Defensive stocks extend rally as caution sets in

NEW YORK (Reuters) - Stocks rose on Tuesday, led by defensive sectors, in a sign the cash piles moving into the market recently are being put to use by cautious investors to pick up more gains.

The S&P 500 is on track to post its best monthly performance since October 2011 as investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record.

Among rising defensive shares, which are companies relatively immune to economic swings, were drugmaker Pfizer, up 1.2 percent to $27.16 and AT&T , 1.5 percent higher to $34.64.

The S&P hovered near 1,500, and market technicians say the benchmark is at a turning point which will determine if the index will keep moving higher or find it difficult to break through, resulting in a move lower in the near term.

"Cyclicals were moving very nicely, now you see balance with some of the defensives. Many managers use that as an internal hedge in equity portfolios," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

She said the market is cautious ahead of Wednesday's statement following the Federal Reserve's two-day meeting. In addition, defensive stocks would hold up better if Friday's payrolls report surprises on the downside.

The Dow Jones industrial average <.dji> rose 57.42 points or 0.41 percent, to 13,939.35, the S&P 500 <.spx> gained 4.88 points or 0.33 percent, to 1,505.06 and the Nasdaq Composite <.ixic> dropped 3.24 points or 0.1 percent, to 3,151.06.

The top performing sectors on the S&P 500 were healthcare <.spxhc> and telecom services <.splrcl>, both up more than 1 percent.

The equity gains have largely come on a strong start to earnings season, though results were mixed on Tuesday with Pfizer rising but Ford Motor Co dropping after its report.

Both companies reported profits that topped expectations, but Ford also forecast a wider loss in its European segment. Shares dropped 3.6 percent to $13.32 as one of the biggest percentage losers on the S&P 500.

Thomson Reuters data showed that of the 174 companies in the S&P 500 that have reported earnings this season, 68.4 percent have been above analyst expectations, which is a higher proportion than over the past four quarters and above the average since 1994.

The Nasdaq was pressured by disappointing outlooks from Seagate Technology and BMC Software . Seagate shares lost 8.3 percent to $34.30 and BMC fell 8.5 percent to $40.70.

Software maker VMware Inc lost 20 percent to $78.26 also after a cautious 2013 outlook.

Amazon was the biggest drag on the Nasdaq with a 2 percent drop to $270.57 before its results, expected after the closing bell.

U.S. home prices rose in November to rack up their best yearly gain since the housing crisis began, a further sign that the sector is on the mend, but consumer confidence fell to its lowest level in more than a year in the wake of higher taxes for many Americans.

(Editing by Kenneth Barry and Nick Zieminski)

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India Ink: At Literature Festival, Yearning for Bollywood Past

Nostalgia for classic Bollywood cinema reigned at the Jaipur Literature Festival, which celebrated 100 years of Indian cinema with several sessions featuring veteran actors and writers, who offered critiques of contemporary Indian film-making.

In the session titled “Bollywood and National Narrative,” Javed Akhtar, the Indian poet and lyricist who scripted several popular Hindi films in the 1970s and ’80s, said that India is a nation of great “movie buffs,” noting that perhaps it was the only country where temples dedicated to movie stars exist.

“If you watch cinema carefully, it tells you a lot about the last 60 to 70 years in India,” Mr. Akhtar, 68, said.

The influence of society on filmmaking was so ingrained that drawing a list of a villain’s character over the years gives a sense of the socioeconomic history of the country, he said. In the 1940s, the villain was the zamindar, or landlord, who exploited the oppressed farmers, he noted. But today, he said, there is no such clear-cut character in society because the line between the heroes and the villains has become blurred.

Pointing to a generational shift in the art of storytelling in Bollywood, Mr. Akhtar argued that nowadays the screenplay is driven by a formulaic method that is aimed at a young, affluent audience who wants to have a good time at the theater and is not willing to engage with serious subjects.

“There is no shortage of stories, but an average producer wants a brand new story that has come before,” he said.

Wistfully, he commented that with the exception of a handful of films, the young generation of filmmakers had “left literature, poetry, art and aesthetics behind.”

But he also said he was hopeful that the next 10 years would usher in an era of more depth in film-making.

In another session on Bollywood, titled “Sex and Sensibility: Women in Cinema,” Shabana Azmi, the veteran Bollywood actress, along with Prasoon Joshi, lyricist, writer and poet, discussed the role of cinema in creating gender perceptions.

Ms. Azmi, who has also worked as a social activist on several issues including women’s rights, argued that Hindi cinema has created an ideal of womanhood based on mythological constructs taken from epics like the Ramayana. While the character of the vamp was created to satisfy men’s sexual appetites, the ideal woman was docile, submissive and had no sexuality, she said.

“The movies are setting the wrong kinds of role models for young girls,” she said.

Mr. Joshi said it was time that “we realize we are not only mirroring society we are shaping it. People are emulating cinema in their daily lives.”

In a fiery debate among the panelists, a consensus was reached that it was ultimately those involved in the business of film-making who were responsible for perpetuating the stereotypes.

“We are all culpable,” Ms. Azmi said.

The younger generation of writers may have been criticized by some veterans for the lack of sensibility in their work, but even they seemed to agree that some of the more recent films did not have a moral compass.

“The line between the hero and the antihero is blurring, and that is very dangerous,” said Mr. Joshi, who is 41. “The antihero is becoming cool. Crime can’t become cool.”

During a session on screenwriting, Jaideep Sahni, a screenwriter and lyricist who has some notable films to his credit, including “Kholsa Ka Ghosla” and “Chake De India” warned against having too much nostalgia for the past. He grew up watching films in the 1980s and the 1990s, and “they had bad scripts,” he said.

“There was a tyranny of listening to the same thing again and again,” he said.

He said a certain kind of popular, commercial entertainment was being considered the “be all and end all” but is having a negative impact on cinema.

However, the screenwriter, who is in his 40s, defended young screenwriters and lyricists like him, saying that they watched old films and listened to old Bollywood music but made films about the present times.

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Barbara Walters Has Chicken Pox

TV Watch

01/28/2013 at 12:40 PM EST

Barbara Walters

Mark VonHolden/DMIPhoto.com/FilmMagic

While much of Hollywood is suffering from the flu, Barbara Walters has come down with the chicken pox.

The View host was hospitalized after injuring her head in a fall during inauguration festivities. She was transferred to a New York hospital late last week and remains there with her new infection.

"You all know that she fell and cut her head 10 days ago, and then was running a temperature, but it turns out it is all the result of a delayed childhood," her co-host Whoopi Goldberg explained on the air Monday.

"Barbara has the chicken pox. She'd never had it as a child," she continued. "So now she's been told to rest, she's not allowed any visitors, and we're telling you, Barbara, no scratching."

In a statement last week, Walters, 83, thanked her fans and "all the people who have called, written and been concerned about me."
– Charlotte Triggs

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Soldier who lost 4 limbs has double-arm transplant

The first soldier to survive after losing all four limbs in the Iraq war has received a double-arm transplant in Baltimore.

His father says Brendan Marrocco (muh-ROCK-oh) had the operation on Dec. 18 at Johns Hopkins Hospital. Marrocco is 26 and lives in New York City. He was injured by a roadside bomb in 2009.

He also received bone marrow from the same dead donor who supplied his new arms. That novel approach is aimed at helping his body accept the new limbs with minimal medication to prevent rejection.

It is the seventh double-hand or double-arm transplant done in the United States. The military is sponsoring operations like these to help wounded troops. About 300 have lost arms or hands in the wars.

Surgeons plan to discuss the transplant Tuesday.

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S&P 500 dips after rally, but Apple lifts Nasdaq

NEW YORK (Reuters) - The Standard & Poor's 500 edged lower on Monday as a four-week rally stalled, while a rebound in Apple shares helped buoy the Nasdaq.

Caterpillar shares helped cap losses in the Dow industrials after the heavy equipment maker's outlook eased investors' fears about an economic slowdown in China. Caterpillar's shares rose 2.1 percent to $97.61.

The S&P 500 is coming off a streak of eight sessions of gains, the longest in eight years. On Friday, the major U.S. stock indexes closed a fourth straight week of gains with the S&P 500 ending the session above 1,500 for the first time in more than five years.

The rally has left the market vulnerable to a short-term pullback of up to 3 percent in the S&P 500 as bullish sentiment continues to rise, according to Richard Ross, Auerbach Grayson's global technical strategist.

"Still," Ross said, "we have a lot of momentum and nice seasonality, and technicals support the long-term bull market."

Data on Monday pointed to growing economic momentum as companies sensed improved consumer demand.

Thomson Reuters data showed that of the 150 companies in the S&P 500 that have reported earnings so far, 67.3 percent have beaten analysts' expectations. Since 1994, 62 percent of companies have topped expectations, while the average over the past four quarters stands at 65 percent.

The Dow Jones industrial average <.dji> rose 4.34 points, or 0.03 percent, to 13,900.32.. The S&P 500 <.spx> shed 0.19 of a point, or 0.01 percent, to 1,502.77. The Nasdaq Composite <.ixic> added 11.40 points, or 0.36 percent, to 3,161.11.

Bargain hunters lifted Apple after the tech giant's stock dropped 14.4 percent in the previous two sessions. With Apple's stock up 2.8 percent at $452, the iPad and iPhone maker regained the title as the largest U.S. company by market capitalization as Exxon Mobil fell 0.9 percent to $90.90 and slipped back to second place.

"I think there is more downside in Apple if you did get a broad market pullback," Auerbach Grayson's Ross said.

"I'd be patient unless you're a trader. It might not be the most attractive entry point."

U.S. durable goods orders jumped 4.6 percent in December, a pace that far outstripped expectations for a rise of 1.8 percent. Pending home sales unexpectedly dropped 4.3 percent. Analysts were looking for an increase of 0.3 percent.

Equities have gained support from a recent agreement in Washington to extend the government's borrowing power. On Monday, Fitch Ratings said that agreement removed the near-term risk to the country's 'AAA' rating.

Hess Corp shares shot up 5.7 percent to $62.27 after the company said it would exit its refining business, freeing up to $1 billion of capital. Separately, hedge fund Elliott Associates is looking for approval to buy about $800 million more in Hess stock.

Keryx Biopharmaceuticals Inc said a late-stage trial of its experimental kidney disease drug met the main study goal, and its shares soared nearly 60 percent to $5.45.

(Editing by Jan Paschal)

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The Lede Blog: Fire at a Nightclub in Southern Brazil

Victims of the fire are attended by medics.

An intense fire ripped through a nightclub crowded with university students in southern Brazil early on Sunday morning, leaving behind a scene of horror with bodies piled in the club’s bathrooms and outside on the street.

At least 245 people were killed, police officials said.

As my colleague, Simon Romero reports, a flare from a live band’s pyrotechnic show ignited the fire in the nightclub, called Kiss, in the southern city of Santa Maria. Throughout the morning on Sunday, rescue workers hauled bodies from the still smoldering building.

One video posted to YouTube showed several bodies of apparently unconscious victims splayed on concrete outside of the club as medics check them for signs of life.

Shortly before the fire, a club D.J. posted a photo on Facebook from inside the crowded club with the caption: “Kiss is pumping.”

A short time later, another photo purportedly taken inside the club and widely disseminated through social media showed smoke billowing on the crowded dance floor.

BOATE KISS PEGANDO FOGO! http://t.co/tdV2DO4q

— Boatos SM ® #LUTO (@BoatoSM) 27 Jan 13

The fire quickly engulfed the building.

Firefighters, apparently joined by volunteers who shielded their faces with T-shirts, struggled to pull people from the burning building.

Firefighters and volunteers tried to pull people from the burning building

Photos from the scene showed frantic friends and family members gathered outside the club and the hospital.

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Predict the SAG Award Winners!

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CDC: Flu seems to level off except in the West

New government figures show that flu cases seem to be leveling off nationwide. Flu activity is declining in most regions although still rising in the West.

The Centers for Disease Control and Prevention says hospitalizations and deaths spiked again last week, especially among the elderly. The CDC says quick treatment with antiviral medicines is important, in particular for the very young or old. The season's first flu case resistant to treatment with Tamiflu was reported Friday.

Eight more children have died from the flu, bringing this season's total pediatric deaths to 37. About 100 children die in an average flu season.

There is still vaccine available although it may be hard to find. The CDC has a website that can help.

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CDC: http://www.cdc.gov/flu/

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Scandal-hit Monte Paschi seeks new investor to revive bank

MILAN (Reuters) - Italian bank Monte dei Paschi di Siena is seeking a financial investor to help revive the ailing lender and will remove a current cap on voting rights to help raise 1 billion euros ($1.3 billion), its chairman said.

"I would like to have a long-term financial investor," Alessandro Profumo told Italian business daily Il Sole 24 Ore in an interview published on Sunday. "Nationality is not a problem. The important thing is that it believes in our project".

Late on Saturday the Bank of Italy gave its approval to Monte Paschi's request for 3.9 billion euros ($5.3 billion) of state loans, which Profumo said would be issued by February.

The central bank's backing was the final stage required to free up the financial help for Italy's third-biggest lender, which this week revealed loss-making derivatives trades that could cost it about 720 million euros.

In October, investors cleared a 1 billion euro share issue as part of its business plan, which Profumo said would be launched by the end of 2015.

Shareholders in the world's oldest bank on Friday approved two additional capital boosting measures for a combined 6.5 billion euros to be used in case the bank is not able to pay back the loans and interest with cash.

Profumo said he was confident the bank would generate enough cash to pay back the state bailout over the next five years and may not need to turn to investors to raise the 6.5 billion euros, which he described "theoretical" guarantees.

"We believe in this. The objective is to return to profits already during the course of this year," he said.

The bank will remove its current 4 percent cap to voting rights before launching the 1 billion euro cash call, he added. The move would encourage investors who could end up with more than 4 percent stakes to participate.

The scandal around opaque Monte Paschi trades is widening fast and Italian media have reported that public prosecutors are investigating a large number of derivatives contracts.

The issue has shot to the centre of the campaign for next month's national election and has prompted questions about how the deals, which were conducted between 2006 and 2009 and involved Japanese bank Nomura and Deutsche Bank, could have been hidden from regulators.

Monte Paschi was already under investigation over its 9 billion euro cash acquisition of smaller lender Antonveneta from Spain's Santander in 2007.

In an interview with La Repubblica daily on Sunday, Monte Paschi Chief Executive Fabrizio Viola said he had no evidence at this time that any crime had been committed, but the bank would not hesitate to protect its interests by taking legal action should any crime be ascertained by judges. ($1 = 0.7421 euros)

(Reporting By Danilo Masoni; Editing by Alison Birrane and Jane Baird)

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Dozens Killed in Clashes at a Venezuelan Prison

Diario el Informador, via Reuters

A rescue worker assisted a man injured during a riot at the Uribana prison in Barquisimeto, a northwestern city in Venezuela.

CARACAS, Venezuela — Dozens of people have been killed in fierce clashes between inmates and National Guard soldiers at a Venezuelan prison, local news media accounts said Saturday.

It was the latest in a series of bloody riots over the past year in overcrowded prisons here, where guns and drugs abound and inmates control many aspects of prison life.

Newspapers reported that more than 50 people had been killed at the Uribana prison in Barquisimeto, a northwestern city, citing the director of a hospital where the wounded and the dead were taken. The reports said that more than 80 people had been injured.

The minister of prisons, Iris Varela, said the violence broke out Friday when National Guard troops entered the prison to conduct an inspection, with the aim of taking weapons away from prisoners and establishing order.

“There was a tragic situation of confusion that we lament very much,” Vice President Nicolás Maduro said on television early Saturday. Mr. Maduro spoke after returning to Venezuela from Cuba, where he had gone to visit the country’s ailing president, Hugo Chávez, who has been out of sight since undergoing surgery in Havana for cancer more than six weeks ago.

Mr. Maduro is running the country in Mr. Chávez’s absence.

He described the prison as one of the country’s most dangerous, and he promised an investigation. “The prisons must be governed by the law,” he said.

There were conflicting reports about the episode but it appeared that inmates had resisted efforts by the National Guard to enter areas of the prison. The local news media reports indicated that some of the inmate bosses, known as prans, had been killed in the raid. The reports said that most of the dead were prisoners.

Ms. Varela said that two days before the raid the authorities received information of an increase in violence inside the prison, involving a settling of scores between different factions vying for control.

At that point, she said, the decision was made to have the troops enter the prison.

But she said that word of the operation leaked out and that it was reported by a television station, Globovision, on the Web site of a local newspaper and on social networking sites.

She called the reports “a detonator of the violence” and blamed them for setting off the riot inside the prison.

Last August, 25 people were killed and dozens were wounded in gunfights between inmates battling for control of the Yare I prison south of Caracas, according the official reports.

Also last summer, 30 people were killed in a prison riot in Merida, in the Andes Mountains, according the Venezuela Prison Observatory, a nongovernmental watchdog group. Outside the prison on Saturday morning a few hundred people, including many anguished relatives of prisoners, waited for news. Some sang the national anthem and some held signs that said “We want peace” and “No more deaths.”

“This happens all the time and nothing changes,” said Yolanda Rodríguez, 57, who was waiting for information about her 24-year-old son, an inmate in the prison. “We know nothing about what’s happening inside.”

Girish Gupta contributed reporting from Barquisimeto, Venezuela.

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