Wall Street ends lower after "fiscal cliff" setback

NEW YORK (Reuters) - U.S. stocks finished lower on Friday after a Republican plan to avoid the "fiscal cliff" failed to gain sufficient support on Thursday night, draining hopes that a deal would be reached before 2013.


Still, stocks managed to rebound from the day's lows near the end of the session, and for the week, the three major U.S. stock indexes still ended higher, with the S&P 500 gaining 1.2 percent.


Trading was volatile because of waning confidence in the prospect of a deal out of Washington, and in part, as the result of the quarterly expiration of options and futures contracts. The CBOE Volatility Index <.vix> or VIX, the market's favorite barometer of investor anxiety, finished below its session high.


Republican House Speaker John Boehner failed to garner enough votes from even his own party to pass his "Plan B" tax bill late on Thursday. It was the latest setback in negotiations to avoid $600 billion in tax hikes and spending cuts that some say could tip the U.S. economy into recession.


"The failure with Plan B was disappointing, if not terribly surprising, but now there's a real lack of clarity about what will happen, and markets hate that," said Mike Hennessy, managing director of investments for Morgan Creek in Chapel Hill, North Carolina.


The Dow Jones industrial average <.dji> dropped 120.88 points, or 0.91 percent, to 13,190.84 at the close. The Standard & Poor's 500 Index <.spx> fell 13.54 points, or 0.94 percent, to 1,430.15. The Nasdaq Composite Index <.ixic> lost 29.38 points, or 0.96 percent, to 3,021.01.


"Amazingly, this sharp decline today may not actually change the technical picture much - unless the decline gets worse," said Larry McMillan, president of options research firm McMillan Analysis Corp, in a research note.


For the week, the Dow gained 0.4 percent and the Nasdaq climbed 1.7 percent.


On Friday, Herbalife dropped for an eighth straight session. Investor Bill Ackman recently ramped up his campaign against the company. The stock skidded 19.2 percent to $27.27 and has lost more than 35 percent this week.


Plan B, which called for tax increases on those who earn $1 million or more a year, was not going to pass the Democratic-led Senate or win acceptance from the White House anyway. But it exposed the reality that it will be difficult to get Republican support for the more expansive tax increases that President Barack Obama has urged.


Still, the declines of about 1 percent in the three major U.S. stock indexes suggest that investors do not believe the economy will be unduly damaged by the absence of a deal, said Mark Lehmann, president of JMP Securities, in San Francisco.


"You could have easily woken up today and seen the market down 300 or 400 points, and everyone would have said, 'That's telling you this is really dire,'" Lehmann said.


"I think if you get into mid-January and (the talks) keep going like this, you get worried, but I don't think we're going to get there."


Banking shares, which outperform during economic expansion and have led the market on signs of progress on resolving the fiscal impasse, led Friday's declines. Citigroup Inc fell 1.7 percent to $39.49, while Bank of America slid 2 percent to $11.29. The KBW Banks index <.bkx> lost 1.19 percent.


Volatility on Friday was exacerbated in part by "quadruple witching," the quarterly expiration of stock index futures and options, stock options and single stock futures contracts.


About 8.59 billion shares changed hands on major U.S. exchanges, more than the daily average of 6.47 billion daily in 2012, in part because of the "quadruple witching" expiration.


The day's round of data indicated the economy was surprisingly resilient in November; consumer spending rose by the most in three years and a gauge of business investment jumped.


But separate data showed consumer sentiment slumped in December. The S&P Retail Index <.spxrt> fell 1.2 percent.


U.S.-listed shares of Research in Motion sank 22.7 percent to $10.91 after the Canadian company, known as the BlackBerry maker, reported its first-ever decline in its subscriber numbers on Thursday alongside a new fee structure for its high-margin services segment.


(Additional reporting by Ryan Vlastelica and Leah Schnurr; Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)



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Syrian rebels fight for strategic town in Hama province


BEIRUT (Reuters) - Rebels began to push into a strategic town in Syria's central Hama province on Thursday and laid siege to at least one town dominated by President Bashar al-Assad's minority sect, activists said.


The operation risks inflaming already raw sectarian tensions as the 21-month-old revolt against four decades of Assad family rule - during which the president's Alawite sect has dominated leadership of the Sunni Muslim majority - rumbles on.


Opposition sources said rebels had won some territory in the strategic southern town of Morek and were surrounding the Alawite town of al-Tleisia.


They were also planning to take the town of Maan, arguing that the army was present there and in al-Tleisia and was hindering their advance on nearby Morek, a town on the highway that runs from Damascus north to Aleppo, Syria's largest city and another battleground in the conflict.


"The rockets are being fired from there, they are being fired from Maan and al-Tleisia, we have taken two checkpoints in the southern town of Morek. If we want to control it then we need to take Maan," said a rebel captain in Hama rural area, who asked not to be named.


Activists said heavy army shelling had targeted the town of Halfaya, captured by rebels two days earlier. Seven people were killed, 30 were wounded, and dozens of homes were destroyed, said activist Safi al-Hamawi.


Hama is home to dozens of Alawite and Christian villages among Sunni towns, and activists said it may be necessary to lay siege to many minority areas to seize Morek. Rebels want to capture Morek to cut off army supply lines into northern Idlib, a province on the northern border with Turkey where rebels hold swathes of territory.


From an offshoot of Shi'ite Islam, Alawites have largely stood behind Assad, many out of fear of revenge attacks. Christians and some other minorities have claimed neutrality, with a few joining the rebels and a more sizeable portion of them supporting the government out of fear of hardline Islamism that has taken root in some rebel groups.


Activists in Hama said rebels were also surrounding the Christian town of al-Suqeilabiya and might enter the city to take out army positions as well as those of "shabbiha" - pro-Assad militias, the bulk of whom are usually Alawite but can also include Christians and even Sunnis.


"We have been in touch with Christian opposition activists in al-Suqeilabiya and we have told them to stay downstairs or on the lowest floor of their building as possible, and not to go outside. The rebels have promised not to hurt anyone who stays at home," said activist Mousab al-Hamdee, speaking by Skype.


He said he was optimistic that potential sectarian tensions with Christians could be resolved but that Sunni-Alawite strife may be harder to suppress.


SECTARIAN FEARS


U.N. human rights investigators said on Thursday that Syria's conflict was becoming more "overtly sectarian", with more civilians seeking to arm themselves and foreign fighters - mostly Sunnis - flocking in from 29 countries.


"They come from all over, Europe and America, and especially the neighboring countries," said Karen Abuzayd, one of the U.N. investigators, told a news conference in Brussels.


Deeper sectarian divisions may diminish prospects for post-conflict reconciliation even if Assad is ousted, and the influx of foreigners raises the risk of fighting spilling into neighboring countries riven by similar communal fault lines.


Some activists privately voiced concerns of sectarian violence, but the rebel commander in Hama said fighters had been told "violations" would not be tolerated and argued that the move to attack the towns was purely strategic.


"If we are fired at from a Sunni village that is loyal to the regime we go in and we liberate it and clean it," he said. "So should we not do the same when it comes to an Alawite village just because there is a fear of an all-out sectarian war? We respond to the source of fire."


President Vladimir Putin of Russia, Assad's main ally and arms supplier, warned that any solution to the conflict must ensure government and rebel forces do not merely swap roles and fight on forever. It appeared to be his first direct comment on the possibility of a post-Assad Syria.


The West and some Arab states accuse Russia of shielding Assad after Moscow blocked three U.N. Security Council resolutions intended to increase pressure on Damascus to end the violence, which has killed more than 40,000 people. Putin said the Syrian people would ultimately decide their own fate.


Assad's forces have been hitting back at rebel advances with heavy shelling, particularly along the eastern ring of suburbs outside Damascus, where rebels are dominant.


A Syrian security source said the army was planning heavy offensives in northern and central Syria to stem rebel advances, but there was no clear sign of such operations yet.


Rebels seized the Palestinian refugee district of Yarmouk earlier this week, which put them within 3 km (2 miles) of downtown Damascus. Heavy shelling and fighting forced thousands of Palestinian and Syrian residents to flee the Yarmouk area.


Rebels said on Thursday they had negotiated to put the camp - actually a densely packed urban district - back into the hands of pro-opposition Palestinian fighters. There are some 500,000 Palestinian refugees and their descendants living in Syria, and they have been divided by the uprising.


Palestinian factions, some backed by the government and others by the rebels, had begun fighting last week, a development that allowed Syrian insurgents to take the camp.


A resident in Damascus said dozens of families were returning to the camp but that the army had erected checkpoints. Many families were still hesitant to return.


LEBANON BORDER POST TAKEN


Elsewhere, Syrian insurgents took over an isolated border post on the western frontier with Lebanon earlier this week, local residents told Reuters on Thursday.


The rebels already hold much of the terrain along Syria's northern and eastern borders with Turkey and Iraq respectively.


They said around 20 rebels from the Qadissiyah Brigade overran the post at Rankus, which is linked by road to the remote Lebanese village of Tufail.


Video footage downloaded on the Internet on Thursday, dated December 16, showed a handful of fighters dressed in khaki fatigues and wielding rifles as they kicked down a stone barricade around a small, single-storey army checkpoint.


Syrian Interior Minister Ibrahim al-Shaar arrived in Lebanon on Wednesday for treatment of wounds sustained in a bomb attack on his ministry in Damascus a week ago.


Lebanese medical sources said Shaar had shrapnel wounds in his shoulder, stomach and legs but they were not critical.


The Syrian opposition has tried to peel off defectors from the government as well as from the army, though only a handful of high-ranking officials have abandoned Assad.


The conflict has divided many Syrian families. Security forces on Thursday arrested an opposition activist who is also the relative of Vice President Farouq al-Sharaa, the Syrian Observatory said. The man was arrested along with five other activists who are considered pacifists, it said.


Sharaa, a Sunni Muslim who has few powers in Assad's Alawite-dominated power structure, said earlier this week that neither side could win the war in Syria. He called for the formation of a national unity government.


(Reporting by Erika Solomon; Editing by Andrew Osborn)



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The X Factor: Who Won the Show?






The X Factor










12/20/2012 at 10:10 PM EST







from left: Fifth Harmony, Tate Stevens and Carly Rose Sonenclar


Ray Mickshaw/FOX


The X Factor ended on a particularly high note for one of the show's finalists Thursday night.

After performing live one last time the night before, Britney Spears's contestant Carly Rose Sonenclar, along with L.A. Reid's Tate Stevens and Simon Cowell's Fifth Harmony all vied for the $5 million recording contract awarded to the season's winner.

Click after the jump to find out who won the coveted prize.

L.A. Reid's "Over 25" contestant Tate Stevens, 37, is the winner of The X Factor season 2. He's a dad of two and a road worker from Missouri.

"First and foremost I got to thank the man upstairs for taking care of me, my family, all the country music fans – God bless you," he said after hearing the results. "Thank you so much for all the votes. This is the best day of my life."

L.A. said, "You deserve this. I'm proud to work with you. I think you represent The X Factor really, really well. So on behalf of Simon and myself and all the judges, congratulations."

Britney's teen contestant, Carly Rose Sonenclar, landed in second place. She and Britney looked emotional but didn't get a chance to say anything at the end.

Third place went to Simon Cowell's girl group, Fifth Harmony.

Member Camila Cabello, said, "I feel like in this competition we've gained more than $5 million could because we've gained friends for life ... I'm so happy to be where I am right now."

Simon said, "I have a feeling that we're going to be hearing and seeing a lot more of these girls in the future."

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AP IMPACT: Steroids loom in major-college football


WASHINGTON (AP) — With steroids easy to buy, testing weak and punishments inconsistent, college football players are packing on significant weight — 30 pounds or more in a single year, sometimes — without drawing much attention from their schools or the NCAA in a sport that earns tens of billions of dollars for teams.


Rules vary so widely that, on any given game day, a team with a strict no-steroid policy can face a team whose players have repeatedly tested positive.


An investigation by The Associated Press — based on interviews with players, testers, dealers and experts and an analysis of weight records for more than 61,000 players — revealed that while those running the multibillion-dollar sport say they believe the problem is under control, that control is hardly evident.


The sport's near-zero rate of positive steroids tests isn't an accurate gauge among college athletes. Random tests provide weak deterrence and, by design, fail to catch every player using steroids. Colleges also are reluctant to spend money on expensive steroid testing when cheaper ones for drugs like marijuana allow them to say they're doing everything they can to keep drugs out of football.


"It's nothing like what's going on in reality," said Don Catlin, an anti-doping pioneer who spent years conducting the NCAA's laboratory tests at UCLA. He became so frustrated with the college system that it was part of the reason he left the testing industry to focus on anti-doping research.


___


EDITOR'S NOTE — Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.


___


While other major sports have been beset by revelations of steroid use, college football has operated with barely a whiff of scandal. Between 1996 and 2010 — the era of Barry Bonds, Mark McGwire, Marion Jones and Lance Armstrong — the failure rate for NCAA steroid tests fell even closer to zero from an already low rate of less than 1 percent.


The AP's investigation, drawing upon more than a decade of official rosters from all 120 Football Bowl Subdivision teams, found thousands of players quickly putting on significant weight, even more than their fellow players. The information compiled by the AP included players who appeared for multiple years on the same teams.


For decades, scientific studies have shown that anabolic steroid use leads to an increase in body weight. Weight gain alone doesn't prove steroid use, but very rapid weight gain is one factor that would be deemed suspicious, said Kathy Turpin, senior director of sport drug testing for the National Center for Drug Free Sport, which conducts tests for the NCAA and more than 300 schools.


Yet the NCAA has never studied weight gain or considered it in regard to its steroid testing policies, said Mary Wilfert, the NCAA's associate director of health and safety.


The NCAA attributes the decline in positive tests to its year-round drug testing program, combined with anti-drug education and testing conducted by schools.


The AP's analysis found that, regardless of school, conference and won-loss record, many players gained weight at exceptional rates compared with their fellow athletes and while accounting for their heights.


Adding more than 20 or 25 pounds of lean muscle in a year is nearly impossible through diet and exercise alone, said Dan Benardot, director of the Laboratory for Elite Athlete Performance at Georgia State University.


In nearly all the rarest cases of weight gain in the AP study, players were offensive or defensive linemen, hulking giants who tower above 6-foot-3 and weigh 300 pounds or more. Four of those players interviewed by the AP said that they never used steroids and gained weight through dramatic increases in eating, up to six meals a day. Two said they were aware of other players using steroids.


"I ate 5-6 times a day," said Clint Oldenburg, who played for Colorado State starting in 2002 and for five years in the NFL. Oldenburg's weight increased over four years from 212 to 290.


Oldenburg told the AP he was surprised at the scope of steroid use in college football, even in Colorado State's locker room. "There were a lot of guys even on my team that were using." He declined to identify any of them.


The AP found more than 4,700 players — or about 7 percent of all players — who gained more than 20 pounds overall in a single year. It was common for the athletes to gain 10, 15 and up to 20 pounds in their first year under a rigorous regimen of weightlifting and diet. Others gained 25, 35 and 40 pounds in a season. In roughly 100 cases, players packed on as much 80 pounds in a single year.


In at least 11 instances, players that AP identified as packing on significant weight in college went on to fail NFL drug tests. But pro football's confidentiality rules make it impossible to know for certain which drugs were used and how many others failed tests that never became public.


Even though testers consider rapid weight gain suspicious, in practice it doesn't result in testing. Ben Lamaak, who arrived at Iowa State in 2006, said he weighed 225 pounds in high school. He graduated as a 320-pound offensive lineman and said he did it all naturally.


"I was just a young kid at that time, and I was still growing into my body," he said. "It really wasn't that hard for me to gain the weight. I love to eat."


In addition to random drug testing, Iowa State is one of many schools that have "reasonable suspicion" testing. That means players can be tested when their behavior or physical symptoms suggest drug use. Despite gaining 81 pounds in a year, Lamaak said he was never singled out for testing.


The associate athletics director for athletic training at Iowa State, Mark Coberley, said coaches and trainers use body composition, strength data and other factors to spot suspected cheaters. Lamaak, he said, was not suspicious because he gained a lot of "non-lean" weight.


But looking solely at the most significant weight gainers also ignores players like Bryan Maneafaiga.


In the summer of 2004, Bryan Maneafaiga was an undersized 180-pound running back trying to make the University of Hawaii football team. Twice — once in pre-season and once in the fall — he failed school drug tests, showing up positive for marijuana use but not steroids.


He'd started injecting stanozolol, a steroid, in the summer to help bulk up to a roster weight of 200 pounds. Once on the team, he'd occasionally inject the milky liquid into his buttocks the day before games.


"Food and good training will only get you so far," he told the AP recently.


Maneafaiga's former coach, June Jones, said it was news to him that one of his players had used steroids. Jones, who now coaches at Southern Methodist University, believes the NCAA does a good job rooting out steroid use.


On paper, college football has a strong drug policy. The NCAA conducts random, unannounced drug testing and the penalties for failure are severe. Players lose an entire year of eligibility after a first positive test. A second offense means permanent ineligibility for sports.


In practice, though, the NCAA's roughly 11,000 annual tests amount to a fraction of all athletes in Division I and II schools. Exactly how many tests are conducted each year on football players is unclear because the NCAA hasn't published its data for two years. And when it did, it periodically changed the formats, making it impossible to compare one year of football to the next.


Even when players are tested by the NCAA, experts like Catlin say it's easy enough to anticipate the test and develop a doping routine that results in a clean test by the time it occurs. NCAA rules say players can be notified up to two days in advance of a test, which Catlin says is plenty of time to beat a test if players have designed the right doping regimen. By comparison, Olympic athletes are given no notice.


Most schools that use Drug Free Sport do not test for anabolic steroids, Turpin said. Some are worried about the cost. Others don't think they have a problem. And others believe that since the NCAA tests for steroids their money is best spent testing for street drugs, she said.


Doping is a bigger deal at some schools than others.


At Notre Dame and Alabama, the teams that will soon compete for the national championship, players don't automatically miss games for testing positive for steroids. At Alabama, coaches have wide discretion. Notre Dame's student-athlete handbook says a player who fails a test can return to the field once the steroids are out of his system.


The University of North Carolina kicks players off the team after a single positive test for steroids. Auburn's student-athlete handbook calls for a half-season suspension for any athlete caught using performance-enhancing drugs.


At UCLA, home of the laboratory that for years set the standard for cutting-edge steroid testing, athletes can fail three drug tests before being suspended. At Bowling Green, testing is voluntary.


At the University of Maryland, students must get counseling after testing positive, but school officials are prohibited from disciplining first-time steroid users.


Only about half the student athletes in a 2009 NCAA survey said they believed school testing deterred drug use. As an association of colleges and universities, the NCAA could not unilaterally force schools to institute uniform testing policies and sanctions, Wilfert said.


"We can't tell them what to do, but if went through a membership process where they determined that this is what should be done, then it could happen," she said.


___


Associated Press writers Ryan Foley in Cedar Rapids, Iowa; David Brandt in Jackson, Miss.; David Skretta in Lawrence, Kan.; Don Thompson in Sacramento, Calif., and Alexa Olesen in Shanghai, China, and researchers Susan James in New York and Monika Mathur in Washington contributed to this report.


___


Contact the Washington investigative team at DCinvestigations (at) ap.org.


Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.


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Asian shares slide as anxieties show over U.S. budget impasse

TOKYO (Reuters) - Asian shares slid on Friday after a Republican proposal to fend off a U.S. fiscal crunch failed to get enough support, deepening uncertainty over prospects for the negotiations to avert automatic spending cuts and tax increases set to start in January.


"Markets disliked signs of further delay in talks, with the risk that a deal may not be reached by the end of the year deadline," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo. "It clearly hit risk sentiment."


The U.S. House of Representatives will adjourn until after Christmas, Republican Representative Peter Roskam said on Thursday, after House Speaker John Boehner's proposed tax bill designed to avert the fiscal cliff failed to pass.


U.S. stock index futures fell sharply. S&P 500 stock futures slipped 1.7 percent, while Dow Jones stock futures and Nasdaq futures both lost 1.5 percent.


That sparked selling in Asian shares, with MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> wiping out earlier gains to tumble 0.7 percent.


Boehner's proposal was aimed at extracting concessions from the White House, which had threatened to veto it, and advance talks closer to a deal.


The Republican-led U.S. House of Representatives, which abruptly recessed on late Thursday, may return as soon as December 27 with a yet-to-be-decided new plan, said a senior party aide.


"This is a major setback for a Fiscal Deal compromise between the two parties. I would say that chances of a deal are down to maybe 40 percent from 65 percent -- despite the dysfunction in Washington D.C," said Douglas A. Kass, founder of hedge fund Seabreeze Partners Management Inc.


Risk assets were sold off, from shares, oil to currencies such as the Australian dollar and the euro, while the yen firmed slightly, though it was pinned near multi-month lows versus the dollar and the euro on expectations for more aggressive Bank of Japan easing next year to drive the economy out of deflation.


"Investors are disappointed by the latest development on fiscal talks. The market will continue to be swayed by the state of U.S. budget negotiations," Kim Soo-young, an analyst at KB Securities, said of Seoul shares <.ks11> which led the declines in Asia with a 1.1 percent fall.


Safe-haven government bond prices rose, with U.S. 10-year Treasury yields moving away from an 8-week high hit this week, falling about 6 basis points to 1.74 percent. Benchmark 10-year Japanese government bond yields also ticked down half a basis point to 0.765 percent.


Inflows into U.S. Treasuries underpinned the U.S. dollar, which inched up 0.2 percent against a basket of major currencies <.dxy>.


Jim Barnes, senior fixed income manager at National Penn Investors Trust Co. in Wyomissing, Pennsylvania, saw Treasuries continuing to gain once U.S. markets open later, but expected a correction by the end of the day.


"Treasury yields will likely fall in Friday morning and will begin to reverse course in the afternoon as investors become more optimistic a deal will be reached," Barnes said.


"So far, the market has been handling set backs in negotiation talks very well. With still a little bit of time left on the clock, this time around will be no different."



Asset returns in 2012: http://link.reuters.com/nyw85s


U.S. GDP: http://link.reuters.com/guw34t


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Along with uncertainties surrounding the future of U.S. budget talks, a firmer dollar also weighed on dollar-based commodities.


The euro fell 0.4 percent to $1.3193, off an 8-1/2-month high of $1.33085 touched on Wednesday.


U.S. crude futures dropped more than $1 to $89.10 a barrel, and spot gold extended losses to near a four-month low touched on Thursday, shedding 0.6 percent to $1,638 an ounce.


YEN GAINS SLIGHTLY


Anxieties over the U.S. budget negotiations also took their toll on Japan's Nikkei average <.n225>, which had been supported by a weaker yen. The Nikkei lost all gains to ease 0.3 percent, although the drop was relatively modest compared to many other Asian bourses. <.t/>


The dollar was down 0.5 percent to 83.94 yen, moving away from a 20-month high of 84.62 yen hit on Wednesday.


The euro slumped 0.8 percent to 110.84 yen also off a 16-month high of 112.59 yen reached on Wednesday.


The yen was kept under pressure after the Bank of Japan further eased monetary policy as expected on Thursday, with investors anticipating that the central bank will be persuaded to pursue more drastic measures next year.


Incoming prime minister, Shinzo Abe, has called for bolder action by the central bank to help bring Japan out of decades-long deflation.


For all the fears of a fiscal cliff debacle to come, several data series showed the United States remained on a recovery track, helping to underpin the U.S. currency.


The world's largest economy grew at a faster-than-expected 3.1 percent annual rate in the third quarter, while other data on Thursday showed factory activity in the mid-Atlantic region picked up this month and home resales in November were the best in three years.


The improving U.S. economy and a stabilizing Europe eroded the appeal of gold as a crisis hedge, triggering a technical sell-off and heavy liquidation by hedge funds before the year-end.


(Additional reporting by Hyunjoo Jin and Chang Seong-won in Seoul and Masayuki Kitano in Singapore and Jennifer Ablan in New York; Editing by Simon Cameron-Moore)



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State Department security chief leaves post over Benghazi


WASHINGTON (Reuters) - The U.S. State Department said on Wednesday its security chief had resigned from his post and three other officials had been relieved of their duties following a scathing official inquiry into the September 11 attack on the U.S. mission in Benghazi.


Eric Boswell has resigned effective immediately as assistant secretary of state for diplomatic security, State Department spokeswoman Victoria Nuland said in a terse statement. A second official, speaking on condition of anonymity, said Boswell had not left the department entirely and remained a career official.


Nuland said that Boswell, and the three other officials, had all been put on administrative leave "pending further action."


An official panel that investigated the incident concluded that the Benghazi mission was completely unprepared to deal with the attack, which killed U.S. Ambassador Christopher Stevens and three other Americans.


The unclassified version of the report, which was released on Tuesday, cited "leadership and management" deficiencies, poor coordination among officials and "real confusion" in Washington and in the field over who had the authority to make decisions on policy and security concerns.


"The ARB identified the performance of four officials, three in the Bureau of the Diplomatic Security and one in the Bureau of (Near Eastern) Affairs," Nuland said in her statement, referring to the panel known as an Accountability Review Board.


Secretary of State Hillary Clinton accepted Boswell's decision to resign effective immediately, the spokeswoman said.


Earlier, a U.S. official who spoke on condition of anonymity said Boswell, one of his deputies, Charlene Lamb, and a third unnamed official has been asked to resign. The Associated Press first reported that three officials had resigned.


PANEL STOPS SHORT OF BLAMING CLINTON


The Benghazi incident appeared likely to tarnish Clinton's four-year tenure as secretary of state but the report did not fault her specifically and the officials who led the review stopped short of blaming her.


"We did conclude that certain State Department bureau-level senior officials in critical positions of authority and responsibility in Washington demonstrated a lack of leadership and management ability appropriate for senior ranks," retired Admiral Michael Mullen, one of the leaders of the inquiry, told reporters on Wednesday.


The panel's chair, retired Ambassador Thomas Pickering, said it had determined that responsibility for security shortcomings in Benghazi belonged at levels lower than Clinton's office.


"We fixed (responsibility) at the assistant secretary level, which is, in our view, the appropriate place to look for where the decision-making in fact takes place, where - if you like - the rubber hits the road," Pickering said after closed-door meetings with congressional committees.


The panel's report and the comments by its two lead authors suggested that Clinton, who accepted responsibility for the incident in a television interview about a month after the Benghazi attack, would not be held personally culpable.


Pickering and Mullen spoke to the media after briefing members of the House of Representatives Foreign Affairs Committee and Senate Foreign Relations Committee behind closed doors on classified elements of their report.


Clinton had been expected to appear at an open hearing on Benghazi on Thursday, but is recuperating after suffering a concussion, dehydration and a stomach bug last week. She will instead be represented by her two top deputies.


Clinton, who intends to step down in January, said in a letter accompanying the review that she would adopt all of its recommendations, which include stepping up security staffing and requesting more money to fortify U.S. facilities.


The National Defense Authorization Act for 2013, which is expected to go to Congress for final approval this week, includes a measure directing the Pentagon to increase the Marine Corps presence at diplomatic facilities by up to 1,000 Marines.


Some Capitol Hill Republicans who had criticized the Obama administration's handling of the Benghazi attacks said they were impressed by the report.


"It was very thorough," said Senator Johnny Isakson. Senator John Barrasso said: "It was very, very critical of major failures at the State Department at very high levels." Both spoke after the closed-door briefing.


Others, however, took a harsher line and called for Clinton to testify as soon as she is able.


"The report makes clear the massive failure of the State Department at all levels, including senior leadership, to take action to protect our government employees abroad," Representative Mike Rogers, the Republican chairman of the House Intelligence Committee, said in a statement.


Senator Bob Corker, who will be the top Republican on the Senate Foreign Relations Committee when the new Congress is seated early next year, said Clinton should testify about Benghazi before her replacement is confirmed by the Senate.


Republicans have focused much of their firepower on U.S. Ambassador to the United Nations Susan Rice, who appeared on TV talk shows after the attack and suggested it was the result of a spontaneous protest rather than a premeditated attack.


The report concluded that there was no such protest.


Rice, widely seen as President Barack Obama's top pick to succeed Clinton, withdrew her name from consideration last week.


(Additional reporting by Tabassum Zakaria and Susan Cornwell; Editing by Christopher Wilson)



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Kodak in $525 million patent deal, eyes bankruptcy end






(Reuters) – Eastman Kodak Co agreed to sell its digital imaging patents for about $ 525 million, a key step to bringing the photography pioneer out of bankruptcy in the first half of 2013.


The deal for the 1,100 patents allows Kodak to fulfill a condition for securing $ 830 million in financing.






The patent deal was reached with a consortium led by Intellectual Ventures and RPX Corp, and which includes some of the world’s biggest technology companies, which will license or acquire the patents.


Those companies are Adobe Systems Inc, Amazon.com Inc, Apple Inc, Facebook Inc, Fujifilm, Google Inc, Huawei Technologies Co Ltd, HTC Corp, Microsoft Corp, Research In Motion Ltd, Samsung Electronics Co Ltd and Shutterfly Inc, according to court documents.


Kodak still must sell its personalized and document-imaging businesses as part of the financing package, and also has to resolve its UK pension obligation.


Kodak said the patent deal puts it on a path to emerge from Chapter 11 in the first half of 2013.


“Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company,” said Antonio Perez, chairman and chief executive of the Rochester, New York-based company.


The patent portfolio was expected to be a major asset for Kodak when it filed for bankruptcy in January. An outside firm had estimated the patents could be worth as much as $ 2.6 billion.


Kodak’s patents hit the market as intellectual property values have soared and technology companies have plowed money into patent-related litigation.


For example, last year Nortel Networks sold 6,000 wireless patents in a bankruptcy auction for $ 4.5 billion and earlier this year Google spent $ 12.5 billion for patent-rich Motorola Mobility.


But Kodak’s patent auction dragged on beyond the initial expectation that it would be wrapped up in August. One patent specialist blamed those early, overly optimistic valuations, which he said encouraged Kodak’s team to set their sights too high.


“Unfortunately (Kodak management) was misled into thinking it was worth billions of dollars and it wasn’t,” said Alex Poltorak, chairman of General Patent Corp, a patent licensing firm. “I think they sold them at a very good price.”


He said after Google acquired Motorola, the search engine company no longer needed patents at any price, deflating the intellectual property market.


Kodak traces its roots to the 19th century and invented the handheld camera. But it has been unable to successfully shift to digital imaging.


It will likely be a different company when it exits bankruptcy, out of the consumer business and focused instead on providing products and services to the commercial imaging market.


The patent sale is subject to approval by the U.S. Bankruptcy Court in Manhattan.


The Kodak bankruptcy case is in Re: Eastman Kodak Co. et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-10202.


(Reporting by Tom Hals in Wilmington, Delaware and Sruthi Ramakrishnan in Bangalore; Editing by Nick Zieminski,; John Wallace and Peter Galloway)


Tech News Headlines – Yahoo! News





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The X Factor: Finalists Sing for Votes One Last Time






The X Factor










12/19/2012 at 10:40 PM EST







from left: Fifth Harmony, Tate Stevens and Carly Rose Sonenclar


Ray Mickshaw/FOX


Who's going to get a $5 million recording contract?

The X Factor's season 2 finale got underway Wednesday night with the finalists performing three songs each – including a duet with a music superstar.

Britney Spears's contestant, Carly Rose Sonenclar, has been a favorite, trading the No. 1 spot with her fellow finalist, L.A. Reid's country singer Tate Stevens, through out the competition.

Carly first reprised "Feeling Good," and sang it better than the first time she performed it during her audition, according to judge Simon Cowell. "It's shocking how bright your star is," Spears said. She performed her duet with Leann Rimes, singing the country star's hit, "How Do I Live." Her final performance – of Leonard Cohen's "Hallelujah" – had the judges gushing. "You looked like an angel," Demi Lovato said. "You sang like a ridiculously talented angel."

Tate, the competition's only country singer, first performed "Anything Goes" by Randy Houser. "I'm still obsessed with you," Demi said. Added Simon, "You are made in America. You are authentic." For his duet, he sang Little Big Town's cheeky party anthem, "Pontoon." And for his final performance in the competition, Tate sang Chris Young's "Tomorrow." "In a year's time," Simon said, "We're going to be hearing about your record sales."

"I'm almost crying because I realize it's the last time I'm going to see you perform on that stage," Demi said.

Simon's remaining act, girl group Fifth Harmony, may have had their best night yet in the competition, beginning with "Anything Can Happen." L.A. called it "magical," adding that they're "the one to beat." Britney said the colorful performance was "spectacular, girly and fun." Their duet, with The X Factor's own Demi Lovato, of "Give Your Heart a Break" was a highlight of the night.

"These girls are so easy to work with," the judge said. "They're so down to earth, so sweet and I love you guys. This was so much fun."

Their last song, "Let It Be" by the Beatles, proved how much the five members have "blossomed as a group," Britney said. Admitting his bias, their mentor Simon said, based on their performances on Wednesday, the girls of Fifth Harmony "deserve to win the competition."

Do you agree? Or is Tate or Carly your choice for the big prize? Tell us in the comments below.

The winner will be revealed Thursday in a two-hour show that will include a performance by One Direction.

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Experts: Kids are resilient in coping with trauma


WASHINGTON (AP) — They might not want to talk about the gunshots or the screams. But their toys might start getting into imaginary shootouts.


Last week's school shooting in Connecticut raises the question: What will be the psychological fallout for the children who survived?


For people of any age, regaining a sense of security after surviving violence can take a long time. They're at risk for lingering anxiety, depression, post-traumatic stress disorder.


But after the grief and fear fades, psychiatrists say most of Newtown's young survivors probably will cope without long-term emotional problems.


"Kids do tend to be highly resilient," said Dr. Matthew Biel, chief of child and adolescent psychiatry at MedStar Georgetown University Hospital.


And one way that younger children try to make sense of trauma is through play. Youngsters may pull out action figures or stuffed animals and re-enact what they witnessed, perhaps multiple times.


"That's the way they gain mastery over a situation that's overwhelming," Biel explained, saying it becomes a concern only if the child is clearly distressed while playing.


Nor is it unusual for children to chase each other playing cops-and-robbers, but now parents might see some also pretending they're dead, added Dr. Melissa Brymer of the UCLA-Duke National Center for Child Traumatic Stress.


Among the challenges will be spotting which children are struggling enough that they may need professional help.


Newtown's tragedy is particularly heart-wrenching because of what such young children grappled with — like the six first-graders who apparently had to run past their teacher's body to escape to safety.


There's little scientific research specifically on PTSD, post-traumatic stress disorder, in children exposed to a burst of violence, and even less to tell if a younger child will have a harder time healing than an older one.


Overall, scientists say studies of natural disasters and wars suggest most children eventually recover from traumatic experiences while a smaller proportion develop long-term disorders such as PTSD. Brymer says in her studies of school shootings, that fraction can range from 10 percent to a quarter of survivors, depending on what they actually experienced. A broader 2007 study found 13 percent of U.S. children exposed to different types of trauma reported some symptoms of PTSD, although less than 1 percent had enough for an official diagnosis.


Violence isn't all that rare in childhood. In many parts of the world — and in inner-city neighborhoods in the U.S., too — children witness it repeatedly. They don't become inured to it, Biel said, and more exposure means a greater chance of lasting psychological harm.


In Newtown, most at risk for longer-term problems are those who saw someone killed, said Dr. Carol North of the University of Texas Southwestern Medical Center, who has researched survivors of mass shootings.


Friday's shootings were mostly in two classrooms of Sandy Hook Elementary School, which has about 450 students through fourth-grade.


But those who weren't as close to the danger may be at extra risk, too, if this wasn't their first trauma or they already had problems such as anxiety disorders that increase their vulnerability, she said.


Right after a traumatic event, it's normal to have nightmares or trouble sleeping, to stick close to loved ones, and to be nervous or moody, Biel said.


To help, parents will have to follow their child's lead. Grilling a child about a traumatic experience isn't good, he stressed. Some children will ask a lot of questions, seeking reassurance, he said. Others will be quiet, thinking about the experience and maybe drawing or writing about it, or acting it out at playtime. Younger children may regress, becoming clingy or having tantrums.


Before second grade, their brains also are at a developmental stage some refer to as magical thinking, when it's difficult to distinguish reality and fantasy. Parents may have to help them understand that a friend who died isn't in pain or lonely but also isn't coming back, Brymer said.


When problem behaviors or signs of distress continue for several weeks, Brymer says it's time for an evaluation by a counselor or pediatrician.


Besides a supportive family, what helps? North advises getting children back into routines, together with their friends, and easing them back into a school setting. Studies of survivors of the Sept. 11 terrorist attacks found "the power of the support of the people who went through it with you is huge," she said.


Children as young as first-graders can benefit from cognitive-behavioral therapy, Georgetown's Biel said. They can calm themselves with breathing techniques. They also can learn to identify and label their feelings — anger, frustration, worry — and how to balance, say, a worried thought with a brave one.


Finally, avoid watching TV coverage of the shooting, as children may think it's happening all over again, Biel added. He found that children who watched the 9/11 clips of planes hitting the World Trade Center thought they were seeing dozens of separate attacks.


___


EDITOR'S NOTE — Lauran Neergaard covers health and medical issues for The Associated Press in Washington.


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Wall Street falls as "cliff" talks sour, but hopes remain

NEW YORK (Reuters) - U.S. stocks sold off late in the day to close at session lows on Wednesday as talks to avert a year-end fiscal crisis turned sour, even as investors still expect a deal.


The S&P 500 slipped after a two-day rally that took the benchmark index to its highest close in two months. Defensive-oriented shares led the decliners, including health care and consumer staples.


General Motors bucked the overall weakness to surge 6.6 percent to $27.18 after the automaker said it will buy back 200 million of its shares from the U.S. Treasury, which plans to sell the rest of its GM stake over the next 15 months.


President Barack Obama and congressional Republicans are struggling to come up with a deal to avoid early 2013 tax hikes and spending cuts that many economists say could send the U.S. economy into recession.


House Speaker John Boehner, the top Republican in Congress, said in a one-minute press conference that his chamber will pass a proposal that Obama had already threatened to veto as it spares many wealthy Americans from tax hikes needed to balance the budget. Obama has already agreed to reductions in benefits for senior citizens.


"My guess is they're close to a deal, and right before, it looks like the deal is about to blow up either on manufactured or legitimate reasons," said Uri Landesman, president of hedge fund Platinum Partners in New York.


He said if the market thought a deal was in real danger, the S&P 500 would slide below 1,400. It stands now near 1,435, not far from a two-month high.


The CBOE Volatility Index <.vix> surged 11.5 percent to 17.36, but has remained relatively stable. Its 14- 50- and 200-day averages are all within 1.1 points.


Landesman said the VIX's stability indicates "the bulls have control of this market still."


Banks and energy shares - groups that outperform during periods of economic expansion - have led recent gains, indicating a shift to focusing on a growing economy as Wall Street looks past the budget talks.


Defensive sectors led Wednesday's downturn, with the S&P health care sector index <.gspa> down 1.1 percent.


The Dow Jones industrial average <.dji> dropped 98.99 points, or 0.74 percent, to 13,251.97. The S&P 500 <.spx> lost 10.98 points, or 0.76 percent, to 1,435.81. The Nasdaq Composite <.ixic> fell 10.17 points, or 0.33 percent, to 3,044.36.


Herbalife Ltd shares tumbled 12.1 percent to $37.34 after William Ackman, one of the world's biggest hedge fund managers, said he is shorting the stock of the weight management products company.


Oracle shares helped cap the Nasdaq's loss after the company reported earnings that beat expectations on strong software sales growth. Oracle jumped 3.7 percent to $34.09.


Knight Capital Group Inc climbed 5.4 percent to $3.51 after it agreed to be bought by Getco Holdings in a deal valued at $1.4 billion. The stock, which nearly collapsed after a trading error in August, remains down about 70 percent so far this year.


Shares of Chinese display advertising provider Focus Media Holding Ltd jumped 6.7 percent to $25.52 after it agreed to be bought by a consortium of private equity funds led by the Carlyle Group for about $3.6 billion.


Data showed homebuilding permits touched their highest level in nearly 4-1/2 years in November. The PHLX housing index <.hgx> fell 0.8 percent, but has gained 66.4 percent this year as the housing market has turned the corner.


About 6.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, slightly above the daily average so far this year of about 6.45 billion shares.


Advancing and declining issues were almost even on both the NYSE and the Nasdaq.


(Reporting by Rodrigo Campos; Editing by Jan Paschal)



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