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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Avigdor Lieberman, Israeli Foreign Minister, Resigns





JERUSALEM — Facing indictment for breach of trust and fraud, Israel’s foreign minister, Avigdor Lieberman, resigned his post Friday afternoon amid mounting political pressure, upending the campaign landscape five weeks before national elections.




Mr. Lieberman, a powerful but polarizing figure, wrote on his Facebook page, “I know that I committed no crime,” but said he was stepping down so “I will be able to put an end to this matter swiftly and without delay and to clear my name completely.”


Mr. Lieberman, who is also a member of Parliament, indicated that he still hoped to compete in the Jan. 22 balloting, suggesting a possible plea bargain. The expected indictment, which prosecutors announced on Thursday, concerns a relatively minor offense compared with a broader case of money laundering and fraud that was dropped after an investigation stretching for more than 12 years.


“I believe that the citizens of the State of Israel are entitled to go to the polling stations after this matter has already been resolved,” Mr. Lieberman’s statement said. If a legal ruling could be made before the elections, “I might continue to serve the State of Israel and the citizens of Israel as part of a strong and united leadership that will cope with the security, political and economic challenges facing the State of Israel.”


Mr. Lieberman, 54, leads the secular, ultranationalist Yisrael Beiteinu party, which last month joined forces with Prime Minister Benjamin Netanyahu’s Likud Party. A populist immigrant from the former Soviet Union, he was widely considered as a potential successor to Mr. Netanyahu as leader of Israel’s right wing, though his hard line on the Palestinian question, among other issues, alienated many Western allies.


After the charges were announced, Mr. Lieberman told supporters that he had been hounded by corruption accusations since July 1996, when he served as a top aide to Mr. Netanyahu during his first term as prime minister. “Since then till today, not a day has passed without me being referred to as ‘a suspect,’ ‘being under investigation,’ ‘being an intelligence target,’ ” Mr. Lieberman said. “This has been one long and rolling case, receiving a different title every now and then.”


The conduct for which Mr. Lieberman will face indictment stems from an investigation into other allegations. He is accused of promoting Israel’s former ambassador to Belarus for another post after the ambassador gave him confidential information regarding an Israeli police investigation into Mr. Lieberman’s activities.


But Mr. Lieberman will not face charges on the underlying, more serious case, in which he was suspected of receiving millions of dollars from international tycoons with business interests in Israel through companies formally led by family members or associates.


Israel’s attorney general, Yehuda Weinstein, said Thursday in a report announcing his decision that he could not adequately prove a link between Mr. Lieberman and the money, though he said, “The suspicions against Lieberman’s series of intricate and intertwined, underhanded actions cannot be ruled out.”


Born in Moldova, Mr. Lieberman enjoys wide support among Israel’s one million immigrants from the former Soviet Union. He lives in a West Bank settlement considered illegal under international law, and he is perhaps the government’s harshest critic of President Mahmoud Abbas of the Palestinian Authority, having called for his ouster and denounced as “diplomatic terrorism” his recent bid for upgraded Palestinian status at the United Nations.


Polls have consistently shown that Mr. Lieberman’s joint ticket with Mr. Netanyahu, known here as Likud Beiteinu, is expected to receive up to 40 of the 120 seats in Israel’s next Parliament, by far the largest bloc. The merger was seen as crowning him a top contender to eventually follow Mr. Netanyahu as prime minister.


Opposition leaders, who on Thursday had called for Mr. Lieberman’s resignation, were swift to embrace it on Friday, but not without adding jabs.


Zahava Gal-On, chairwoman of the left-wing Meretz party, said Mr. Lieberman had “spared himself ignobility and disgrace” by stepping down, according to the Web site of Channel 2 News. Shelly Yacimovich, chairwoman of the Labor Party, said he had “severely undermined the rule of law and damaged the public’s faith in its elected officials and democracy.”


Tzipi Livni, a former foreign minister who now heads the new Hatnua Party, issued a more moderate statement, saying: “Avigdor Lieberman performed the right and necessary action. We hope he will receive a swift legal proceeding.”


Mr. Netanyahu had no immediate comment on Mr. Lieberman’s resignation Friday, but on Thursday had offered only support. “I believe in Israel’s legal system and respect it,” the prime minister said in a statement. “The right that it grants any Israeli citizen to defend himself also extends to Minister Lieberman, and I hope for him that he’ll be able to prove that he’s also innocent regarding the only case that remains.”


Under Israeli law, when a cabinet minister resigns, the prime minister becomes “custodian” of his portfolio, and Mr. Netanyahu is expected to handle foreign affairs himself at least until after the elections.


Jonathan Rosen contributed reporting.



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Home invasion victim gets help over Xbox headset






NORTH APOLLO, Pa. (AP) — Police say a Pennsylvania man used his Xbox headphones to call for help after being bound with duct tape and menaced with a gun during a home invasion.


Investigators say the 22-year-old suburban Pittsburgh man was playing video games in an upstairs bedroom when he heard his front door open. The man initially thought it was a family member but saw an armed man wearing a ski mask when he looked downstairs.






Authorities say the intruder bound Derick Shaffer and led him around the North Apollo home to locate valuables, then fled in Shaffer’s car. Shaffer reached a friend over his Xbox Live headset and had him call police.


The missing car was located about an hour later. Police questioned three people but are still trying to identify a suspect.


Gaming News Headlines – Yahoo! News


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Charles and Camilla's Royal Christmas Card Revealed









12/14/2012 at 11:35 AM EST







Prince Charles and the Duchess of Cornwall, on their Christmas card


Danny Martindale/WireImage


Why shouldn't Prince Charles and the Duchess of Cornwall be smiling?

It's been a year filled with happy news: the Queen's Jubilee, a baby on the way for the Duke and Duchess of Cambridge, even Prince Harry was revealed as a popular party guy – yet responsible enough to serve his country proudly.

And so, the couple's official Christmas card shows the two of them looking their merriest in a shot taken by photographer Danny Martindale while the royals were on board the Spirit of Chartwell during the Thames Diamond Jubilee Pageant on June 3, reports the Telegraph.

As for their outfits, Charles is sporting his Royal Navy admiral's ceremonial day dress uniform, while Camilla is donning an Anna Valentine coat and dress with a hat by Philip Treacy.

Not seen in the photo, although also in attendance at the ceremony: the Queen, the Duke of Edinburgh, the Duke and Duchess of Cambridge and Prince Harry.

And the message inside? "Wishing you a very Happy Christmas and New Year."

Back at you, folks!

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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."


___


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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Wall Street steady on "cliff" apprehension, Apple drops

NEW YORK (Reuters) - Stocks were little changed on Friday, with the Nasdaq weighed by a 3-percent drop in shares of tech giant Apple, amid investor worries about a lack of progress by politicians in ongoing fiscal negotiations.


Apple was down 2.8 percent at $515.11 as UBS cut its price target to $700 from $780. The stock has tumbled in recent months for a variety of reasons, including investors locking in profits ahead of scheduled capital-gains increases for next year.


President Barack Obama and House of Representatives Speaker John Boehner held a "frank" meeting Thursday to try to break an impasse in negotiations over the "fiscal cliff," tax hikes and spending cuts set to kick in early in 2013.


"The uncertainty that (the fiscal talks) is creating is basically holding the markets hostage in the short term," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds, in New York.


Frustration has mounted over the lack of progress in the discussions, with market participants' worries reflected in a 0.6 percent drop in the S&P 500 on Thursday. Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to ultimately be reached, a drawn-out debate - like the one seen over 2011's debt ceiling - can erode confidence.


Still, expectations of an eventual agreement have helped the S&P 500 bounce back over the last month, and on Wednesday, the index hit its highest intraday level since late October. For the year, the S&P has advanced more than 12 percent.


"For the end of this year, I wouldn't expect a lot of big decisions by investors," Garcia-Amaya said. "It's been a fairly good year for equities and for that reason a lot of people don't want to be a hero going into the end of the year."


The Dow Jones industrial average <.dji> edged up 11.05 points, or 0.08 percent, at 13,181.77. The Standard & Poor's 500 Index <.spx> slipped 2.49 points, or 0.18 percent, to 1,416.96. The Nasdaq Composite Index <.ixic> lost 12.62 points, or 0.42 percent, to 2,979.54.


Best Buy Co Inc slid more than 15 percent to $11.90 after it agreed to extend the deadline for the company's founder to make bid.


Consumer prices fell in November for the first time in six months, indicating U.S. inflation pressures were muted. A separate report showed manufacturing grew at its swiftest pace in eight months in December.


Meanwhile, data out of China was encouraging for its key trading partners, including the U.S., and for the prospects for global growth. It showed manufacturing in the world's second-largest economy grew at its fastest pace in 14 months in December.


(Editing by Bernadette Baum)



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Chinese Court Said to Punish Tibetan Students with Prison Terms





BEIJING — A Chinese court has sentenced eight Tibetan students to prison for their role in street protests last month that unnerved security forces already coping with a wave of self-immolations, many of them by young people who have become increasingly radicalized in their opposition to Chinese policies in the region, a Washington-based advocacy group reported on Wednesday.




According to the group, the International Campaign for Tibet, the students, from a predominantly Tibetan part of Qinghai Province, were sentenced to five-year terms on Dec. 5 for organizing demonstrations in response to government booklets that vilified the self-immolators and disparaged the Dalai Lama, Tibet’s exiled spiritual leader.


The group said news of the verdicts was based on a Tibetan exile with contacts in the region. Local government officials reached by telephone on Thursday declined to comment.


Word of the trials and convictions comes amid a growing crisis for Beijing as it tries to stop the surge in self-immolations that began more than two years ago. So far, nearly 100 people in Tibetan areas of the country have set themselves on fire, nearly a third of them since November. The majority have been in their teens and 20s.


The authorities have responded harshly, locking down some monasteries, requiring Buddhist monks to attend “political education” classes and issuing new regulations that criminalize any act seen as encouraging the protests. Earlier this week, the official Xinhua news agency said a Tibetan monk and his nephew had been detained for their role in eight self-immolations.


The student demonstrations in Tsolho Prefecture, known in Chinese as Hainan, began late last month after the authorities distributed the pamphlets. Infuriated by several passages, students from the Tsolho Professional Training School marched to a government building chanting slogans that called for “freedom” and Tibetan language rights, according to Radio Free Asia.


At one point, some protesters burned the pamphlets, drawing a violent response from paramilitary police who arrested a number of participants. “They beat up the students, hurled tear gas at them and there was also some kind of explosive used on the student crowd,” according to an account published by Radio Free Asia, quoting a local source. More than 20 students were injured, several critically, the report said.


Although the literature was designed in part to convince local students to support bilingual education, it also took aim at the Dalai Lama, calling him a “political itinerant who wants to split the Chinese Motherland.” It also described the self-immolators as puppets controlled by “foreign imperialist forces.”


Kate Saunders, communications director for the International Campaign for Tibet, said such protests, including a series of student-led demonstrations last month in a nearby city, Rebkong, underscored the intense antipathy young people feel toward Chinese educational policies, which often emphasize Mandarin over Tibetan.


“This is a new political moment in Tibet, with a new generation prepared to directly confront the authorities despite the risks,” Ms. Saunders said. “But it seems the authorities have no strategy other than oppression and as we can see it is not working.”


She said that at least 18 students from the school remained in police custody in addition to three monks who have been accused of sending news of the protests to the outside world.


Mia Li contributed research



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Stephen Fishbach Blogs About Lisa Whelchel's End-Game Survivor Strategy






Survivor










12/13/2012 at 11:45 AM EST







Stephen Fishbach and Lisa Whelchel


Monty Brinton/CBS (2)


"You're going to want to show that either you were the top villain or the top hero or the top something. You're going to want to show you had the gameplay to get you there, and you even turned on your own to get you there. That is the game."
– Rupert Boneham, Survivor: Heroes vs. Villains

Oh, Lisa. I don't know why week to week I let you toy with my heart the way you do.

Almost every episode, Lisa announces her Survivor coming-out. She's been passive – but she's finally ready to take control of her destiny and make a big move. Tonight. Seriously. Right now.

Except it never quite comes together. The wrong person wins immunity or the right person makes a heartfelt appeal. "I could've played a great game," Lisa told her brother last week, channeling Marlon Brando in On The Waterfront.

Lisa's excuse for not voting out Denise is that she's thinking about whom she wants to sit next to at the final tribal. And I know how hard those last few days can be.

The challenge of the end-game is that group decision-making gets shunted aside for individual decision-making. You need to think about what's best for you, not what's best for your alliance. Your erstwhile allies are making the same calculations.

Every tiny decision has impossibly complex repercussions. Skupin says it best: "Everything matters so much when you get down to the end game like this. And you have to consider every scenario if you want to come out on top."

Just track Lisa's thought process. She wants to sit at the end with Abi. But if she keeps Abi instead of Denise this week, Malcolm will be likelier to take Abi instead of her next week, because Denise is more threatening to Malcolm. Malcolm and Denise are likely to turn on each other, as they're each other's biggest competition for jury votes. So by keeping Denise, Lisa basically ensures that she and Skupin will make the finals. Get all that?

The problem with Lisa's thinking is that she's devised a foolproof plan to get to the end – and a foolproof plan to lose. Sure, either Denise or Malcolm will be gone. But then the other one will still be there to rake in the million. So Lisa and Skupin are guaranteed to make final tribal ... along with someone who's sure to beat them.

Lisa wins an anti-Fishy for her inaction. By taking out Denise, Lisa could give herself at least a shot of making it to the final three with Abi, and without a jury threat.

She might actually have been a contender.

Rupert Boneham on Survivor Juries
I asked America's favorite player, Rupert Boneham, for his insight into what the jurors are thinking while they contemplate who to crown Sole Survivor. Rupert has served on more juries than any other contestants – on Pearl Islands, All Stars and Heroes vs. Villains. He recently ran for governor in Indiana; now, he's once again mentoring Rupert's Kids.

Do juries have a favorite going in?
Almost everyone in the jury goes in with the idea of who they hate least. It's usually not a favorite as much as who you are least mad at.

Does the final tribal actually change the vote?Final tribal can change jury members' votes. I've seen it work both ways. If you are good at explaining why you did what you did in the game, I have seen jury members change their opinion about you in the middle of tribal council. The same way, when you are pitiful at answering questions, I have seen people lose votes for their answers.

Do jurors affect each others' opinions at Ponderosa?
At the Ponderosa, you are able to talk and interact with each other. But, when you start trying to influence votes, you can be sequestered in your own little area away from everyone else. The producers don't actively police the jury, but will respond to complaints.

Note: Other jurors dispute the Ponderosa sequester.

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Dozens sue pharmacy, but compensation uncertain


NASHVILLE, Tenn. (AP) — Dennis O'Brien rubs his head as he details ailments triggered by the fungal meningitis he developed after a series of steroid shots in his neck: nausea, vomiting, dizziness, drowsiness, blurred vision, exhaustion and trouble with his speech and attention.


He estimates the disease has cost him and his wife thousands of dollars in out-of-pocket expenses and her lost wages, including time spent on 6-hour round trip weekly visits to the hospital. They've filed a lawsuit seeking $4 million in damages from the Massachusetts pharmacy that supplied the steroid injections, but it could take years for them to get any money back and they may never get enough to cover their expenses. The same is true for dozens of others who have sued the New England Compounding Center.


"I don't have a life anymore. My life is a meningitis life," the 59-year-old former school teacher said, adding that he's grateful he survived.


His is one of at least 50 federal lawsuits in nine states that have been filed against NECC, and more are being filed in state courts every day. More than 500 people have gotten sick after receiving injections prepared by the pharmacy.


The lawsuits allege that NECC negligently produced a defective and dangerous product and seek millions to repay families for the death of spouses, physically painful recoveries, lost wages and mental and emotional suffering. Thirty-seven people have died in the outbreak.


"The truth is the chance of recovering damages from NECC is extremely low," said John Day, a Nashville attorney who represents several patients who have been sickened by fungal meningitis.


To streamline the process, attorneys on both sides are asking to have a single judge preside over the pretrial and discovery phases for all of the federal lawsuits.


This approach, called multidistrict litigation, would prevent inconsistent pretrial rulings and conserve resources of all parties. But unlike a class-action case, those lawsuits would eventually be returned to judges in their original district for trial, according to Brian Fitzpatrick, a law professor at Vanderbilt University Law School in Nashville.


Even with this approach, Fitzpatrick noted that federal litigation is very slow, and gathering all the evidence, records and depositions during the discovery phase could take months or years.


"Most of the time what happens is once they are consolidated for pretrial proceedings, there is a settlement, a global settlement between all the lawyers and the defendants before anything is shipped back for trial," he said.


A lawyer representing NECC, Frederick H. Fern, described the consolidation process as an important step.


"A Boston venue is probably the best scenario," Fern said in an email. "That's where the parties, witnesses and documents are located, and where the acts subject to these complaints occurred."


Complicating efforts to recover damages, attorneys for the patients said, NECC is a small private company that has now recalled all its products and laid off its workers. The company's pharmacy licenses have been surrendered, and it's unclear whether NECC had adequate liability insurance.


Fern said NECC has insurance, but they were still determining what the policy covers.


But Day says, "It's clear to me that at the end of the day, NECC is not going to have sufficient assets to compensate any of these people, not even 1 percent."


As a result, many attorneys are seeking compensation from other parties. Among the additional defendants named in lawsuits are NECC pharmacist and co-founder Barry Cadden; co-founder Greg Conigliaro; sister company Ameridose and its marketing and support arm, Medical Sales Management.


Founded in 2006 by Cadden and Conigliaro, Ameridose would eventually report annual revenue of $100 million. An NECC spokesman didn't respond to a request for the pharmacy's revenue.


While Federal Drug Administration regulators have also found contamination issues at Westborough, Mass.-based Ameridose, the FDA has said it has not connected Ameridose drugs to infection or illness.


Under tort law, a lawsuit has to prove a defendant has a potential liability, which in this case could be anyone involved in the medical procedure. However, any such suit could take years and ultimately may not be successful.


"I would not be surprised if doctors, hospitals, people that actually injected the drugs, the people that bought the drugs from the compounding company, many of those people will also be sued," said Fitzpatrick.


Plaintiffs' attorneys said they're considering that option but want more information on the relationships between the compounding pharmacy and the hundreds of hospitals and clinics that received its products.


Day, the attorney in Tennessee, said the clinics and doctors that purchase their drugs from compounding pharmacies or manufacturers could be held liable for negligence because they are in a better position to determine the safety of the medicine than the patients.


"Did they use due care in determining from whom to buy these drugs?" Day said.


Terry Dawes, a Michigan attorney who has filed at least 10 federal lawsuits in the case, said in traditional product liability cases, a pharmaceutical distributor could be liable.


"We are looking at any conceivable sources of recovery for our clients including pharmaceutical supply places that may have dealt with this company in the past," he said.


Ten years ago, seven fungal meningitis illnesses and deaths were linked to injectable steroid from a South Carolina compounding pharmacy. That resulted in fewer than a dozen lawsuits, a scale much smaller than the litigations mounting up against NECC.


Two companies that insured the South Carolina pharmacy and its operators tried unsuccessfully to deny payouts. An appellate court ruled against their argument that the pharmacy willfully violated state regulations by making multiple vials of the drug without specific prescriptions, but the opinion was unpublished and doesn't set a precedent for the current litigation.


The lawsuits represent a way for patients and their families recover expenses, but also to hold the pharmacy and others accountable for the incalculable emotional and physical toll of the disease.


A binder of snapshots shows what life is like in the O'Briens' rural Fentress County, Tenn., home: Dennis hooked up to an IV, Dennis in an antibiotics stupor, bruises on his body from injections and blood tests. He's had three spinal taps. His 11-day stay in the hospital cost over $100,000, which was covered by health insurance.


His wife said she sometimes quietly checks at night to see whether her husband of 35 years is still breathing.


"In my mind, I thought we were going to fight this and get over it. But we are not ever going to get over it," said Kaye O'Brien.


Marjorie Norwood, a 59-year-old grandmother of three who lives in Ethridge, Tenn., has spent just shy of two months total in the hospital in Nashville battling fungal meningitis after receiving a steroid injection in her back. She was allowed to come home for almost a week around Thanksgiving, but was readmitted after her symptoms worsened.


Family members are still dealing with much uncertainty about her recovery, but they have not filed a lawsuit, said their attorney Mark Chalos. He said Norwood will likely be sent to a rehabilitation facility after her second stay in the hospital rather than return home again.


Marjorie Norwood's husband, an autoworker, has taken time off work to care for her and they depend on his income and insurance.


"It doesn't just change her life, it changes everyone else's life around her because we care about her and want her to be happy and well and have everything that she needs," said her daughter, Melanie Norwood.


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Wall Street little changed as caution tempers data

NEW YORK (Reuters) - Stocks opened little changed on Thursday after data showed first time claims for jobless benefits fell sharply last week, but investors were cautious about making aggressive bets in the midst of ongoing "fiscal cliff" negotiations.


Shares of Best Buy Co surged almost 18 percent after a report that the company's founder is expected to make a fully financed offer to buy the consumer electronics retailer by the end of the week. Best Buy was up 17.9 percent at $14.36, making it the biggest gainer on the S&P 500.


Other economic data on Thursday showed retail sales rose in November after an October decline, brightening the picture for consumer spending.


Still, equities gains were constrained as the set of tax hikes and spending cuts that are set to come into effect in the new year remained at the forefront of investors' minds. Negotiators on Wednesday warned the showdown over reaching a deal on the so-called fiscal cliff could drag on past Christmas.


"With the suggestion that they're not any closer than they were a few days ago, we're really just in a market that's trying to figure out what the next catalyst might be," said Kate Warne, investment strategist at Edward Jones in St Louis.


"I think we need to see either an actual plan or signs that they've worked out a way to be sure they don't end up disagreeing at the last minute. Either of those would be positive, but so far we're not seeing anything that suggests either one."


The Federal Reserve on Wednesday announced a fresh bout of stimulus for the U.S. economy, but markets focused on comments from Chairman Ben Bernanke, who reiterated that monetary policy would not be enough to offset going over the fiscal cliff.


Investors are worried that doing so could send the economy back into recession, though most expect a deal will be struck eventually.


The Dow Jones industrial average <.dji> inched up 2.11 points, or 0.02 percent, at 13,247.56. The Standard & Poor's 500 Index <.spx> edged down 0.56 point, or 0.04 percent, at 1,427.92. The Nasdaq Composite Index <.ixic> eased 2.51 points, or 0.08 percent, to 3,011.31.


If the S&P 500 ends the session lower, it would break a six-day winning streak. Some of those days saw only slight gains on lower volume.


In the European Union, finance ministers reached a deal to make the European Central Bank the bloc's top banking supervisor. The move could boost confidence in leaders' ability to tackle the region's sovereign debt crisis.


Initial claims for state unemployment benefits dropped 29,000 to a seasonally adjusted 343,000, pointing to healing in the labor market.


Separate reports released at the same time showed producer prices fell more than expected in November, while retail sales rebounded though not by as much as expected.


CVS Caremark Corp gained 3.4 percent to $49.16 after it said it expects higher earnings next year.


(Editing by Kenneth Barry)



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