Riches in niches: U.S. cops, in-flight movies may be model for Panasonic survival

TOKYO (Reuters) – Panasonic Corp’s answer to the brutal onslaught on its TV sales may be in a product the Japanese firm launched 17 years ago and which is a must-have for U.S. police cars.

Two thirds of the 420,000 patrol cars in the United States are equipped with the company’s rugged Toughbook computers, and Panasonic chief Kazuhiro Tsuga sees the niche product as a model for how the sprawling conglomerate can make money beyond a gadget mass market increasingly dominated by Samsung Electronics and Apple Inc.

“What we need are businesses that earn, and they don’t necessarily have to have big sales,” Tsuga told reporters after his appointment as company president was approved in June.

Tsuga also sees avionics – Panasonic is the world’s leading maker of in-flight entertainment systems – automated production machinery, and lighting as profit earners as income from TVs and other consumer electronics dwindles.

Panasonic, Sony Corp and Sharp Corp have been hit hard by South Korean-made TVs, Blu-ray players and mobiles and Apple tablets that threaten to wipe out Japan as a global consumer electronics hub. The Toughbook, sold only to businesses and governments, was conceived as a response to the type of profit sapping competition that is now roiling TVs.

“At the time, we were losing in personal computers to Compaq and IBM,” said Hide Harada, who heads the Toughbook unit from the group’s headquarters in Osaka, western Japan. IBM later sold its laptop business to China’s Lenovo Group and Compaq was absorbed by Hewlett Packard.

“It was a guerilla strategy,” Harada said, recalling the Toughbook’s launch in 1996. Panasonic’s promotion campaign included driving jeeps over its computers, dropping them on the ground and dousing them with coffee on morning TV shows.

At rival Sony, too, signs of a niche strategy are emerging in a battle with Apple and South Korean brands that are making gains from a weaker won currency. Combining technologies from several divisions – from projectors to video cameras and headphones – Sony’s 3D Viewer head-mounted visor gives users the feel they are sitting in the middle of a 500-seat movie theater.

The target audience, says product manager Hideki Mori, are those consumers looking to immerse themselves in computer graphics and high quality movies. “Demand has been greater than anticipated,” he said, declining to give specific sales numbers.

LOSING GROUND

The two Japanese firms will show off their wares at this week’s annual CES consumer electronics show in Las Vegas, an event usually dominated by prototypes for next-generation TV technology. Tsuga is due to deliver the event’s keynote speech.

In the past, the Japanese have showcased ultra high-definition 4K televisions, while Samsung and LG Electronics Inc have displayed their ultra-thin OLED (organic light-emitting diode) screens. But, at a price tag likely 10 times that of conventional LCD screens, consumers will take a while to make the generational leap.

Meanwhile, losses at Panasonic, Sony and Sharp mount up. Panasonic has predicted a net loss of $ 8.9 billion in the year to end-March, while Sharp, which has been bailed out by banks, expects an annual loss of $ 5.24 billion. Helped by asset sales, Sony should eke out a small profit.

Japan’s share of the flat panel TV market has shrunk by around a quarter in the past two years, to around 31 percent, according to the Japan Electronics and Information Technology Industries Association. Amid a prolonged strong yen squeeze, the industry lobby expects Japan’s share of the DVD and Blu-ray disc player market to have dropped to around half last year from nearly two-thirds in 2010. Just 8 of every 100 mobile phones sold globally are now Japanese. Manufacturers have shifted TV production overseas, with output in Japan now less than a tenth of what it was two years ago.

Tsuga, who acknowledges Panasonic is a “loser” in consumer electronics, has warned his business units they will be closed or sold if they fail to match Toughbook’s success, giving each two years to deliver at least a 5 percent operating margin.

Any niche-winning strategy that takes his company away from mass market products means Tsuga will need fewer workers, investors say. Panasonic is Japan’s biggest commercial employer with a workforce of more than 300,000. It plans to axe 10,000 jobs in the year to March on top of the 36,000 that were cut in the previous year. More big cuts in Japan, where major lay-offs are uncommon and severance packages expensive, won’t be easy, said Yuuki Sakurai, CEO at Fukoku Capital Management in Tokyo, which manages assets worth $ 18.4 billion, but doesn’t own Panasonic stock.

“It’s like trying to chase the course of a battleship. If they want to become a light cruiser or destroyer, they’ll have to lose employees,” Sakurai said.

GLOBAL STANDARD

Workers Panasonic will likely keep are those in Kobe in western Japan who build the Toughbook PCs – a category defined by a U.S. military quality benchmark that serves as a de facto global standard. Its market share is on a par with Apple’s in tablets, with most U.S. police departments willing to pay as much as $ 3,000 for the rugged laptops which can withstand bumpy high-speed chases and other rigors of street policing.

“They have been near bullet-proof. We had a patrol car catch fire and after all the heat, smoke and water dissipated the computer continued to function,” said Bill Richards, logistics commander for the Tucson police in Arizona, whose force owns close to 650 Toughbooks that connect patrol cars with dispatchers, license records and other police databases.

Other customers include the New York Police Department, California Highway Patrol, Brazilian Military Police and British and U.S. military, which use them on unmanned aerial drones.

“Panasonic is the bellwether, the most recognized brand. The Toughbook is almost synonymous with rugged notebooks,” said David Krebs, a vice president at VDC Research.

While margins in the global PC market are getting slimmer – research firm IHS iSuppli sees annual sales growth of around 7 percent over the next four years from about 216 million PCs last year – the premium-price, fatter margin, rugged PC niche is seen growing by around 10 percent a year to nearly 1.2 million computers by 2016, according to VDC Research.

ANALOG EDGE, DIGITAL SAMENESS

At the Kobe factory, Toughbooks are put through their paces: hosed down to test water resistance, baked to 50 degrees Celsius, chilled to minus 20 degrees and dropped on their tops, bottoms, sides and corners.

Harada describes it as an analog edge in digital products.

“Whoever makes them, the insides of a computer are pretty much the same. It’s the mechanical side that makes us different,” he explained.

The creators of Sony’s 3D Viewer, too, are looking for mechanical appeal as much as electronic prowess. A second, redesigned model, which is now on sale in Japan, is 25 percent lighter at 330 grams, has a better grip and gives users the option of headphones or earplugs, said Mori. “We want to make it lighter,” he added, noting engineers are looking to slim down the heaviest component, the lenses.

While Sony keeps chasing consumers, Panasonic is pursuing a business-to-business niche market model that Tsuga has put at the heart of his revival plan. High on Harada’s target list for the Toughbook are Japanese police forces, which don’t yet buy the computers.

There are no plans, he said, to make cheaper mass market models – which could protect some jobs in the group.

“We aren’t going to put it in Best Buy or Walmart. I don’t think it would turn out well.”

($ 1 = 85.9250 Japanese yen)

(Editing by Ian Geoghegan)

Gadgets News Headlines – Yahoo! News

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Jordana Brewster Is 'Enamored' with the Idea of Having Twins

01/06/2013 at 05:00 PM EST

Jordana Brewster has babies on the brain – yes, you read that right: plural.

The Dallas star, 32, who has been married to movie producer Andrew Form since 2007, tells Latina she "definitely" wants two kids and is "enamored" by the idea of having twins.

"My dad was a twin, so it runs in the family," she explains. "Fingers crossed. We're thinking about having kids but I don't know when it'll happen. I feel very ready now."

When the couple does eventually expand their family, the children will be raised in a loving home.

"We FaceTime all of the time," Brewster says, of keeping the romance alive long distance. "We love that. There are times when I just say, 'I need to see you now.' And so we FaceTime a lot, or I surprise him and visit him or he does the same. It's super important … Couples shouldn't be apart for too long. We've been married for five years now and we know how important that is because otherwise you just lose touch with each other."

A big part of their bond has come from the way Form inspires his wife on a professional level.

"It's so amazing to have a husband in the business who can challenge me and we can talk about his work and my work and understand each other in that way," Brewster says. "I love getting his feedback and he likes getting mine. And of course, that has pushed me more to consider producing in the future."

And she's not just talking about babies!

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FDA: New rules will make food safer

WASHINGTON (AP) — The Food and Drug Administration says its new guidelines would make the food Americans eat safer and help prevent the kinds of foodborne disease outbreaks that sicken or kill thousands of consumers each year.

The rules, the most sweeping food safety guidelines in decades, would require farmers to take new precautions against contamination, to include making sure workers' hands are washed, irrigation water is clean, and that animals stay out of fields. Food manufacturers will have to submit food safety plans to the government to show they are keeping their operations clean.

The long-overdue regulations could cost businesses close to half a billion dollars a year to implement, but are expected to reduce the estimated 3,000 deaths a year from foodborne illness. The new guidelines were announced Friday.

Just since last summer, outbreaks of listeria in cheese and salmonella in peanut butter, mangoes and cantaloupe have been linked to more than 400 illnesses and as many as seven deaths, according to the federal Centers for Disease Control and Prevention. The actual number of those sickened is likely much higher.

Many responsible food companies and farmers are already following the steps that the FDA would now require them to take. But officials say the requirements could have saved lives and prevented illnesses in several of the large-scale outbreaks that have hit the country in recent years.

In a 2011 outbreak of listeria in cantaloupe that claimed 33 lives, for example, FDA inspectors found pools of dirty water on the floor and old, dirty processing equipment at Jensen Farms in Colorado where the cantaloupes were grown. In a peanut butter outbreak this year linked to 42 salmonella illnesses, inspectors found samples of salmonella throughout Sunland Inc.'s peanut processing plant in New Mexico and multiple obvious safety problems, such as birds flying over uncovered trailers of peanuts and employees not washing their hands.

Under the new rules, companies would have to lay out plans for preventing those sorts of problems, monitor their own progress and explain to the FDA how they would correct them.

"The rules go very directly to preventing the types of outbreaks we have seen," said Michael Taylor, FDA's deputy commissioner for foods.

The FDA estimates the new rules could prevent almost 2 million illnesses annually, but it could be several years before the rules are actually preventing outbreaks. Taylor said it could take the agency another year to craft the rules after a four-month comment period, and farms would have at least two years to comply — meaning the farm rules are at least three years away from taking effect. Smaller farms would have even longer to comply.

The new rules, which come exactly two years to the day President Barack Obama's signed food safety legislation passed by Congress, were already delayed. The 2011 law required the agency to propose a first installment of the rules a year ago, but the Obama administration held them until after the election. Food safety advocates sued the administration to win their release.

The produce rule would mark the first time the FDA has had real authority to regulate food on farms. In an effort to stave off protests from farmers, the farm rules are tailored to apply only to certain fruits and vegetables that pose the greatest risk, like berries, melons, leafy greens and other foods that are usually eaten raw. A farm that produces green beans that will be canned and cooked, for example, would not be regulated.

Such flexibility, along with the growing realization that outbreaks are bad for business, has brought the produce industry and much of the rest of the food industry on board as Congress and FDA has worked to make food safer.

In a statement Friday, Pamela Bailey, president of the Grocery Manufacturers Association, which represents the country's biggest food companies, said the food safety law "can serve as a role model for what can be achieved when the private and public sectors work together to achieve a common goal."

The new rules could cost large farms $30,000 a year, according to the FDA. The agency did not break down the costs for individual processing plants, but said the rules could cost manufacturers up to $475 million annually.

FDA Commissioner Margaret Hamburg said the success of the rules will also depend on how much money Congress gives the chronically underfunded agency to put them in place. "Resources remain an ongoing concern," she said.

The farm and manufacturing rules are only one part of the food safety law. The bill also authorized more surprise inspections by the FDA and gave the agency additional powers to shut down food facilities. In addition, the law required stricter standards on imported foods. The agency said it will soon propose other overdue rules to ensure that importers verify overseas food is safe and to improve food safety audits overseas.

Food safety advocates frustrated over the last year as the rules stalled praised the proposed action.

"The new law should transform the FDA from an agency that tracks down outbreaks after the fact, to an agency focused on preventing food contamination in the first place," said Caroline Smith DeWaal of the Center for Science in the Public Interest.

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"Cliff" concerns give way to earnings focus

NEW YORK (Reuters) - Investors' "fiscal cliff" worries are likely to give way to more fundamental concerns, like earnings, as fourth-quarter reports get under way next week.

Financial results, which begin after the market closes on Tuesday with aluminum company Alcoa , are expected to be only slightly better than the third-quarter's lackluster results. As a warning sign, analyst current estimates are down sharply from what they were in October.

That could set stocks up for more volatility following a week of sharp gains that put the Standard & Poor's 500 index <.spx> on Friday at the highest close since December 31, 2007. The index also registered its biggest weekly percentage gain in more than a year.

Based on a Reuters analysis, Europe ranks among the chief concerns cited by companies that warned on fourth-quarter results. Uncertainty about the region and its weak economic outlook were cited by more than half of the 25 largest S&P 500 companies that issued warnings.

In the most recent earnings conference calls, macroeconomic worries were cited by 10 companies while the U.S. "fiscal cliff" was cited by at least nine as reasons for their earnings warnings.

"The number of things that could go wrong isn't so high, but the magnitude of how wrong they could go is what's worrisome," said Kurt Winters, senior portfolio manager for Whitebox Mutual Funds in Minneapolis.

Negative-to-positive guidance by S&P 500 companies for the fourth quarter was 3.6 to 1, the second worst since the third quarter of 2001, according to Thomson Reuters data.

U.S. lawmakers narrowly averted the "fiscal cliff" by coming to a last-minute agreement on a bill to avoid steep tax hikes this weeks -- driving the rally in stocks -- but the battle over further spending cuts is expected to resume in two months.

Investors also have seen a revival of worries about Europe's sovereign debt problems, with Moody's in November downgrading France's credit rating and debt crises looming for Spain and other countries.

"You have a recession in Europe as a base case. Europe is still the biggest trading partner with a lot of U.S. companies, and it's still a big chunk of global capital spending," said Adam Parker, chief U.S. equity strategist at Morgan Stanley in New York.

Among companies citing worries about Europe was eBay , whose chief financial officer, Bob Swan, spoke of "macro pressures from Europe" in the company's October earnings conference call.

REVENUE WORRIES

One of the biggest worries voiced about earnings has been whether companies will be able to continue to boost profit growth despite relatively weak revenue growth.

S&P 500 revenue fell 0.8 percent in the third quarter for the first decline since the third quarter of 2009, Thomson Reuters data showed. Earnings growth for the quarter was a paltry 0.1 percent after briefly dipping into negative territory.

On top of that, just 40 percent of S&P 500 companies beat revenue expectations in the third quarter, while 64.2 percent beat earnings estimates, the Thomson Reuters data showed.

For the fourth quarter, estimates are slightly better but are well off estimates for the quarter from just a few months earlier. S&P 500 earnings are expected to have risen 2.8 percent while revenue is expected to have gone up 1.9 percent.

Back in October, earnings growth for the fourth quarter was forecast up 9.9 percent.

In spite of the cautious outlooks, some analysts still see a good chance for earnings beats this reporting period.

"The thinking is you need top line growth for earnings to continue to expand, and we've seen the market defy that," said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs.

Based on his analysis, energy, industrials and consumer discretionary are the S&P sectors most likely to beat earnings expectations in the upcoming season, while consumer staples, materials and utilities are the least likely to beat, Jackson said.

Sounding a positive note on Friday, drugmaker Eli Lilly and Co said it expects profit in 2013 to increase by more than Wall Street had been forecasting, primarily due to cost controls and improved productivity.

(Reporting By Caroline Valetkevitch; Editing by Kenneth Barry)

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India Takes Aim at Poverty With Cash Transfer Program

Manish Swarup/Associated Press

Poor and homeless people waited for food on Tuesday at a New Delhi temple.

NEW DELHI — India has more poor people than any nation on earth, but many of its antipoverty programs end up feeding the rich more than the needy. A new program hopes to change that.

On Jan. 1, India eliminated a raft of bureaucratic middlemen by depositing government pension and scholarship payments directly into the bank accounts of about 245,000 people in 20 of the nation’s hundreds of districts, in a bid to prevent corrupt state and local officials from diverting much of the money to their own pockets. Hundreds of thousands more people will be added to the program in the coming months.

In a country of 1.2 billion, the numbers so far are modest, but some officials and economists see the start of direct payments as revolutionary — a program intended not only to curb corruption but also to serve as a vehicle for lifting countless millions out of poverty altogether.

The nation’s finance minister, Palaniappan Chidambaram, described the cash transfer program to Indian news media as a “pioneering and pathbreaking reform” that is a “game changer for governance.” He acknowledged that the initial rollout had been modest because of “practical difficulties, some quite unforeseen.” He promised that those problems would be resolved before the end of 2013, when the program is to be extended in phases to other parts of the country.

Some critics, however, said the program was intended more to buy votes among the poor than to overcome poverty. And some said that in a country where hundreds of millions have no access to banks, never mind personal bank accounts, direct electronic money transfers are only one aspect of a much broader effort necessary to build a real safety net for India’s vast population.

“An impression has been created that the government is about to launch an ambitious scheme of direct cash transfers to poor families,” Jean Drèze, an honorary professor at the Delhi School of Economics, wrote in an e-mail. “This is quite misleading. What the government is actually planning is an experiment to change the modalities of existing transfers — nothing more, nothing less.”

The program is based on models in Mexico and Brazil in which poor families receive stipends in exchange for meeting certain social goals, like keeping their children in school or getting regular medical checkups. International aid organizations have praised these efforts in several places; in Brazil alone, nearly 50 million people participate.

But one of India’s biggest hurdles is simply figuring out how to distinguish its 1.2 billion citizens. The country is now in the midst of another ambitious project to undertake retinal and fingerprint scans in every village and city in the hope of giving hundreds of millions who have no official identification a card with a 12-digit number that would, among other things, give them access to the modern financial world. After three years of operation, the program has issued unique numbers to 220 million people.

Bindu Ananth, the president of IFMR Trust, a financial charity, said that getting people bank accounts can be surprisingly beneficial because the poor often pay stiff fees to cash checks or get small loans, fees that are substantially reduced for account holders.

“I think this is one of the biggest things to happen to India’s financial system in a decade,” Ms. Ananth said.

Only about a third of Indian households have bank accounts. Getting a significant portion of the remaining households included in the nation’s financial system will take an enormous amount of additional effort and expense, at least part of which will fall on the government to bear, economists said.

“There are two things this cash transfer program is supposed to do: prevent leakage from corruption, and bring everybody into the system,” said Surendra L. Rao, a former director general of the National Council of Applied Economic Research. “And I don’t see either happening anytime soon.”

The great promise of the cash transfer program — as well as its greatest point of contention — would come if it tackled India’s expensive and inefficient system for handing out food and subsidized fuel through nearly 50,000 government shops.

India spends almost $14 billion annually on this system, or nearly 1 percent of its gross domestic product, but the system is poorly managed and woefully inefficient.

Malavika Vyawahare contributed reporting.

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Ohio sheriff confronts protesters in football rape case

STEUBENVILLE, Ohio (Reuters) – A county sheriff under fire for how he has handled a high school rape investigation faced down a raucous crowd of protesters on Saturday and said no further suspects would be charged in a case that has rattled Ohio football country.

Ma’lik Richmond and Trenton Mays, both 16 and members of the Steubenville High School football team, are charged with raping a 16-year-old fellow student at a party last August, according to statements from their attorneys.

Jefferson County Sheriff Fred Abdalla, accused of shielding the popular football program from a more rigorous investigation, told reporters no one else would be charged in the case, just moments after he addressed about 1,000 protesters gathered in front of the Jefferson County Courthouse.

“I’m not going to stand here and try to convince you that I’m not the bad guy,” he said to a chorus of boos. “You’ve already made your minds up.”

The “Occupy Steubenville” rally was organized by the online activist group Anonymous.

Abdalla declined to take the investigation over from Steubenville police, sparking more public outrage. Anonymous and community leaders say police are avoiding charging more of those involved to protect the school’s beloved football program.

The two students will be tried as juveniles in February in Steubenville, a close-knit city of 19,000 about 40 miles west of Pittsburgh.

The case shot to national prominence this week when Anonymous made public a picture of the purported rape victim being carried by her wrists and ankles by two young men. Anonymous also released a video that showed several other young men joking about an assault.

Abdalla, who said he first saw the video three days ago, said on Saturday that it provided no new evidence of any crimes.

“It’s a disgusting video,” he said. “It’s stupidity. But you can’t arrest somebody for being stupid.”

The protest’s masked leader, standing atop a set of stairs outside the courthouse doors, invited up to the makeshift stage anyone who was a victim of sexual assault. Protesters immediately flooded the platform, which was slightly smaller than a boxing ring.

Victims passed around a microphone, taking turns telling their stories. Some called for Abdalla and other local officials to step down from office for not charging more of the people and for what they called a cover-up by athletes, coaches and local officials.

Abdalla then climbed the stairs himself and addressed the protest over a microphone.

Abdalla said he had dedicated his 28-year career to combating sexual assault, overseeing the arrest of more than 200 suspects.

Clad in a teal ribbon symbolizing support for sexual assault victims, Abdalla later told Reuters that he stood by his decision to leave the investigation with local police. He would have had to question all 59 people that the Steubenville Police Department had already interviewed in its original investigation, he said.

“People have got their minds made up,” he said. “A case like this, who would want to cover any of it up?”

(Editing by Daniel Trotta and Eric Walsh)

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Bethenny Frankel Divorcing Jason Hoppy

By Sarah Michaud

01/05/2013 at 05:00 PM EST

Bethenny Frankel and Jason Hoppy

Albert Michael/Startraks

It's official – Bethenny Frankel and Jason Hoppy's marriage is over.

Having announced a separation over the holidays, the reality star began the divorce process by filing earlier this week in New York, TMZ reports.

"It brings me great sadness to say that Jason and I are separating," Frankel, 42, had said in a statement Dec. 23. "This was an extremely difficult decision that as a woman and a mother, I have to accept as the best choice for our family."

The split comes after months of rumors that the pair – who married in 2010 and are parents to daughter Bryn, 2½ – were on the rocks.

"Bethenny is devastated," a friend tells PEOPLE.

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FDA proposes sweeping new food safety rules

WASHINGTON (AP) — The Food and Drug Administration on Friday proposed the most sweeping food safety rules in decades, requiring farmers and food companies to be more vigilant in the wake of deadly outbreaks in peanuts, cantaloupe and leafy greens.

The long-overdue regulations are aimed at reducing the estimated 3,000 deaths a year from foodborne illness. Just since last summer, outbreaks of listeria in cheese and salmonella in peanut butter, mangoes and cantaloupe have been linked to more than 400 illnesses and as many as seven deaths, according to the federal Centers for Disease Control and Prevention. The actual number of those sickened is likely much higher.

The FDA's proposed rules would require farmers to take new precautions against contamination, to include making sure workers' hands are washed, irrigation water is clean, and that animals stay out of fields. Food manufacturers will have to submit food safety plans to the government to show they are keeping their operations clean.

Many responsible food companies and farmers are already following the steps that the FDA would now require them to take. But officials say the requirements could have saved lives and prevented illnesses in several of the large-scale outbreaks that have hit the country in recent years.

In a 2011 outbreak of listeria in cantaloupe that claimed 33 lives, for example, FDA inspectors found pools of dirty water on the floor and old, dirty processing equipment at Jensen Farms in Colorado where the cantaloupes were grown. In a peanut butter outbreak this year linked to 42 salmonella illnesses, inspectors found samples of salmonella throughout Sunland Inc.'s peanut processing plant in New Mexico and multiple obvious safety problems, such as birds flying over uncovered trailers of peanuts and employees not washing their hands.

Under the new rules, companies would have to lay out plans for preventing those sorts of problems, monitor their own progress and explain to the FDA how they would correct them.

"The rules go very directly to preventing the types of outbreaks we have seen," said Michael Taylor, FDA's deputy commissioner for foods.

The FDA estimates the new rules could prevent almost 2 million illnesses annually, but it could be several years before the rules are actually preventing outbreaks. Taylor said it could take the agency another year to craft the rules after a four-month comment period, and farms would have at least two years to comply — meaning the farm rules are at least three years away from taking effect. Smaller farms would have even longer to comply.

The new rules, which come exactly two years to the day President Barack Obama's signed food safety legislation passed by Congress, were already delayed. The 2011 law required the agency to propose a first installment of the rules a year ago, but the Obama administration held them until after the election. Food safety advocates sued the administration to win their release.

The produce rule would mark the first time the FDA has had real authority to regulate food on farms. In an effort to stave off protests from farmers, the farm rules are tailored to apply only to certain fruits and vegetables that pose the greatest risk, like berries, melons, leafy greens and other foods that are usually eaten raw. A farm that produces green beans that will be canned and cooked, for example, would not be regulated.

Such flexibility, along with the growing realization that outbreaks are bad for business, has brought the produce industry and much of the rest of the food industry on board as Congress and FDA has worked to make food safer.

In a statement Friday, Pamela Bailey, president of the Grocery Manufacturers Association, which represents the country's biggest food companies, said the food safety law "can serve as a role model for what can be achieved when the private and public sectors work together to achieve a common goal."

The new rules could cost large farms $30,000 a year, according to the FDA. The agency did not break down the costs for individual processing plants, but said the rules could cost manufacturers up to $475 million annually.

FDA Commissioner Margaret Hamburg said the success of the rules will also depend on how much money Congress gives the chronically underfunded agency to put them in place. "Resources remain an ongoing concern," she said.

The farm and manufacturing rules are only one part of the food safety law. The bill also authorized more surprise inspections by the FDA and gave the agency additional powers to shut down food facilities. In addition, the law required stricter standards on imported foods. The agency said it will soon propose other overdue rules to ensure that importers verify overseas food is safe and to improve food safety audits overseas.

Food safety advocates frustrated over the last year as the rules stalled praised the proposed action.

"The new law should transform the FDA from an agency that tracks down outbreaks after the fact, to an agency focused on preventing food contamination in the first place," said Caroline Smith DeWaal of the Center for Science in the Public Interest.

Read More..

S&P 500 finishes at 5-year high on economic data

NEW YORK (Reuters) - The benchmark Standard & Poor's 500 index ended at a five-year high on Friday, lifted by reports showing employers kept up a steady pace of hiring workers and the vast services sector expanded at a brisk rate.

The gains on the S&P 500 pushed the index to its highest close since December 2007 and its biggest weekly gain since December 2011.

Most of the gains came early in the holiday-shortened week, including the largest one-day rise for the index in more than a year on Wednesday after politicians struck a deal to avert the "fiscal cliff."

The Dow Jones industrial average <.dji> gained 43.85 points, or 0.33 percent, to 13,435.21. The Standard & Poor's 500 Index <.spx> rose 7.10 points, or 0.49 percent, to 1,466.47. The Nasdaq Composite Index <.ixic> edged up 1.09 points, or 0.04 percent, to 3,101.66.

For the week, the S&P gained 4.6 percent, the Dow rose 3.8 percent and the Nasdaq jumped 4.8 percent to post their largest weekly percentage gains in more than a year.

The CBOE Volatility index <.vix>, a measure of investor anxiety, dropped for a fourth straight session, giving the index a weekly decline of nearly 40 percent, its biggest weekly fall ever. The close of 13.83 on the VIX marks its lowest level since August.

In Friday's economic reports, the Labor Department said non-farm payrolls grew by 155,000 jobs last month, slightly below November's level. Gains were distributed broadly throughout the economy, from manufacturing and construction to healthcare.

Also serving to boost equities was data from the Institute for Supply Management showing U.S. service sector activity expanding the most in 10 months.

With the S&P 500 index at a five-year closing high, analysts said any gains above the index's intraday high near 1,475 in September may be harder to come by.

"We are getting to a point where we need a strong catalyst, which could be earnings, it could be three months of good economic data, it could be a variety of things," said Adam Thurgood, managing director at HighTower Advisors in Las Vegas, Nevada.

"What is going on right now is this conflicting view of fundamentals look pretty good and improving, and then you've got these negative tail risks that could blow everything up," Thurgood said.

He referred to "a fiscal superstorm brewing" of issues still left unresolved in Washington, including tough federal budget cuts and the need to raise the government's debt ceiling all within a couple of months.

The rise in payrolls shown by the jobs data did not make a dent in the U.S. unemployment rate still at 7.8 percent.

A Reuters poll on Friday of economists at Wall Street's top financial institutions showed that most expect the Fed in 2013 to end the program with which it bought Treasury debt in an effort to stimulate the economy.

A drop in Apple Inc shares of 2.6 percent to $528.36 kept pressure on the Nasdaq.

Adding to concerns about Apple's ability to produce more innovative products, rival Samsung Electronics Co Ltd is expected to widen its lead over Apple in global smartphone sales this year with growth of 35 percent. Market researcher Strategy Analytics said Samsung had a broad product lineup.

Eli Lilly and Co was among the biggest boost's to the S&P, up 3.7 percent to $51.56 after the pharmaceuticals maker said it expects its 2013 earnings to increase to $3.75 to $3.90 per share, excluding items, from $3.30 to $3.40 per share in 2012.

Fellow drugmaker Johnson & Johnson rose 1.2 percent to $71.55 after Deutsche Bank upgraded the Dow component to a "Buy" from a "Hold" rating. The NYSEArca pharmaceutical index <.drg> climbed 0.6 percent.

Shares of Mosaic Co gained 3.3 percent to $58.62. Excluding items, the fertilizer producer's quarterly earnings beat analysts' expectations, according to Thomson Reuters I/B/E/S.

Volume was modest with about 6.07 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly below the 2012 daily average of 6.42 billion.

Advancing stocks outnumbered declining ones on the NYSE by 2,287 to 701, while on the Nasdaq, advancers beat decliners 1,599 to 866.

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

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Fatah Celebration in Gaza Signals Easing of Rift With Hamas

JERUSALEM — Turning the streets of Gaza City into a swarm of sunshine-yellow flags, hundreds of thousands of Palestinians celebrated the anniversary of the Fatah faction on Friday in the heartland of its militant Islamist rival, Hamas, the latest in a series of signals heralding possible reconciliation between the parties after their bitter five-year rift.

The rally, which came on the heels of Hamas celebrations last month in the Fatah-dominated West Bank, added momentum to what Palestinian leaders consider their twin victories in November: Hamas’s firing rockets into Israeli population centers of Tel Aviv and Jerusalem, and the Palestine Liberation Organization’s upgrade to nonmember observer state status at the United Nations. Though it is unclear the two sides will ultimately overcome real differences, the show of unity creates a diplomatic quandary for the United States, which has urged Israel to return to negotiations with the Palestinians, but also rejects direct talks with Hamas, which it considers a terrorist organization.

Nabil A. Shaath, a Fatah leader who organized Friday’s event, and Taher al-Nounou, a Hamas spokesman, each said in separate interviews on Friday evening that they expected reconciliation talks to begin under the auspices of the Egyptians within two weeks. President Mohamed Morsi of Egypt invited President Mahmoud Abbas of the Palestinian Authority to Cairo, Mr. Shaath said, where he is expected to meet with the Hamas political chief, Khaled Meshal.

“The climate is excellent for reconciliation,” Mr. Shaath said. “I don’t think there are any more organizational issues to be settled; what is needed is to sit down and write a political program. Cairo remains the best chaperon for this.”

Friday’s huge rally, the first Fatah anniversary celebration in Gaza since Hamas took control of the area in 2007, was unimaginable even six weeks ago. Though more than 170 Gazans were killed and dozens of buildings destroyed during the intense eight-day conflict with Israel, and the United Nations upgrade is largely symbolic, the two events seem to have strengthened both Hamas and Fatah in the eyes of the Palestinian public.

A mid-December poll by the Palestinian Center for Survey Research showed Mr. Abbas’s approval rating at 54 percent, up from 46 percent in September after a year of free-fall. Ismail Haniya, the Hamas prime minister in Gaza, got an even bigger boost, to 56 percent from 35 percent, and for the first time, the poll showed Mr. Haniya would beat Mr. Abbas in a head-to-head presidential election.

Positive evaluations of the conditions in both Gaza and the West Bank also rose significantly, and 39 percent said they expected unity between the two areas to soon be restored, nearly triple the portion who said so three months before. Granting permission for rivals to hold rallies is one thing, analysts said, but compromising on core principles and actually sharing power quite another. Recent public statements by Mr. Abbas, Mr. Haniya and Mr. Meshal show great gulfs remain regarding how to deal with Israel, among other things, and Palestinian political experts said they were not as confident as people in the street that such differences would be quickly worked out.

“Neither side is willing to be seen as responsible for the continuation of disunity, so they give lip service to reconciliation, but they realize fully that reconciliation at this point is not on the agenda,” said Khalil Shikaki, who heads the Ramallah-based center for survey research. “Reconciliation now means it will come at a price for one of the two, and neither side is willing to pay the price at the moment.”

Mkhaimar Abusada, a political scientist at Al Azhar University in Gaza City, said relations between the parties have clearly improved since the Gaza conflict, but he called the rallies, telephone calls between leaders and exchange of political prisoners “confidence-building measures,” not substantive progress. He and others noted that the factions have signed no fewer than four peace pacts in the past five years, none of which have been fulfilled, and that those agreements call for establishing a national unity government, holding presidential and parliamentary elections and reconstituting the Palestine Liberation Organization to include Hamas, among other things.

“What we see now is some kind or moral reconciliation,” Professor Abusada said. “Hamas and Fatah are no longer inciting against each other, Hamas and Fatah are no longer accusing each other, but the big issues have not been tackled yet.”

Israel and the United States have expressed deep concerns about the prospect of reconciliation, particularly now that an emboldened Gaza leadership feels it has the upper hand. Twice in the last few days, Prime Minister Benjamin Netanyahu of Israel has warned in public comments that Hamas could “take over” the Palestinian Authority. Last month, after Mr. Meshal promised at his own huge Gaza rally to liberate Palestine “from the river to the sea,” Mr. Netanyahu condemned Mr. Abbas for considering a full partnership with him.

On Friday, Mr. Abbas, who has not stepped foot in Gaza since 2007, appeared via video feed from Ramallah calling for reconciliation.

“Soon we will achieve unity and end the occupation, raising the Palestinian flag over Al Aqsa mosque and Jerusalem,” he told the large crowd, according to the Ma’an news agency. “Our whole lives under occupation and siege, our eyes are now fixed on Jerusalem and we must all take this opportunity to combine our efforts, hearts, and our determination to save Jerusalem, our capital.”

The president was the only official to address the rally, organizers said, with other speeches as well as a much-anticipated dance program canceled because of the surprise turnout. Health officials in Gaza said 50 people were injured, three seriously, in falls from high perches, electrical accidents, and near-suffocations.

“It was so noisy and the sound system was not really coping,” Mr. Shaath said afterward. “I have a Ph.D. in management, but I have absolutely no experience in management of one million people in celebration.”

Crowd estimates ranged from 300,000 to 1.2 million, in any case a large swath of Gaza’s 1.7 million people. Many may not have been active supporters of Fatah, but people who wanted to show unity or simply watch the spectacle. Thousands, including lots of families, spent Thursday night in Saraya Square to ensure themselves a spot, and by dusk on Friday, the throngs had not fully dispersed. After a mass prayer at noon, witnesses said, most of the hours were spent singing revolutionary songs from Fatah’s early days and waving flags.

“We came from the early morning, it’s like a holiday,” said a 23-year-old woman from Beit Hanoun, in the north of the strip, who gave only her first name, Amani. “We are coming today because we have been oppressed for five years. We wish that this will be the first step of unity.”

Abeer Ayyoub contributed reporting from Gaza City, and Fares Akram from Kuala Lumpur, Malaysia. Wire service reports also contributed.

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