IHT Rendezvous: Adding More Bricks to the Great Firewall of China

HONG KONG — China appears to have reinforced its Internet firewall in recent days, blocking some of the leading services that allow people on the mainland to access forbidden sites like Twitter, Facebook and YouTube.

International business transactions also are being affected, Internet analysts said. The New York Times Web site remains 100 percent blocked on the mainland, along with the Chinese-language edition of The Times and Rendezvous.

At least three foreign companies — Astrill, WiTopia and StrongVPN — have apologized to customers whose virtual private networks, or VPNs, have been slowed or disabled. VPNs are used to circumvent the Communist government’s firewall. The companies, meanwhile, were suggesting some work-arounds.

The daily newspaper Global Times, affiliated with the Communist Party, acknowledged the firewall had been “upgraded,” but it also warned that foreign providers of VPN services were operating illegally.

China blocks online searches of politically sensitive terms, smothers embarrassing news events, blocks online messages from dissidents and simply deletes any microblog posts that it dislikes.

The firewall also blocks countless Web sites that are openly available to users elsewhere around the world — from pornography sites and commercial come-ons to news reporting, political activism and religious proselytizing. Users on the mainland thus have to use VPNs to reach the banned sites.

Liu Xiao Ming, the Chinese ambassador to Britain, told the BBC on Friday that there was “a misconception about the Internet and development in China.”

“In fact, the Chinese are very much open in terms of the Internet,” he said, quoted in an article in The South China Morning Post. “In fact, we have the most number of Internet users in China today.”

An estimated 600 million Chinese have access to the Internet.

Foreign businesses also use VPNs not only to safeguard their transactions but also to keep government censors and rival companies from seeing their corporate communications.

Global Times quoted an anonymous executive at a foreign technology company operating in China who said the lack of a VPN would damage the firm’s operations.

Josh Ong, China editor of the tech monitoring site The Next Web, said in an interview with the Voice of America that international companies were reporting disruptions in their corporate VPN services.

“A lot of companies have a general policy that they must use their own proxy network in order to transfer data, especially into and out of China,” Mr. Ong said. “So you are looking at banks or e-commerce companies, anyone who is transferring very sensitive information, a lot of them use corporate VPNs.”

Mr. Ong suggested that the tightening of the firewall could be tied to the recent leadership change in the Chinese Communist Party.

“It is certainly possible that some of it is just a general flexing of might, kind of coming in with a strong arm to really show who’s in control,” he said. “But there is definitely something intentional happening when these VPN services are being restricted.”

As Bill Bishop wrote recently on DealBook, China’s management of the Internet “has not been encouraging for those who want to believe the leadership will push reforms.”

“I have lived in Beijing since 2005, and these have been the most draconian few days of Internet restrictions I have experienced,” he said last month.

“Indiscriminate blocking of major parts of the global Internet is not going to help China in its quest to internationalize the renminbi and make it a reserve currency,” Bill said. “Internet controls at the level of the last few days may also deter foreign firms from moving their regional headquarters to China.”

Barbara Demick of The Los Angeles Times bureau in Beijing offered this cautionary tweet:

My colleagues Sharon LaFraniere and David Barboza wrote about similar concerns over China’s Internet censorship last year, and they spoke to Duncan Clark, chairman of BDA China, an investment and strategy consultancy based in Beijing.

“It has been double the guard, and double the guard, and you never hear proclamations about things being relaxed,” said Mr. Clark, a 17-year resident of China. “We have never seen this level of control in the time I have been here, and I have been here since the beginning of the Internet.”

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Without an ‘iTV,’ Apple’s growth could shrink to the single digits by 2015

Another analyst believes that Apple is losing its shine. Toni Sacconaghi of Bernstein Research on Thursday trimmed his price target for the company, citing concerns that growth may be slowing. The analyst believes that iPhone sales will remain strong for at least the next two years, however Apple (AAPL) is expected to lose overall market share “if it does not bring out a lower-price device” in the wake of a changing industry. Sacconaghi notes that the iPad should continue to see success in a tablet market that is “a rocket…an absolute juggernaut,” with tablet PC shipments estimated to more than triple over the next five years. It is believed, however, that Apple will likely become a single digit growth company by 2015, unless it releases a new major product such as an HDTV.

[More from BGR: RIM’s biggest problem: It’s still scrambling to catch yesterday’s hottest mobile app]

“That said, it will have a pristine balance sheet, and be generating a mind-boggling $ 49 billion in free cash flow a year after paying its current dividend,” Sacconaghi wrote in a note to investors, according to Forbes. “More importantly, we believe that Apple’s innovation offers significant option value, which is not in our forecast. Three years ago, the iPad did not exist. Today it generates $ 32 billon in annual revenues, and as a standalone business would be the 11th biggest U.S. tech company. Potential ‘options’ for Apple investors include a lower-end iPhone, a television ‘solution,’ a larger iPad or converged device and monetizing advertising, e-commerce and search from its iOS platform (and credit card database) of 435 million users.”

[More from BGR: WhatsApp goes free for iPhone for a limited time]

The analyst kept his Outperform rating on shares of Apple, although he trimmed his price target from $ 800 to $ 750 and lowered his 2013 fiscal year EPS forecast to $ 49.41 per share, from $ 50.57.

This article was originally published by BGR

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Sip This! Try This Naughty Hot Chocolate for Christmas

By Alison Schwartz

12/23/2012 at 10:15 AM EST

Santa’s Naughty Hot Chocolate

Courtesy Bailey's

There's nothing all that hot about winter (mainly because these guys are wearing sweaters).

But Brooke Parkhurst and James Briscione, the chefs behind newlywed kitchen guide Just Married and Cooking, are changing that one sip at a time.

Whip up their adult spin on a cup of hot cocoa, which would only taste better if you were drinking it with one of the aforementioned shirtless guys.

Santa's Naughty Hot Chocolate

Serves 2

• 8 oz. almond milk
• 3 tbsp. cocoa powder
• 2 tsp. sugar
• 6 oz. hazelnut liqueur (recipe recommends Baileys hazelnut liqueur)
• 1 oz. chocolate vodka (recipe recommends Godiva chocolate-infused vodka)

Combine the almond milk, cocoa powder and sugar in a sauce pot. Bring the mixture to a simmer, and whisk to dissolve the cocoa. Stir in the liqueur and vodka, and then remove from the heat. Pour into two glasses or mugs, and garnish with marshmallow skewers.

Marshmallow Skewers

• 2 large marshmallows
• Pinch of ground cinnamon, cocoa powder and/or espresso powder
Cut the marshmallows crosswise into three equal-sized disks. Dust each piece with cinnamon, cocoa or espresso powder. Arrange the marshmallow pieces on a skewer, with the cut sides facing out. Garnish drinks with skewers and enjoy!

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Predicting who's at risk for violence isn't easy

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

___

Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

Read More..

Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.

A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.

Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.

Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.

"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.

"The markets still basically believe that something will be done," he said.

If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.

For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.

Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.

IT COULD GET A LITTLE CRAZY

Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.

If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.

"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.

"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."

Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.

Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.

"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.

"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."

Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.

The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.

Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.

U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)

(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Taliban Claim Role in Attack That Kills Pakistan Politician

PESHAWAR, Pakistan — The Pakistani Taliban claimed responsibility on Saturday for a suicide bomb attack that killed a senior politician in northwest Pakistan who was one of the group’s most vocal critics. At least eight other people were killed in the attack and more than 15 others were wounded, senior government officials and doctors at a local hospital said.

The politician, Bashir Ahmad Bilour, was a senior minister in the northwestern Khyber-Pakhtunkhwa Province, where the Taliban have a strong presence. Mr. Bilour was long on the target list of the Tehrik-i-Taliban Pakistan, an umbrella organization of the Pakistani militant groups, for publicly denouncing them and challenging their violent policies.

Mr. Bilour was coming out of a meeting of his Pashtun nationalist Awami National Party in the provincial capital of Peshawar, when the suicide bomber blew himself up, said the secretary of home and tribal affairs, Azam Khan.

Mr. Bilour had been taken to the hospital in critical condition, said Dr. Arshad Javed, chief executive of the city’s Lady Reading Hospital.

Among those killed were Mr. Bilour’s secretary and a police officer, Mr. Khan said.

The provincial information minister, Mian Iftikhar Hussain, called for immediate action against militants in the nearby tribal region of North Waziristan, the safest haven for militants in Pakistan, saying it was time to take action against all militants. “Let there be no difference between good Taliban and bad Taliban,” he said.

A security analyst, Asad Munir, a retired brigadier, said the attack would further complicate campaigning in Khyber-Pakhtunkhwa Province for a national election expected next year. He said that secular, liberal and nationalist parties would have a difficult time because they are on the Taliban hit list, and that, “Religious parties will take advantage of the situation.”

Also on Saturday, police officials in the southern province of Sindh said that a mob had tortured and killed a man accused of burning the Koran, the latest in a series of violent episodes in Pakistan stemming from allegations of blasphemy.

The killing occurred Friday in Seeta, a remote village in the Dadu district in southern Sindh Province. The village’s head cleric, Usman Memon, said charred remnants of the Koran had been found in the mosque that morning, and that the victim had been staying at the mosque alone. It is common for impoverished travelers and religious proselytizers to stay at mosques while traveling.

The man, whose name was not known, was handed over to the police and accused of violating Pakistan’s blasphemy laws, Mr. Memon said.

But as news of the episode spread later on Friday, an angry crowd gathered outside the police station and eventually forced its way in. The man was dragged out, tortured and killed, and his body was set on fire, according to the police.

Usman Ghani, the district’s senior police superintendent, said that he had suspended the official in charge of the police station and filed administrative charges against seven other officers for negligence.

He said that charges had been filed against 1,000 people believed to have participated in the mob action and that 150 people had been arrested.

Little was known about the victim or what motive he was thought to have had for burning the Koran, if he did so. Cases of violence arising from blasphemy accusations appear to be on the rise in Pakistan. Human rights groups have said that most of those victimized are members of religious minorities, particularly Christians, but Muslims are sometimes accused.

In a case similar to Friday’s, a mentally disabled man was beaten and burned to death in Punjab Province in July, also after an angry crowd broke into a police station.

Blasphemy is a capital crime in Pakistan, and it is a highly delicate and emotional issue for the deeply conservative country. Calls for repealing or revising the blasphemy laws have met with strong resistance from religious leaders, who have organized large protests against efforts to amend them. Two prominent advocates of changing the laws were assassinated last year.

Ismail Khan reported from Peshawar, and Salman Masood from Islamabad, Pakistan. Zia ur-Rehman contributed reporting from Karachi, Pakistan.

Read More..

Erin Burnett Weds in N.Y.C

By Sharon Cotliar

12/22/2012 at 11:45 AM EST

Erin Burnett and David Rubulotta

Courtesy of David Gordon

Breaking news: CNN'S Erin Burnett is a married woman!

The 36-year-old anchor married David Rubulotta, 42, a managing director at Citigroup, in a ceremony at City Hall on Friday that was officiated by a Justice of the Peace.

The bride donned a red dress to the ceremony, a departure from what she told PEOPLE she planned to wear.

"We're very casual. I love how at City Hall people come in everything from wedding gowns to jeans. It's so mellow and chill, just how we like it," she said.

Later, for their reception at Atlantic Grill, the bride changed into a gold, floor-length beaded gown by Carmen Marc Valvo couture. And the couple entered to Frank Sinatra's "New York, New York."

As for the party, Burnett planned it herself, and she included many holiday-themed touches such as a classical guitarist playing Christmas carols. "Christmas is our favorite time of year," Burnett said. "We thought it would be the perfect time to get married."

"I was overflowing with joy to have those I love together," she said of the reception.

The couple met on a blind date eight years ago. Burnett recalled that when she walked into the restaurant and saw Rubulotta, she thought, "I hope that's him."

In September, they announced their engagement just as Burnett revealed her latest CNN show, Erin Burnett OutFront.

Read More..

Predicting who's at risk for violence isn't easy

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

___

Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

Read More..

Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.

A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.

Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.

Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.

"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.

"The markets still basically believe that something will be done," he said.

If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.

For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.

Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.

IT COULD GET A LITTLE CRAZY

Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.

If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.

"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.

"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."

Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.

Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.

"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.

"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."

Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.

The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.

Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.

U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)

(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

Read More..

Kerry Is Pick for Secretary of State, Official Says

WASHINGTON — President Obama plans to nominate Senator John Kerry of Massachusetts as secretary of state, a senior administration official said. He would succeed Hillary Rodham Clinton and become the first member of Mr. Obama’s second-term national security team.

Brendan Hoffman for The New York Times

Senator John Kerry during a hearing last week in Washington.

The appointment of Mr. Kerry, a Massachusetts Democrat and his party’s former presidential nominee in 2004, has been widely expected since last week, when Susan E. Rice, the ambassador to the United Nations, asked Mr. Obama to withdraw her candidacy for the post.

Ms. Rice had come under weeks of attack from Republicans in Congress over her role in the aftermath of the deadly attack on the United States mission in Benghazi, Libya. Mr. Kerry, as chairman of the Senate Foreign Relations Committee, oversaw a hearing on Benghazi on Thursday, at which the State Department came under renewed criticism for its failure to respond to requests for additional security in Libya.

The decision by Mr. Obama, expected to be announced early Friday afternoon, comes at a time when Mrs. Clinton has been recovering from a concussion suffered earlier this month. Mrs. Clinton, who has long said she would leave the post after Mr. Obama’s first term, is not expected to attend the announcement.

An elder of the Democratic foreign-policy establishment, Mr. Kerry, 69, has long coveted the job of secretary of state. He built close ties to Mr. Obama, giving him the keynote speech assignment that helped begin his national political career at the Democratic convention in 2004 and becoming an early Senate supporter of Mr. Obama’s presidential run.

Mr. Kerry has carried out several diplomatic missions for the Obama administration, helping to persuade President Hamid Karzai of Afghanistan to agree to a runoff election in 2009. Early in the administration, he also tried to engage President Bashar al-Assad of Syria, who has waged a brutal crackdown on his own people as he fights to cling to power.

President Obama does not intend to name a new secretary of defense or director of the Central Intelligence Agency on Friday, an official said.

One of the front-runners for the Pentagon post, former Senator Chuck Hagel, is fighting off a series of criticisms of his record, not unlike the campaign that dogged Ms. Rice. The White House has defended Mr. Hagel, though officials said on Thursday that Mr. Obama had not yet decided whom to nominate for that post.

The contest for C.I.A. has come down to two names: Michael J. Morrell, the current acting director, and John O. Brennan, the president’s counterterrorism adviser.

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