Stocks hit session highs after Fed announcement

NEW YORK (Reuters) - Stocks climbed to session highs on Wednesday after the U.S. Federal Reserve announced a new stimulus plan at the end of its two-day monetary policy meeting in its latest attempt to kickstart a struggling economy.

The central bank replaced a more modest stimulus program due to expire at year-end with a fresh round of Treasury purchases that will increase its balance sheet, as was widely expected. It committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

"The market was expecting this - they basically stopped doing the Operation Twist, and it looks like they are going to be doing $45 billion a month in Treasury purchases, which was the expectation," said Troy Logan, managing director and senior economist at Warren Financial Service, in Exton, Pennsylvania.

"This was expected, and the market is waiting for the year-end 'fiscal cliff' issue to be solved, so what we have to do is have confidence our political system can actually make a functional decision."

U.S. House of Representatives Speaker John Boehner said on Wednesday "serious differences" remain with President Barack Obama in talks to avert the "fiscal cliff" of steep tax hikes and budget cuts set for the end of the year.

The S&P 500 was up for a sixth straight day, its longest winning streak since August, although gains have been less than 0.5 percent per day, on average, in part due to uncertainty over the cliff negotiations.

The Dow Jones industrial average <.dji> gained 71.44 points, or 0.54 percent, to 13,319.88. The Standard & Poor's 500 Index <.spx> rose 10.19 points, or 0.71 percent, to 1,438.03. The Nasdaq Composite Index <.ixic> advanced 12.29 points, or 0.41 percent, to 3,034.59.

Shares of Aetna , the third-largest U.S. health insurer, jumped 4.8 percent to $46.61 a day after the company gave a higher forecast for profit and revenue growth next year.

Wal-Mart Stores Inc fell 2.3 percent to $69.24 as the biggest drag on the Dow after India's government announced an inquiry into the company's lobbying practices.

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Cheikh Modibo Diarra, Mali’s Prime Minister, Resigns After Arrest

BAMAKO, Mali — Soldiers arrested Mali’s prime minister at his residence late Monday night, signaling new turmoil in a West African nation racked by military interference and an Islamist takeover in the north.

Associated Press

Prime Minister Cheikh Modibo Diarra appeared on state television and announced his government’s resignation on Tuesday.

Hours later, Prime Minister Cheikh Modibo Diarra appeared grim-faced on national television to announce his government’s resignation. A spokesman for soldiers who seized power earlier in the year — and later nominally relinquished it to Mr. Diarra — confirmed the prime minister’s arrest on Tuesday morning, accusing him of “playing a personal agenda” while the country faced a crisis in the north. The soldiers arrived at Mr. Diarra’s home around 11 p.m. Monday as he was preparing for a flight to Paris for a medical checkup, said the military spokesman, Bakary Mariko. The prime minister was taken to the military encampment at Kati, just outside Bamako, the capital, where Capt. Amadou Sanogo, the officer who led the March military coup, and others told him “there were proofs against him that he was calling for subversion,” Mr. Mariko said.

On Tuesday morning, the streets of Bamako appeared calm following what appeared to be the country’s second coup d’état in less than a year. But the new upheaval is likely to be considered a setback to Western efforts to help Mali regain control of territory lost to Qaeda-linked militants earlier in the year.

The West has watched with growing alarm as Islamist radicals have constructed a stronghold in the country’s vast north. The United Nations, regional African bodies, France and the United States have tried to aid the faltering Malian Army in a military strike to take back the lost north. Those efforts have so far not coalesced into a coherent plan, despite numerous meetings and United Nations resolutions. More meetings at the United Nations are planned for later this month.

The latest political turmoil in the capital will almost certainly slow down any campaign in the north, however. Already, the United States has expressed reluctance to provide too much direct military assistance, given the shakiness of the political order here. Those doubts are only likely to increase following the latest upheaval.

Mr. Diarra — appointed last spring as a caretaker prime minister until new elections could be organized — was known to disagree with Captain Sanogo on military policy.

He has been an advocate of immediate international military assistance to recapture the north from the Islamists. Captain Sanogo has rebuffed suggestions that the Malian military is incapable of handling the job on its own. Indeed, the captain for weeks resisted the notion that troops from other African nations should even approach the capital.

While Mr. Diarra has made the rounds of foreign capitals, pleading for help to fight the increasingly aggressive Islamists, military leaders have remained at the Kati base, grumbling.

That conflict was evident in the declarations of the military’s spokesman on Tuesday. “Since he has been in power, he has been working simply to position his own family,” Mr. Mariko said. “There has been a paralysis in government.”

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Notorious patent troll hits RIM with new lawsuit, seeks BlackBerry sales ban

Well-known patent troll Wi-LAN has filed a new lawsuit against BlackBerry maker Research In Motion (RIMM) in the U.S. District Court for the Southern District of Florida. Wi-LAN, which describes itself as “a leading intellectual property licensing company,” claims RIM’s BlackBerry smartphones infringe U.S. Patent No. 6,260,168, owned by Wi-LAN, which relates to Bluetooth implementation. The lawsuit covers multiple BlackBerry handsets including Bold, Torch, Pearl and Storm models, Reuters reports. Wi-LAN is reportedly seeking unspecified damages and is looking to ban sales of RIM’s infringing BlackBerry phones in the United States.

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Gadgets News Headlines – Yahoo! News

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Tom Brady Is Thrilled His Sons Have a Sister

Mom & Babies
Celebrity Baby Blog

12/11/2012 at 11:00 AM ET

Rob Carr/Getty

Having grown up with three of them, Tom Brady knows the value of having a sister — and is thrilled for his sons that they get to experience it.

“I think it’s great for my boys to have a girl in the house,” the father of two sons and a newborn daughter, Vivian Lake, tells ESPN.

The New England Patriots quarterback hopes it helps John, 5, and Benjamin, 3, “understand at least a little bit about what makes a woman tick — not that I can certainly figure that out, because I can’t. She’s a beautiful little girl.”

With his ever-growing brood, Brady, 35, is settling into a nice work-life balance with wife Gisele Bündchen.

“I love playing football. I love coming to work every day,” he says. “But also, being at home, and giving those boys my attention, and my affection, and my discipline, and being a good parent is so important, because I grew up with two of the best parents a son could ever ask for.”

– Tim Nudd

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Surprise: New insurance fee in health overhaul law

WASHINGTON (AP) — Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That's because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer.

The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63.

It will phase out completely in 2017 — unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits — decides to extend it.

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Tech titans, "cliff" hopes push indexes up

NEW YORK (Reuters) - Rising shares in technology companies helped push major stock indexes up around 1 percent on Tuesday, as the S&P 500 reached its best levels since mid-October, recouping its post-election selloff.

A 3.1 percent gain in Apple Inc's stock lifted the Nasdaq, as the largest U.S. company by market value rebounded from a week in which investors took profits before a possible tax rise next year. Prior to Tuesday's trading, Apple shares had lost 25 percent from an all-time intraday high hit in September.

Other major tech stocks also rose. Texas Instruments gained 3.8 percent to $30.97 after bumping up its profit target late Monday. That helped other chipmakers rally, with the PHLX Semiconductor index <.sox> up 2 percent. Microsoft rose 1.8 percent to $27.44.

"I see a lot of buying in tech, and that's taking the whole market up with it," said Tom Donino, co-head of trading at First New York Securities in New York.

The Dow Jones industrial average <.dji> gained 112.57 points, or 0.85 percent, at 13,282.45. The Standard & Poor's 500 Index <.spx> was up 13.23 points, or 0.93 percent, at 1,431.78. The Nasdaq Composite Index <.ixic> rose 40.95 points, or 1.37 percent, at 3,027.91.

Retailers like luggage maker Tumi Holding Inc and Michael Kors Holding gained on Tuesday after a positive report from Goldman Sachs Equity Research. Tumi was up 4.1 percent to $21.80, and Michael Kors gained 2.6 percent, reaching $51.08.

Traders voiced cautious optimism as the pace of negotiations over the "fiscal cliff" quickened. However, representatives from both parties cautioned that an agreement remains uncertain.

Republican House Speaker John Boehner called on President Barack Obama to propose a counter-offer on Tuesday.

"I guess in our own dysfunctional way, there is progress," said Frank Davis, director of sales and trading at LEK Securities in New York.

"Since conversations are occurring, it clarifies at least they are taking some action. My personal gut is they'll jostle this into the holiday week and try to do a last minute push."

Lawmakers worked toward a deal to avoid a series of automatic tax hikes and spending cuts that would hurt U.S. economic growth next year.

The lack of demonstrable progress has kept investors from making aggressive bets in recent weeks.

Still, stocks have steadily marched higher on thin volume. The S&P 500 hovered around 1433.38 on Tuesday, retracing losses incurred in the first seven sessions after Obama's re-election. Gains were broad, with more than two shares rising for every one falling on the New York Stock Exchange and winners outpacing losers on the Nasdaq Stock Exchange by nearly three-to-one.

The U.S. Treasury is selling its remaining stake in insurer American International Group Inc . AIG's shares were up 4.7 percent at $34.94.

The Fed began a two-day policy-setting meeting on Tuesday. The central bank is expected to announce a new round of Treasury bond purchases when the meeting ends on Wednesday to replace its "Operation Twist" stimulus which expires at the end of the year.

(Editing by Kenneth Barry and Nick Zieminski)

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U.S. Forecast as No. 2 Economy, but Energy Independent

WASHINGTON — A new intelligence assessment of global trends projects that China will outstrip the United States as the leading economic power before 2030, but that America will remain an indispensable world leader, bolstered in part by an era of energy independence.

Russia’s clout will wane, as will the economic strength of other countries reliant on oil for revenues, the assessment says.

The product of four years of intelligence-gathering and analysis, the study, by the National Intelligence Council, presents grounds for optimism and pessimism in nearly equal measure. The council reports to the director of national intelligence and has responsibilities for long-term strategic analysis.

One remarkable development it anticipates is a spreading affluence that leads to a larger global middle class that is better educated and has wider access to health care and communications technologies like the Internet and smartphones. The report assesses global trends until 2030.

“The growth of the global middle class constitutes a tectonic shift,” the study says, adding that billions of people will gain new individual power as they climb out of poverty. “For the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world.”

At the same time, it warns, half of the world’s population will probably be living in areas that suffer from severe shortages of fresh water, meaning that management of natural resources will be a crucial component of global national security efforts.

But these developments also bring significant risks, allowing radicalized groups to enter world politics on a scale even more violent than that of current terrorist organizations by adopting “lethal and disruptive technologies,” including biological weapons and cyberweapons.

The study warns of the risk that terrorists could mount a computer-network attack in which the casualties would be measured not by the hundreds or thousands killed but by the millions severely affected by damaged infrastructure, like electrical grids being taken down.

“There will not be any hegemonic power,” the 166-page report says. “Power will shift to networks and coalitions in a multipolar world.”

It warns that at least 15 countries are “at high risk of state failure” by 2030, among them Afghanistan and Pakistan, but also Burundi, Rwanda, Somalia, Uganda and Yemen.

The study acknowledges that the future “is malleable,” and it lists important “game changers” that will most influence the global scene until 2030: a crisis-prone world economy, shortcomings in governance, conflicts within states and between them, the impact of new technologies and whether the United States can “work with new partners to reinvent the international system.”

The best-case situation for global security until 2030, according to the study, would be a growing political partnership between the United States and China. But it could take a crisis to bring Washington and Beijing together — something like a nuclear standoff between India and Pakistan resolved only by bold cooperation between the United States and China.

The worst-case situation envisions a stalling of economic globalization that would preclude any advancement of financial well-being around the world. That would be a likely outcome after an outbreak of a health pandemic that, even if short-lived, would result in closed borders and economic isolationism.

The chief author and manager of the project, Mathew Burrows, who is counselor for the National Intelligence Council, said the findings had been presented in advance in more than 20 nations to groups of academic experts, business leaders and government officials, including local intelligence officers.

In an interview, Mr. Burrows noted that the audiences in China were far more accepting of the American intelligence assessments — both those predicting China’s economic ascendancy and those warning of political dangers if there was no reform of governance in Beijing — than were audiences in Russia.

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Husband of Kate's Late Nurse Writes About 'Tragic Loss'

By Stephen M. Silverman

12/10/2012 at 01:45 PM EST

The husband of Jacintha Saldanha, the London nurse who last week answered the prank call from an Australian radio station about the condition of the pregnant Duchess of Cambridge and then apparently took her own life, has expressed his grief in a public message.

On his Facebook page, Ben Barboza writes, "I am devastated with the tragic loss of my beloved wife Jacintha in tragic circumstances, She will be laid to rest in Shirva, India."

In addition, King Edward VII's Hospital, where the 46-year-old mother of two worked, announced Monday the launch of a memorial fund in her honor. All donations will go to her family.

"Jacintha Saldanha," said the hospital chairman, Lord Glenarthur, in a statement, "was an outstanding nurse whose loss has shocked and saddened everyone at the hospital. Following discussions with her family, we have now established the Jacintha Saldanha Memorial Fund in her memory."

Donations may be sent to: Finance, King Edward VII's Hospital, 10 Beaumont St., London W1G 6AA, U.K.

Also on Monday, Mel Greig and Michael Christian, the two deejays who placed the phone call and impersonated Queen Elizabeth and Prince Charles inquiring after Kate's condition, apologized in interviews with two Australian TV stations.

"It was the worst phone call I've ever had in my life," said Greig. "There's not a minute that goes by that we don't think about her family and what they must be going through. And the thought that we may have played a part in that is gut-wrenching."

Their program has been terminated and they have been placed on suspension by Australia's 2DayFM.

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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Wall Street edges up, led by McDonald's and tech

NEW YORK (Reuters) - Stocks advanced slightly on Monday, helped by gains in McDonald's after the fast-food giant posted strong sales results, and a move up in technology shares.

Technology stocks were the S&P 500's best-performing sector as Hewlett-Packard Co climbed 2.5 percent to $14.14 on rumors that activist investor Carl Icahn is building a stake in the PC maker. The stock is down 44.5 percent for the year and ranks as the Dow's worst performer.

Tech was also supported by Cisco Systems , which gained 2.2 percent to $19.75 after the company presented its midterm growth strategy on Friday. Monday's rally put the stock on track for its fifth advance in the past six sessions.

U.S. President Barack Obama met with Republican House Speaker John Boehner on Sunday to negotiate a budget deal. A Boehner aide said Monday that talks are continuing. Obama is expected to make remarks at 2 p.m. from Michigan where he is touring an auto plant.

Persistent worries about the negotiations over the "fiscal cliff," a series of automatic tax hikes and spending cuts that could hurt economic growth next year, have kept market moves small of late.

"The funnel is starting to get narrower and narrower at the end of the year. We're waiting for political resolutions, waiting for headlines," said Brian Battle, director of trading at Performance Trust Capital Partners, in Chicago.

The benchmark S&P 500 index has yet to see a move greater than 0.5 percent in either direction for December, and hasn't moved more than 1 percent either way since November 23. However, the market has regained most of the losses incurred post-election as investors refocused on the fiscal cliff.

McDonald's Corp gave the Dow a jolt, gaining 1.3 percent to $89.66, as its November sales were stronger than expected and showed a bounce back from a decline in October.

The Dow Jones industrial average <.dji> rose 22.11 points, or 0.17 percent, to 13,177.24. The Standard & Poor's 500 Index <.spx> gained just 0.75 of a point, or 0.05 percent, at 1,418.82. The Nasdaq Composite Index <.ixic> was up 5.38 points, or 0.18 percent, at 2,983.42.

News out of Italy kept sentiment in check as Prime Minister Mario Monti said he would resign after the approval of the 2013 budget. The move added to uncertainty about progress being made to tackle the euro zone's debt problem and drove Italy's borrowing costs higher.

(Editing by Jan Paschal)

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