Equity futures rise, but "cliff" stalemate suggests more losses

(Reuters) - Equity futures were slightly higher at the beginning of electronic trading on Sunday night as talks continued in Washington over resolving the "fiscal cliff."

However, stocks still could end up falling on Monday when the cash markets open if lawmakers are unable to come to an agreement to avoid a series of $600 billion in tax hikes and spending cuts that are expected to hurt economic growth.

"Hard to predict how or when there will be a deal, but I believe investors will show their displeasure tomorrow by selling stocks if there is no deal," said Mohannad Aama, managing director at Beam Capital Management, an investment advisory firm in New York.

S&P 500 futures were up 5.5 points, or 0.4 percent, to 1,389.50 in electronic trading. Stocks fell sharply on Friday, with significant losses in the last minutes of trading, as prospects for a deal worsened at the beginning of the weekend.

The rise in the futures market does not necessarily augur for a rally on Monday, however. The cash market and futures markets closed with a wide gulf on Friday, by virtue of the extra 15 minutes of trading in futures, when investors sold aggressively.

The S&P 500 closed at 1,402.43 at 4 p.m. EST on Friday, down 1.1 percent, but futures continued to fall before closing 15 minutes later with a loss of 1.9 percent. S&P futures and the S&P cash index don't match point by point, but that kind of disparity is uncommon, and it points to a weak opening in stocks on Monday.

One hour before they had hoped to present a plan, Democratic and Republican Senate leaders said they were still unable to reach a compromise that would stop the automatic tax hikes and spending cuts that could push the U.S. economy back into recession.

Earlier in the day, President Barack Obama, appearing on NBC's "Meet the Press," said investors could begin to show greater concerns in the new year.

"If people start seeing that on January 1st, this problem still hasn't been solved ... then obviously that's going to have an adverse reaction in the markets," he said,

Investors have remained relatively sanguine about the process, believing that it will eventually be solved. In the past two months, markets have not shown the kind of volatility that was present during the fight to raise the debt ceiling in 2011.

Both the Dow industrials and the S&P 500 lost 1.9 percent last week, after falling for five straight sessions, the S&P 500's longest losing streak in three months. Equities have largely performed well in the last two months despite constant chatter about the fiscal cliff, but the last few days shows a bit of increased worry.

The CBOE Volatility Index rose to its highest level since June on Friday, closing at 22.72.

(Reporting by David Gaffen; Editing by Jan Paschal)

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IHT Rendezvous: The Rope, the App and Van Gogh in Amsterdam

AMSTERDAM—Consolation for disappointed art lovers who arrive in this city and realize that the Van Gogh Museum is closed for renovation: Follow the red braided rope.

It’s affixed to the corner of the old museum building, leading away from the construction site and stretches to Museumplein, Amsterdam’s great museum square.

The red rope is part of Amsterdam’s most public Van Gogh installation, the Van Gogh Mile. In place until the Van Gogh Museum reopens in spring 2013, it connects the Van Gogh museum with the site of the temporary Van Gogh exhibition, the Hermitage museum, 2.2 kilometers across the historic center of Amsterdam.  The rope is the most visible part of a multidisciplinary art walk designed by Henk Schut for the Van Gogh Museum. The walk guides would-be visitors through Van Gogh’s life, thoughts and travels, while directing them to his famous paintings.

“By following the rope, you can let go and you can trust us,” said Mr. Schut, whose installation is inspired by the 900 letters Vincent Van Gogh wrote to his brother, Theo.

A Van Gogh Mile app can be downloaded from a free WiFi spot close to the start of the tour and is supported by iPhones, iPads and Android-based phones.

The first digital installment of the tour is activated at the head of the fountain basin on the Museum Square, just in front of the “IamAmsterdam” sign.  A tap on the device and the same place appears on the screen. As if looking through a camera, the monuments and buildings of the Museumplein move as the user moves the device. A sweep of the device downward shows the scene as an expanse of sunflowers in bloom.

“There are moments of poetic license to synthesize, to be inspired by his letters,” said Mr. Schut.

The augmented reality software transposes the courtyard of an old sanitarium in the south of France where Van Gogh spent some time into the inner courtyard of the Hermitage museum.

At a stop along the route in front of the Rijkmuseum, the user flies (with the help of their digital device and some imagination) through an open window to see a Rembrandt painting. An audio clip of a reading of one of the artist’s letters describing his reaction to Rembrandt’s art comes through the headphones.

The audio for the tour is all from Van Gogh’s letters, and is in either English or Dutch. Rather than explain the visual experiences, the snippets provide atmosphere.

David Kat, who co-created the app, describes Van Gogh’s letters used in the tour as “handwritten, sketch-like, quick thoughts.”

A third component of the tour ensures that not only smart-phone users benefit from the Van Gogh Mile. Loudspeakers hanging from trees, posts and house-fronts along the rope’s route broadcast more of Van Gogh’s letters. Other public installations, such as a picture frame bearing one of Van Gogh’s musings about art near the Amstel Church, are strewn along the path to be discovered by those who take their time in looking around.  By having walkers looking upward at a rope instead of downward at a map, Mr. Schut hopes to make the audience discover Amsterdam the way Van Gogh himself would have on his many solitary walks.

“It is a connection between looking and walking,” said Mr. Schut.

The detour from the Van Gogh Museum to the Van Gogh art at the Hermitage Museum, with its fragmented audio, fantastical images and physical installations is designed to inspire engagement with the artist, not provide biographical information on his life, explained Mr. Schut.

There are already plenty of sources for that.

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Matthew McConaughey & Wife Camila Welcome Baby No. 3

By Elizabeth Leonard

12/28/2012 at 06:10 PM EST

Camila and Matthew McConaughey

Gary Miller/FilmMagic

It's a very merry holiday week for Matthew McConaughey and his wife Camila.

The couple welcomed their third child together in Austin, Texas, on Friday, sources confirm to PEOPLE.

The pair, who are also parents to Vida, who turns 3 next month, and Levi, 4, announced the pregnancy just one month after their June nuptials in Texas.

Camila, 29, joked that even as she put on pregnancy pounds, her actor husband, 43, was losing weight – dramatically – for The Dallas Buyers Club, in which he plays the real-life Ron Woodruff, who contracted HIV.

"We have gone the complete opposite direction eating wise, but we're navigating it," she said last summer. "But I don't really have cravings yet."

McConaughey's latest movie, Mud, will be released April. 26,

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Kenya hospital imprisons new mothers with no money

NAIROBI, Kenya (AP) — The director of the Pumwani Maternity Hospital, located in a hardscrabble neighborhood of downtown Nairobi, freely acknowledges what he's accused of: detaining mothers who can't pay their bills. Lazarus Omondi says it's the only way he can keep his medical center running.

Two mothers who live in a mud-wall and tin-roof slum a short walk from the maternity hospital, which is affiliated with the Nairobi City Council, told The Associated Press that Pumwani wouldn't let them leave after delivering their babies. The bills the mothers couldn't afford were $60 and $160. Guards would beat mothers with sticks who tried to leave without paying, one of the women said.

Now, a New York-based group has filed a lawsuit on the women's behalf in hopes of forcing Pumwani to stop the practice, a practice Omondi is candid about.

"We hold you and squeeze you until we get what we can get. We must be self-sufficient," Omondi said in an interview in his hospital office. "The hospital must get money to pay electricity, to pay water. We must pay our doctors and our workers."

"They stay there until they pay. They must pay," he said of the 350 mothers who give birth each week on average. "If you don't pay the hospital will collapse."

The Center for Reproductive Rights, which filed the suit this month in the High Court of Kenya, says detaining women for not paying is illegal. Pumwani is associated with the Nairobi City Council, one reason it might be able to get away with such practices, and the patients are among Nairobi's poorest with hardly anyone to stand up for them.

Maimouna Awuor was an impoverished mother of four when she was to give birth to her fifth in October 2010. Like many who live in Nairobi's slums, Awuor performs odd jobs in the hopes of earning enough money to feed her kids that day. Awuor, who is named in the lawsuit, says she had saved $12 and hoped to go to a lower-cost clinic but was turned away and sent to Pumwani. After giving birth, she couldn't pay the $60 bill, and was held with what she believes was about 60 other women and their infants.

"We were sleeping three to a bed, sometimes four," she said. "They abuse you, they call you names," she said of the hospital staff.

She said saw some women tried to flee but they were beaten by the guards and turned back. While her husband worked at a faraway refugee camp, Awuor's 9-year-old daughter took care of her siblings. A friend helped feed them, she said, while the children stayed in the family's 50-square-foot shack, where rent is $18 a month. She says she was released after 20 days after Nairobi's mayor paid her bill. Politicians in Kenya in general are expected to give out money and get a budget to do so.

A second mother named in the lawsuit, Margaret Anyoso, says she was locked up in Pumwani for six days in 2010 because she could not pay her $160 bill. Her pregnancy was complicated by a punctured bladder and heavy bleeding.

"I did not see my child until the sixth day after the surgery. The hospital staff were keeping her away from me and it was only when I caused a scene that they brought her to me," said Anyoso, a vegetable seller and a single mother with five children who makes $5 on a good day.

Anyoso said she didn't have clothes for her child so she wrapped her in a blood-stained blouse. She was released after relatives paid the bill.

One woman says she was detained for nine months and was released only after going on a hunger strike. The Center for Reproductive Rights says other hospitals also detain non-paying patients.

Judy Okal, the acting Africa director for the Center for Reproductive Rights, said her group filed the lawsuit so all Kenyan women, regardless of socio-economic status, are able to receive health care without fear of imprisonment. The hospital, the attorney general, the City Council of Nairobi and two government ministries are named in the suit.

___

Associated Press reporter Tom Odula contributed to this report.

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Wall Street ends sour week with 5th straight decline

NEW YORK (Reuters) - Stocks fell for a fifth straight day on Friday, dropping 1 percent and marking the S&P 500's longest losing streak in three months as the federal government edged closer to the "fiscal cliff" with no solution in sight.

President Barack Obama and top congressional leaders met at the White House to work on a solution for the draconian debt-reduction measures set to take effect beginning next week. Stocks, which have been influenced by little else than the flood of fiscal cliff headlines from Washington in recent days, extended losses going into the close with the Dow Jones industrial average and the S&P 500 each losing 1 percent, after reports that Obama would not offer a new plan to Republicans. The Dow closed below 13,000 for the first time since December 4.

"I was stunned Obama didn't have another plan, and that's absolutely why we sold off," said Mike Shea, managing partner at Direct Access Partners LLC in New York. "He's going to force the House to come to him with something different. I think that's a surprise. The entire market is disappointed in a lack of leadership in Washington."

In a sign of investor anxiety, the CBOE Volatility Index <.vix>, known as the VIX, jumped 16.69 percent to 22.72, closing at its highest level since June. Wall Street's favorite fear barometer has risen for five straight weeks, surging more than 40 percent over that time.

The Dow Jones industrial average <.dji> dropped 158.20 points, or 1.21 percent, to 12,938.11 at the close. The Standard & Poor's 500 Index <.spx> lost 15.67 points, or 1.11 percent, to 1,402.43. The Nasdaq Composite Index <.ixic> fell 25.59 points, or 0.86 percent, to end at 2,960.31.

For the week, the Dow fell 1.9 percent. The S&P 500 also lost 1.9 percent for the week, marking its worst weekly performance since mid-November. The Nasdaq finished the week down 2 percent. In contrast, the VIX jumped 22 percent for the week.

Pessimism continued after the market closed, with stock futures indicating even steeper losses. S&P 500 futures dropped 26.7 points, or 1.9 percent, eclipsing the decline seen in the regular session.

All 10 S&P 500 sectors fell during Friday's regular trading, with most posting declines of 1 percent, but energy and material shares were among the weakest of the day, with both groups closely tied to the pace of growth.

An S&P energy sector index <.gspe> slid 1.8 percent, with Exxon Mobil down 2 percent at $85.10, and Chevron Corp off 1.9 percent at $106.45. The S&P material sector index <.gspm> fell 1.3 percent, with U.S. Steel Corp down 2.6 percent at $23.03.

Decliners outnumbered advancers by a ratio of slightly more than 2 to 1 on the New York Stock Exchange, while on the Nasdaq, two stocks fell for every one that rose.

"We've been whipsawing around on low volume and rumors that come out on the cliff," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, who helps oversee $7 billion in assets.

With time running short, lawmakers may opt to allow the higher taxes and across-the-board federal spending cuts to go into effect and attempt to pass a retroactive fix soon after the new year. Standard & Poor's said an impasse on the cliff wouldn't affect the sovereign credit rating of the United States.

"We're not as concerned with January 1 as the market seems to be," said Richard Weiss, senior money manager at American Century Investments, in Mountain View, California. "Things will be resolved, just maybe not on a good timetable, and any deal can easily be retroactive."

Trading volume was light throughout the holiday-shortened week, with just 4.46 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Friday, below the daily average so far this year of about 6.48 billion shares. On Monday, the U.S. stock market closed early for Christmas Eve, and the market was shut on Tuesday for Christmas. Many senior traders were absent this week for the holidays.

Highlighting Wall Street's sensitivity to developments in Washington, stocks tumbled more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned that a deal was unlikely before the deadline. But late in the day, stocks nearly bounced back when the House said it would hold an unusual Sunday session to work on a fiscal solution.

Positive economic data failed to alter the market's mood.

The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest expanded in December.

"Economic reports have been very favorable, and once Congress comes to a resolution, the market should resume an upward trend, based on the data," said Weiss, who helps oversee about $125 billion in assets. "All else being equal, we see any further decline as a buying opportunity."

Barnes & Noble Inc rose 4.3 percent to $14.97 after the top U.S. bookstore chain said British publisher Pearson Plc had agreed to make a strategic investment in its Nook Media subsidiary. But Barnes & Noble also said its Nook business will not meet its previous projection for fiscal year 2013.

Shares of magicJack VocalTec Ltd jumped 10.3 percent to $17.95 after the company gave a strong fourth-quarter outlook and named Gerald Vento president and chief executive, effective January 1.

The U.S.-listed shares of Canadian drugmaker Aeterna Zentaris Inc surged 13.8 percent to $2.47 after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for a Phase 3 registration trial in endometrial cancer with AEZS-108 treatment.

(Reporting by Ryan Vlastelica; Editing by Jan Paschal)

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Putin to Sign Ban on U.S. Adoptions of Russian Children

MOSCOW — President Vladimir V. Putin said Thursday that he would sign into law a bill banning adoptions of Russian children by American citizens, retaliating against a new American law that seeks to punish human rights abuses in Russia and dealing a serious blow to bilateral relations after a year in which ties have become increasingly strained.

Most immediately, though, the ban stands to upend the plans of dozens of American families in the final stages of adopting children in Russia, adding wrenching emotional tumult to a process that can cost $50,000 or more, requires repeated trips overseas, and even under the best of circumstances typically entails lengthy and maddening bureaucracy.

Although his decision has been eagerly awaited, Mr. Putin seemed rather blasé at a meeting with senior government officials on Thursday that included cabinet members, legislative leaders and governors. When Vladimir S. Gruzdev, the governor of the Tula region, said, “I would like to ask, what is the fate of the law?” Mr. Putin replied curtly, “Which law?”

The adoption ban, included in a broader law aimed at retaliating against the United States, was approved unanimously by the Federation Council, the upper chamber of Parliament, on Wednesday. Mr. Putin went on to say that he would sign the bill and a decree also adopted on Wednesday, calling for improvements in Russia’s child welfare system.

“I intend to sign the law,” Mr. Putin said, “as well as a presidential decree changing the procedure of helping orphaned children, children left without parental care, and especially children who are in a disadvantageous situation due to their health problems.”

Mr. Putin also brushed aside criticism that the law would deny some Russian orphans the chance for a much better life in the United States. In 2011, about 1,000 Russian children were adopted to America, more than to any other foreign country, but still a tiny number given that nearly 120,000 children in Russia are eligible for adoption.

“There are probably many places in the world where living standards are better than ours,” Mr. Putin said. “So what? Shall we send all children there, or move there ourselves?”

United States officials have strongly criticized the measure and have urged the Russian government not to enmesh orphaned children in politics. “We have repeatedly made clear, both in private and in public, our deep concerns about the bill passed by the Russian Parliament,” a State Department spokesman, Patrick Ventrell, said on Thursday. “Since 1992 American families have welcomed more than 60,000 Russian children into their homes, and it is misguided to link the fate of children to unrelated political considerations.”

Internally, however, Obama administration officials have been engaged in a debate over how strongly to respond to the adoption ban, and how to assess the potential implications for other aspects of the country’s relationship with Russia.

The United States, for instance, now relies heavily on overland routes through Russia to ship supplies to military units in Afghanistan, and has enlisted Russia’s help in containing Iran’s nuclear program. The former cold war rivals also have sharp disagreements, notably over the civil war in Syria.

And with the White House and Congress heavily focused on the fiscal debate in Washington, there seems to be little room for developing a more forceful response on the adoption issue.

The news led to shock and despair among the hundreds of American families waiting to adopt a Russian child.

“I’m a little numb,” said Maria Drewinsky, a massage therapist from Sea Cliff, N.Y., who was in the final stages of adopting Alyosha, 5, has flown twice to visit him and speaks to him weekly on the telephone. “We have clothes and a bedroom all set up for him, and we talk about him all the time as our son.”

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Get Jennifer Aniston's Beach Vacation Bikini - for Less!

Stylewatch
Style News Now

12/27/2012 at 04:00 PM ET

Jennifer Aniston: FameFlynet

If you’re lucky enough to be taking a few days off and going somewhere warm this week, a) we’re very jealous and b) we recommend getting packing inspiration from Jennifer Aniston, who spent the holiday soaking up the sun in Cabo San Lucas, Mexico looking casually chic in a simple and sexy two-piece.

Aniston showed off her enviable physique when she stepped out with fiancé Justin Theroux on Christmas Eve in a vivid triangle bikini and the perfect beach accessories. But there’s no need to have a Hollywood bank account to get this look. We found a flattering hot pink bikini, similar to the one the actress is wearing, from Victoria’s Secret for just $39.

Pair the swimsuit with oval sunglasses (like this $24 pair) and a floppy beach hat (Zappos carries a style like hers for $46.99) because everyone knows the first step to getting and maintaining a complexion like Aniston’s is protecting it against the sun. A pretty sarong (we’re loving this $47.50 Cosabella cover-up) is also a must-have, since it works as a skirt, a dress, even a boho headscarf.

The whole ensemble will set you back less than $160, which leaves you plenty of money left over to treat yourself to mojitos at the beachside bar. Tell us: Do you like Aniston’s beach look?

–Jennifer Cress

PHOTOS: SHOP MORE STARS’ STYLE — FOR LESS!

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Kenya hospital imprisons new mothers with no money

NAIROBI, Kenya (AP) — The director of the Pumwani Maternity Hospital, located in a hardscrabble neighborhood of downtown Nairobi, freely acknowledges what he's accused of: detaining mothers who can't pay their bills. Lazarus Omondi says it's the only way he can keep his medical center running.

Two mothers who live in a mud-wall and tin-roof slum a short walk from the maternity hospital, which is affiliated with the Nairobi City Council, told The Associated Press that Pumwani wouldn't let them leave after delivering their babies. The bills the mothers couldn't afford were $60 and $160. Guards would beat mothers with sticks who tried to leave without paying, one of the women said.

Now, a New York-based group has filed a lawsuit on the women's behalf in hopes of forcing Pumwani to stop the practice, a practice Omondi is candid about.

"We hold you and squeeze you until we get what we can get. We must be self-sufficient," Omondi said in an interview in his hospital office. "The hospital must get money to pay electricity, to pay water. We must pay our doctors and our workers."

"They stay there until they pay. They must pay," he said of the 350 mothers who give birth each week on average. "If you don't pay the hospital will collapse."

The Center for Reproductive Rights, which filed the suit this month in the High Court of Kenya, says detaining women for not paying is illegal. Pumwani is associated with the Nairobi City Council, one reason it might be able to get away with such practices, and the patients are among Nairobi's poorest with hardly anyone to stand up for them.

Maimouna Awuor was an impoverished mother of four when she was to give birth to her fifth in October 2010. Like many who live in Nairobi's slums, Awuor performs odd jobs in the hopes of earning enough money to feed her kids that day. Awuor, who is named in the lawsuit, says she had saved $12 and hoped to go to a lower-cost clinic but was turned away and sent to Pumwani. After giving birth, she couldn't pay the $60 bill, and was held with what she believes was about 60 other women and their infants.

"We were sleeping three to a bed, sometimes four," she said. "They abuse you, they call you names," she said of the hospital staff.

She said saw some women tried to flee but they were beaten by the guards and turned back. While her husband worked at a faraway refugee camp, Awuor's 9-year-old daughter took care of her siblings. A friend helped feed them, she said, while the children stayed in the family's 50-square-foot shack, where rent is $18 a month. She says she was released after 20 days after Nairobi's mayor paid her bill. Politicians in Kenya in general are expected to give out money and get a budget to do so.

A second mother named in the lawsuit, Margaret Anyoso, says she was locked up in Pumwani for six days in 2010 because she could not pay her $160 bill. Her pregnancy was complicated by a punctured bladder and heavy bleeding.

"I did not see my child until the sixth day after the surgery. The hospital staff were keeping her away from me and it was only when I caused a scene that they brought her to me," said Anyoso, a vegetable seller and a single mother with five children who makes $5 on a good day.

Anyoso said she didn't have clothes for her child so she wrapped her in a blood-stained blouse. She was released after relatives paid the bill.

One woman says she was detained for nine months and was released only after going on a hunger strike. The Center for Reproductive Rights says other hospitals also detain non-paying patients.

Judy Okal, the acting Africa director for the Center for Reproductive Rights, said her group filed the lawsuit so all Kenyan women, regardless of socio-economic status, are able to receive health care without fear of imprisonment. The hospital, the attorney general, the City Council of Nairobi and two government ministries are named in the suit.

___

Associated Press reporter Tom Odula contributed to this report.

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Wall Street rebounds on House session, but off for 4th day

NEW YORK (Reuters) - Stocks fell for a fourth day on Thursday, but recovered most of their losses after the House of Representatives, in the barest sign of progress, said it would come back to work on avoiding the "fiscal cliff" this weekend.

It was a jittery session for stocks, with shares falling more than 1 percent after Senate Majority Harry Reid warned a deal was unlikely before the deadline, only to rebound merely on the news that the House would reconvene Sunday, a day before the December 31 "cliff" deadline.

"There's no conviction in the move or the overall market, based on the across-the-board reduction we've seen in volume ... but there will be continued weakness until there's sustained positive direction coming from our leaders," said Joseph Cangemi, managing director at ConvergEx Group, in New York.

The market has been prone to quick reactions to headlines and those moves have sometimes seemed more dramatic because of reduced trading volume. About 5.18 billion shares changed hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT, well below the daily average so far this year of about 6.48 billion shares.

Investors are looking for any hint that lawmakers will avert the $600 billion in tax hikes and spending cuts that will start to take effect next week and could push the U.S. economy into recession.

"Markets turned around in a heartbeat, as the House session is the first announcement of anything getting done," said Randy Bateman, chief investment officer of Huntington Asset Management, in Columbus, Ohio, which oversees $14.5 billion in assets. "I'm not convinced it will result in a deal, but you could get enough concessions by both parties to at least avoid the immediacy of going over the cliff."

In a sign of the anxiety, the CBOE Volatility Index <.vix>, or VIX, rose above 20 for the first time since July, suggesting rising worries, but ended up finishing the day down 0.4 percent as the stock market rebounded.

Stocks in the materials and the financial sectors, which are more vulnerable to the economy's performance, bore the brunt of the selling before recovering. Shares of Bank of America fell 0.6 percent to $11.47 while Freeport-McMoRan Copper & Gold fell 0.7 percent to $33.68.

Some of 2012's biggest gainers bucked the broader trend and rallied, a sign of year-end "window dressing." Expedia Inc was the S&P 500's top percentage gainer, climbing 4.1 percent to $60.30. The price of the online travel agency's stock has doubled this year.

The Dow Jones industrial average <.dji> slipped 18.28 points, or 0.14 percent, to 13,096.31 at the close. The Standard & Poor's 500 Index <.spx> declined 1.73 points, or 0.12 percent, to end at 1,418.10. The Nasdaq Composite Index <.ixic> dropped 4.25 points, or 0.14 percent, to close at 2,985.91.

Marvell Technology Group fell 3.5 percent to $7.14 after it said it would seek to overturn a jury's finding of patent infringement. The stock had fallen more than 10 percent in the previous session after a jury found the company infringed on patents held by Carnegie Mellon University and ordered the chipmaker to pay $1.17 billion in damages.

The four-day decline marked the S&P 500's longest losing streak in three months. The index has lost 1.8 percent over the period as investors grapple with the possibility that a deal may not be reached until next year.

President Barack Obama arrived back in Washington from Hawaii to restart stalled negotiations with Congress. House Speaker John Boehner and other Republican leaders were to hold a conference call with Republican lawmakers. The expectation was that lawmakers would be told to get back to Washington quickly if the Senate passed a bill.

Treasury Secretary Timothy Geithner announced the first of a series of measures that should push back the date when the U.S. government will hit its legal borrowing authority - a limit known as the debt ceiling - by about two months.

Economic data seemed to confirm worries about the impact of the fiscal cliff on the economy.

The Conference Board, an industry group, said its index of consumer confidence in December fell to 65.1 as the budget crisis dented growing optimism about the economy. The gauge fell more than expected from 71.5 in November.

However, the job market continues to mend. Initial claims for unemployment benefits dropped 12,000 to a seasonally adjusted 350,000 last week and the four-week moving average fell to the lowest since March 2008.

Decliners outnumbered advancers on the New York Stock Exchange by a ratio of about 8 to 7, while on the Nasdaq, about 14 stocks fell for every 11 that rose.

(Editing by Jan Paschal)

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Bennett Pushes Netanyahu Rightward

Uriel Sinai/Getty Images

As a major in the army reserves who served in the prestigious Sayeret Matkal unit, then made a fortune in Israel’s booming technology industry, Mr. Bennett embodies one popular vision of today’s Zionist ideal.

JERUSALEM — Naftali Bennett is not a serious contender to be Israel’s next prime minister. He has never held elective office, and the faction he represents currently fills five or seven of Parliament’s 120 seats, depending on how you count.

Yet Mr. Bennett, 40, has emerged a month ahead of the Jan. 22 national elections as perhaps the campaign’s most dynamic and influential factor. Newspaper polls show his revamped Jewish Home party poised to become the third largest in the next Parliament with up to 15 seats, and analysts say Prime Minister Benjamin Netanyahu is running scared as Mr. Bennett’s appealing biography and far-right platform combine to lure voters away from Mr. Netanyahu’s dominant Likud-Beiteinu ticket.

While the prime minister is still widely expected to serve another term, the Bennett phenomenon could transform his governing coalition, balancing — or replacing — the power of the ultra-Orthodox parties with the more nationalist, modern religious sector that has been fractured and weak in the political sphere for decades. Other modern-Orthodox candidates are also ranked high on rival parties’ slates, ensuring their significant numbers in the next Parliament.

“We’re talking about political expression of sociological change in Israeli society,” said Yedidia Z. Stern, a law professor and vice president of the Israel Democracy Institute, a nonpartisan research group. Noting that so-called religious Zionists are ever more prominent in Israel’s military, news media, science and business, Mr. Stern said: “Whatever issue you raise that is a major issue for the state of Israel, the national-religious community has a view that is basically driving the discourse. Bennett is representing it in politics.”

The political tensions over Mr. Bennett’s ascendance intensified in recent days, when Mr. Netanyahu seized on Mr. Bennett’s comment that, as a reserve officer in the Israeli Army, he would refuse an order to evacuate a Jewish settlement in the West Bank on ideological grounds. The prime minister said someone who would refuse had no place in his government. Mr. Bennett quickly recanted, but the attacks have continued.

“Here you see for the first time Netanyahu is really fighting in a serious way someone from the right,” Mr. Stern observed. “I see a real chance that the new coalition will be based on a different kind of transaction.”

Mr. Bennett’s new prominence is one of several forces pushing Mr. Netanyahu rightward. After merging with the ultranationalist Yisrael Beiteinu party, Likud yielded in its primary a far more conservative list than its current Parliament membership, ousting three respected moderates. At the official campaign kickoff on Tuesday evening, there was no mention of a two-state solution to the Israeli-Palestinian conflict — which Mr. Netanyahu has supported — and it is unclear whether the idea will be included in the party platform.

As a major in the army reserve who served in the prestigious Sayeret Matkal unit, then made a fortune in Israel’s booming technology industry, Mr. Bennett embodies one popular vision of today’s Zionist ideal. He wears the knitted kippa that is the religious-Zionist signature but lives in the affluent town of Raanana, north of Tel Aviv — and not in a West Bank settlement — because, he said, his wife is secular.

They have four children, ages 7 to 1, and Mr. Bennett has said he does not believe a solution to the Israeli-Palestinian conflict is achievable in their lifetime.

So, instead of peace, he talks about annexation — as in, Israel should annex the nearly two-thirds of the West Bank known as Area C, which is home to 350,000 Jewish settlers. In his view, the Palestinians who live there — estimates range from Mr. Bennett’s 48,000 to the United Nations’ 150,000 — could then apply for Israeli citizenship, akin to those who live within Israel’s 1948 borders. Then he would try to remove checkpoints to ease traffic and movement throughout the region, and, he said in a recent interview, “make a grocery list of 20 things we could do to make life better” for both Jews and Palestinians living in the territory.

“Forget whether it’s right or wrong; we’re here to stay, now what can we do about it?” he said. “To strive for perfection brings disaster again and again. It’s time for new thinking.

“What do we do in the long term?” he asked, then answered in a way unusual for a politician: “I don’t know.”

The son of San Francisco Bay Area residents who moved to Israel after the 1967 war, Mr. Bennett lived in New York for four years before selling his Internet company, which deals with bank security, in 2005 for $145 million. He was chief of staff to Mr. Netanyahu as leader of the opposition, from 2006 to 2008, then ran the settlers’ council from January 2010 to January 2012.

Irit Pazner Garshowitz contributed reporting.

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