarily an anomaly in keeping relatively mum. From dictators who are unable to envision their countries without them at the helm, to leaders of western democracies who attempt to pursue political projects despite medical setbacks, secrecy is often the norm.
“It is a long-standing pattern,” says Jerrold Post, who co-wrote "When Illness Strikes the Leader: The Dilemma of the Captive King" and is director of the political psychology program at George Washington University.
Recommended: Hugo Chávez 101: a quiz about Venezuela's president
'TELL US THE TRUTH'
Norm or not, the lack of news has kept people talking. Type in #DiganLaVerdadSobreChavez, or #TellUsTheTruthAboutChavez, and the trending Twitter topic reveals the state of speculation that has become the state of Venezuela since Chávez traveled to Havana for treatment last month.
No one has heard from him since.
Get our FREE 2013 Global Security Forecast now
He’s fine. He’s dead. He’s in a coma. He’s on life support. He’s recovering. You name it – any scenario you wish to believe has been posited. And that’s largely because no one knows. Since Chávez first announced he was ill, in 2011, no medical report has detailed exactly what he faces or what his prognosis is. The government has said that it is keeping the public informed of his health status, as the president himself wishes, but in reality their reports have raised more questions than answers, even as they accuse the opposition of spreading rumors in a form of “psychological war.”
The opposition, for their part, is outraged, demanding more specificity, that the Venezuelan people be told the “whole truth” of the status of the country’s leader.
WHAT DOES SECRECY TELL US?
From former US presidents Ronald Reagan to Franklin Roosevelt, the states of health of leaders was carefully curated by administrations. In one oft-cited case, French President Francois Mitterrand hid his cancer diagnosis from the public for over a decade before being forced to step down. “Yet every year the doctor dutifully said he was in fine health,” says Dr. Post.
In some cases the secrecy reflects different historical social mores about privacy and the public's right to information. And in many cases it was also an effort not to minimize a leader’s mandate.
But in an age of social media, such secrecy is not tolerated – or even possible. The recent health statuses of other Latin American leaders facing illness, for example, including the presidents of Paraguay and Brazil, have been promptly released to the public.
In fact, Pedro Burelli, a former member of the executive board of Petróleos de Venezuela and today a political analyst in Washington who is critical of Chávez, says that the leader chose treatment in Cuba, where there is no free press, for the guarantee of secrecy.
“The natural tendency would have been for him to go to Brazil,” Mr. Burelli says, as it boasts among the best cancer treatment centers in Latin America. It’s also where other leaders in the region have been treated.
But in a democracy with a robust press, Burelli says, “Chávez feared that information [about his condition] would filter out.” Instead, he chose "sub-optimal care" in Cuba, in Burelli’s opinion, in order to keep his medical condition tightly concealed.
Recommended: Hugo Chávez 101: a quiz about Venezuela's president
IMAGINING THE FUTURE
In fact, Fidel Castro temporarily stepped down in 2006 and permanently in 2008, after his own health crisis was disclosed only as an intestinal problem and has been a “state secret” ever since. Over the years, Twitter has alighted with speculation of his health, especially after a long period out of the spotlight. Inevitably he has appeared again, either on television or with his name on a written column in the state-run Granma newspaper.
Mr. Pope says that in the case of leaders such as Castro or Chávez, the secrecy is linked to an inability to imagine their countries without them. “We are talking about [an individual], who has totally entwined his own identity with that of Venezuela,” Pope says.
It is possible that the newest announcement on Chávez’s health status by Venezuela’s Minister of Communication and Information, Ernesto Villegas, represents a move toward transparency on the part of the government. But now Venezuelans are speculating why he made the announcement. And he also failed to mention the scheduled Jan. 10 inauguration of Chávez, who won a fourth term in office in Oct. 7 elections.
Instead, Mr. Villegas condemned the "psychological war unleashed by transnational media about the health of the Head of State, with the ultimate goal of destabilizing the Bolivarian Republic of Venezuela,” he said.
Twitter accounts are likely to stay as active, and as speculative, until the government gives more clarity.

Read More..

Israel tells underweight models to gain weight or get off the runway

“You’re a knockout! Did you gain a little weight?” Israeli fashion photographer and model agent Adi Barkan crows as he greets one of his top models, a towering brunette decked out in a chic black minidress surrounded by the exuberant chaos of the photo shoot in downtown Tel Aviv.
This is a celebratory week for Mr. Barkan, as a new law championed by the fashion giant took effect Jan. 1, banning the use of underweight models in local ads and on the catwalk. Its aim is to help curb a rise in eating disorders among those in the fashion industry and the general public.
“Beautiful is not underweight, beautiful is not anorexic,” says Knesset member Rachel Adato, who helped push the law through. “A revolution has begun against the perception of beauty in Israel, [and] this law shatters the anorexic ideal serving as an example for the country’s youth.”
Daria Keller, one of Barkan’s star models, came to the Simply-U agency from an agency where she says they tried to convince her that her “fullness” would stand in the way of her career. Barkan says she has the perfect measurements. Today, she smiles into the camera with natural confidence.
Recommended: Best 4 novels set in the world of fashion
“When I was 16, I ate only an apple for three full days, but now I want to stay as Daria,” says Ms. Keller, who has been modeling since that age.
The new law, known as the “photoshop law,” requires models to present their employers with a current doctor’s note confirming that they meet a minimum body mass index (BMI) – a calculation of weight to height proportion – of 18.5, which is considered the lowest threshold for a healthy weight. Advertisements featuring models who are “photoshopped” or otherwise digitally altered to make them appear thinner must be clearly marked as manipulated images.
Get our FREE 2013 Global Security Forecast now
'WE ARE THE PROBLEM'
Barkan says that he has always seen the campaign to promote healthy body images as a matter of life and death.
When a 15-year-old girl named Katy came to him in 1997 for help in finding modeling jobs, he instead immediately brought her to the hospital, where he sat with her every night to make sure she ate. Shortly after Katy was released from the hospital, Barkan appeared as a guest on a morning television show. The host said to Barkan, "I want to show you something, a girl whose life you saved," and Katy appeared on stage to tell her story and express her gratitude, Barkan recalls.
After his television appearance, Barkan received 174 phone calls from women pleading “Help me, I’m going to die,” he recalls.
“I saw them all – children, women – everybody wanting to be good-looking. When I asked them, 'What does it mean?' they said, 'The girls that you shoot.' Then I understood that we are the problem,” Barkan says.
In 2007, when another client, a girl named Hila Elmalich who was diagnosed with anorexia, died in his arms at the hospital, he was spurred to greater action – campaigning for legislation that would help suppress the rising trend of underweight models.
“We went out on the balcony and she started to smoke a cigarette. She had a heart attack, and fell down upon me. Right then, I took an oath that I would not give up until I pass this law,” Barkan says.
REDEFINING BEAUTY
His campaign to raise awareness of anorexia, which he had initiated three years earlier with the coordination of Ms. Adato, the Knesset member, gained momentum, despite the fact that illness remained relatively unacknowledged in Israel. In March 2012 the law was finally pushed through the Knesset.
Adato, a former lawyer and gynecologist, says she hoped it would promote a healthy body image among Israeli women, and consequently lower the rates of anorexia and other eating disorders. As is the case in many other countries, eating disorders in Israel have risen with globalization and the subsequent import of American goods and culture, say experts here.
Some 3 percent of Israeli girls between the ages of 11 and 18 suffer from eating disorders, a rate similar to other industrialized Western countries, says Sigal Gooldin, a Hebrew University medical sociologist.
The law is a “symbolic achievement” in the battle to confront eating disorders, she says, but admits that it’s a “small step if girls are still consuming the same popular images and influenced by their surroundings."
A HARSH SPOTLIGHT
The concept of extreme thinness as the beauty ideal exploded with the rise of British supermodel Twiggy in the 1960s and Kate Moss in the 1990s. Critics say that the impossible standards promoted by designers and agencies have led to an epidemic in eating disorders, especially in young women.
The deaths of young models from complications of eating disorders in recent years have put the fashion industry in the hot seat, and put more pressure on governments to take action to change industry norms.
Italy and India banned underweight models from the catwalk in 2006. In the US and Britain, the fashion industry has internal guidelines because legislative restrictions on the industry are considered an infringement on commercial freedoms.
Despite potential roadblocks in implementation, including resistance from within the model community and the relevance of the law only to Israeli advertising companies, the law is a desperately needed response to a growing social crisis, says Dana Weinberg, director of the organization Women and their Bodies, which promotes healthy attitudes among Jewish and Arab women in Israel.
Like many other Western countries, Israel sees its model gliteratti as national treasures. Daily paparazzi shots and other snippets of their daily life regularly flood Israeli websites and social media. "The very fact that the law was passed sends a significant message against extreme thinness,” Ms. Weinberg says.
The flood of American cultural images, often cited as a key cause of eating disorders, may be a big factor in the rising rates of eating disorders, but US influence may also have spurred awareness of and openness to treating the problem.
In both the US and Israel, experts believe that these illnesses often go unreported because of social stigmas, but the estimated rate of eating disorders in both countries is somewhere between 2 and 3 percent. Barkan says that until Ms. Elmalich's death in 2007, there was little awareness of eating disorders in Israel, making his crusade against the fashion industry's warped beauty ideals a daunting task.
PUSHBACK
Some in the modeling community are skeptical that the law can have a real impact, and argue that legislation should focus on health rather than weight. Some models insist that genetics, not eating choices, determine their weight, and resent what they say is a punishment from the government. There is not yet a proposal for a way to evaluate the less quantifiable measure of health.
The Israeli model and television host Yael Goldman called the new law “absurd,” saying "models were always skinny and will always be, that’s the way it is.”
Daria Keller begs to differ.
"Today, models don’t have to be afraid, from themselves, also,” she says, referring to the growing social acceptance of average-sized models. “They can say, 'I can eat pizza, or a hamburger, because actually we’re too smart to ruin our lives for this.

Read More..

Stocks soar on budget deal, but problems lurk

The "fiscal cliff" compromise, even with all its chaos, controversy and unresolved questions, was enough to ignite the stock market on Wednesday, the first trading day of the new year.
The Dow Jones industrial average careened more than 300 points higher, its biggest gain since December 2011. It's now just 5 percent below its record high close reached in October 2007. The Russell 2000, an index that tracks smaller companies, shot up to 873.42, the highest close in its history.
The reverie multiplied across the globe, with stock indexes throughout Europe and Asia leaping higher. A leading British index, the FTSE 100, closed above 6,000 for the first time since July 2011, at 6,027.37.
In the U.S., the rally was extraordinarily broad. For every stock that fell on the New York Stock Exchange, roughly 10 rose. All 30 stocks that make up the Dow rose, as did 94 percent of the stocks in the Standard & Poor's 500 index.
U.S. government bond prices dipped sharply as investors pulled money out of safe-harbor investments. And the VIX, the "fear index" that measures investors' expectations of future market volatility, plunged more than 18 percent to 14.68, the lowest close since October.
The very last week of each year and the first two days of the new year usually average out to a gain for U.S. stocks. But the size of this year's gains made it stand out.
The Dow has risen on the first day of the trading year for each of the past four years, from 2009 to 2012. The average gain was 171 points — sizable, but still much smaller than Wednesday's leap of 308.41.
In the midst of the euphoria, many investors remained cautious. The deal that politicians hammered out merely postpones the country's budget reckoning, they said, rather than averting it.
"Washington negotiations remind me of the Beach Boys song, 'We'll have fun, fun, fun 'til her daddy takes the T-Bird away,'" Jack Ablin, chief investment officer of BMO Private Bank in Chicago, wrote in a note to clients.
"Nothing got solved," added T. Doug Dale, chief investment officer for Security Ballew Wealth Management in Jackson, Miss.
According to these and other market watchers, investors were celebrating Wednesday not because they love the budget deal that was cobbled together, but because they were grateful there was any deal at all.
"Most people think that no deal would have been worse than a bad deal," said Mark Lehmann, president of JMP Securities in San Francisco.
The House passed the budget bill late Tuesday night, a contentious exercise because many Republicans had wanted a deal that did more to cut government spending. The Senate had already approved the bill.
The late-night haggling was a product of lawmakers wanting to avert a sweeping set of government spending cuts and tax increases that kicked in Tuesday, the start of the new year, because there was no budget deal ready. The scenario came to be known as the fiscal cliff, because of the threat it posed to the fragile U.S. economic recovery.
The bill that passed Tuesday night ended the stalemate for now, but it leaves many questions unanswered.
The deal doesn't include any significant deficit-cutting agreement, meaning the country still doesn't have a long-term plan or even an agreement in principle on how to rein in spending. Big cuts to defense and domestic programs, which were slated to kick in with the new year, weren't worked out but instead were just delayed for two months. And the U.S. is still bumping up against its borrowing limit, or "debt ceiling."
"There's definitely another drama coming down the road," said Lehmann. "That's the March cliff."
The political bickering that's almost certain to persist could have another unwelcome effect: influencing ratings agencies to cut the U.S. government's credit score. That happened before, when Standard & Poor's cut its rating on U.S. government debt in August 2011, and the stock market plunged.
Even so, Wednesday's performance gave no hint of the dark clouds on the horizon.
The Dow enjoyed big gains throughout the day, up by more than 200 points within minutes of the opening bell. It swelled even bigger in the final half hour of trading, and closed up 2.4 percent to 13,412.55.
The Standard & Poor's 500 jumped 36.23, or 2.5 percent, to 1,462.42. The Nasdaq rose 92.75, or 3.1 percent, to 3,112.26.
The yield on the 10-year Treasury note rose sharply, to 1.84 percent from 1.75 percent. Prices for oil and key metals were up. The price of copper, which can be a gauge of how investors feel about manufacturing, rose 2.3 percent. The Dow Jones transportation index rose to its highest point since July 2011.
The gains persisted despite small reminders that there are still serious problems punctuating the world economy, like middling growth in the U.S. and the still-unsolved European debt crisis. The government reported that U.S. builders spent less on construction projects in November, the first decline in eight months. And the president of debt-wracked Cyprus said he'd refuse to sell government-owned companies, a provision that the country's bailout deal says it must at least consider.
Among stocks making big moves, Zipcar shot up 48 percent, rising $3.94 to $12.18, after the company said it would sell itself to Avis. Avis rose 5 percent, up 95 cents to $20.77.
Marriott rose 4 percent, up $1.52 to $38.79, after SunTrust analysts upgraded the stock to "buy." Headphone maker Skullcandy dropped 13 percent, losing 99 cents to $6.80, after Jefferies analysts downgraded it to "underperform."

Read More..

Clothing retailer Gap to buy Intermix for $130 million - WSJ

 Gap Inc will buy women's fashion boutique Intermix Inc for $130 million (80 million pounds) to enter the luxury clothes market, the Wall Street Journal reported.
The casual-clothes retailer plans to double Intermix's store count and look for opportunities to expand the chain overseas, the Journal said, quoting Art Peck, president in charge of new brands at Gap.
Intermix, which does not produce its own clothes and has about 30 stores in the United States and Canada, has relationships with designers, including Herve Leger, Yves Saint Laurent and Rag & Bone, from which Gap could benefit.
"We are the incubator with emerging brands and we can help them out with collaborations," Intermix founder and chief executive, Khajak Keledjian told the Wall Street Journal. Keledjian will remain at the company as chief creative officer.
The deal is the latest by Gap since it paid $150 million in 2008 for women's active apparel retailer Athleta, an acquisition aimed at tapping demand for yoga and workout gear, the Journal said.
Officials with Gap could not be reached for comment outside regular U.S. business hours.
Gap, which competes with Swedish retailer H & M Hennes & Mauritz AB , H&M and Inditex Group's Zara, is also closing about a fifth of its North American namesake stores, the Journal daily said.

Read More..

Gold slips from 2-week peak after U.S. budget deal

 Gold eased on Thursday from the prior session's two-week peak as the dollar strengthened and oil prices fell, with investors focusing on coming U.S. budget talks after euphoria over a vote to avert a fiscal crisis faded.
A global stock market rally petered out on Thursday as investors began worrying about likely future U.S. political battles over spending cuts.
Spot gold was at $1,681.1 by 1114 GMT, down 0.31 percent, having touched a two-week peak above $1,694 in the previous session. U.S. gold futures for December delivery were down $7.0 an ounce at $1,681.80.
The precious metal made a strong start to the year along with other financial assets, with commodities hitting multi-week highs on Wednesday, after the U.S. Congress passed a bill to avert an approaching fiscal crisis.
Lawmakers opted to raise taxes on wealthy individuals and families, but left unresolved another sticky issue involving $109 billion in planned spending cuts, promising more political showdowns on the budget in coming months.
"The deal to avoid a fiscal cliff has booted some problems into the long grass by a considerable distance, but there are still issues out there such as expanding the debt ceiling, which could prove to be difficult negotiations," said David Jollie, strategic analyst at Mitsui Precious Metals.
He said that gold had been swept up in a relief rally of financial assets and commodities after the deal to avert the fiscal cliff, but that this had lost momentum on Thursday.
The euro fell more than one percent against the yen as investors booked profits and sold riskier and growth-linked currencies on concerns about the prospect of more U.S. budget negotiations in coming weeks.
Technical analysts at ScotiaMocatta said gold's rise back above a key retracement level at $1,695 an ounce on Wednesday had led to an improved chart picture for the metal.
"The break of $1,685 has shifted our view from bearish to neutral," they said. "(We) see support now at $1,679 and $1,670, with resistance at $1,695 and $1,708."
GRAPHICS
2012 asset returns: http://link.reuters.com/muc46s
2012 commod returns: http://link.reuters.com/faz36s
Gold across currencies: http://r.reuters.com/wun62s
Gold/platinum ratio: http://link.reuters.com/xez92s
Plat/palladium ratio: http://link.reuters.com/qub87s
HEADWINDS FOR GOLD
Gold ended up around 7 percent in 2012, the twelfth straight year of gains, but faces headwinds this year after posting its worst quarterly performance in more than four years in the last three months of 2012.
Bank Credit Suisse cut its gold price forecasts for 2013 to $1,740 an ounce on Thursday from $1,840 previously, and said in a report that the end of the bull market was in sight.
"A more stable financial environment and improving global growth is likely to see investor demand for defensive assets fade and the market turn lower by Q4," it said. "We do not forecast a bursting bubble collapse in price, more a slow puncture."
Premiums for gold bars were steady in Singapore at $1.10 to$1.20 an ounce to the spot London prices as supply had yet to recover after the Christmas and New Year holidays. Buyers from India, historically the top consumer, were on the sidelines.
India's finance minister said on Tuesday he was looking at further curbs on gold imports to help rein in a current account gap that touched an all-time high in the July-September quarter.
"Physical gold demand may be negatively affected in the next few months by the fact that the Indian government is considering raising duties on gold imports even further," Commerzbank said in a note.
"The aim is to tackle the country's record-high current account deficit, for which - according to India's central bank - gold imports are roughly 80 percent to blame."
The Istanbul Gold Exchange reported on Thursday that Turkey's gold imports rose by 57 percent last year to 120.78 tonnes from 79.7 tonnes in 2011.
Among other precious metals, silver was down 0.16 percent to $30.92 an ounce, while platinum firmed 0.11 percent to $1,562.24 and palladium dipped 0.20 percent to $700.97 an ounce.

Read More..

Sensex gains for third day; Q3 earnings key

 BSE Sensex edgedup on Thursday, marking a third consecutive session of gains that pushed indexes to their highest close in two years, as expectations for better-than-expected quarterly earnings lifted technology stocks such as Infosys.

Shares have started 2013 on a strong note as investors bet the Reserve Bank of India (RBI) will cutinterest rates later this month, and as the resolution to the so-called U.S. "fiscal cliff" negotiations have benefitted global markets.

Foreign investors have also bought a net 19.25 billion rupees in equities this year, according to provisional exchange and regulatory data, after buying a net $24.37 billion last year.

However, analysts say 2013 would be a lot different from 2012, which saw a 25.7 percent gain in the benchmark index, as budget problems in the U.S. are far from over, while at home the fiscal defict poses a challenge for a meaningful reduction in interest rates.

"Market is in a wait-and-watch mode because U.S. problems are just postponed and not solved as discussion regarding debt limit will come back," said Jagannadham Thunuguntla, head of Research at SMC Investmensts and Advisors.

Earnings growth in 2013 will largely depend on the central bank's stance on rates and government policy measures, he added.

The benchmark BSE index rose 0.26 percent, or 50.54 points, to end at 19,764.78, marking its highest close since January 6, 2011.

The broader NSE index rose 0.27 percent, or 16.25 points, to end at 6,009.50, its highest close since January 6, 2011, and ending above the psychologically key level of 6,000 points.

Indian companies are due to start reporting earnings next week, with Infosys Ltd kicking off on January 11.

Hopes that software service exporters would report solid earnings were amplified by expectations an agreement on the U.S. fiscal cliff would improve demand from the key U.S. market.

Infosys gained 1.24 percent, Tata Consultancy Services Ltd rose 1.4 percent, while Wipro Ltd ended up 1 percent.

Jet Airways gained 4.7 percent after a Indian government source told reporters the carrier was the front-runner for an investment from Etihad Airways.

Jet later confirmed it was in talks with Etihad, in the first confirmation of a potential deal by either side.

SpiceJet Ltd gained 1 percent on hopes the carrier would also eventually attract foreign investment, but Kingfisher Airlines fell 2.

India's Dr. Reddy's Laboratories Ltd gained 2.4 percent after the company said it has launched prostate drug finasteride tablets in the U.S.

Shares in gold loan providers rallied after a central bank report proposed increasing the loan-to-value, or LTV, ratio to 75 percent from 60 percent currently.

Muthoot Finance shares ended up 9.7 percent, while Manappuram Finance closed 20 percent higher at the maximun daily limit.

However, shares in Titan Industries , which makes gold jewellery, ended down 1.75 percent on concerns over rising costs after the government said it will make importing gold costlier.

Shares in India's biggest domestic iron ore producer, state-run NMDC Ltd, fell 3.22 percent after reducing prices for its most common grade by almost 6 percent a tonne in January, an unexpected move that will help cut the costs of steel makers who rely on imports.

Read More..

Wall Street dips as profits booked after rally

NEW YORK (Reuters) - U.S. stocks edged lower on Thursday as investors locked in gains after a rally Wednesday, which was spurred by a deal by U.S. lawmakers to avert a "fiscal cliff" of austerity measures that had been due to kick in this year.
Losses were limited, however, by better-than-expected data that showed U.S. private-sector employers added 215,000 jobs in December. That was well above economists' expectations for a gain of 133,000 jobs, according to a Reuters survey.
"The report now sets the stage as we expect a strong non-farm payroll reading on Friday," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York
The ADP report beat forecasts partly due to "a snapback from (superstorm) Sandy, although we prefer to stick to our line of thought that says the economy is gaining momentum rather than losing it regardless of the impact of fiscal talks in Washington," he said.
The key payrolls report is due on Friday. A Reuters survey forecasts non-farm payrolls rose to 150,000 last month, from 146,000 in November.
A separate report Thursday showed the number of Americans filing new claims for unemployment benefits rose last week, but the data was too distorted by year-end holidays to offer a clear read of labor market conditions.
The Dow Jones industrial average was down 45.92 points, or 0.34 percent, at 13,366.63. The Standard & Poor's 500 Index was down 3.62 points, or 0.25 percent, at 1,458.80. The Nasdaq Composite Index was down 8.15 points, or 0.26 percent, at 3,104.11.
Wall Street began the new year Wednesday with a rally and their best performance in more than a year, sparked by a last-minute deal in Washington to avert a fiscal cliff of automatic massive tax hikes and spending cuts that, in the worst-case scenario, would have hurt the nation's economic growth.
The minutes of the Federal Reserve's policy meeting last month will be released at 2:00 p.m. EST (1900 GMT). The minutes will give details on the discussions of the Federal Open Market Committee's December 11-12 meeting.
U.S. retailer Costco Wholesale Corp reported a better-than-expected 9 percent rise in December sales at stores open at least a year, mainly helped by an additional sales day in the reporting period. Costco shares rose 1.3 percent to $102.80.
Gap Inc will buy women's fashion boutique Intermix Inc for $130 million to enter the luxury clothes market, the Wall Street Journal reported. The stock rose 3 percent to $32.28.
Family Dollar Stores Inc reported a lower-than-expected quarterly profit as its emphasis on selling more everyday items like cigarettes and soft drinks put pressure on margins. The stock fell 12 percent to $56.47.

Read More..

Myanmar launches air-strikes on Kachin rebels

Heavy fighting between the Myanmar Army and the rebel Kachin Independence Army (KIA), is raising concern that a major escalation of violence is under way in the region, casting a shadow over Myanmar's much-touted reforms.
The Myanmar Army offensive – which includes the use of helicopter gunships and fighter jets – comes after weeks of heavy fighting at outposts about 10 miles outside the KIA headquarters on the Myanmar-China frontier.
The government of Myanmar (also known as Burma) and the KIA signed a cease-fire in 1994, but that came apart in June 2011, even as the government embarked on reforms that include tentative cease-fires with some of the myriad other ethnic minority armed groups that have long fought in the border regions.
With peace talks between the government and KIA stalled, President Thein Sein has told the Army only to fight in self-defense in Kachin, but the latest violence could signal that this request has been rescinded, or that the reformist president is being ignored by the Army.
“The situation is very tense. The bombers are bombing just about four or five miles from the town here,” says Joseph Nbwi Naw, a Kachin Catholic priest in the KIA headquarters Laiza, a valley town separated from Yunnan, China, only by the 1-ft. deep, 20-yard-wide Jeyang River.
“People are digging trenches and foxholes in the town,” says La Nan, KIA spokesperson.
Recommended: Think you know Asia? Take our geography quiz.
Ethnic groups in the northern part of the country have long accused the government of repression, and have been fighting for greater autonomy.
The Kachin – supported by a smaller militia known as the All Burma Students Democratic Front – countered a Myanmar Army attempt to resupply soldiers near the front line Dec. 14, by overrunning an Army position near a Buddhist temple on the main road from Laiza to Myitkina, the government-held state capital of the Kachin region – upping the ante in a grueling 18-month war.
Since the fighting ramped up in mid December, at least one civilian and an unverifiable numbers of soldier militia members have died.
La Nan told the Monitor Wednesday that “our people in Pangwa say that the Burmese jets flew 1 kilometer into China yesterday before attacking us,” echoing claims posted online alongside numerous video clips of Myanmar helicopters and jets attacking KIA positions and flying over camps set up for some of the around 100,000 civilians made homeless by the fighting.
Get our FREE 2013 Global Security Forecast now
The Myanmar government first denied and then acknowledged that the Army is carrying out the airstrikes, after accusing the KIA of attacking power stations during the Christmas holidays. All told, the KIA carried out “101 mine attacks in Kachin State and from 18 May 2011 to 21 December 2012,” according to the government mouthpiece The New Light of Myanmar, implying that the government considers the attacks a reaction to rebel attacks.
Questions about the latest fighting sent to the Myanmar president's office had gone unanswered at time of writing, but a report on the government's Myawaddy news said that the Army seized a rebel outpost on Dec. 30 "with the help of air strikes in the region."
Kachin is the northernmost state in Myanmar and is a mountainous and resource-rich region known for its jade. Fighting has centered around lucrative mines near the town of Hpakant in recent months.
The KIA was set up in 1961 after the government reneged on promises to devolve powers to the Kachin and other ethnic groups, as a military junta seized power at the start of what turned out to be five decades of Army rule.
The estimated 1 million Kachin are mostly Baptist Christian, in a country of almost 60 million where close to 90 percent of people are thought to be Buddhist and some 70 percent are Burman, the majority ethnic group.
The KIA, once accused of part-funding operations through opium cultivation, has an estimated 10,000 soldiers but is mostly armed with light weaponry, while the 400,000 Myanmar Army is among the best-equipped in southeast Asia, with a long history of brutality in the hill and jungle ethnic minority borderlands.
Nlam Bok Mai, a Kachin mother who is among more than 7,000 people living in cramped shacks in Jeyang camp outside Laiza, told the Monitor that she fled with her family in June 2011 as the Myanmar Army approached their village, 25 miles away: “We did not wait there for the Army to come, we did not want to get caught in any fighting.

Read More..

Egypt's Brotherhood says UAE arrests unfounded

CAIRO (Reuters) - Egypt's Muslim Brotherhood said on Wednesday some of its members had been wrongfully arrested in United Arab Emirates (UAE) on allegations of helping to train local Islamists in subversion tactics.
"I know 11 people were detained. I know that some of them are from the Brotherhood," said Mahmoud Ghozlan, a Brotherhood spokesman in Cairo. "The claim that they are a cell seeking to destabilize the country is devoid of truth."
The arrests came to light on Tuesday when a UAE newspaper reported the authorities had arrested an "Egyptian Muslim Brotherhood cell", citing an unnamed source.
The oil-rich UAE, which has long voiced distrust of the Muslim Brotherhood that helped propel Egyptian President Mohamed Mursi to power this year, arrested about 60 Islamists last month, accusing them of being linked to the Egyptian group and plotting to undermine governments in the Gulf region.
In what appeared to be an effort to ease tensions, Egypt's intelligence chief, General Mohamed Shehata, headed to the UAE for talks, airport officials said.
An aide to the Egyptian president also handed over a message from Mursi to UAE's president, a statement from the Egyptian presidency said, without giving details.
"We are in contact with the authorities there and will see what will happen in the next period," Foreign Minister Mohamed Kamel Amr was quoted as saying by the state news agency.
The son of one of the arrested Egyptians said in Cairo that his father, Ali Sonbol, is a medical doctor and is not involved in political activities.
"They didn't say where they were taking him and what were the charges," Ahmed Sonbol told Reuters. "The Egyptian embassy only assured us that he was detained by UAE authorities and he is well."
UAE officials were not available for comment.
Relations between Egypt and the UAE soured after Egyptian strongman Hosni Mubarak - a longtime Gulf ally - was toppled in Egypt's 2011 revolution.
Last month, UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahayan summoned Egypt's ambassador over claims carried by Egyptian media the UAE was behind a plot against Egypt's leadership, saying they were "fabricated".
Thanks to their state-sponsored cradle-to-grave welfare systems, the UAE and other Gulf Arab monarchies have largely avoided the Arab Spring unrest which has unseated long-serving rulers elsewhere in the past two years.
The Brotherhood has sought to reassure Gulf states it has no plan to push for political change beyond Egypt's borders.

Read More..

5 female teachers killed: Pakistan aid work imperiled

Pakistani police on Wednesday searched for the gunmen behind the brazen murder of five teachers and two health workers, amid fears that public health campaigns would suffer and lead to a resurgence of polio and other preventable diseases.
There was no immediate claim of responsibility for the attack, which occurred Tuesday in Swabi, a city in the troubled northwest. The Pakistani Taliban has in the past vowed to target, among others, health workers involved in campaigns to wipe out polio.
Last year, 15 health and aid workers were killed in Pakistan, making the country one of the most dangerous in the world for aid workers, according to the British-based consultancy Humanitarian Outcomes. Most were women. Development sector experts now express concerns that those working on the ground will shy away from assignments.
“In the past, local volunteers, be they teachers, medical workers or social mobilizers, considered themselves safe and worked hand in hand with foreign aid workers and paramilitary personnel in even the most dire of circumstances,” says Hassan Belal Zaidi, a development and communication specialist, based in Islamabad. “But now, it would not be unreasonable for them to think twice and even refuse to travel to remote parts of the country if they know there is a chance they may get shot.”
The six women and one man were traveling in a van when gunmen on motorcycles stopped it Tuesday afternoon after it left a children's community center, according to Abdur Rasheed Khan, chief of the Swabi police force. The four gunmen took a 4-year-old boy belonging to one of the women from the van, and then raked the vehicle with gunfire, he said. The child was unharmed and was later turned over to police by bystanders, he said.
Recommended: How much do you know about Pakistan? Take this quiz.
These murders come a few weeks after nine health workers with national polio campaign were killed in different parts of the country in what police said was a coordinated attack. That prompted the Pakistani government and the United Nations agencies to suspend their vaccination drive for the disease, which has seen a uptick in cases in recent years.
Pakistan is one out of the three countries where polio persists; at least 57 cases were registered in 2012. The World Health Organization last year warned Pakistan that it could face travel and visa restrictions and sanctions imposed by other countries if polio continues to spread.
Get our FREE 2013 Global Security Forecast now
Distrust of public health initiatives like the polio campaign is particularly strong in districts of Pakistan where religious extremists have tightened their grip. That sentiment deepened in 2011 after the US raid that killed Osama bin Laden. A CIA-led operation to confirm Mr. bin Laden’s location in the city of Abbottabad used a hepatitis B vaccination campaign to gather DNA evidence on bin Laden.
The recent attacks are likely to further frighten people from working with foreign and Pakistani aid and development organizations, says Bushra Arain, chairwoman for the All Pakistan Lady Health Workers Welfare Association, which counts more than 100,000 registered members.
“We are the backbone of Pakistani health sector. If the attacks continue, with the state showing the inability it currently is demonstrating in stopping us from being targeted, we will stop working,” Ms. Arain says.
The Taliban and affiliated groups are targeting aid workers for several reasons, says Khadim Hussain, who heads one of the largest private charity school networks in the northwestern Khyber Pakhtunkhwa province. First, the militants think aid groups have an anti-Muslim agenda, spying on the local population, a suspicion that was deepened by the raid on bin Laden. Secondly, the groups equate health campaigns with modernizing society, in opposition to some fundamentalist tenets for Islamic radicals. Some groups also believe the vaccine is intended to sterilize Muslim children.
“If the attacks by the Taliban continue, there will be widespread de-motivation amongst aid workers, which I am already witnessing,” Mr. Hussain says.
While some development advocates say there needs to be a coordinated, public response by Pakistani and foreign NGOs to the attacks, others say the government should stop public education campaigns altogether and just allow aid workers to operate quietly.
“The less attention we get, the less vulnerable we will be as targets for the terrorists,” Ms. Arain says.
“We are involved with anti-polio drive, infant health awareness programs, family planning, etc. and if the government does not pull its act together, many deadly diseases can spread rapidly in Pakistan,” she says. “The situation can get out of hand.

Read More..

Gunmen kidnap seven Pakistani soldiers

ISLAMABAD (Reuters) - Gunmen kidnapped seven soldiers from a bus in Pakistan on Wednesday, military officials said, just days after Taliban forces executed 21 pro-government paramilitaries they had seized.
The gunmen took the seven soldiers and let go a sweeper on the bus with them, one military official said. The gunmen were wearing military uniforms, other sources said.
The men were travelling between army headquarters in Rawalpindi and their stations in the northern province of Khyber Pakhtunkhwa when they were taken off their bus in Jand in Punjab province.
Taliban commander Tariq Afridi, who has forces in the area, was not available for comment and no Taliban spokesman returned calls seeking comment.
Last week the Taliban kidnapped 23 paramilitary pro-government forces. Twenty-one of their bodies, bound, blindfolded and shot in the head, were discovered on Sunday. One man escaped and another was badly wounded.
A military offensive over the past two years has clawed back swathes of Pakistan from the Taliban.
But the insurgents are still able to organize kidnaps and killings over wide swathes of the country and high-profile attacks have increased over the past month. Elections are scheduled for the spring and the insurgency will be a key issue.
Poorly trained police, overburdened courts and corruption have hampered Pakistan's ability to crack down on militancy.
On Monday, the bullet-riddled bodies of nine men were found in North Waziristan, local tribesmen said. A Taliban spokesman claimed they were fighters that had been taken prisoner over the past few months. Military officials did not return calls seeking comment.
In August, the Taliban kidnapped 17 soldiers and beheaded them.

Read More..

Former Chilean military officials held in singer's 1973 slaying

At least four former military officials were detained in Chile on Wednesday for their alleged role in the slaying of singer-songwriter Victor Jara during the dictatorship of General Augusto Pinochet.
Jara was killed days after the coup that ousted left-leaning President Salvador Allende, and his death became a symbol of the political violence and human rights abuses that ravaged Latin America in the 1970s.
Chilean prosecutors have accused two former lieutenants, Hugo Sanchez and Pedro Barrientos, of fatally shooting Jara and named six others as accomplices in the 1973 case.
Sanchez was detained on Wednesday after surrendering to police, the judge in the case said. An extradition request will be made for Barrientos, who lives in the United States.
Three other men, accused of being accomplices in Jara's killing, also were being held at a military base after turning themselves in. Another suspect was expected to hand himself over to police, his lawyers said.
Jara, author of well-known songs such as "Te Recuerdo Amanda" ("I Remember You Amanda") and "El Derecho a Vivir en Paz" ("The Right to Live in Peace"), was arrested along with students and teachers at the State Technical University.
He was taken to the Chile Stadium, a sports venue that was used as a torture center in the days after the September 11, 1973, coup and is now named after Jara.
According to witnesses, he was tortured for several days - his hands battered with the butt of a revolver - before he was shot dead on September 16. His bullet-riddled body was found dumped near a cemetery three days later.
Jara's family has welcomed the eight arrest orders and hope progress in the case can spur advances in investigations of other dictatorship-era crimes.
"If Victor's case serves as an example, we're pushing forward in demanding justice for Victor with the hope that justice will follow for everyone," Jara's widow, Joan Jara, told reporters.
Jara's case has been closed several times but the investigation was revived in 2003 by Judge Juan Guzman, who also investigated Pinochet over human rights abuses.
Some 3,000 people were kidnapped and killed during Pinochet's 1973-1990 rule. Another 28,000 people were tortured during military rule, among them former President Michelle Bachelet.

Read More..

Stocks struggle for direction as 'cliff' nears

 With the "fiscal cliff" just hours away and politicians yet to reach a solution, the stock market struggled to decide which way to go.
The Dow Jones industrial average hopped between small gains and losses in morning trading. The Standard & Poor's 500 index and the Nasdaq composite dipped into the red but spent most of the morning holding onto small gains.
Many investors are unsure of what to do with their money as long as the "fiscal cliff" remains unsolved. That refers to higher taxes and government spending cuts that will kick in Tuesday if Republicans and Democrats can't hammer out a budget compromise by midnight Monday. Both sides had been hoping for a deal over the weekend, but negotiations were stop and go. On Monday, the House and Senate met in rare New Year's Eve sessions to try to take another swing at compromising.
It's difficult to discern how a deal, or lack of a deal, might affect the stock market. From mid-November through roughly mid-December, the stock market rose more or less steadily, despite the "fiscal cliff" looming on the horizon. It wasn't until shortly before Christmas that the "cliff" finally scared investors enough to send the market down.
Some investors are unruffled by the approaching "cliff." Even on Monday, some investors were still expecting a deal to get done on time. After all, it's not unusual for high-profile budget negotiations to go down to the wire.
And even if Republicans and Democrats can't reach a deal, some investors think the effect of the higher taxes and lower government spending would be more like the anti-climactic Y2K scare than a true Armageddon. The impact would be felt only gradually — for example, workers might get more taxes withheld from their first couple of paychecks in the new year — but then Congress could always retroactively repeal those higher taxes, these investors reason.
Others are more concerned. The higher taxes and lower government spending could take more than $600 billion out of the U.S. economy and send it back into recession. Politically, the U.S. would send a message that its lawmakers can't cooperate. And without a deal, investors would have no good read on the country's long-term policy for taxes and spending, or how the government plans to eventually trim its deficit.
Tim Speiss, partner in charge of the personal wealth advisers practice at EisnerAmper in New York, followed the "cliff" negotiations on Monday and wondered if the U.S. would get its debt rating cut again. The Standard & Poor's ratings agency cut its rating of the U.S. amid similar negotiations, when lawmakers were arguing over the government's borrowing limit in August 2011. S&P said at the time that "America's governance and policymaking (is) becoming less stable, less effective, and less predictable." Its rating cut sent the stock market into a tailspin.
The other major ratings agencies, Moody's and Fitch, have suggested that they might lower their ratings of the U.S. if the country goes over the "fiscal cliff."
"That is, unfortunately, the big story," Speiss said.
There's also been little other news to trade on during the holiday season. No major companies are scheduled to report earnings this week, and the major economic indicator this week, the government's monthly jobs report, won't be released until Friday.
Trading volume has also been light, with many investors still on vacation. That also makes the market more susceptible to getting yanked around: With fewer shares trading hands, the market can be moved by relatively small trades.
Last week, about 2.2 billion shares traded hands each day on average. Throughout the year, the average has been closer to 3.6 billion.
By midday, the Dow was down four points to 12,934. The S&P 500 was up four points to 1,407. The Nasdaq composite index was up 20 to 2,981.
The yield on the benchmark 10-year Treasury note rose to 1.73 percent from 1.70 percent late Friday.
The Dow Jones industrial average is set to close about 6 percent higher for the year, slightly better than last year's gain of 5.5 percent. That's less than the 11 percent gain of 2010 and the 19 percent gain of 2009, though those big increases were possible largely because the Dow plunged 34 percent in 2008.
Some of the best-performing stocks for the year were those that had been hammered in 2011. Homebuilder PulteGroup, appliance maker Whirlpool and Bank of America all more than doubled over the year, after falling by double-digit percentages in 2011.
Some of the worst performers of the year were Best Buy, Hewlett-Packard and J.C. Penney. All are struggling to keep up with competitors who have adapted more quickly to changing technologies and changing customer tastes. They were all up Monday, but were each down at least 45 percent for the year.

Read More..

CIBC to pay $149.5 million to Lehman, ending dispute

Canadian Imperial Bank of Commerce has agreed to pay $149.5 million to the estate of Lehman Brothers Holdings Inc to resolve litigation over a collateralized debt obligation tied to the bankruptcy of the former Wall Street bank.
The settlement announced Monday resolves litigation that began on September 14, 2010, when Lehman sued CIBC and dozens of others to recover more than $3 billion it said it had been deprived of due to its Chapter 11 filing two years earlier.
Lehman sought to hold CIBC responsible for much of the more than $1.3 billion due under an agreement requiring the Canadian bank to cover payment shortfalls tied to a large CDO transaction.
In addition, Lehman contended its contracts gave it senior payment priority, but that the bankruptcy caused it to be improperly replaced with junior payment priority.
CIBC, Canada's fifth largest bank, recognized a gain of $841 million following Lehman's bankruptcy on September 15, 2008, when it had reduced to zero its financial commitment related to a note issued by the CDO.
It has said in regulatory filings that Lehman was the guarantor of a related credit default swap agreement. Monday's payment amounts to $110.3 million after taxes, CIBC said.
Lehman spokeswoman Kimberly Macleod declined to comment.
Once Wall Street's fourth largest investment bank, Lehman emerged from bankruptcy protection on March 6 and has paid out roughly half of the estimated $65 billion it hopes to return to creditors. Its bankruptcy is the largest in U.S. history.
The case is Lehman Brothers Special Financing Inc v. Bank of America NA et al, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-03547. The main bankruptcy case is In re: Lehman Brothers Holdings Inc in the same court, No. 08-13555.

Read More..

Stocks turn up on hints of 'fiscal cliff' deal

 The stock market shot higher on Monday afternoon, in the year's final hour of trading, signaling that investors believe the politicians in Washington will work out a budget compromise to avoid the "fiscal cliff."
The Dow was up 137 to 13,075 in the late afternoon, more than 1 percent. The Standard & Poor's 500 and the Nasdaq composite were up by more, with the Nasdaq rising nearly 2 percent.
It was a high note in what had been a choppy day for the market, as choppy as the "fiscal cliff" deal-making that has been yanking it around.
Stocks opened lower and struggled for direction in the morning. They jerked higher at midday, on reports that the bare outline of a deal to avoid the "cliff" had been knit together. Then, they lost some of those gains when President Barack Obama made an early afternoon appearance to say that a compromise was "within sight," but not finalized. Then, in the late afternoon, they shot higher.
The market's indecisiveness overlaid a day of dramatic budget negotiations in Washington. If Republicans and Democrats can't agree to a new budget deal by midnight, then higher taxes and lower government spending will automatically kick in Tuesday — the so-called fiscal cliff.
That would hurt the economy and could even send it back into recession, many investors believe. But what might hurt more, they add, is the psychological impact of knowing that the government can't agree on a budget.
"We're having a fragile recovery, with the pain of 2008 still fresh on everybody's mind," said Joe Heider, principal at Rehmann Group outside Cleveland. "It's fear of the unknown. And fear is one of the greatest drivers of the financial markets."
The Dow Jones industrial average surged 99 points in midday trading after The Associated Press reported that Republicans and Democrats had agreed on some key aspects of a compromise budget plan. They cooled after Obama made it clear that a deal wasn't done. Then, around 2:45 p.m. EST, they started shooting higher again.
Shortly after 3 p.m. EST, the Standard & Poor's 500 index was up 21 to 1,423 and the Nasdaq composite index was up 57 to 3,017.
Investors' opinions about the "fiscal cliff," and how much it matters, are varied.
Some are unruffled: They're confident that politicians will work out a last-minute deal, as they often do. Or they think that even if the U.S. does go over the "cliff," it would be more akin to the anti-climactic Y2K scare than a true Armageddon. The "cliff's" impact would be felt only gradually, they reason. For example, workers might get more taxes withheld from their first couple of paychecks in the new year, but it's not as if they'd have to pay all their higher taxes up front on Tuesday. And Congress could always retroactively repeal those higher taxes.
Others are more concerned. The higher taxes and lower government spending could take more than $600 billion out of the U.S. economy and send it back into recession. Politically, the U.S. would send a message that its lawmakers can't cooperate. And investors would have no good read on the country's long-term policy for taxes and spending, or how the government plans to eventually trim its deficit.
That's made the fiscal cliff's impact on the stock market uneven. From mid-November through roughly mid-December, the stock market rose more or less steadily, despite the "cliff" looming on the horizon. It wasn't until shortly before Christmas, with still no deal in sight, that the "cliff" finally scared investors enough to send the market down.
Tim Speiss, partner in charge of the personal wealth advisers practice at EisnerAmper in New York, followed the "cliff" negotiations on Monday and wondered if the U.S. would get its debt rating cut again. The Standard & Poor's ratings agency cut its rating of the U.S. government amid similar negotiations in August 2011, when lawmakers were arguing over the government's borrowing limit. S&P said at the time that the "political brinksmanship" highlighted how "America's governance and policymaking (is) becoming less stable, less effective, and less predictable." Its rating cut sent the stock market into a tailspin.
The other major ratings agencies, Moody's and Fitch, have suggested that they might lower their ratings of the U.S. because of the "fiscal cliff."
"That is, unfortunately, the big story," Speiss said.
It's also one of the only stories. There's been little other news to trade on during the holiday season, giving the "fiscal cliff" drama outsized influence. No major companies are scheduled to report earnings this week. The most significant economic indicator scheduled for this week, the government's monthly jobs report, won't be released until Friday.
Trading volume has also been light, with many investors still on vacation. That also makes the market more volatile: With fewer shares trading hands, it can be moved by relatively small trades.
Last week, about 2.2 billion shares traded hands each day on average. Throughout the year, the average has been closer to 3.6 billion.
The yield on the benchmark 10-year Treasury note rose to 1.76 percent from 1.70 percent late Friday, a sign that investors were moving money into stocks.
Some of the best-performing stocks for the year were those that had been hammered in 2011. Homebuilder PulteGroup, appliance maker Whirlpool and Bank of America all more than doubled over the year, after falling by double-digit percentages in 2011.
Some of the worst performers of the year were Best Buy, Hewlett-Packard and J.C. Penney. All are struggling to keep up with competitors who have adapted more quickly to changing technologies and changing customer tastes. They were all up Monday, but were each down at least 45 percent for the year.

Read More..

Global shares up on hopes U.S. to avoid 'fiscal cliff'

 Wall Street rallied on Monday and global equities headed for their best year in the last three as U.S. lawmakers closed in on a deal to avoid a budget crisis that many fear could cripple the world economy in 2013.
U.S. President Barack Obama said Congress was close to an agreement that would start chipping away at the deficit without raising middle class taxes.
Senate Republican leader Mitch McConnell also said agreement was "very, very close."
U.S. stocks rose, capping off a strong year on a high note and leaving the MSCI all-world index on track to end the year up 13 percent. U.S. government debt prices fell.
The deal is not likely to provide a long-term road map to reduce the U.S. budget deficit, which has been above $1 trillion for four straight years.
But without it, $600 billion of automatic spending cuts and across-the-board tax increases would take effect January 1, a blast of austerity that economists fear would thrust the United States into recession and hurt world growth.
"Traders understand that this is a stop-gap measure, but they'll take it," said Quincy Krosby, market strategist at Prudential Financial in Newark. "Markets can rally with some growth, but not with no growth. For now, they don't mind kicking the can down the road."
The Dow Jones industrial average was up 150.93 points, or 1.17 percent, at 13,089.04. The Standard & Poor's 500 Index was up 21.80 points, or 1.55 percent, at 1,424.23. The Nasdaq Composite Index was up 59.94 points, or 2.02 percent, at 3,020.25.
European shares also gained after a quiet day in Asia, where Japan's Nikkei and other indexes were already closed for 2012.
Despite recent declines on Wall Street and what seemed like a hopeless stalemate in budget talks, the benchmark S&P 500 was up 12.5 percent in 2012 after a nearly flat performance the prior year. The Dow was up 6 percent and the Nasdaq 15 percent.
With the world's major central banks expected to keep pumping stimulus into their economies at any sign of weakness, most economists forecast further gains in equities next year.
Benchmark 10-year U.S. Treasuries fell 16/32 on the pending fiscal cliff deal to yield 1.76 percent. Treasury yields finished the year only slightly above where they started it, thanks to heavy safe-haven buying and the Fed's asset purchase programs aimed at keeping long-term rates low.
STILL RISKS AHEAD
Risks still remain for 2013, investors said.
Europe could lurch back into trouble if slow growth puts further pressure on heavily indebted countries such as Spain and Italy, said Alan Wilde, who helps manage $50 billion at Baring Asset Management in London.
"This pressure point may make acceptance of austere policy measures unpalatable and politicians may find they have to find other ways to cut costs," he said.
In the United States, striking the right balance between growth and deficit reduction will also be a challenge, as will addressing long-term fiscal problems.
"It looks to be another lengthy time of instability and volatility on Wall Street as the real work to address the longer term fiscal health of the U.S. government moves into 2013," said Ron Florance, managing director of investment strategy at Wells Fargo Private Bank.
But in 2012, investors worst fears -- a euro zone collapse, a hard landing in China's once-booming economy and another U.S. recession -- never came to pass.
The pan-European FTSEurofirst 300 gained roughly 13 percent this year, largely due to the European Central Bank's vow to tackle the region's debt crisis, and recovered from an early morning dip to end the year at 1,131.64.
Peripheral euro zone bonds also rallied after a roller coaster year. Yields on Spanish and Italian sovereign bonds, a measure of the compensation creditors demand for lending to those governments money, spiked in the summer but have since fallen sharply. Euro zone bond markets were closed on Monday.
The euro was down 0.2 percent at $1.3191 but was up 2 percent for the year. An agreement on the U.S. budget would also be viewed as positive for the euro because it would help boost global growth.
Against the yen, the dollar hit 86.64, its best showing since mid-2010, and was set to end the year 12 percent firmer against Japan's currency, its biggest gain since 2005.
With a new Japanese government led by Prime Minister Shinzo Abe expected to pursue a policy mix of aggressive monetary easing and heavy fiscal spending to beat deflation, analysts see the yen staying under pressure in 2013.
Commodities also found recent support as economic data in key emerging economies such as China have started pointing to a gradual pick-up in the pace of growth in 2013.
Gold was $1,675.60 an ounce, up more than 6 percent for the year and on track for a 12th consecutive year of gains. Rock-bottom interest rates, concerns over the financial stability of the euro zone, and diversification into bullion by central banks have boosted the metal. Copper also rose, ended the year up 6 percent after a late rally on Monday.

Read More..

Equities rally as U.S. 'cliff' deal nears; oil up

 Wall Street rallied on Monday and global equities finished their best year in the last three as U.S. lawmakers closed in on a deal to avoid a budget crisis that many fear could cripple the world economy in 2013.
U.S. President Barack Obama said Congress was close to an agreement that would start chipping away at the deficit without raising middle-class taxes.
Senate Republican leader Mitch McConnell also said an agreement was "very, very close," though it wasn't clear whether a vote would happen on Monday or be pushed into early 2013.
U.S. stocks rose, capping off a strong year on a high note and leaving the MSCI all-world index on track to end the year up more than 13 percent.
The S&P 500 closed out 2012 with a gain of 13.4 percent in 2012 after a nearly flat performance the prior year. The Dow was up 7.3 percent and the Nasdaq nearly 16 percent.
Oil prices edged higher on Monday on optimism over a budget deal, while U.S. government debt prices fell.
The budget deal is not likely to provide a long-term road map to reduce the U.S. budget deficit, which has been above $1 trillion (616 billion pounds) for four straight years.
"Traders understand that this is a stop-gap measure, but they'll take it," said Quincy Krosby, market strategist at Prudential Financial in Newark. "Markets can rally with some growth, but not with no growth. For now, they don't mind kicking the can down the road."
Without a deal $600 billion (369 billion pounds) of automatic spending cuts and across-the-board tax increases would begin to take effect January 1, a blast of austerity that economists fear would thrust the United States into recession and hurt world growth.
The Dow Jones industrial average was up 150.93 points, or 1.17 percent, at 13,089.04. The Standard & Poor's 500 Index was up 21.80 points, or 1.55 percent, at 1,424.23. The Nasdaq Composite Index was up 59.94 points, or 2.02 percent, at 3,020.25.
European shares also gained after a quiet day in Asia, where Japan's Nikkei and other indexes were already closed for 2012.
With the world's major central banks expected to keep pumping stimulus into their economies at any sign of weakness, most economists forecast further gains in equities next year.
Benchmark 10-year U.S. Treasuries fell 16/32 on the pending fiscal cliff deal to yield 1.76 percent. Treasury yields finished the year only slightly above where they started it, thanks to heavy safe-haven buying and the Fed's asset purchase programs aimed at keeping long-term rates low.
STILL RISKS AHEAD
Risks remain for 2013, investors said.
Europe could lurch back into trouble if slow growth puts further pressure on heavily indebted countries such as Spain and Italy, said Alan Wilde, who helps manage $50 billion (30 billion pounds) at Baring Asset Management in London.
"This pressure point may make acceptance of austere policy measures unpalatable and politicians may find they have to find other ways to cut costs," he said.
In the United States, striking the right balance between growth and deficit reduction will also be a challenge, as will addressing long-term fiscal problems.
"It looks to be another lengthy time of instability and volatility on Wall Street as the real work to address the longer term fiscal health of the U.S. government moves into 2013," said Ron Florance, managing director of investment strategy at Wells Fargo Private Bank.
But in 2012, investors' worst fears -- a euro zone collapse, a hard landing in China's once-booming economy and another U.S. recession -- never came to pass.
The pan-European FTSEurofirst 300 gained roughly 13 percent this year, largely due to the European Central Bank's vow to tackle the region's debt crisis, and recovered from an early morning dip on Monday to end the year at 1,131.64.
Peripheral euro zone bonds also rallied after a roller coaster year. Yields on Spanish and Italian sovereign bonds, a measure of the compensation creditors demand for lending money to those governments, spiked in the summer but have since fallen sharply. Euro zone bond markets were closed on Monday.
The euro was down 0.2 percent at $1.3191, but was up 2 percent for the year. An agreement on the U.S. budget would also be viewed as positive for the euro because it would help boost global growth.
Against the yen, the dollar hit 86.64, its best showing since mid-2010, and was set to end the year 12 percent firmer against Japan's currency, its biggest gain since 2005.
With a new Japanese government led by Prime Minister Shinzo Abe expected to pursue a policy mix of aggressive monetary easing and heavy fiscal spending to beat deflation, analysts see the yen staying under pressure in 2013.
Commodities also found recent support as economic data in key emerging economies such as China have started pointing to a gradual pick-up in the pace of growth in 2013.
Gold was $1,675.60 an ounce, up more than 6 percent for the year and on track for a 12th consecutive year of gains. Rock-bottom interest rates, concerns over the financial stability of the euro zone, and diversification into bullion by central banks have boosted the metal. Copper also rose, ended the year up 6 percent after a late rally on Monday.
U.S. crude rose $1.02 to $91.82 per barrel but ended 2012 down more than 7 percent, snapping a string of three straight yearly gains. Brent crude closed 2012 up for a fourth straight year after geopolitical threats offset worries about falling demand. Brent crude averaged more than $111 a barrel in 2012, the highest on record.

Read More..