Jefferies results beat estimates on higher fixed-income revenue

(Reuters) - Jefferies Group Inc reported a higher-than-expected adjusted quarterly profit as the investment bank benefited from higher earnings from its fixed-income unit, and said its business expansion in Asia has started delivering.
The midsized investment bank has been expanding in China and India and recently poached bankers from the Royal Bank of Scotland to expand its business in China.
Jefferies said it also benefited from a pickup in trading across the board in September thanks to fresh stimulus plans from the U.S. Federal Reserve, and that it was gaining market share from larger rivals. The Fed had unveiled a program to purchase $40 billion in mortgage bonds.
The company saw its trading revenue more than double to $293 million from $141 million a year earlier.
"Our competitive position is very strong so across the products within fixed income I think we're gaining market share," Chief Executive Richard Handler said on a post-earnings conference call.
As the first investment bank to report earnings, Jefferies is often viewed as an indicator for larger Wall Street banks such as Goldman Sachs Group and Morgan Stanley .
Jefferies, founded in 1962 in Los Angeles to trade large stock orders away from the New York Stock Exchange, agreed last month to be bought by top shareholder Leucadia National Corp for $2.76 billion in stock.
"Combining our company with an extremely well-capitalized parent will allow us to continue to aggressively add value to our clients," Jefferies said in a statement on Tuesday.
Compensation costs at the company remained high with the company paying 59.9 percent of net revenue to employees, in line with previous periods but higher than the 50 percent industry peers generally target.
Net income rose to $72 million, or 31 cents per share, in the fourth quarter from $48 million, or 21 cents per share, a year earlier.
On an adjusted basis, earnings were 35 cents per share.
Analysts had expected the company to earn 32 cents per share, according to Thomson Reuters I/B/E/S.
Revenue for the quarter rose 39 percent to $769 million, above estimates of $722.6 million. Investment banking revenue rose 8 percent to $283 million.
Jefferies shares, which have risen 12 percent since the Leucadia deal was announced in mid-November, was trading up 2.5 percent at $18.70 on the New York Stock Exchange on Tuesday.

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Oracle 2Q earnings rise 18 pct as tech spending up

SAN FRANCISCO (AP) — Oracle says its latest quarterly earnings rose 18 percent as companies splurged on more software and other technology toward the end of the year.
The results announced Tuesday are an improvement from Oracle's previous quarter, when the company's revenue dipped slightly from a year earlier.
The latest quarter spanned September through November. That makes Oracle the first technology bellwether to provide insights into corporate spending since the Nov. 6 re-election of President Obama and negotiations to avoid the so-called fiscal cliff began to heat up.
Oracle Corp. earned $2.6 billion, or 53 cents per share, in its fiscal second quarter. That compares with net income of $2.2 billion, or 43 cents per share, last year.
Revenue increased 3 percent to $9.1 billion.

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Oracle sees third-quarter profit of 64 to 68 cents per share

BOSTON (Reuters) - Oracle Corp, the world's No. 3 software maker, said it expects to report non-GAAP earnings per share of 64 cents to 68 cents in its fiscal third quarter.
Oracle forecast that third-quarter new software sales and cloud subscriptions sales will rise 3 percent to 13 percent from a year earlier.
The company said its sees third-quarter hardware products sales flat to down 10 percent from a year ago.
Chief Executive Larry Ellison said he expects hardware systems revenue to start growing from the fiscal fourth quarter.
Oracle President Mark Hurd said that Oracle is gaining share against SAP in Europe.

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Syrian forces bombard rebel areas near capital

 Syrian government warplanes and artillery pounded restive suburbs of Damascus on Friday and anti-regime activists said a car bomb targeted an intelligence building north of the capital.
Fighting in Syria's civil war has flared in areas around Damascus as rebels seeking to topple President Bashar Assad try to push into the city itself. The rebel advances in the suburbs threaten the government's grip on its seat of power, prompting a punishing response from the military on rebel areas skirting the capital.
Anti-regime activists circulated a video they said showed an explosion near a military intelligence office in the town of Nabk, north of the capital. They had no information on casualties and the government did not comment on the bombing.
The blast came one day after a car bomb hit a gas station in the capital itself, killing eleven people, activists said. While no one has claimed responsibility for the attacks, they could be guerrilla strikes by rebels groups who lack the force to battle Assad's troops in the capital.
Syria's 21-month conflict has turned into a bloody stalemate that the United Nations says has killed more than 60,000 people, and it warns the civil war could claim the lives of many more this year. International efforts to stop the fighting have failed so far, and although rebels have made gains in recent months, they still can't challenge Assad's hold on much of the country.
On Friday, the Britain-based Syrian Observatory for Human Rights said government warplanes bombed suburbs of the capital, including Douma, where twin airstrikes killed more than a dozen people a day earlier.
The Observatory also reported the explosion near the military intelligence building in Nabk, some 50 miles (80 kilometers) north of Damascus.
A amateur video posted online showed a large explosion and a large gray cloud of smoke billowing from the area. An off-camera narrator said the blast struck the intelligence building.
The video appeared genuine and corresponded to other AP reporting.
Fighting also raged south of the capital, where rebels have been trying to push into the city for weeks.
Damascus activist Maath al-Shami said the government fired rockets and mortars from Qasioun mountain overlooking the capital at orchards near the southern suburbs of Daraya and Kfar Sousseh.
The Observatory reported clashes between rebels and the army in other areas south of the capital and on the road to the city's airport, to the southeast.
For its part, the Syrian army said in a statement late Thursday that troops had killed "terrorists" in areas around the capital, including Daraya.
The government says the uprising is fueled by foreign-backed terrorists who seek to destroy the country.
"Regime forces are facing very strong resistance in Daraya," said al-Shami via Skype, but added that government forces had been able to advance down the suburb's main thoroughfare.
The government's capture of Daraya, southwest of the city, would provide a boost to the regime's defense of Damascus. It is close to a military air base as well as government headquarters and one of President Bashar Assad's palaces.
In the north, rebels continued to clash with government forces inside the Taftanaz air base in Idlib province and near the Mannagh military airport and the international airport in Aleppo. The attacks are part of the rebel's effort to erode the military's air power.
Fadi al-Yassin, an activist based in Idlib, said the rebels killed on Thursday the commander of Taftanaz air base, a brigadier general.
"The battles now are at the gates of the airport," al-Yassin said via Skype. He added that it has become very difficult for the regime helicopters to take off and land at the facility.
He said warplanes taking off from airfields in the central province of Hama and the coastal region of Latakia are targeting rebels fighting around Taftanaz.
The Syrian Army General Command said troops directed "painful strikes" against the "armed terrorist groups" of Jabhat al-Nusra, a group the U.S. claims has designated a terrorist organization that is at the forefront of the airport attacks. The Syrian military said it killed many of the group's fighters.
The Aleppo airport has been closed since Monday. A government official in Damascus said the situation is relatively quiet around the facility, adding that it is up to civil aviation authorities to resume flights.
A man who answered the telephone at the information office at the Damascus International Airport said, "God willing, flights will resume to Aleppo very soon.

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Leaders of Sudan, South Sudan start talks to defuse tension

ADDIS ABABA (Reuters) - The leaders of Sudan and South Sudan met late on Friday to try to defuse hostility that has simmered since the south broke away in 2011 and restart cross-border oil flows to rescue their crumbling economies.
No details emerged as Sudan's Omar Hassan al-Bashir and South Sudan's Salva Kiir met in the presence of Ethiopian Prime Minister Hailemariam Desalegn who is trying to mediate between the neighbors who came close to war in April.
Both leaders will meet alone for the first time at a summit on Saturday, Sudan's state news agency SUNA said.
North and south already agreed in September to resume oil exports and secure the volatile border but they failed to follow through as mistrust lingered, a legacy of one of Africa's longest civil wars.
Analysts say the confrontation helps shore up the domestic popularity of both governments by diverting attention from their economic problems and widespread corruption.
But the neighboring economies rely heavily on energy revenues and need the oil to flow again from the fields in South Sudan. The southern government in Juba shut down its entire output of 350,000 barrels a year ago after failing to agree on an export fee.
The north charges the south millions of dollars a month to pipe the crude through its territory and export it via a terminal on the Red Sea.
Under the September deals, they agreed to pull back their armies from the border stretching for almost 2,000 km (1,200 miles), much of which is disputed.
Both sides say such a buffer zone is necessary before oil from the landlocked south can flow through Sudanese territory.
On Friday, South Sudan's chief mediator Pagan Amum accused Sudan of dropping bombs across the border four times this week. Sudan's army was not immediately available for comment but routinely denies such claims.
"It is very, definitely, negative. These (air strikes) are having a negative impact on the summit and discussion," Amum told reporters in Addis Ababa.
In turn, Sudan regularly accuses South Sudan of supporting rebels of the Sudan People's Liberation Movement-North (SPLM-North) in two border states. Juba denies the accusation and says Sudan is backing militias on its territory.
Diplomats say both sides tend to see such summits as an opportunity to pick away at the other's weaknesses rather than an opportunity to solve their conflicts.

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Italy's Monti unveils alliance, rules out minister role

ROME (Reuters) - Italian Prime Minister Mario Monti on Friday unveiled the alliance he will lead into February's parliamentary election and said he was unlikely to agree to serve as a minister in another premier's cabinet after the vote.
The 69-year-old former European commissioner, who replaced Silvio Berlusconi as prime minister in November 2011 when Italy was scrambling to avert a financial crisis, announced last week that he would run for a second term.
Monti said on Friday the grouping would be called "With Monti for Italy", whose logo is a circular symbol with the colors of the Italian flag and his surname in the center.
"I hope that (the new alliance) helps improve politics, and that it renews the interest of those Italians who had turned their back on politics, involving them actively again in public affairs," Monti said.
Opinion surveys have shown that up to 50 percent of the electorate plan to abstain or are undecided in the February 24-25 election that is a three-way battle between rightist Berlusconi, Monti and center-left frontrunner Pier Luigi Bersani.
Focusing the campaign strongly around Monti could be a risky tactic, with his popularity dented by the tough tax hikes and spending cuts he has introduced over the past 13 months. Roughly 60 percent of Italians are against the idea of him standing for a second term, polls show.
A poll by the Tecne research institute released on SkyTG24 on Friday showed that Monti's grouping would likely attract slightly more than 12 percent of the vote.
That compares with 40 percent for his rivals on the left, Bersani's Democratic Party (PD) and its coalition ally Left, Ecology, Freedom; and 25 percent for the most likely center-right coalition of Berlusconi's People of Freedom (PDL) and the Northern League, the poll showed.
FUTURE ROLE
Monti, who wants to form a broad coalition of pro-Europe, pro-reform parties after the election, said on Friday that his goal was to continue as prime minister, and he was unlikely to accept a job in someone else's cabinet.
When asked if he would consider being, for example, the economy minister under another prime minister, he told La 7 television channel: "I believe not."
"I do not think I would have the motivation to commit myself to serve a government that did not agree with me on at least 98 percent of policy," he said.
He told La 7 he would be open to a three-way television debate with Berlusconi and Bersani.
Monti plans to lead a single alliance in the upper house, while three separate blocs would run as a coalition with the economics professor as their leader in the lower house.
One will be a list of candidates who have not before participated in politics, to be called "A Civic Choice: With Monti for Italy".
The other two will be already existing centrist parties, the Catholic UDC led by Pier Ferdinando Casini, and FLI led by Chamber of Deputies President Gianfranco Fini.
The different groupings in the two houses would maximize the alliance's political power while preserving the separate identities of the centrist parties that are backing Monti.
Monti said the names of parliamentary candidates running for his alliance were due to be unveiled by Tuesday. He added candidates would be closely scrutinized to rule out any conflicts of interest or ties to organized crime.

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Chile: Couple dies defending home amid protests

SANTIAGO, Chile (AP) — An elderly couple whose family's vast landholdings have long been targeted by Mapuche Indians in southern Chile were killed in an arson attack early Friday while trying to defend their home. The president quickly flew to the scene and announced new security measures, including the application of Chile's tough anti-terrorism law and the creation of a special police anti-terror unit backed by Chile's military.
No one claimed responsibility for the attack, which some Mapuche Indians repudiated Friday as senseless and abhorrent. But Chile's interior minister said pamphlets condemning police violence and demanding the return of Mapuche lands were left at the scene. The presidentially appointed governor of the remote southern region of Araucania, Andres Molina, called the attackers "savages."
"This attack affects the entire country and causes gigantic damage, for the pain and the delays that it means for thousands of families who want to live in peace," Pinera said. "This government is united in its effort to combat terrorism that affects the region. We will not hesitate to apply the full weight of the law."
"It should be completely clear," Pinera added, "that this fight is not against the Mapuche people. It's with a minority of violent terrorists who must be fought with everything the law allows."
Werner Luchsinger, 75, fired a weapon in self-defense, and struck a man from the nearby Mapuche community of Juan Quintrupil before his home burned to the ground, regional police chief Ivan Bezmalinovic said.
Luchsinger's wife Vivian McKay called relatives for help during the attack, but when they arrived just 15 minutes later the house was already in flames and she didn't answer her phone, according to the victim's cousin, Jorge Luchsinger.
The attack began Thursday night as one of many political protests around Chile commemorating the death five years ago of Mapuche activist Matias Catrileo, who was shot in the back by an officer who served a minor sentence and then rejoined the police. The Indians scattered pamphlets related to the anniversary while on the Luchsinger property, Interior Minister Andres Chadwick said.
The victims' Lumahue ranch is just 16 miles (25 kilometers) from the spot where Catrileo was killed on Jan. 3, 2008.
Celestino Cordova Transito, 26, was detained near the scene early Friday. Police have him under arrest in a hospital in Temuco, where he was being treated for a gunshot wound in the neck, the chief said.
Gov. Molina said that Werner Luchsinger's gunshot, by enabling police to capture the wounded suspect, may help solve not only the couple's death but previous arson attacks as well.
"I want to thank Don Werner, because probably thanks to him we're closer to finding these savages who have done such damage to Araucania," he said.
Pinera also met briefly with the Luchsinger family as well as other local landowners next to the burned-out home, but Chile's El Mercurio said the meeting was cut short when some fled due to a false rumor that Mapuche activists were targeting their properties even as the president spoke. Other landowners shouted out in anger, asking for tougher security measures, and then briefly blocked the main highway in protest.
Jorge Luchsinger said earlier Friday that masked Indians have repeatedly attacked his and other relatives' properties as well, despite the considerable police presence in the area. "It's obvious that the authorities are completely overwhelmed," he told radio Cooperativa.
Many of Chile's Mapuche activist groups were silent Friday about the murders, repeating instead their complaints about continuing police violence of the kind that killed Catrileo years ago.
But Venancio Conuepan, who described himself as a law student who comes from a long line of Mapuche leaders, wrote an editorial Friday condemning the violence, rejecting the idea that armed conflict can win their demands, and calling for the killers to be identified and tried in court. He said the vast majority of the Mapuche people agree with him.
"Enough of people using violence in the name of the Mapuche people. Our grandfathers never covered their faces. The Mapuche created parliaments, and always put dialogue first," wrote Conuepan on Radio BioBio's web site, titling his editorial, "Although you don't believe me, I'm Mapuche and I'm not a Terrorist."
The Luchsinger family has been among the most outspoken in defending the property rights of the region's landowners against ancestral land claims by the Mapuche. But Jorge said his cousin had taken a lower profile and refused police protection.
Lorena Fries, the director of Chile's official Human Rights Institute, warned Friday against cracking down using the anti-terror law, which allows for holding suspects in isolation without charges, using secret witnesses and other measures that have been discredited by Chile's courts in previous cases of Mapuche violence. Instead, she said Pinera should reach out to the Indians, and honor their demands for self-governance and the recovery of ancestral land. "Something has to be done so that everyone puts an end to the violence," she said.
The Mapuches' demands for land and autonomy date back centuries. They resisted Spanish and Chilean domination for more than 300 years before they were forced south to Araucania in 1881. Many of the 700,000 Mapuches who survive among Chile's 17 million people still live in Araucania. A small fraction have been rebelling for decades, destroying forestry equipment and torching trees. Governments on the left and right have sent in police while offering programs that fall far short of their demands.
The Luchsinger family also arrived in Araucania in the late 1800s, from Switzerland, and benefited from the government's colonization policies for decades thereafter, becoming one of the largest landowners in Chile's Patagonia region. Their forestry and ranching companies now occupy vast stretches of southern Chile, and impoverished Mapuches live on the margins of their properties.

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Syria blames "terrorists" for deadly petrol station blast

BEIRUT (Reuters) - Syria said on Friday a car bomb at a crowded petrol station in Damascus was set off by "terrorists", a term it uses for rebels seeking to topple President Bashar al-Assad.
The blast on Thursday night killed 11 people and wounded 40 at a station packed with Syrians queuing for fuel, which has become scarce in the 21-month insurgency against Assad, in the second petrol station attack in the capital this week, opposition activists said.
"Terrorists ... blew up an explosive device at Qassioun Petrol Station near Hamish Hospital in Barzeh, Damascus, martyring several civilians," state news agency SANA said.
The United Nations says more than 60,000 people have been killed in the civil war, the longest, bloodiest conflict born from uprisings across the Arab world in the past two years.
Dozens of people were incinerated in an air strike as they waited for fuel at another Damascus petrol station on Wednesday, according to opposition sources.
The semi-official al-Ikhbariya television station aired its own footage from Barzeh, indicating the attack struck a government-held area. Barzeh's residents include members of the Sunni Muslim majority and religious and ethnic minorities.
The rebels hold a crescent of suburbs on the southern and eastern edges of Damascus, which have come under bombardment by government forces. Rebel forces also seized territory in Syria's north and east during advances in the second half of 2012.
The war pits rebels, mainly from the Sunni Muslim majority, against a government supported by members of Assad's Shi'ite-derived Alawite sect and some members of other minorities who fear revenge if he falls. Assad's family has ruled for 42 years since his father seized power in a coup.
U.S. soldiers who will man Patriot anti-missile batteries to protect Turkey from the spillover of the Syrian conflict began arriving in the NATO ally on Friday, the U.S. military said, but the missiles themselves are due later.
Turkey formally asked NATO for the missiles in November to bolster security along its 900-km (560-mile) border with Syria.
Turkey repeatedly has scrambled fighter jets along the frontier and responded in kind when Syrian shells came down inside its borders, fanning fears that the civil war could spread to destabilize the region.
About 400 U.S. personnel and equipment from the 3rd Battalion, 2nd Air Defense Artillery, based at Fort Sill, Oklahoma, will arrive over the next several days by U.S. military airlift, the U.S. European Command said on its website.
No U.S. Patriot missiles arrived on Friday, however, according to a military source, and it will be several weeks before the missiles, supplied by Germany and the Netherlands, get to Turkey.
The U.S. troops, who began arriving at Incirlik air base in Turkey, will man two U.S. Patriot batteries out of a total of six batteries that have been promised by NATO allies.
In Washington, a Pentagon spokeswoman said the first U.S. military personnel belonging to the Patriot unit began arriving in Turkey on Friday and more will arrive over the coming days.
The equipment would start arriving a few days later, with the aim of having the U.S. Patriot batteries in place by mid-January, she said.
LEBANON TO REGISTER REFUGEES
Fighting has forced 560,000 Syrians to flee to neighboring countries, according to the United Nations, causing a growing humanitarian problem in the region.
Lebanon, a country which has so far tried to distance itself from the conflict for fear it will inflame sectarian tensions, approved a plan to start registering 170,000 Syrian refugees and ask international donors for $180 million in aid.
"The Lebanese state will register the refugees...and guarantee aid and protection for the actual refugees in Lebanon," Social Affairs Minister Wael Abu Faour said after a cabinet session on Thursday night.
Most Sunni-ruled Arab states, as well as the West and Turkey have called for Assad to step down. He is supported by Russia and Shi'ite Iran.
ARMY WITHDRAWAL?
A Lebanese citizen who crossed into Syria through a mountainous frontier region said the army appeared to have withdrawn from several border posts and villages in the area.
Rebels controlled a line of border towns and villages north of the capital Damascus, stretching about 40 km (25 miles) from Yabroud south to Rankus, said the man, who did not want to be named and visited Syria on Wednesday and Thursday.
Rebels in the area reported that some of Assad's forces have pulled back to defend the main north-south highway linking Syria's main cities of Damascus, Homs, Hama and Aleppo, while others were sent to reinforce the northern approach to Damascus.
"The border is controlled by the Free Syrian Army rebels," he said on Friday, adding he had crossed through mountainous terrain, covered in parts by more than a meter of snow.

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RIM shares jump in Toronto, rebound from sharp decline

 Shares of Research In Motion Ltd jumped nearly 10 percent on the Toronto Stock Exchange on Thursday, following similar gains in New York on Wednesday, in a rebound from last week's sharp decline.
Last Friday, the volatile stock plunged more than 20 percent after the company said on an earnings conference call that it was rolling out a new fee structure for its services segment, which some investors fear could pressure the high-margin business.
"It got hit so hard after the conference call," said Ed Snyder, an analyst with Charter Equity Research. "People are still fairly optimistic about (BlackBerry 10) coming out in January, so (the rebound is) really just a value play."
The new fee structure overshadowed stronger-than-expected quarterly results.
RIM shares were up 9.7 percent to C$11.42 in midday trade on the Toronto Stock Exchange. The company's Nasdaq-listed stock was down 2 percent to $11.60 after big gains on Wednesday, when Canadian equity markets were closed for Boxing Day.
Through the autumn of 2012, RIM rallied as investors grew optimistic about prospects for its new make-or-break BlackBerry 10 devices, to be formally unveiled January 30. On Thursday, the shares were still up more than 80 percent from the year's low, touched in September.
The Wednesday and Thursday gains also came after several websites posted photos of what they said could be the first BlackBerry 10 phone with a physical keyboard.
Evercore Partners analyst Mark McKechnie said the photos boosted RIM's stock, which he said was depressed from last week's selloff, on a quiet trading day.
"There certainly are folks that believe in the new product cycle," he said. "The whole Wall Street community's been trying to handicap how strong that product cycle will be for RIM."
RIM has said it plans to roll out touchscreen-only devices first, a few weeks before it releases a smartphone with the QWERTY keyboard many longtime BlackBerry users rave about. But some analysts believe devices with hard keyboards will not hit the market until spring.
Management has touted BlackBerry 10's new on-screen keyboard, but some see the company's reputation for building solid, usable physical keyboards as an important competitive advantage as RIM fights for market share against Apple Inc and Samsung Electronics .
McKechnie said volatility is not unusual ahead of big smartphone launches.
"There's so much scale involved in this industry, one way or the other. A successful product versus a failure is going to really change the earnings power of a company," he said.

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A surprisingly good vintage as market logs gains

NEW YORK (AP) — If you'd told investors what was going to happen in 2012 — U.S. economic growth at stall speed, an intensifying European debt crisis, a slowdown in China, fiscal deadlock in Washington, decelerating corporate earnings growth — and asked how the stock market would perform, few would have predicted a good year.
But that's just what they got.
The Dow Jones industrial average, the Standard & Poor's 500 and the Nasdaq composite index all ended the year substantially higher, despite losing ground in the final days of year as concerns about the looming "fiscal cliff" mounted.
The Dow gained 7 percent for the year, its fourth consecutive annual advance, having started the year at 12,217. The S&P 500, which started the year at 1,257, is up 13 percent, beating the 7.8 percent average annual gain of the past 20 years. The Nasdaq also logged a better-than-average gain, 16 percent.
Including dividends, the total return on the S&P 500 index was even better: 16 percent.
Financial companies led the gains among S&P 500 stocks, advancing 26 percent, as banks continued their restructuring efforts after the recession. Bank of America more than doubled, gaining $6.05 to $11.61 and Citigroup advanced $13.25, or 50 percent, to $39.56. Utilities, the best-performing industry group last year, was the only sector of 10 industry groups in the index to decline, dropping 2.9 percent.
"There's been a lot thrown at this market, and it's proven to be very resilient," said Gary Flam, a portfolio manager at Bel Air Investment Advisors in California. "Here we are at the end of the year, and it's still relatively strong."
Stocks started the year on a tear, with optimism about an improving job market and a broader economic recovery providing the backdrop to the S&P 500's best first-quarter rally in 14 years.
The index advanced 12 percent by the end of March, closing the quarter at 1,408, its highest in almost four years, with financial companies and technology firms leading the charge. The Dow ended the first quarter at 13,212, logging an 8 percent gain.
Apple was one of the star performers of the first quarter and was probably the year's most talked-about company.
The popularity of the iPhone and iPad led to staggering sales growth that helped push its stock up 48 percent to almost $600 at the end of March. Apple also announced a dividend and overtook Exxon Mobil as the U.S.'s most valuable company.
At the start of the second quarter, the intensifying European debt crisis and concerns about the impact that it would have on global economic growth prompted a sell-off.
By the start of June, U.S. stocks had given up the year's gains. Borrowing costs for Spain surged and investors fretted over the outcome of Greek elections that had the potential to pull the euro currency bloc apart.
The outlook for growth in China, the world's second-largest economy, also began to weigh on investors' minds. Economic growth there slowed to 8.1 percent in the first quarter as export demand waned, and investors worried that it would keep falling.
The Dow fell as low as 12,101 June 4. The S&P dropped to 1,278 June 1.
The second quarter was also marred by Facebook's initial public offering.
The stock sale was one of the most keenly anticipated initial public offerings in years, but investors didn't "like" the $16 billion market debut. The social network priced its IPO at $38 per share, and the stock started to fall soon after the first day of trading on concern about the company's mobile strategy.
Facebook closed as low as $17.73 on Sept. 4 before recovering some of the ground it lost to close the year at $26.62.
Company earnings reports were also starting to make uncomfortable reading for investors. Earnings growth for S&P 500 companies fell as low as 0.8 percent in the second quarter, according to S&P Capital IQ data.
The stock market only recovered its poise after the European Union put together loans to bail out Spain's banks on June 10 and the head of the European Central Bank, Mario Draghi, pledged to do "whatever it takes" to save the euro.
Speculation that the Federal Reserve was set to provide the economy with more stimulus to prevent it from slipping back into recession also bolstered stocks.
The rally even survived a blip when a software glitch at trading firm Knight Capital threw stock prices into chaos Aug. 1.
The firm said the problem was triggered by new trading software it installed. Erroneous orders were sent to 140 stocks listed on the New York Stock Exchange, causing sudden price swings and surging trading volume.
Apple launched the iPhone 5, the latest version of its smartphone, in September, and the company's stock climbed to a record close of $702.10 on Sept. 19. That gave Apple a market value of $658 billion, and many analysts predicted more gains lay ahead.
By the time Fed Chairman Ben Bernanke announced Sept. 13 that the U.S. central bank would start a third round of its bond-purchase program, which is intended to push longer term interest rates lower and encourage borrowing and investment, the S&P 500 had surged 14 percent from its June 1 low. A day later, the index peaked at five-year high of 1,466. The Dow Jones reached its peak for the year of 13,610, Oct. 5.
As is often the case on Wall Street, investors "bought the rumor and sold the fact," and quickly turned their attention to the challenges that lay ahead.
Analysts had also been cutting their outlook for growth in the final quarter of the year. At the start of the second quarter, estimated earnings growth for the period was 15.7 percent. That forecast had fallen to 3.4 percent by Dec. 27.
"One of the blessings that supported the stock market's moves in prior years was earnings growth," said Lawrence Creatura, a portfolio manager at Federated Investors. "That's true this year, but at a decelerating rate. It's not gone unnoticed that earnings growth is slowing, and many forecasts now include a full stall."
Apple's halo also began to slip in the final three months of the year. Its iPad Mini tablet, launched Nov. 2, met with lukewarm reviews, there were hints of unrest among its executive ranks. Investors began to fret that the intensifying competition in the smartphone market would crimp Apple's profits. The stock tumbled, and despite rallying in recent days is still down 27 percent from its September peak.
The year's final twist came in Washington.
Stocks wavered ahead of a presidential election that at times seemed too close to call, and while President Barack Obama ultimately reclaimed the White House by a comfortable margin, the Republicans retained control of the House.
The divided government set the stage for a tense end to the year as Democrats and Republicans sought to thrash out a budget plan that would avoid the U.S. falling off the "fiscal cliff," a series of tax hikes and government spending cuts that economists say would push the economy back into recession.
Initially, markets fell as much as 5 percent in the 10 days after the elections as investors worried that a divided government would not be able to agree on a budget plan to cut the U.S. deficit.
While the S&P 500 managed to recoup those losses by December on optimism that a deal would be reached, some investors are still urging caution. Any agreement will still be "ill-tasting medicine" to the economy, as it will almost certainly involve both spending cuts and tax hikes, says Joe Costigan, director of equity research at Bryn Mawr Trust Company.
"The question is, how much will the drag from the government be offset by business and personal spending," says Costigan. "The market has reasonable expectations for growth priced in, so I don't think we're going to see a big run-up."

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Stocks surge after last-minute budget deal reached

Stocks are opening sharply higher on Wall Street after lawmakers averted sweeping cuts in government spending and with a last-minute budget deal.
The Dow Jones industrial average jumped 232 points to 13,336 shortly after the opening bell Tuesday, the first trading day of 2013. That's a gain of 1.8 percent.
The Standard & Poor's 500 index shot up 29 points, or 2 percent, to 1,455. The Nasdaq composite rose 82 points, or 2.7 percent, to 3,102.
Investors have been keeping a close eye on the budget stalemate in Washington and were relieved that a deal was reached. However the late-night budget agreement leaves many issues unresolved and it remained unclear how long the market rally would last. Next up is a fight over the government's borrowing limit.

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'Fiscal cliff' deal sends markets shooting higher

 The "fiscal cliff" compromise, for all its chaos and controversy, was enough to send the stock market shooting higher Wednesday, the first trading day of the new year.
All the major U.S. stock indexes swelled by at least 2 percent. For the Dow Jones industrial average, up 263 points soon after the market opened, it was the biggest surge in six months.
Stocks around the world also leapt higher. The major indexes in Britain, France and Germany rose more than 2 percent, and Greece and Spain were up by more than 3 percent. Stocks in Asia also surged.
In the U.S., the rally was extraordinarily broad. For every stock that fell on the New York Stock Exchange, roughly 18 rose.
The Dow was up 263 at 13,369 after the first 45 minutes of trading. The S&P 500 was up 30 to 1,456. The Nasdaq composite was up 82 to 3,102.
The yield on the 10-year Treasury note rose sharply, to 1.84 percent from 1.75 percent, as investors dumped safe harbor investments like U.S. government bonds and plowed money into stocks. The dollar fell against the euro and prices for oil and other commodities rose.
Late Tuesday night the U.S. House of Representatives passed a budget bill meant to ward off the "fiscal cliff." Many House Republicans balked at voting for the bill because they wanted a deal that did more to cut government spending.
Because lawmakers didn't have a budget compromise in place when the new year started on Tuesday, the U.S. technically did go over the "fiscal cliff," meaning tax increases and government spending cuts automatically kicked in that day. Some analysts worried that the combination would kick the U.S. back into recession. But the bill passed Tuesday night by the House will prevent the "cliff" from taking hold. It already has Senate approval, and now awaits a signature from President Barack Obama.
Some investors, even as they watched the stock market leap higher, cautioned that the euphoria could be short-lived. The deal leaves a host of questions unresolved. Notably, the core issue of the "fiscal cliff" standoff in Washington has been the country's long-term plan for trimming its debt, and the deal doesn't include any significant deficit-cutting agreement.
Next up is what could turn into a vicious fight over the debt ceiling, or how much the government is allowed to borrow. And the U.S. could still get its debt rating downgraded by one of the ratings agencies. The stock market plunged in August 2011 after Standard & Poor's cut the U.S. government's credit rating.
Some investors also noted that the "fiscal cliff," which has dominated headlines for weeks, is only masking serious problems punctuating the world economy, including the still-unsolved European debt crisis and middling growth for the U.S. economy. Wednesday, the president of debt-wracked Cyprus said he'd refuse to sell government-owned companies, a provision that the country's bailout deal says it must at least consider.
Among stocks making big moves, Zipcar shot up 48 percent, or $3.96, to $12.20 after the company said it had agreed to be acquired by Avis. Avis rose $1.16 to $20.98. Zipcar has a business model that's popular with drivers, allowing them to rent cars for just a few hours at a time. The company has struggled to win over investors, however, and its stock plunged nearly 39 percent in 2012. Avis rose 84 percent in the same period.

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Nigerian stocks continue gains, up 1.5 pct on banks

LAGOS (Reuters) - Nigerian stocks rose 1.5 percent on Wednesday in thin trade, led by heavy weight banks, adding to optimism that a surge in share prices last year will continue into 2013.
The index of Nigeria's top-10 banks on Wednesday gained 3.5 percent to help lift the all-share index up 424 points to 28,502 points by 1404 GMT.
Sub-Saharan Africa's second biggest index crossed a 28,000 point psychological level on Monday, hitting a 32-month high to close as the second best performing African stock market after Uganda, rising 35.5 percent in 2012.
Nigerian stocks recovered last year after falling 16 percent in 2011 but the market is still less than half the value it was prior to the 2008 collapse, which wiped off 60 percent of stock values and coincided with a banking crisis.
The index rose 70 percent in 2007.
Skye Bank rose the maximum 10 percent allowed for stock eligible for market-making on Wednesday, while Diamond Bank and FCMB each rose over 9 percent.

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UN says more than 60,000 dead in Syrian civil war

The United Nations gave a grim new count Wednesday of the human cost of Syria's civil war, saying the death toll has exceeded 60,000 in 21 months — far higher than recent estimates by anti-regime activists.
The day's events illustrated the escalating violence that has made recent months the deadliest of the conflict: As rebels pressed a strategy of attacking airports and pushing the fight closer to President Bashar Assad's stronghold in Damascus, the government responded with deadly airstrikes on restive areas around the capital.
A missile from a fighter jet hit a gas station in the suburb of Mleiha, killing or wounding dozens of people who were trapped in burning piles of debris, activists said.
Gruesome online video showed incinerated victims — one still sitting astride a motorcycle — or bodies torn apart.
"He's burning! The guy is burning!" an off-camera voice screamed in one video over a flaming corpse.
It was unclear if the government had a military strategy for attacking the gas station. At least one of the wounded wore a military-style vest often used by rebel fighters. Human rights groups and anti-regime activists say Assad's forces often make little effort to avoid civilian casualties when bombing rebel areas.
Syria's conflict began in March 2011 with protests calling for political change but has evolved into a full-scale civil war.
As the rebels have grown more organized and effective, seizing territory in the north and establishing footholds around Damascus, the government has stepped up its use of airpower, launching daily airstrikes. The escalating violence has sent the death toll soaring.
The U.N.'s new count of more than 60,000 deaths since the start of the conflict is a third higher than recent estimates by anti-regime activists. One group, the Britain-based Syrian Observatory for Human Rights, says more than 45,000 people have been killed. Other groups have given similar tolls.
"The number of casualties is much higher than we expected, and is truly shocking," U.N. High Commissioner for Human Rights Navi Pillay said in a statement.
She criticized the government for inflaming the conflict by cracking down on peaceful protests and said rebel groups, too, have killed unjustifiably. Acts by both sides could be considered war crimes, she said.
She also faulted world powers for not finding a way to stop the violence.
"The failure of the international community, in particular the Security Council, to take concrete actions to stop the bloodletting shames us all," Pillay said. "Collectively, we have fiddled at the edges while Syria burns."
The U.S. and many European and Arab nations have demanded that Assad step down, while Russia, China and Iran have criticized calls for regime change.
The new death toll was compiled by independent experts commissioned by the U.N. human rights office who compared 147,349 killings reported by seven different sources, including the Syrian government.
After removing duplicates, they had a list of 59,648 individuals killed between the start of the uprising on March 15, 2011, and Nov. 30, 2012. In each case, the victim's first and last name and the date and location of death were known. Killings in December pushed the number past 60,000, she said.
The total death toll is likely to be even higher because incomplete reports were excluded, and some killing may not have been documented at all.
"There are many names not on the list for people who were quietly shot in the woods," Pillay's spokesman Rupert Colville told The Associated Press.
The data did not distinguish among soldiers, rebels or civilians.
It indicated that the pace of killing has accelerated. Monthly death tolls in summer 2011 were around 1,000. A year later, they had reached about 5,000 per month.
Most of the killings were in the province of Homs, followed by the Damascus suburbs, Idlib, Aleppo, Daraa and Hama. At least three-fourths of the victims were male.
Pillay warned that thousands more could die or be injured, and she said the danger could continue even after the war.
"We must not compound the existing disaster by failing to prepare for the inevitable — and very dangerous — instability that will occur when the conflict ends," she said.
The U.N. refugee agency said about 84,000 people fled Syria in December alone, bringing the total number of refugees to about a half-million. Many more are displaced inside Syria.
While no one expects the war to end soon, international sanctions and rebel advances are eroding Assad's power. Rebels recently have targeted two pillars of his strength: his control of the skies and his grip on Damascus.
Rebels in northern Syria attacked a government helicopter base near the village of Taftanaz in Idlib province, activists said. Videos posted online showed them blasting targets inside the airport with heavy machine guns mounted on trucks.
All videos appeared genuine and corresponded with other AP reporting on the events.
In recent weeks, rebels have attacked three other airports in north Syria. They clashed Wednesday with forces inside the Mannagh military airport near the Turkish border as well as near the Aleppo international airport and adjacent Nerab military airport, halting air traffic there for the second straight day.
The fall of those airports to the rebels would embarrass the regime but not fully stop the airstrikes by government jets, many of which come from bases farther south.
In another blow to the regime and to Syria's economy, a company based in the Philippines that handled shipping containers at Syria's largest port said it was canceling its contract, citing an "untenable, hostile and dangerous business environment."
The Manila-based International Container Terminal Services Inc. said the amount of port traffic had gone down, hurting business, while conditions in Syria grew more dangerous.
The company's departure will significantly limit cargo services at the Tartus port.
Also, Wednesday, the family of American journalist James Foley revealed that he has been missing in Syria for more than a month. Foley was providing video for Agence France-Press when he was abducted Nov. 22 by unknown gunmen, his family said in a statement.
"His captors, whoever they may be, must release him immediately," said AFP chairman Emmanuel Hoog.
Covering Syria has been a challenge for journalists. The government rarely gives visas to journalists, prompting some to sneak in with the rebels, often at great danger.

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Nominee to be Libyan foreign minister turns down the job

TRIPOLI (Reuters) - The man proposed as Libya's foreign minister has rejected the post despite being cleared by an Integrity Commission which was asked to examine his ties to deposed leader Muammar Gaddafi.
Ali Aujali, Libya's former ambassador to the United States was among eight of the 27 ministers nominated by Prime Minister Ali Zeidan who were referred to the commission, which studies the backgrounds of public officials, after protests outside congress over the makeup of his cabinet.
Congress elected Zeidan prime minister in October after his predecessor lost a confidence vote over his choice of ministers - highlighting the fractious politics in a country previously run with an eccentric system of personal rule.
The eight ministers were invited to appeal their cases, and Aujali won his, according to a statement on the Facebook page of the Integrity Commission.
But in a letter of resignation to the head of parliament obtained by Reuters on Wednesday, Aujali simply said he did not want to take up the position of foreign minister even though he was now cleared to do so.
"It is an honor to be appointed to this position, but for objective and personal reasons, I have informed the prime minister that I must turn down this position at this time," the letter, dated December 30, read.
He did not elaborate and was not available for comment.
Aujali was Libya's ambassador to the United States during the war that toppled Gaddafi in August 2011. A telegram presented to the commission as part of his appeal showed he had defected on March 22, a month after the uprising began.

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Egypt panel implicates Mubarak, military in deaths

CAIRO (AP) — An Egyptian fact-finding mission determined that Hosni Mubarak watched the uprising against him unfold through a live TV feed at his palace, despite his later denial that he knew the extent of the protests and crackdown against them, a member of the mission said Wednesday.
The mission's findings increase pressure for a retrial of the 84-year old ousted president, who is already serving a life sentence for the deaths of 900 protesters. But its report could hold both political gains and dangers for his successor, Mohammed Morsi. A new prosecution of Mubarak would be popular, since many Egyptians were angered that he was convicted only for failing to stop the killing of protesters, rather than for ordering the crackdown.
But the report also implicates the military and security officials in protester deaths. Any move to prosecute them could spark a backlash from powerful generals and others who still hold positions under Morsi's government.
Rights activists said they would watch carefully how aggressively Morsi pursues the evidence, detailed by a fact-finding mission he commissioned.
"This report should be part of the democratic transformation of Egypt and restructuring of security agencies," Ahmed Ragheb, a member of the commission and a rights lawyer, told The Associated Press. "At the end of the day, there will be no national reconciliation without revealing the truth, and ensuring accountability."
Morsi, an Islamist from the Muslim Brotherhood, asked the commission to send the report to the chief prosecutor Talaat Abdullah to investigate new evidence, his office said Wednesday.
Morsi recently appointed Abdullah to replace a Mubarak holdover who many considered an obstacle to strongly prosecuting former regime officials. Some judges criticized the appointment as a political move to continue to wield leverage over the prosecutor post.
The case will be a test whether Abdullah will conduct a thorough process of holding officials responsible. Some rights activists were already disappointed that Morsi didn't empower the fact-finding commission itself to turn the investigations into prosecutions and avoid political influence.
The 700-page report on protester deaths the past two years was submitted Wednesday to Morsi by the commission, made up of judges, rights lawyers, and representatives from the Interior Ministry and the intelligence, as well as families of victims.
Morsi formed the commission soon after coming to office in June as Egypt's first freely elected president after campaign promises to order retrials of former regime figures if new evidence was revealed.
The trial of Mubarak and other figures from his regime left the public deeply unconvinced justice was done. The prosecution was limited in scope, focusing only on the first few days of the 18-day uprising and on two narrow corruption cases. Lawyers have since criticized the case as shoddy, based mainly on evidence collected by battered and widely hated police in the days following the uprising.
In the verdicts last summer, Mubarak and his two sons were acquitted on corruption charges. His former interior minister was convicted and sentenced to life in prison for complicity in the crackdown, while six top security aides were acquitted for lack of evidence.
Mubarak was convicted to a life sentence of failing to prevent the deaths of protesters during the uprising, which ended with his fall on Feb. 11, 2011. Many Egyptians believed he should have been held responsible for ordering the killings, in addition to widespread corruption, police abuse and political wrongdoing under his regime.
One key new finding by the commission was that Mubarak closely monitored the crackdown.
Ragheb said state TV had designated an encrypted satellite TV station that fed live material from cameras installed in and around Tahrir Square directly to Mubarak's palace throughout clashes between protesters and security forces.
"Mubarak knew of all the crimes that took place directly. The images were carried to him live, and he didn't even need security reports," said Ragheb. "This entails a legal responsibility" in the violence against the protesters, including the infamous Camel Battle, where men on horses and camel and other Mubarak supporters stormed Tahrir.
At least 11 people are said to have been killed in that attack, and some 25 former ruling party members tried in the case were acquitted.
In questioning for his trial, Mubarak said he was kept in the dark by top aides as to the gravity of the situation, and fended off charges that he ordered or knew of the deadly force.
Khaled Abu Bakr, another lawyer who represented some of the victims in the uprising, said a retrial could "add more jail time if new charges appeared, and it could also change the penalty from life sentence to the death penalty."
More politically explosive is the commission's look at the 17 months of military rule after Mubarak's fall, when activists protesting the generals' conduct of the transition clashed repeated with security forces in violence that killed at least 100 protesters.
The report clearly established that security officials and the military used live ammunition against protesters during the transition and the anti-Mubarak uprising, Ragheb said.
The military repeatedly denied firing live ammunition, despite several protesters killed by bullets and pellets and despite reports by rights groups holding the army responsible.
The report established that at least one of nearly 70 missing since the uprising was tortured and died in a military prison, said Ragheb. It also details abuse by military and security officers in the days following Mubarak's ouster, including the beating and abusing of women protesters and the conducting of "virginity tests" to intimidate and humiliate them.
Ragheb refused to give further specifics. The report was not made public. But he told Al-Masry Al-Youm daily thatit recommends summoning hundreds for questioning in protester killings.
Several rights activists raised concerns that findings implicating any military officials or security figures in the current Interior Ministry will be ignored.
"There is every reason for Morsi and the prosecutor general he appointed to act on the findings and make sure they are translated into prompt prosecution," said Hossam Bahgat, a human rights lawyer from the Egyptian Initiative for Personal Rights.
"It will be a major embarrassment not to do anything," he said, adding that it would also be "clear evidence" of what many believe to be an agreement by Morsi to grant immunity to military leaders for any alleged crimes during their rule.
Morsi appointed the latest commission at a time when his relations with the generals were rough. Just before officially transferring rule to Morsi, the military had issued a decree stripping the presidency of most of its powers.
After barely a month in office, Morsi pushed out the top generals who ruled during the transition and reclaimed his powers. His move brought no protest from the military, which many took as a sign of a backroom deal.
Gamal Eid, a lawyer who has represented protester families, pointed out that prosecutors and the court ignored a previous fact-finding mission that established evidence that could have been more incriminating.
Heba Morayef, a researcher with Human Rights Watch in Egypt, said a "protect the revolution" law recently issued by Morsi providing for new investigations into protester killings made no mention of the commission, meaning its findings were not binding and could be ignored.
"It is a wasted opportunity," she said. "Without a clear implementing mechanism, you leave room for political compromise at the expense of accountability.

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Venezuela opposition: Chavez secrecy feeds rumors

CARACAS, Venezuela (AP) — Venezuela's opposition demanded that the government reveal specifics of President Hugo Chavez's condition Wednesday, criticizing secrecy surrounding the ailing leader's health more than three weeks after his cancer surgery in Cuba.
Opposition coalition leader Ramon Guillermo Aveledo said at a news conference that the information provided by government officials "continues to be insufficient."
Chavez has not been seen or heard from since the Dec. 11 operation, and Vice President Nicolas Maduro on Tuesday said the president's condition remained "delicate" due to complications from a respiratory infection.
Maduro also urged Venezuelans to ignore rumors about Chavez's condition.
Aveledo said the opposition has been respectful during Chavez's illness, arguing that "the secrecy is the source of the rumors."
"They should tell the truth," Aveledo said, noting that Maduro had pledged to provide full reports about Chavez's condition. He reiterated the opposition's call for the government to release a medical report and said all indications are that Chavez won't be able to be sworn in to begin a new term Jan. 10.
If Chavez can't take office on that date, Aveledo said the constitution is clear that the National Assembly president should then take over temporarily until a new election is held. He said what happens next in Venezuela should be guided by "the truth and the constitution."
If Chavez dies or is unable to continue in office, the Venezuelan Constitution says a new election should be held within 30 days.
With rumors swirling that Chavez had taken a turn for the worse, Maduro said on Tuesday that he had met with the president twice, had spoken with him and would return to Caracas on Wednesday.
"He's totally conscious of the complexity of his post-operative state and he expressly asked us ... to keep the nation informed always, always with the truth, as hard as it may be in certain circumstances," Maduro said in the prerecorded interview in Havana, which was broadcast Tuesday night by the Caracas-based television network Telesur.
Both supporters and opponents of Chavez have been on edge in the past week amid shifting signals from the government about the president's health. Officials have reported a series of ups and downs in his recovery — the most recent, on Sunday, announcing that he faced the new complications from a respiratory infection.
Maduro did not provide any new details about Chavez's complications during Tuesday's interview. But he joined other Chavez allies in urging Venezuelans to ignore gossip, saying rumors were being spread due to "the hatred of the enemies of Venezuela."
He didn't refer to any rumors in particular, though one circulating online had described Chavez as being in a coma.
Maduro said Chavez faces "a complex and delicate situation." But Maduro also said that when he talked with the president and looked at his face, he seemed to have "the same strength as always."
"All the time we've been hoping for his positive evolution. Sometimes he has had light improvements, sometimes stationary situations," he said.
Maduro's remarks about the president came at the end of an interview in which he praised Cuba's government effusively and touched on what he called the long-term strength of Chavez's socialist Bolivarian Revolution movement. He mentioned that former Cuban President Fidel Castro had visited the hospital where Chavez was treated.
In Washington, the U.S. State Department said procedures under the Venezuelan Constitution should be followed if Chavez is no longer able to carry out his duties as president.
"We want to see any transition take place in a manner that is consistent with the Venezuelan Constitution, that any election be fully transparent, democratic, free and fair," State Department spokeswoman Victoria Nuland told reporters on Wednesday.
Asked if Chavez being out of the picture would make it easier to improve long-strained ties between Venezuela and the U.S., Nuland said, "Obviously we will judge our ability to improve our relationship with Venezuela based on steps they are able to take."
The U.S. Embassy in Caracas has been without an ambassador since July 2010. Chavez rejected the U.S. nominee for ambassador, accusing him of making disrespectful remarks about Venezuela's government. That led Washington to revoke the visa of the Venezuelan ambassador.
But recently U.S. and Venezuelan diplomats began high-level conversations aimed at improving relations, a U.S. government official said. The official spoke on condition of anonymity because he wasn't authorized to speak publicly about the matter.
The official confirmed recent reports that Roberta Jacobson, assistant secretary of state for Western Hemisphere affairs, spoke by telephone with Maduro in November and discussed ways of improving relations. He also confirmed that U.S. diplomat Kevin Whitaker had a subsequent conversation with Roy Chaderton, Venezuela's ambassador to the Organization of American States.
Venezuelan diplomats could not be reached to comment about those recent contacts with U.S. officials.
In Bolivia, meanwhile, President Evo Morales said he is concerned about his friend and ally.
"I hope we can see him soon," Morales said at a news conference Wednesday. "But it's a very worrying situation."
"I've tried to make contact with the vice president, and it's been difficult. I hope all of their aims are achieved to save President Chavez's life."
Before his operation, Chavez acknowledged he faced risks and designated Maduro as his successor, telling supporters they should vote for the vice president if a new presidential election was necessary.
Maduro didn't discuss the upcoming inauguration plans, saying only that he is hopeful Chavez will improve.
"Someone asked me yesterday by text message: How is the president? And I said, 'With giant strength,'" Maduro said. He recalled taking Chavez by the hand: "He squeezed me with gigantic strength as we talked.

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U.N. lifts Syria death toll to "truly shocking" 60,000

AMMAN/GENEVA (Reuters) - More than 60,000 people have died in Syria's uprising and civil war, the United Nations said on Wednesday, dramatically raising the death toll in a struggle that shows no sign of ending.
In the latest violence, dozens were killed in a rebellious Damascus suburb when a government air strike turned a petrol station into an inferno, incinerating drivers who had rushed there for a rare chance to fill their tanks, activists said.
"I counted at least 30 bodies. They were either burnt or dismembered," said Abu Saeed, an activist who arrived in the area an hour after the 1 p.m. (1100 GMT) raid in Muleiha, a suburb on the eastern edge of the capital.
In the north, rebels launched a major attack to take a military airport, and said they had succeeded in destroying a fighter plane and a helicopter on the ground.
U.N. Human Rights Commissioner Navi Pillay said in Geneva that researchers cross-referencing seven sources over five months of analysis had listed 59,648 people killed in Syria between March 15, 2011 and November 30, 2012.
"The number of casualties is much higher than we expected and is truly shocking," she said. "Given that there has been no let-up in the conflict since the end of November, we can assume that more than 60,000 people have been killed by the beginning of 2013."
There was no breakdown by ethnicity or information about whether the dead were rebels, soldiers or civilians. There was also no estimate of an upper limit of the possible toll.
Previously, the opposition-linked Syrian Observatory for Human Rights monitoring group had put the toll at around 45,000 confirmed dead but said the real number was likely to be higher.
FATAL RUSH FOR PETROL
Video footage taken by activists at the scene of the air strike on the petrol station showed the body of a man in a helmet still perched on a motorcycle amid flames engulfing the scene. Another man was shown carrying a dismembered body.
The video could not be verified. The government bars access to the Damascus area to most international media.
The activists said rockets were fired from a nearby government air base at the petrol station and a residential area after the air raid.
"Until the raid, Muleiha was quiet. We have been without petrol for four days and people from the town and the countryside rushed to the station when a state consignment came in," Abu Fouad, another activist at the scene, said by phone.
President Bashar al-Assad's forces also fired artillery and mortars at the capital's rebellious districts of Douma, Irbin and Zamlaka, activists living there said.
After nightfall there was shelling in the Jobar and Assali districts, and fighting occurred in the northern suburb of Harasta, on the highway leading north, Syria's main artery.
Assad's forces control the centre of the capital, while rebels and their sympathizers hold a ring of southern and eastern suburbs that are often hit from the air.
The Observatory said a separate air strike killed 12 members of a family, most of them children, in Moadamiyeh, a southwestern district near the centre of Damascus where rebels have fought for a foothold.
The rebels hold wide swathes of the north and east of the country, but have been unable to protect the areas they control from Assad's air power. Their main targets in recent months have been air bases, with a goal of preventing the government from using its jets and helicopters.
The rebels launched a major attack on Wednesday on Taftanaz, a northern air base which they hope to seize. A statement by the northern rebel Idlib Coordination Committee said they had battled their way to the airport's main command building but were not yet in control of the site.
The statement said the rebels had detonated a car bomb inside the Taftanaz airport grounds and destroyed a helicopter.
A rebel speaking from near the airport told Reuters the base's main sections were still in loyalist hands but rebels had destroyed a fighter jet as well as the helicopter.
The family of an American freelance journalist, James Foley, 39, said on Wednesday he had been missing in Syria since being kidnapped six weeks ago by gunmen. No group has publicly claimed responsibility for his abduction.
Syria was by far the most dangerous country for journalists in 2012, with 28 killed there.
The conflict began in March 2011 with peaceful protests against four decades of Assad family rule and turned into an armed revolt after months of government repression.
"FOR GOD'S EYES"
Both sides have been accused of committing atrocities in the 21-month-old conflict, but the United Nations says the government and its allies have been more culpable.
In the latest evidence of atrocities, Internet video posted by Syrian rebels shows armed men, apparently fighters loyal to Assad, stabbing two men to death and stoning them with concrete blocks in a summary execution lasting several minutes.
Reuters could not verify the provenance of the footage or the identity of the perpetrators and their victims. The video was posted on Tuesday but it was not clear where or when it was filmed. However it does clearly show a summary execution and torture, apparently being carried out by government supporters.
At one point, one of the assailants says: "For God's eyes and your Lord, O Bashar," an Arabic incantation suggesting actions being carried out in the leader's name.
The video was posted on YouTube by the media office of the Damascus-based rebel First Brigade, which said it had been taken from a captured member of the shabbiha pro-government militia.
The perpetrators show off for the camera, smiling for close-up shots, slicing at the victims' backs, then stabbing them and bashing them with large slabs of masonry.
Syria's civil war is the longest and deadliest conflict to emerge from uprisings that began sweeping the Arab world in 2011 and has developed a significant sectarian element.
Rebels, mostly from the Sunni Muslim majority, confront Assad's army and security forces, dominated by his Shi'ite-derived Alawite sect, which, along with some other minorities, fears revenge if he falls.

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Oil down slightly as fiscal-cliff talks continue

The price of oil fell slightly Friday, as the stock market drifted lower and efforts continued in Washington to strike a budget deal before the year-end deadline.
U.S. benchmark crude fell 7 cents to finish at $90.80 a barrel.
Hopes that a budget compromise might be reached were still alive as congressional leaders met with President Barack Obama at the White House. The Republican-dominated House is set to meet Sunday and stay in session until Jan. 2, the day before the new Congress is sworn in. Without a budget deal, automatic tax hikes and government spending cuts could send the economy into recession, economists say.
Traders are also weighing rising energy supplies.
Phil Flynn, of the Price Futures Group, said that a government report Friday showed U.S. oil production hit its highest point since March of 1993, at nearly 7 million barrels per day.
The Energy Department's Energy Information Administration said that U.S. crude supplies fell by 600,000 barrels last week but were still 13 percent above year-ago levels. Analysts expected a drop of 2 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos. Supplies at the crude delivery hub in Cushing, Okla., rose to an all-time high of 49.2 million barrels, more than 20 million barrels above year-ago levels.
Gasoline supplies increased by 3.8 million barrels, well above the 250,000-barrel increase that analysts forecast. Demand for gasoline at the wholesale level is nearly 3 percent lower than a year ago.
Flynn also said traders were looking beyond the fiscal cliff to supply changes in the new year. Next month the pipeline flow between Cushing and Texas will increase. That means more buyers can access that oil, so Flynn expects higher prices for crude. And with much of the nation facing its real first cold snap of the winter — with the coldest temperatures in two years — Flynn said many traders expect more demand for petroleum products.
In other energy futures trading on the Nymex:
— Wholesale gasoline fell 2 cents to end at $2.80 a gallon.
— Heating oil fell 3 cents to finish at $3.04 a gallon.
— Natural gas rose 6 cents to end at $3.47 per 1,000 cubic feet.
In London, Brent crude, used to price various kinds of foreign oil, fell 18 cents to finish at $110.62 a barrel on the ICE Futures exchange.

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Stocks drop as hope for a budget deal slips away

 Stocks are dropping again on Wall Street as investors lose hope that Washington will meet a self-imposed deadline for reaching a budget deal by year-end.
The five-day losing streak for the Dow Jones industrial average was the longest since July.
The Dow lost 158 points to close at 12,938 Friday.
The Standard & Poor 500 index fell 15 points to 1,402 and the Nasdaq dropped 25 points to 2,960.
The market was down all day. The losses accelerated in the final 20 minutes of trading as reports circulated that President Barack Obama would not make a new budget proposal in a meeting with congressional leaders.
Two stocks fell for every one that rose on the New York Stock Exchange. Volume was lower than the recent average at 2.4 billion shares.

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Wall Street ends sour week with 5th straight decline

- Stocks fell for a fifth straight day on Friday, dropping 1 percent and marking the S&P 500's longest losing streak in three months as the federal government edged closer to the "fiscal cliff" with no solution in sight.
President Barack Obama and top congressional leaders met at the White House to work on a solution for the draconian debt-reduction measures set to take effect beginning next week. Stocks, which have been influenced by little else than the flood of fiscal cliff headlines from Washington in recent days, extended losses going into the close with the Dow Jones industrial average and the S&P 500 each losing 1 percent, after reports that Obama would not offer a new plan to Republicans. The Dow closed below 13,000 for the first time since December 4.
"I was stunned Obama didn't have another plan, and that's absolutely why we sold off," said Mike Shea, managing partner at Direct Access Partners LLC in New York. "He's going to force the House to come to him with something different. I think that's a surprise. The entire market is disappointed in a lack of leadership in Washington."
In a sign of investor anxiety, the CBOE Volatility Index <.vix>, known as the VIX, jumped 16.69 percent to 22.72, closing at its highest level since June. Wall Street's favorite fear barometer has risen for five straight weeks, surging more than 40 percent over that time.
The Dow Jones industrial average <.dji> dropped 158.20 points, or 1.21 percent, to 12,938.11 at the close. The Standard & Poor's 500 Index <.spx> lost 15.67 points, or 1.11 percent, to 1,402.43. The Nasdaq Composite Index <.ixic> fell 25.59 points, or 0.86 percent, to end at 2,960.31.
For the week, the Dow fell 1.9 percent. The S&P 500 also lost 1.9 percent for the week, marking its worst weekly performance since mid-November. The Nasdaq finished the week down 2 percent. In contrast, the VIX jumped 22 percent for the week.
Pessimism continued after the market closed, with stock futures indicating even steeper losses. S&P 500 futures dropped 26.7 points, or 1.9 percent, eclipsing the decline seen in the regular session.
All 10 S&P 500 sectors fell during Friday's regular trading, with most posting declines of 1 percent, but energy and material shares were among the weakest of the day, with both groups closely tied to the pace of growth.
An S&P energy sector index <.gspe> slid 1.8 percent, with Exxon Mobil down 2 percent at $85.10, and Chevron Corp off 1.9 percent at $106.45. The S&P material sector index <.gspm> fell 1.3 percent, with U.S. Steel Corp down 2.6 percent at $23.03.
Decliners outnumbered advancers by a ratio of slightly more than 2 to 1 on the New York Stock Exchange, while on the Nasdaq, two stocks fell for every one that rose.
"We've been whipsawing around on low volume and rumors that come out on the cliff," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, who helps oversee $7 billion in assets.
With time running short, lawmakers may opt to allow the higher taxes and across-the-board federal spending cuts to go into effect and attempt to pass a retroactive fix soon after the new year. Standard & Poor's said an impasse on the cliff wouldn't affect the sovereign credit rating of the United States.
"We're not as concerned with January 1 as the market seems to be," said Richard Weiss, senior money manager at American Century Investments, in Mountain View, California. "Things will be resolved, just maybe not on a good timetable, and any deal can easily be retroactive."
Trading volume was light throughout the holiday-shortened week, with just 4.46 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Friday, below the daily average so far this year of about 6.48 billion shares. On Monday, the U.S. stock market closed early for Christmas Eve, and the market was shut on Tuesday for Christmas. Many senior traders were absent this week for the holidays.
Highlighting Wall Street's sensitivity to developments in Washington, stocks tumbled more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned that a deal was unlikely before the deadline. But late in the day, stocks nearly bounced back when the House said it would hold an unusual Sunday session to work on a fiscal solution.
Positive economic data failed to alter the market's mood.
The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest expanded in December.
"Economic reports have been very favorable, and once Congress comes to a resolution, the market should resume an upward trend, based on the data," said Weiss, who helps oversee about $125 billion in assets. "All else being equal, we see any further decline as a buying opportunity."
Barnes & Noble Inc rose 4.3 percent to $14.97 after the top U.S. bookstore chain said British publisher Pearson Plc had agreed to make a strategic investment in its Nook Media subsidiary. But Barnes & Noble also said its Nook business will not meet its previous projection for fiscal year 2013.
Shares of magicJack VocalTec Ltd jumped 10.3 percent to $17.95 after the company gave a strong fourth-quarter outlook and named Gerald Vento president and chief executive, effective January 1.
The U.S.-listed shares of Canadian drugmaker Aeterna Zentaris Inc surged 13.8 percent to $2.47 after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for a Phase 3 registration trial in endometrial cancer with AEZS-108 treatment.

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Wall St Week Ahead - Cliff may be a fear, but debt ceiling much scarier

 Investors fearing a stock market plunge - if the United States tumbles off the "fiscal cliff" next week - may want to relax.
But they should be scared if a few weeks later, Washington fails to reach a deal to increase the nation's debt ceiling because that raises the threat of a default, another credit downgrade and a panic in the financial markets.
Market strategists say that while falling off the cliff for any lengthy period - which would lead to automatic tax hikes and stiff cuts in government spending - would badly hurt both consumer and business confidence, it would take some time for the U.S. economy to slide into recession. In the meantime, there would be plenty of chances for lawmakers to make amends by reversing some of the effects.
That has been reflected in a U.S. stock market that has still not shown signs of melting down. Instead, it has drifted lower and become more volatile.
In some ways, that has let Washington off the hook. In the past, a plunge in stock prices forced the hand of Congress, such as in the middle of the financial crisis in 2008.
"If this thing continues for a bit longer and the result is you get a U.S. debt downgrade ... the risk is not that you lose two-and-a-half percent, the risk is that you lose ten and a half," said Jonathan Golub, chief U.S. equity strategist at UBS Equity Research, in New York.
U.S. Treasury Secretary Tim Geithner said this week that the United States will technically reach its debt limit at the end of the year.
INVESTORS WARY OF JANUARY
The White House has said it will not negotiate the debt ceiling as in 2011, when the fight over what was once a procedural matter preceded the first-ever downgrade of the U.S. credit rating. But it may be forced into such a battle again. A repeat of that war is most worrisome for markets.
Markets posted several days of sharp losses in the period surrounding the debt ceiling fight in 2011. Even after a bill to increase the ceiling passed, stocks plunged in what was seen as a vote of "no confidence" in Washington's ability to function, considering how close lawmakers came to a default.
Credit ratings agency Standard & Poor's lowered the U.S. sovereign rating to double-A-plus, citing Washington's legislative problems as one reason for the downgrade from triple-A status. The benchmark S&P 500 dropped 16 percent in a four-week period ending August 21, 2011.
"I think there will be a tremendous fight between Democrats and Republicans about the debt ceiling," said Jon Najarian, a co-founder of online brokerage TradeMonster.com, in Chicago.
"I think that is the biggest risk to the downside in January for the market and the U.S. economy."
There are some signs in the options market that investors are starting to eye the January period with more wariness. The CBOE Volatility Index <.vix>, or the VIX, the market's preferred indicator of anxiety, has remained at relatively low levels throughout this process, though on Thursday it edged above 20 for the first time since July.
More notable is the action in VIX futures markets, which shows a sharper increase in expected volatility in January than in later-dated contracts. January VIX futures are up nearly 23 percent in the last seven trading days, compared with a 13 percent increase in March futures and an 8 percent increase in May futures. That's a sign of increasing near-term worry among market participants.
The CBOE Volatility Index closed on Friday at 22.72, gaining nearly 17 percent to end at its highest level since June as details emerged of a meeting on Friday afternoon of President Barack Obama with Senate and House leaders from both parties where the president offered proposals similar to those already rejected by Republicans. Stocks slid in late trading and equity futures continued that slide after cash markets closed.
"I was stunned Obama didn't have another plan, and that's absolutely why we sold off," said Mike Shea, a managing partner and trader at Direct Access Partners LLC, in New York.
Obama offered hope for a last-minute agreement to avoid the fiscal cliff after a meeting with congressional leaders, although he scolded Congress for leaving the problem unresolved until the 11th hour.
"The hour for immediate action is here," he told reporters at a White House briefing. "I'm modestly optimistic that an agreement can be achieved."
The U.S. House of Representatives is set to convene on Sunday and continue working through the New Year's Day holiday. Obama has proposed maintaining current tax rates for all but the highest earners.
Consumers don't appear at all traumatized by the fiscal cliff talks, as yet. Helping to bolster consumer confidence has been a continued recovery in the housing market and growth in the labor market, albeit slow.
The latest take on employment will be out next Friday, when the U.S. Labor Department's non-farm payrolls report is expected to show jobs growth of 145,000 for December, in line with recent growth.
Consumers will see their paychecks affected if lawmakers cannot broker a deal and tax rates rise, but the effect on spending is likely to be gradual.
PLAYING DEFENSE
Options strategists have noted an increase in positions to guard against weakness in defense stocks such as General Dynamics because those stocks would be affected by spending cuts set for that sector. Notably, though, the PHLX Defense Index is less than 1 percent away from an all-time high reached on December 20.
This underscores the view taken by most investors and strategists: One way or another, Washington will come to an agreement to offset some effects of the cliff. The result will not be entirely satisfying, but it will be enough to satisfy investors.
"Expectations are pretty low at this point, and yet the equity market hasn't reacted," said Carmine Grigoli, chief U.S. investment strategist at Mizuho Securities USA, in New York. "You're not going to see the markets react to anything with more than a 5 (percent) to 7 percent correction."
Save for a brief 3.6 percent drop in equity futures late on Thursday evening last week after House Speaker John Boehner had to cancel a scheduled vote on a tax-hike bill due to lack of Republican support, markets have not shown the same kind of volatility as in 2008 or 2011.
A gradual decline remains possible, Golub said, if business and consumer confidence continues to take a hit on the back of fiscal cliff worries. The Conference Board's measure of consumer confidence fell sharply in December, a drop blamed in part on the fiscal issues.
"If Congress came out and said that everything is off the table, yeah, that would be a short-term shock to the market, but that's not likely," said Richard Weiss, a Mountain View, California-based senior money manager at American Century Investments.
"Things will be resolved, just maybe not on a good time table. All else being equal, we see any further decline as a buying opportunity.

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Stocks open lower as US budget deadline nears

 Stocks are falling again on Wall Street as Washington leaders blame each other for an impasse over the budget that seems less and less likely to be resolved before a year-end deadline.
That's when a series of across-the-board government spending cuts and tax increases kick in, an event that has become known as the "fiscal cliff."
The market is on track for its fifth consecutive decline as the political gridlock continues and investors fret about the fallout it will have on the fragile economic recovery in the U.S.
The Dow Jones industrial average fell 71 points to 13,024 shortly after the opening of trading Friday.
The Standard & Poor's 500 index fell eight points to 1,409 and the Nasdaq composite fell 16 to 2,970.

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