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. This 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.


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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Syrian rebels fight for strategic town in Hama province


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


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


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


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


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


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


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


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


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


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


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


SECTARIAN FEARS


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


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


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


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


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


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


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


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


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


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


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


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


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


LEBANON BORDER POST TAKEN


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


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


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


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


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


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


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


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


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


(Reporting by Erika Solomon; Editing by Andrew Osborn)



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Video game shares down in wake of shooting






LOS ANGELES (AP) — Shares of video game makers and sellers fell Thursday in the aftermath of a mass shooting at a Connecticut elementary school, which has renewed debate about violent games and their potential influence on crime.


Shares of GameStop Corp., whose stores sell video games as well as systems like the Xbox and Wii, fell 5 percent in afternoon trading.






Investors are seen as being increasingly concerned that the government may impose tougher rules on the sales of games rated for “mature” and older audiences.


Investors may be worried that parents will also avoid buying first-person shooter games like “Call of Duty: Black Ops 2″ after the tragedy Friday morning at Sandy Hook Elementary, in which 20 children and six adults were shot and killed by 20-year-old Adam Lanza.


“Maybe there will be more stringent efforts to make sure youth are not playing games that they’re not old enough to play,” said Mike Hickey, an analyst with National Alliance Securities. “Maybe there will be a greater effort by parents in managing the content their kids are playing.”


Shares of companies involved in the video game industry, many of which had been dropping since the shooting, declined further Thursday.


GameStop stock lost $ 1.37, or 5 percent, to $ 26.18. Shares have barely changed since last Thursday’s close, the day before the shooting, to Wednesday’s close.


— Shares of Activision Blizzard Inc., the publisher of “Call of Duty: Black Ops 2,” fell 9 cents to $ 10.70. The stock had already dropped 5.6 percent.


Electronic Arts Inc. shares fell 41 cents, or 2.9 percent, to $ 13.99. Shares had dropped 5.6 percent.


— Take-Two Interactive Software Inc. shares slipped 29 cents, or 2.5 percent, to $ 11.69. The stock had dropped 8 percent.


The declines came as broader markets rose. The Dow Jones industrial average was up 0.3 percent at 13,295.


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Danielle Fishel Graduates College















12/20/2012 at 06:00 PM EST



Danielle Fishel has successfully taken on more this year than just the comical role of Lindsay Lohan playing Elizabeth Taylor.

The upcoming Girl Meets World star, 31, announced on Wednesday that she is "super proud" to be done with college!

"I'm officially a college graduate," she wrote on her Tumblr, explaining that she decided to go back to school four years ago, despite initial hesitation.

"I was too afraid of being the old lady in class – of being whispered about and especially of not remembering how to do simple math equations," she wrote. "After my 27th birthday, I made the decision to stop letting fear be a factor in fulfilling my dreams and living the life I wanted."

Although she admits some of her biggest fears of going back to school came true, in the end, she reached one of her "proudest achievements in life," explaining, "You will lose a lot of social time (shout outs to all my friends I've barely seen in the last four years!) and you will wonder why you decided to do this whole school thing again. But you will gain so much more in the long run."

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AP IMPACT: Steroids loom in major-college football


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


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


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


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


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


___


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


___


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


Doping is a bigger deal at some schools than others.


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


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


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


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


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


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


___


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


___


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


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


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Wall Street bounces back on hope for "cliff' solution

NEW YORK (Reuters) - U.S. stocks rebounded from early losses on Thursday after Republican House Speaker John Boehner said he would keep working on a solution to the "fiscal cliff" while also slamming President Barack Obama's approach to budget talks.


NYSE Euronext was the S&P 500's biggest gainer, surging 34 percent to $32.25 after IntercontinentalExchange Inc said it would buy the operator of the New York Stock Exchange for $8.2 billion.


ICE shares shot up 1.4 percent to $130.10.


Republicans in the U.S. House of Representatives pushed ahead with their own plan to avoid a series of steep tax hikes and spending cuts due in early 2013, complicating negotiations with the White House. Obama has vowed to veto the plan.


Investors have hoped for an agreement soon between policymakers, but progress has been slow. Boehner said he expected to continue to work with Obama, but repeated his charge that the president and Senate Democrats were trying to "slow walk" the country over the fiscal cliff.


"Speaker Boehner went on the air and basically told us he doesn't like what the president's doing or not doing, and the markets rallied on that, which was kind of weird," said Stephen Guilfoyle, a trader at Meridian Equity Partners, in New York.


The Dow Jones industrial average <.dji> gained 59.75 points, or 0.45 percent, to 13,311.72 at the close. The S&P 500 <.spx> rose 7.88 points, or 0.55 percent, to 1,443.69. The Nasdaq Composite <.ixic> climbed 6.02 points, or 0.20 percent, to 3,050.39.


Stocks rallied earlier in the week on signs of progress in the fiscal cliff negotiations. But with the S&P 500 up 14.8 percent so far this year, investors are taking the opportunity to engage in some hedging as 2012 comes to a close.


Herbalife lost 9.6 percent to $33.74 following news that hedge fund manager Bill Ackman was betting against the company as part of his big end-of-the-year short.


The S&P Financial Index <.gspf> gained 1.4 percent.


The U.S. economy grew 3.1 percent in the third quarter, faster than previously estimated, while the number of Americans filing new claims for jobless benefits rose more than expected in the latest week.


Existing home sales jumped 5.9 percent in November, more than expected, and by the fastest monthly pace in three years. An index of housing shares <.hgx> gained 0.78 percent.


But KB Home slid 6.4 percent to $15.60 as the company reported higher homebuilding costs and expenses in the fourth quarter.


About 6.4 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, roughly in line with the daily average so far this year of about 6.46 billion shares.


On the NYSE, advancers outnumbered decliners by a ratio of about 2 to 1. On the Nasdaq, five stocks rose for every three that fell.


(Additional reporting by Ryan Vlastelica and Leah Schnurr; Editing by Jan Paschal)



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U.S. State Dept officials resign under pressure over Benghazi killings


WASHINGTON (Reuters) - Three senior U.S. State Department officials were asked to resign after an official inquiry harshly criticized their offices for failing to provide adequate security at the U.S. mission in Benghazi, Libya, before it came under attack in September, a U.S. official said on Wednesday.


The official, who spoke on condition of anonymity, said Eric Boswell, the assistant secretary for diplomatic security; one of his deputies, Charlene Lamb; and an unnamed official in the Bureau of Near Eastern Affairs were asked to step down because of the inquiry panel's report, which did not fault Secretary of State Hillary Clinton in connection with the attack.


State Department officials declined to comment on the matter, saying it was a personnel issue. The Associated Press first reported that the three officials had resigned.


An unclassified version of the report released Tuesday by the State Department concluded that the mission was completely unprepared to deal with a September 11 attack that killed U.S. Ambassador Chris Stevens and three other Americans.


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


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


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


The report by the Accountability Review Board probing the attack and comments by its two lead authors suggested that Clinton, who accepted responsibility for the incident, would not be held personally culpable.


"The secretary of state has been very clear about taking responsibility here, (yet) it was from my perspective not reasonable in terms of her having a specific level of knowledge," said Mullen, the former chairman of the U.S. Joint Chiefs of Staff.


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


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


"GROSSLY INADEQUATE"


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


The scathing report could tarnish Clinton's four-year tenure as secretary of state, which has seen her consistently rated as the most popular member of President Barack Obama's Cabinet.


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


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


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


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


Others, however, kept up their criticism of the administration and called for Clinton to testify as soon as she is able.


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


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


"I do think it's imperative for all concerned that she testify in an open session prior to any changing of the regime," Corker said.


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


The report concluded that there was no such protest.


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


(Additional reporting by Tabassum Zakaria and Susan Cornwell; Editing by Doina Chiacu and Philip Barbara)



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Changes in law aim to protect kids’ online data






WASHINGTON (AP) — Aiming to prevent companies from exploiting online information about children under 13, the Obama administration on Wednesday imposed sweeping changes in regulations designed to protect a young generation with easy access to the Internet.


Two years in the making, the amended rules to the decade-old Children’s Online Privacy Protection Act go into effect in July. Privacy advocates said the changes were long overdue in an era of cellphones, tablets, social networking services and online stores with cellphone apps aimed at kids for as little as 99 cents.






Siphoning details of children’s personal lives — their physical location, contact information, names of friends and more — from their Internet activities can be highly valuable to advertisers, marketers and data brokers.


The Obama administration has largely refrained from issuing regulations that might stifle growth in the technology industry, one of the U.S. economy’s brightest spots. Yet the Federal Trade Commission pressed ahead with the new kids’ privacy guidelines despite loud complaints — particularly from small businesses and software apps developers — that the revisions would be too costly to comply with and cause responsible companies to abandon the children’s marketplace.


As evidence of online risks, the FTC last week said it was investigating an unspecified number of software developers that may have illegally gathered information without the consent of parents.


Under the changes to the law, known as COPPA, information about children that cannot be collected unless a parent first gives permission now includes the location data that a cellphone generates, as well as photos, videos and audio files containing a human image or voice.


The Congressional Bipartisan Privacy Caucus commended the FTC for writing the new rules. “Keeping kids safe on the Internet is as important as ensuring their safety in schools, in homes, in cars,” caucus co-chairman Rep. Edward Markey, D-Mass., said at a Capitol Hill news conference.


Data known as “persistent identifiers,” which allow a person to be tracked over time and across websites, are also considered personal data and covered by the rules, the agency said. But parental consent is not required when a website operator collects this data solely to support its internal operations, which can include advertising, site analysis and network communications.


The rules offer several new methods for verifying a parent’s consent, including electronically scanned consent forms, video conferencing and email.


The FTC sought to achieve a balance between protecting kids and spurring innovation in the technology industry, said Jon Leibowitz, the agency’s chairman.


The final rules expand the definition of a website or online service directed at children to include plug-ins and advertising networks that collect personal information from kids.


But the rules were also tightened in a way favorable to some Internet heavyweights, Google and Apple. Their online apps stores, which dominate the marketplace for mobile applications, won’t be held liable for violations because they “merely offer the public access to child-directed apps,” the FTC said.


Google and Apple had warned that if the rule were written to include their stores, they would jettison many apps specifically intended for kids. They said that would hurt the nation’s classrooms, where new and interactive apps are used by teachers and students.


A Washington trade group that represents independent apps developers criticized the agency for addressing the concerns of large businesses while doing too little for the startups that make educational apps parents and teachers want. The FTC’s belief that the apps industry will figure out how to thrive under the new rules is akin to jumping off a cliff then building a parachute, said Morgan Reed, executive director of the Association for Competitive Technology.


“While that may work for big companies, small companies lack the silk and line to build that parachute before they hit the ground,” Reed said.


Companies are not excluded from advertising on websites directed at children, allowing business models that rely on advertising to continue, Leibowitz said. But behavioral marketing techniques that target children are prohibited unless a parent agrees. “You may not track children to build massive profiles,” he said.


The agency included in the rules new methods for securing verifiable consent after the software industry and Internet companies raised concerns over how to confirm that the permission actually came from a parent. Electronic scans of signed consent forms are acceptable, as is video-teleconferencing between the website operator or online service and the parent, according to the agency.


The FTC also said it is encouraging technology companies to recommend additional verification methods. Leibowitz said he expects that this will “unleash innovation around consent mechanisms.”


Emailed consent is also acceptable as long as the business confirms it by sending an email back to the parent or calling or sending a letter. In cases of email confirmation, the information collected can only be used for internal use by that company and not shared with third parties, the agency said.


The FTC’s investigation of apps developers came after the agency examined 400 kids’ apps that it purchased from Apple’s iTunes store and Google’s apps store, Google Play. It determined that 60 percent of them transmitted the user’s unique device identification to the software maker or, more frequently, to advertising networks and companies that compile, analyze and sell consumer information for marketing campaigns.


Internet News Headlines – Yahoo! News





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Experts: Kids are resilient in coping with trauma


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


___


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


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

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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


(Reporting by Rodrigo Campos; Editing by Jan Paschal)



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