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.

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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.

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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.

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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.

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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.

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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.

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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.

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