Facebook shares rise in buildup to mystery event, earnings

SAN FRANCISCO (Reuters) – Facebook Inc’s stock opened on Monday above $ 32 for the first time since July as anticipation about upcoming products and financial results underscored Wall Street’s renewed confidence in the online social network.

Facebook will on Tuesday host its first major press event at its headquarters in Menlo Park, California, since its troubled initial public offering in May, triggering a guessing game among technology observers and online blogs about what it could unveil – everything from a smartphone to a search engine.

“There’s a lot of speculation. Nothing to me seems to be that certain,” Jefferies & Co analyst Brian Pitz said.

“If I were to bet, I’d think it was something that was ad-platform related. I’m not convinced on the phone,” said Pitz, citing previous comments by Facebook’s leaders including CEO Mark Zuckerberg that making a smartphone would be the “wrong strategy” for Facebook.

In an email to reporters last week, Facebook invited the media to “come and see what we’re building” without providing details.

Some analysts said the stock’s recent gains – shares are up roughly 17 percent since the start of the year – may have more to do with the company’s upcoming fourth-quarter financial results, slated for January 30.

“The stock is up because they have driven a dramatic increase in the ad load of their mobile app which is giving investors hope that they exceeded expectations,” BTIG analyst Richard Greenfield said.

Shares were down about 1.3 percent to $ 31.30 in mid-afternoon trading.

The world’s No.1 social network with 1 billion users, Facebook became the first U.S. company to debut on stock markets with a value of more than $ 100 billion. Its value subsequently plunged by more than 50 percent on mounting concerns about slowing revenue growth and the challenges of making money as users shift from personal computers to mobile devices.

Facebook surprised Wall Street in the third quarter by announcing that mobile ads accounted for 14 percent of its total ad revenue. Some analysts expect the company to report further growth in its nascent mobile ad business for the fourth quarter.

Zuckerberg, who founded Facebook in his Harvard dorm room, has said that mobile is the “most misunderstood aspect” of Facebook. But he has repeatedly poured cold water on rumors that Facebook would build its own smartphone to compete against Apple Inc’s iPhone and smartphones based on Google Inc’s Android operating system.

During an on-stage interview at a conference in September, Zuckerberg said that he believed search could be a ripe area of growth for Facebook.

“Facebook is really uniquely positioned to answer a lot of the questions that people have,” Zuckerberg said, such as finding a good restaurant or learning more about a job opportunity.

Still, many technology observers believe that Facebook is more likely to improve the search capabilities within Facebook than to develop a full-fledged search engine that indexes all the Web’s content and competes head-on with search leader Google.

Among the other items that technology blogs and analysts speculate might be unveiled on Tuesday were new standalone apps for Apple’s iPad tablet, new features to display video ads and even a new wing of corporate headquarters.

Some cautioned that expectations of a game-changing new product were likely to cause disappointment.

“There’s no way they’re announcing anything that has financial impact, or they wouldn’t do it now, they’d wait two weeks,” said Wedbush Securities analyst Michael Pachter, citing Facebook’s upcoming earnings.

“Why would you announce something that has a financial impact during the quiet period?,” he said.

(Reporting By Alexei Oreskovic; Editing by Paul Simao)

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Britney Grabs Coffee Post Split with Jason Trawick

By Dahvi Shira

01/14/2013 at 03:50 PM EST

Britney Spears still believes in "love" – at least when it comes to wearing it.

The pop star, 31 – whose failed engagement to Jason Trawick, 41, was announced on Friday – grabbed coffee in L.A. on Monday, sporting a black and white sweatshirt with the four-letter word displayed in large letters across the front.

The former X Factor judge looked casual, wearing shades and her hair in a ponytail.

Once the split was official, a source told PEOPLE, "Britney had a lot of issues with Jason doing his own thing – in business and seeing his friends. In her perfect world he would have been home with her twenty-four/seven, so that was a point of contention; something they were always working on."

But she didn't seem too bent out of shape when she made her outing and grabbed two drinks to go, as she wore a happy grin the whole time.

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Hospitals crack down on workers refusing flu shots

CHICAGO (AP) — Patients can refuse a flu shot. Should doctors and nurses have that right, too? That is the thorny question surfacing as U.S. hospitals increasingly crack down on employees who won't get flu shots, with some workers losing their jobs over their refusal.

"Where does it say that I am no longer a patient if I'm a nurse," wondered Carrie Calhoun, a longtime critical care nurse in suburban Chicago who was fired last month after she refused a flu shot.

Hospitals' get-tougher measures coincide with an earlier-than-usual flu season hitting harder than in recent mild seasons. Flu is widespread in most states, and at least 20 children have died.

Most doctors and nurses do get flu shots. But in the past two months, at least 15 nurses and other hospital staffers in four states have been fired for refusing, and several others have resigned, according to affected workers, hospital authorities and published reports.

In Rhode Island, one of three states with tough penalties behind a mandatory vaccine policy for health care workers, more than 1,000 workers recently signed a petition opposing the policy, according to a labor union that has filed suit to end the regulation.

Why would people whose job is to protect sick patients refuse a flu shot? The reasons vary: allergies to flu vaccine, which are rare; religious objections; and skepticism about whether vaccinating health workers will prevent flu in patients.

Dr. Carolyn Bridges, associate director for adult immunization at the federal Centers for Disease Control and Prevention, says the strongest evidence is from studies in nursing homes, linking flu vaccination among health care workers with fewer patient deaths from all causes.

"We would all like to see stronger data," she said. But other evidence shows flu vaccination "significantly decreases" flu cases, she said. "It should work the same in a health care worker versus somebody out in the community."

Cancer nurse Joyce Gingerich is among the skeptics and says her decision to avoid the shot is mostly "a personal thing." She's among seven employees at IU Health Goshen Hospital in northern Indiana who were recently fired for refusing flu shots. Gingerich said she gets other vaccinations but thinks it should be a choice. She opposes "the injustice of being forced to put something in my body."

Medical ethicist Art Caplan says health care workers' ethical obligation to protect patients trumps their individual rights.

"If you don't want to do it, you shouldn't work in that environment," said Caplan, medical ethics chief at New York University's Langone Medical Center. "Patients should demand that their health care provider gets flu shots — and they should ask them."

For some people, flu causes only mild symptoms. But it can also lead to pneumonia, and there are thousands of hospitalizations and deaths each year. The number of deaths has varied in recent decades from about 3,000 to 49,000.

A survey by CDC researchers found that in 2011, more than 400 U.S. hospitals required flu vaccinations for their employees and 29 hospitals fired unvaccinated employees.

At Calhoun's hospital, Alexian Brothers Medical Center in Elk Grove Village, Ill., unvaccinated workers granted exemptions must wear masks and tell patients, "I'm wearing the mask for your safety," Calhoun says. She says that's discriminatory and may make patients want to avoid "the dirty nurse" with the mask.

The hospital justified its vaccination policy in an email, citing the CDC's warning that this year's flu outbreak was "expected to be among the worst in a decade" and noted that Illinois has already been hit especially hard. The mandatory vaccine policy "is consistent with our health system's mission to provide the safest environment possible."

The government recommends flu shots for nearly everyone, starting at age 6 months. Vaccination rates among the general public are generally lower than among health care workers.

According to the most recent federal data, about 63 percent of U.S. health care workers had flu shots as of November. That's up from previous years, but the government wants 90 percent coverage of health care workers by 2020.

The highest rate, about 88 percent, was among pharmacists, followed by doctors at 84 percent, and nurses, 82 percent. Fewer than half of nursing assistants and aides are vaccinated, Bridges said.

Some hospitals have achieved 90 percent but many fall short. A government health advisory panel has urged those below 90 percent to consider a mandatory program.

Also, the accreditation body over hospitals requires them to offer flu vaccines to workers, and those failing to do that and improve vaccination rates could lose accreditation.

Starting this year, the government's Centers for Medicare & Medicaid Services is requiring hospitals to report employees' flu vaccination rates as a means to boost the rates, the CDC's Bridges said. Eventually the data will be posted on the agency's "Hospital Compare" website.

Several leading doctor groups support mandatory flu shots for workers. And the American Medical Association in November endorsed mandatory shots for those with direct patient contact in nursing homes; elderly patients are particularly vulnerable to flu-related complications. The American Nurses Association supports mandates if they're adopted at the state level and affect all hospitals, but also says exceptions should be allowed for medical or religious reasons.

Mandates for vaccinating health care workers against other diseases, including measles, mumps and hepatitis, are widely accepted. But some workers have less faith that flu shots work — partly because there are several types of flu virus that often differ each season and manufacturers must reformulate vaccines to try and match the circulating strains.

While not 100 percent effective, this year's vaccine is a good match, the CDC's Bridges said.

Several states have laws or regulations requiring flu vaccination for health care workers but only three — Arkansas, Maine and Rhode Island — spell out penalties for those who refuse, according to Alexandra Stewart, a George Washington University expert in immunization policy and co-author of a study appearing this month in the journal Vaccine.

Rhode Island's regulation, enacted in December, may be the toughest and is being challenged in court by a health workers union. The rule allows exemptions for religious or medical reasons, but requires unvaccinated workers in contact with patients to wear face masks during flu season. Employees who refuse the masks can be fined $100 and may face a complaint or reprimand for unprofessional conduct that could result in losing their professional license.

Some Rhode Island hospitals post signs announcing that workers wearing masks have not received flu shots. Opponents say the masks violate their health privacy.

"We really strongly support the goal of increasing vaccination rates among health care workers and among the population as a whole," but it should be voluntary, said SEIU Healthcare Employees Union spokesman Chas Walker.

Supporters of health care worker mandates note that to protect public health, courts have endorsed forced vaccination laws affecting the general population during disease outbreaks, and have upheld vaccination requirements for schoolchildren.

Cases involving flu vaccine mandates for health workers have had less success. A 2009 New York state regulation mandating health care worker vaccinations for swine flu and seasonal flu was challenged in court but was later rescinded because of a vaccine shortage. And labor unions have challenged individual hospital mandates enacted without collective bargaining; an appeals court upheld that argument in 2007 in a widely cited case involving Virginia Mason Hospital in Seattle.

Calhoun, the Illinois nurse, says she is unsure of her options.

"Most of the hospitals in my area are all implementing these policies," she said. "This conflict could end the career I have dedicated myself to."

__

Online:

R.I. union lawsuit against mandatory vaccines: http://www.seiu1199ne.org/files/2013/01/FluLawsuitRI.pdf

CDC: http://www.cdc.gov

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Apple weighs on S&P, Nasdaq; Dell jumps after report

NEW YORK (Reuters) - The S&P 500 and Nasdaq edged lower on Monday as concerns about demand for Apple products sent shares of the tech heavyweight lower and investors braced for earnings disappointments.

But Dell Inc's stock jumped 12.8 percent to $12.28, offsetting some of the tech-sector weakness, after Bloomberg TV said the No. 3 personal computer maker is in talks with private equity firms to go private.

Apple lost 3.1 percent to $505.33 and was the biggest weight on both the S&P 500 and Nasdaq 100 <.ndx> indexes after reports that the company has cut orders for LCD screens and other parts for the iPhone 5 this quarter due to weak demand. The stock earlier hit a session low of $498.51, the first dip below $500 since February 16.

"It's clear from (Apple's) reducing their supply orders that the sales haven't met their expectations, though certainly the orders they put into place for the iPhone 5 displays were higher than those that were in place for the prior phone," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

"Certainly, the rate of growth that they had - the tremendous surge in their revenue, stock price, all things do eventually slow and come down, so it's not a big surprise."

Apple suppliers also lost ground, with Cirrus Logic off 8.7 percent to $28.82 and Qualcomm down 1.4 percent to $63.98. The S&P tech sector <.gspt> declined 1 percent as the worst performer of the 10 major S&P sectors.

The Dow Jones industrial average <.dji> was up 24.95 points, or 0.19 percent, at 13,513.38. The Standard & Poor's 500 Index <.spx> was down 0.81 points, or 0.06 percent, at 1,471.24. The Nasdaq Composite Index <.ixic> was down 5.62 points, or 0.18 percent, at 3,120.02.

The Dow fared better than the other two indexes as Hewlett-Packard rose 6.3 percent to $17.18. The stock, which was up early in the session after JPMorgan upgraded its rating on the stock and raised its price target to $21 from $15, added to gains after the Dell report.

The pace of earnings season picks up this week with 38 S&P 500 companies set to report, including Goldman Sachs , Bank of America , Intel and General Electric .

Overall earnings are expected to grow by just 1.9 percent in this reporting period, according to Thomson Reuters data.

President Barack Obama warned Congress at a news conference on Monday that a refusal to raise the U.S. debt ceiling next month could mean a government shutdown and trigger economic chaos.

Separately, Federal Reserve Chairman Ben Bernanke will be speaking on monetary policy, recovery from the global financial crisis and long-term challenges facing the American economy at 4 p.m. (2100 GMT).

Appliance and electronics retailer Hhgregg Inc slumped 7.1 percent to $7.33 after the electronics and appliance retailer cut its same-store sales forecast for the full year.

(Additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry and Nick Zieminski)

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Leon Panetta Says U.S. Has Pledged to Help France in Mali

LISBON — In a move that could draw the United States into another conflict in North Africa, the Obama administration has pledged to help the French in their fight against Islamist militants in Mali, Defense Secretary Leon E. Panetta said Monday. He said the assistance could include air and other logistical support.

Jacquelyn Martin/Associated Press

Defense Secretary Leon E. Panetta boards a plane bound for Portugal on Monday.

The United States was already sharing intelligence with the French when their warplanes struck camps, depots and other militant positions deep inside Islamist-held territory in northern Mali on Sunday. Defense officials said that no decisions had been made about whether the United States would also offer help with midflight refueling planes and air transport, but that those options were under review.

Defense officials would not rule out the possibility that American military transport planes might land in Mali, where the United States has been conducting an ambitious counterterrorism program for years. The officials would not discuss whether the United States has deployed drone aircraft, either armed or unarmed, over Mali.

Mr. Panetta, who spoke to reporters on his plane en route to Portugal for a weeklong trip in Europe, said that the chaos in Mali was of deep concern to the administration, and he praised the French for their actions. He also said “what we have promised them is that we would work with them, to cooperate with them, to provide whatever assistance we can to try to help them in that effort.”

Mr. Panetta said that the Obama administration was deeply worried about the two extremist groups that hold large swaths of territory in northern Mali, Ansar Dine and Al Qaeda in the Islamic Maghreb, or AQIM. “We’re concerned that any time Al Qaeda establishes a base of operations, while they might not have any immediate plans for attacks in the United States and in Europe, that ultimately that still remains their objective,” he said.

For that reason, he said, “we have to take steps now to make sure that AQIM does not get that kind of traction.”

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Johnson’s tweet about Trestman landing NFL job creates buzz in football circles

Marc Trestman remains the head coach of the Montreal Alouettes, at least for now.

Former NFL head coach Jimmy Johnson got the football world — north and south of the border — buzzing Friday when he strongly suggested Trestman was heading to Chicago to become the Bears‘ head coach.

“Looks like 2 of my guys getting NFL jobs..Chud Cleveland and my QB coach at U Trestman to Chicago,” tweeted Johnson, now working as an NFL analyst with Fox.

An Alouettes spokesman said the CFL club had no comment about Johnson’s tweet while the Bears didn’t immediately comment publicly either.

Trestman interviewed with both Cleveland and Chicago but according to numerous reports the Bears continue to speak to potential coaching candidates and haven’t decided on a coach. The Browns are expected to unveil Rob Chudzinski as their new head coach Friday.

The Bears missed the NFL playoffs despite posting a 10-6 record and fired Lovie Smith after nine seasons as head coach.

Trestman, 56, has spent the last five seasons with Montreal, guiding the Alouettes to two Grey Cup victories in three appearances.

His coaching resume includes time in the NFL as an offensive co-ordinator, quarterback or running back coach with Minnesota (twice), Cleveland, San Francisco, Detroit, Arizona, Oakland, and Miami.

Trestman also coached in the NCAA with Johnson at Miami as well as North Carolina State.

Trestman is regarded as a quarterback guru and has a background with Chicago starter Jay Cutler and backup Jason Campbell, helping both in their respective pre-draft preparations.

Social Media News Headlines – Yahoo! News

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Miss America Mallory Hytes Hagan: Five Things to Know

By Mark Gray

01/13/2013 at 04:00 PM EST

Miss American 2013 Mallory Hytes Hagan

CraigSjodin/ABC

The new Miss America is an Alabama-bred blonde beauty who lives in Brooklyn, N.Y., and loves '80s pop music. But Mallory Hytes Hagan is more than just a pretty face who tap-danced her way into the judges' hearts on Saturday. Here are five things to know about the new Miss America:

1. Modern Day Rags to Riches?
At 18, Hagan moved to New York with only $1,000 in her pocket. "I just didn't know that $1,000 wasn't enough money," she told PEOPLE. "I look back at my parents now for letting me do it and I think, 'Are you crazy?' " I genuinely think they thought I'd be there for three weeks and move back. I hit the ground running and had three job offers in first day."

2. She Wants to Jump Out of a Plane!
Hagan claims she's not a risk taker, but she would love to go skydiving because it's "completely out of control" – the opposite of how she usually behaves. "I think it would be amazing," she said. "I'm truly a Capricorn, so I like to plan out what's going to happen. I think it's about the drive. I'd love to go skydiving. Why not?"

3. She's No Longer the 'Bridesmaid'
If it appeared that Hagan was genuinely shocked when her name was announced as the new Miss America it's because she was. "As a teen, I was third, second and first runner-up. In Miss New York, I was first runner-up twice. My thought process was, 'They're going to get another first runner up photo of me.' I'm thrilled to be here but I didn't expect it at all."

4. She Wants to Stop Sexual Abuse of Children

Her platform, Stop It Now! (which works to prevent child sexual abuse), is close to her heart because several of the women (and possibly some of the men) in her family were sexually abused as children, she told reporters in a press conference. "I never was, but it was something I was going through in my teenage years as my family was trying to find peace in that," she says. She thinks mandatory child sexual awareness education would be "an incredible step for America."

5. She Loves Cosmetics
She may not be different than many women with her interest in cosmetics, but Hagan wants to make a career out of it. A student studying advertising, communications and marketing at the Fashion Institute of Technology, Hagan's dream job would be the global marketing director for a cosmetic company. As part of her duties as Miss America, Hagan will work with Artistry cosmetics. "This will be a wonderful internship," she said.

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Flu more widespread in US; eases off in some areas

NEW YORK (AP) — Flu is now widespread in all but three states as the nation grapples with an earlier-than-normal season. But there was one bit of good news Friday: The number of hard-hit areas declined.

The flu season in the U.S. got under way a month early, in December, driven by a strain that tends to make people sicker. That led to worries that it might be a bad season, following one of the mildest flu seasons in recent memory.

The latest numbers do show that the flu surpassed an "epidemic" threshold last week. That is based on deaths from pneumonia and influenza in 122 U.S. cities. However, it's not unusual — the epidemic level varies at different times of the year, and it was breached earlier this flu season, in October and November.

And there's a hint that the flu season may already have peaked in some spots, like in the South. Still, officials there and elsewhere are bracing for more sickness

In Ohio, administrators at Miami University are anxious that a bug that hit employees will spread to students when they return to the Oxford campus next week.

"Everybody's been sick. It's miserable," said Ritter Hoy, a spokeswoman for the 17,000-student school.

Despite the early start, health officials say it's not too late to get a flu shot. The vaccine is considered a good — though not perfect — protection against getting really sick from the flu.

Flu was widespread in 47 states last week, up from 41 the week before, the Centers for Disease Control and Prevention said on Friday. The only states without widespread flu were California, Mississippi and Hawaii.

The number of hard-hit states fell to 24 from 29, where larger numbers of people were treated for flu-like illness. Now off that list: Florida, Arkansas and South Carolina in the South, the first region hit this flu season.

Recent flu reports included holiday weeks when some doctor's offices were closed, so it will probably take a couple more weeks to get a better picture, CDC officials said Friday. Experts say so far say the season looks moderate.

"Only time will tell how moderate or severe this flu season will be," CDC Director Dr. Thomas Frieden said Friday in a teleconference with reporters.

The government doesn't keep a running tally of adult deaths from the flu, but estimates that it kills about 24,000 people in an average year. Nationally, 20 children have died from the flu this season.

Flu vaccinations are recommended for everyone 6 months or older. Since the swine flu epidemic in 2009, vaccination rates have increased in the U.S., but more than half of Americans haven't gotten this year's vaccine.

Nearly 130 million doses of flu vaccine were distributed this year, and at least 112 million have been used. Vaccine is still available, but supplies may have run low in some locations, officials said.

To find a shot, "you may have to call a couple places," said Dr. Patricia Quinlisk, who tracks the flu in Iowa.

In midtown Manhattan, Hyrmete Sciuto got a flu shot Friday at a drugstore. She skipped it in recent years, but news reports about the flu this week worried her.

During her commute from Edgewater, N.J., by ferry and bus, "I have people coughing in my face," she said. "I didn't want to risk it this year."

The vaccine is no guarantee, though, that you won't get sick. On Friday, CDC officials said a recent study of more than 1,100 people has concluded the current flu vaccine is 62 percent effective. That means the average vaccinated person is 62 percent less likely to get a case of flu that sends them to the doctor, compared to people who don't get the vaccine. That's in line with other years.

The vaccine is reformulated annually, and this year's is a good match to the viruses going around.

The flu's early arrival coincided with spikes in flu-like illnesses caused by other bugs, including a new norovirus that causes vomiting and diarrhea, or what is commonly known as "stomach flu." Those illnesses likely are part of the heavy traffic in hospital and clinic waiting rooms, CDC officials said.

Europeans also are suffering an early flu season, though a milder strain predominates there. China, Japan, the West Bank, the Gaza Strip, Algeria and the Republic of Congo have also reported increasing flu.

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. But people with severe symptoms should see a doctor. They may be given antiviral drugs or other medications to ease symptoms.

Some shortages have been reported for children's liquid Tamiflu, a prescription medicine used to treat flu. But health officials say adult Tamiflu pills are available, and pharmacists can convert those to doses for children.

___

Associated Press writers Dan Sewell in Cincinnati, Catherine Lucey in Des Moines, and Malcolm Ritter in New York contributed to this report.

___

Online:

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

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Getting comfortable with living on the edge

LONDON (Reuters) - Just as you learn to put up with a nagging toothache, this week is expected to provide fresh evidence that the U.S. economy is getting used to life on the edge of the fiscal cliff.

Of course, putting off that trip to the dentist is not necessarily wise. The longer Washington delays, the more painful it will become to narrow its gaping budget deficit.

But surveys of U.S. consumer confidence in January and of house builder sentiment in December are likely to show resilience, buttressing the argument of equity bulls that Wall Street's firm start to the year is more than a relief rally or a desperate search for higher returns on investment.

Bluford Puttnam, chief economist of CME Group, said the U.S. economy had managed to grow almost 2 percent last year and create about 1.8 million jobs despite stagnation in Europe, a slowdown in China and the deadlocked budget talks.

"So I see a lot of momentum going into 2013," Puttnam said. "If we can get past this fiscal cliff, the economy is poised to have a much more confident year."

Despite fiscal tightening, he said growth could reach 2.5 percent to 3.0 percent.

Puttnam said the next rounds in the budget battle later this quarter would again be bitterly fought and the resolution would again satisfy no one. But, as with the showdown at the end of 2012, the economy would quickly move on.

"There is a one-in-ten chance that the government may even shut down for a week. It's just going to be ugly. And then it will be over. There will be some kind of compromise, and by April it will fade quickly into the background," he said.

THREE GORGES

U.S. retail sales are likely to have increased only 0.2 percent in December, dampened by the budget worries, according to economists polled by Reuters.

But a pair of regional Federal Reserve surveys and the monthly Reuters/University of Michigan consumer poll are projected to improve, while housing starts, new building permits and builders' confidence should all show that the housing recovery stands on firm foundations.

"That's what's really encouraging consumers to feel that the economy is getting better and that the momentum is broadly positive," said Jerry Webman, chief economist at OppenheimerFunds in New York.

While the phrase fiscal cliff used by U.S. Federal Reserve chief Ben Bernanke conjured up an image of an immediate plunge at the start of this year, in truth any austerity was always likely to take effect on the economy gradually.

Bank of America Merrill Lynch describes the challenges the United States faces in coming months rather as three fiscal gorges it must leap over.

The government could hit the debt ceiling approved by Congress as early as mid-February; across-the-board spending cuts are due to kick in on March 1; and the ‘continuing resolution' to fund all discretionary government spending expires on March 27.

Ideally, investors would like Democrats and Republicans to resolve all three issues with an overarching agreement to slash the deficit by $4 trillion over the next decade.

Instead, given the dysfunctional state of politics, Webman said the best that could be hoped for was another short-term fix that cuts spending and ends some tax breaks.

"The U.S. doesn't move by grand bargains, by big deals. We move by incremental decisions, and I think we'll make some imperfect but improved decisions over the course of 2013," he said.

CHINA ON THE MEND, EUROPE EERILY CALM

Encouraging economic news from China, including stronger-than-expected exports and imports in December, has also supported the start-of-year move by financial market investors out of cash and into riskier assets.

Figures on Friday are expected to show that the world's second-largest economy grew 7.8 percent from a year earlier, rebounding from the 7.4 percent pace of the third quarter and further allaying fears of a hard landing.

"Given some of the bearish commentary on China a few months ago, this should be a relief for markets and it's good for the world economy," said Derry Pickford, macro analyst at investment managers Ashburton in London.

Continuing calm in the euro zone has also helped equities, even though full-year German GDP data on Tuesday will serve as a reminder of the area's economic malaise.

Europe's largest economy contracted last quarter as factories slashed output in response to weak demand from Germany's neighbors, the Economy Ministry said on Friday.

At a news conference a day earlier, European Central Bank President Mario Draghi said he expected a recovery in euro zone growth later this year. But he ruled out an early end to the ECB's crisis policy measures and cautioned that risks were still tilted to the downside. Markets shrugged.

In Europe as in the United States, investors seem to have got used to high levels of policy uncertainty, said Ethan Harris, chief U.S. economist at Bank of America Merrill Lynch.

"It appears that the markets will look past brinkmanship moments unless policy makers break new ground," he said.

In Europe, that might mean not just threatening to eject Greece from the euro zone but actually forcing the exit. In the United States, that might mean not just threatening to violate the debt ceiling but actually doing so, Harris said in a report.

As long as such extreme events do not occur, Harris expects periodic swoons in confidence but no acute crisis.

"This renewed resilience is important because we expect many brinkmanship moments in the months ahead. A now-regular pattern has been established where deals are only struck at the last minute and often under market pressure," he wrote.

(Editing by Patrick Graham)

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India Ink: Woman Raped by Seven Men in Punjab, India, Police Say

NEW DELHI — Police said Sunday that a  29-year-old woman had been raped by a bus driver, a bus conductor and five other men in the north Indian state of Punjab, in an incident that recalls the recent attack in Delhi that has caused widespread outrage.

The woman boarded a bus on Friday bound for Gurdaspur, to visit her in-laws, the police chief of Gurdaspur, Raj Jit Singh, said in a telephone interview. When she got off the bus, the driver offered her a ride on his motorcycle, perhaps to her in-laws village, the police said. Instead, he took her to a nearby village where he and six other men, including the bus conductor, raped her repeatedly through the night.

The next morning, the driver dropped her at her in-laws home, where the woman told her family members of the incident, and then reported it to the police, Mr. Singh said.

Six men, including the bus driver and conductor, have been arrested, he said. All of the men are their twenties.

Gurmesh Singh, the deputy superintendent of police for the  region, said it was unclear how or why the bus driver persuaded the woman to go with him on his motorcycle. She was in a state of distress during the bus ride, Mr. Singh said, and originally refused to get off of the bus when it reached its final destination.

The Press Trust of India reported that the bus driver did not stop at her stop when requested.

The gang-rape of a woman on a moving bus in New Delhi on Dec. 16, and her subsequent death from injuries sustained during the rape, has sparked widespread protests and calls for increased policing and tougher laws against sexual assault in India.

The case against five of the men arrested in that rape is being heard this month in a special fast-track court created just for incidents of sexual assault.

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