Pakistan militants kill 41 in mass execution, attack on Shi’ites






PESHWAR, Pakistan (Reuters) – Pakistani militants, who have escalated attacks in recent weeks, killed at least 41 people in two separate incidents, officials said on Sunday, challenging assertions that military offensives have broken the back of hardline Islamist groups.


The United States has long pressured nuclear-armed ally Pakistan to crack down harder on both homegrown militants groups such as the Taliban and others which are based on its soil and attack Western forces in Afghanistan.






In the north, 21 men working for a government-backed paramilitary force were executed overnight after they were kidnapped last week, a provincial official said.


Twenty Shi’ite pilgrims died and 24 were wounded, meanwhile, when a car bomb targeted their bus convoy as it headed toward the Iranian border in the southwest, a doctor said.


New York-based Human Rights Watch has noted more than 320 Shias killed this year in Pakistan and said attacks were on the rise. It said the government’s failure to catch or prosecute attackers suggested it was “indifferent” to the killings.


Pakistan, seen as critical to U.S. efforts to stabilize the region before NATO forces withdraw from Afghanistan by the end of 2014, denies allegations that it supports militant groups like the Afghan Taliban and Haqqani network.


Afghan officials say Pakistan seems more genuine than ever about promoting peace in Afghanistan.


At home, it faces a variety of highly lethal militant groups that carry out suicide bombings, attack police and military facilities and launch sectarian attacks like the one on the bus in the southwest.


Witnesses said a blast targeted their three buses as they were overtaking a car about 60 km (35 miles) west of Quetta, capital of sparsely populated Baluchistan province.


“The bus next to us caught on fire immediately,” said pilgrim Hussein Ali, 60. “We tried to save our companions, but were driven back by the intensity of the heat.”


Twenty people had been killed and 24 wounded, said an official at Mastung district hospital.


CONCERN OVER EXTREMIST SUNNI GROUPS


International attention has focused on al Qaeda and the Pakistani Taliban.


But Pakistani intelligence officials say extremist Sunni groups, lead by Lashkar-e-Jhangvi (LeJ) are emerging as a major destabilizing force in a campaign designed to topple the government.


Their strategy now, the officials say, is to carry out attacks on Shi’ites to create the kind of sectarian tensions that pushed countries like Iraq to the brink of civil war.


As elections scheduled for next year approach, Pakistanis will be asking what sort of progress their leaders have made in the fight against militancy and a host of other issues, such as poverty, official corruption and chronic power cuts.


Pakistan’s Taliban have carried out a series of recent bold attacks, as military officials point to what they say is a power struggle in the group’s leadership revolving around whether it should ease attacks on the Pakistani state and join groups fighting U.S.-led forces in Afghanistan.


The Taliban denies a rift exists among its leaders.


In the attack in the northwest, officials said they had found the bodies of 21 men kidnapped from their checkpoints outside the provincial capital of Peshawar on Thursday. The men were executed one by one.


“They were tied up and blindfolded,” Naveed Anwar, a senior administration official, said by telephone.


“They were lined up and shot in the head,” said Habibullah Arif, another local official, also by telephone.


One man was shot and seriously wounded but survived, the officials said. He was in critical condition and being treated at a local hospital. Another had escaped before the shootings.


Taliban spokesman Ihsanullah Ihsan claimed responsibility for the attacks.


“We killed all the kidnapped men after a council of senior clerics gave a verdict for their execution. We didn’t make any demand for their release because we don’t spare any prisoners who are caught during fighting,” he said.


The powerful military has clawed back territory from the Taliban, but the kidnap and executions underline the insurgents’ ability to mount high-profile, deadly attacks in major cities.


This month, suicide bombers attacked Peshawar’s airport on December 15 and a bomb killed a senior Pashtun nationalist politician and eight other people at a rally on December 22.


(Additional reporting by Saud Mehsud in DERA ISMAIL KHAN and Gul Yousufzai in QUETTA; Writing by Katharine Houreld; Editing by Michael Georgy and Ron Popeski)


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Kobe Bryant Finally Joins Twitter — Kind Of






Long among the sports world’s biggest Twitter holdouts, Kobe Bryant has finally joined the social network. But he hasn’t opened an account, and won’t be around for long.


Social savvy fans are being blessed with his presence thanks to Nike Basketball, which has turned over its account to Bryant since Tuesday.






[More from Mashable: Avery Johnson’s Teenage Son Unloads on Twitter After NBA Firing]


Nike Basketball, which sponsors Bryant and produces his official sneaker, announced the Kobe takeover in a Christmas Day tweet. The account’s name is now “Kobe Bryant” although its handle remains @nikebasketball. Kobe has spent the past few days tweeting about a variety of subjects using a series of hashtags that play off the theme #counton-fill-in-the-blank.


He’s tweeted about the Lakers progress as a team:


[More from Mashable: FanDuel Is Fantasy Sports With a Twist]


He’s tweeted behind-the-scenes snippets of training and treatment:


And he’s tweeted a totally normal, typical, everyday holiday family portrait:


Bryant actually joined Twitter for realsies back in 2011, but then deleted the account after racking up more than 35,000 followers in a just a few hours. He’s one of the NBA’s few stars without a Twitter presence. Nearly 90% of the league’s players are on the social network, according to Twitter.


But Bryant did become much more active on Facebook this summer, especially while traveling with the United States’ Olympic basketball team. He has nearly 15 million fans there, and reportedly writes his status updates and messages himself, with editing and actual posting done by support staff. In November he asked Facebook fans whether to join Instagram or Twitter next, and on Monday hinted in a status update that he may soon open an Instagram account.


What athletes would you most like to see get more active on social media? Let us know in the comments.


BONUS: 30 Must-Follow Twitter Accounts This NBA SEASON


1. @NBA


The NBA is arguably the world’s most engaging sports league on social media. Follow its official Twitter account for news, highlights and promotions.


Click here to view this gallery.


Thumbnail image courtesy Flickr, Keith Allison


This story originally published on Mashable here.


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Praying Hitler in ex-Warsaw ghetto sparks emotion






WARSAW, Poland (AP) — A statue of Adolf Hitler praying on his knees is on display in the former Warsaw Ghetto, the place where so many Jews were killed or sent to their deaths by Hitler’s regime, and it is provoking mixed reactions.


The work, “HIM” by Italian artist Maurizio Cattelan, has drawn many visitors since it was installed last month. It is visible only from a distance, and the artist doesn’t make explicit what Hitler is praying for, but the broader point, organizers say, is to make people reflect on the nature of evil.






In any case, some are angered by the statue’s presence in such a sensitive site.


One Jewish advocacy group, the Simon Wiesenthal Center, this week called the statue’s placement “a senseless provocation which insults the memory of the Nazis’ Jewish victims.”


“As far as the Jews were concerned, Hitler’s only ‘prayer’ was that they be wiped off the face of the earth,” the group’s Israel director, Efraim Zuroff, said in a statement.


However, many others are praising the artwork, saying it has a strong emotional impact. And organizers defend putting it on display in the former ghetto.


Fabio Cavallucci, director of the Center for Contemporary Art, which oversaw the installation, said, “There is no intention from the side of the artist or the center to insult Jewish memory.”


“It’s an artwork that tries to speak about the situation of hidden evil everywhere,” he said.


The Warsaw ghetto was an area of the city which the Nazis sealed off after they invaded Poland. They forced Jews to live in cramped, inhuman conditions there as they awaited deportation to death camps. Many died from hunger or disease or were shot by the Germans before they could be transported to the camps.


The Hitler installation is just one object in a retrospective of Cattelan’s work titled “Amen,” a show that explores life, death, good and evil. The other works are on display at the center itself, which is housed in the Ujazdowski Castle.


The Hitler representation is visible from a hole in a wooden gate across town on Prozna Street. Viewers only see the back of the small figure praying in a courtyard. Because of its small size, it appears to be a harmless schoolboy.


“Every criminal was once a tender, innocent and defenseless child,” the center said in a commentary on the work.


Poland’s chief rabbi, Michael Schudrich, said he was consulted on the installation’s placement ahead of time and did not oppose it because he saw value in the artist’s attempt to try to raise moral questions by provoking viewers.


He said he was reassured by curators who told him there was no intention of rehabilitating Hitler but rather of showing that evil can present itself in the guise of a “sweet praying child.”


“I felt there could be educational value to it,” said Schudrich, who also wrote an introduction to the exhibition’s catalogue in which he says art can “force us to face the evil of the world.”


On Friday, a stream of people walked by to view the work, and many praised it.


“It had a big emotional impact on me. It’s provocative, but it’s not offensive,” said Zofia Jablonska, a 30-year-old lawyer. “Having him pray in the place where he would kill people — this was the best place to put it.”


Cattelan caused controversy in Warsaw in 2000 when another gallery showed his work “La Nona Ora” — or “The Ninth Hour” — which depicts the late Pope John Paul II being crushed by a meteorite. That offended many in Poland, which is both deeply Catholic and was John Paul’s homeland.


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Analysis: After “fiscal cliff” dive, more battles, new cliffs






WASHINGTON (Reuters) – Whether or not the “fiscal cliff” impasse is broken before the New Year’s Eve deadline, there will be no post-cliff peace in Washington.


With the political climate toxic in Congress as the cliff’s steep tax hikes and spending cuts approach, other partisan fights loom, all over the issue that has paralyzed the capital for the past two years: federal spending.






The first will come in late February when the Treasury Department runs out of borrowing authority and has to come to Congress to get the debt ceiling raised.


The next is likely in late March, when a temporary bill to fund the government runs out, confronting Congress with a deadline to act or face a government shutdown. The third will possibly be whenever the temporary bill replacing the temporary bill expires.


While Congress is supposed to pass annual spending bills before the start of each fiscal year, it has failed to complete that process since 1996, resorting to stopgap funding ever since.


Influential anti-tax activist Grover Norquist predicted in an interview with Reuters that conservatives would wage repeated battles with President Barack Obama to demand budget savings every time the government needs a temporary funding bill or more borrowing capacity.


The so-called “continuing resolutions” to which a divided Congress has increasingly resorted to keep the government operating, provide a “very powerful tool” to pry out spending cuts, said Norquist, president of Americans for Tax Reform.


Republican Senator Bob Corker of Tennessee said he will not be satisfied until there are substantial cuts to federal retirement and healthcare benefits known as entitlements, producing savings in the $ 4.5 trillion to $ 5 trillion range.


“Unfortunately for America,” said Corker, “the next line in the sand will be the debt ceiling.”


Most observers see the $ 16.4 trillion debt limit as the true fiscal cliff in the new year because if not increased, it would eventually lead to a default on U.S. Treasury debt, an event that could prove cataclysmic for financial markets.


The Treasury Department said on Wednesday it would start taking extraordinary measures by December 31 to extend its borrowing capacity for about two more months.


‘POISONOUS CLIMATE’


It was a deadlock over raising the debt ceiling in August 2011 that prompted a deficit reduction deal that led to a key fiscal cliff component, the $ 109 billion in automatic spending cuts on military and domestic programs.


If the fiscal cliff’s spending cuts or tax increases are left even partly unresolved on December 31, the political combat over them will carry over into the new Congress, possibly simultaneously with the debt ceiling debate.


“We would be pessimistic of a quick fix” if the deadline is missed, Sean West, head U.S. analyst at Eurasia Group, a political risk consultancy, said in a note to clients. “The political climate will be poisoned. The new Congress will need time to settle in.”


“We are concluding one of the most unsuccessful Congresses in history,” Democratic Representative John Dingell of Michigan declared in a statement on Saturday, “noteworthy not only for its failure to accomplish anything of importance, but also for the poisonous climate of the institution.”


Dingell, 86, is the longest serving member of the House, elected first in 1955.


Historically, bitter struggles in Congress like that over the fiscal cliff lead to further resentment and strife in a cycle of cumulative grudges that now spans nearly 30 years.


Many analysts and lobbyists in Washington believe the strife could get even worse because the new Congress convening on January 3 will include fewer members from moderate or swing districts and more from districts tilted heavily to the left or the right.


Republicans in particular are likely to face their most serious re-election challenges in 2014 not from Democrats but from conservative Republicans challenging them in primary elections.


“Ironically,” said a post-election analysis published by the law firm Patton Boggs, “the voters have elected a 113th Congress that may be even more partisan than the 112th.”


(Reporting by David Lawder and Fred Barbash; Editing by Eric Beech)


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Berlusconi says Monti plotting with Italy’s center left






ROME/MILAN (Reuters) – Silvio Berlusconi said on Saturday that outgoing Prime Minister Mario Monti was plotting with the left in his centrist alliance’s bid to win Italy‘s national election in February, but centrist leaders denied any secret accord.


Monti, who replaced Berlusconi as prime minister last year when Italy was scrambling to avert a financial crisis, said on Friday he wanted to unite a broad coalition of factions around a reform agenda aimed at easing the country’s economic woes.






Monti ended weeks of speculation when he confirmed his bid for a second term, pitting him against the center-left Democratic Party (PD) and Berlusconi’s center-right People of Freedom (PDL) party in a three-way contest.


Speaking to reporters at Milan Central railway station, Berlusconi said Monti wanted to help the left secure power after the February 24-25 election so he could continue his austerity agenda of tax hikes and spending cuts.


“This grouping has been formed to favor the left – also the similarities with the left’s programme points in this direction,” he said, after earlier describing Monti as “the spare wheel” of the PD in an interview with Vista TV.


The 76-year-old billionaire, who caught the train from Rome with his 27-year-old partner, Francesca Pascale, said he did not believe Italian voters would “fall into the trap”, which he said was aimed at stealing votes from the center right.


But Pier Ferdinando Casini, head of Italy’s oldest and largest centrist party, the UDC, which is cooperating with Monti, denied the accusations.


“Our initiative was not born with the support of the PD. It has not been started with a predetermined alliance … until election day what’s important is aiming for the majority,” Casini said at a news conference on Saturday.


“PHASE OF RESPONSIBILITY”


Opinion polls suggest the PD, under Pier Luigi Bersani, will win a comfortable lower house majority but may have to strike a deal with centrist forces in the Senate, where the center left has struggled to gain control in past elections.


The PD, which has pledged to maintain Monti’s broad reform course while putting more emphasis on jobs and growth, has urged the 69-year-old technocrat to clarify the approach the centrist forces will take towards the left.


“Will they present themselves as alternatives, as rivals, or as open to an alliance?” Bersani asked on SkyTG24 television on Friday, saying that the center left would be open to discuss an accord when Monti’s position is clear.


Monti, a former European Commissioner, is a favorite with international investors, the Catholic Church and the business establishment, and has been widely credited with restoring Italy’s credibility after the scandal-plagued Berlusconi years.


“For the first time, an atmosphere is forming that points towards the future for a Europe that needs Italy and a country that wants to change deeply,” centrist leader Casini said on Saturday.


“As of yesterday, we are putting behind us the empty electoral promises, populism, demagoguery, fake assurances; a phase of responsibility is beginning,” he said.


Also on Saturday, Italian magistrate Antonio Ingroia officially announced he was joining the election race, and backers of his anti-corruption, law-and-order platform said it was time for both Monti and Berlusconi to step aside.


“We can’t give them back the keys to the country,” said Felice Belisario from the opposition Italy of Values party, which said it supported Ingroia’s candidacy for prime minister.


“Both have ruined Italy and have only acted in the interests of themselves and their friends at the expense of Italian citizens,” Belisario said in a statement.


The PD has so far maintained a tone of polite respect for Monti, in contrast to Berlusconi’s attacks on his “Germano-centric” austerity policies, which he blames for deepening a severe recession and fuelling record unemployment.


The media tycoon said on Saturday he was disappointed that Monti had made a bid for a second term because the economics professor had told him he would not use the exposure gained as an unelected technocrat for future political motives.


He said if the center-right won the election he would launch an investigation into Monti’s ascent to power.


Later on Saturday Berlusconi met leaders of the Northern League, his former government allies. He told reporters following the meeting that he remained hopeful for a possible alliance but the PDL was still not convinced on some points.


PDL secretary Angelino Alfano said on Twitter that the disagreements could lead to the PDL and the Northern League heading their separate ways at the next election.


(Editing by Louise Ireland)


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Arab League chief says Palestinians to petition UN






RAMALLAH, West Bank (AP) — Arab League chief Nabil Elaraby says two decades of talks with Israel have been “a waste of time” and that Palestinians will soon take a new statehood bid to the U.N.


“We will return to the U.N. Security Council,” he said in Ramallah Saturday after meeting Palestinian officials. “Palestine will be cooperating with Arab and EU countries to change the equation (in the peace process) that prevailed over the past 20 years, which was a waste of time.”






The U.N. last month endorsed a de facto Palestinian state in the West Bank, east Jerusalem and Gaza, areas Israel won in a 1967 war.


Talks collapsed in 2008 after Palestinians demanded Israel stop building in areas they want for a future state. Israel insists settlements and other issues should be negotiated.


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The Boy Genius Report: The Wii U is Nintendo’s last console






I remember it still — people flipped out about the Nintendo (NTDOY) Wii. Yes, its name was mocked for a while, but there was genuine excitement around what Nintendo was doing with motion and the entire gameplay experience. While the original Nintendo Wii was almost an Apple (AAPL)-like product — Nintendo focused on the gameplay and not on specs; the company didn’t even have HD graphics when every other console did — the Nintendo Wii U clearly demonstrates how far Nintendo has fallen and how out of touch the company is.


[More from BGR: Samsung could face $ 15 billion fine for trying to ban iPhone, other Apple devices]






I bought a Nintendo Wii U for one reason and one reason only, and that’s to play and beat “Super Mario Bros. U.” I’ll probably end up returning the console after I’m done, because that’s how horrible the Wii U actually is.


[More from BGR: Five-year-old finds porn on refurbished Nintendo 3DS from GameStop]


First of all, the fact that Nintendo actually decided to ship this joke of a controller called the GamePad with a 6.2-inch touchscreen in the middle says it all. It only lasted for around two hours per charge over the week I’ve used it, and it’s big, clunky and made of glossy Nintendo plastic. The problem it, it has no charm. It feels thrown together to try to make a statement, one that says that Nintendo isn’t afraid of the iPads or Android tablets or iPhones or iPod touches, and that it too can take on touch just as it took on motion.


It fails miserably. And that’s just the controller.


The actual console is one that finally for the first time ever supports HDMI and HD graphics, yet Nintendo’s flagship game doesn’t look good in high-definition. The console’s UI is a mess, and let’s be honest, we are living in a time where we are so connected, where so much is shared across continents instantly, that real design transcends what country it was designed in.


When you see a beautiful iPhone app’s interface, there’s a good chance you couldn’t tell if it was designed by a company in San Francisco or Paris or Hong Kong. But Nintendo’s interface is blatantly Japanese, and it lacks any and all sophistication. It’s like all of Nintendo’s designers just gave up and are living in a time when Apple’s iOS devices and Google’s (GOOG) Android devices don’t exist, blissfully ignoring the threat that their company is facing from all angles.


The Wii U experience is so terrible that it took over an hour to update the software on the console recently, and apparently that wasn’t that bad. People have told me their updates took over 4 hours when performed closer to Christmas. Do you know what that 7-year-old is doing during those 4 hours you’re making him wait? Playing Temple Run or Angry Birds on his iPad mini. Way to go Nintendo.


I’ll go on record and say that I think this is the last video game console Nintendo will make for the home. I just don’t see the future here with hardware. Not by a mile.


Nintendo needs to realize that hardware is hardware and that Nintendo’s hardware isn’t special, it isn’t elegant and it isn’t thoughtful. It’s merely a delivery mechanism in a time where design has never been more important.


Nintendo is a great company, one that has invented so many great products, but sooner or later it will be forced to offer its titles on iOS devices and Android devices. It’s going to get to that point. There’s way too much revenue to be made — Nintendo isn’t Sega, and Sega is crushing it as a software-only company.


I just hope Nintendo follows suit sooner or later, because I have $ 9.99 ready to go for the Super Mario app on iOS.


This article was originally published by BGR


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Fans to join Beyonce onstage at Super Bowl






NEW YORK (AP) — All the single ladies — and fellas — will have a chance to join Beyonce onstage at the upcoming Super Bowl.


Pepsi announced Friday that 100 fans will hit the stage when the Grammy-winning diva performs on Feb. 3 at the Mercedes-Benz Superdome in New Orleans. A contest that kicks off Saturday will allow fans to submit photos of themselves in various poses, including head bopping, feet tapping and hip shaking. Those pictures will be used in a TV ad introducing Beyonce’s halftime performance, and 50 people — along with a friend — will be selected to join the singer onstage.






The photo contest — at www.pepsi.com/halftime — ends Jan. 19, but Jan. 11 is the cut-off date for those interested in appearing onstage with Beyonce.


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Senate leaders to make last-ditch “fiscal cliff” effort






WASHINGTON (Reuters) – President Barack Obama and U.S. congressional leaders agreed on Friday to make a final effort to prevent the United States from going over the “fiscal cliff,” setting off intense bargaining over Americans’ tax rates as a New Year’s Eve deadline looms.


With only days left to avoid steep tax hikes and spending cuts that could cause a recession, two Senate veterans will try to forge a deal that has eluded the White House and Congress for months.






Obama said he was “modestly optimistic” an agreement could be found. But neither side appeared to give much ground at a White House meeting of congressional leaders on Friday.


What they did agree on was to task Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber’s Republican minority, with reaching a budget agreement by Sunday at the latest.


“The hour for immediate action is here. It is now. We’re now at the point where in just four days, every American’s tax rates are scheduled to go up by law. Every American’s paycheck will get considerably smaller. And that would be the wrong thing to do,” Obama told reporters.


A total of $ 600 billion in tax hikes and automatic cuts to government spending will start kicking in on Tuesday – New Year’s Day – if politicians cannot reach a deal. Economists fear the measures will push the U.S. economy into a recession.


Pessimism about the fiscal cliff helped push U.S. stocks down on Friday for a fifth straight day. The Dow Jones industrial average dropped 158.20 points, or 1.21 percent. Retailers are blaming worries about the “fiscal cliff” for lackluster Christmas season shopping.


Under the plan hashed out on Friday, any agreement between McConnell and Reid would be backed by the Senate and then approved in the Republican-controlled House of Representatives before the end of the year.


But the House could well be the graveyard of any accord.


A core of fiscal conservatives there strongly opposes Obama’s efforts to raise taxes for the wealthiest as part of a plan to close America’s budget deficit. House Republicans also want to see Obama commit to major spending cuts.


Talks between Obama and Republican House Speaker John Boehner collapsed last week when several dozen Republicans defied their leader and rejected a plan to raise rates for those earning $ 1 million and above.


A Democratic aide said Boehner stuck mainly to “talking points” in Friday’s White House meeting, with the message that the House had acted on the budget and it was now time for the Senate to move.


TALKS ON ‘BIG NUMBERS’


The two Senate leaders and their aides will plunge into talks on Saturday that will focus mainly on the threshold for raising income taxes on households with upper-level earnings, a Democratic aide said. Analysts say both sides could agree on raising taxes for households earning more than $ 400,000 or $ 500,000 a year.


The pair will also discuss whether the estate tax should be kept at current low levels or allowed to rise, the aide said.


Democrat Reid warned of tough talks.


“It’s not easy, we’re dealing with big numbers, and some of that stuff we do is somewhat complicated,” he said.


McConnell described Friday’s White House summit, also attended by Democratic House Minority Leader Nancy Pelosi, as “a good meeting.”


“So we’ll be working hard to try to see if we can get there in the next 24 hours. So I’m hopeful and optimistic,” he said.


If things cannot be worked out between the Senate leaders, Obama said he wanted both chambers in Congress to vote on a backup plan that would increase taxes only for households with more than $ 250,000 of annual income.


The plan would also extend unemployment insurance for about 2 million Americans and set up a framework for a larger deficit reduction deal next year.


There are signs in the options market that investor fear is taking hold. The CBOE Volatility Index, or the VIX, the market’s favored anxiety indicator, has remained at relatively low levels throughout this process, but it moved on Friday above 22, the highest level since June.


But some in the market were resigned to Washington going beyond the New Year’s Day deadline, as long as a serious agreement on deficit reduction comes out of the talks in early January.


“Regardless of whether the government resolves the issues now, any deal can easily be retroactive. We’re not as concerned with January 1 as the market seems to be,” said Richard Weiss, a senior money manager at American Century Investments.


Another component of the “fiscal cliff” – $ 109 billion in automatic spending cuts to military and domestic programs – is set to kick in on Wednesday.


S&P rating agency said on Friday the fiscal cliff impasse did not affect the U.S. sovereign rating.


That lifted the immediate threat of a downgrade from the agency, which cut the United States’ triple-A rating in August, 2011 in an unprecedented move after a similar partisan budget fight.


(Additional reporting by David Lawder, Thomas Ferraro, Rachelle Younglai and Mark Felsenthal; Writing by Alistair Bell; Editing by Peter Cooney)


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A surprisingly good vintage as market logs gains






NEW YORK (AP) — If you’d told investors what was going to happen in 2012 — U.S. economic growth at stall speed, an intensifying European debt crisis, a slowdown in China, fiscal deadlock in Washington, decelerating corporate earnings growth — and asked how the stock market would perform, few would have predicted a good year.


But that’s just what they got.






The Dow Jones industrial average, the Standard & Poor’s 500 and the Nasdaq composite index will all end the year substantially higher, despite losing ground in the final days of year as concerns about the looming “fiscal cliff” mounted.


The Dow is on track for a 7 percent increase, its fourth yearly gain in a row, having started the year at 12,217. The S&P 500, which started the year at 1,257, is up 12 percent, beating the 7.8 percent average annual gain of the past 20 years. The Nasdaq also logged a better-than-average gain, 14 percent.


Those returns were higher when dividend payments were taken into consideration. On that basis the Dow returned 10 percent, the S&P 500 index 15 percent and the Nasdaq 16 percent.


“There’s been a lot thrown at this market, and it’s proven to be very resilient,” said Gary Flam, a portfolio manager at Bel Air Investment Advisors in California. “Here we are at the end of the year, and it’s still relatively strong.”


Stocks started the year on a tear, with optimism about an improving job market and a broader economic recovery providing the backdrop to the S&P 500′s best first-quarter rally in 14 years.


The index advanced 12 percent by the end of March, closing the quarter at 1,408, its highest in almost four years, with financial companies and technology firms leading the charge. The Dow ended the first quarter at 13,212, logging an 8 percent gain.


Apple was one of the star performers of the first quarter and was probably the year’s most talked-about company.


The popularity of the iPhone and iPad led to staggering sales growth that helped push its stock up 48 percent to almost $ 600 at the end of March. Apple also announced a dividend and overtook Exxon Mobil as the U.S.’s most valuable company.


Investors’ optimism faded, though. The intensifying European debt crisis and concerns about the impact that it would have on global economic growth prompted a sell-off.


Within two months, by the start of June, U.S. stocks had given up the year’s gains. Borrowing costs for Spain surged and investors fretted over the outcome of Greek elections that had the potential to pull the euro currency bloc apart.


The outlook for growth in China, the world’s second-largest economy, also began to weigh on investors’ minds. Economic growth there slowed to 8.1 percent in the first quarter as export demand waned, and investors worried that it would keep falling.


The Dow fell as low as 12,101 June 4. The S&P dropped to 1,278 June 1.


The second quarter was also marred by Facebook’s initial public offering.


The stock sale was one of the most keenly anticipated initial public offerings in years, but investors didn’t “like” the $ 16 billion market debut. The social network priced its IPO at $ 38 per share, and the stock started to fall soon after the first day of trading on concern about the company’s mobile strategy.


Facebook closed as low as $ 17.73 on Sept. 4 before recovering some of the ground it lost.


Company earnings reports were also starting to make uncomfortable reading for investors. Earnings growth for S&P 500 companies fell as low as 0.8 percent in the second quarter, according to S&P Capital IQ data.


The stock market only recovered its poise after the European Union put together loans to bail out Spain’s banks on June 10 and the head of the European Central Bank, Mario Draghi, pledged to do “whatever it takes” to save the euro.


Speculation that the Federal Reserve was set to provide the economy with more stimulus to prevent it from slipping back into recession also bolstered stocks.


The rally even survived a blip when a software glitch at trading firm Knight Capital threw stock prices into chaos Aug. 1.


The firm said the problem was triggered by new trading software it installed. Erroneous orders were sent to 140 stocks listed on the New York Stock Exchange, causing sudden price swings and surging trading volume.


Apple launched the iPhone 5, the latest version of its smartphone, in September, and the company’s stock climbed to a record close of $ 702.10 on Sept. 19. That gave Apple a market value of $ 658 billion, and many analysts predicted more gains lay ahead.


By the time Fed Chairman Ben Bernanke announced Sept. 13 that the U.S. central bank would start a third round of its bond-purchase program, which is intended to push longer term interest rates lower and encourage borrowing and investment, the S&P 500 had surged 14 percent from its June 1 low. A day later, the index peaked at five-year high of 1,466. The Dow Jones reached its peak for the year of 13,610, Oct. 5.


As is often the case on Wall Street, investors “bought the rumor and sold the fact,” and quickly turned their attention to the challenges that lay ahead.


Analysts had also been cutting their outlook for growth in the final quarter of the year. At the start of the second quarter, estimated earnings growth for the period was 15.7 percent. That forecast had fallen to 3.4 percent by Dec. 27.


“One of the blessings that supported the stock market‘s moves in prior years was earnings growth,” said Lawrence Creatura, a portfolio manager at Federated Investors. “That’s true this year, but at a decelerating rate. It’s not gone unnoticed that earnings growth is slowing, and many forecasts now include a full stall.”


Apple‘s halo also began to slip in the final three months of the year. Its iPad Mini tablet, launched Nov. 2, met with lukewarm reviews, there were hints of unrest among its executive ranks. Investors began to fret that the intensifying competition in the smartphone market would crimp Apple‘s profits. The stock tumbled, and despite rallying in recent days is still down 27 percent from its September peak.


The year’s final twist came in Washington.


Stocks wavered ahead of a presidential election that at times seemed too close to call, and while President Barack Obama ultimately reclaimed the White House by a comfortable margin, the Republicans retained control of the House.


The divided government set the stage for a tense end to the year as Democrats and Republicans sought to thrash out a budget plan that would avoid the U.S. falling off the “fiscal cliff,” a series of tax hikes and government spending cuts that economists say would push the economy back into recession.


Initially, markets fell as much as 5 percent in the 10 days after the elections as investors worried that a divided government would not be able to agree on a budget plan to cut the U.S. deficit.


While the S&P 500 managed to recoup those losses by December on optimism that a deal would be reached, some investors are still urging caution. Any agreement will still be “ill-tasting medicine” to the economy, as it will almost certainly involve both spending cuts and tax hikes, says Joe Costigan, director of equity research at Bryn Mawr Trust Company.


“The question is, how much will the drag from the government be offset by business and personal spending,” says Costigan. “The market has reasonable expectations for growth priced in, so I don’t think we’re going to see a big run-up.”


Economy News Headlines – Yahoo! News





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