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.

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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.
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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.
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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.

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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.

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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.
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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.
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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.

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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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