Wal-Mart defends low-price ads after rivals' objection

(Reuters) - Retail giant Wal-Mart Stores Inc has gone on the defensive against charges by competitors that a recent ad campaign is using inaccurate information, leading the competitors to file complaints with state legal officials.
A Wal-Mart Stores spokesman defended the retailer's ad campaign that claims to offer better prices on some products than competitors, after the Wall Street Journal reported rivals have complained to attorneys general in more than half a dozen states.
In documents reviewed by the Wall Street Journal, rivals have claimed that Wal-Mart's advertisements cross a line by making misleading comparisons or promoting products the company does not have in ample supply.
Wal-Mart ads have targeted retailers including Toys "R" Us Inc and Best Buy Co Inc , as well as several regional supermarket chains. Best Buy complained about a Wal-Mart ad to the Florida attorney general's office, while Toys "R" Us complained to Michigan officials, the Journal said.
"We know competitors don't like it when we tell customers to compare prices and see for themselves," Wal-Mart spokesperson Steven Restivo told the Wall Street Journal. "We are confident on the legal, ethical and methodological standards associated with our price comparison advertisements," he added.
Restivo confirmed to Reuters the accuracy of his comments published by the Journal.
Wal-Mart, which launched the radio and television ads last spring, said the initial ads spurred a 1.2 percent boost in sales at stores open at least a year and a 1.1 percent rise in store visits in areas where those ads were aired, compared with similar regions where they did not run.
Wal-Mart told the paper it responded to attorneys general in Michigan, Illinois, Pennsylvania, and Missouri over complaints from regional supermarket chains and Toys "R" Us. (http://link.reuters.com/dan94t)
The company said it has not received complaints from Best Buy. The attorneys general offices in Florida and New Jersey said they were reviewing similar complaints, according to the paper.
Toys "R" Us and Best Buy officials could not immediately be reached for comment by Reuters after regular U.S. business hours.

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Asian shares drop on Fed minutes, dollar extends gains

TOKYO (Reuters) - Asian shares fell on Friday, as investors booked profits from a recent sharp climb after senior Federal Reserve officials expressed concerns about continuing to expand stimulative bond buying, but the dollar extended gains as U.S. debt yields rose.
European shares were seen tracking Asian peers lower, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX would open down as much as 0.3 percent. A 0.1 percent drop in U.S. stock futures suggested a soft Wall Street start.
Minutes from the Fed's December policy meeting released on Thursday showed concerns among some members of the Federal Open Markets Committee about the potential risks of the Fed's asset purchases on financial markets, even if it looked set to continue an open-ended stimulus program for now.
The Fed's asset-buying policy has been pivotal in underpinning investor risk appetite, so the more hawkish Fed minutes unnerved financial markets.
Benchmark U.S. Treasury yields continued their climb, hitting an eight-month high around 1.93 percent in Asia on Friday, while key 10-year Japanese government bond yields touched a 3-1/2-month high of 0.83 percent.
The dollar also rose on data showing U.S. private-sector hiring improved in December, raising hopes for a strong monthly payrolls report due later in the day, a key gauge to the U.S. economy and the Fed's future policy course.
The dollar's rise makes dollar-based assets more expensive for non-dollar investors, hitting precious metals and oil.
The Fed's minutes spurred consolidation from broad-based buying which took place after U.S. lawmakers earlier this week narrowly avoided falling off the "fiscal cliff" of automatic taxes rises and spending cuts, which risked derailing the economy.
"Market moves largely reflect positioning after the recent rallies and before the nonfarm payrolls, which could tip the markets either way," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo, adding that markets may be dictated by interest rates this year, rather than risk-on, risk-off sentiment as was last year.
MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.7 percent, after scaling its highest since August 2011 on Thursday. But the pan-Asian index was set to end the first week of 2013 up 1.8 percent, thanks to the New Year's rally.
"After the big relief rally we had on the fiscal cliff decision and compromise, I would expect the market to consolidate a little bit," Martin Lakos division director at Macquarie Private Wealth, said of Australian shares which slipped 0.4 percent, retreating from Thursday's 19-month highs. Hong Kong shares eased from a 19-month highs, falling 0.6 percent, but Shanghai rose 0.5 percent.
The dollar hit its highest since July 2010 against the yen at 87.835 while the euro fell to a three-week low of $1.3019. The U.S. dollar also touched a six-week high against a basket of major currencies on Friday.
"Dollar-positive momentum is solid as the fiscal cliff was averted, the overnight data was good and yields were rising. I won't be surprised to see the dollar rise to 90 yen soon," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo.
"Despite repeated Japanese intervention, the dollar had refused to strengthen in the past, but now, it's advancing without any action, suggesting the direction has completely changed to support continued dollar buying," Maeba said.
The yen's tumble pushed Japan's benchmark Nikkei stock average briefly up more than 3 percent to its highest since March 2011, outshining the Asian regional bourses. The Nikkei closed up 2.8 percent.
FISCAL CLIFF VS DATA
U.S. President Barack Obama and congressional Republicans face tough talks on spending cuts and an increase in the nation's debt limit as the hard-fought fiscal deal delayed decisions on expenditures until March 1.
Investor sentiment was supported by recent solid data from the world's two largest economies, the United States and China.
China's services sector saw its slowest rate of expansion in nearly a year and a half in December, a private sector survey showed on Friday, but underlying growth revival remained intact, even if it were modest.
"We are coming off overbought levels today. This cyclical-led rally in offshore Chinese shares should continue in the next few weeks, China's improving economic data will help," said Wang Ao-chao, UOB-Kay Hian's Shanghai-based head of China research.
The U.S. economy likely added 150,000 jobs in December, according to a Reuters survey, up from 146,000 in November. The unemployment rate is expected to hold steady at 7.7 percent.
Resolution of the U.S. fiscal cliff crisis could weigh on some Asian assets as investors could start to shift some money out of overpriced Asian investments in favour of the U.S. on brightening prospects for American stocks.
U.S. crude fell 0.7 percent to $92.26 a barrel while Brent shed 0.6 percent to $111.47.
Spot gold fell 1 percent to around $1,645, dragging silver down more than 2 percent to $29.48.
Despite the decline in equities markets, sentiment in Asian credit markets remained upbeat, with the spread on the iTraxx Asia ex-Japan investment-grade index narrowing by two basis points.

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Fed becoming worried about stimulus side effects

WASHINGTON (Reuters) - Federal Reserve officials are increasingly concerned about the potential risks of the U.S. central bank's asset purchases on financial markets, even if they look set to continue an open-ended stimulus program for now.
In a surprise to Wall Street, minutes from the Fed's December policy meeting, published on Thursday, showed a growing reticence about further increases in the central bank's $2.9 trillion balance sheet, which it expanded sharply in response to the financial crisis and recession of 2007-2009.
"Several (officials) thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet," the minutes said, referring to the narrower group of voting Fed members.
Investors picked up on the report's hawkish tone, with stock prices drifting lower after the announcement, while the U.S. dollar extended gains against the euro. Yields on the 30-year Treasury bond hit 3.12 percent, their highest levels since May.
"The minutes of the Federal Reserve's December monetary policy meeting revealed a somewhat surprising level of concern among the ranks of central bankers regarding the long-term impact of the bank's asset purchase program, or quantitative easing," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C.
Still, the Fed appeared likely to continue buying assets for the foreseeable future, having announced in December it was extending monthly purchases of $40 billion in mortgage securities and also buying $45 billion in Treasuries each month.
A few of the voting members on the central bank's policy-setting Federal Open Market Committee thought asset buying would be warranted until about the end of 2013. A few others highlighted the need for further large-scale stimulus but did not specify an amount or time frame.
Fed officials generally agreed that the labour market outlook was not likely to improve without further nudging from the monetary authorities.
QE "HEEBIE-JEEBIES"
The U.S. economy expanded a respectable 3.1 percent in the third quarter on an annualized basis, but growth is believed to have slowed sharply to barely above 1.0 percent in the last three months of the year.
Data on Thursday showed a solid gain of 215,000 new private sector jobs for December, while analysts polled by Reuters last week were looking for a rise of 150,000 new jobs in the Labor Department's official survey, due out on Friday.
Still, the minutes indicated worries about quantitative easing policies were spreading beyond the usual regional Fed hawks who, like Richmond Fed President Jeffrey Lacker, have opposed additional Fed easing.
"What's clear from these minutes is that there is little consensus among the members of the FOMC on how long asset purchases should carry on," said Jason Conibear, trading director at Cambridge Mercantile.
"Some members want more accommodation for as long as it takes, some want more but to start winding it down while others have got the heebie-jeebies about the size of the balance sheet."
In the December meeting, the Fed also launched a new framework of policy thresholds, numerical guideposts that are supposed to give markets and the public a clearer idea of how policymakers will react to incoming economic data.
Officials say they will keep interest rates near zero until the unemployment rate falls to 6.5 percent for as long as estimates of medium-run inflation do not exceed 2.5 percent.
The minutes suggested it took officials some time to build a consensus around the idea.
"A few participants expressed a preference for using a qualitative description of the economic indicators influencing the Committee's thinking," the minutes said.
U.S. unemployment has come down steadily after hitting a peak of 10 percent in late 2009, but remains elevated at 7.7 percent.
Fed officials noted worries about the looming "fiscal cliff," which was dealt with only partly in an agreement earlier this week, were hurting the confidence of businesses and households.

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Report: Israeli ex-spy chief criticizes PM on Iran

A recently retired Israeli spy chief says Prime Minister Benjamin Netanyahu acted irresponsibly regarding Iran's nuclear program and accuses him of prioritizing personal concerns over national interests.
Yuval Diskin, chief of Israel's Shin Bet intelligence agency from 2005 to 2011, has voiced similar criticisms before.
Diskin says Netanyahu tried to convince him and his colleagues to approve what he called an "illegal" decision to attack Iran. He describes attending a "bizarre" meeting with Netanyahu, Defense Minister Ehud Barak and then-foreign minister Avigdor Lieberman, in which they discussed the Iranian nuclear threat over cigars and liquor.
Diskin spoke in an interview to a filmmaker who made a documentary about Israeli spymasters. The interview appeared Friday in Israel's daily Yediot Ahronot.
Netanyahu's office in a text-messaged statement called Diskin's comments "baseless.

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Sadr visits Baghdad church, site of 2010 attack

Firebrand Shiite cleric Muqtada al-Sadr visited a Baghdad church that was the scene of a deadly 2010 attack as well as one of the Iraqi capital's main Sunni mosques on Friday, an apparent overture to other religious groups as opposition mounts against his rival, Prime Minister Nouri al-Maliki.
The cleric's stops at the holy sites — a rare public appearance by Al-Sadr outside predominantly Shiite parts of Iraq — came as tens of thousands of protesters angry over perceived second-class treatment gathered in Sunni-dominated areas to maintain pressure against al-Maliki's Shiite-led government.
Al-Sadr, wearing his signature black cloak and turban, said he visited the Our Lady of Salvation church to express sorrow at the attack and send a message of peace to Iraq's Christian community.
The visit comes amid rising sectarian tensions a year after the U.S. withdrawal from Iraq. Al-Sadr grudgingly backed fellow Shiite al-Maliki following elections in 2010. But last year he joined Iraq's minority Sunni Arabs and Kurds in calling for al-Maliki to resign.
Al-Sadr, since coming to prominence following the U.S.-led 2003 invasion, has frequently made overtures to Sunnis and others. But militias loyal to him were some of the worst perpetrators of sectarian violence last decade, and he is still viewed with hostility or suspicion by many Sunnis, Kurds and others.
At the church, al-Sadr sat quietly in the front pew, listening and nodding as Father Ayssar al-Yas welcomed him. The priest then gave al-Sadr a tour of the recently renovated church, pointing out places where attackers in 2010 killed priests and worshippers during a church service ambush. Over 50 were killed in the attack, blamed on Sunni extremists.
Al-Maliki himself attended a ceremony to officially reopen the church last month.
Al-Sadr's heavily protected convoy then made its way to the al-Gailani mosque, one of Baghdad's most prominent Sunni places of worship, shortly before midday Friday prayers.
As he entered the mosque, one worshipper called out that he is "the unifier of Sunnis and Shiites." Another hailed him as "the patriot, the patriot."
Al-Sadr this week spoke up for the Sunni protesters, and echoed that sentiment again Friday.
"We support the demands of the people, but I urge them to safeguard Iraq's unity," he said in brief comments inside the mosque following the Sunni imam's speech and midday prayers.
As he left, women in the courtyard ululated and showered him with candy.
Protesters, meanwhile, massed in several Sunni areas around the country.
The demonstrations appeared to be some of the largest in a wave of rallies over the past two weeks that erupted following the arrest of bodyguards assigned to Finance Minister Rafia al-Issawi, one of the central government's most senior Sunni officials.
The detention of female prisoners has been a focus of the demonstrations, though the protests tap into deeper Sunni feelings of perceived discrimination and unfair application of laws against their sect by al-Maliki's government.
Iraqi authorities this week ordered the release of 11 women facing criminal charges and pledged to transfer other women prisoners to jails in their home provinces in a nod to protesters' demands.
But demonstrators Friday continued to press for more prisoners to be released.
Several thousand people took to the streets amid tight security outside Baghdad's Abu Hanifa mosque after the midday prayers. They demanded the release of detainees, and held banners with slogans against the politicization of the judiciary and calling for an end to corruption.
Their chants included: "Iran out!" — a reference to what many Iraqis see as their neighbor's influence over the government — and "Nouri al-Maliki is a liar."
Local TV broadcast what appeared to be tens of thousands of protesters massed along a highway near the western city of Ramadi, which has been the focus of demonstrations and sit-ins in recent weeks.
About 3,000 people gathered in the northern city of Mosul, where they called for the release of female prisoners and to end to what they say are random arrests of Sunnis. Among their chants were: "Down, down with al-Maliki" and "No to sectarianism."
In the ethnically mixed city of Kirkuk, about 1,000 protested to demand the release of Sunni detainees.
Protests were also reported in the Sunni strongholds of Fallujah and Tikrit.

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Israel ex-spy chief blasts PM ahead of election

JERUSALEM (AP) — A prominent Israeli ex-intelligence chief sought to sway Israelis against Benjamin Netanyahu in upcoming elections, saying in an interview published Friday that the prime minister has mismanaged Israel's response to Iran's nuclear program and missed opportunities to make inroads on a peace agreement with the Palestinians.
The interview by Yuval Diskin was an unusually strong and overt assault on a prime minister by a figure formerly from the security establishment, coming less than three weeks before the Jan. 22 election, in which polls predict Netanyahu will be reelected. The election campaign has hardly touched on security issues like the conflict with Iran or the stalled peace process with the Palestinians, focusing almost entirely on domestic issues.
Diskin, who ran Israel's Shin Bet intelligence agency from 2005 to 2011, has been a vocal critic of Netanyahu. But his front-page interview to the daily Yediot Ahronot included his sharpest comments yet. He accused Netanyahu of acting illegally by ordering the security apparatus to prepare for an attack on Iran before gaining former approval by the Cabinet of ministers. He also said Netanyahu squandered the gains made by Israel's security forces by not using a period of relative quiet over the past few years to move toward peace with the Palestinians.
"I am convinced we deserve a better leadership that's braver and more moral, and that sets a better personal example," Diskin said. "If I cause the Israeli voter to think twice before choosing parties and leaders that are not worthy, because they are actually not leading us where we should be going, I've done my part."
He said he formed his opinion "based on dozens of discussions with many people more or less of my rank" who feel "a lack of security, lack of trust and lack of appreciation" for the current administration.
Netanyahu's office in a text-messaged statement called Diskin's comments "baseless" and accused him of personal frustration over not being selected to head the prestigious Mossad spy agency.
Though Diskin oversaw Israel's domestic security in his role as Shin Bet chief, he was also involved in key security decisions affecting the country including deliberations over a possible strike on Iran's nuclear facilities.
Diskin said that in 2010 Netanyahu and Defense Minister Ehud Barak tried to convince him, the army chief and the head of Israel's Mossad intelligence agency to prepare the security apparatus for an attack on Iran before gaining approval from the necessary government forums, a move Diskin called "illegal."
The army chief and Mossad chief from the time — Lt. Gen. Gabi Ashkenazi and Meir Dagan — both spoke similarly about the meeting to Israeli television in November.
Diskin also described attending a meeting with Netanyahu, Barak and then-foreign minister Avigdor Lieberman, in which they discussed the Iranian nuclear threat over cigars and liquor. He called the atmosphere "bizarre," saying leaders discussing such a serious subject with Israeli security officials should show more gravity.
Diskin said Netanyahu acted irresponsibly regarding Iran's nuclear program and accused him of prioritizing personal concerns over national interests.
"I have a very strong feeling that with the Iranian issue Netanyahu is 'haunted' by (former Israeli prime minister) Menachem Begin, who attacked the reactor in Iraq, and by (former Israeli prime minister Ehud) Olmert, who, as it is claimed in many places, attacked the reactor in Syria," Diskin said. Netanyahu "wants to go down in history as someone who did something of the same proportions."
Netanyahu and Barak have both repeatedly hinted that Israel would carry out military action to stop Iran's nuclear program if necessary. Israel says Iran's nuclear program is aimed at weapons development. Iran denies this and says its nuclear program is for peaceful purposes.
On the Palestinian issue, Diskin criticized Netanyahu's lack of movement on peace talks and said there is a chance another Palestinian uprising could break out.
"The role of the security forces is to create conditions so the political echelon will know what to do with them, and the quiet which was achieved in the last few years is an opportunity that the political echelon should not have missed," Diskin said.
Asked about the response by Netanyahu's office to his comments, Diskin replied only "Have a good Sabbath" in a text message to The Associated Press.

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Syrian warplanes bomb suburbs of the capital

BEIRUT (AP) — Syrian ground and air forces bombarded rebel strongholds on the outskirts of Damascus and other areas around the country Friday while anti-government forces targeted a military post near the capital with a car bomb, activists said.
The Britain-based Syrian Observatory for Human Rights said warplanes targeted neighborhoods around the capital including Douma, which troops have been trying to recapture for weeks. Two air raids there Thursday killed 12 people and caused heavy damage.
The Observatory added that a car bomb blew up outside a military intelligence building in the northern Damascus suburb of Nabk but had no immediate word on casualties.
An amateur video posted online showed a strong explosion with black smoke billowing from Nabk and the narrator said the blast targeted the military intelligence facility. The video appeared genuine and corresponded to other AP reporting on the events depicted.
The violence came two days after the U.N. said that more than 60,000 people have been killed since Syria's crisis began in March 2011 — a figure much higher than previous opposition estimates.
Damascus-based activist Maath al-Shami said government troops were firing rockets and mortars from the Qasioun mountains overlooking the capital down at orchards near the southern suburbs of Daraya and Kfar Sousseh. The Observatory says troops were also fighting rebels in Aqraba and Beit Saham, also south of Damascus, near the capital's international airport.
The army command said in a statement Thursday night that troops carried out operations in suburbs of the capital including Douma and Daraya.
"Regime forces are facing very strong resistance in Daraya," said al-Shami via Skype, but said that government forces had been able to advance down the main street in the suburb.
The government capture of Daraya would provide a boost to the regime's defense of Damascus. It is close to a military air base as well as the government's headquarters and one of President Bashar Assad's palaces.
In the north, rebels resumed a week-old offensive against regime-held airbases. The government's air power poses the biggest obstacle to advances by opposition fighters.
Activists said there were battles around the military air base of Taftanaz in the northern province of Idlib close to the Turkish border and near the international airport of Aleppo, Syria's largest city and commercial center.
Fadi al-Yassin, an activist based in Idlib, said the rebels killed on Thursday the commander of Taftanaz air base, a brigadier general.
"The battles now are at the gates of the airport," al-Yassin said via Skype. He added that it has become very difficult for the regime helicopters to take off and land at the base.
He said warplanes taking off from airfields in the central province of Hama and the coastal region of Latakia are participating in attacking rebels around Taftanaz.
The Syrian Army General Command said troops directed "painful strikes" against the "armed terrorist groups" of Jabhat al-Nusra, a group the U.S. claims is linked to al-Qaida-linked organization. The Syrian military says the extremist group is carrying out the Taftanaz attack, and that dozens of fighters were killed.
Aleppo airport has been closed since Monday. A government official in Damascus said the situation is relatively quiet around the facility, adding that it is up to civil aviation authorities to resume flights.
A man who answered the telephone at the information office at the Damascus International Airport said, "God willing, flights will resume to Aleppo very soon."
Syrian rebels are fighting a 21-month-old revolt against the Assad regime. The crisis began with pro-democracy protests but has morphed into a civil war.

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Fatah party stages first rally in Gaza since 2007

 Leaders of the Palestinian Fatah party led tens of thousands of supporters Friday in a mass rally in the Gaza Strip, the first such gathering for the largely secular party in the territory since the rival Islamist Hamas seized power there in 2007.
The demonstration, which was condoned by Hamas, showed how the long-bitter relations between the rival Palestinian factions have improved since an Israeli assault on the Gaza Strip in November.
While Friday's rally pointed to the improving ties between Hamas and Fatah, it also served as a reminder of the conflicts within Fatah that continue to dog the movement: Officials cancelled the event halfway through after 20 people were injured due to overcrowding, and shoving matches erupted between separate Fatah factions.
Yahiya Rabah, a top Fatah official in Gaza, said the rally was cancelled "due to the huge number of participants and logistical failures."
But witnesses said one pushing match was between supporters of Palestinian President Mahmoud Abbas and partisans of former Fatah's former Gaza security commander Mohammed Dahlan, who was expelled from the party because of conflicts with Abbas.
Another Fatah official, who spoke anonymously because he did not want to embarrass the party, said the rally was cancelled because hundreds of Dahlan supporters jumped up on the stage and clashed with Abbas supporters.
Fatah spokesman Fayez Abu Etta attributed the injuries to overcrowding and the excitement of the rally.
Overnight, throngs had camped out in a downtown Gaza square to ensure themselves a spot for the anniversary commemoration of Fatah's 1965 founding, and tens of thousands marched early Friday carrying Fatah banners. When the rally began, people stampeded to the stage to try to shake leaders' hands.
Hamas was not directly involved in the event but allowed it to take place. Top Fatah officials arrived in Gaza for the first time since they were ousted from Gaza by Hamas in 2007.
Abbas, who rules in the West Bank, did not attend the event, but spoke to the crowd via a televised address, telling them that "there is no substitute for national unity."
Organizers then ended the rally, cancelling the other planned speeches and musical performances.
Hamas has gained new support among Palestinians following eight days of fighting with Israel in November, during which Israel pounded the seaside strip from the air and sea, while Palestinians militants lobbed rockets toward the Israeli cities of Jerusalem and Tel Aviv for the first time.
Following the fighting, relations have thawed somewhat between Hamas and Fatah. Hamas was allowed to hold its first West Bank rallies since the 2007 split in which Hamas seized Gaza and Fatah was left in control of the West Bank. Hamas returned the favor Friday by allowing the Fatah rally.
Senior Fatah official Nabil Shaath said the party received a congratulatory message from Hamas Prime Minister Ismail Haniyeh, who expressed hope that the two factions could reconcile their differences and work together as joint representatives of the Palestinian people.
"This festival will be like a wedding celebration for Palestine, Jerusalem, the prisoners, the refugees and all the Palestinians," Shaath said.
Reconciliation between the two factions, however, is still far from a done deal. Hamas chief Khaled Mashaal, considered more pragmatic than Hamas' Gaza-based hardline leaders, forged a reconciliation agreement with Abbas in 2011.
But the Gaza-based leadership, unsupportive of the deal, has held up implementing it. Fatah enjoys Western support and has been pressured not to forge a unity agreement with the militant Hamas - facing a potential cutback in foreign aid if it does. Hamas has carried out hundreds of deadly attacks against Israeli citizens and is regarded by the U.S. and Israel as a terrorist organization.
Fadwa Taleb, 46, who worked as a police officer during the previous rule of Fatah, gathered at the rally with her family. "We feel like birds freed from our cage today," Taleb said. "We are happy and feel powerful again."
A Gaza security official said a Fatah-linked former aide to the late Palestinian leader Yasser Arafat died of a heart attack in the square overnight, saying he was shocked by the large crowd that was allowed to gather.
In the West Bank, Palestinian President Abbas signed a presidential decree changing the name of the Palestinian Authority to the "State of Palestine," following the Palestinians' upgraded status at the United Nations as a non-member observer state.
According to the decree, reported by the official Palestinian news agency Wafa Thursday night, all stamps, signs, and official letterhead will be changed to bear the new name.
It is the first concrete, albeit symbolic, step the Palestinians have taken following the November decision by the United Nations. Abbas has hesitated to take more dramatic steps, like filing war crimes indictments against Israel at the International Criminal Court, a tactic that only a recognized state can carry out.

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Shares steady after rally, dollar jumps

 World stocks stalled on Thursday as traders were cautious after equities hit an 18-month high, while the U.S. dollar climbed to a three-week high against a basket of currencies on concerns about more budget wrangling in Washington.
Data suggesting some momentum in the U.S. economy as the year ended showed private-sector employers stepped up hiring in December, allowing for the upward tick in stocks and further supporting the greenback.
President Barack Obama and congressional Republicans face two more months of tough talks on spending cuts and an increase in the nation's debt limit as the hard-fought deal to avert the "fiscal cliff" of automatic tax hikes and spending cuts covered only taxes and delayed decisions on expenditures until March 1.
"There's still some clouds over the horizon, with the fiscal issue of the government," said Jeff Meyerson, head of trading at Sunrise Securities in New York. "We don't know how they're going to pan out, but in all likelihood there's not going to be a calamity."
The MSCI world equity index <.miwd00000pus> advanced less than 0.1 percent, reversing a dip through most of the session after hitting an 18-month high on Wednesday.
A European equity benchmark <.fteu3> ended up 0.45 percent after hitting its highest intraday level since March 2011, boosted by a belated reaction in Swiss stocks due to a holiday.
The Dow Jones industrial average <.dji> was up 7.03 points, or 0.05 percent, at 13,419.58. The Standard & Poor's 500 Index <.spx> was up 1.57 points, or 0.11 percent, at 1,463.99. The Nasdaq Composite Index <.ixic> was up 2.49 points, or 0.08 percent, at 3,114.75.
The euro tumbled against the dollar as investors grew worried about more budget fights ahead. Analysts say the market could be set up for volatility as Obama and congressional Republicans tussle over the next two months.
The dollar was up 0.4 percent against a basket of major currencies <.dxy> at a three-week high of 80.13, although it slipped 0.4 percent against the yen to 86.97.
"We really just kicked the can down the line and we're set up for another fight on the hill in the next month and a half or so," said John Doyle, currency strategist at Tempus Consulting in Washington.
The euro, which had touched an 8-1/2 month high against the dollar on Wednesday, was down 0.6 percent at $1.3110.
Investors will now turn their attention to Friday's December U.S. employment report. It is expected to show modest job growth of around 150,000, compared with 146,000 in November.
The ADP National Employment Report showed Thursday the U.S. private sector added 215,000 jobs in December, comfortably above economists' expectation of a 133,000 gain. Following the recent rally in equities, any disappointment in Friday's payrolls number could trigger a profit-taking sell-off.
DOLLAR JUMP HITS COMMODITIES
The dollar's strength and rising oil supplies pushed crude prices lower, with Brent down 0.1 percent to $112.31 a barrel. U.S. crude futures were down 0.1 percent at $93.15.
Analysts expect oil prices to drop in 2013 as supply outweighs demand, especially after U.S. crude production hit a 19-year high in 2012.
Gold futures followed commodities lower and were down about 0.6 percent at $1,676.41 an ounce.
Thursday's retreat across riskier asset markets might have been sharper but for data showing activity in China's services sector and at U.S. factories expanded in December, brightening the outlook for global growth.
China's official purchasing managers' index for the non-manufacturing sector rose to a four-month high in December, adding to signs of a revival in the world's second-largest economy.
U.S. Treasury debt prices eased, pushing yields to three-month highs after the U.S. private jobs data cut into the appeal of safe U.S. government issues. Treasuries had already sold off sharply on Wednesday following the U.S. government deal to avoid the so-called "fiscal cliff."
The benchmark 10-year U.S. Treasury note was down 7/32, the yield at 1.8618 percent, a 15-week high.

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Stocks edge lower as next fiscal showdown looms

Stock indexes turned lower Thursday afternoon after the Federal Reserve said its policymakers are split over how long to continue a bond-purchasing program intended to stimulate the economy.
The Dow Jones industrial average and the Standard & Poor's 500 index treaded water for much of the day, then dipped into the red after 2 p.m. Eastern, when the Fed released minutes from its December policy meeting.
As of 2:33 p.m. the Dow was off 27 points at 13,396. The Dow is coming off its biggest gain in more than a year and is still up 450 points this week.
The S&P 500 was down three points at 1,459 and the Nasdaq composite fell eight to 3,104.
At last month's meeting of the Federal Reserve's policymaking committee, the central bank said it would buy $85 billion of Treasury securities and mortgage-backed bonds on an open-ended basis, and also keep a benchmark interest rate near zero until the unemployment rates drops below 6.5 percent. The unemployment rate was 7.7 percent in November. The government reports the rate for December on Friday.
On Thursday, the Fed revealed a split among its members over how long to continue the bond purchases. Some of its 12 voting members thought they would continue through this year, while others thought they should be slowed or stopped before the end of 2013. Those governors were concerned that the continued bond purchases would destabilize the economy.
Prices of U.S. government bonds fell, sending their yields higher, after the minutes of the Fed's meeting were released. The yield on the benchmark 10-year Treasury note rose to 1.90 percent from 1.84 percent late Wednesday. That means investors are anticipating the Fed will slow its purchases of bonds.
The stock market opened on a weak note after retailers reported mixed holiday sales and as the prospect of a new budget battle in Congress loomed. UnitedHealth Group led the Dow lower. The stock fell $1.65 to $52.88 after analysts at Deutsche Bank and other firms cut their ratings on the stock.
"It's natural to relax a bit after such a huge day as yesterday," said Lawrence Creatura, who manages a small-company fund at Federated Investors.
The Dow soared 308 points Wednesday, its largest point gain since December 2011. The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases called the "fiscal cliff."
That deal gave the market a jump start into the new year. The Dow and the S&P 500 are already up more than 2 percent.
"We're off to a very strong start," Creatura said. "The dominant reason is the resolution of the fiscal cliff. But January is usually a strong month, as investors all shift money into the market at the same time. When the calendar flips, it's as if you're allowed to begin the race anew."
Economists had warned that the full force of the fiscal cliff could drag the country into a recession. The law passed late Tuesday night averted that outcome for now, but other fiscal squabbles are likely in the months ahead. Congress must raise the government's borrowing limit soon or be forced to choose between slashing spending or paying its debts.
Ross Stores surged 6 percent in early trading. The retailer said sales at stores open at least a year increased 11 percent during the holiday shopping season. Ross Stores rose $3.65 to $58.09.
Nordstom Inc. surged 2 percent after the department-store chain also reported strong holiday sales, especially in the South and Midwest. Nordstrom's stock was up $1.21 to $54.84.
Other retailers struggled during the holidays as shoppers held out for deep discounts.
Family Dollar Stores sank 12 percent after reporting earnings that fell short of analysts' projections. The company also forecast a weaker outlook for the current period and full year. Family Dollar's stock lost $7.25 to $56.75.
Among other stocks making big moves:
— Transocean jumped $3.33, or 7 percent, to $49.57. The owner of the oil rig that sank in the Gulf of Mexico in 2010 after an explosion killed 11 workers reached a $1.4 billion settlement with the Justice Department.

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Fed split on stimulus plans nudges stocks lower

NEW YORK (AP) — Stocks are fading into the close of trading on Wall Street after the Federal Reserve revealed a split among its policymakers over how long to continue an economic stimulus program.
The market started on a weak note Thursday following mixed holiday sales reports from retailers and the prospect of another fiscal fight looming in Congress over the nation's borrowing limit.
The Dow Jones industrial average finished down 21 points at 13,391. The Dow surged 308 points the day before, its biggest gain in more than a year.
The Standard & Poor's 500 index lost three points to end at 1,459. The Nasdaq composite lost 11 to end at 3,100.
Rising stocks outnumbered falling ones on the New York Stock Exchange. Volume was 3.8 billion shares, above the recent average.

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Private sector job gains offer hope for labor market

WASHINGTON (Reuters) - Private-sector employers shrugged off a looming budget crisis and stepped up hiring in December, offering further evidence of underlying strength in the economy as 2012 ended.
While other data on Thursday showed an increase in the number of Americans filing new claims for unemployment benefits, the trend remained consistent with steady job growth.
"The underlying economy has momentum, and the employment data confirms that. The hope and prayer of the market is that our political leaders don't screw it up," said John Brady, managing director at R.J. O'Brien & Associates in Chicago.
Although Congress this week approved a deal to avoid the so-called fiscal cliff, a combination of sharp government spending cuts and higher taxes that would have sucked about $600 billion from the economy, the budget problems are far from resolved.
The ADP National Employment Report showed the private sector added 215,000 jobs last month after increasing payrolls by 148,000 in November. The report is jointly developed with Moody's Analytics.
The job gains came even as companies worried the economy might fall off the fiscal cliff.
However, the ADP data tends to overstate job gains in December because of a year-end accounting quirk.
"While we are encouraged by the better tone in the ADP employment report, we are cautious about reading too much into it, particularly given its tendency to exaggerate the performance of the labor market in December," said Millan Mulraine, a senior economist at TD Securities in New York.
Still, the report added to other data ranging from consumer spending to manufacturing that have suggested the economy was in a much better shape than previously thought.
It was released ahead of the government's more comprehensive employment report on Friday, which is expected to show employers added 150,000 jobs to their payrolls in December, according to a Reuters survey of economists, up from 146,000 in November.
STEADY JOB GAINS
A separate report from the Labor Department showed initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 372,000 last week. However, claims data for nine states, including California and Virginia, was estimated because of the Christmas and New Year holidays.
The four-week moving average for new claims, a better measure of job market trends, was little changed at 360,000, a sign labor conditions continue to improve at a steady pace.
"The claims data are not always reliable labor market indicators around the holiday season because of issues seasonally adjusting the data, but it is still a somewhat encouraging sign to see the trend in the data remain relatively low," said Daniel Silver, an economist at JPMorgan in New York.
Job gains in the first 11 months of last year averaged about 151,000 per month, not enough to significantly lower unemployment. The jobless rate dropped by 0.2 percentage point to 7.7 percent in November and is expected to have held at that level last month.
Labor market concerns prompted the Federal Reserve to aggressively ease monetary policy, but consensus is diminishing.
Minutes of the U.S. central bank's December 11-12 meeting released on Thursday showed some policymakers thought it would be prudent to slow or stop asset purchases well before the end of this year because of concerns about financial stability.
Stocks on Wall Street ended lower on the prospect of the Fed adopting a less accommodative stance. Prices for U.S. government debt fell, with the yield on the longer-dated 30-year bond touching its highest level since May.
The U.S. dollar rose against a basket of currencies.
The improving labor market tone was also captured by a third report showing planned layoffs at U.S. firms fell in December for the first time in four months, while the overall job-cut total in 2012 was the lowest since 1997.
"The key to job creation is the pace at which companies are willing to hire new workers since it appears they are already retaining existing employees at a high rate," said John Ryding, chief economist at RDQ Economics in New York.
Better job security is helping to support domestic demand. Auto sales rose 9.0 percent last month to a 1.36 million-unit annual rate last month.
Several major retailers reported better-than-expected sales in December. Sales at stores open at least a year rose 4.5 percent, beating analysts' estimates for 3.3 percent growth.

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Stocks fade after Fed discloses split on stimulus

A two-day rally in the stock market came to an end Thursday afternoon when an account of the Federal Reserve's last meeting revealed a split between bank officials over how long the Fed should keep buying bonds to support the economy.
The Dow Jones industrial average and the Standard & Poor's 500 index treaded water for much of the day, then slid into the red around 2 p.m. Eastern, after the Fed released the minutes from its December meeting.
The Dow ended with a loss of 21.19 points at 13,391.36.
The S&P 500 lost 3.05 points to 1,459.37 and the Nasdaq composite fell 11.70 to 3,100.57.
At last month's meeting of the Federal Reserve's policy-making committee, the central bank pledged to buy $85 billion of Treasurys and mortgage-backed bonds and also keep a benchmark interest rate near zero until the unemployment rates drops below 6.5 percent.
On Thursday, the minutes from that meeting showed Fed officials were divided over the bond purchases. Some of its 12 voting members thought they should continue through this year, while another group thought they should be slowed or stopped much earlier. Just "a few" members saw no need for a time frame, according to the minutes.
"It's pretty surprising," said Thomas Simons, market economist at the investment bank Jefferies. "I think everybody thought there was broad agreement on policy, but now it seems like few of them really wanted to vote for it."
The stock market opened on a weak note after retailers reported mixed holiday sales and as the prospect of a new budget battle in Congress loomed. UnitedHealth Group led the Dow lower. The insurance giant's stock fell $2.55 to $51.99 after analysts at Deutsche Bank and other firms cut their ratings on the stock.
"It's natural to relax a bit after such a huge day as yesterday," said Lawrence Creatura, who manages a small-company fund at Federated Investors.
The Dow soared 308 points Wednesday, its largest point gain since December 2011. The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases called the "fiscal cliff."
That deal gave the market a jump start into the new year. The Dow and the S&P 500 are already up more than 2 percent.
"We're off to a very strong start," Creatura said. "The dominant reason is the resolution of the fiscal cliff. But January is usually a strong month, as investors all shift money into the market at the same time. When the calendar flips, it's as if you're allowed to begin the race anew."
Economists had warned that the full force of the fiscal cliff could drag the country into a recession. The law passed late Tuesday night averted that outcome for now, but other fiscal squabbles are likely in the months ahead. Congress must raise the government's borrowing limit soon or be forced to choose between slashing spending and paying its debts.
In other Thursday trading, prices of U.S. government bonds fell, sending their yields higher. The yield on the benchmark 10-year Treasury note rose to 1.90 percent from 1.84 percent late Wednesday, a sign that some bond traders believe the Fed minutes hinted at an early end to its bond buying.
Family Dollar Stores sank 13 percent after reporting earnings that fell short of analysts' projections. The company also forecast a weaker outlook for the current period and full year. Family Dollar's stock lost $8.30 to $55.74.
Nordstom Inc. surged 3 percent after the department-store chain reported strong holiday sales, especially in the South and Midwest. Nordstrom's stock was up $1.64 to $55.27.
Among other stocks making big moves:
— Transocean jumped $2.96 to $49.20. The owner of the oil rig that sank in the Gulf of Mexico in 2010 after an explosion killed 11 workers reached a $1.4 billion settlement with the Justice Department.
— Hormel Foods, known for making Spam and other meat products, said that it's buying Skippy, the country's No. 2 peanut butter brand, from Unilever for about $700 million. Hormel's stock jumped $1.19 to $33.20.

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New purported BlackBerry Z10 specs emerge: 1.5GHz processor, 2GB RAM, 8MP camera

Another week, another batch of purported leaks for Research In Motion’s (RIMM) first BlackBerry 10-powered Z10. BBin claims to have most of the Z10′s final specs confirmed and it is shaping up to be a powerful device. Rumored specs for the Z10 include a TI OMAP 4470 1.5GHz dual-core processor (Qualcomm Snapdragon MSM8960 for the U.S. and Canada), a 4.2-inch display (1,280 x 768 resolution), quad-band LTE, 2GB of RAM, 16GB or 32GB of internal storage, an 8-megapixel rear camera with LED flash, a 2-megapixel front camera, a microSD card slot, and an 1,800 mAh removable battery. On the connectivity side, the Z10 is also rumored to have NFC, Bluetooth 4.0, dual-band 802.11 a/g/n Wi-Fi, A-GPS, a Micro USB port and a Micro HDMI-out port. BlackBerry 10′s January 30th unveiling in New York City can’t come soon enough.

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Apple still said to account for 87% of North American tablet traffic as Kindle Fire, Nexus 7 gain

Apple’s (AAPL) share of the global tablet market is in decline now that low-cost Android slates are proliferating, but the iPad still appears to be the most used tablet by a huge margin. Ad firm Chitika regularly monitors tablet traffic in the United States and Canada and in its latest report, Apple’s iPad was responsible for almost 90% of all tablet traffic across the company’s massive network.
[More from BGR: Samsung looks to address its biggest weakness in 2013]
Using a sample of tens of millions of impressions served to tablets between December 8th and December 14th this year, Chitika determined that various iPad models collectively accounted for 87% of tablet traffic in North America. That figure is down a point from the prior month but still represents a commanding lead in the space.
[More from BGR: New purported BlackBerry Z10 specs emerge: 1.5GHz processor, 2GB RAM, 8MP camera]
The next closest device line, Amazon’s (AMZN) Kindle Fire tablet family, had a 4.25% share of tablet traffic during that period, up from 3.57% in November. Samsung’s (005930) Galaxy tablets made up 2.65% of traffic, up from 2.36%, and Google’s (GOOG) Nexus 7 and Nexus 10 tablets combined to account for 1.06% of tablet traffic in early December.
“Despite these gains by some of the bigger players in the tablet marketplace, there has been a negligible impact to Apple’s dominant usage share,” Chitika wrote in a post on its blog.

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iOS apps see Christmas sales spike shrink in 2012

Distimo just released its statistics on Christmas Day app downloads and revenue growth… and the download spike is far smaller than it was last year. Back in 2011, Christmas Day iOS app download volume spiked 230% above the December average. This year, the increase was just 87% — far below industry expectations. The revenue spike came in at 70%.
[More from BGR: Google names 12 best Android apps of 2012]
Interestingly, iPad downloads increased by 140% this Christmas, implying that the iPhone download bounce was really modest.
[More from BGR: New purported BlackBerry Z10 specs emerge: 1.5GHz processor, 2GB RAM, 8MP camera]
A few weeks ago, AppAnnie released statistics showing that iOS app revenue growth had stalled over the summer of 2012, whereas Android app revenue growth was relatively strong at 48% over a five month period. Both Distimo and Appannie are respected companies and their analytics are closely followed by app industry professionals. Could it be that the pace of iPhone app revenue growth has slowed down sharply from 2011 levels, even if Distimo and AppAnnie numbers aren’t entirely accurate?

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Leaked BlackBerry 10 slides show video calling and screen sharing for BBM

Research in Motion (RIMM) recently updated its BlackBerry Messenger application to include free Wi-Fi calling. With the release of BlackBerry 10 just around the corner, RIM is looking to add even more features to its flagship messaging app. Slides from a purported internal BlackBerry 10 presentation that were originally posted on the CrackBerry forums suggest that the company is planning to update BBM to include video calling and screen-sharing capabilities. A second slide highlights a task manager application called BlackBerry Remember, which is believed to be the replacement for RIM’s native Tasks app. Additional slides from the presentation can be viewed below.

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iPad mini met with ‘insatiable’ demand in China

Despite a “soft” launch with few lines and seemingly abundant availability, China is going crazy for the iPad mini according Topeka Capital Markets analyst Brian White. His checks in China and Hong Kong reveal consumers are snapping up iPad minis at rapid rates, causing short supply, even with Apple (AAPL) opening two new retail stores in Hong Kong and three in China. White wrote in a research note on Friday that the iPad mini was sold-out at virtually all Apple Stores in both regions this week and is already more popular than the fourth-generation iPad thanks to the tablet’s smaller size and lower price.
[More from BGR: The Boy Genius Report: The Wii U is Nintendo’s last console]
[More from BGR: Samsung could face $15 billion fine for trying to ban iPhone, other Apple devices]
Additionally, White’s research shows iPhone 5 supply has improved to the point where anyone can walk into an Apple Store and buy one on the spot.
“After the Galaxy S III and Galaxy Note I/II became more popular than the iPhone 4S in recent months, our discussions now indicate that the iPhone 5 has recently become the most popular high-end smartphone at the resellers that we spoke with,” White in his note.

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Egypt's leader sees currency stabilizing "within days"

 Egypt's pound fell to a record low on Monday as the president signaled his government would allow it to depreciate slowly for several more days to stop a drain on foreign reserves that has driven the economy into crisis since the fall of Hosni Mubarak.
Hit by a new bout of political turmoil in the last month, the pound had weakened to a record low on Sunday at a new dollar auction brought in by the central bank. It fell further at a second auction on Monday, last trading at 6.37 to the dollar on the interbank market.
The drop means the central bank has allowed the pound to slide almost 3 percent over the last two days after limiting its decline to only 6 percent since the uprising that removed Mubarak from power almost two years ago.
The pound's fall, which is certain to increase the price of imported staples such as tea and sugar, underlines the economic crisis facing President Mohamed Mursi as his administration tries to contain the political fall-out of his move to fast-track a contentious new constitution passed into law last week.
Egyptians, panicked by street clashes between Mursi's Islamist backers and his more secular-minded opponents on the streets of Cairo and other cities, have rushed to change their pounds into dollars in recent weeks, fearing it would be devalued further.
"The market will return to stability," Mursi told Arab journalists on Sunday evening, the state news agency MENA reported.
The pound's fall "does not worry or scare us, and within days matters will balance out," he said.
Having just sold their last dollar bills, dealers at one Cairo foreign exchange bureau did not bother changing the price board when the new low appeared on their trading screens.
"He took our last dollars," one of the traders said, pointing to a man walking out of the door.
Outside, another man told a friend his dollar hunt had failed. "They have no dollars. What can I do?" he said on a mobile phone. "I went to many dealers and could not find dollars."
The fall has been driven mainly by ordinary citizens who have been trying to turn their savings into foreign currency, worried that the pound will weaken further because of the latest political turmoil.
The crisis wiped 10 percent off the value of Egyptian stocks when it erupted in late November. But the main index has mostly recovered since then, climbing in the two sessions since the introduction of the new foreign currency system.
Market participants attribute the rise to buying by Arab and international investors using the cheaper pound to bargain hunt.
FREE FLOATING POUND
The auctions are part of a shift announced on Saturday and designed to conserve foreign reserves, which the bank says are now at "critical" levels that cover just three months of the food, fuel and other goods Egypt imports.
Bankers have described the new system as a move toward establishing a free market value for the pound, which has been tightly controlled since a managed devaluation that ended in 2004.
The head of the Egyptian banking federation said the new system was an "important first step" toward a free float.
In remarks to MENA, Tarek Amer, who is also chairman of Egypt's largest bank, state-owned National Bank of Egypt, said the new system was a success on its first day and had "significantly reduced" demand for dollars.
The International Monetary Fund also gave the new currency policy its stamp of approval, an important imprimatur given that Egypt hopes to secure a $4.8 billion IMF loan. "IMF staff is in close contact with the authorities and we remain strongly committed to supporting Egypt," an IMF spokeswoman said.
The central bank has sold about $75 million at each of Sunday's and Monday's auctions.
The run on the pound prompted officials last week to impose controls on how much cash could be physically carried out of the country. Security men at one Cairo bank branch had to remove one customer angered by a $10,000 limit on how much currency he could withdraw, witnesses said.
The changes announced on Saturday include regular foreign currency auctions and limit how much foreign currency companies can withdraw at a time.
The central bank had spent more than $20 billion - or more than half of its reserves - over the past two years to defend the currency. The reserves fell an additional $448 million in November to about $15 billion.
Prices of imports have already started to rise. Pyramid Oil Field, a company that imports chemicals for use in water treatment and oil fields, had raised its prices 10 to 15 percent last week, fearing a further weakening of the pound.
"This instability obliges you to increase the price, to have a safety factor," Ashraf el-Gamal, president and managing director of the company, told Reuters. "From now on, the contracts will be of a very short validity."
To be on the safe side, he was projecting that the pound would weaken to stand at 9 against the euro, compared with a previous level of 8.
ECONOMY FRAGILE
Prime Minister Hisham Kandil said on Sunday that the economy was in "a very difficult and fragile" situation, adding that he expected loan talks with the IMF to resume in January.
Egypt won preliminary approval in November from the IMF for the loan, but delayed seeking final approval until January after it suspended a series of tax increases to allow more time to explain a heavily criticized package of economic austerity measures to the public.
Kandil's efforts to revive the economy have been hit by the latest turmoil, which scared off tourists who had begun to return. On the eve of the anti-Mubarak revolt, Egypt's tourism industry accounted for one in eight jobs.
Mursi hoped that the passage of a new constitution would stabilize Egypt's politics, giving him space to implement economic reforms and attract investment. The constitution, written by Mursi's Islamist allies, was approved in a popular referendum in December.
But it remains the focus of controversy, and the opposition is likely to seize upon austerity measures demanded under an IMF deal as a stick to beat the Muslim Brotherhood ahead of a parliamentary vote expected in early 2013.
Two-fifths of Egypt's 84 million population live near the poverty line and depend on subsidies that are straining the treasury.
Gamal of Pyramid Oil Field said he knew of at least three foreign companies that were hesitant to make large investments in the country because of the instability.
"They are feeling insecure because of everything that is happening," he said. "One is looking to invest billions.

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TSX rises with hope for "fiscal cliff" deal

 Canada's main stock index rose more than 1 percent on Monday, boosted by the materials sector, as U.S. lawmakers pushed for a last-minute agreement to avoid the "fiscal cliff" that could put the U.S. economy into recession.
Gold rallied in the afternoon after news of a potential deal, and held its gains as President Barack Obama said a deal to prevent the tax hikes and sharp spending cuts was in sight, but not yet complete.
"As always, they leave it to the very last moment, and then something almost invariably emerges, even if it's not the major, game-changing plan that they wanted," said Gavin Graham, president at Graham Investment Strategy.
Graham said investors were likely buying gold because of inflation that could follow a resolution of the U.S. budget dispute. Gold is seen as a hedge against inflation.
He said upbeat manufacturing data out of China was also helping the Canadian market: "It's evident now that China is emerging from its slowdown."
That data boosted iron ore and copper prices, and Teck Resources Ltd , Canada's largest diversified miner, was an influential gainer on the TSX, rising 3.5 percent to C$36.29.
At 3:00 p.m. the Toronto Stock Exchange's S&P/TSX composite index <.gsptse> was up 138.77 points, or 1.1 percent, at 12,454.89. The index was on track to finish up about 4 percent for the year.
"If you're a Canadian and you bought the index, you got killed by the commodities this year," said David Baskin, president of Baskin Financial Services. "You got whacked by the gold stocks."
Gold miners underperformed in 2012 as soaring operating and development costs cut into profits despite historically high gold prices.
Goldcorp Inc was one of the most influential gainers in the index on Monday, however, rising 3.5 percent to C$36.68.
The heavyweight materials sector rose 2.8 percent overall.
Financial stocks, which have been rising and falling with the perceived chances of a U.S. budget deal in recent weeks, were up 0.4 percent in volatile trading.
Energy stocks rose 1.3 percent as oil prices edged higher on optimism about the U.S. budget talks. Suncor Energy Inc led the index higher, rising 1.8 percent to C$32.79.
Canpotex Ltd, the offshore sales agency for Potash Corp of Saskatchewan , Mosaic Co and Agrium Inc , said it struck a six-month agreement to supply a subsidiary of China's Sinofert Holdings Ltd . Potash Corp rose 2.0 percent to C$40.52, and Agrium was up 2.0 percent at C$99.78.
The Canadian Imperial Bank of Commerce said it would pay $149.5 million to the estate of Lehman Brothers Holdings Inc to resolve litigation over a collateralized debt obligation tied to the bankruptcy of the former Wall Street bank. Shares fell 0.7 percent to C$80.02, and CIBC was the most influential negative stock in the index.

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Equities rally as U.S. "cliff" deal nears; oil up

Wall Street rallied on Monday and global equities finished their best year in the last three as U.S. lawmakers closed in on a deal to avoid a budget crisis that many fear could cripple the world economy in 2013.
U.S. President Barack Obama said Congress was close to an agreement that would start chipping away at the deficit without raising middle-class taxes.
Senate Republican leader Mitch McConnell also said an agreement was "very, very close," though it wasn't clear whether a vote would happen on Monday or be pushed into early 2013.
U.S. stocks rose, capping off a strong year on a high note and leaving the MSCI all-world index on track to end the year up more than 13 percent.
The S&P 500 closed out 2012 with a gain of 13.4 percent in 2012 after a nearly flat performance the prior year. The Dow was up 7.3 percent and the Nasdaq nearly 16 percent.
Oil prices edged higher on Monday on optimism over a budget deal, while U.S. government debt prices fell.
The budget deal is not likely to provide a long-term road map to reduce the U.S. budget deficit, which has been above $1 trillion for four straight years.
"Traders understand that this is a stop-gap measure, but they'll take it," said Quincy Krosby, market strategist at Prudential Financial in Newark. "Markets can rally with some growth, but not with no growth. For now, they don't mind kicking the can down the road."
Without a deal $600 billion of automatic spending cuts and across-the-board tax increases would begin to take effect January 1, a blast of austerity that economists fear would thrust the United States into recession and hurt world growth.
The Dow Jones industrial average was up 150.93 points, or 1.17 percent, at 13,089.04. The Standard & Poor's 500 Index was up 21.80 points, or 1.55 percent, at 1,424.23. The Nasdaq Composite Index was up 59.94 points, or 2.02 percent, at 3,020.25.
European shares also gained after a quiet day in Asia, where Japan's Nikkei and other indexes were already closed for 2012.
With the world's major central banks expected to keep pumping stimulus into their economies at any sign of weakness, most economists forecast further gains in equities next year.
Benchmark 10-year U.S. Treasuries fell 16/32 on the pending fiscal cliff deal to yield 1.76 percent. Treasury yields finished the year only slightly above where they started it, thanks to heavy safe-haven buying and the Fed's asset purchase programs aimed at keeping long-term rates low.
STILL RISKS AHEAD
Risks remain for 2013, investors said.
Europe could lurch back into trouble if slow growth puts further pressure on heavily indebted countries such as Spain and Italy, said Alan Wilde, who helps manage $50 billion at Baring Asset Management in London.
"This pressure point may make acceptance of austere policy measures unpalatable and politicians may find they have to find other ways to cut costs," he said.
In the United States, striking the right balance between growth and deficit reduction will also be a challenge, as will addressing long-term fiscal problems.
"It looks to be another lengthy time of instability and volatility on Wall Street as the real work to address the longer term fiscal health of the U.S. government moves into 2013," said Ron Florance, managing director of investment strategy at Wells Fargo Private Bank.
But in 2012, investors' worst fears -- a euro zone collapse, a hard landing in China's once-booming economy and another U.S. recession -- never came to pass.
The pan-European FTSEurofirst 300 gained roughly 13 percent this year, largely due to the European Central Bank's vow to tackle the region's debt crisis, and recovered from an early morning dip on Monday to end the year at 1,131.64.
Peripheral euro zone bonds also rallied after a roller coaster year. Yields on Spanish and Italian sovereign bonds, a measure of the compensation creditors demand for lending money to those governments, spiked in the summer but have since fallen sharply. Euro zone bond markets were closed on Monday.
The euro was down 0.2 percent at $1.3191, but was up 2 percent for the year. An agreement on the U.S. budget would also be viewed as positive for the euro because it would help boost global growth.
Against the yen, the dollar hit 86.64, its best showing since mid-2010, and was set to end the year 12 percent firmer against Japan's currency, its biggest gain since 2005.
With a new Japanese government led by Prime Minister Shinzo Abe expected to pursue a policy mix of aggressive monetary easing and heavy fiscal spending to beat deflation, analysts see the yen staying under pressure in 2013.
Commodities also found recent support as economic data in key emerging economies such as China have started pointing to a gradual pick-up in the pace of growth in 2013.
Gold was $1,675.60 an ounce, up more than 6 percent for the year and on track for a 12th consecutive year of gains. Rock-bottom interest rates, concerns over the financial stability of the euro zone, and diversification into bullion by central banks have boosted the metal. Copper also rose, ended the year up 6 percent after a late rally on Monday.
U.S. crude rose $1.02 to $91.82 per barrel but ended 2012 down more than 7 percent, snapping a string of three straight yearly gains. Brent crude closed 2012 up for a fourth straight year after geopolitical threats offset worries about falling demand. Brent crude averaged more than $111 a barrel in 2012, the highest on record.

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A surprisingly good vintage as market logs gains

If you'd told investors what was going to happen in 2012 — U.S. economic growth at stall speed, an intensifying European debt crisis, a slowdown in China, fiscal deadlock in Washington, decelerating corporate earnings growth — and asked how the stock market would perform, few would have predicted a good year.
But that's just what they got.
The Dow Jones industrial average, the Standard & Poor's 500 and the Nasdaq composite index all ended the year substantially higher, despite losing ground in the final days of year as concerns about the looming "fiscal cliff" mounted.
The Dow gained 7 percent for the year, its fourth consecutive annual advance, having started the year at 12,217. The S&P 500, which started the year at 1,257, is up 13 percent, beating the 7.8 percent average annual gain of the past 20 years. The Nasdaq also logged a better-than-average gain, 16 percent.
Including dividends, the total return on the S&P 500 index was even better: 16 percent.
Financial companies led the gains among S&P 500 stocks, advancing 26 percent, as banks continued their restructuring efforts after the recession. Bank of America more than doubled, gaining $6.05 to $11.61 and Citigroup advanced $13.25, or 50 percent, to $39.56. Utilities, the best-performing industry group last year, was the only sector of 10 industry groups in the index to decline, dropping 2.9 percent.
"There's been a lot thrown at this market, and it's proven to be very resilient," said Gary Flam, a portfolio manager at Bel Air Investment Advisors in California. "Here we are at the end of the year, and it's still relatively strong."
Stocks started the year on a tear, with optimism about an improving job market and a broader economic recovery providing the backdrop to the S&P 500's best first-quarter rally in 14 years.
The index advanced 12 percent by the end of March, closing the quarter at 1,408, its highest in almost four years, with financial companies and technology firms leading the charge. The Dow ended the first quarter at 13,212, logging an 8 percent gain.
Apple was one of the star performers of the first quarter and was probably the year's most talked-about company.
The popularity of the iPhone and iPad led to staggering sales growth that helped push its stock up 48 percent to almost $600 at the end of March. Apple also announced a dividend and overtook Exxon Mobil as the U.S.'s most valuable company.
At the start of the second quarter, the intensifying European debt crisis and concerns about the impact that it would have on global economic growth prompted a sell-off.
By the start of June, U.S. stocks had given up the year's gains. Borrowing costs for Spain surged and investors fretted over the outcome of Greek elections that had the potential to pull the euro currency bloc apart.
The outlook for growth in China, the world's second-largest economy, also began to weigh on investors' minds. Economic growth there slowed to 8.1 percent in the first quarter as export demand waned, and investors worried that it would keep falling.
The Dow fell as low as 12,101 June 4. The S&P dropped to 1,278 June 1.
The second quarter was also marred by Facebook's initial public offering.
The stock sale was one of the most keenly anticipated initial public offerings in years, but investors didn't "like" the $16 billion market debut. The social network priced its IPO at $38 per share, and the stock started to fall soon after the first day of trading on concern about the company's mobile strategy.
Facebook closed as low as $17.73 on Sept. 4 before recovering some of the ground it lost to close the year at $26.62.
Company earnings reports were also starting to make uncomfortable reading for investors. Earnings growth for S&P 500 companies fell as low as 0.8 percent in the second quarter, according to S&P Capital IQ data.
The stock market only recovered its poise after the European Union put together loans to bail out Spain's banks on June 10 and the head of the European Central Bank, Mario Draghi, pledged to do "whatever it takes" to save the euro.
Speculation that the Federal Reserve was set to provide the economy with more stimulus to prevent it from slipping back into recession also bolstered stocks.
The rally even survived a blip when a software glitch at trading firm Knight Capital threw stock prices into chaos Aug. 1.
The firm said the problem was triggered by new trading software it installed. Erroneous orders were sent to 140 stocks listed on the New York Stock Exchange, causing sudden price swings and surging trading volume.
Apple launched the iPhone 5, the latest version of its smartphone, in September, and the company's stock climbed to a record close of $702.10 on Sept. 19. That gave Apple a market value of $658 billion, and many analysts predicted more gains lay ahead.
By the time Fed Chairman Ben Bernanke announced Sept. 13 that the U.S. central bank would start a third round of its bond-purchase program, which is intended to push longer term interest rates lower and encourage borrowing and investment, the S&P 500 had surged 14 percent from its June 1 low. A day later, the index peaked at five-year high of 1,466. The Dow Jones reached its peak for the year of 13,610, Oct. 5.
As is often the case on Wall Street, investors "bought the rumor and sold the fact," and quickly turned their attention to the challenges that lay ahead.
Analysts had also been cutting their outlook for growth in the final quarter of the year. At the start of the second quarter, estimated earnings growth for the period was 15.7 percent. That forecast had fallen to 3.4 percent by Dec. 27.
"One of the blessings that supported the stock market's moves in prior years was earnings growth," said Lawrence Creatura, a portfolio manager at Federated Investors. "That's true this year, but at a decelerating rate. It's not gone unnoticed that earnings growth is slowing, and many forecasts now include a full stall."
Apple's halo also began to slip in the final three months of the year. Its iPad Mini tablet, launched Nov. 2, met with lukewarm reviews, there were hints of unrest among its executive ranks. Investors began to fret that the intensifying competition in the smartphone market would crimp Apple's profits. The stock tumbled, and despite rallying in recent days is still down 27 percent from its September peak.
The year's final twist came in Washington.
Stocks wavered ahead of a presidential election that at times seemed too close to call, and while President Barack Obama ultimately reclaimed the White House by a comfortable margin, the Republicans retained control of the House.
The divided government set the stage for a tense end to the year as Democrats and Republicans sought to thrash out a budget plan that would avoid the U.S. falling off the "fiscal cliff," a series of tax hikes and government spending cuts that economists say would push the economy back into recession.
Initially, markets fell as much as 5 percent in the 10 days after the elections as investors worried that a divided government would not be able to agree on a budget plan to cut the U.S. deficit.
While the S&P 500 managed to recoup those losses by December on optimism that a deal would be reached, some investors are still urging caution. Any agreement will still be "ill-tasting medicine" to the economy, as it will almost certainly involve both spending cuts and tax hikes, says Joe Costigan, director of equity research at Bryn Mawr Trust Company.
"The question is, how much will the drag from the government be offset by business and personal spending," says Costigan. "The market has reasonable expectations for growth priced in, so I don't think we're going to see a big run-up.

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Housing and jobs key to lifting S&P toward record

It may be a big if, but assuming Washington lawmakers can get past the "fiscal cliff," many analysts say that the outlook for stocks next year is good, as a recovering housing market and an improving jobs outlook helps the economy maintain a slow, but steady recovery.
An advance of 10 percent in 2013 would send the S&P 500 toward, and possibly past, its record close of 1,565 reached in October 2007.
A mid-year rally in 2012 pushed stocks to their highest in more than four years. Both the Standard & Poor's 500 and the Dow Jones industrial average gained in 2012. Those advances came despite uncertainty about the outcome of the presidential election and bouts of turmoil from Europe, where policy makers finally appear to be getting a grip on the region's debt crisis.
"As you remove little bits of uncertainty, investors can then once again return to focusing on the fundamentals," says Joseph Tanious, a global market strategist at J.P. Morgan Funds. "Corporate America is actually doing quite well."
Although earnings growth of S&P 500 listed companies dipped as low as 0.8 percent in the summer, analysts are predicting that it will rebound to average 9.5 percent for 2013, according to data from S&P Capital IQ. Companies have also been hoarding cash. The amount of cash and cash-equivalents being held by companies listed in the S&P 500 climbed to an all-time high $1 trillion at the end of September, 65 percent more than five years ago, according to S&P Dow Jones Indices.
By the time trading ended Monday, Republicans and Democrats still hadn't reached a budget compromise — but investors were betting that they would — after President Barack Obama said that a compromise was "within sight," but not finalized. Without a budget agreement, millions of Americans face the prospect of higher taxes and the government would be forced to slash spending, measures that would probably push the economy into recession, economists say.
Assuming a budget deal is reached in a reasonable amount of time, investors will be more comfortable owning stocks in 2013, allowing valuations to rise, says Tanious.
Stocks in the S&P 500 index are currently trading on a price-to-earnings multiple of about 13.5, compared with the average of 17.9 since 1988, according to S&P Capital IQ data. A lower-than-average ration suggests that stocks are cheap.
The stock market will also likely face less drag from the European debt crisis this year, said Steven Bulko, the chief investment officer at Lombard Odier Investment Managers. While policy makers in Europe have yet to come up with a comprehensive solution to the region's woes, they appear to have a better handle on the region's problems than they have for quite some time.
"There is still some heavy lifting that needs to be done in Europe," said Bulko. Now, though, "we are dealing with much more manageable risk than we have had in the past few years."
Next year may also see an increase in mergers and acquisitions as companies seeks to make use of the cash on their balance sheets, says Jarred Kessler, global head of equities at broker Cantor Fitzgerald.
While the number of M&A deals has gradually crept higher in the past four years, the dollar value of the deals remains remains well short of the total reached five years ago. U.S. targeted acquisitions totaled $964 billion through Dec. 27, according to data tracking firm Dealogic. That's slightly down from last year's total of $1 trillion and about 40 percent lower than in 2007, when deals worth $1.6 trillion were struck.
M&A deals are good for stock prices because the acquiring company typically pays a premium for the one it's buying.
Falling interest rates also set off a rally in the bond market. Concerns about swings in stock prices prompted investors to switch money out of stocks and into bond funds. If investors decide that the bond rally may be nearing an end, that flow of funds may be reversed, providing a support for stocks.
"Equities are the best house in a bad neighborhood," says Cantor's Kessler. "Bonds are, not priced to euphoria, but they are definitely rich compared to equities right now."
Not all investors are as sanguine about the prospects for 2013.
The rally in stocks in 2012 had less to do with company earnings and the economy and more to do with monetary stimulus from the Federal Reserve and other central banks around the world, says David Wright, a managing director and co-founder at Sierra Investment Management in Santa Monica, Calif.
Federal Reserve Chairman Ben Bernanke announced Sept. 13 that the central bank would add another round to its bond-purchase program, known as "quantitative easing" on Wall Street, which is intended to lower borrowing costs and boost growth. Speculation that more stimulus was coming had pushed the S&P 500 index to 1,466, its highest close of the year, a day earlier. The Dow peaked for the year at 13,610, Oct. 5.
"The Fed has done everything it can do and is probably pretty close to having used its last bullet," said Wright. "It's been a good year for stocks, but we think that's an artifact of monetary stimulus."
This year's peaks in the Dow and the S&P 500 won't be surpassed in 2013 and stocks may even slump in the first quarter, as investors lower their earnings expectations, Wright says. The money manager also says that any budget plan, regardless of the details, will be negative for stocks as it will involve higher taxes and lower government spending.
Wells Fargo Securities market analyst Gina Martin Adams also says companies will struggle in the first half of the year as the economy flirts with recession. Export growth is slowing and policymakers are struggling to come up with a plan to reduce the budget deficit.
The bank recommends that investors add to their holdings of financial and utilities stocks because low rates should help support steady earnings growth in the early part of the 2013. Financial stocks advanced 25 percent in 2012, making them the best performing industry group in the S&P 500. Utility stocks fell 3.4 percent, the worst performing of 10 industry groups in the index. The bank says investors should reduce their exposure to so-called consumer discretionary stocks, such as hotels and restaurant companies, because consumer spending will likely take a hit next year as taxes rise.
With a backdrop of historically low interest rates and an economy that still needs to address its fiscal imbalances, investors should remain realistic about the returns they are going to get from the stock market, says Darell Krassnoff, managing director at Bel Air Investment Advisors.
"Things are getting better, not worse, but you have to have reasonable expectations," Krassnoff says.

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