Wall Street Week Ahead: Attention turns to financial earnings

NEW YORK (Reuters) - After over a month of watching Capitol Hill and Pennsylvania Avenue, Wall Street can get back to what it knows best: Wall Street.

The first full week of earnings season is dominated by the financial sector - big investment banks and commercial banks - just as retail investors, free from the "fiscal cliff" worries, have started to get back into the markets.

Equities have risen in the new year, rallying after the initial resolution of the fiscal cliff in Washington on January 2. The S&P 500 on Friday closed its second straight week of gains, leaving it just fractionally off a five-year closing high hit on Thursday.

An array of financial companies - including Goldman Sachs and JPMorgan Chase - will report on Wednesday. Bank of America and Citigroup will join on Thursday.

"The banks have a read on the economy, on the health of consumers, on the health of demand," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

"What we're looking for is demand. Demand from small business owners, from consumers."

EARNINGS AND ECONOMIC EXPECTATIONS

Investors were greeted with a slightly better-than-anticipated first week of earnings, but expectations were low and just a few companies reported results.

Fourth quarter earnings and revenues for S&P 500 companies are both expected to have grown by 1.9 percent in the past quarter, according to Thomson Reuters I/B/E/S.

Few large corporations have reported, with Wells Fargo the first bank out of the gate on Friday, posting a record profit. The bank, however, made fewer mortgage loans than in the third quarter and its shares were down 0.8 percent for the day.

The KBW bank index <.bkx>, a gauge of U.S. bank stocks, is up about 30 percent from a low hit in June, rising in six of the last eight months, including January.

Investors will continue to watch earnings on Friday, as General Electric will round out the week after Intel's report on Thursday.

HOUSING, INDUSTRIAL DATA ON TAP

Next week will also feature the release of a wide range of economic data.

Tuesday will see the release of retail sales numbers and the Empire State manufacturing index, followed by CPI data on Wednesday.

Investors and analysts will also focus on the housing starts numbers and the Philadelphia Federal Reserve factory activity index on Thursday. The Thomson Reuters/University of Michigan consumer sentiment numbers are due on Friday.

Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, said he expected to see housing numbers continue to climb.

"They won't be that surprising if they're good, they'll be rather eye-catching if they're not good," he said. "The underlying drive of the markets, I think, is economic data. That's been the catalyst."

POLITICAL ANXIETY

Worries about the protracted fiscal cliff negotiations drove the markets in the weeks before the ultimate January 2 resolution, but fear of the debt ceiling fight has yet to command investors' attention to the same extent.

The agreement was likely part of the reason for a rebound in flows to stocks. U.S.-based stock mutual funds gained $7.53 billion after the cliff resolution in the week ending January 9, the most in a week since May 2001, according to Thomson Reuters' Lipper.

Markets are unlikely to move on debt ceiling news unless prominent lawmakers signal that they are taking a surprising position in the debate.

The deal in Washington to avert the cliff set up another debt battle, which will play out in coming months alongside spending debates. But this alarm has been sounded before.

"The market will turn the corner on it when the debate heats up," Prudential Financial's Krosby said.

The CBOE Volatility index <.vix> a gauge of traders' anxiety, is off more than 25 percent so far this month and it recently hit its lowest since June 2007, before the recession began.

"The market doesn't react to the same news twice. It will have to be more brutal than the fiscal cliff," Krosby said. "The market has been conditioned that, at the end, they come up with an agreement."

(Reporting by Gabriel Debenedetti; editing by Rodrigo Campos)

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At War Blog: Highlights From Karzai, Obama News Conference

President Obama, after meeting with President Hamid Karzai of Afghanistan, said Friday that the United States would be able to accelerate the withdrawal of troops from Afghanistan in coming months because of gains made by Afghan security forces.

As The Times’s Mark Landler reported, Mr. Obama also made clear that he contemplated leaving relatively few troops in Afghanistan after the NATO combat mission ends in 2014, saying that the mission would be focused on advising and supporting Afghan troops and targeting the remnants of Al Qaeda.

You can watch the full video here:

You can also find the joint statement released by President Obama and President Karzai here.

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Factbox: Video game industry meets with Biden gun task force

WASHINGTON (Reuters) – Representatives from the companies that make “first-person shooter” games such as “Call of Duty,” “Medal of Honor” and “Grand Theft Auto” met with Vice President Joe Biden on Friday as the Obama administration looks for ways to curb U.S. gun violence.

Biden is heading a task force formed after a gunman shot dead 20 children and six adults last month at a Connecticut elementary school. Biden plans to make recommendations on reducing gun violence to President Barack Obama by next Tuesday.

The vice president has held discussions with a wide range of groups including gun retailers, gun owners, the National Rifle Association gun rights lobbying organization, the film industry, victims of gun violence, and law enforcement authorities.

Following is a list of groups present at Friday’s meeting with Biden, Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius.

Activision Blizzard Inc

Electronic Arts Inc

E-Line Media

Entertainment Software Association

Entertainment Software Ratings Board

Epic Games

GameStop Corp

Joan Ganz Cooney Center at Sesame Workshop

Take-Two Interactive Software Inc

Texas A&M University

University of Wisconsin at Madison

Zenimax Media Inc

(Reporting by Roberta Rampton; Editing by Will Dunham)

Gaming News Headlines – Yahoo! News

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Poppy Montgomery Expecting Second Child

Mom & Babies
Celebrity Baby Blog

01/11/2013 at 04:00 PM ET

Gregg DeGuire/WireImage

There’s a baby on the way for Poppy Montgomery!

The Unforgettable star is expecting her second child this spring, a rep for Montgomery confirms to PEOPLE exclusively.

This will be the actress’ first child with Shawn Sanford, a Microsoft executive Montgomery began dating in late 2011. She’s already mom to son Jackson, 5, from her prior relationship with actor Adam Kaufman.

“Shawn and I are thrilled and Jackson is so excited to be a big brother!” Montgomery, who is also known for her series Without a Trace, tells PEOPLE.

In addition to writing her PEOPLE.com blog, Montgomery will continue work on Unforgettable when it returns to CBS this summer.

RELATED: Poppy Montgomery’s PEOPLE.com Blog Series

– Sarah Michaud

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Flu season puts businesses and employees in a bind

WASHINGTON (AP) — Nearly half the 70 employees at a Ford dealership in Clarksville, Ind., have been out sick at some point in the past month. It didn't have to be that way, the boss says.

"If people had stayed home in the first place, a lot of times that spread wouldn't have happened," says Marty Book, a vice president at Carriage Ford. "But people really want to get out and do their jobs, and sometimes that's a detriment."

The flu season that has struck early and hard across the U.S. is putting businesses and employees alike in a bind. In this shaky economy, many Americans are reluctant to call in sick, something that can backfire for their employers.

Flu was widespread in 47 states last week, up from 41 the week before, the Centers for Disease Control and Prevention said Friday. The only states without widespread flu were California, Mississippi and Hawaii. And the main strain of the virus circulating tends to make people sicker than usual.

Blake Fleetwood, president of Cook Travel in New York, says his agency is operating with less than 40 percent of its full-time staff because of the flu and other ailments.

"The people here are working longer hours and it puts a lot of strain on everyone," Fleetwood says. "You don't know whether to ask people with the flu to come in or not." He says the flu is also taking its toll on business as customers cancel their travel plans: "People are getting the flu and they're reduced to a shriveling little mess and don't feel like going anywhere."

Many workers go to the office even when they're sick because they are worried about losing their jobs, says John Challenger, CEO of Challenger, Gray & Christmas, an employer consulting firm. Other employees report for work out of financial necessity, since roughly 40 percent of U.S. workers don't get paid if they are out sick. Some simply have a strong work ethic and feel obligated to show up.

Flu season typically costs employers $10.4 billion for hospitalization and doctor's office visits, according to the CDC. That does not include the costs of lost productivity from absences.

At Carriage Ford, Book says the company plans to make flu shots mandatory for all employees.

Linda Doyle, CEO of the Northcrest Community retirement home in Ames, Iowa, says the company took that step this year for its 120 employees, providing the shots at no cost. It is also supplying face masks for all staff.

And no one is expected to come into work if sick, she says.

So far, the company hasn't seen an outbreak of flu cases.

"You keep your fingers crossed and hope it continues this way," Doyle says. "You see the news and it's frightening. We just want to make sure that we're doing everything possible to keep everyone healthy. Cleanliness is really the key to it. Washing your hands. Wash, wash, wash."

Among other steps employers can take to reduce the spread of the flu on the job: holding meetings via conference calls, staggering shifts so that fewer people are on the job at the same time, and avoiding handshaking.

Newspaper editor Rob Blackwell says he had taken only two sick days in the last two years before coming down with the flu and then pneumonia in the past two weeks. He missed several days the first week of January and has been working from home the past week.

"I kept trying to push myself to get back to work because, generally speaking, when I'm sick I just push through it," says Blackwell, the Washington bureau chief for the daily trade paper American Banker.

Connecticut is the only state that requires some businesses to pay employees when they are out sick. Cities such as San Francisco and Washington have similar laws.

Challenger and others say attitudes are changing, and many companies are rethinking their sick policies to avoid officewide outbreaks of the flu and other infectious diseases.

"I think companies are waking up to the fact right now that you might get a little bit of gain from a person coming into work sick, but especially when you have an epidemic, if 10 or 20 people then get sick, in fact you've lost productivity," Challenger says.

___

Associated Press writers Mike Stobbe in Atlanta, Eileen A.J. Connelly in New York, Paul Wiseman in Washington, Barbara Rodriguez in Des Moines, Iowa, and Jim Salter in St. Louis contributed to this report.

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Wall Street ends flat as rally slows, earnings eyed

NEW YORK (Reuters) - Stocks ended little changed on Friday as investors took a step back from buying ahead of next week's busy corporate earnings calendar.

Overall earnings are expected to grow by just 1.9 percent in this season, according to Thomson Reuters data. Analysts say that, with the bar low, there's room for companies to beat expectations, and that may have contributed to the rise in stocks so far in 2013.

That rally has slowed in the last few days.

"It's a market that is waiting for more of a catalyst from earnings," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

The S&P 500 index has gained 5 percent over the last two weeks to take the benchmark to five-year highs.

Wells Fargo & Co set a weak tone Friday after it reported results. It showed lower fourth-quarter net interest margin - a key measure of how much money banks make from loans - even as profit jumped.

The bank, which was the first major financial institution to report results this earnings season, also made fewer mortgage loans than in the third quarter.

Wells Fargo ended down 0.8 percent at $35.10, off its lows for the day, while bank shares weighed on the broader market. The S&P 500 financial sector index <.gspf> fell 0.3 percent after rallying more than 1 percent on Thursday.

Bank of America Corp , JPMorgan Chase & Co and Citigroup Inc are due to report results next week, as are other major companies including General Electric and Intel .

An agreement reached in Washington at the start of the year over the "fiscal cliff" saw investors in U.S.-based funds add $7.53 billion to stock mutual funds in the week ended Jan 9, the most since 2001, data from Thomson Reuters' Lipper service showed.

"The money poured into the market at the beginning of the year and you're going to need new money to bring this market higher," said Krosby. She said that in the short-term the market has a bias toward moving higher, even though it is overbought.

The Dow Jones industrial average <.dji> gained 17.21 points, or 0.13 percent, to 13,488.43. The Standard & Poor's 500 Index <.spx> dipped 0.07 points to 1,472.05. The Nasdaq Composite Index <.ixic> added 3.88 points, or 0.12 percent, to 3,125.64.

For the week, the S&P and Dow both gained 0.4 percent and the Nasdaq rose 0.8 percent.

Boeing weighed on the Dow after a cracked cockpit window and an oil leak on separate flights in Japan added to problems with some of its Dreamliner 787 jets, compounding safety concerns about the new aircraft.

The U.S. Department of Transportation said the jet would be subject to a review of its critical systems by regulators. Boeing was the biggest loser on the Dow, falling 2.5 percent to $75.16.

Best Buy rallied after its results showed a small turnaround in U.S. stores, though same-store sales were flat during the key holiday season. Its shares jumped 16.4 percent to $14.21, making it the best performer on the S&P 500.

Dendreon Corp surged 21 percent to $6.17 after Sanford C. Bernstein upgraded the drugmaker's stock to "outperform" from "market-perform" and said it could be one of the best performers in 2013.

Volume was below the 2012 average of 6.42 billion shares traded a day, with roughly 5.93 billion shares changing hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT.

Advancers outpaced decliners on the New York Stock Exchange by 1,578 to 1,393, while advancers narrowly outnumbered decliners on the Nasdaq by 1,228 to 1,223.

(Editing by Nick Zieminski)

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German Bishops Cancel Study Into Sexual Abuse by Priests

PARIS (Reuters) — Germany’s Roman Catholic bishops on Wednesday canceled a study into the sexual abuse of minors by priests, prompting the investigator to accuse them of trying to censor what was to be a major report on the scandals.

The independent study, examining church files that sometimes date to 1945, was meant to shed light on undiscovered cases after about 600 people filed claims against priests in 2010 following a wave of revelations of sexual abuse. The German scandals were part of a series of abuse scandals that also shook the Catholic Church in Ireland, Belgium, the Netherlands and the United States, forcing Pope Benedict XVI to issue a public apology.

Bishop Stephan Ackermann, a spokesman on abuse issues for the German Bishops’ Conference, said that the hierarchy had lost confidence in the researcher, Christian Pfeiffer, a criminologist, and that it would look for another specialist for the study.

“We will have to find a new partner,” Bishop Ackermann said in a statement that blamed Mr. Pfeiffer’s “communications behavior with church officials” for the breakdown.

Mr. Pfeiffer told German Radio that the bishops wanted to change previously agreed-upon guidelines for the project to include a final veto over publishing its results, which he could not accept.

Officials made “an attempt to turn the whole contract towards censorship and stronger control by the church,” said Mr. Pfeiffer, head of the Criminological Research Institute of Lower Saxony.

One lay Catholic organization, known as the International Movement We Are Church, called the decision “a devastating signal for the credibility of the church leadership” that showed the bishops could not accept an independent inquiry into the scandals. The German justice minister, Sabine Leutheusser-Schnarrenberger, said that the church’s effort to clear up the scandals should not end in “a halfhearted inventory.”

“It’s high time that the Catholic Church opened up and let outside experts look at its archives,” she told the Sueddeutsche Zeitung newspaper.

Investigations into the records of priests accused of molesting children have been conducted in recent years in other countries, sometimes with devastating results for the reputation of the church involved.

Ireland was shocked when several inquiries conducted by the government revealed widespread abuse and a pattern of secrecy to cover them up. Three bishops resigned as a result. An official Dutch report said that up to 20,000 children had been sexually abused in Catholic orphanages, boarding schools and seminaries between 1945 and 2010.

A commission set up by the Belgian church received 475 reports of abuse before its premises were raided in 2010 by the police seeking evidence for possible criminal cases against predator priests. It reported 13 victims had been driven to suicide.

Revelations of sexual abuse cases in the United States starting in the 1990s led to a wave of court cases, costing the church $2 billion in settlements.

Speaking to German Radio, Bishop Ackermann said the bishops feared that Mr. Pfeiffer would publish results without their permission. “We weren’t trying to hold things back,” he said. “We want a similar project to go ahead.”

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Jimmy Dushku: The 25-year-old who is North Korea’s one true Twitter friend

Mother Jones takes a look at a globetrotting young investor who’s the only American — and the only human being — Pyongyang follows

Google Chairman Eric Schmidt capped a controversial four-day visit to North Korea on Thursday with a call for the country’s censorship-happy communist government to give its people access to the internet, or face further economic decline due to the country’s global isolation. It was a strong message from one of the web’s most powerful figures, although North Korea watchers seem pretty confident the country’s young leader, Kim Jong Un, will ignore it. There’s one American, however, Pyongyang does appear to listen to. That would be Jimmy Dushku, a young investor who is one of exactly three Twitter users Kim’s government follows on Twitter. What’s the story behind this unlikely online bromance? Here, a guide:

Who is Jimmy Dushku?
He’s a 25-year-old financial whiz kid from Austin, Texas. Dushku, who also goes by the nicknames “Jimmer” and “Jammy,” started a website development business when he was 14, according to Mother Jones, and he parlayed his early earnings into investments that now include everything from construction projects in Europe to real estate in Texas to mines in South America. He’s also a rabid Coldplay fan, and when he isn’t jetting around the world, he says he likes to play Rachmaninoff on his piano and zoom around on his Ducati Monster motorcycle.

SEE MORE: North Korea’s rocket launch: 3 consequences

So how did he become buddies with North Korea?
Dushku tells Asawin Suebsaeng at Mother Jones he’s not really sure. “People always ask me how it happened, and I honestly can’t remember,” he says. “It started sometime back in 2010. I was initially surprised.” North Korea followed him, he followed North Korea “out of courtesy.” He tweeted back, “Hello my friend,” and a relationship was born. Then, the North Korean government, which has piled up some 11,000 followers in two-and-a-half years on Twitter, abruptly whittled down the number of accounts it follows, leaving just three. Dushku made the cut (along with a Vietnam account and another official North Korean handle).

What has Dushku gotten from the relationship?
Death threats, for one thing. Not long after he linked up with North Korea’s account, which goes by @uriminzok (or “our nation”), Dushku says he started getting angry messages from exiles and South Koreans. Since then, he has mostly kept a low profile, just to be safe, although he does occasionally grant interviews to foreign publications. For its part, North Korea gets a rare glimpse at the outside world through Dushku, as his is the only account North Korea follows that is regularly updated — the other two haven’t tweeted in months. He’s also the only human being in the bunch.

Will @JimmyDushku and @uriminzok ever meet in real life?
That’s always the question for acquaintances who meet online, isn’t it? Dushku says his friendly relationship has won him a standing offer to visit North Korea. Casual observers, however, advise him to proceed with caution. “Am I the only one thinking they picked some random guy so they can lure him into North Korea and use him as a political prisoner/bargaining chip?” one commenter at Gizmodo said. Another suggests that Dushku play it cool, without making Pyongyang angry, saying, “Never unfollow anybody with nuclear weapons.”

Sources: Austinist, CNN, Gizmodo, Mother Jones

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Lindsay Lohan Says Rejection Is 'Nothing Like Going to Jail'

By Maggie Coughlan

01/10/2013 at 04:45 PM EST

Lindsay Lohan

Adhemar Sburlati/Broadimage

Ever wonder what happens once Lindsay Lohan is cast in a film?

New York Times Magazine contributing writer Stephen Rodrick found out when he spent time with the actress on the set of The Canyons – an explicit Kickstarter-funded "microbudget" film penned by American Psycho author Bret Easton Ellis.

In the nearly 8,000 word piece, Rodrick unveils a unique version of Lohan, 26, in which she goes on extended crying jags yet shows actual talent on set. Still, he depicts her behaving very unreliably (at one point actually fleeing from crew members to go out to lunch with her friends) and acting jealous of adult film star James Deen, her costar.

After arriving late to the first read-through of the film's script, Lohan lends her thoughts on her character, Tara, a failed actress who is financially dependent on her boyfriend, Christian (Deen).

"Rejection for an actress is formative," director Paul Schrader tells her.

"Well, it's nothing like going to jail, I can tell you that," Lohan replies.

While another incident Rodrick is witness to serves as a painful reminder of Lohan's dysfunctional family life.

After rehearsing a scene where costar Deen has to throw her to the ground, Lohan "bounced up with a smile," the author describes. "That was great! Want to do it again?" she asks Schrader in the article. When the scene ends, someone compliments Lohan's work. She answers: "Well, I've got a lot of experience with that from my dad."

"She didn't elaborate, and no one asked," Rodrick writes.

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Flu season hits early and, in some places, hard

NEW YORK (AP) — From the Rocky Mountains to New England, hospitals are swamped with people with flu symptoms. Some medical centers have limited visitors, and one Pennsylvania hospital set up a tent outside its ER to handle the feverish patients.

Flu season in the U.S. has hit early and, in some places, hard. But whether this will be considered a bad season by the time it has run its course in the spring remains to be seen.

"Those of us with gray hair have seen worse," said Dr. William Schaffner, a flu expert at Vanderbilt University in Nashville.

The evidence so far is pointing to a moderate season, Schaffner and others believe. It just looks bad compared with last year — an unusually mild one.

Flu usually doesn't blanket the country until late January or February, but it is already widespread in more than 40 states.

What's probably complicating the situation: The main influenza virus this year tends to make people sicker. And there are other bugs out there causing flu-like illnesses. So what people are calling the flu may, in fact, be something else.

"There may be more of an overlap than we normally see," said Dr. Joseph Bresee, who tracks the flu for the Centers for Disease Control and Prevention.

The flu's early arrival in the U.S. coincided with spikes in a variety of other viruses, including a childhood malady that mimics flu and a new norovirus that causes what some people call "stomach flu."

Most people don't undergo lab tests to confirm flu, and the symptoms are so similar that it's sometimes hard to distinguish flu from other viruses, or even a cold. Over the holidays, 250 people were sickened at a Mormon missionary training center in Utah, but the culprit turned out to be a norovirus, not the flu.

Flu is a major contributor, though, to what's going on.

"I'd say 75 percent," said Dr. Dan Surdam, head of the emergency department at Cheyenne Regional Medical Center, Wyoming's largest hospital. The 17-bed ER saw its busiest day ever last week, with 166 visitors.

The early onslaught has resulted in a spike in hospitalizations, prompting hospitals to take steps to deal with the influx and protect other patients from getting sick, including restricting visits from children, requiring family members to wear masks, and banning anyone with flu symptoms from maternity wards.

One hospital in Allentown, Pa., this week set up a tent for a steady stream of patients with flu symptoms.

But so far, "what we're seeing is a typical flu season," said Terry Burger, director of infection control and prevention for the hospital, Lehigh Valley Hospital-Cedar Crest.

On Wednesday, Boston declared a public health emergency, and all the flu activity has caused some to question whether this year's flu shot is working.

There's a new flu vaccine each year, based on the best guess of what flu viruses will be strongest that year. This year's vaccine is well-matched to what's going around. The government estimates that between a third and a half of Americans have gotten the vaccine.

But the vaccine isn't foolproof, and even those who were vaccinated can still get sick. At best, the vaccine may be only 75 percent effective in younger people and even less so in the elderly and people with weak immune systems.

Health officials are analyzing the vaccine's effectiveness, but early indications are that about 60 percent of all vaccinated people have been protected from the flu. That's in line with how effective flu vaccines have been in other years.

In New York City, 57-year-old Judith Quinones suffered her worst case of flu-like illness in years, laid up for nearly a month with fever and body aches. "I just couldn't function," she said.

She decided to skip getting a flu shot last fall. But her daughter got the shot. "And she got sick twice," Quinones said.

On average, about 24,000 Americans die each flu season, according to the CDC.

Flu usually peaks in midwinter. Symptoms can include fever, cough, runny nose, head and body aches and fatigue. Some people also suffer vomiting and diarrhea, and some develop pneumonia or other severe complications.

Most people with flu have a mild illness and can help themselves and protect others by staying home and resting. But people with severe symptoms should see a doctor. They may be given antiviral drugs or other medications to ease symptoms.

The last bad flu season involved a swine flu that hit in two waves in the spring and fall of 2009. But that was considered a unique strain, different from the regular winter flu.

___

Online:

CDC flu: http://www.cdc.gov/flu/index.htm

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