Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.


A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.


Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.


Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.


"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.


"The markets still basically believe that something will be done," he said.


If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.


For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.


Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.


IT COULD GET A LITTLE CRAZY


Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.


If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.


"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.


"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."


Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.


Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.


"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.


"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."


Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.


The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.


Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.


U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.


(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)


(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)



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Egypt's constitution seen passing in referendum


CAIRO (Reuters) - Egyptians voted on a constitution drafted by Islamists on Saturday in a second round of balloting expected to approve the charter that opponents say will create deeper turmoil in Egypt.


After a first round last week in which unofficial results showed 57 percent of those who voted approved the constitution, the opposition cried foul, saying a litany of alleged abuses meant the first stage of the referendum should be re-run.


But the committee overseeing the two-stage vote said their investigations showed no major irregularities in voting on December 15, which covered about half of Egypt's 51 million eligible voters.


Islamist supporters of President Mohamed Mursi, who was elected in June, say the constitution is vital to moving Egypt towards democracy two years after Hosni Mubarak was overthrown in a popular uprising. They say it will help restore the stability needed to fix an economy that is on the ropes.


If the basic law is passed, a parliamentary election will be held in about two months.


However, the opposition says the constitution is divisive and accuses Mursi of pushing through a document that favors his Islamist allies and ignores the rights of Christians, who make up about 10 percent of the population, as well as women.


"I'm voting 'no' because Egypt can't be ruled by one faction," said Karim Nahas, 35, a stock market broker, heading to a polling station in Giza, a province included in this round of voting which covers parts of greater Cairo.


Polling stations opened at 8 a.m. (0600 GMT) and close at 7 p.m. (1700 GMT) though voting could be extended as it was last week. Queues formed at some polling stations around the country.


Unofficial tallies are likely to emerge within hours of the close, but the referendum committee may not declare an official result for the two rounds until Monday, after hearing appeals.


Shahinaz Shalaby, a housewife, said she would be voting "yes" even though she disagreed with some clauses. "We feel our voice matters," she said, adding that a "yes" vote would not stop protests but "then it will stabilize afterwards".


Cairo districts covered in the first round voted "no", but overall the vote in that round was in favor.


Analysts expect another "yes" vote on Saturday because it covers rural and other areas seen as having more Islamist sympathizers. Islamists may also be able to count on many Egyptians who are simply exhausted by two years of turmoil.


MORE UNREST


But, even if it is approved, the opposition say it is a recipe for trouble since the charter has not received broad consensus backing from the population. They say the result may go in Mursi's favor but will not be the result of a fair vote.


"I see more unrest," said Ahmed Said, head of the liberal Free Egyptians Party and a member of the National Salvation Front, an opposition coalition formed after Mursi expanded his powers on November 22 and then pushed the constitution to a vote.


Citing what he said were "serious violations" on the first day of voting, he said anger against Mursi and his Islamist allies was growing: "People are not going to accept the way they are dealing with the situation."


At least eight people were killed in protests outside the presidential palace in Cairo this month. Islamists and rivals clashed on Friday in the second biggest city of Alexandria, hurling stones at each other. Two buses were torched.


Mohamed Beltagy, a senior official in the Muslim Brotherhood, the group that propelled Mursi to elected office, said the constitution was crucial to holding a parliamentary election and setting up the essential institutions of state.


"What is the catastrophe of this constitution?" he asked the assembly which drafted the document, during a sitting on Friday that was called to challenge opposition criticism of the text.


Opponents, who had earlier quit the drafting assembly saying their voices were not heard, were invited but stayed away.


The vote was staggered after many judges refused to supervise the vote, meaning there were not enough to hold the referendum on a single day nationwide.


The first round was won by a slim enough margin to buttress opposition arguments that the text was divisive. Opponents who include liberals, leftists, Christians and more moderate-minded Muslims accuse Islamists of using religion to sway voters.


"The problem is not whether the majority approves, it is that they rallied the people in the name of the religion," said Mustafa Shuman, who is among dozens of people who have been camped outside Mursi's palace in Cairo in protest.


Islamists, who have won successive ballots since Mubarak's overthrow albeit by narrowing margins, dismiss charges that they are exploiting religion and say the document reflects the will of a majority in the country where most people are Muslim.


(Additional reporting by Tamim Elyan; Writing by Edmund Blair; Editing by Andrew Osborn)



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Red Hat shares up on acquisition and 3Q results






Red Hat Inc.‘s shares jumped Friday on the software company‘s solid third-quarter results and plans to acquire cloud-based software company ManageIQ.


THE SPARK: Red Hat said late Thursday that it would buy privately held ManageIQ for $ 104 million in cash.






The Raleigh, N.C., company also reported that it earned 29 cents per share for its fiscal third quarter on an adjusted basis, up a penny from the prior year and in line with analyst expectations. Its revenue for the period increased 18 percent to $ 343.6 million, which beats the $ 338 million that analysts polled by FactSet had forecast.


THE BIG PICTURE: ManageIQ’s software helps businesses deploy and manage private clouds. Red Hat said the deal will expand the reach of its public-private cloud setups for its customers. The acquisition is expected to have no material impact to Red Hat’s revenue for its fiscal year ending in February.


THE ANALYSIS: Stifel Nicolaus analyst Brad R. Reback said that the company has been able to maintain momentum even in a difficult environment and he thinks the latest deal offers an interesting longer-term angle for its business. He thinks the company is well positioned to generate at least 15 to 20 percent billings growth in the future. He reiterated a “Buy” rating and a $ 65 price target on its shares.


SHARE ACTION: Shares gained $ 2.25, or more than 4 percent, to $ 54.86 in afternoon trading. Shares have traded between $ 39.19 and $ 62.75 in the past 52 weeks.


Linux/Open Source News Headlines – Yahoo! News





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See If You Can Spot the One Color That Popped on the Carpet This Week







Style News Now





12/21/2012 at 12:00 PM ET











Lauren Bush Lauren Beauty ProductsGetty; Splash News Online; WireImage


Even though we didn’t see as many stars on the red carpet this week as last — it’s quiet in Hollywood this holiday season! — we still saw some strong trends emerge at various events. What were they? Let’s get to it!



Up: Pops of red. You can thank the holidays for this festive mini-trend, which we spotted on Hailee Steinfeld’s purse, Bella Heathcote’s dress and Rose Byrne’s jacket. Adding just a hint of the bold hue to your outfit is an easy way to look all holiday-y without going overboard.




Up: Head-to-toe black. What, are stars sick of sequined dresses already? This week we saw nearly one dozen leading ladies wear all black: Britney Spears, Demi Lovato, LeAnn Rimes, Alexa Chung, Jessica Chastain, Miley Cyrus, Krysten Ritter and Kerry Washington … to name a few. As New Yorkers, we’re always happy to see all-black ensembles en force, and it is a look that’s usually pretty failsafe — and slimming.



Down: Stick-straight hair. Rita Ora was the only woman we saw with pin-straight locks this week; everyone else went for bouncy curls and elegant updos (and cropped cuts, if you count Miley Cyrus!). With Christmas and New Year’s Even upon us, we predict we’ll be seeing a lot more exciting hairdos and less of the minimalist straight looks.


Tell us: Which color are you more likely to wear at the holidays: red or black?






Want more Trend Report? Click to hear our thoughts on mini dresses, cut-outs and collars.


FIND ALL THE LATEST RED CARPET NEWS AND PHOTOS HERE!




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AP IMPACT: Big Pharma cashes in on HGH abuse


A federal crackdown on illicit foreign supplies of human growth hormone has failed to stop rampant misuse, and instead has driven record sales of the drug by some of the world's biggest pharmaceutical companies, an Associated Press investigation shows.


The crackdown, which began in 2006, reduced the illegal flow of unregulated supplies from China, India and Mexico.


But since then, Big Pharma has been satisfying the steady desires of U.S. users and abusers, including many who take the drug in the false hope of delaying the effects of aging.


From 2005 to 2011, inflation-adjusted sales of HGH were up 69 percent, according to an AP analysis of pharmaceutical company data collected by the research firm IMS Health. Sales of the average prescription drug rose just 12 percent in that same period.


___


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


___


Unlike other prescription drugs, HGH may be prescribed only for specific uses. U.S. sales are limited by law to treat a rare growth defect in children and a handful of uncommon conditions like short bowel syndrome or Prader-Willi syndrome, a congenital disease that causes reduced muscle tone and a lack of hormones in sex glands.


The AP analysis, supplemented by interviews with experts, shows too many sales and too many prescriptions for the number of people known to be suffering from those ailments. At least half of last year's sales likely went to patients not legally allowed to get the drug. And U.S. pharmacies processed nearly double the expected number of prescriptions.


Peddled as an elixir of life capable of turning middle-aged bodies into lean machines, HGH — a synthesized form of the growth hormone made naturally by the human pituitary gland — winds up in the eager hands of affluent, aging users who hope to slow or even reverse the aging process.


Experts say these folks don't need the drug, and may be harmed by it. The supposed fountain-of-youth medicine can cause enlargement of breast tissue, carpal tunnel syndrome and swelling of hands and feet. Ironically, it also can contribute to aging ailments like heart disease and Type 2 diabetes.


Others in the medical establishment also are taking a fat piece of the profits — doctors who fudge prescriptions, as well as pharmacists and distributors who are content to look the other way. HGH also is sold directly without prescriptions, as new-age snake oil, to patients at anti-aging clinics that operate more like automated drug mills.


Years of raids, sports scandals and media attention haven't stopped major drugmakers from selling a whopping $1.4 billion worth of HGH in the U.S. last year. That's more than industry-wide annual gross sales for penicillin or prescription allergy medicine. Anti-aging HGH regimens vary greatly, with a yearly cost typically ranging from $6,000 to $12,000 for three to six self-injections per week.


Across the U.S., the medication is often dispensed through prescriptions based on improper diagnoses, carefully crafted to exploit wiggle room in the law restricting use of HGH, the AP found.


HGH is often promoted on the Internet with the same kind of before-and-after photos found in miracle diet ads, along with wildly hyped claims of rapid muscle growth, loss of fat, greater vigor, and other exaggerated benefits to adults far beyond their physical prime. Sales also are driven by the personal endorsement of celebrities such as actress Suzanne Somers.


Pharmacies that once risked prosecution for using unauthorized, foreign HGH — improperly labeled as raw pharmaceutical ingredients and smuggled across the border — now simply dispense name brands, often for the same banned uses. And usually with impunity.


Eight companies have been granted permission to market HGH by the U.S. Food and Drug Administration, which reviews the benefits and risks of new drug products. By contrast, three companies are approved for the diabetes drug insulin.


The No. 1 maker, Roche subsidiary Genentech, had nearly $400 million in HGH sales in the U.S. last year, up an inflation-adjusted two-thirds from 2005. Pfizer and Eli Lilly were second and third with $300 million and $220 million in sales, respectively, according to IMS Health. Pfizer now gets more revenue from its HGH brand, Genotropin, than from Zoloft, its well-known depression medicine that lost patent protection.


On their face, the numbers make no sense to the recognized hormone doctors known as endocrinologists who provide legitimate HGH treatment to a small number of patients.


Endocrinologists estimate there are fewer than 45,000 U.S. patients who might legitimately take HGH. They would be expected to use roughly 180,000 prescriptions or refills each year, given that typical patients get three months' worth of HGH at a time, according to doctors and distributors.


Yet U.S. pharmacies last year supplied almost twice that much HGH — 340,000 orders — according to AP's analysis of IMS Health data.


While doctors say more than 90 percent of legitimate patients are children with stunted growth, 40 percent of 442 U.S. side-effect cases tied to HGH over the last year involved people age 18 or older, according to an AP analysis of FDA data. The average adult's age in those cases was 53, far beyond the prime age for sports. The oldest patients were in their 80s.


Some of these medical records even give explicit hints of use to combat aging, justifying treatment with reasons like fatigue, bone thinning and "off-label," which means treatment of an unapproved condition


Even Medicare, the government health program for older Americans, allowed 22,169 HGH prescriptions in 2010, a five-year increase of 78 percent, according to data released by the Centers for Medicare and Medicaid Services in response to an AP public records request.


"There's no question: a lot gets out," said hormone specialist Dr. Mark Molitch of Northwestern University, who helped write medical standards meant to limit HGH treatment to legitimate patients.


And those figures don't include HGH sold directly by doctors without prescriptions at scores of anti-aging medical practices and clinics around the country. Those numbers could only be tallied by drug makers, who have declined to say how many patients they supply and for what conditions.


First marketed in 1985 for children with stunted growth, HGH was soon misappropriated by adults intent on exploiting its modest muscle- and bone-building qualities. Congress limited HGH distribution to the handful of rare conditions in an extraordinary 1990 law, overriding the generally unrestricted right of doctors to prescribe medicines as they see fit.


Despite the law, illicit HGH spread around the sports world in the 1990s, making deep inroads into bodybuilding, college athletics, and professional leagues from baseball to cycling. The even larger banned market among older adults has flourished more recently.


FDA regulations ban the sale of HGH as an anti-aging drug. In fact, since 1990, prescribing it for things like weight loss and strength conditioning has been punishable by 5 to 10 years in prison.


Steve Kleppe, of Scottsdale, Ariz., a restaurant entrepreneur who has taken HGH for almost 15 years to keep feeling young, said he noticed a price jump of about 25 percent after the block on imports. He now buys HGH directly from a doctor at an annual cost of about $8,000 for himself and the same amount for his wife.


Many older patients go for HGH treatment to scores of anti-aging practices and clinics heavily concentrated in retirement states like Florida, Nevada, Arizona and California.


These sites are affiliated with hundreds of doctors who are rarely endocrinologists. Instead, many tout certification by the American Board of Anti-Aging and Regenerative Medicine, though the medical establishment does not recognize the group's bona fides.


The clinics offer personalized programs of "age management" to business executives, affluent retirees, and other patients of means, sometimes coupled with the amenities of a vacation resort. The operations insist there are few, if any, side effects from HGH. Mainstream medical authorities say otherwise.


A 2007 review of 31 medical studies showed swelling in half of HGH patients, with joint pain or diabetes in more than a fifth. A French study of about 7,000 people who took HGH as children found a 30 percent higher risk of death from causes like bone tumors and stroke, stirring a health advisory from U.S. authorities.


For proof that the drug works, marketers turn to images like the memorable one of pot-bellied septuagenarian Dr. Jeffry Life, supposedly transformed into a ripped hulk of himself by his own program available at the upscale Las Vegas-based Cenegenics Elite Health. (He declined to be interviewed.)


These promoters of HGH say there is a connection between the drop-off in growth hormone levels through adulthood and the physical decline that begins in late middle age. Replace the hormone, they say, and the aging process slows.


"It's an easy ruse. People equate hormones with youth," said Dr. Tom Perls, a leading industry critic who does aging research at Boston University. "It's a marketing dream come true."


___


Associated Press Writer David B. Caruso reported from New York and AP National Writer Jeff Donn reported from Plymouth, Mass. AP Writer Troy Thibodeaux provided data analysis assistance from New Orleans.


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AP's interactive on the HGH investigation: http://hosted.ap.org/interactives/2012/hgh


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The AP National Investigative Team can be reached at investigate(at)ap.org


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


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Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.


A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.


Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.


Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.


"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.


"The markets still basically believe that something will be done," he said.


If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.


For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.


Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.


IT COULD GET A LITTLE CRAZY


Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.


If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.


"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.


"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."


Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.


Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.


"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.


"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."


Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.


The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.


Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.


U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.


(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)


(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)



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Syrian rebels fight for strategic town in Hama province


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


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


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


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


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


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


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


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


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


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


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


SECTARIAN FEARS


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


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


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


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


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


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


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


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


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


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


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


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


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


LEBANON BORDER POST TAKEN


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


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


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


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


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


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


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


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


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


(Reporting by Erika Solomon; Editing by Andrew Osborn)



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Insiders steal a march in leak prone Asian markets






SINGAPORE (Reuters) – When South Korean automaker Hyundai Motor Co announced last month it had overstated the fuel efficiency levels on around one million of its cars in the United States and Canada some investors were left fuming more than others.


Some had already sold their shares before the announcement on November 2. The stock fell 4 percent on November 1 with about 2.2 million shares changing hands, the highest trading volume of the year at that point.






“This smells pretty bad,” said Robert Boxwell, director of consulting firm Opera Advisors in Kuala Lumpur who has studied insider dealing patterns.


“It would have fallen into our suspect trading category,” he added.


Boxwell spots suspect trading by looking at how much the volume diverges from the average level in the days before a market moving announcement. In the Hyundai instance, the volume was more than five standard deviations, a measure of variation, away from the daily average of 598,741 shares over the past year.


A Hyundai spokeswoman declined to comment.


Research from the Capital Markets Co-operative Research Centre (CMCRC), an academic centre in Sydney that studies financial market efficiency, found that 26 percent of price-sensitive announcements in Asia Pacific markets showed signs of leakage in the first quarter of this year, the most recent period for which data was available.


That compared with 13 percent in North American markets.


The CMCRC says it looks for suspected information leaks by examining abnormal price moves and trading volumes ahead of price-sensitive announcements.


Investors say one reason for leaks in Asia has been low enforcement rates for insider trading and breaches of disclosure rules. Enforcement in some markets is virtually non-existent.


There are also misconceptions about whether trading on non-public information is a crime.


“The idea that insider trading is wrong rather than smart is only being ingrained in the current generation of Asian players, not the older generation who are often still in the driving seat,” said Peter Douglas, founder of GFIA, a hedge fund consultancy in Singapore.


LOSS OF CONFIDENCE


Japan’s largest investment bank Nomura Holdings was embarrassed this year after regulatory investigations found it leaked information to clients ahead of three public share offerings.


Nomura has acknowledged that its employees leaked information on three share issues it underwrote in 2010. In June, it published the results of an internal investigation that found breaches of basic investment banking safeguards against leaking confidential information and announced a raft of measures to prevent recurrence.


The bank was also fined 200 million yen ($ 2.37 million) by the Tokyo Stock Exchange and 300 million yen by the Japan Securities Dealers Association.


Such leaks hurt companies’ share prices in the long run because investors put in less money if they feel they are not on a level playing field.


“It is very damaging. You may not know how much money you’ve lost but if there is not confidence that the regulators are prosecuting and enforcing the rules on this then it undermines investor confidence and liquidity,” said Jamie Allen, secretary general of the Asian Corporate Governance Association.


The issue isn’t being ignored. Many Asian markets such as Hong Kong and China have tightened their rules on insider trading over the past decade.


Indeed some investors feel that while leaks and insider dealing are unfair, regulators in the region have more serious issues they should be tackling.


“I would like to see the regulators spend more resources on investigating and prosecuting fraud against listed companies, which severely damages shareholder value,” said David Webb, a corporate governance activist in Hong Kong, arguing insider dealing as less of an impact on a company’s long-term share price.


HTC AND APPLE


A week after Hyundai’s announcement about its problems in the United States, there was an unexpected move on the Taiwan Stock Exchange.


Shares in smartphone maker HTC Corp jumped almost seven percent on Friday, November 9, hitting the daily upper trading limit. On Sunday came the surprise announcement that the company was ending its long-running patent dispute with Apple Inc , a move seen as a positive for the stock.


The Taiwan bourse announced it was investigating the trading patterns to see if there was a possible leak.


When asked for comment, HTC referred back to a November 13 statement in which the company said it had kept the Apple settlement process confidential and has strict controls on insider trading.


Michael Lin, a spokesman for the Taiwan Exchange, told Reuters on Friday that the bourse is still working with the regulator on the case.


‘ENORMOUS LOSSES’


Michael Aitken, who oversees research at the CMCRC, said many other Asian markets lack tough enough rules to force information to be released as efficiently and timely as possible, a primary reason for the prevalence of leaks.


“Poor regulation hampers enforcement efforts,” he said pointing out that few markets have the “continuous disclosure” rules used in Australia which require listed companies to release material information as soon as possible.


In Korea, when Hyundai shares started to fall, rumours began swirling that news about a problem with some of its cars was on its way, but investors say it took the company too long to disclose what exactly was happening.


“Hyundai at that time did not confirm the rumours. We suffered enormous losses because of this,” said one fund manager, who declined to be named because he was not authorised to speak to the media.


An official from Korea Exchange declined to comment on whether it was investigating this case, saying only that the exchange looks carefully into possible cases of insider trading.


Across Asia, regulators concede that many company executives and insiders still do not appreciate that leaking or trading on material, non-public information is an offence.


“People don’t even know they are engaging in insider trading, for example if their friends are talking about it on the golf course,” said Tong Daochi director-general for international affairs at the China Securities Regulatory Commission, during a regulation conference last month.


“We try to tell society, what are the criminal issues, what are the insider trading issues? For example we have held 27 press conferences to tell the public what kind of activities are involved in insider trading and to let people know that this is an active crime.” ($ 1 = 84.2600 Japanese yen) ($ 1 = 0.6147 British pounds)


(Reporting by Rachel Armstrong; additional reporting by Nishant Kumar in HONG KONG and Hyunjoo Jin in SEOUL; Editing by Emily Kaiser)


Wireless News Headlines – Yahoo! News





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Asian shares slide as U.S. budget impasse creates anxiety

TOKYO (Reuters) - Asian shares slid on Friday after a Republican proposal to deal with a U.S. fiscal crunch failed to get enough support, deepening uncertainty over the U.S. can avert the "fiscal cliff" of automatic spending cuts and tax increases set to start January 1.


"Markets disliked signs of further delay in talks, with the risk that a deal may not be reached by the end of the year deadline," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo. "It clearly hit risk sentiment."


The U.S. House of Representatives will adjourn until after Christmas, Republican Representative Peter Roskam said on Thursday, after House Speaker John Boehner's proposed tax bill designed to avert the fiscal cliff failed to pass.


U.S. stock index futures fell sharply. S&P 500 stock futures slipped 1.7 percent, while Dow Jones stock futures and Nasdaq futures both lost 1.5 percent.


European shares will likely drop also, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> will open down as much as 0.6 percent. <.l><.eu/>


The worrying U.S. political news sparked selling in Asian shares, with MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> wiping out earlier gains to tumble 0.7 percent. The index was on track to end the week down 0.6 percent, the first weekly loss in five weeks.


Markets broadly had been supported by optimism that U.S. lawmakers would avoid the fiscal cliff, which threatens to derail the U.S. economy and drag down global growth with it.


Boehner's proposal was aimed at extracting concessions from the White House, which had threatened to veto it, and advance talks closer to a deal.


The Republican-led U.S. House of Representatives, which abruptly recessed on late Thursday, may return as soon as December 27 with a yet-to-be-decided new plan, said a senior party aide.


"This is a major setback for a Fiscal Deal compromise between the two parties. I would say that chances of a deal are down to maybe 40 percent from 65 percent -- despite the dysfunction in Washington D.C," said Douglas A. Kass, founder of hedge fund Seabreeze Partners Management Inc.


Risk assets were sold off, from shares, oil to currencies such as the Australian dollar and the euro. The yen firmed slightly, though it was pinned near multi-month lows versus the dollar and the euro on expectations for more aggressive Bank of Japan easing next year to drive the economy out of deflation.


"The delay in resolving the U.S. fiscal cliff problem is raising concern as the market expected some sort of positive direction out of the talks by the end of the year," said Fujio Ando, a senior managing director at Chibagin Asset Management.


Safe-haven government bond prices rose, with U.S. 10-year Treasury yields moving away from an 8-week high hit this week, falling about 6 basis points to 1.74 percent. Benchmark 10-year Japanese government bond yields also ticked down half a basis point to 0.765 percent.


Inflows into U.S. Treasuries underpinned the U.S. dollar, which inched up 0.1 percent against a basket of major currencies <.dxy>.


Jim Barnes, senior fixed income manager at National Penn Investors Trust Co. in Wyomissing, Pennsylvania, saw Treasuries continuing to gain once U.S. markets open later, but expected a correction by the end of the day.


"Treasury yields will likely fall Friday morning and will begin to reverse course in the afternoon as investors become more optimistic a deal will be reached," Barnes said.


"So far, the market has been handling setbacks in negotiation talks very well. With still a little bit of time left on the clock, this time around will be no different."



Asset performance in 2012: http://link.reuters.com/muc46s


U.S. GDP: http://link.reuters.com/guw34t


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Along with uncertainties surrounding the future of U.S. budget talks, a firmer dollar also weighed on dollar-based commodities.


The euro fell 0.3 percent to $1.3206, off an 8-1/2-month high of $1.33085 touched on Wednesday.


U.S. crude futures dropped more than $1 to $89.10 a barrel, but oil was still on track for its biggest weekly gain since August.


Spot gold extended losses to near a four-month low touched on Thursday, and was last down 0.1 percent to $1,644.90 an ounce. Gold remained on course for a 12th annual growth on rock-bottom interest rates, concerns over the euro zone financial stability and diversification into bullion by central banks.


YEN GAINS SLIGHTLY


Anxieties over the U.S. budget negotiations also took their toll on Japan's Nikkei average <.n225>, which had been supported by a weaker yen. The Nikkei gave up all of earlier gains to close down 1 percent and below the key 10,000 mark it reclaimed for the first time since early April on Wednesday. <.t/>


The dollar was down 0.4 percent to 84.02 yen, moving away from a 20-month high of 84.62 yen hit on Wednesday.


The euro slumped 0.7 percent to 110.91 yen also off a 16-month high of 112.59 yen reached on Wednesday.


The yen was kept under pressure after the Bank of Japan further eased monetary policy as expected on Thursday, with investors anticipating that the central bank will be persuaded to pursue more drastic measures next year.


The incoming prime minister, Shinzo Abe, has called for bolder action by the central bank to help bring Japan out of decades-long deflation.


For all the fears of a fiscal cliff debacle to come, several data series showed the United States remained on a recovery track, helping to underpin the dollar.


(Additional reporting by Masayuki Kitano in Singapore, Jennifer Ablan in New York and Ayai Tomisawa in Tokyo; Editing by Richard Borsuk)



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