Wall Street ends slightly higher, helped by acquisitions

NEW YORK (Reuters) - The S&P 500 eked out a small gain for a third straight session on Thursday, helped by a flurry of merger activity, though investors see no catalysts to lift the market further with major averages near multi-year highs.


The market's slowed advance took the S&P 500 to its highest intraday level since November 2007 on Wednesday. While the index notched its third straight day of gains, none was more than 0.2 percent.


Shares of H.J. Heinz Co jumped 20 percent to $72.50 after it said Warren Buffett's Berkshire Hathaway and 3G Capital will buy the food company for $72.50 a share, or $28 billion including debt. Berkshire's class B shares rose 1.3 percent to $99.21.


Also supporting the market was data showing the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The CBOE Volatility index <.vix> fell 2.4 percent, dropping to 12.67.


"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.


Equities have struggled to break above current levels where they have been hovering for almost two weeks. The S&P 500 is up more than 6 percent so far this year.


"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher," said Selkin, who helps oversee about $3 billion in assets.


Stocks fell earlier after a report the euro zone's gross domestic product contracted by the steepest amount since the first quarter of 2009. In addition, Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.


The Dow Jones industrial average <.dji> was down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index <.spx> was up 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index <.ixic> was up 1.78 points, or 0.06 percent, at 3,198.66.


Constellation Brands soared 37 percent to $43.75 after AB InBev's deal to take over Mexican brewer Grupo Modelo was revised to grant Constellation perpetual rights to distribute Corona and other Modelo brands in the United States. U.S. shares of AB InBev gained 5.1 percent to $92.77.


American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 4.6 percent to $13.99.


Weakness in Europe contributed to a 5 percent drop in revenue from the region for Cisco Systems , which nonetheless beat estimates as it reported its results late Wednesday. The company's shares dipped 0.7 percent to $20.99.


General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. The stock was off 3.3 percent to $27.73.


Only five more stocks rose than fell on the New York Stock Exchange, while 51 percent of Nasdaq-listed shares closed higher.


Volume was light, with about 6.36 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.48 billion shares.


(Editing by Nick Zieminski and Kenneth Barry)



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Iran suggests progress, but no deal, in U.N. atom talks


DUBAI (Reuters) - Iran indicated that some progress was made in talks with the U.N. nuclear watchdog on Wednesday, but that the two sides again failed to finalize an elusive framework deal over the Islamic state's disputed atomic activity.


Iran's ambassador to the International Atomic Energy Agency (IAEA), Ali Asghar Soltanieh, said a new meeting would be held, without giving a date. There was no immediate comment from the IAEA about the one-day meeting in Tehran.


The IAEA had hoped to bridge persistent differences with Iran preventing the U.N. agency from restarting a long-stalled investigation into suspected nuclear weapons research by Tehran. Iran says the allegations are forged and baseless.


The apparent absence of a breakthrough deal in Wednesday's discussions in the Iranian capital will come as no surprise for Western diplomats, who have accused Iran of stonewalling the IAEA for years, a charge Tehran rejects.


World powers were watching the IAEA-Iran talks for signs that Tehran may finally be ready to start addressing their concerns over its nuclear program, which Tehran says is peaceful but the West fears is aimed at developing weapons.


Soltanieh said Iran and the IAEA had agreed on "some points" in the text of a planned framework agreement on how the IAEA should carry out its investigation, without giving details.


There was no immediate comment from the IAEA, which has been trying for more than a year to nail down such an accord giving it access to officials, documents and sites it says it needs for its inquiry in Iran.


"In addition to removing some differences and agreeing on some points in the text ... the two sides decided to review and exchange views about the new proposals that were given in this meeting, in the next meeting," Soltanieh said, according to Fars news agency.


AGREEMENT "NEAR" - STATE TV


Press TV, Iran's English-language state broadcaster, cited Soltanieh as saying that the remaining differences would be discussed in the next Iran-IAEA meeting. "Iran, IAEA near agreement on structured framework," it said in a headline.


The IAEA's immediate priority is to visit the Parchin military base southeast of Tehran, where it suspects explosives tests relevant to nuclear weapons may have taken place, perhaps a decade ago, an accusation Tehran denies.


The United States late last year set a March deadline for Iran to start cooperating in substance with the IAEA's investigation, warning Tehran that it might otherwise be referred to the U.N. Security Council.


Iran was first reported to the U.N. Security Council over its nuclear program by the IAEA's 35-nation board in 2006, and was then punished with U.N. sanctions.


The Islamic Republic denies Western allegations that its nuclear energy program is geared to developing the capability to produce atomic bombs. Iran says it is stockpiling enriched uranium only for civilian energy purposes.


On February 26, Iran and the six world powers are due, after a break of eight months to resume separate, broader negotiations in Kazakhstan aimed at finding a diplomatic settlement to the decade-old dispute and avert the threat of a new war in the Middle East.


The stakes are high: Israel, assumed to be the Middle East's only nuclear-armed power, has strongly hinted that it might take military action to prevent its foe acquiring weapons of mass destruction.


The six powers - the United States, Russia, China, France, Britain and Germany - want Iran to curb uranium enrichment and cooperate fully with the IAEA investigation.


Iran wants them to recognize what it sees as its right to refine uranium for peaceful purposes, and an easing of sanctions, which are hurting its oil-dependent economy.


(Additional reporting by Zahra Hosseinian in Zurich and Fredrik Dahl in Vienna; Editing by Michael Roddy)



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Lady Gaga Cancels Born This Way Ball Tour Due to Severe Injury















02/13/2013 at 08:50 PM EST



It's a somber week for Lady Gaga – and her Little Monsters.

Following Tuesday's Facebook announcement that she was "devastated and sad" because she couldn't walk and had to postpone several Born This Way Ball concerts, the pop star, 26, has officially canceled the remaining dates of her world tour.

"After additional tests this morning to review the severity of the issue, it has been determined that Lady Gaga has a labral tear of the right hip," the singer's rep told PEOPLE Wednesday in a statement. "She will need surgery to repair the problem, followed by strict down time to recover. This unfortunately, will force her to cancel the tour, so she can heal."

Refunds for the cancelled performances will be available at point of purchase starting on Thursday.

"I hope you can forgive me, as it is nearly impossible for me to forgive myself," she wrote the previous day of postponing the dates. "I hate this. I hate this so much. I love you and I'm sorry."

Get well, Gaga!

Reporting by CHUCK ARNOLD

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Clues to why most survived China melamine scandal


WASHINGTON (AP) — Scientists wondering why some children and not others survived one of China's worst food safety scandals have uncovered a suspect: germs that live in the gut.


In 2008, at least six babies died and 300,000 became sick after being fed infant formula that had been deliberately and illegally tainted with the industrial chemical melamine. There were some lingering puzzles: How did it cause kidney failure, and why wasn't everyone equally at risk?


A team of researchers from the U.S. and China re-examined those questions in a series of studies in rats. In findings released Wednesday, they reported that certain intestinal bacteria play a crucial role in how the body handles melamine.


The intestines of all mammals teem with different species of bacteria that perform different jobs. To see if one of those activities involves processing melamine, researchers from the University of North Carolina at Greensboro and Shanghai Jiao Tong University gave lab rats antibiotics to kill off some of the germs — and then fed them melamine.


The antibiotic-treated rats excreted twice as much of the melamine as rats that didn't get antibiotics, and they experienced fewer kidney stones and other damage.


A closer look identified why: A particular intestinal germ — named Klebsiella terrigena — was metabolizing melamine to create a more toxic byproduct, the team reported in the journal Science Translational Medicine.


Previous studies have estimated that fewer than 1 percent of healthy people harbor that bacteria species. A similar fraction of melamine-exposed children in China got sick, the researchers wrote. But proving that link would require studying stool samples preserved from affected children, they cautioned.


Still, the research is pretty strong, said microbiologist Jack Gilbert of the University of Chicago and Argonne National Laboratory, who wasn't involved in the new study.


More importantly, "this paper adds to a growing body of evidence which suggests that microbes in the body play a significant role in our response to toxicity and in our health in general," Gilbert said.


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Wall Street pauses after rally to five-year high

NEW YORK (Reuters) - Stocks drifted in light volume on Wednesday, ending little changed, as investors remained cautious after the S&P 500 index briefly hit its highest intraday level since November 2007.


The S&P 500 was buoyed by General Electric after cable company Comcast Corp said it will buy from GE the the part of NBCUniversal it didn't already own for $16.7 billion.


Comcast's stock hit the highest since 1999 before closing up 3 percent at $40.13 and GE gained 3.6 percent to $23.39.


The S&P 500 is up 6.6 percent so far this year, partly due to stronger-than-expected corporate earnings and a better economic outlook. The Dow industrials is about 1 percent away from an all-time intraday high, reached in October 2007.


Volume has been weak in recent days with the S&P moving sideways around 1,520. The index is about 3 percent away from closing at a record high.


A scarcity of sellers after a consistent string of gains is a positive sign and shows the uptrend is intact, King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, said.


"Last year we had double-digit returns in the first quarter. It's fairly possible we can move higher from here," he said.


The Dow Jones industrial average <.dji> fell 35.79 points or 0.26 percent, to 13,982.91, the S&P 500 <.spx> gained 0.9 point or 0.06 percent, to 1,520.33 and the Nasdaq Composite <.ixic> added 10.38 points or 0.33 percent, to 3,196.88.


The S&P gained 12 percent in the first three months of 2012.


Deere & Co , the world's largest farm equipment maker, forecast a modest increase in sales this year despite the prospect of the biggest corn crop in U.S. history. The forecast fell short of analysts' expectations, sending shares of Deere down 3.5 percent to $90.68.


In extended trading, shares of technology bellwether Cisco Systems fell 2 percent after it posted results.


Dr Pepper Snapple fell 5.8 percent to $42.69 after it forecast profit for the current year below analysts' estimates.


Cliffs Natural Resources lost a fifth of its market value a day after the miner reported a quarterly loss and slashed its dividend by 76 percent. Its shares fell 20 percent to 429.29.


According to the latest Thomson Reuters data, of the 364 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.


About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average in February last year of 6.94 billion.


On the NYSE, roughly seven issues rose for every five that fell and on Nasdaq more than six rose for every five decliners.


(Editing by Kenneth Barry and Bernadette Baum)



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North Korean nuclear test draws anger, including from China


SEOUL (Reuters) - North Korea conducted its third nuclear test on Tuesday in defiance of U.N. resolutions, drawing condemnation from around the world, including from its only major ally, China, which summoned the North Korean ambassador to protest.


Pyongyang said the test was an act of self-defense against "U.S. hostility" and threatened stronger steps if necessary.


The test puts pressure on U.S. President Barack Obama on the day of his State of the Union speech and also puts China in a tight spot, since it comes in defiance of Beijing's admonishments to North Korea to avoid escalating tensions.


The U.N. Security Council held an emergency meeting at which its members, including China, "strongly condemned" the test and vowed to start work on appropriate measures in response, the president of the council said.


North Korean leader Kim Jong-un, the third of his line to rule the country, has presided over two long-range rocket launches and a nuclear test during his first year in power, pursuing policies that have propelled his impoverished and malnourished country closer to becoming a nuclear weapons power.


North Korea said the test had "greater explosive force" than those it conducted in 2006 and 2009. Its KCNA news agency said it had used a "miniaturized" and lighter nuclear device, indicating it had again used plutonium, which is suitable for use as a missile warhead.


China, which has shown signs of increasing exasperation with the recent bellicose tone of its reclusive neighbor, summoned the North Korean ambassador in Beijing and protested sternly, the Foreign Ministry said.


Foreign Minister Yang Jiechi said China was "strongly dissatisfied and resolutely opposed" to the test and urged North Korea to "stop any rhetoric or acts that could worsen situations and return to the right course of dialogue and consultation as soon as possible".


Analysts said the test was a major embarrassment to China, which is a permanent member of the Security Council and North Korea's sole major economic and diplomatic ally.


Obama called the test a "highly provocative act" that hurt regional stability.


"The danger posed by North Korea's threatening activities warrants further swift and credible action by the international community. The United States will also continue to take steps necessary to defend ourselves and our allies," Obama said.


U.S. Ambassador to the United Nations Susan Rice said Washington and its allies intended to "augment the sanctions regime" already in place due to Pyongyang's previous atomic tests. North Korea is already one of the most heavily sanctioned states in the world and has few external economic links that can be targeted.


Japanese Prime Minister Shinzo Abe said the test was a "grave threat" that could not be tolerated.


Russian Foreign Minister Sergei Lavrov urged North Korea to abandon its nuclear arms program and return to talks. NATO condemned the test as an "irresponsible act."


South Korea, still technically at war with North Korea after a 1950-53 civil war ended in a mere truce, also denounced the test. Obama spoke to South Korean President Lee Myung-bak on Tuesday and told him the United States "remains steadfast in its defense commitments" to Korea, the White House said.


MAXIMUM RESTRAINT


North Korea's Foreign Ministry said the test was "only the first response we took with maximum restraint".


"If the United States continues to come out with hostility and complicates the situation, we will be forced to take stronger, second and third responses in consecutive steps," it said in a statement carried by the official KCNA news agency.


North Korea - which gave the U.S. State Department advance warning of the test - often threatens the United States and its "puppet", South Korea, with destruction in colorful terms.


North Korea told the U.N. disarmament forum in Geneva that it would never bow to resolutions on its nuclear program and that prospects were "gloomy" for the denuclearization of the divided Korean peninsula because of a "hostile" U.S. policy.


Suzanne DiMaggio, an analyst at the Asia Society in New York, said North Korea had embarrassed China with the test. "China's inability to dissuade North Korea from carrying through with this third nuclear test reveals Beijing's limited influence over Pyongyang's actions in unusually stark terms," she said.


Mark Fitzpatrick of the International Institute for Strategic Studies think tank, said: "The test is hugely insulting to China, which now can be expected to follow through with threats to impose sanctions."


The magnitude of the explosion was roughly twice that of the 2009 test, according to the Vienna-based Comprehensive Nuclear-Test Ban Treaty Organization. The U.S. Geological Survey said that a seismic event measuring 5.1 magnitude had occurred.


U.S. intelligence agencies were analyzing the event and found that North Korea probably conducted an underground nuclear explosion with a yield of "approximately several kilotons", the Office of the Director of National Intelligence said.


Nuclear experts have described Pyongyang's previous two tests as puny by international standards. The yield of the 2006 test has been estimated at less than 1 kiloton (1,000 tons of TNT equivalent) and the second at some 2-7 kilotons, compared with 20 kilotons for a Nagasaki-type bomb.


Initial indications are that the test involved the latest version of a plutonium-based prototype weapon, according to one current and one former U.S. national security official. Both previous tests involved plutonium. If it turns out the test was of a new uranium-based weapon, it would show that North Korea has made more progress on uranium enrichment than previously thought.


The United States uses WC-135 Constant Phoenix "sniffer" aircraft to collect samples to identify nuclear explosions. These would need to be deployed quickly to detect whether highly enriched uranium rather than plutonium was used because uranium decays to undetectable levels within a matter of days. Plutonium takes much longer to decay.


North Korea trumpeted news of the test on its state television channel to patriotic music against a backdrop of its national flag.


"It was confirmed that the nuclear test that was carried out at a high level in a safe and perfect manner using a miniaturized and lighter nuclear device with greater explosive force than previously did not pose any negative impact on the surrounding ecological environment," KCNA said.


North Korea linked the test to its technical prowess in launching a long-range rocket in December, a move that triggered the U.N. sanctions, backed by China, that Pyongyang said prompted it to take Tuesday's action.


The North's ultimate aim, Washington believes, is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could hit the United States. North Korea says the program is aimed at putting satellites in space.


Despite its three nuclear tests and long-range rocket tests, North Korea is not believed to be close to manufacturing a nuclear missile capable of hitting the United States.


It used plutonium in previous nuclear tests and before Tuesday there had been speculation that it would use highly enriched uranium so as to conserve its plutonium stocks, as testing eats into its limited supply of materials to construct a nuclear bomb.


"VICIOUS CYCLE"


When Kim Jong-un, who is 30, took power after his father's death in December 2011, there were hopes that he would bring reforms and end Kim Jong-il's "military first" policies.


Instead, North Korea, whose economy is smaller than it was 20 years ago and where a third of children are believed to be malnourished, appears to be trapped in a cycle of sanctions followed by further provocations.


"The more North Korea shoots missiles, launches satellites or conducts nuclear tests, the more the U.N. Security Council will impose new and more severe sanctions," said Shen Dingli, a professor at Shanghai's Fudan University. "It is an endless, vicious cycle."


Options for the international community appear to be in short supply. Diplomats at the United Nations said negotiations on new sanctions could take weeks since China is likely to resist tough new measures for fear they could lead to further retaliation by the North Korean leadership.


Beijing has also been concerned that tougher sanctions could further weaken North Korea's economy and prompt a flood of refugees into China.


Tuesday's action appeared to have been timed for the run-up to February 16 anniversary celebrations of Kim Jong-il's birthday, as well as to achieve maximum international attention.


Significantly, the test comes at a time of political transition in China, Japan and South Korea, and as Obama begins his second term. The U.S. president will likely have to tweak his State of the Union address due to be given on Tuesday.


Japanese Prime Minister Shinzo Abe is bedding down a new government and South Korea's new president, Park Geun-hye, is preparing to take office on February 25.


China too is in the midst of a once-in-a-decade leadership transition to Xi Jinping, who takes office in March. Both Abe and Xi are staunch nationalists.


The longer-term game plan from Pyongyang may be to restart international talks aimed at winning food and financial aid. China urged it to return to the stalled "six-party" talks on its nuclear program, hosted by China and including the two Koreas, the United States, Japan and Russia.


Its puny economy and small diplomatic reach mean that North Korea struggles to win attention on the global stage - other than through nuclear tests and attacks on South Korea, the last of which was made in 2010.


"Now the next step for North Korea will be to offer talks... - any form to start up discussion again to bring things to their advantage," predicted Jeung Young-tae, senior research fellow at the Korea Institute for National Unification in Seoul.


(Additional reporting by Jack Kim, Christine Kim and Jumin Park in SEOUL; Linda Sieg in TOKYO; Louis Charbonneau and Michelle Nichols at the UNITED NATIONS; Fredrik Dahl in VIENNA; Michael Martina and Chen Aizhu in BEIJING; Mette Fraende in COPENHAGEN; Adrian Croft, Charlie Dunmore and Justyna Pawlak in BRUSSELS; Mark Hosenball, Paul Eckert, Roberta Rampton, Tabassum Zakaria and Jeff Mason in WASHINGTON; Editing by Nick Macfie, Claudia Parsons and David Brunnstrom)



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Lady Gaga: I Can't Walk Due to Injury















02/12/2013 at 06:45 PM EST



Lady Gaga is feeling like a little monster for postponing concerts because of an injury.

"I barely know what to say," she writes on her Facebook page, Tuesday. "I've been hiding a show injury and chronic pain for some time now, [and] over the past month it has worsened. I've been praying it would heal. I hid it from my staff. I didn't want to disappoint my amazing fans. However, after last night's performance I could not walk and still can't."

The pop star, 26 – whose Twitter page explains that she has a case of synovitis, which is severe inflammation of the joints – was forced to postpone two concerts in Chicago, one in Detroit and one in Hamilton, Ontario.

"I hope you can forgive me, as it is nearly impossible for me to forgive myself," the rest of her Facebook post says. "I'm devastated & sad. It will hopefully heal as soon as possible. I hate this. I hate this so much. I love you and I'm sorry."

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Study questions kidney cancer treatment in elderly


In a stunning example of when treatment might be worse than the disease, a large review of Medicare records finds that older people with small kidney tumors were much less likely to die over the next five years if doctors monitored them instead of operating right away.


Even though nearly all of these tumors turned out to be cancer, they rarely proved fatal. And surgery roughly doubled patients' risk of developing heart problems or dying of other causes, doctors found.


After five years, 24 percent of those who had surgery had died, compared to only 13 percent of those who chose monitoring. Just 3 percent of people in each group died of kidney cancer.


The study only involved people 66 and older, but half of all kidney cancers occur in this age group. Younger people with longer life expectancies should still be offered surgery, doctors stressed.


The study also was observational — not an experiment where some people were given surgery and others were monitored, so it cannot prove which approach is best. Yet it offers a real-world look at how more than 7,000 Medicare patients with kidney tumors fared. Surgery is the standard treatment now.


"I think it should change care" and that older patients should be told "that they don't necessarily need to have the kidney tumor removed," said Dr. William Huang of New York University Langone Medical Center. "If the treatment doesn't improve cancer outcomes, then we should consider leaving them alone."


He led the study and will give results at a medical meeting in Orlando, Fla., later this week. The research was discussed Tuesday in a telephone news conference sponsored by the American Society of Clinical Oncology and two other cancer groups.


In the United States, about 65,000 new cases of kidney cancer and 13,700 deaths from the disease are expected this year. Two-thirds of cases are diagnosed at the local stage, when five-year survival is more than 90 percent.


However, most kidney tumors these days are found not because they cause symptoms, but are spotted by accident when people are having an X-ray or other imaging test for something else, like back trouble or chest pain.


Cancer experts increasingly question the need to treat certain slow-growing cancers that are not causing symptoms — prostate cancer in particular. Researchers wanted to know how life-threatening small kidney tumors were, especially in older people most likely to suffer complications from surgery.


They used federal cancer registries and Medicare records from 2000 to 2007 to find 8,317 people 66 and older with kidney tumors less than 1.5 inches wide.


Cancer was confirmed in 7,148 of them. About three-quarters of them had surgery and the rest chose to be monitored with periodic imaging tests.


After five years, 1,536 had died, including 191 of kidney cancer. For every 100 patients who chose monitoring, 11 more were alive at the five-year mark compared to the surgery group. Only 6 percent of those who chose monitoring eventually had surgery.


Furthermore, 27 percent of the surgery group but only 13 percent of the monitoring group developed a cardiovascular problem such as a heart attack, heart disease or stroke. These problems were more likely if doctors removed the entire kidney instead of just a part of it.


The results may help doctors persuade more patients to give monitoring a chance, said a cancer specialist with no role in the research, Dr. Bruce Roth of Washington University in St. Louis.


Some patients with any abnormality "can't sleep at night until something's done about it," he said. Doctors need to say, "We're not sticking our head in the sand, we're going to follow this" and can operate if it gets worse.


One of Huang's patients — 81-year-old Rhona Landorf, who lives in New York City — needed little persuasion.


"I was very happy not to have to be operated on," she said. "He said it's very slow growing and that having an operation would be worse for me than the cancer."


Landorf said her father had been a doctor, and she trusts her doctors' advice. Does she think about her tumor? "Not at all," she said.


___


Online:


Kidney cancer info: http://www.cancer.net/cancer-types/kidney-cancer


and http://www.cancer.gov/cancertopics/types/kidney


Study: http://gucasym.org


___


Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP


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Wall Street ends slightly higher, Dow near a record

NEW YORK (Reuters) - Stocks closed modestly higher on Tuesday, putting the Dow within striking distance of an all-time high, as investors looked ahead to President Barack Obama's State of the Union address.


Investors will be listening to Obama's speech for any clues on a deal with Republicans to avert automatic spending cuts due to take effect March 1. The tone of the speech will also be scrutinized, with any sign of compromise likely to be warmly received.


The S&P 500 has risen for the past six weeks, putting it up 6.5 percent so far this year, while the Dow is about 1 percent away from its all-time closing record of 14,164.53, reached in October 2007.


But gains have been harder to come by since the S&P hit a five-year high on February 1. Daily moves have been small and trading volume light as investors search for new reasons to drive stocks higher.


About 5.73 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Tuesday, below the daily average so far this year of about 6.48 billion shares.


"We're likely to settle in for a period and digest the gains we've had, though there's still a bias towards positive momentum," said Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina.


"Questions over government spending are the big overhang, and we're looking for Obama to inspire some confidence over that tonight."


The White House has signaled Obama will urge investment in infrastructure and clean energy, suggesting companies in those sectors may be volatile in Wednesday's session.


"Gun makers could also see a reaction if Obama talks about anything with respect to gun control," said Teal, who helps oversee $5 billion. Shares of Smith & Wesson fell 2 cents to $9.11 while Sturm Ruger was up 0.4 percent at $53.91.


The Dow Jones industrial average <.dji> was up 47.46 points, or 0.34 percent, at 14,018.70. The Standard & Poor's 500 Index <.spx> was up 2.42 points, or 0.16 percent, at 1,519.43. The Nasdaq Composite Index <.ixic> was down 5.51 points, or 0.17 percent, at 3,186.49.


Housing shares were among the strongest of the day, led by a 12.5 percent jump in Masco Corp to $20.02 after the home improvement product maker said it expects new home construction to show strong growth in 2013. The PHLX housing sector index <.hgx> rose 3.7 percent.


Avon Products Inc surged 20 percent to $20.79 as the S&P 500's top percentage gainer after the cosmetics company reversed sales declines and cut costs.


On the downside, Coca-Cola Co fell 2.7 percent to $37.56 and was the biggest drag on the Dow after reporting revenue below estimates, hurt by a weaker-than-expected performance in Europe.


Michael Kors Holdings shares jumped 8.8 percent to $62.04 after the fashion company handily beat Wall Street's estimates and raised its full-year outlook.


With earnings season starting to wind down, Thomson Reuters data through Tuesday morning shows of the 353 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.


Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.


About 62 percent of stocks traded on the New York Stock Exchange closed higher while 59 percent of Nasdaq-listed shares closed in positive territory.


(Editing by Nick Zieminski)



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Pope's sudden resignation sends shockwaves through Church


VATICAN CITY (Reuters) - Pope Benedict stunned the Roman Catholic Church on Monday when he announced he would stand down, the first pope to do so in 700 years, saying he no longer had the mental and physical strength to carry on.


Church officials tried to relay a climate of calm confidence in the running of a 2,000-year-old institution, but the decision could lead to uncertainty in a Church already besieged by scandal for covering up sexual abuse of children by priests.


The soft-spoken German, who always maintained that he never wanted to be pope, was an uncompromising conservative on social and theological issues, fighting what he regarded as the increasing secularization of society.


It remains to be seen whether his successor will continue such battles or do more to bend with the times.


Despite his firm opposition to tolerance of homosexual acts, his eight year reign saw gay marriage accepted in many countries. He has staunchly resisted allowing women to be ordained as priests, and opposed embryonic stem cell research, although he retreated slightly from the position that condoms could never be used to fight AIDS.


He repeatedly apologized for the Church's failure to root out child abuse by priests, but critics said he did too little and the efforts failed to stop a rapid decline in Church attendance in the West, especially in his native Europe.


In addition to child sexual abuse crises, his papacy saw the Church rocked by Muslim anger after he compared Islam to violence. Jews were upset over rehabilitation of a Holocaust denier. During a scandal over the Church's business dealings, his butler was accused of leaking his private papers.


In an announcement read to cardinals in Latin, the universal language of the Church, the 85-year-old said: "Well aware of the seriousness of this act, with full freedom I declare that I renounce the ministry of Bishop of Rome, Successor of St Peter ...


"As from 28 February 2013, at 20:00 hours (1900 GMT) the See of Rome, the See of St. Peter will be vacant and a conclave to elect the new Supreme Pontiff will have to be convoked by those whose competence it is."


POPE DOESN'T FEAR SCHISM


Benedict is expected to go into isolation for at least a while after his resignation. Vatican spokesman Father Federico Lombardi said Benedict did not intend to influence the decision of the cardinals in a secret conclave to elect a successor.


A new leader of the world's 1.2 billion Roman Catholics could be elected as soon as Palm Sunday, on March 24, and be ready to take over by Easter a week later, Lombardi said.


Several popes in the past, including Benedict's predecessor John Paul, have refrained from stepping down over their health, because of the division that could be caused by having an "ex-pope" and a reigning pope alive at the same time.


Lombardi said the pope did not fear a possible "schism", with Catholics owing allegiances to a past and present pope in case of differences on Church teachings.


He indicated the complex machinery of the process to elect a new pope would move quickly because the Vatican would not have to wait until after the elaborate funeral services for a pope.


It is not clear if Benedict will have a public life after he resigns. Lombardi said Benedict would first go to the papal summer residence south of Rome and then move into a cloistered convent inside the Vatican walls.


The resignation means that cardinals from around the world will begin arriving in Rome in March and after preliminary meetings, lock themselves in a secret conclave and elect the new pope from among themselves in votes in the Sistine Chapel.


There has been growing pressure on the Church for it to choose a pope from the developing world to better reflect where most Catholics live and where the Church is growing.


"It could be time for a black pope, or a yellow one, or a red one, or a Latin American," said Guatemala's Archbishop Oscar Julio Vian Morales.


The cardinals may also want a younger man. John Paul was 58 when he was elected in 1978. Benedict was 20 years older.


"We have had two intellectuals in a row, two academics, perhaps it is time for a diplomat," said Father Tom Reese, senior fellow at the Woodstock Theological Center at Georgetown University. "Rather than electing the smartest man in the room, they should elect the man who will listen to all the other smart people in the Church."


Liberals have already begun calling for a pope that would be more open to reform.


"The current system remains an 'old boy's club' and does not allow for women's voices to participate in the decision of the next leader of our Church," said the Women's Ordination Conference, a group that wants women to be able to be priests.


"GREAT COURAGE"


The last pope to resign willingly was Celestine V in 1294 after reigning for only five months, his resignation was known as "the great refusal" and was condemned by the poet Dante in the "Divine Comedy". Gregory XII reluctantly abdicated in 1415 to end a dispute with a rival claimant to the papacy.


Lombardi said Benedict's stepping aside showed "great courage". He ruled out any specific illness or depression and said the decision was made in the last few months "without outside pressure". But the decision was not without controversy.


"This is disconcerting, he is leaving his flock," said Alessandra Mussolini, a parliamentarian who is granddaughter of Italy's wartime dictator. "The pope is not any man. He is the vicar of Christ. He should stay on to the end, go ahead and bear his cross to the end. This is a huge sign of world destabilization that will weaken the Church."


Cardinal Stanislaw Dziwisz, secretary to the late Pope John Paul, said the former pope had stayed on despite failing health for the last decade of his life as he believed "you cannot come down from the cross."


While the pope had slowed down recently - he started using a cane and a wheeled platform to take him up the long aisle in St Peter's Square - he had given no hint recently that he was considering such a dramatic decision.


Elected in 2005 to succeed the enormously popular John Paul, Benedict never appeared to feel comfortable in the job.


"MIND AND BODY"


In his announcement, the pope told the cardinals that in order to govern "... both strength of mind and body are necessary, strength which in the last few months, has deteriorated in me to the extent that I have had to recognize my incapacity to adequately fulfill the ministry entrusted to me."


Before he was elected pope, the former Cardinal Joseph Ratzinger was known as "God's rottweiler" for his stern stand on theological issues. After a few months, he showed a milder side but he never drew the kind of adulation that had marked the 27-year papacy of his predecessor John Paul.


U.S. President Barack Obama extended prayers to Benedict and best wishes to those who would choose his successor.


German Chancellor Angela Merkel said the pope's decision must be respected if he feels he is too weak to carry out his duties. British Prime Minister David Cameron said: "He will be missed as a spiritual leader to millions."


The Archbishop of Canterbury, leader of the worldwide Anglican communion, said he had learned of the pope's decision with a heavy heart but complete understanding.


CHEERS AND SCANDAL


Elected to the papacy on April 19, 2005, Benedict ruled over a slower-paced, more cerebral and less impulsive Vatican.


But while conservatives cheered him for trying to reaffirm traditional Catholic identity, his critics accused him of turning back the clock on reforms by nearly half a century and hurting dialogue with Muslims, Jews and other Christians.


After appearing uncomfortable in the limelight at the start, he began feeling at home with his new job and showed that he intended to be pope in his way.


Despite great reverence for his charismatic, globe-trotting predecessor -- whom he put on the fast track to sainthood and whom he beatified in 2011 -- aides said he was determined not to change his quiet manner to imitate John Paul's style.


A quiet, professorial type who relaxed by playing the piano, he showed the gentle side of a man who was the Vatican's chief doctrinal enforcer for nearly a quarter of a century.


The first German pope for some 1,000 years and the second non-Italian in a row, he traveled regularly, making about four foreign trips a year, but never managed to draw the oceanic crowds of his predecessor.


The child abuse scandals hounded most of his papacy. He ordered an official inquiry into abuse in Ireland, which led to the resignation of several bishops.


Scandal from a source much closer to home hit in 2012 when the pontiff's butler, responsible for dressing him and bringing him meals, was found to be the source of leaked documents alleging corruption in the Vatican's business dealings.


Benedict confronted his own country's past when he visited the Nazi death camp at Auschwitz. Calling himself "a son of Germany", he prayed and asked why God was silent when 1.5 million victims, most of them Jews, were killed there.


Ratzinger served in the Hitler Youth during World War Two when membership was compulsory. He was never a member of the Nazi party and his family opposed Adolf Hitler's regime.


(Additional reporting by James Mackenzie, Barry Moody, Cristiano Corvino, Alexandra Hudson in Berlin, and Dagamara Leszkowixa in Poland; Editing by Peter Graff)



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