Wall Street ends slightly higher, helped by acquisitions

NEW YORK (Reuters) - The S&P 500 eked out a small gain for a third straight session on Thursday, helped by a flurry of merger activity, though investors see no catalysts to lift the market further with major averages near multi-year highs.


The market's slowed advance took the S&P 500 to its highest intraday level since November 2007 on Wednesday. While the index notched its third straight day of gains, none was more than 0.2 percent.


Shares of H.J. Heinz Co jumped 20 percent to $72.50 after it said Warren Buffett's Berkshire Hathaway and 3G Capital will buy the food company for $72.50 a share, or $28 billion including debt. Berkshire's class B shares rose 1.3 percent to $99.21.


Also supporting the market was data showing the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The CBOE Volatility index <.vix> fell 2.4 percent, dropping to 12.67.


"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.


Equities have struggled to break above current levels where they have been hovering for almost two weeks. The S&P 500 is up more than 6 percent so far this year.


"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher," said Selkin, who helps oversee about $3 billion in assets.


Stocks fell earlier after a report the euro zone's gross domestic product contracted by the steepest amount since the first quarter of 2009. In addition, Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.


The Dow Jones industrial average <.dji> was down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index <.spx> was up 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index <.ixic> was up 1.78 points, or 0.06 percent, at 3,198.66.


Constellation Brands soared 37 percent to $43.75 after AB InBev's deal to take over Mexican brewer Grupo Modelo was revised to grant Constellation perpetual rights to distribute Corona and other Modelo brands in the United States. U.S. shares of AB InBev gained 5.1 percent to $92.77.


American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 4.6 percent to $13.99.


Weakness in Europe contributed to a 5 percent drop in revenue from the region for Cisco Systems , which nonetheless beat estimates as it reported its results late Wednesday. The company's shares dipped 0.7 percent to $20.99.


General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. The stock was off 3.3 percent to $27.73.


Only five more stocks rose than fell on the New York Stock Exchange, while 51 percent of Nasdaq-listed shares closed higher.


Volume was light, with about 6.36 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.48 billion shares.


(Editing by Nick Zieminski and Kenneth Barry)



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Vowing Reform, China’s Leader, Xi Jinping, Airs Other Message in Private





HONG KONG — When China’s new leader, Xi Jinping, visited the country’s south to promote himself before the public as an audacious reformer following in the footsteps of Deng Xiaoping, he had another message to deliver to Communist Party officials behind closed doors.







Feng Li/Getty Images

Xi Jinping has came to power at a time when the pressure of public expectations for greater official accountability is growing. 






Despite decades of heady economic growth, Mr. Xi told party insiders during a visit to Guangdong Province in December, China must still heed the “deeply profound” lessons of the former Soviet Union, where political rot, ideological heresy and military disloyalty brought down the governing party. In a province famed for its frenetic capitalism, he demanded a return to traditional Leninist discipline.


“Why did the Soviet Union disintegrate? Why did the Soviet Communist Party collapse? An important reason was that their ideals and convictions wavered,” Mr. Xi said, according to a summary of his comments that has circulated among officials but has not been published by the state-run news media.


“Finally, all it took was one quiet word from Gorbachev to declare the dissolution of the Soviet Communist Party, and a great party was gone,” the summary quoted Mr. Xi as saying. “In the end nobody was a real man, nobody came out to resist.”


In Mr. Xi’s first three months as China’s top leader, he has gyrated between defending the party’s absolute hold on power and vowing a fundamental assault on entrenched interests of the party elite that fuel corruption. How to balance those goals presents a quandary to Mr. Xi, whose agenda could easily be undermined by rival leaders determined to protect their own bailiwicks and on guard against anything that weakens the party’s authority, insiders and analysts say.


“Everyone is talking about reform, but in fact everyone has a fear of reform,” said Ma Yong, a historian at the Chinese Academy of Social Sciences. For party leaders, he added: “The question is: Can society be kept under control while you go forward? That’s the test.”


Gao Yu, a former journalist and independent commentator, was the first to reveal Mr. Xi’s comments, doing so on a blog. Three insiders, who were shown copies by officials or editors at state newspapers, confirmed their authenticity, speaking on the condition of anonymity because of the risk of punishment for discussing party affairs.


The tension between embracing change and defending top-down party power has been an abiding theme in China since Deng set the country on its economic transformation in the late 1970s. But Mr. Xi has come to power at a time when such strains are especially acute, and the pressure of public expectations for greater official accountability is growing, amplified by millions of participants in online forums.


Mr. Xi has promised determined efforts to deal with China’s persistent problems, including official corruption and the chasm between rich and poor. He has also sought a sunnier image, doing away with some of the intimidating security that swaddled his predecessor, Hu Jintao, and demanding that official banquets be replaced by plainer fare called “four dishes and a soup.”


Yet Mr. Xi’s remarks on the lessons of the Soviet Union, as well as warnings in the state news media, betray a fear that China’s strains could overwhelm the party, especially if vows of change founder because of political sclerosis and opposition from privileged interest groups like state-owned conglomerates. Already this year, public outcries over censorship at a popular newspaper and choking pollution in Beijing have given the new party leadership a taste of those pressures.


Some progressive voices are urging China’s leaders to pay more than lip service to respecting rights and limits on party power promised by the Constitution. Meanwhile, some old-school leftists hail Mr. Xi as a muscular nationalist who will go further than his predecessors in asserting China’s territorial claims.


The choices facing China’s new leadership include how much to relax the state’s continuing grip on the commanding heights of the economy and how far to take promises to fight corruption — a step that could alienate powerful officials and their families.


“How can the ruling party ensure its standing during a period of flux?” asked Ding Dong, a current affairs commentator in Beijing. “That’s truly a real challenge, and it’s creating a sense of tension and latent crisis inside the party.”


Mr. Xi and his inner circle have about 18 months to consolidate power and begin any big initiatives before preparations for the next Communist Party Congress and leadership reshuffle in 2017 start to consume elite attention, said Christopher Johnson, an analyst on China at the Center for Strategic and International Studies in Washington.


Edward Wong contributed reporting from Beijing.



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Justin Timberlake’s ‘Suit & Tie’ Video Is Just as Justin Timberlake-y as Expected






At the Grammys he made our screens go sepia tone, and now, in his new, black-and-white, David Fincher-directed music video for the much hyped comeback single “Suit & Tie,” Justin Timberlake continues to try and prove that he’s a classy neo-Rat Pack star. That is, he’s a classy neo-Rat Pack star with a nearly naked women writhing around him and lot of “cool” modern conveniences like his iPad. See, JT gets rolled, via bed, into a soundstage-type area reading such a device: 


RELATED: David Fincher Is Directing the Ridiculous Justin Timberlake Music Video






Before he starts performing the song at a venue that appears to be Los Angeles’ Hollywood Bowl, JT and Jay-Z are just kind of chilling, because remember these are two improbably famous bros with a lot of fancy amenities: 


RELATED: The 2012 Gossip Stories We Loved


There are references to Singin’ in the Rain-type films: 


RELATED: Dr. Dre and the Lucrative Business of Not Rapping


9144c  7b354a620ff8d137a92f6d97f484b520 600x320 Justin Timberlakes Suit & Tie Video Is Just as Justin Timberlake y as Expected


And then, later on, hot girls in puddles on a stage because such is the life of Justin Timberlake, apparently: 


9144c  53ffc0d2865daeaed71614bedd7aaf6c 600x316 Justin Timberlakes Suit & Tie Video Is Just as Justin Timberlake y as Expected


Watch the entire video here, and remember it was directed by Fincher, so they all probably did a million takes of every shot: 


Gadgets News Headlines – Yahoo! News




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Why Melissa Joan Hart Is Resisting Valentine's Day This Year

Age is more than just a number for mom-of-three Melissa Joan Hart.


The actress, who welcomed her second child, Brady, now 4½, two years after the birth of her first son, Mason, now 7, says waiting until both boys were older to expand her family further was ideal.


“It’s definitely easier to have an infant when the other two boys are potty trained and can dress themselves,” Hart, 36, told PEOPLE at Wednesday’s Operation Shower in Pacific Palisades, Calif.


“I’m able to enjoy every single minute, and that has been great.”


Basking in baby bliss with her now 5-month-old son Tucker, Hart is embracing the opportunity to relive all of the major milestones for a third time.


“[Tucker] is just such a happy baby, lots of smiles and laughing. Like the other boys, he has great motor skills and right now it’s fun to see him grab at things,” she says.


Melissa Joan Hart Operation Baby Shower
Eddie Spantman



Unlike his older brothers, however, Tucker is already sporting some long locks. “One of the biggest differences is that he has tons of hair,” she says.


Having welcomed three children, Hart is adamant about celebrating every birth, which is why she has teamed up with Operation Shower and Birdies for the Brave, a mission to host baby showers for military families whose partners are serving overseas.


“I can’t even imagine how difficult it is for these military moms going through pregnancy alone while their spouses are in harm’s way. It’s an emotional time, especially with all of the hormones,” she says of the event, hosted by Carousel Designs.


“Operation Shower and Birdies for the Brave do a great job of making these moms feel special and recognizing all of their sacrifices at home. It’s a sincere pleasure to support these two outstanding organizations.”


With Valentine’s Day on Thursday, Hart and her husband Mark Wilkerson are looking forward to toasting to some couple time — only she’ll be phoning it in from the set of her show, Melissa & Joey.


“Valentine’s Day is my first day back at work, so I will be enjoying the day with the great cast and crew,” she says.


Continues Hart: “We usually celebrate the day before or the day after anyhow since it’s difficult getting a babysitter that night and it’s so crowded everywhere.”


– Anya Leon


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Wall Street pauses after rally to five-year high

NEW YORK (Reuters) - Stocks drifted in light volume on Wednesday, ending little changed, as investors remained cautious after the S&P 500 index briefly hit its highest intraday level since November 2007.


The S&P 500 was buoyed by General Electric after cable company Comcast Corp said it will buy from GE the the part of NBCUniversal it didn't already own for $16.7 billion.


Comcast's stock hit the highest since 1999 before closing up 3 percent at $40.13 and GE gained 3.6 percent to $23.39.


The S&P 500 is up 6.6 percent so far this year, partly due to stronger-than-expected corporate earnings and a better economic outlook. The Dow industrials is about 1 percent away from an all-time intraday high, reached in October 2007.


Volume has been weak in recent days with the S&P moving sideways around 1,520. The index is about 3 percent away from closing at a record high.


A scarcity of sellers after a consistent string of gains is a positive sign and shows the uptrend is intact, King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, said.


"Last year we had double-digit returns in the first quarter. It's fairly possible we can move higher from here," he said.


The Dow Jones industrial average <.dji> fell 35.79 points or 0.26 percent, to 13,982.91, the S&P 500 <.spx> gained 0.9 point or 0.06 percent, to 1,520.33 and the Nasdaq Composite <.ixic> added 10.38 points or 0.33 percent, to 3,196.88.


The S&P gained 12 percent in the first three months of 2012.


Deere & Co , the world's largest farm equipment maker, forecast a modest increase in sales this year despite the prospect of the biggest corn crop in U.S. history. The forecast fell short of analysts' expectations, sending shares of Deere down 3.5 percent to $90.68.


In extended trading, shares of technology bellwether Cisco Systems fell 2 percent after it posted results.


Dr Pepper Snapple fell 5.8 percent to $42.69 after it forecast profit for the current year below analysts' estimates.


Cliffs Natural Resources lost a fifth of its market value a day after the miner reported a quarterly loss and slashed its dividend by 76 percent. Its shares fell 20 percent to 429.29.


According to the latest Thomson Reuters data, of the 364 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.


About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average in February last year of 6.94 billion.


On the NYSE, roughly seven issues rose for every five that fell and on Nasdaq more than six rose for every five decliners.


(Editing by Kenneth Barry and Bernadette Baum)



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Kerry Says He Is Preparing Proposals on Syria Crisis





WASHINGTON — Secretary of State John Kerry said on Wednesday that he had ideas about how to persuade President Bashar al-Assad to agree to a political transition in Syria and planned to raise them on his first foreign trip this month.




“We need to address the question of President Assad’s calculation currently,” Mr. Kerry said after a meeting with Jordan’s foreign minister, Nasser Judeh. “I believe there are additional things that can be done to change his current perception. I’ve got a good sense of what I think we might propose.”


Mr. Kerry did not say what proposals he had in mind. He is expected to travel to the Middle East and Europe, but the trip has not been formally announced.


“I can assure you my goal is to see us change his calculation, my goal is to see us have a negotiated outcome and minimize the violence,” Mr. Kerry said. “It may not be possible. I am not going to stand here and tell you that’s automatic or easily achievable. There are a lot of forces that have been unleashed here over the course of the last months.”


Mr. Kerry made a similar statement during his Senate confirmation hearing last month. Despite his caution that progress might not be possible, the effect of Mr. Kerry’s comments was to heighten expectations for his trip. Mr. Kerry is also expected to try to make headway on the issues dividing the Palestinians and the Israelis and set the stage for President Obama’s trip to Israel next month.


Mr. Kerry’s comment on Syria came a day after Mr. Obama said little about the Syria crisis in his State of the Union address. In that speech, Mr. Obama said he would keep pressure on the Syrian regime, but he did not voice confidence, as he had in his 2012 address, that Mr. Assad would soon be forced to relinquish power.


Mr. Kerry said that Mr. Obama would begin by listening to Israeli and Arab leaders and would not be bringing a major new proposal.


“The president is not prepared at this point in time to do more than listen to the parties, which is why he has announced he is going to go to Israel,” he said.


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Amazon shares climb on Kindle e-book optimism






SAN FRANCISCO (Reuters) – Amazon.com Inc shares climbed more than 4 percent on Tuesday after an analyst note fueled optimism about the company’s Kindle e-book business.


The e-book market is a lot bigger than previously thought, and owners of Kindle e-readers and tablets are reading more e-books, Morgan Stanley‘s Scott Devitt, a leading Internet and e-commerce analyst, told investors in the research note.






Devitt estimated worldwide e-book unit sales of 859 million in 2012, up considerably from a previous estimate of 567 million. With almost 45 percent of the e-book market, Amazon likely sold 383 million e-books last year, compared with an earlier estimate of 252 million, the analyst added.


Amazon’s broader strategy is to sell mobile devices at or near cost and make money when consumers use the gadgets to buy digital content, including e-books, music, videos, apps and games.


Devitt said on Wednesday that the strategy may be working with e-books, one of Amazon’s oldest digital categories.


“We initially assumed that early adopters of eReader devices would be avid readers and, therefore, the marginal buyer would read less,” Devitt wrote.


However, data from a recent Amazon presentation show that consumers who bought a Kindle in 2011 read 4.6 times more e-books, on average, in the 12 months following their gadget purchase, compared with the 12 months before getting the device, the analyst noted.


Similar data from 2008 show consumers reading e-books 2.6 times as much after their Kindle device purchase, on average, according to Devitt.


The success of Amazon’s Kindle business is important because it is more profitable than some of the company’s other operations, Devitt said.


The Kindle business, which includes the gadgets and related digital content sales, generated about 11 percent of Amazon’s sales last year and 34 percent of the company’s consolidated segment operating income, or CSOI, Devitt estimated. The CSOI is a closely watched measure of Amazon’s profitability.


“The Kindle franchise is a profit pool that subsidizes investments in other growth initiatives,” Devitt wrote.


Amazon shares rose 4.1 percent to $ 269.30 in afternoon trading on Wednesday.


(Reporting By Alistair Barr; editing by Gunna Dickson)


Gadgets News Headlines – Yahoo! News





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Pope shows lifetime jobs aren't always for life


The world seems surprised that an 85-year-old globe-trotting pope who just started tweeting wants to resign, but should it be? Maybe what should be surprising is that more leaders his age do not, considering the toll aging takes on bodies and minds amid a culture of constant communication and change.


There may be more behind the story of why Pope Benedict XVI decided to leave a job normally held for life. But the pontiff made it about age. He said the job called for "both strength of mind and body" and said his was deteriorating. He spoke of "today's world, subject to so many rapid changes," implying a difficulty keeping up despite his recent debut on Twitter.


"This seemed to me a very brave, courageous decision," especially because older people often don't recognize their own decline, said Dr. Seth Landefeld, an expert on aging and chairman of medicine at the University of Alabama at Birmingham.


Age has driven many leaders from jobs that used to be for life — Supreme Court justices, monarchs and other heads of state. As lifetimes expand, the woes of old age are catching up with more in seats of power. Some are choosing to step down rather than suffer long declines and disabilities as the pope's last predecessor did.


Since 1955, only one U.S. Supreme Court justice — Chief Justice William Rehnquist — has died in office. Twenty-one others chose to retire, the most recent being John Paul Stevens, who stepped down in 2010 at age 90.


When Thurgood Marshall stepped down in 1991 at the age of 82, citing health reasons, the Supreme Court justice's answer was blunt: "What's wrong with me? I'm old. I'm getting old and falling apart."


One in 5 U.S. senators is 70 or older, and some have retired rather than seek new terms, such as Hawaii's Daniel Akaka, who left office in January at age 88.


The Netherlands' Queen Beatrix, who just turned 75, recently said she will pass the crown to a son and put the country "in the hands of a new generation."


In Germany, where the pope was born, Chancellor Angela Merkel, who is 58, said the pope's decision that he was no longer fit for the job "earns my very highest respect."


"In our time of ever-lengthening life, many people will be able to understand how the pope as well has to deal with the burdens of aging," she told reporters in Berlin.


Experts on aging agreed.


"People's mental capacities in their 80s and 90s aren't what they were in their 40s and 50s. Their short-term memory is often not as good, their ability to think quickly on their feet, to execute decisions is often not as good," Landefeld said. Change is tougher to handle with age, and leaders like popes and presidents face "extraordinary demands that would tax anybody's physical and mental stamina."


Dr. Barbara Messinger-Rapport, geriatrics chief at the Cleveland Clinic, noted that half of people 85 and older in developed countries have some dementia, usually Alzheimer's. Even without such a disease, "it takes longer to make decisions, it takes longer to learn new things," she said.


But that's far from universal, said Dr. Thomas Perls, an expert on aging at Boston University and director of the New England Centenarians Study.


"Usually a man who is entirely healthy in his early 80s has demonstrated his survival prowess" and can live much longer, he said. People of privilege have better odds because they have access to good food and health care, and tend to lead clean lives.


"Even in the 1500s and 1600s there were popes in their 80s. It's remarkable. That would be today's centenarians," Perls said.


Arizona Sen. John McCain turned 71 while running for president in 2007. Had he won, he would have been the oldest person elected to a first term as president. Ronald Reagan was days away from turning 70 when he started his first term as president in 1981; he won re-election in 1984. Vice President Joe Biden just turned 70.


In the U.S. Senate, where seniority is rewarded and revered, South Carolina's Strom Thurmond didn't retire until age 100 in 2002. Sen. Robert Byrd of West Virginia was the longest-serving senator when he died in office at 92 in 2010.


Now the oldest U.S. senator is 89-year-old Frank Lautenberg of New Jersey. The oldest congressman is Ralph Hall of Texas who turns 90 in May.


The legendary Alan Greenspan was about to turn 80 when he retired as chairman of the Federal Reserve in 2006; he still works as a consultant.


Elsewhere around the world, Cuba's Fidel Castro — one of the world's longest serving heads of state — stepped down in 2006 at age 79 due to an intestinal illness that nearly killed him, handing power to his younger brother Raul. But the island is an example of aged leaders pushing on well into their dotage. Raul Castro now is 81 and his two top lieutenants are also octogenarians. Later this month, he is expected to be named to a new, five-year term as president.


Other leaders who are still working:


—England's Queen Elizabeth, 86.


—Abdullah bin Abd al-Aziz al-Saud, king of Saudi Arabia, 88.


—Sabah al-Ahmad al-Jaber al-Sabah, emir of Kuwait, 83.


—Ruth Bader Ginsburg, U.S. Supreme Court associate justice, 79.


__


Associated Press writers Paul Haven in Havana, Cuba; David Rising in Berlin; Seth Borenstein, Mark Sherman and Matt Yancey in Washington, and researcher Judy Ausuebel in New York contributed to this report.


___


Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP


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Wall Street ends slightly higher, Dow near a record

NEW YORK (Reuters) - Stocks closed modestly higher on Tuesday, putting the Dow within striking distance of an all-time high, as investors looked ahead to President Barack Obama's State of the Union address.


Investors will be listening to Obama's speech for any clues on a deal with Republicans to avert automatic spending cuts due to take effect March 1. The tone of the speech will also be scrutinized, with any sign of compromise likely to be warmly received.


The S&P 500 has risen for the past six weeks, putting it up 6.5 percent so far this year, while the Dow is about 1 percent away from its all-time closing record of 14,164.53, reached in October 2007.


But gains have been harder to come by since the S&P hit a five-year high on February 1. Daily moves have been small and trading volume light as investors search for new reasons to drive stocks higher.


About 5.73 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Tuesday, below the daily average so far this year of about 6.48 billion shares.


"We're likely to settle in for a period and digest the gains we've had, though there's still a bias towards positive momentum," said Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina.


"Questions over government spending are the big overhang, and we're looking for Obama to inspire some confidence over that tonight."


The White House has signaled Obama will urge investment in infrastructure and clean energy, suggesting companies in those sectors may be volatile in Wednesday's session.


"Gun makers could also see a reaction if Obama talks about anything with respect to gun control," said Teal, who helps oversee $5 billion. Shares of Smith & Wesson fell 2 cents to $9.11 while Sturm Ruger was up 0.4 percent at $53.91.


The Dow Jones industrial average <.dji> was up 47.46 points, or 0.34 percent, at 14,018.70. The Standard & Poor's 500 Index <.spx> was up 2.42 points, or 0.16 percent, at 1,519.43. The Nasdaq Composite Index <.ixic> was down 5.51 points, or 0.17 percent, at 3,186.49.


Housing shares were among the strongest of the day, led by a 12.5 percent jump in Masco Corp to $20.02 after the home improvement product maker said it expects new home construction to show strong growth in 2013. The PHLX housing sector index <.hgx> rose 3.7 percent.


Avon Products Inc surged 20 percent to $20.79 as the S&P 500's top percentage gainer after the cosmetics company reversed sales declines and cut costs.


On the downside, Coca-Cola Co fell 2.7 percent to $37.56 and was the biggest drag on the Dow after reporting revenue below estimates, hurt by a weaker-than-expected performance in Europe.


Michael Kors Holdings shares jumped 8.8 percent to $62.04 after the fashion company handily beat Wall Street's estimates and raised its full-year outlook.


With earnings season starting to wind down, Thomson Reuters data through Tuesday morning shows of the 353 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.


Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.


About 62 percent of stocks traded on the New York Stock Exchange closed higher while 59 percent of Nasdaq-listed shares closed in positive territory.


(Editing by Nick Zieminski)



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News Analysis: As North Korea’s Nuclear Ability Grows, China Faces Dilemma





BEIJING — In the aftermath of Tuesday’s nuclear test by North Korea, China will almost certainly join the United States in supporting tougher sanctions at the United Nations, accompanied by sterner reprimands from Beijing against its recalcitrant ally in Pyongyang.




But as impatient as China might be with North Korea, there is little chance that the new Chinese leader, Xi Jinping, will move quickly to change the nation’s long-held policy of propping up the walled-off government that has long served as a buffer against closer intrusion by the United States on the Korean Peninsula.


The Chinese military, and to a lesser extent the International Liaison Department of the Chinese Communist Party, assert strong influence on China’s Korean policy, and both these powerful entities prefer to keep North Korea close at hand, Chinese and American analysts say.


While the People’s Liberation Army does not even conduct military exercises with the North Koreans — the government in the North forbids such contact with outsiders — Chinese military strategists adhere to the doctrine that they cannot afford to abandon their ally, no matter how bad its behavior, analysts here say.


At the same time, the Chinese Communist Party looks upon the North Korean Communist Party — led by Kim Jong-un, the grandson of the nation’s founder — as a fraternal brotherhood. Indeed, relations between the two countries are conducted largely between the two parties rather than through the more normal diplomatic channels between the two foreign ministries.


But within this basic contour there could be some adjustments by Mr. Xi, according to Zhu Feng, a professor of international relations at Peking University, an advocate of a tougher policy by China against North Korea.


“One nuclear test will not make China’s new administration decide to ‘abandon North Korea’ but it will definitely worsen China-North Korea relations,” Professor Zhu wrote in a recent article in the Straits Times of Singapore. “North Korea’s nuclear test will make the new Xi Jinping administration angry, and give China a headache.”


Mr. Xi, who became head of the Communist Party and military council in November, will ascend to the presidency of the country next month. Already he has shown himself to be more nationalistic than his predecessor, Hu Jintao, displaying China’s determination to prevail in the East China Sea crisis in which China is seeking to wrest control of islands administered by Japan. He has also displayed considerably more interest in China’s military, visiting bases and troops in the last two months with blandishments to soldiers to be combat ready.


To improve China’s strained relationship with the United States, Mr. Xi could start with getting tougher on North Korea, harnessing China’s clout with the outlier government to help slow down its nuclear program. If Mr. Xi does not help in curbing the North Koreans, perhaps by privately threatening to pull the plug on infusions of Chinese oil and investments that keep North Korea afloat, he will almost certainly face an accelerated American ballistic missile defense program in Northeast Asia on behalf of Japan and other allies in the region. That would be an unpalatable situation for China.


The Obama administration excoriated Mr. Hu after North Korea’s second nuclear test in 2009, accusing him of “willful blindness” to that country’s actions.


“With Hu out of the picture, the administration is intent on determining whether Xi Jinping will prove more attentive to U.S. security concerns,” said Jonathan D. Pollack, director of the John L. Thornton China Center at the Brookings Institution.


“How Xi chooses to respond will be an important early signal of his foreign policy priorities and whether he is ready to cooperate much more openly and fully with Washington and Seoul than his predecessor,” he said, referring to South Korea.


A more heightened debate about North Korea is now swirling around China’s foreign policy circles. On one side are those like Professor Zhu who favor some kind of co-operation with the United States in curbing North Korea’s nuclear program. On the other side are the traditionalists in powerful positions in the army and the party who adhere to the buffer zone theory.


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