Wall Street advances, on track for third day of gains

NEW YORK (Reuters) - U.S. stocks edged higher on Thursday, pointing to a third straight day of gains in the wake of some strong economic data, though a further advance may be limited with major averages near multi-year highs.

While some data released Thursday were rosy, a read on economic growth was weaker than expected, and analysts said a pullback may be in store a day after major equity indexes posted their biggest daily advance since early January.

Over the past two sessions, the S&P 500 has gained 1.9 percent, rising back above the closely watched level of 1,500. The Dow Jones industrial average moved within striking distance of an all-time high.

"The market is looking choppy, and I think investors should use this as an opportunity to sell into strength," said Matt McCormick, a money manager at Cincinnati-based Bahl & Gaynor. "This seems like an environment where someone should be conservative instead of aggressive."

The U.S. economy grew 0.1 percent in the fourth quarter, a weaker pace than expected, although a slightly better performance in exports and fewer imports led the government to scratch an earlier estimate of an economic contraction.

Separately, the number of Americans filing new claims for unemployment benefits fell more than expected last week, while the February Chicago Purchasing Managers Index unexpectedly rose to an 11-month high.

While equity markets suffered steep losses earlier in the week on concerns over European debt, they have since recovered, with the gains fueled by strong data and recent comments by Federal Reserve Chairman Ben Bernanke that showed continued support for the Fed's economic stimulus policy.

"Growth is still anemic and there are still issues with Europe. People seem to be ignoring the signs that would otherwise give them cause for concern," said McCormick, who helps oversee $8.2 billion in assets.

The Dow Jones industrial average <.dji> was up 27.27 points, or 0.19 percent, at 14,102.64. The Standard & Poor's 500 Index <.spx> was up 5.13 points, or 0.34 percent, at 1,521.12. The Nasdaq Composite Index <.ixic> was up 13.75 points, or 0.43 percent, at 3,176.01.

The benchmark S&P 500 has gained 1.4 percent in February, the Dow is up 1.7 percent and the Nasdaq has added 1 percent.

J.C. Penney Co Inc slumped 18 percent to $17.32 as the S&P's biggest decliner after the department store reported a steep drop in sales on Wednesday. Groupon Inc also slumped on weak revenue, with the stock off 25 percent at $4.50.

Mylan Inc jumped 6.5 percent to $30.45 on the Nasdaq after the generic drugmaker posted a 25 percent rise in fourth-quarter profit.

Investors were keeping an eye on the debate in Washington over sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement on spending and taxes. President Barack Obama and Republican congressional leaders arranged to hold last-ditch talks to prevent the cuts, but expectations were low that any deal would be produced.

With 93 percent of the S&P 500 companies having reported results so far, 69.5 percent have beaten profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6.2 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(Editing by Bernadette Baum)

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India Ink: Image of the Day: Feb. 27

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Meet the Biggest Star in Music Right Now: A Goat!

By Cara Lynn Shultz

02/27/2013 at 11:15 AM EST

The biggest duet partner for music's biggest stars right now? A goat.

We're not kidding.

If your coworker bleating with joy, he or she has probably stumbled upon a new meme, which mashes up pop hits with an old clip of a goat screaming as if it were a human. (Some might argue that the goat improves the songs, but we'll leave that discussion to the comments section.) So far, Taylor Swift's "I Knew You Were Trouble," Justin Bieber's "Baby" and Katy Perry's "Firework" have all gotten the wooly treatment.

Put on your headphones (our goat pal is loud), throw your hooves in the air, and wave them like you just don't care to some of our favorites – before this goat gets a record deal!

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Vt. lye victim gets new face at Boston hospital

BOSTON (AP) — A Vermont woman whose face was disfigured in a lye attack has received a face transplant.

Doctors at Boston's Brigham and Women's Hospital say 44-year-old Carmen Blandin Tarleton underwent the surgery earlier this month.

A team worked 15 hours to transplant the facial skin, including the neck, nose, lips, facial muscles, arteries and nerves.

The 44-year-old Tarleton, of Thetford, Vt., was attacked by her former husband in 2007. He doused her with industrial strength lye. She suffered chemical burns over 80 percent of her body. The mother of two wrote a book about her experience that describes her recovery.

It was the fifth face transplant at the Boston hospital.

Physicians are planning to discuss the case Wednesday at the hospital.

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Wall Street rises on Bernanke, Italian bond auction

NEW YORK (Reuters) - Wall Street rose on Wednesday as Federal Reserve Chairman Ben Bernanke reaffirmed his support of the Fed's stimulus policy, the latest U.S. earnings showed strength and an Italian bond auction drew ample demand, reassuring investors.

In his second day before a congressional committee, Bernanke repeated testimony in which he defended the Fed's policy of buying bonds to keep interest rates low in order to promote growth and bring down the unemployment rate.

Bernanke's similar remarks on Tuesday helped the market rebound from its worst decline since November. The S&P 500 <.spx> is now back above 1,500, a closely watched level that has been technical support until recently.

"Bernanke comments will keep liquidity in place in the market and every dip now is being viewed as an opportunity to get in," said Dan Veru, chief investment officer at Palisade Capital Management.

Financial markets had been worried about the possibility the Fed would end its bond buying earlier than expected after Fed meeting minutes showed some policymakers favored changes.

Also supporting the market, European stocks and the euro rose on relief that Italy was able to sell bonds despite jitters about the country's political instability.

The Dow Jones industrial average <.dji> rose 96.77 points, or 0.70 percent, at 13,996.90. The Standard & Poor's 500 Index <.spx> gained 11.93 points, or 0.80 percent, at 1,508.87. The Nasdaq Composite Index <.ixic> advanced 30.75 points, or 0.98 percent, at 3,160.39.

The benchmark S&P 500, up 6 percent for the year, was within reach of record highs a week ago, before the minutes from the Fed's January meeting were released. Since then, the index has shed 1 percent as the minutes raised questions about whether the Fed may slow or halt its economy-stimulating measures soon.

In earnings news, discount retailer Target Corp appeared poised for a solid showing in the first quarter and forecast a higher profit for the full year after a weak performance in the key holiday season. The stock was off 1.5 percent at $63.07.

Dollar Tree Inc reported a higher quarterly profit as shoppers spent more and the chain controlled costs. The stock jumped 10 percent to $45.00.

Shares of Boyd Gaming jumped 2 percent to $6.63 after New Jersey Governor Chris Christie signed a revised online gaming bill.

A closely watched proxy for business spending plans jumped 6.3 percent in January, the biggest gain since December 2011, data on durable goods orders showed on Wednesday.

Another report showed an index of pending home sales increased 4.5 percent to its highest level since April 2010 - just before the expiration of the home-buyer tax credit.

(Editing by Bernadette Baum)

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India Ink: Image of the Day: Feb. 26

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Seth MacFarlane's TV Guide Critic Reacts to Oscar Mention

02/26/2013 at 11:30 AM EST

Seth MacFarlane (far left) and William Shatner, with Stephen Battaglio (inset)

Zuma; Inset: Getty

So, how does it feel to have your name dropped before a billion people?

Surprising, says TV Guide columnist Stephen Battaglio, who was part of the lively opening exchange between Oscar host Seth MacFarlane and intruder from the future William Shatner.

In a spoof (and a screen grab), the Star Trek captain showed the Family Guy guy what would be his upcoming review from Battglio.

"I didn't know it was coming," Battaglio writes on TV Guide's website. "I was watching the show at home with my wife. Staring at the byline, it took a few seconds to absorb."

And once it did, he says, "every electronic device in our apartment was ringing, buzzing, pinging or vibrating."

For the writer's full reaction, click here.
– Stephen M. Silverman

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Wall Street rebounds from Italy drop, Bernanke defends policy

NEW YORK (Reuters) - U.S. stocks advanced on Tuesday, rebounding from a steep decline a day earlier after an inconclusive Italian election and on Federal Reserve Chairman Ben Bernanke's testimony defending the central bank's bond-buying program.

Major indexes had fallen more than 1 percent on Monday, with the S&P 500 dropping the most since November on voting in Italy where groups opposed to austerity posted a strong showing. But no faction secured a clear majority in parliament, renewing fears about a new euro zone debt crisis.

"There's an increased willingness to buy equities, and every decline is met with a new round of buying, but there's a question as to whether that can be sustained," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio.

European equities <.fteu3>, which closed before the results on Monday, fell 1.1 percent, even as U.S. shares rose.

"It's a little surprising that we're not taking Europe more seriously now," he added. "It will be hard for us to avoid the weight of Europe's decline, and the question is whether our early strength will hold throughout the day."

In testimony before the Senate Banking Committee, Bernanke strongly defended the Fed's bond-buying stimulus program, or quantitative easing. Equities have benefited from the Fed's easy monetary policy, designed to boost the economy and employment.

"If Bernanke were to give any nugget of information about when QE might end, that would move markets, but we haven't seen anything like that," said Mike Shea, a trader at Direct Access Partners in New York.

Last week, concerns the Fed might curtail or end its stimulus efforts earlier than expected prompted a sharp decline by stocks, though they recovered most of the lost ground by the end of the week.

The Dow Jones industrial average <.dji> was up 88.66 points, or 0.64 percent, at 13,872.83. The Standard & Poor's 500 Index <.spx> was up 6.09 points, or 0.41 percent, at 1,493.94. The Nasdaq Composite Index <.ixic> was up 7.82 points, or 0.25 percent, at 3,124.07.

Dow component Home Depot Inc was the top gainer on both the Dow and S&P 500 after reporting adjusted earnings and sales that beat expectations, sending shares up 5.6 percent to $67.52.

Macy's Inc rose 3.3 percent to $39.80 after stating it expects full-year earnings to be above analysts' forecasts because of strong sales in the holiday period.

Economic reports that showed strength in housing and consumer confidence also supported stocks.

Home prices rose more than expected in December, according to the Standard & Poor's/Case-Shiller index. Consumer confidence rebounded in February, jumping more than expected, and new-home sales rose to their highest in 4-1/2 years.

For the benchmark S&P 500 index, 1,500 will be watched as a key level after the index closed below it on Monday for the first time since February 4, with selling accelerating after falling below it. An inability to break back above it could portend further losses.

(Editing by Chizu Nomiyama and Kenneth Barry)

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Top British Cardinal Resigns After Accusations of ‘Inappropriate Acts’

VATICAN CITY — Britain’s most senior Roman Catholic cleric announced his resignation on Monday, a day after being accused of “inappropriate acts” with priests, saying he would not attend the conclave to elect a new pope.

The cleric, Cardinal Keith O’Brien, said that he had submitted his resignation months ago, and the Vatican said Pope Benedict XVI had accepted it on Feb. 18. However, the timing of the announcement — a day after news reports of alleged abuse appeared in Britain —suggested that the Vatican had encouraged the cardinal to stay away from the conclave.

The move is bound to raise questions about other cardinals. It comes amid a campaign by some critics to urge Cardinal Roger Mahony of Los Angeles not to attend the conclave because of his role in moving priests accused of abuse.

It also comes just days after the Vatican Secretariat of State issued a harsh statement against recent media reports —including ones alleging a gay sex scandal inside the Vatican —that cardinals should not be conditioned by external pressures, including from the media, when they vote for the next pope. There are expected to be some 115 cardinals at the gathering.

Vatican watchers said that Cardinal O’Brien’s decision not to attend the conclave was rare.

“It’s quite unprecedented,” said Sandro Magister, a Vatican expert with the Italian weekly L’Espresso. “He made it clear that his resignation came under the pressure of the accusations. His certainly isn’t a frequent case and hasn’t happened in conclaves in recent memory.”

Cardinal O’Brien’s announcement came a day after The Observer newspaper reported that four men had made complaints to the pope’s diplomatic representative in Britain, Antonio Mennini, that reached him the week before Pope Benedict XVI announced Feb. 11 that he would be stepping down as of Feb. 28.

The Observer said that the accusations, which dated back to the 1980s, had been forwarded to theVatican.

Last week, Cardinal O’Brien drew different headlines, telling the BCC that the next pope should consider abandoning the church’s insistence on priestly celibacy, and suggested that it might be time for the papal conclave to choose a new pontiff from Africa or Asia, where church membership has been growing even as it has fallen across Europe and North America.

On Monday, the Vatican spokesman, the Rev. Federico Lombardi, downplayed the connection between the media reports and Cardinal O’Brien’s resignation, which the pope accepted under a norm of church law that says he had reached the normal retirement age of 75.

A statement issued by the media office of the Roman Catholic Church in Scotland said Cardinal O’Brien had informed the pope some time ago of his intention to resign as archbishop of St. Andrews and Edinburgh as his 75th birthday approached on March 17 but that no date had been set.

The cardinal said in the statement: “The Holy Father has now decided that my resignation will take effect today, 25 February 2013.”

“Looking back over my years of ministry: For any good I have been able to do, I thank God,” he said. “For any failures, I apologize to all whom I have offended.”

“I also ask God’s blessing on my brother cardinals who will soon gather in Rome,” the statement said, adding, “I will not join them for this conclave in person. I do not wish media attention in Rome to be focused on me — but rather on Pope Benedict XVI and on his successor.”

Cardinal O’Brien, whose office had initially said he would fly to Rome before the conclave, has been the head of the Catholic Church in Scotland since 1985, and was named a cardinal by Pope John Paul II in 2003. He was among the cardinals who attended the conclave that chose Benedict as John Paul’s successor in 2005.

The main role of a cardinal is to elect a new pope and they remain eligible to vote under any circumstances, even if they have been excommunicated, Bishop Juan Ignacio Arrieta, the secretary for the Pontifical Council for Legislative Texts, said last week.

Ambrogio Piazzoni, a papal historian, told reporters last week that he could think of no examples of cardinals who refrained from voting for anything other than health reasons — or from the pressures of different governments in past years.

On Monday, Benedict changed the laws governing the conclave to allow cardinals to decide to move up the start date before the traditional 15-20 day waiting period after the papacy is vacant. He also met with three cardinals who had conducted a secret investigation into a scandal of leaked documents and ruled that the contents of their report would be known only to his successor — not to the cardinals entering the conclave.

Alan Cowell contributed reporting from London.

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What You Didn't See at the Oscars

Curious about went down backstage during the ceremony? We've got your all-access pass!

Credit: Christopher Polk/Getty

Updated: Monday Feb 25, 2013 | 01:00 AM EST
By: Kate Hogan

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