Tech shares, optimism on "cliff" propel Wall Street higher

NEW YORK (Reuters) - Technology shares led a 1 percent rise in major stock indexes on Tuesday, pushing the S&P 500 to its best levels since mid-October and erasing all of the post-election selloff.

The Nasdaq was lifted by a 3 percent gain in Apple Inc's stock to $545.37. The company's shares had dropped last week as investors took profits before a possible tax rise next year. Coming into Tuesday's trading, Apple shares had lost 25 percent from an all-time intraday high hit in September.

Other large tech stocks also rallied. Texas Instruments gained 3.5 percent to $30.88 after bumping up its profit target late Monday. That helped other chipmakers rally, with the PHLX Semiconductor index <.sox> up 1.9 percent.

"I see a lot of buying in tech, and that's taking the whole market up with it," said Tom Donino, co-head of trading at First New York Securities in New York.

The Dow Jones industrial average <.dji> rose 126.66 points, or 0.96 percent, at 13,296.54. The Standard & Poor's 500 Index <.spx> was up 14.55 points, or 1.03 percent, at 1,433.10. The Nasdaq Composite Index <.ixic> gained 44.40 points, or 1.49 percent, at 3,031.37.

Traders voiced cautious optimism as the pace of negotiations over the "fiscal cliff" quickened. However, representatives from both parties cautioned that an agreement remains uncertain.

"I guess in our own dysfunctional way, there is progress," said Frank Davis, director of sales and trading at LEK Securities in New York.

"Since conversations are occurring, it clarifies at least they are taking some action. My personal gut is they'll jostle this into the holiday week and try to do a last minute push."

Lawmakers worked toward a deal to avoid a series of automatic tax hikes and spending cuts that would hurt U.S. economic growth next year.

The lack of demonstrable progress has kept investors from making aggressive bets in recent weeks.

But stocks have steadily marched higher on thin volume. The S&P 500 surpassed 1433.38 on Tuesday, retracing losses in the first seven sessions after President Barack Obama's re-election.

A positive report from Goldman Sachs Equity Research pushed up shares in some retailers. Luggage maker Tumi Holding Inc. was up 4.8 percent to $21.94 and Michael Kors Holding gained 4 percent to $51.76.

The U.S. Treasury is selling its remaining stake in insurer American International Group Inc . AIG's shares were up 4.1 percent at $34.74.

Unexpected improvement in data out of Europe set the positive tone early. In Germany, analyst and investor sentiment rose sharply in December, entering positive territory for the first time since May, a leading survey showed.

The Fed began a policy-setting meeting on Tuesday. The central bank is expected to announce a new round of Treasury bond purchases when the meeting ends on Wednesday to replace its "Operation Twist" stimulus which expires at the end of the year.

(Editing by Kenneth Barry)

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Chávez Put Party Unity Before Another Cancer Surgery

LA PAZ, Bolivia — President Hugo Chávez of Venezuela has flown repeatedly to Cuba this year for cancer treatments, but the flight that took him back to Caracas on Friday may have been the most meaningful of all.

Mr. Chávez postponed emergency cancer surgery to return home, meet with his inner circle and announce on television on Saturday, for the first time, that he had picked the man he wanted to lead his socialist revolution when he is gone — something he seemed to suggest might come sooner than his millions of followers would hope.

He flew to Cuba again on Monday to prepare for surgery, news agencies reported. 

Mr. Chávez could well recover and remain a potent force, but on Saturday night he seemed intent on smoothing over factions within his party and solidifying support for the man he chose to succeed him, Vice President Nicolás Maduro.

Mr. Chávez, 58, spoke the word “unity” several times during Saturday’s somber, symbolically weighted appearance. To his left sat Mr. Maduro, and behind both of them viewers could see a bust of Mr. Chávez’s hero, the South American independence leader Simón Bolívar (who never realized his dream of unifying a fractious continent).

Mr. Chávez, a charismatic and polarizing leader who has crafted his own brand of socialist revolution in this oil-rich country, has been vague about the nature of his illness since it was first disclosed in June last year. Since then, he has had at least two operations, chemotherapy and radiation treatment. Yet he said on Saturday that doctors had once again found malignant cells, necessitating a new operation.

The fact that he chose to go home to put his political house in order and clear up the long-unresolved line of succession — rather than write about it on Twitter or report it by calling in to a government television show, as he so often has done with lesser policy decisions during his many medical absences — suggests that his doctors have told him that the news is not good.

“This is a huge passing of the torch,” said Javier Corrales, a political science professor at Amherst College.

Even if Mr. Chávez makes a strong recovery after his surgery, Mr. Corrales said, “there’s no question we are in the transition stage, and that’s always incredibly uncertain.”

Mr. Chávez, who has been president for nearly 14 years, was re-elected in October to another six years. His new term is to begin on Jan. 10.

But if he dies or cannot continue to govern before then, the Constitution states that the vice president, Mr. Maduro, would become president and finish out the last days of the current term.

If Mr. Chávez is unable to begin his new term, or if he leaves office within the first four years, then new elections would be called, according to the Constitution.

In that case, Mr. Chávez said on Saturday that he wanted Mr. Maduro to be his party’s candidate, and he asked his supporters to elect him.

“I ask it from my heart,” he said.

New elections could open the way for a new run by Henrique Capriles Radonski, a young state governor who opposed Mr. Chávez in October. Mr. Capriles received 44 percent of the vote and 6.5 million votes, far more than any previous candidate against Mr. Chávez.

But Mr. Capriles is now running a difficult race for re-election as governor of Miranda, which includes part of Caracas, the captial, and one of the country’s most populous states. The election is on Sunday.

He is being challenged by a former vice president, Elías Jaua, and the government and Mr. Chávez’s socialist party have made it a priority to defeat Mr. Capriles, hoping that it will weaken him politically and remove him as a threat.

“If Capriles loses, there will be a battle in the opposition, a struggle for power, and the leaders will call for a change,” said Luis Vicente León, a pollster close to the opposition.

Some polls taken earlier this year showed that Mr. Capriles could beat Mr. Maduro if they ran against each other.

But Mr. León said conditions had changed with Mr. Chávez’s endorsement of Mr. Maduro. If Mr. Chávez were to die or become too ill to continue in office, it could give Mr. Maduro’s candidacy an emotional boost, he said.

But Mr. Maduro, 50, will have difficulties of his own in having to rein in factions within Mr. Chávez’s party. That could include the military and former military officers to whom Mr. Chávez has given a major role in his government.

For the time being, Venezuelans can look forward to more uncertainty.

The country has been obsessed with Mr. Chávez’s illness since it was first revealed. It has been the source of endless speculation and conspiracy theories. Some people even insist that he is not sick and has invented the illness to throw his opponents off guard. His fiercest opponents see his cancer as a sign of hope that his days as president are numbered; his supporters insist that he will recover, and they condemn such grim speculation as necrophilia.

But the last announcement of his need for another surgery, coupled with his call to rally behind Mr. Maduro, takes the nervous focus on Mr. Chávez’s cancer and what it means for the country’s future to a new level.

Several hundred supporters of Mr. Chávez congregated on Sunday in Bolívar Plaza in central Caracas in what was an uncharacteristically subdued gathering, by the standards of his followers. But also on display was their quasi-religious connection with the president — and the refusal among many to acknowledge his mortality.

“He is going to overcome this difficult time,” said Israel Pérez, 32, a law student. “He will be with us forever.”

Nonetheless, would he support Mr. Maduro as Mr. Chávez’s replacement?

“Venezuelans would support any proposal the president asks them to,” Mr. Pérez said.

Andrew Rosati contributed reporting from Caracas, Venezuela.

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Miley Cyrus's Latest Look Will Definitely Shock You

Stylewatch
Style News Now

12/10/2012 at 11:30 AM ET

Michael Tran/FilmMagic

We’ve seen a lot of out-there ensembles on Miley Cyrus recently — denim jumpsuits, bra tops, visible lingerie — but the outfit she wore in Hollywood on Saturday night definitely trumped them all.

Performing with DJ/producer Borgore at Christmas Creampies concert at the Fonda Theatre, Cyrus opted for high-waisted pants and knee-high snakeskin boots, a peekaboo bra top and lots of gold accessories. She finished the look with an even shorter version of her bright blonde ‘do, which she originally debuted over the summer.

Cyrus’s style has evolved somewhat this year; she started 2012 in full-on glamour mode, looking grown-up and gorgeous at the Oscars. As time went on, she got a bit more revealing, showing some skin on the red carpet at The Hunger Games premiere and more famously, the Billboard Music Awards.

But once she got her haircut, Cyrus went retro, often opting for ’90s-inspired cut-off shorts, combat boots and crop tops. So after seeing Saturday’s outfit, we’re definitely interested to find out where Cyrus takes her sense of style next. Tell us: Are you into Miley’s outfit? Or is it too much? 

WEIGH IN ON INTERESTING STAR STYLES IN ‘OBSESSED OR HOT MESS?’

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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Wall Street gains on McDonald's and tech stocks

NEW YORK (Reuters) - Stocks rose on Monday, aided by gains in McDonald's and technology stocks, but moves remained muted as investors looked for any signs of movement on the "fiscal cliff" front.

Developments in Europe also served to keep sentiment in check as Italian Prime Minister Mario Monti said he would resign once the 2013 budget is approved. The move added to uncertainty about progress being made to tackle the euro zone's debt problem and drove Italy's borrowing costs higher.

U.S. President Barack Obama met with Republican House Speaker John Boehner on Sunday to negotiate a deal for avoiding the "fiscal cliff" set to go into effect in the new year.

The two sides declined to provide details about the unannounced meeting. Obama is expected to make remarks at 2 p.m. (1900 GMT) from Michigan where he is touring an auto plant.

The fiscal cliff talks have kept markets on edge in the last month as investors worry that the scheduled tax hikes and budget cuts could send the U.S. economy into recession if politicians do not reach a deal.

But the heightened rhetoric and lack of substantial progress has also handcuffed the equities market. The benchmark S&P 500 index has yet to see a move greater than 0.5 percent in either direction for December, and hasn't moved more than 1 percent either way since November 23.

"What we have been seeing is any headline that emanates from anywhere in the world will drive the market pretty quickly one way or the other," said Keith Bliss, senior vice-president at Cuttone & Co, in New York.

"People are out of the market if they have already got their gains (for the year) and the other thing is anybody that is in the market is just kind of sitting around waiting."

The Dow got its biggest lift from McDonald's Corp , up 1.2 percent at $89.55. The fast-food chain's stronger-than-expected November sales marked a rebound after a decline in October.

The Dow Jones industrial average <.dji> gained 34.89 points, or 0.27 percent, to 13,190.02. The Standard & Poor's 500 Index <.spx> added 2.78 points, or 0.20 percent, to 1,420.85. The Nasdaq Composite Index <.ixic> advanced 12.79 points, or 0.43 percent, to 2,990.83.

Technology stocks were the S&P 500's best-performing sector, helped by a 3.6 percent climb in Hewlett-Packard Co to $14.30 on rumors that activist investor Carl Icahn is building a stake in the PC maker. The stock is down 44.5 percent for the year and ranks as the Dow's worst performer.

Cisco Systems also buoyed tech stocks. Cisco's shares rose 2 percent to $19.71 after the company, known for its Internet routers and switches, laid out its midterm growth strategy on Friday. Monday's rally put the stock on track for its fifth advance in the past six sessions.

Ingersoll-Rand Plc edged up 0.1 percent to $48.76 after the company said it will spin off its security division and announced a $2 billion share buyback.

(Editing by Jan Paschal)

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Changes to Agriculture Highlight Cuba’s Problems

HAVANA — Cuba’s liveliest experiment with capitalism unfolds every night in a dirt lot on the edge of the capital, where Truman-era trucks lugging fresh produce meet up with hundreds of buyers on creaking bicycle carts clutching wads of cash.

“This place, it feeds all of Havana,” said Misael Toledo, 37, who owns three small food stores in the city. “Before, you could only buy or sell in the markets of Fidel.”

The agriculture exchange, which sprang up last year after the Cuban government legalized a broader range of small businesses, is a vivid sign of both how much the country has changed, and of all the political and practical limitations that continue to hold it back.

President Raúl Castro has made agriculture priority No. 1 in his attempt to remake the country. He used his first major presidential address in 2007 to zero in on farming, describing weeds conquering fallow fields and the need to ensure that “anyone who wants can drink a glass of milk.”

No other industry has seen as much liberalization, with a steady rollout of incentives for farmers. And Mr. Castro has been explicit about his reasoning: increasing efficiency and food production to replace imports that cost Cuba hundreds of millions of dollars a year is a matter “of national security.”

Yet at this point, by most measures, the project has failed. Because of waste, poor management, policy constraints, transportation limits, theft and other problems, overall efficiency has dropped: many Cubans are actually seeing less food at private markets. That is the case despite an increase in the number of farmers and production gains for certain items. A recent study from the University of Havana showed that market prices jumped by nearly 20 percent in 2011 alone. And food imports increased to an estimated $1.7 billion last year, up from $1.4 billion in 2006.

“It’s the first instance of Cuba’s leader not being able to get done what he said he would,” said Jorge I. Domínguez, vice provost for international affairs at Harvard, who left Cuba as a boy. “The published statistical results are really very discouraging.”

A major cause: poor transportation, as trucks are in short supply, and the aging ones that exist often break down.

In 2009, hundreds of tons of tomatoes, part of a bumper crop that year, rotted because of a lack of transportation by the government agency charged with bringing food to processing centers.

“It’s worse when it rains,” said Javier González, 27, a farmer in Artemisa Province who described often seeing crops wilt and rot because they were not picked up.

Behind him were the 33 fertile, rent-free acres he had been granted as part of a program Mr. Castro introduced in 2008 to encourage rural residents to work the land. After clearing it himself and planting a variety of crops, Mr. Gonzalez said, he was doing relatively well and earned more last year than his father, who is a doctor, did.

But Cuba’s inefficiencies gnawed at him. Smart, strong, and ambitious, he had expansion plans in mind, even as in his hand he held a wrench. He was repairing a tractor part meant to be grading land. It was broken. Again.

The 1980s Soviet model tractor he bought from another farmer was as about good as it gets in Cuba. The Cuban government maintains a monopoly on selling anything new, and there simply is not enough of anything — fertilizer, or sometimes even machetes — to go around.

Government economists are aware of the problem. “If you give people land and no resources, it doesn’t matter what happens on the land,” said Joaquin Infante of the Havana-based Cuban National Association of Economists.

But Mr. Castro has refused to allow what many farmers and experts see as an obvious solution to the shortages of transportation and equipment: Let people import supplies on their own. “It’s about control,” said Philip Peters, a Cuba analyst with the Lexington Institute, a Virginia-based research group.

Other analysts agree, noting that though the agricultural reforms have gone farther than other changes — like those that allow for self-employment — they remain constrained by politics.

“The government is not ready to let go,” said Ted Henken, a Latin American studies professor at Baruch College. “They are sending the message that they want to let go, or are trying to let go, but what they have is still a mechanism of control.”

For many farmers, that explains why land leases last for 10 years with a chance to renew, not indefinitely or the 99 years offered to foreign developers. It is also why many farmers say they will not build homes on the land they lease, despite a concession this year to allow doing so.

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Software guru McAfee did not have heart attack: lawyer

GUATEMALA CITY (Reuters) – Software pioneer John McAfee did not have a heart attack in Guatemala as originally thought, but is suffering from stress and hypertension, his lawyer Telesforo Guerra said on Thursday.

“He never had a heart attack. Nothing like that,” Guerra said in Guatemala City. “I’m not a doctor. I’m just telling you what the doctors told me. He was suffering from stress, hypertension and tachycardia (an abnormally rapid heartbeat).”

After being rushed to a hospital in an ambulance on Thursday, McAfee, 67, was later spirited out of the building out of sight of reporters and into a police patrol car, Guerra said.

McAfee, who is fighting deportation from Guatemala, was detained on Wednesday after crossing illegally into the country from neighboring Belize. Police in Belize want to question McAfee in connection with his neighbor’s murder.

Earlier, Guerra said McAfee had suffered two mild heart attacks in the morning.

(Reporting by Lomi Kriel; Editing by Stacey Joyce)

Internet News Headlines – Yahoo! News

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Holiday Drink Recipes: Seasonal Fruit Cocktails to Enjoy

Celebrity Diners Club

By Julia Haskins

12/09/2012 at 12:30 PM EST

Courtesy Appleton Estate Reserve

There's no better way to bask in the holiday season than using the best produce of the season. Crisp apples and pomegranates are delicious on their own, but even more satisfying in a refreshing or body-warming cocktail.

Make your evening complete by whipping up a mug of Appleton Estate's Hot Buttered Cider or a glass of PAMA's Champagne Dreams, and enjoy! 

Hot Buttered Cider

1.5 oz. Spiced rum 
2-3 oz. Unfiltered apple cider
1 Tbsp. butter
Garnish: grated nutmeg

Steam until butter dissolves, mix and serve in a festive mug.

Champagne Dreams

2 oz. Pomegranate liqueur 
2 oz. Champagne or sparkling wine
¼ oz. Orange liqueur
1 oz. Fresh orange juice

Combine all ingredients except Champagne in a shaker. Add ice and shake vigorously. Strain into chilled champagne glass and top with champagne. Garnish with orange or edible flower as desired.

Cheers!

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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Wall St Week Ahead: "Cliff" worries may drive tax selling

NEW YORK (Reuters) - Investors typically sell stocks to cut their losses at year end. But worries about the "fiscal cliff" - and the possibility of higher taxes in 2013 - may act as the greatest incentive to sell both winners and losers by December 31.

The $600 billion of automatic tax increases and spending cuts scheduled for the beginning of next year includes higher rates for capital gains, making tax-related selling even more appealing than usual.

Tax-related selling may be behind the weaker trend in the shares of market leader Apple , analysts said. The stock is down 20 percent for the quarter, but it's still up nearly 32 percent for the year.

Apple dropped 8.9 percent in the past week alone. For a stock that gained more than 25 percent a year for four consecutive years, the embedded capital gains suddenly look like a selling opportunity if one's tax bill is going to jump sharply just because the calendar changes.

"Tax-loss selling is always a factor (but) tax-gains selling has been a factor this year," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"You have a lot of high-net-worth individuals in taxable accounts, and that could be what's affecting stocks like Apple. If you look at the stocks that people have their largest gains in, they seem to be under a little bit more pressure here than usual."

Of this year's top 20 performers in the S&P 1500 index, which includes large, small and mid-cap stocks, all but four have lost ground in the last five trading sessions.

The rush to avoid higher taxes on portfolio gains could cause additional weakness.

The S&P 500 ended the week up just 0.1 percent after another week of trading largely tied to fiscal cliff negotiation news, which has pushed the market in both directions.

A PAIN PILL FROM THE FED?

This week's Federal Reserve meeting could offer some relief if policymakers announce further plans to help the lackluster U.S. economy. The Federal Open Market Committee will meet on Tuesday and Wednesday. The policy statement is expected at about 12:30 p.m. EST on Wednesday after the conclusion of the meeting - the Fed's last one for the year.

Friday's jobs report showing non-farm payrolls added 146,000 jobs in November eased worries that superstorm Sandy had hit the labor market hard.

"After the FOMC meeting, I think it's going to be downhill from there as worries about the fiscal cliff really take center stage and prospects of a deal become less and less likely," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

"I think we are likely to see an escalation in profit-taking ahead of tax rates going up next year," he said.

MORE VOLUME AND VOLATILITY

Volume could increase as investors try to shift positions before year end, some analysts said.

While most of that would be in stocks, some of the extra trading volume could spill over into options, said J.J. Kinahan, TD Ameritrade's chief derivatives strategist.

Volatility could pick up as well, and some of that is already being seen in Apple's stock.

"The actual volatility in Apple has been very high while the market itself has been calm. I expect Apple's volatility to carry over into the market volatility," said Enis Taner, global macro editor at RiskReversal.com, an options trading firm in New York.

Shares of Apple, the largest U.S. company by market value, on Friday registered their worst week since May 2010. In another bearish sign, the stock's 50-day moving average fell to $599.52 - below its 200-day moving average at $601.38.

"There's a lot of tax-related selling happening now, and it will continue to happen. Apple is an example, even (though) there are other factors involved with Apple," Aama said.

If tax rates are going up, an investor would sell now to book gains and pay lower capital gains taxes, according to Aama. But if an investor has capital losses, then "you take losses and have them count against capital gains or regular income if you do not have any offsetting capital gains.

"In essence, higher capital gains tax rates will give your losses a higher value next year than this year as the income tax shield will be worth more in 2013. So if you have no capital gains this year, you are better off holding off on selling your losers in 2012 and waiting till 2013," he said in an email.

While investors may be selling stocks to avoid higher taxes in 2013, companies may continue to announce special and accelerated dividend payments before year end. Among the latest, Expedia announced a special dividend of 52 cents a share to be paid on December 28.

To be sure, the big sell-off in stocks following the November 6 election was likely related to tax selling, making it hard to judge how much more is to come.

Even with stocks' recent declines, the three major U.S. stock indexes are still up for the year. The Dow Jones industrial average <.dji> is up 7.7 percent for 2012 so far, while the benchmark Standard & Poor's 500 index <.spx> is up 12.8 percent and the Nasdaq Composite Index <.ixic> is up 14.3 percent for the year to date.

Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said there is a decent chance that the market could rally before the year ends.

"Even with little or spotty news that one would put in the positive bucket regarding the (cliff) negotiations, the market has basically hung in there, and I think it's hung in there in anticipation of something coming," he said.

(Wall St Week Ahead runs every Sunday. Questions or comments on this column can be emailed to: caroline.valetkevitch(at)thomsonreuters.com)

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal; Multimedia versions of Reuters Top News are now available for:; 3000 Xtra: visit Reuters Top News; BridgeStation: view story .134; For London stock market outlook please click on <.l>; Pan-European stock market outlook <.eu>; Tokyo stock market outlook <.t>)

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