Market rallies on emerging "fiscal cliff" deal

Traders work the floor at the New York Stock Exchange in New York, December 26, 2012.

Credit: Reuters/Eduardo Munoz

By Chuck Mikolajczak

NEW YORK | Mon Dec 31, 2012 3:10pm EST

NEW YORK (Reuters) - U.S. stocks advanced on Monday in a choppy session after comments from President Barack Obama suggesting a deal on the "fiscal cliff" was drawing closer.

The S&P 500 jumped above 1 percent after Obama said it appeared a deal was within sight, but quickly cut some gains when the president noted an agreement was not complete yet. With just an hour left in the final session of 2012, though, the S&P 500 resumed its climb and shot above 1 percent.

A source familiar with the matter said an emerging deal, if adopted by Congress and President Barack Obama, would raise $600 billion in revenue over the next 10 years by increasing tax rates for individuals making more than $400,000 and households earning above $450,000 annually.

A plan is needed in order to avert a combination of tax hikes and spending cuts that many believe could push the U.S. economy into recession.

"There is positive momentum in the market, and we are building up to a deal - markets are definitely starting to price in a deal sometime before tomorrow," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"This sounds counterintuitive, but if that doesn't happen, even if we don't get a bridge deal done, that is just going to increase the pressure on a deal getting done."

The gains put the S&P 500 on track to snap a five-day losing skid, its longest losing streak since September.

The Dow Jones industrial average .DJI gained 136.08 points, or 1.05 percent, to 13,074.19. The Standard & Poor's 500 Index .SPX rose 19.82 points, or 1.41 percent, to 1,422.25. The Nasdaq Composite Index .IXIC climbed 59.89 points, or 2.02 percent, to 3,020.20.

The S&P 500 is now up 13.1 percent for the year, compared with a flat performance in 2011. The Dow is up 7 percent and the Nasdaq is up 15.9 percent.

Gains in Apple Inc (AAPL.O), the most valuable U.S. company, helped lift the Nasdaq. The stock rose 4.4 percent to $531.85, lifting the S&P information technology sector index .GSPT up 1.9 percent. For the year so far, Apple is up 31.3 percent.

The Dow was bolstered by Caterpillar Inc (CAT.N) and Home Depot (HD.N) , both up more than 1 percent. In late afternoon trading, Caterpillar shot up nearly 3 percent to $86.35.

While a deal on the cliff is not yet official, investors may be ready to take on more risk next year in hopes of a greater reward.

Bank stocks rose after a New York Times report that U.S. regulators are nearing a $10 billion settlement with several banks that would end the government's efforts to hold lenders responsible for faulty foreclosure practices.

Bank of America Corp (BAC.N) was up 2.1 percent at $11.59.

Financial stocks were among the strongest of the year, with the S&P financial index .GSPF surging 25.2 percent for 2012 so far. Bank of America is the top-performing Dow component, with its stock price more than doubling over the past 12 months.

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Secretary of State Clinton hospitalized with blood clot

1 of 4. U.S. Secretary of State Hillary Clinton answers questions from the audience at the 2012 Saban Forum on U.S.-Israel relations gala dinner in Washington, in this file photo from November 30, 2012. Clinton was sent to the hospital December 30, 2012 with a blood clot stemming from a concussion she suffered earlier this month and was being assessed by doctors, a State Department spokesman said.

Credit: Reuters/Mary F. Calvert/Files

By Andrew Quinn

WASHINGTON | Sun Dec 30, 2012 11:04pm EST

WASHINGTON (Reuters) - U.S. Secretary of State Hillary Clinton was admitted to a New York hospital on Sunday with a blood clot linked to a concussion she suffered earlier this month, the State Department said in an announcement that looked sure to fuel speculation over the health of one of America's best-known political figures.

Clinton, 65, has been out of the public spotlight since mid-December, when officials said she suffered a concussion after fainting due to a stomach virus contracted during a trip to Europe.

"In the course of a follow-up exam today, Secretary Clinton's doctors discovered a blood clot had formed, stemming from the concussion she sustained several weeks ago," State Department spokesman Philippe Reines said in a statement.

"She is being treated with anti-coagulants and is at New York-Presbyterian Hospital so that they can monitor the medication over the next 48 hours," Reines said. "They will determine if any further action is required."

U.S. officials said on December 15 that Clinton, who canceled an overseas trip because of the stomach virus, suffered a concussion after fainting due to dehydration.

They have since described her condition as improving and played down suggestions that it was more serious. She had been expected to return to work this week.

Clinton's illness, already the subject of widespread political speculation, forced her to cancel planned testimony to Congress on December 20 in connection with a report on the deadly attack on the U.S. diplomatic post in Benghazi, Libya.

The attack became the subject of heated political debate in the run-up to the U.S. presidential election in November, and Republican lawmakers have repeatedly demanded that Clinton appear to answer questions directly.

Clinton's two top deputies testified in her place on the September 11 attack in Benghazi, which killed the U.S. ambassador and three other Americans and raised questions about security at far-flung diplomatic posts.

Some Republican commentators have implied that Clinton was seeking to avoid questioning on the subject, suggestions that have been strongly rebutted by State Department officials.

Clinton has stressed that she remains ready to testify and was expected to appear before lawmakers this month before she steps down, as planned, around the time of Obama's inauguration for his second term in late January.

After narrowly losing the Democratic presidential nomination to Obama in 2008, Clinton has been consistently rated as the most popular member of his Cabinet and is often mentioned as a potential presidential candidate in 2016.

Any serious medical concern could throw a fresh question mark over her future plans, although she has frequently alluded to her general good health.

BLOOD THINNERS

Dr. Edward Ellerbeck, a professor at the University of Kansas School of Medicine, said clots are more common in people who are sedentary, genetically predisposed, or on certain types of medicines such as the contraceptive pill or Estrogen replacements.

Ellerbeck, who is not treating Clinton, said clots are usually treated with blood thinners, typically for three to six months, and generally carry a low risk of further complications

Clinton is not known to have any of the risk factors that increase the risk of abnormal clotting, such as atherosclerosis or autoimmune disorders.

Head injuries such as the one she sustained earlier this month are associated more with bleeding than with clotting.

In one well-known case of bleeding following a head injury, actress Natasha Richardson hit her head skiing in 2009 and seemed fine, but died two days later of a hematoma, or bleeding between the outer membrane of the brain and the skull.

Clinton has said she wants to take a break from public life and has laughed off suggestions that she may mount another bid to become the first woman president of the United States - a goal she came close to reaching in 2008.

Her stint as secretary of state has further burnished the credentials she earned as a political partner to her husband, former President Bill Clinton, and later as a Democratic senator from New York.

In the four years since she became Obama's surprise choice as the top U.S. diplomat, Clinton has broken travel records as she dealt with immediate crises, including Libya and Syria, and sought to manage longer-term challenges, including U.S. relations with China and Russia.

She has maintained a punishing travel schedule, and was diagnosed with the virus after a December trip that took her to the Czech Republic, NATO headquarters in Brussels, Dublin and Belfast - where she had her last public appearance on December 7.

Officials announced on December 9 that she was ill with the stomach virus, forcing her to cancel a trip to North Africa and the Gulf that was to include a stop in Morocco for a meeting on the Syria crisis.

READY TO STEP DOWN

Clinton has repeatedly said that she only intended to serve one term, and aides said she was on track to leave office within the next few weeks, once a successor is confirmed by the Senate.

Her last months in office have been overshadowed by the Benghazi attack, the first to kill a U.S. ambassador in the line of duty since 1979, which brought sharp criticism of the State Department.

An independent inquiry this month found widespread failures in both security planning and internal management in the department.

It did not find Clinton personally responsible for any security failures, although she publicly took overall responsibility for Benghazi and the safety and security of U.S. diplomats overseas.

The State Department's top security officer resigned from his post under pressure and three other mid-level employees were relieved of their duties after the inquiry released its report.

The controversy also cost U.S. Ambassador to the United Nations Susan Rice her chance to succeed Clinton as secretary of state.

Rice drew heavy Republican criticism for comments on several television talk shows in which she said the attack appeared to be the result of a spontaneous demonstration rather than a planned assault. She ultimately withdrew her name for consideration for the top diplomatic job.

Obama on December 21 nominated Senator John Kerry, the Massachusetts Democrat who heads the Senate Foreign Relations Committee, to fill the position of secretary of state.

(Additional reporting by Jilian Mincer and Sharon Begley.; Editing by Eric Walsh and Christopher Wilson)

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Nine killed, more than 25 hurt in Oregon bus crash: state police

Rescue personnel respond to the scene of a charter bus crash on I-84, east of Pendleton, Oregon in this December 30, 2012 handout photo. Five people were killed and at least 20 injured in the incident. Police said the bus may have gone out of control on the highway before crashing through a guardrail and down an embankment.

Credit: Reuters/Oregon State Police/Handout

By Teresa Carson

PORTLAND, Oregon | Sun Dec 30, 2012 10:54pm EST

PORTLAND, Oregon (Reuters) - Nine people were killed and at least 26 others injured on Sunday when a charter bus headed to Canada from Las Vegas skidded off an icy mountain highway and crashed down an embankment in northeastern Oregon.

The Oregon State Police said a preliminary investigation showed the charter bus, carrying about 40 people through the Blue Mountains en route to Vancouver, British Columbia, "lost control on the snow/ice covered westbound lanes of Interstate 84" near Pendleton.

The bus crashed through a guardrail alongside the road and went down an embankment of around 200 feet. Crews trained in rope rescue were needed to bring victims back up to the highway, police said.

State Police spokesman Lt. Gregg Hastings said nine people had been confirmed killed in the crash.

"We are continuing to try and confirm the total number of passengers and number of injured persons transported to area hospital or secondary locations due to severity of injuries." the state police said in a written statement.

The bus driver survived the crash but investigators said he had not yet been interviewed because of the severity of his injuries.

St. Anthony Hospital in Pendleton initially received 26 of the injured, spokesman Larry Blanc said. Five of those patients were stabilized and transported to a secondary hospital by air for further treatment.

"About 10:30 this morning we got the call and declared a Code D, which means we bring in extra staff and supplies," he said, adding that D stands for "disaster."

"There are various types of injuries. Some of the injured were able to walk in on their own," Blanc said. "We are taking a lot of CT scans and assessing the injuries

Blanc said that of the 21 patients who remained at St. Anthony, some had been treated and released and were being provided food and shelter by the Red Cross. Some of them were children, he said.

Brycie Jones, spokeswoman for Oregon Health and Science University said that hospital had received four patients from the bus crash.

Jones said she could not disclose their identities or condition and it was not immediately clear if the patients had come from another hospital.

Authorities identified the charter company as Mi Joo Tour & Travel, based in Vancouver, British Columbia and said the bus was headed there as part of a round-trip from Las Vegas, Nevada.

Representatives for Mi Joo could not be reached for comment on Sunday evening.

Police said the names of the dead and wounded would not be released until next of kin were notified, which could take several days because many were believed to be from out of the country.

Pendleton is in northeast Oregon near the border with Washington state, about 200 miles east of Portland.

(Reporting by Teresa Carson; Writing by Dan Whitcomb; Editing by Cynthia Osterman and Todd Eastham)

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In Indian student's gang rape, murder, two worlds collide

Policemen stand guard outside the cremation ground during the funeral of a rape victim after her body arrived from Singapore, in New Delhi December 30, 2012.

Credit: Reuters/Adnan Abidi

By Annie Banerji

NEW DELHI | Mon Dec 31, 2012 5:53am EST

NEW DELHI (Reuters) - One of hundreds of attacks reported in New Delhi each year, the gang rape and murder of a medical student caught Indian authorities and political parties flat-footed, slow to see that the assault on a private bus had come to symbolize an epidemic of crime against women.

In the moments before the December 16 attack, the 23-year-old woman from India's urban middle class, who had recently qualified as a trainee physiotherapist in a private Delhi hospital, and her male friend, a software engineer, were walking home from a cinema at a shopping mall in south Delhi, according to a police reconstruction of events.

A bus, part of a fleet of privately owned vehicles used as public transport across the city of 16 million, and known as India's "rape capital", was at the same time heading toward them. Earlier that day, it had ferried school students but was now empty except for five men and a teenage boy, including its crew, police said. Most of the men were from the city's slums.

One of the six - all now charged with murder - lured the couple onto the bus, promising to drop the woman home, police have said, quoting from an initial statement that she gave from her hospital bed before her condition deteriorated rapidly.

A few minutes into the ride, her friend, 28, grew suspicious when the bus deviated from the supposed route and the men locked the door, according to her statement. They then taunted her for being out with a man late at night, prompting the friend to intervene and provoking an initial scuffle.

The attackers then beat him with a metal rod, knocking him unconscious, before turning on the woman who had tried to come to his defense. Police say the men admitted after their arrest to torturing and raping the student "to teach her a lesson".

At one point, the bus driver gave the wheel to another of the accused and dragged the woman by the neck to the back of the vehicle and forced himself upon her. The other five then took turns raping her and also driving the bus, keeping it circling through the busy streets of India's capital city, police said.

The woman was raped for nearly an hour before the men pushed a metal rod inside her, severely damaging her internal organs, and then dumped both her and her friend on the roadside, 8 km (5 miles) from where they had boarded it, police said.

Robbed of their clothes and belongings, they were found half naked, bleeding and unconscious later that night by a passerby, who alerted the police.

Last year, a rape was reported on average every 20 minutes in India. Just 26 percent of the cases resulted in convictions, according to the National Crime Records Bureau, which registered 24,206 rapes in 2011, up from 22,141 the previous year.

At first, authorities treated the assault on the medical student as one crime among many, and they were not prepared for the furious public reaction that led to running battles between protesters and police near the heart of government in New Delhi.

FAMILY ROLE MODEL

The woman, whose identity has been withheld by police, gave her statement to a sub-divisional magistrate on December 21 in the intensive care unit of Delhi's Safdarjung Hospital, according to media reports. She was undergoing multiple surgical procedures and her condition later began to rapidly worsen.

Ten days after the attack and still in a critical condition, she was flown to Singapore for specialist treatment. She died in Singapore's Mount Elizabeth Hospital two days later. Her body was flown back to Delhi and cremated there on Sunday in a private ceremony.

Family members who had accompanied her to Singapore declined to speak to reporters, but relatives told the Times of India newspaper she had been a role model to her two younger brothers.

Unlike most traditional Indian families who only send their sons to fee-paying colleges or universities, her parents pinned their hopes on the daughter and took loans to fund her studies.

She was born and brought up in a middle class Delhi neighborhood after her family moved to the city more than 20 years ago from the northern state of Uttar Pradesh.

Her male friend recorded his statement to a court days after the attack and helped police identify the six accused. He left for his hometown in Uttar Pradesh late on Saturday, missing the woman's funeral, media reported.

SHAME, ANGER IN SLUM

Four of the accused, all in custody, live in the narrow by-lanes of Ravi Das Camp, a slum about 17 km (11 miles) from the woman's home in southwest Delhi. Inside the slum - home to some 1,200 people who eke out a meager living as rickshaw pullers and tea hawkers - many demanded the death penalty for the accused.

"The incident has really shocked all of us. I don't know how I will get my children admitted to a school. The incident has earned a bad name to this place," said Pooja Kumari, a neighbor of one of the accused.

Girija Shankar, a student, said: "Our heads hang in shame because of the brutal act of these men. They must reap what they have sown."

The house of one of the accused was locked, with neighbors saying his family had left the city to escape the shame and anger. Meena, a 45-year-old neighbor, said she had wanted to join the protests that followed the rape, but was too scared.

"You never know when a mob may attack this slum and attack our houses. But we want to say we're as angry as the entire nation. We want them to be hanged," she said.

Two of the six alleged assailants come from outside Delhi, according to police. One is married with children and was arrested in his native village in Bihar state and the other, a juvenile, is a runaway from a broken home in Uttar Pradesh.

In India, murder is punishable by death by hanging, except in the case of offenders aged below 18.

(Additional reporting by Suchitra Mohanty and Nita Bhalla; Editing by Mark Bendeich and Ian Geoghegan)

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Chinese fishing boat detained in Japan: Xinhua

A Chinese fishing boat, which is detained by Japan's coastguard, is seen in this handout photo taken December 29, 2012. Japan's coastguard detained a Chinese fishing boat within Japanese waters on Sunday evening, China's Xinhua news agency said, citing the Chinese consulate general in Fukuoka, a city in southwestern Japan. Picture taken December 29, 2012.

Credit: Reuters/Kagoshima Coast Guard Office/Handout

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Al Qaeda in Yemen offers bounty for U.S. ambassador

U.S. ambassador to Yemen Gerald Feierstein speaks during an interview in New York, in this file picture taken October 18, 2012.

Credit: Reuters/Brendan McDermid/Files

DUBAI | Mon Dec 31, 2012 5:51am EST

DUBAI (Reuters) - The Yemen-based branch of al Qaeda has offered a bounty for anyone who kills the U.S. ambassador to Yemen or an American soldier in the impoverished Arab state, a group that monitors Islamist websites said.

Al Qaeda in the Arabian Peninsula (AQAP) said it was offering three kilograms of gold for the killing of the U.S. ambassador in Sanaa, Gerald Feierstein, the U.S.-based SITE Intelligence Group said, citing an audio released by militants.

AQAP will also pay 5 million rials ($23,350) to whoever kills any American soldier in Yemen, it said.

The offer, valid for six months, was made "to encourage our Muslim Ummah (nation), and to expand the circle of the jihad (holy war) by the masses," SITE said, citing the audio.

AQAP, mostly militants from Yemen and Saudi Arabia, is regarded by the United States as the most dangerous branch of the network founded by Osama bin Laden.

In September, AQAP urged Muslims to step up protests and kill U.S. diplomats in Muslim countries over a film denigrating the Prophet Mohammad, which it said was another chapter in the "crusader wars" against Islam.

The film provoked an outcry among Muslims, who deem any depiction of the Prophet as blasphemous and triggered violent attacks on embassies in countries in Asia and the Middle East.

Four U.S. officials including the ambassador to Libya were killed in the aftermath. The Pentagon said it had sent a platoon of Marines to Yemen after demonstrators stormed the U.S. Embassy in Sanaa.

A U.S. ally, Yemen is struggling against challenges on many fronts since mass protests forced veteran leader Ali Abdullah Saleh to step down in February after decades in power.

President Abd-Rabbu Mansour Hadi's government is trying to re-establish order and unify the army.

Washington, which has pursued a campaign of assassination by drone and missile against suspected al Qaeda members, backed a military offensive in May to recapture areas of Abyan province. But militants have struck back with a series of bombings and killings.

(Reporting by Rania El Gamal; editing by Todd Eastham)

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Hours from "fiscal cliff," Washington still awaits deal

1 of 15. A man walks past the U.S. Capitol Building in Washington December 17, 2012.

Credit: Reuters/Joshua Roberts

By Fred Barbash

WASHINGTON | Mon Dec 31, 2012 1:27am EST

WASHINGTON (Reuters) - The U.S. Congress comes back on Monday without a deal to avert the "fiscal cliff" and only a few hours of actual legislative time scheduled in which to act if an agreement materializes.

Negotiations involving Vice President Joe Biden and Senate Republican leader Mitch McConnell appeared to offer the last hope for avoiding the across-the-board tax increases and draconian cuts in the federal budget that will be triggered at the start of the New Year because of a deficit-reduction law enacted in August, 2011.

A jolt from the financial markets could also prod the parties, as it has occasionally in the past.

"I believe investors will show their displeasure" at the lack of progress in Washington, said Mohannad Aama, managing director at Beam Capital Management, an investment advisory firm in New York.

Democratic and Republican leaders in the Senate had hoped to clear the way for swift action on Sunday. But with the two sides still at loggerheads in talks, Senate Democratic leader Harry Reid postponed any possible votes and the Senate adjourned until Monday.

The main sticking point between Republicans and Democrats remained whether to extend existing tax rates for everyone, as Republicans want, or just for those earning below $250,000 to $400,000, as Democrats have proposed.

Also at issue were Republican demands for larger cuts in spending than those offered by President Barack Obama.

Hopes for a "grand bargain" of deficit-reduction measures vanished weeks ago as talks stalled.

While Congress has the capacity to move swiftly when motivated, the leaders of the U.S. House of Representatives and the Senate have left themselves little time for what could be a complicated day of procedural maneuvering in the event of an agreement.

House Speaker John Boehner has insisted that the Senate act first, but that chamber does not begin legislative business until about noon Monday.

OTHER BUSINESS ALSO ON AGENDA

And the cliff is not the only business on the House agenda. Farm-state lawmakers are seeking a one-year extension of the expiring U.S. farm law to head off a possible doubling of retail milk prices to $7 or more a gallon in early 2013.

Relief for victims of Superstorm Sandy is waiting in line in the House as well, though it could still consider a Senate bill on assistance for the storm until January 2, the last day of the Congress that was elected in November 2010.

Expiring along with low tax rates at midnight Monday are a raft of other tax measures effecting tens of millions of Americans.

A payroll tax holiday Americans have enjoyed for two years looks like the most certain casualty as neither Republicans or Democrats have shown much interest in continuing it, in part because the tax funds the Social Security retirement program.

The current 4.2 percent payroll tax rate paid by about 160 million workers will revert to the previous 6.2 percent rate after December 31, and will be the most immediate hit to taxpayers.

A "patch" for the Alternative Minimum Tax that would prevent millions of middle-class Americans from being taxed as if they were rich, could go over the cliff as well. Both Republicans and Democrats support doing another patch, but have not approved one.

At best, the Internal Revenue Service has warned that as many as 100 million taxpayers could face refund delays without an AMT fix. At worst, they could face higher taxes unless Congress comes back with a retroactive fix.

After Tuesday, Congress could move for retroactive relief on any or all of the tax and spending issues. But that would require compromises that Republicans and Democrats have been unwilling to make so far.

Obama said on Sunday he plans on pushing legislation as soon as January 4 to reverse the tax hikes for all but the wealthy.

(Editing by Christopher Wilson)

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