Syria Rebels Postpone Formation of Transitional Government





MOSCOW — Russia announced Monday that it was sending two airplanes from its emergency services fleet to Beirut to evacuate around 100 Russian citizens leaving Syria, reflecting Moscow’s assessment that President Bashar al-Assad’s forces are losing control of the country after nearly two years of fighting.




It was not clear whether the news signaled the beginning of a large-scale evacuation. Russia has an estimated 30,000 citizens in Syria, including government and military personnel, private contractors and tens of thousands of women married to Syrian men. Around a dozen Russian ships are in the Mediterranean off the coast of Syria for naval exercises and could, officials have said, be used to evacuate Russian citizens.


Irina Rossius,  a spokeswoman for Russia’s Emergency Services Ministry, said two airplanes would fly to Beirut on Tuesday “so that all Russians who wish to can leave Syria,” Interfax reported. She said more than 100 Russians expected to leave. It is now common for people leaving Damascus, if they can afford it, to avoid the contested route to the city’s airport by driving to Beirut and flying out from there.


Ms. Rossius did not say which group was evacuating, but conditions have been deteriorating for diplomats. Last week, Russia announced that it was closing its consulate in Aleppo in the wake of a double bombing that killed 82 people, and security officials told the newspaper Kommersant last month that the authorities were prepared to send 100 armed intelligence officers to help Russian diplomats leave Damascus if necessary. Russian arms manufacturers also have military advisers in place to assist the Syrian military with air-defense systems purchased from Russia.


Russia first formulated plans for an evacuation seven months ago, but delayed putting them into action — in part, analysts said, because it would send a political message that Moscow no longer considered it likely that Mr. Assad would prevail. But Foreign Ministry officials are increasingly concerned about security and have been quietly trying to negotiate the release of two Russian steel workers who were kidnapped last month.


The conflict continued to rage on Monday, with the government accusing rebels of attacking an important power line, causing a blackout in Damascus, the capital, as well as areas to the north and a swath of territory reaching south to the Jordanian border. Power failures have been frequent reminders of the conflict that has engulfed Syria, but the latest one appeared to be the first to affect the entire capital, where Mr. Assad’s forces are still largely in control. The Associated Press reported that power was restored in parts of Damascus on Monday.


In Istanbul, the main exile opposition group once again failed to form a transitional government, deciding instead to postpone the step while new proposals are drawn up. The delay was a setback to the opposition’s plans to fill the power vacuum created by the ever bloodier civil war.


The opposition group, the National Coalition of Syrian Revolutionary and Opposition Forces, has won recognition by a number of foreign countries as the sole legitimate representative of the Syrian people, but it has not yet solidified support among rebels fighting on the ground. Nor has it begun planning for a post-Assad future.


The Western and Arab nations that pressed Mr. Assad’s adversaries to reorganize last year have been urging the new coalition to select a prime minister, but no candidate has won a consensus.


A statement by the National Coalition on Monday said that it had formed a five-member committee to “lead consultations” with rebel commanders, foreign backers and others seeking Mr. Assad’s ouster, and to draw up proposals for a transitional government within 10 days. The statement was similar to one the coalition made last month, after failing to form a government at a meeting in Cairo.


The talks over a transitional government were bogged down by a heated debate over a provision in the coalition’s bylaws banning its members from assuming ministerial posts in any future interim government, in an effort to protect the coalition from accusations that its members are merely seeking personal power. Some opposition leaders want to scrap that provision, arguing that it will deny the interim government the benefit of including experienced and respected senior figures, but they met with strong resistance.


“The idea faced an immediate storm of objections and criticism,” said Samir Nachar, a member of the Syrian National Coalition. “We saw that during the meeting, and decided not to change anything.”


Mr. Nachar said the main reason the opposition has failed to shape a transitional government so far is that it is not sure such a government would receive the international recognition and support it would need to function.


“Falling into the trap of forming a paralyzed government will not just be useless, it will be a huge disappointment to Syrians,” he said. “The coalition was promised a lot when it was formed, and none of that materialized.”


The coalition announced that it was sending $250,000 in emergency aid to Daraya, a Damascus suburb that has been hit hard recently with artillery and airstrikes, and forming committees to aid refugees and the wounded and to coordinate with armed opposition groups inside Syria. The coalition has been under pressure to show that it can offer real help to Syrians inside the country.


But providing aid is complicated, as the government still plays a role in coordinating international aid. The coalition also said it was forming a committee to pressure the United Nations to stop all aid to official Syrian institutions, a move that could further hamper the delivery of aid that is already challenged by the dangers of moving around the country. Syrian employees of quasi-official agencies currently transport much of the United Nations’ food aid to displaced citizens, John Ging, the head of the United Nations Office for the Coordination of Humanitarian Affairs, noted in a news conference in Damascus by a high-level United Nations delegation. Mr. Ging thanked the Syrian Arab Red Crescent for its bravery, Syria’s state news agency reported.


Ellen Barry reported from Moscow, and Hania Mourtada from Beirut, Lebanon. Alan Cowell contributed reporting from London, and Hala Droubi from Dubai, United Arab Emirates.



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Putin orders Russian computers to be protected after spy attacks






MOSCOW (Reuters) – President Vladimir Putin has ordered Russian authorities to protect state computers from hacking attacks, the Kremlin said on Monday, after an Internet security firm said a spy network had infiltrated government and embassy computers across the former Soviet bloc.


Dubbed Red October, the network used phishing attacks – or unsolicited emails to intended targets – to infect the computers of embassies and other state institutions with a program designed to harvest intelligence and send it back to a server.






Putin signed a decree on January 15 empowering the Federal Security Service (FSB) to “create a state system for the detection, prevention and liquidation of the effects of computer attacks on the information resources of the Russian Federation”.


State computer and telecommunications networks protected by the cyber security system should include those inside Russia and at its embassies and consulates abroad, according to the decree, which was published on a Kremlin website on Monday.


The Russian Internet security firm Kaspersky Labs said last week that the computer espionage network, discovered last October, had been seeking intelligence from Eastern European and ex-Soviet states including Russia since 2007. (http://r.reuters.com/mag45t )


Many of the systems infected belonged to diplomatic missions, Vitaly Kamluk, an expert in computer viruses at Kaspersky Labs, said last week. He declined to name specific countries.


Kamluk said last week that the network was still active, and that law enforcement agencies in several European countries were investigating it.


Kaspersky Labs said the infiltrators had created more than 60 domain names, mostly in Russia and Germany, that worked as proxies to hide the location of their real server.


The FSB declined immediate comment last week when asked whether Russia had taken action to bring any suspected members of the espionage network to justice, or acted to improve Internet security in light of the discovery.


The FSB – the main successor agency of the Soviet KGB – requested a written query, to which it has not yet responded. The Kremlin declined immediate comment on Monday when asked whether Putin’s decree was linked to Red October.


(Reporting by Steve Gutterman and Thomas Grove; Editing by Kevin Liffey)


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President Obama: I Love Michelle's New Bangs















01/21/2013 at 04:20 PM EST







President Barack Obama and Michelle Obama


Matthew Cavanaugh/EPA/Landov


First Lady Michelle Obama's new do has the approval of a very powerful man.

Following his official swearing-in ceremony on Sunday, President Barack Obama attended an Inauguration eve gala at the National Building Museum, where he complimented his wife's fresh look.

"To address the most significant event of the weekend, I love her bangs," Obama said, according to USA Today. "She looks good. She always looks good."

The First Lady debuted her cut in a photo released on her 49th birthday last Thursday – and showed it off (along with her Thom Browne dress) again at the Inauguration on Monday.

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Flu season fuels debate over paid sick time laws


NEW YORK (AP) — Sniffling, groggy and afraid she had caught the flu, Diana Zavala dragged herself in to work anyway for a day she felt she couldn't afford to miss.


A school speech therapist who works as an independent contractor, she doesn't have paid sick days. So the mother of two reported to work and hoped for the best — and was aching, shivering and coughing by the end of the day. She stayed home the next day, then loaded up on medicine and returned to work.


"It's a balancing act" between physical health and financial well-being, she said.


An unusually early and vigorous flu season is drawing attention to a cause that has scored victories but also hit roadblocks in recent years: mandatory paid sick leave for a third of civilian workers — more than 40 million people — who don't have it.


Supporters and opponents are particularly watching New York City, where lawmakers are weighing a sick leave proposal amid a competitive mayoral race.


Pointing to a flu outbreak that the governor has called a public health emergency, dozens of doctors, nurses, lawmakers and activists — some in surgical masks — rallied Friday on the City Hall steps to call for passage of the measure, which has awaited a City Council vote for nearly three years. Two likely mayoral contenders have also pressed the point.


The flu spike is making people more aware of the argument for sick pay, said Ellen Bravo, executive director of Family Values at Work, which promotes paid sick time initiatives around the country. "There's people who say, 'OK, I get it — you don't want your server coughing on your food,'" she said.


Advocates have cast paid sick time as both a workforce issue akin to parental leave and "living wage" laws, and a public health priority.


But to some business owners, paid sick leave is an impractical and unfair burden for small operations. Critics also say the timing is bad, given the choppy economy and the hardships inflicted by Superstorm Sandy.


Michael Sinesky, an owner of seven bars and restaurants around the city, was against the sick time proposal before Sandy. And after the storm shut down four of his restaurants for days or weeks, costing hundreds of thousands of dollars that his insurers have yet to pay, "we're in survival mode."


"We're at the point, right now, where we cannot afford additional social initiatives," said Sinesky, whose roughly 500 employees switch shifts if they can't work, an arrangement that some restaurateurs say benefits workers because paid sick time wouldn't include tips.


Employees without sick days are more likely to go to work with a contagious illness, send an ill child to school or day care and use hospital emergency rooms for care, according to a 2010 survey by the University of Chicago's National Opinion Research Center. A 2011 study in the American Journal of Public Health estimated that a lack of sick time helped spread 5 million cases of flu-like illness during the 2009 swine flu outbreak.


To be sure, many employees entitled to sick time go to work ill anyway, out of dedication or at least a desire to project it. But the work-through-it ethic is shifting somewhat amid growing awareness about spreading sickness.


"Right now, where companies' incentives lie is butting right up against this concern over people coming into the workplace, infecting others and bringing productivity of a whole company down," said John A. Challenger, CEO of employer consulting firm Challenger, Gray & Christmas.


Paid sick day requirements are often popular in polls, but only four places have them: San Francisco, Seattle, Washington, D.C., and the state of Connecticut. The specific provisions vary.


Milwaukee voters approved a sick time requirement in 2008, but the state Legislature passed a law blocking it. Philadelphia's mayor vetoed a sick leave measure in 2011; lawmakers have since instituted a sick time requirement for businesses with city contracts. Voters rejected a paid sick day measure in Denver in 2011.


In New York, City Councilwoman Gale Brewer's proposal would require up to five paid sick days a year at businesses with at least five employees. It wouldn't include independent contractors, such as Zavala, who supports the idea nonetheless.


The idea boasts such supporters as feminist Gloria Steinem and "Sex and the City" actress Cynthia Nixon, as well as a majority of City Council members and a coalition of unions, women's groups and public health advocates. But it also faces influential opponents, including business groups, Mayor Michael Bloomberg and City Council Speaker Christine Quinn, who has virtually complete control over what matters come to a vote.


Quinn, who is expected to run for mayor, said she considers paid sick leave a worthy goal but doesn't think it would be wise to implement it in a sluggish economy. Two of her likely opponents, Public Advocate Bill de Blasio and Comptroller John Liu, have reiterated calls for paid sick leave in light of the flu season.


While the debate plays out, Emilio Palaguachi is recovering from the flu and looking for a job. The father of four was abruptly fired without explanation earlier this month from his job at a deli after taking a day off to go to a doctor, he said. His former employer couldn't be reached by telephone.


"I needed work," Palaguachi said after Friday's City Hall rally, but "I needed to see the doctor because I'm sick."


___


Associated Press writer Susan Haigh in Hartford, Conn., contributed to this report.


___


Follow Jennifer Peltz at http://twitter.com/jennpeltz


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Euro zone surveys to offer hope as Japan eases


LONDON (Reuters) - The prospect of stronger European manufacturing surveys and decisive monetary easing in Japan this week ought to bolster confidence that the global economy can look forward to better days.


It is definitely not yet time to break open the champagne.


The index derived from polls of purchasing managers across the euro zone, though recovering, is likely to remain well below the 50 threshold that signals expansion.


If the Bank of Japan bows to political pressure and relaxes policy more boldly, it is because the country's noxious cocktail of a huge debt burden, deflation and dwindling external surpluses threatens an eventual fiscal crunch.


And an expected contraction in Britain's economy when fourth-quarter figures are released on Friday will be a reminder, as was Germany's grim end to 2013, that Europe has to dig itself out of a deep hole.


"The real hard economic data are still very negative," said Bert Colijn, an economist in Brussels with the Conference Board, a business research group. "There are improvements, but it still doesn't look that bright."


However, he said the economic news from the euro zone rim was not quite as troubling, and the mood was brightening among the core countries of the single currency area.


Lena Komileva, managing director of G+ Economics, a London consultancy, said it was hard to argue against investors' new-found appetite for riskier assets given that the volatility of equity prices was approaching historical lows and yields on corporate bonds had fallen sharply.


"Financial stress indicators signal a significant improvement in the health of the global economy," she said.


Friday's solid fourth-quarter economic data from China reinforced that view.


PURCHASERS' PROGRESS


Economists polled by Reuters expect an uptick in Thursday's advance purchasing managers' indexes for France and Germany as well as for the euro zone as a whole.


Germany's IFO business confidence survey on Friday is also projected to have risen for the third month in a row.


"The fact that business confidence measures are coming in more positive is a good sign," Colijn commented.


Commerzbank said its leading indicator for the German economy reached an all-time high in December after the European Central Bank's pledge to buy the bonds of troubled economies eased fears of a break-up of the euro.


"We assume that increasingly more companies are gaining confidence and viewing business prospects more positively," said Commerzbank economist Ralph Solveen.


BNP Paribas is also bullish on Germany and is looking for a marked pick-up in growth.


In addition to the ECB's safety net, the global manufacturing cycle is pointing up, while a strong labor market and easy financial conditions are supporting consumption, economists Evelyn Herrmann and Ken Wattret said in a report.


"Moreover, should the global economy surpass expectations and euro zone market stress ease further, upside surprises would be likely to follow. A key issue in this respect would be higher export growth and confidence triggering a stronger rebound in investment," they said.


That is exactly what Japan would like to see, too.


To that end, the government of new Prime Minister Shinzo Abe and the Bank of Japan have agreed to set 2 percent inflation as a new target, supplanting a softer 1 percent ‘goal', according to sources familiar with the central bank's thinking.


They said the BOJ, which meets on Monday and Tuesday, will also consider making an open-ended commitment to buy assets until the target is in sight.


FOR AND AGAINST EASING


Credit Suisse's global equity strategists said an easier monetary policy is justified to cushion the significant fiscal tightening on which Japan will have to embark before long to whittle down a government debt that has reached some 220 percent of national income.


This task is all the more pressing because Japan is moving towards a current account deficit, which will make it more reliant on foreign investors to finance its budget shortfall, Credit Suisse argued.


Trade figures on Thursday will underline the deterioration in Japan's external accounts, with economists polled by Reuters forecasting the sixth consecutive monthly deficit.


Nomura reckons the deficit for all of 2012 widened to 6.6 trillion yen ($73.4 billion) from 2.7 trillion in 2011.


Japanese equities have surged in anticipation of a more aggressive monetary policy stance, but not everyone is happy.


The accompanying slump in the yen has prompted Russia's deputy central bank governor to warn of a new round of ‘currency wars' and the medium-term risk of running ultra-loose monetary policies is likely to be a theme of the World Economic Forum in Davos, which opens on Wednesday.


"I'm pretty worried about the new policies of Japan's newly elected government," German Finance Minister Wolfgang Schaeuble said last week. "When you think of the surplus of liquidity on global financial markets, it is fuelled further by a wrong understanding of central bank policy.


(Editing by Susan Fenton)



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Prime Minister David Cameron to Reschedule Europe Speech Soon





LONDON — Prime Minister David Cameron of Britain, who postponed a much-awaited address on his country’s future relations with Europe because of the Algeria hostage crisis, will deliver the speech in the next few days, Foreign Secretary William Hague said on Sunday.




“It will happen this week,” Mr. Hague told the BBC, but he said the date and location would not be announced until Monday.


His remarks coincided with one more sign of American public displeasure that Mr. Cameron may move Britain closer to leaving the 27-nation European Union when he gives the address, which was initially scheduled for Friday in the Netherlands.


Last week a White House spokesman quoted President Obama as telling Mr. Cameron in a telephone call that “the United States values a strong U.K. in a strong European Union, which makes critical contributions to peace, prosperity and security in Europe and around the world.”


That theme resurfaced Sunday when the American ambassador in London, Louis B. Susman, told Sky News that “we cannot imagine a strong E.U. without a vibrant partner in the U.K.”


“That is what we hope will come about, but it is up to the British people to decide what they want,” Mr. Susman said, according to the Press Association news agency.


On Friday, after Mr. Cameron postponed the speech, his office released excerpts suggesting that he had planned to deliver an explicit warning that Britain might leave the European Union unless the bloc changed the way it is run.


Mr. Cameron planned to say that there was “a gap between the E.U. and its citizens which has grown dramatically in recent years and which represents a lack of democratic accountability and consent that is — yes — felt particularly acutely in Britain.”


“If we don’t address these challenges, the danger is that Europe will fail and the British people will drift toward the exit,” Mr. Cameron planned to say. “I do not want that to happen. I want the European Union to be a success, and I want a relationship between Britain and the E.U. that keeps us in it.”


Mr. Cameron is under pressure from members of his own Conservative Party to promise a referendum on Europe, and he has signaled his readiness to hold one, although the precise question to be asked has not been made clear.


Mr. Hague, the foreign secretary, said Sunday that there was a strong case for seeking “fresh consent” about the relationship between the European Union and Britain, which held a referendum approving membership in 1975.


“We want to succeed in the European Union — we want an outward-looking E.U. to succeed in the world, and for the United Kingdom to succeed in that,” he said.


“But we have to recognize that the European Union has changed a lot since the referendum of 1975, and that there have been not only great achievements to the E.U.’s name but some things that have gone badly wrong, such as the euro,” Mr. Hague said, referring to the protracted crisis over the bloc’s single currency. Britain does not participate in the single currency.


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Notre Dame football star says he was not in on hoax – ESPN






(Reuters) – Notre Dame football star Manti Te’o has denied ever being in on an elaborate hoax, telling ESPN he had believed his relationship with a woman who turned out to be an online fabrication was real.


The tragic story of his girlfriend and her injuries from a car accident and death from leukemia was one of the most widely recounted U.S. sports stories last year as Notre Dame made a drive toward the national championship game.






“I wasn’t faking it,” Te’o told ESPN in an off-camera interview on Friday, excerpts of which were posted on ESPN.com. “I wasn’t part of this.”


When asked whether he had made up the tale to support his chances of winning the Heisman Trophy, the highest individual honor for a college football player, Te’o replied: “Well, when they hear the facts they’ll know. They’ll know that there is no way that I could be part of this.”


The interview was Te’o's first since the sports blog Deadspin.com on Wednesday exposed the heart-wrenching tale of his girlfriend, Lennay Kekua, and her death as a hoax and that a friend of Te’o's named Ronaiah Tuiasosopo was behind it.


Te’o told ESPN that Tuiasosopo called him on Wednesday and admitted he was behind the hoax and it was then Te’o was sure the woman had never existed.


“I don’t wish an ill thing to somebody,” Te’o said of Tuiasosopo, according to ESPN. “I just hope he learns. I think embarrassment is big enough.”


Outside Tuiasosopo’s home in Palmdale, California, on Thursday, a member of his family who did not identify himself told reporters they had no comment.


Te’o acknowledged in a statement on Wednesday that he had never met the woman in person, though he considered her his girlfriend and said he had been duped.


In the ESPN interview, Te’o said he tried to video chat with her several times, but she could never be seen on the other end. He also said he intentionally told people stories about her in a way that would make people believe they had met in person.


“I even knew that it was crazy that I was with somebody that I didn’t meet,” Te’o said.


NATIONAL PROMINENCE


ESPN said the interview was held at a training facility in Florida where Te’o has been preparing for the National Football League draft. The star linebacker was expected to be a high draft pick before the hoax was revealed.


Te’o sprang to national prominence last fall when he led Notre Dame to a victory over Michigan State within days of learning his grandmother and girlfriend had both died. The grandmother’s death was real.


The story grew to become a big feature in coverage of the team, which went undefeated in the regular season and reached the national championship game. Alabama defeated Notre Dame in the title game on January 7.


Notre Dame, one of the most powerful institutions in U.S. collegiate athletics, held a news conference within hours of the Deadspin.com article to say that Te’o had been duped.


Notre Dame Athletic Director Jack Swarbrick said on Friday the Indiana university was comfortable, based on a private investigation it launched and on four years experience with Te’o, that he was the victim and encouraged Te’o to speak publicly.


(Reporting by David Bailey in Minneapolis; Editing by Eric Beech)


Internet News Headlines – Yahoo! News





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Selena Gomez vs. Justin Bieber: Who Sang It Better?















01/20/2013 at 06:00 PM EST







Selena Gomez and Justin Bieber


Bryan Bedder/Getty; Steve Mack/FilmMagic


Selena Gomez didn't officially comment on the status of her relationship with on-again, off-again beau Justin Bieber at her New York City acoustic concert benefit for UNICEF. She didn't have to: her song choices seemed to do all the talking.

Along with a cover of industry pal Taylor Swift's "I Knew You Were Trouble," she also performed a rousing rendition of Justin Timberlake's ultimate breakup anthem: "Cry Me a River."

"I’ve kind of been through a lot these past couple of months, and it’s been really interesting and fun at the same time – and weird and sad, but cool," Gomez, 20, told the audience gathered Saturday night before launching into the 2002 pop single. "This song has helped me through a lot, and if anybody knows 'N Sync or, you know, some J.T., you’re gonna know what I’m talking about. But this song definitely speaks to me."

Of course, true Be-liebers know who made the first move: At his November concert in Boston, Bieber, 18, grabbed his acoustic guitar for a stripped-down version of Timberlake's hit, which takes on the feeling of finding out a partner has been cheating. (According to Vulture, he also covered the song in 2008.)

Watch the former couple try their hands at Timberlake's tune, and tell us in the comments below: Who deserves a standing ovation?

Reporting by GABRIELLE OLYA

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Lilly drug chosen for Alzheimer's prevention study


Researchers have chosen an experimental drug by Eli Lilly & Co. for a large federally funded study testing whether it's possible to prevent Alzheimer's disease in older people at high risk of developing it.


The drug, called solanezumab (sol-ah-NAYZ-uh-mab), is designed to bind to and help clear the sticky deposits that clog patients' brains.


Earlier studies found it did not help people with moderate to severe Alzheimer's but it showed some promise against milder disease. Researchers think it might work better if given before symptoms start.


"The hope is we can catch people before they decline," which can come 10 years or more after plaques first show up in the brain, said Dr. Reisa Sperling, director of the Alzheimer's center at Brigham and Women's Hospital in Boston.


She will help lead the new study, which will involve 1,000 people ages 70 to 85 whose brain scans show plaque buildup but who do not yet have any symptoms of dementia. They will get monthly infusions of solanezumab or a dummy drug for three years. The main goal will be slowing the rate of cognitive decline. The study will be done at 50 sites in the U.S. and possibly more in Canada, Australia and Europe, Sperling said.


In October, researchers said combined results from two studies of solanezumab suggested it might modestly slow mental decline, especially in patients with mild disease. Taken separately, the studies missed their main goals of significantly slowing the mind-robbing disease or improving activities of daily living.


Those results were not considered good enough to win the drug approval. So in December, Lilly said it would start another large study of it this year to try to confirm the hopeful results seen patients with mild disease. That is separate from the federal study Sperling will head.


About 35 million people worldwide have dementia, and Alzheimer's is the most common type. In the U.S., about 5 million have Alzheimer's. Current medicines such as Aricept and Namenda just temporarily ease symptoms. There is no known cure.


___


Online:


Alzheimer's info: http://www.alzheimers.gov


Alzheimer's Association: http://www.alz.org


___


Follow Marilynn Marchione's coverage at http://twitter.com/MMarchioneAP


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Wall Street Week Ahead: Earnings, money flows to push stocks higher

NEW YORK (Reuters) - With earnings momentum on the rise, the S&P 500 seems to have few hurdles ahead as it continues to power higher, its all-time high a not-so-distant goal.


The U.S. equity benchmark closed the week at a fresh five-year high on strong housing and labor market data and a string of earnings that beat lowered expectations.


Sector indexes in transportation <.djt>, banks <.bkx> and housing <.hgx> this week hit historic or multiyear highs as well.


Michael Yoshikami, chief executive at Destination Wealth Management in Walnut Creek, California, said the key earnings to watch for next week will come from cyclical companies. United Technologies reports on Wednesday while Honeywell is due to report Friday.


"Those kind of numbers will tell you the trajectory the economy is taking," Yoshikami said.


Major technology companies also report next week, but the bar for the sector has been lowered even further.


Chipmakers like Advanced Micro Devices , which is due Tuesday, are expected to underperform as PC sales shrink. AMD shares fell more than 10 percent Friday after disappointing results from its larger competitor, Intel . Still, a chipmaker sector index <.sox> posted its highest weekly close since last April.


Following a recent underperformance, an upside surprise from Apple on Wednesday could trigger a return to the stock from many investors who had abandoned ship.


Other major companies reporting next week include Google , IBM , Johnson & Johnson and DuPont on Tuesday, Microsoft and 3M on Thursday and Procter & Gamble on Friday.


CASH POURING IN, HOUSING DATA COULD HELP


Perhaps the strongest support for equities will come from the flow of cash from fixed income funds to stocks.


The recent piling into stock funds -- $11.3 billion in the past two weeks, the most since 2000 -- indicates a riskier approach to investing from retail investors looking for yield.


"From a yield perspective, a lot of stocks still yield a great deal of money and so it is very easy to see why money is pouring into the stock market," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.


"You are just not going to see people put a lot of money to work in a 10-year Treasury that yields 1.8 percent."


Housing stocks <.hgx>, already at a 5-1/2 year high, could get a further bump next week as investors eye data expected to support the market's perception that housing is the sluggish U.S. economy's bright spot.


Home resales are expected to have risen 0.6 percent in December, data is expected to show on Tuesday. Pending home sales contracts, which lead actual sales by a month or two, hit a 2-1/2 year high in November.


The new home sales report on Friday is expected to show a 2.1 percent increase.


The federal debt ceiling negotiations, a nagging worry for investors, seemed to be stuck on the back burner after House Republicans signaled they might support a short-term extension.


Equity markets, which tumbled in 2011 after the last round of talks pushed the United States close to a default, seem not to care much this time around.


The CBOE volatility index <.vix>, a gauge of market anxiety, closed Friday at its lowest since April 2007.


"I think the market is getting somewhat desensitized from political drama given, this seems to be happening over and over," said Destination Wealth Management's Yoshikami.


"It's something to keep in mind, but I don't think it's what you want to base your investing decisions on."


(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak and Caroline Valetkevitch; Editing by Kenneth Barry)



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