Optimism about "cliff" boost market; financials lead

NEW YORK (Reuters) - The S&P 500 ended at its highest level in almost two months on Monday on rising hopes that negotiations over the "fiscal cliff" were making progress and that a deal could be reached in days.

After weeks of stalemate, President Barack Obama and Republican House Speaker John Boehner met at the White House on Monday, raising hopes that Washington will be able to head off steep tax hikes and spending cuts that threaten the economy.

All of the S&P 500's 10 sectors were higher, led by financials and other growth-oriented sectors. The S&P Financial Index <.gspf> gained 2.1 percent, and shares of Bank of America jumped 4 percent to $11. In a research note Monday, Meredith Whitney Advisory Group shifted to a positive stance on financials and upgraded Bank of America, Citigroup and Discover Financial shares.

The S&P consumer distretionary index <.gspd>, up 1.8 percent, was the second-best performing sector. Investors worry the U.S. economy could slide into recession if the tax and spending changes are implemented.

Boehner has edged closer to Obama's position by proposing to extend lower tax rates for everyone who earns less than $1 million. Still, his position remains far from that of President Obama.

"Trumping everything right now are the fiscal cliff talks. It seems like progress is being made. I think it's getting to the nitty gritty," said Alan Lancz, president of Alan B. Lancz & Associates Inc. in Toledo, Ohio. "The bet right now is that something will come by the end of this week."

The Dow Jones industrial average <.dji> was up 100.38 points, or 0.76 percent, at 13,235.39. The Standard & Poor's 500 Index <.spx> was up 16.78 points, or 1.19 percent, at 1,430.36, its highest close since October 22. The Nasdaq Composite Index <.ixic> was up 39.27 points, or 1.32 percent, at 3,010.60.

The gains, which came on lighter-than-usual volume, ended a two-day losing streak on the S&P 500. The index also had its best daily percentage gain since November 23. Volume was roughly 6.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.4 billion.

In the financial sector, American International Group Inc. shares rose 3 percent to $34.95 on plans to sell as much as $6.5 billion of AIA Group Ltd. Advancing stocks also included those in the home construction sector <.djushb>, which rose 4.5 percent.

"People are looking for sectors to play, and I think Bank of America broke out of some long-standing price levels, and it got everything going in that sector," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

Shares of Citigroup were up 4.1 percent at $39.15 while shares of Discover Financial were up 1.6 percent at $40.18.

Clearwire Corp agreed to sell the rest of the company to Sprint Nextel Corp for a slightly sweetened $2.2 billion offer just days after minority shareholders criticized the previous bid as too low. Clearwire tumbled 13.6 percent to $2.91, while Sprint was up 0.2 percent to $5.56.

Apple Inc shares edged up after recent losses, rising 1.8 percent to $518.83 even though two firms cut their price targets on the stock Monday.

The tech giant said it sold more than 2 million of its new iPhone 5 smartphones in China during the three days after its launch there on Friday, but the figures did not ease worries about stiffer competition. Apple shares have tumbled more than 25 percent in about three months.

Compuware Corp rose 12.9 percent to $10.76 after hedge fund Elliott Management offered to buy the business software maker for $2.3 billion and S&P Capital IQ raised the target price and moved it to "hold" from "strong sell.

Advancers outnumbered decliners on the NYSE by about 2 to 1, and on the Nasdaq by nearly 9 to 4.

(Editing by Kenneth Barry and Nick Zieminski)

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Clinton gets accountability report on Benghazi attacks

WASHINGTON (Reuters) - Secretary of State Hillary Clinton on Monday received an official review of the September attack on a U.S. diplomatic mission in Benghazi, Libya, setting the stage for testimony on an incident that prompted a political furor and sharp questions about security at U.S. diplomatic facilities overseas.

The State Department said Clinton - who is convalescing after suffering a concussion last week - received the report from the Accountability Review Board formed to probe the attack which killed U.S. Ambassador Christopher Stevens and three other Americans.

"The ARB has completed its work. Its report has gone to the secretary this morning. She now has it," State Department spokeswoman Victoria Nuland said.

The committee has been meeting in private and State Department officials have declined to discuss almost all specifics of the Benghazi attack pending its reports.

The findings are expected to cover questions on whether enough attention was given to potential threats and how Washington responded to security requests from U.S. diplomats in Libya.

A determination that top State Department officials turned down those requests, as Republican congressional investigators allege, could refuel criticism of the officials - and possibly even end the careers of some of them.

Clinton had been expected to testify to Congress on December 20 on the report's results, but is under doctors' orders to remain at home this week.

Deputy Secretary William Burns and Deputy Secretary Thomas Nides will testify in her stead at Thursday's open hearings of the Senate and House foreign affairs committees, Nuland said.

Prior to that, the Accountability Review Board's two leaders - retired Ambassador Thomas Pickering and retired chairman of the U.S. Joint Chiefs of Staff Michael Mullen - will testify in closed door hearings of the two committees on Wednesday, she said.

POLITICAL FALLOUT

The political uproar over the September 11 Benghazi attack has already claimed one victim.

U.S. Ambassador to the United Nations Susan Rice, widely tipped as a front-runner to replace Clinton when she steps down as secretary of state early next year, last week withdrew her name from consideration, saying she wished to avoid a potentially disruptive Senate confirmation process.

Republican lawmakers had blasted Rice for televised comments she made in the aftermath of the attack in which she said preliminary information suggested the assault was the result of protests over an anti-Muslim video made in California rather than a premeditated strike.

Rice has said she was relying on talking points drawn up by U.S. intelligence officials.

Nuland said the final report could contain both classified and unclassified sections, and that only the latter would be made publicly available.

Central questions raised include why the ambassador was in such an unstable part of Libya on the anniversary of the September 11, 2001, attacks on New York and the Pentagon.

The five-person independent board usually includes retired ambassadors, a former CIA officer and a member of the private sector. It has the power to issue subpoenas, and members are required to have appropriate security clearances to review classified information.

Nuland said that Clinton - who intends to step down toward the end of January when President Barack Obama is sworn in for his second term - was "on the mend" following her concussion, which occurred when she fell as a result of dehydration due to a stomach virus.

She added that Clinton remained open to discussing the attack with lawmakers herself next month.

"She looks forward to continuing to engage with them in January and she will be open to whatever they consider appropriate in that regard," Nuland said. (Editing by Warren Strobel and Mohammad Zargham)

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Amazon smartphone reportedly set for 2013 launch

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Newtown Shooting Victims: Their Photos, Their Lives

When his mother told him she loved him, Noah replied, "Not as much as I love you, Mom," said his uncle, according to the AP. In another classroom, his twin sister, whom he called his best friend, survived the shooting. Along with their older sister, 8-year-old Sophia, the siblings were inseparable. "He was just a really lively, smart kid," added his uncle. "He would have become a great man, I think. He would have grown up to be a great dad." Photo: Family photo/AP

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Experts: No link between Asperger's, violence

NEW YORK (AP) — While an official has said that the 20-year-old gunman in the Connecticut school shooting had Asperger's syndrome, experts say there is no connection between the disorder and violence.

Asperger's is a mild form of autism often characterized by social awkwardness.

"There really is no clear association between Asperger's and violent behavior," said psychologist Elizabeth Laugeson, an assistant clinical professor at the University of California, Los Angeles.

Little is known about Adam Lanza, identified by police as the shooter in the Friday massacre at a Newtown, Conn., elementary school. He fatally shot his mother before going to the school and killing 20 young children, six adults and himself, authorities said.

A law enforcement official, speaking on condition of anonymity because the person was not authorized to discuss the unfolding investigation, said Lanza had been diagnosed with Asperger's.

High school classmates and others have described him as bright but painfully shy, anxious and a loner. Those kinds of symptoms are consistent with Asperger's, said psychologist Eric Butter of Nationwide Children's Hospital in Columbus, Ohio, who treats autism, including Asperger's, but has no knowledge of Lanza's case.

Research suggests people with autism do have a higher rate of aggressive behavior — outbursts, shoving or pushing or angry shouting — than the general population, he said.

"But we are not talking about the kind of planned and intentional type of violence we have seen at Newtown," he said in an email.

"These types of tragedies have occurred at the hands of individuals with many different types of personalities and psychological profiles," he added.

Autism is a developmental disorder that can range from mild to severe. Asperger's generally is thought of as a mild form. Both autism and Asperger's can be characterized by poor social skills, repetitive behavior or interests and problems communicating. Unlike classic autism, Asperger's does not typically involve delays in mental development or speech.

Experts say those with autism and related disorders are sometimes diagnosed with other mental health problems, such as depression, anxiety, bipolar disorder or obsessive-compulsive disorder.

"I think it's far more likely that what happened may have more to do with some other kind of mental health condition like depression or anxiety rather than Asperger's," Laugeson said.

She said those with Asperger's tend to focus on rules and be very law-abiding.

"There's something more to this," she said. "We just don't know what that is yet."

After much debate, the term Asperger's is being dropped from the diagnostic manual used by the nation's psychiatrists. In changes approved earlier this month, Asperger's will be incorporated under the umbrella term "autism spectrum disorder" for all the ranges of autism.

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AP Writer Matt Apuzzo contributed to this report.

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Online:

Asperger's information: http://1.usa.gov/3tGSp5

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Wall Street Week Ahead: Holiday "on standby" as clock ticks on cliff

NEW YORK (Reuters) - The last two weeks of December are traditionally quiet for stocks, but traders accustomed to a bit of time off are staying close to their mobile devices, thanks to the "fiscal cliff."

Last-minute negotiations in Washington on the so-called fiscal cliff - nearly $600 billion of tax increases and spending cuts set to take effect in January that could cause a sharp slowdown in growth or even a recession - are keeping some traders and analysts from taking Christmas holidays because any deal could have a big impact on markets.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

"Next week is going to be a Capitol Hill-driven market."

With talks between President Barack Obama and House Speaker John Boehner at an apparent standstill, it was increasingly likely that Washington will not come up with a deal before January 1.

Gordon Charlop, managing director at Rosenblatt Securities in New York, will also be on standby for the holiday season.

"It's a 'Look guys, let's just rotate and be sensible" type of situation going on," Charlop said.

"We are hopeful there is some resolution down there, but it seems to me they continue to walk that political tightrope... rather than coming up with something."

Despite concerns that the deadline will pass without a deal, the S&P 500 has held its ground with a 12.4 percent gain for the year. For this week, though, the S&P 500 fell 0.3 percent.

BEWARE OF THE WITCH

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

"We could see some heavy selling as there is going to be a lot of re-establishing of positions, reallocation of assets before the year-end," Kinahan said.

RETHINKING APPLE

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, if Congress and the White House don't come up with a solution to avert the fiscal cliff. That possibility could give investors an incentive to unload certain stocks in some tax-related selling by December 31.

Some market participants said tax-related selling may be behind the weaker trend in the stock price of market leader Apple . Apple's stock has lost a quarter of its value since it hit a lifetime high of $705.07 on September 21.

On Friday, the stock fell 3.8 percent to $509.79 after the iPhone 5 got a chilly reception at its debut in China and two analysts cut shipment forecasts. But the stock is still up nearly 26 percent for the year.

"If you owned Apple for a long time, you should be thinking about reallocation as there will be changes in taxes and other regulations next year, although we don't really know which rules to play by yet," Kinahan said.

But one indicator of the market's reduced concern about the fiscal cliff compared with a few weeks ago, is the defense sector, which will be hit hard if the spending cuts take effect. The PHLX Defense Sector Index <.dfx> is up nearly 13 percent for the year, and sits just a few points from its 2012 high.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Japan's next PM Abe must deliver on economy, cope with China

TOKYO (Reuters) - Conservative ex-premier Shinzo Abe will get a second chance to lead Japan after his Liberal Democratic Party surged back to power in Sunday's election, but he must move swiftly to bolster a sagging economy and manage strained ties with China to avoid the fate of his short-lived predecessors.

Abe, whose party won by a landslide just three years after a crushing defeat, is due to meet the leader of its small ally on Monday to cement their alliance and confirm economic steps to boost an economy now in its fourth recession since 2000.

The victory by the LDP, which had ruled Japan for most of the past 50 years before it was ousted in 2009, will usher in a government pledged to a tough stance in a territorial row with China, a pro-nuclear energy policy despite the 2011 Fukushima disaster and a potentially risky recipe for hyper-easy monetary policy and big fiscal spending to boost growth.

Projections by TV broadcasters showed that the LDP had won at least 294 seats in the 480-member lower house, while its ally the New Komeito party took 31 seats.

That gives them a two-thirds majority needed to overrule parliament's upper house in most matters. Since 2007, successive governments have been hamstrung by a "twisted parliament" where ruling coalitions lacked control over the upper house, which could block most legislation.

While investors have already pushed the yen lower and share prices higher in anticipation of an LDP victory and Abe's economic stimulus, the "super majority" drove the yen to a 20-month low against the U.S. dollar as far as 84.48.

Japan's benchmark Nikkei opened up 1.6 pct on Monday, hitting a high of more than eight months.

Prime Minister Yoshihiko Noda's Democratic Party of Japan (DPJ) was crushed. It was forecast to win 57 seats -- less than a fifth of its showing in 2009, when it swept to power promising to pay more heed to consumers than companies and pry control of policies from bureaucrats.

But voters felt the DPJ failed to live up to those pledges and the party was hit by defections before the vote due to Noda's unpopular plan to raise the sales tax to curb public debt, which is already more than twice the size of the economy.

"This was an overwhelming rejection of the DPJ," said Gerry Curtis, a professor at New York's Columbia University. That sentiment was echoed in Japanese media.

"In a word, rather than a huge victory for the LDP, this election was a massive defeat for the Democrats," the Nikkei business daily said in an editorial.

Analyst Bruce Klingner of the Heritage Foundation think tank in Washington agreed, but said it "also reflects an embrace of conservative views" after strained relations with Japan's neighbors in recent years.

"Chinese assertiveness and North Korean provocations nudged the public from its usual post-war complacency toward a new desire to stand up for Japanese sovereignty," he said.

However, that did not mean the Japanese were embracing a return to militarism, added Klingner, a former CIA analyst.

LOW TURNOUT

Abe, expected to be voted in by parliament on December 26, will also have to prove he has learned from the mistakes of his first administration, plagued by scandals and charges of incompetence.

Voter distaste for both major parties has spawned a clutch of new parties, including the Japan Restoration Party founded by popular Osaka Mayor Toru Hashimoto, which took 54 seats according to media projections.

Media estimates also showed turnout at around 59 percent, which could match the previous post-war low.

LDP leader Abe, 58, who quit as premier in 2007 citing ill health, has been talking tough in a row with China over uninhabited isles in the East China Sea, although some experts say he may temper his hard line with pragmatism once in office.

The soft-spoken grandson of a prime minister, who will become Japan's seventh premier in six years, Abe also wants to loosen the limits of a 1947 pacifist constitution on the military so Japan can play a bigger global security role.

President Barack Obama congratulated Abe and underlined U.S. interest in working with the longstanding American ally.

"The U.S-Japan Alliance serves as the cornerstone of peace and prosperity in the Asia-Pacific and I look forward to working closely with the next government and the people of Japan," he said in a statement.

Abe, who visited China first during his first term, said he would start off this time by going to Washington.

The LDP, which promoted nuclear energy during its decades-long reign, is expected to be friendly to power utilities, although deep public concerns remain over safety.

Abe has called for "unlimited" monetary easing and big spending on public works to rescue the economy. Such policies, a centerpiece of the LDP's platform for decades, have been criticized by many as wasteful pork-barrel politics.

Jiji news agency said previous LDP Prime Minister Taro Aso, 72, could be tapped as finance minister and deputy premier. He launched massive economic stimulus packages to fight the impact of the 2008-2009 global financial crisis but was dogged by policy flipflops and gaffes.

Many economists say that prescription for "Abenomics" could create temporary growth that would allow the government to proceed with a planned initial sales tax rise in 2014 to help curb public debt.

But it looks unlikely to cure deeper ills or bring sustainable growth to Japan's ageing society, and risks triggering a market backlash if investors decide Japan has lost control of its finances.

(Editing by Tomasz Janowski and Paul Tait)

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Cisco hires bank to sell home wireless router unit: report

(Reuters) – Networking equipment company Cisco Systems Inc has hired Barclays to sell its Linksys home router unit, a report said on Sunday.

The business, which Cisco acquired for $ 500 million in 2003, will likely be valued for less because it has low margins, according to Bloomberg.

The sale is part of Cisco’s strategy to shed its consumer unit and focus on its software and technology services businesses.

Last year, Cisco axed its Flip camera business as part of this strategy.

(Reporting By Olivia Oran; Editing by Marguerita Choy)

Tech News Headlines – Yahoo! News

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Donald Faison Marries Cacee Cobb

By Lesley Messer

12/15/2012 at 08:25 PM EST

Cacee Cobb and Donald Faison

Dr. Billy Ingram/WireImage

It's official!

After six years together, Donald Faison and Cacee Cobb were married Saturday night at the Los Angeles home of his Scrubs costar Zach Braff.

Cobb's friend Jessica Simpson was a bridesmaid. Sister Ashlee Simpson also attended.

"What a happy day," Tweeted groomsman Joshua Radin, a singer, who posted a photo of himself with Faison and Braff in their tuxedos.

The couple got engaged in August 2011. At the time, Faison Tweeted, "If you like it then you better put a Ring on it," and Cobb replied, "If she likes it then she better say YES!!"

Since then, the couple had been hard at work planning their wedding. On Nov. 12, Faison, who currently stars on The Exes, Tweeted that they were tasting cocktails to be served on the big day.

"Alcohol tasting for the wedding!" he wrote, adding a photo of the drinks. "The [sic] Ain't Say It Was Going To Be Like This!!!"

This is the first marriage for Cobb. Faison was previously married to Lisa Askey, with whom he has three children. (He also has a son from a previous relationship.)

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Fewer health care options for illegal immigrants

ALAMO, Texas (AP) — For years, Sonia Limas would drag her daughters to the emergency room whenever they fell sick. As an illegal immigrant, she had no health insurance, and the only place she knew to seek treatment was the hospital — the most expensive setting for those covering the cost.

The family's options improved somewhat a decade ago with the expansion of community health clinics, which offered free or low-cost care with help from the federal government. But President Barack Obama's health care overhaul threatens to roll back some of those services if clinics and hospitals are overwhelmed with newly insured patients and can't afford to care for as many poor families.

To be clear, Obama's law was never intended to help Limas and an estimated 11 million illegal immigrants like her. Instead, it envisions that 32 million uninsured Americans will get access to coverage by 2019. Because that should mean fewer uninsured patients showing up at hospitals, the Obama program slashed the federal reimbursement for uncompensated care.

But in states with large illegal immigrant populations, the math may not work, especially if lawmakers don't expand Medicaid, the joint state-federal health program for the poor and disabled.

When the reform has been fully implemented, illegal immigrants will make up the nation's second-largest population of uninsured, or about 25 percent. The only larger group will be people who qualify for insurance but fail to enroll, according to a 2012 study by the Washington-based Urban Institute.

And since about two-thirds of illegal immigrants live in just eight states, those areas will have a disproportionate share of the uninsured to care for.

In communities "where the number of undocumented immigrants is greatest, the strain has reached the breaking point," Rich Umbdenstock, president of the American Hospital Association, wrote last year in a letter to Obama, asking him to keep in mind the uncompensated care hospitals gave to that group. "In response, many hospitals have had to curtail services, delay implementing services, or close beds."

The federal government has offered to expand Medicaid, but states must decide whether to take the deal. And in some of those eight states — including Texas, Florida and New Jersey — hospitals are scrambling to determine whether they will still have enough money to treat the remaining uninsured.

Without a Medicaid expansion, the influx of new patients and the looming cuts in federal funding could inflict "a double whammy" in Texas, said David Lopez, CEO of the Harris Health System in Houston, which spends 10 to 15 percent of its $1.2 billion annual budget to care for illegal immigrants.

Realistically, taxpayers are already paying for some of the treatment provided to illegal immigrants because hospitals are required by law to stabilize and treat any patients that arrive in an emergency room, regardless of their ability to pay. The money to cover the costs typically comes from federal, state and local taxes.

A solid accounting of money spent treating illegal immigrants is elusive because most hospitals do not ask for immigration status. But some states have tried.

California, which is home to the nation's largest population of illegal immigrants, spent an estimated $1.2 billion last year through Medicaid to care for 822,500 illegal immigrants.

The New Jersey Hospital Association in 2010 estimated that it cost between $600 million and $650 million annually to treat 550,000 illegal immigrants.

And in Texas, a 2010 analysis by the Health and Human Services Commission found that the agency had provided $96 million in benefits to illegal immigrants, up from $81 million two years earlier. The state's public hospital districts spent an additional $717 million in uncompensated care to treat that population.

If large states such as Florida and Texas make good on their intention to forgo federal money to expand Medicaid, the decision "basically eviscerates" the effects of the health care overhaul in those areas because of "who lives there and what they're eligible for," said Lisa Clemans-Cope, a senior researcher at the Urban Institute.

Seeking to curb expenses, hospitals might change what qualifies as an emergency or cap the number of uninsured patients they treat. And although it's believed states with the most illegal immigrants will face a smaller cut, they will still lose money.

The potential impacts of reform are a hot topic at MD Anderson Cancer Center in Houston. In addition to offering its own charity care, some MD Anderson oncologists volunteer at a county-funded clinic at Lyndon B. Johnson General Hospital that largely treats the uninsured.

"In a sense we've been in the worst-case scenario in Texas for a long time," said Lewis Foxhall, MD Anderson's vice president of health policy in Houston. "The large number of uninsured and the large low-income population creates a very difficult problem for us."

Community clinics are a key part of the reform plan and were supposed to take up some of the slack for hospitals. Clinics received $11 billion in new funding over five years so they could expand to help care for a swell of newly insured who might otherwise overwhelm doctors' offices. But in the first year, $600 million was cut from the centers' usual allocation, leaving many to use the money to fill gaps rather than expand.

There is concern that clinics could themselves be inundated with newly insured patients, forcing many illegal immigrants back to emergency rooms.

Limas, 44, moved to the border town of Alamo 13 years ago with her husband and three daughters. Now single, she supports the family by teaching a citizenship class in Spanish at the local community center and selling cookies and cakes she whips up in her trailer. Soon, she hopes to seek a work permit of her own.

For now, the clinic helps with basic health care needs. If necessary, Limas will return to the emergency room, where the attendants help her fill out paperwork to ensure the government covers the bills she cannot afford.

"They always attended to me," she said, "even though it's slow."

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Sherman can be followed on Twitter at https://twitter.com/chrisshermanAP .

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP .

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