Kate's Morning Sickness Is 'Acute'
Label: LifestyleKate is still in the early stages of her pregnancy – less than 12 weeks – and already the next royal is making his or her presence dramatically known.
The Palace has described the Duchess of Cambridge's morning sickness as "acute" and she is at King Edward VII Hospital in Central London, joined by her husband, Prince William. According to a source at St James's Palace, Kate arrived at the hospital from her parents' new home in Bucklebury.
The source adds that the couple decided to "be open" about Kate's pregnancy because she was admitted to the hospital. But, since it's so early, "we aren't going into detail about the pregnancy itself," the source says.
Kate, 30, also has canceled her next three official engagements.
According to the Palace, Kate is suffering from hyperemesis gravidarum, characterized by severe and persistent nausea and vomiting during pregnancy. If untreated, the patient can suffer dehydration and dangerous weight loss.
This is the first child for the royal couple, who wed in April 2011.
US envoy hits China's stand in UN climate talks
Label: HealthDOHA, Qatar (AP) — The United States on Monday challenged China's view of how to split the burden of curbing carbon emissions, saying the rich-poor divide in past climate agreements has no place in a future pact to fight global warming.
The U.S. envoy to international climate talks in Qatar, Todd Stern, said that the next climate deal must be based on "real-world" considerations, not "an ideology that says we're going to draw a line down the middle of the world."
Beijing wants to maintain a division between developed and developing nations, setting out softer emissions-cutting requirements for poorer countries. It notes that despite its roaring growth, millions of Chinese still live in poverty, and emission limits would slow the economic expansion that would improve their lot.
The climate pact is one of the key issues under discussion at the United Nations-led talks, which have entered their second week. Last year, governments agreed it should be adopted by 2015 and take effect five years later. The U.S. didn't join the only binding emissions agreement to date, the 1997 Kyoto Protocol, because it only covered industrialized nations and not major developing countries like India and China, which is now the world's biggest carbon emitter.
"It's going to be an enormously challenging, and I think enormously important, task to get this agreement right," Stern said.
The dispute will not be resolved in Doha, where negotiators are focusing on side issues including aid to help poor countries shift to renewable energy and protect themselves from rising sea levels and other effects of global warming.
They also plan to extend the Kyoto agreement, which expires this year, until a new treaty is in place. But several nations including Japan and New Zealand don't want to be part of the extension, meaning it will only cover European countries and Australia, which account for less than 15 percent of global emissions.
Even that has been complicated by disputes over whether emissions allowances granted to Poland and other eastern European countries to offset the early economic fallout after the collapse of communism should carry over into the second phase.
U.N. climate chief Christiana Figueres told reporters that people shouldn't expect the talks to yield success overnight because they deal with "a complete transformation of the economic structure of the world" — a shift from fossil fuels to renewable energy.
"What gives me frustration is the fact that we are very far behind what science tells us we should be doing," she said. "What gives me hope is the fact that ... over the past two to three years, this process has had more progress than it did in the past 10."
EU climate commissioner Connie Hedegaard said she would raise a host of side issues at a round-table discussion with environment ministers this week, including how to reduce subsidies for fossil fuels. Even though the G-20 group of industrialized and emerging nations called for the phasing-out of such subsidies already in 2009, the International Energy Agency recently said they grew 30 percent last year to $523 billion, primarily due to increases in the Middle East and Africa.
"It has been discussed for three years or more," Hedegaard said. "Now we need to start the phasing out."
In addition to the fuel subsidies in developing countries, rich nations in 2011 gave more than $58 billion in tax breaks and other production subsidies to oil and coal companies, according to a report Monday by Oil Change International, an advocacy group for clean energy. The U.S. figure was $13 billion.
Stern said that President Barack Obama has pushed for reducing fossil fuel subsidies domestically and internationally.
"It's difficult in other countries and it's difficult at home to carry it forward because there are a lot of entrenched interests," he said.
While he highlighted U.S. initiatives undertaken during Obama's first term — such as sharply increasing fuel efficiency standards for cars and trucks and investing in green energy — Stern noted that more ambitious climate legislation had stalled in Congress and that shifts in the U.S. climate position should not be expected following Obama's re-election.
"I don't know if I would think about this in terms of a different tone here," he said. "The U.S. has done quite significant things in the president's first four years."
Climate talks are scheduled to end on Friday.
Wall Street up on China, but U.S. factory data pares gains
Label: BusinessNEW YORK (Reuters) - The S&P 500 edged up to rise for a fourth straight day on Monday as upbeat Chinese data lifted sentiment, but weak U.S. factory numbers cut into gains.
Wall Street opened higher on that data but pared most of its gains after U.S. manufacturing unexpectedly contracted in November, falling to its lowest in over three years in a sign the sector may be struggling to gain traction.
Concerns over budget dealings in Washington are expected to keep traders cautious as political wrangling continues over how to deal with spending cuts and tax hikes scheduled to kick in next year that could tip the U.S. economy back into recession.
China's economy picked up in November even as a broader global recovery remains fragile, with factory activity patchy elsewhere in Asia as demand from the developed world remains weak.
"It's not clear exactly which numbers to focus on, but data is probably positive for markets starting from the China release last night," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.
Adding to the upbeat market tone, Spain formally requested the disbursement more than $50 billion of European funds to recapitalize its crippled banking sector while Greece said it would spend 10 billion euros ($13 billion) to buy back bonds in a bid to reduce its ballooning debt.
"There's other positive news out of Europe with Greeks buying back their debt," Zemsky said. "Net-net the news cycle is positive for (equity) markets."
The Dow Jones industrial average <.dji> dipped 9.87 points, or 0.08 percent, to 13,015.71. The S&P 500 Index <.spx> gained 0.82 point, or 0.06 percent, to 1,417.00. The Nasdaq Composite <.ixic> added 6.24 points, or 0.21 percent, to 3,016.49.
The S&P 500 on Friday closed its fifth positive month in six and is up 8 percent since the end of May.
U.S. Treasury Secretary Timothy Geithner pushed Republicans on Sunday to offer specific ideas to cut the deficit and predicted that they would agree to raise tax rates on the rich to obtain a year-end deal to avoid the "fiscal cliff."
"Right now for both sides it's all about staying firm and determined to go to the very end," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York about the negotiations. "But we all know the stakes are high and (Congress) can't be that stupid as to induce another recession."
Singapore Airlines
Dell
(Reporting by Rodrigo Campos, editing by Kenneth Barry)
Egyptian Court Postpones Ruling on Charter
Label: World
Wissam Nassar
Egyptian police officers stood guard outside Egypt's Supreme Constitutional Court on Sunday, while supporters of President Mohamed Morsi protested near the entrance of the building.
CAIRO — Egypt’s highest court on Sunday postponed its much-awaited ruling on the legitimacy of the legislative assembly that drafted a new charter last week, accusing a crowd of Islamists of blocking judges from entering their building on what it called “a dark black day in the history of the Egyptian judiciary.”
Although hundreds of security officers were on hand to ensure that judges of the Supreme Constitutional Court could get into the court, and civilians came and went without any problems, the accusations intensified a standoff between the judges appointed under former President Hosni Mubarak and Egypt’s new Islamist leaders that has thrown the political transition into a new crisis 22 months after Mr. Mubarak’s ouster.
Upon approaching the court on Sunday morning, the judges said in a statement that they saw crowds “closing the entrances of the roads to the gates, climbing the fences, chanting slogans denouncing its judges and inciting the people against them.”
The judges were prevented from entering “because of the threat of harm and danger to their safety,” the statement said, calling it “an abhorrent scene of shame and disgrace.”
As a result, the judges announced that they were “suspending the court’s sessions” until they could resume their work without “psychological and physical pressures.”
Anticipation of the court’s decision on the new constitution had set off the latest political crisis. Fear that the court would dissolve the assembly and undo months of work led President Mohamed Morsi, of the Muslim Brotherhood’s political party, to announce 10 days ago that his edicts were not be subject to judicial review until the completion of the constitution.
Despite Mr. Morsi’s attempt, the same anticipation of dissolution drove the Islamist-dominated assembly to rush out a hurried constitution before the court could act and against the objections of Egypt’s secular parties and the Coptic Christian Church. Judges appointed by Mr. Mubarak have previously dissolved the elected Parliament and the first constitutional assembly.
The sudden effort by the president and his Islamist allies to push through a constitution over any objections from their secular factions or the courts has unified the opposition, prompted hundreds of thousands of protesters to take to the streets and set off a wave of attacks on a dozen offices of the Brotherhood’s Freedom and Justice Party. A judicial trade association has urged judges across the country to go on strike, and some of the highest courts have joined it.
Over the weekend, Mr. Morsi continued to push his plans for the new constitution, setting a national referendum on it for Dec. 15.
“I pray to God and hope that it will be a new day of democracy in Egypt,” he said in a nationally televised speech, calling for a “national dialogue.”
But his recent tone and actions reminded critics of the autocratic ways of his predecessor, and have aroused a new debate here about his commitment to democracy and pluralism at a time when he and his Islamist allies dominate political life.
Mr. Morsi’s advisers call the tactics a regrettable but necessary response to genuine threats to the political transition from what they call the deep state — the vestiges of the autocracy of former President Mubarak, especially in the news media and the judiciary.
But his critics say they hear a familiar paranoia in Mr. Morsi’s new tone that reminds them of talk of the “hidden hands” and foreign plots that Mr. Mubarak once used to justify his authoritarianism.
“I have sent warnings to many people who know who they are, who may be committing crimes against the homeland,” Mr. Morsi declared in an interview with state television on Thursday night, referring repeatedly to secret information about a “conspiracy” and “real and imminent threats” that he would not disclose. “If anybody tries to derail the transition, I will not allow them.”
Asperger's dropped from revised diagnosis manual
Label: HealthCHICAGO (AP) — The now familiar term "Asperger's disorder" is being dropped. And abnormally bad and frequent temper tantrums will be given a scientific-sounding diagnosis called DMDD. But "dyslexia" and other learning disorders remain.
The revisions come in the first major rewrite in nearly 20 years of the diagnostic guide used by the nation's psychiatrists. Changes were approved Saturday.
Full details of all the revisions will come next May when the American Psychiatric Association's new diagnostic manual is published, but the impact will be huge, affecting millions of children and adults worldwide. The manual also is important for the insurance industry in deciding what treatment to pay for, and it helps schools decide how to allot special education.
This diagnostic guide "defines what constellations of symptoms" doctors recognize as mental disorders, said Dr. Mark Olfson, a Columbia University psychiatry professor. More important, he said, it "shapes who will receive what treatment. Even seemingly subtle changes to the criteria can have substantial effects on patterns of care."
Olfson was not involved in the revision process. The changes were approved Saturday in suburban Washington, D.C., by the psychiatric association's board of trustees.
The aim is not to expand the number of people diagnosed with mental illness, but to ensure that affected children and adults are more accurately diagnosed so they can get the most appropriate treatment, said Dr. David Kupfer. He chaired the task force in charge of revising the manual and is a psychiatry professor at the University of Pittsburgh.
One of the most hotly argued changes was how to define the various ranges of autism. Some advocates opposed the idea of dropping the specific diagnosis for Asperger's disorder. People with that disorder often have high intelligence and vast knowledge on narrow subjects but lack social skills. Some who have the condition embrace their quirkiness and vow to continue to use the label.
And some Asperger's families opposed any change, fearing their kids would lose a diagnosis and no longer be eligible for special services.
But the revision will not affect their education services, experts say.
The new manual adds the term "autism spectrum disorder," which already is used by many experts in the field. Asperger's disorder will be dropped and incorporated under that umbrella diagnosis. The new category will include kids with severe autism, who often don't talk or interact, as well as those with milder forms.
Kelli Gibson of Battle Creek, Mich., who has four sons with various forms of autism, said Saturday she welcomes the change. Her boys all had different labels in the old diagnostic manual, including a 14-year-old with Asperger's.
"To give it separate names never made sense to me," Gibson said. "To me, my children all had autism."
Three of her boys receive special education services in public school; the fourth is enrolled in a school for disabled children. The new autism diagnosis won't affect those services, Gibson said. She also has a 3-year-old daughter without autism.
People with dyslexia also were closely watching for the new updated doctors' guide. Many with the reading disorder did not want their diagnosis to be dropped. And it won't be. Instead, the new manual will have a broader learning disorder category to cover several conditions including dyslexia, which causes difficulty understanding letters and recognizing written words.
The trustees on Saturday made the final decision on what proposals made the cut; recommendations came from experts in several work groups assigned to evaluate different mental illnesses.
The revised guidebook "represents a significant step forward for the field. It will improve our ability to accurately diagnose psychiatric disorders," Dr. David Fassler, the group's treasurer and a University of Vermont psychiatry professor, said after the vote.
The shorthand name for the new edition, the organization's fifth revision of the Diagnostic and Statistical Manual, is DSM-5. Group leaders said specifics won't be disclosed until the manual is published but they confirmed some changes. A 2000 edition of the manual made minor changes but the last major edition was published in 1994.
Olfson said the manual "seeks to capture the current state of knowledge of psychiatric disorders. Since 2000 ... there have been important advances in our understanding of the nature of psychiatric disorders."
Catherine Lord, an autism expert at Weill Cornell Medical College in New York who was on the psychiatric group's autism task force, said anyone who met criteria for Asperger's in the old manual would be included in the new diagnosis.
One reason for the change is that some states and school systems don't provide services for children and adults with Asperger's, or provide fewer services than those given an autism diagnosis, she said.
Autism researcher Geraldine Dawson, chief science officer for the advocacy group Autism Speaks, said small studies have suggested the new criteria will be effective. But she said it will be crucial to monitor so that children don't lose services.
Other changes include:
—A new diagnosis for severe recurrent temper tantrums — disruptive mood dysregulation disorder. Critics say it will medicalize kids' who have normal tantrums. Supporters say it will address concerns about too many kids being misdiagnosed with bipolar disorder and treated with powerful psychiatric drugs. Bipolar disorder involves sharp mood swings and affected children are sometimes very irritable or have explosive tantrums.
—Eliminating the term "gender identity disorder." It has been used for children or adults who strongly believe that they were born the wrong gender. But many activists believe the condition isn't a disorder and say calling it one is stigmatizing. The term would be replaced with "gender dysphoria," which means emotional distress over one's gender. Supporters equated the change with removing homosexuality as a mental illness in the diagnostic manual, which happened decades ago.
___
AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner .
Cliff fight may knock out December rally
Label: BusinessNEW YORK (Reuters) - In normal times, next week's slew of U.S. economic data could be a springboard for a December rally in the stock market.
December is historically a strong month for markets. The S&P 500 has risen 16 times in the past 20 years during the month.
But the market hasn't been operating under normal circumstances since November 7 when a day after the U.S. election, investors' focus shifted squarely to the looming "fiscal cliff."
Investors are increasingly nervous about the ability of lawmakers to undo the $600 billion in tax increases and spending cuts that are set to begin in January; those changes, if they go into effect, could send the U.S. economy into a recession.
A string of economic indicators next week, which includes a key reading of the manufacturing sector on Monday, culminates with the November jobs report on Friday.
But the impact of those economic reports could be muted. Distortions in the data caused by Superstorm Sandy are discounted.
The spotlight will be more firmly on signs from Washington that politicians can settle their differences on how to avoid the fiscal cliff.
"We have a week with a lot of economic data, and obviously most of the economic data is going to reflect the effects of Sandy, and that might be a little bit negative for the market next week, but most of that is already expected - the main focus remains the fiscal cliff," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Concerns about the cliff sent the S&P 500 <.spx> into a two-week decline after the elections, dropping as much as 5.3 percent, only to rally back nearly 4 percent as the initial tone of talks offered hope that a compromise could be reached and investors snapped up stocks that were viewed as undervalued.
On Wednesday, the S&P 500 gained more than 20 points from its intraday low after House Speaker John Boehner said he was optimistic that a budget deal to avoid big spending cuts and tax hikes could be worked out. The next day, more pessimistic comments from Boehner, an Ohio Republican, briefly wiped out the day's gains in stocks.
On Friday, the sharp divide between the Democrats and the Republicans on taxes and spending was evident in comments from President Barack Obama, who favors raising taxes on the wealthy, and Boehner, the top Republican in Congress, who said Obama's plan was the wrong approach and declared that the talks had reached a stalemate.
"It's unusual to end up with one variable in this industry, it's unusual to have a single bullet that is the causal factor effect, and you are sitting here for the next maybe two weeks or more, on that kind of condition," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago.
"And that is what is grabbing the markets."
BE CONTRARY AND MAKE MERRY
But investor attitudes and seasonality could also help spur a rally for the final month of the year.
The most recent survey by the American Association of Individual Investors reflected investor caution about the cliff. Although bullish sentiment rose above 40 percent for the first time since August 23, bearish sentiment remained above its historical average of 30.5 percent for the 14th straight week.
December is a critical month for retailers such as Target Corp
With consumer spending making up roughly 70 percent of the U.S. economy, a solid showing for retailers during the holiday season could help fuel any gains.
Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, believes the recent drop after the election could be a market bottom, with sentiment leaving stocks poised for a December rally.
"The concerns on the fiscal cliff - as valid as they might be - could be overblown. When you look at a lot of the overriding sentiment, that has gotten extremely negative," said Detrick.
"From that contrarian point of view with the historically bullish time frame of December, we once again could be setting ourselves up for a pretty nice end-of-year rally, based on lowered expectations."
SOME FEEL THE BIG CHILL
Others view the fiscal cliff as such an unusual event that any historical comparisons should be thrown out the window, with a rally unlikely because of a lack of confidence in Washington to reach an agreement and the economic hit caused by Sandy.
"History doesn't matter. You're dealing with an extraordinary set of circumstances that could very well end up in the U.S. economy going into a recession," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
"And the likelihood of that is exclusively in the hands of our elected officials in Washington. They could absolutely drag us into a completely voluntary recession."
(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com )
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)
Dr. Andrew Moore Performs Life-Changing Surgeries for Free
Label: Lifestyle
Heroes Among Us
Dr. Andrew Moore (center, in scrubs) with staff members, from left: Shirley Ramsey, Barry Bussell and Tony Reyes
John Chiasson
When an increasing number of his patients couldn't pay for their life-saving surgeries, Dr. Andrew Moore decided he wasn't going to just stand by or send them away without doing anything.
So he found a way to make the procedures completely free of charge.
The Lexington, Kentucky-based plastic surgeon initially started waiving his fees for some patients, but soon found that wasn't reaching far enough. He grew disheartened every time a patient told him he couldn't afford to have a melanoma removed because he had no insurance. "It was so frustrating," says Moore, 63. "How was I going to take care of them?"
"We figured out the things we needed to do to make this work," says Moore. "It makes a difference in individual lives."
In 2005 the doctor launched Surgery on Sunday, a nonprofit group of more than 400 volunteer surgeons, nurses and medical professionals who perform free gall bladder removals, orthopedic repairs and other outpatient procedures in a donated surgical facility in Lexington.
To date, Moore's group has performed about 4,500 surgeries – and has a waiting list of more than 500. The program has also spawned offshoots in Louisville and three other Lexington hospitals, with the hope to expand nationwide.
Raising funds through grants and donations to cover malpractice insurance and medical supplies, Moore's band of medical good Samaritans has changed the lives of people like Michael Weyls, who lived in pain and terror after being diagnosed with a cancerous lesion he couldn't afford to have removed.
A doctor he knew referred him to Surgery on Sunday; Moore performed three surgeries and rebuilt Weyls's nose. "It could've killed me, and Dr. Moore worked a miracle," says Weyls. "I thank God for this man."
Know a hero? Send suggestions to heroesamongus@peoplemag.com. For more inspiring stories, read the latest issue of PEOPLE magazine
South Africa makes progress in HIV, AIDS fight
Label: HealthJOHANNESBURG (AP) — In the early '90s when South Africa's Themba Lethu clinic could only treat HIV/AIDS patients for opportunistic diseases, many would come in on wheelchairs and keep coming to the health center until they died.
Two decades later the clinic is the biggest anti-retroviral, or ARV, treatment center in the country and sees between 600 to 800 patients a day from all over southern Africa. Those who are brought in on wheelchairs, sometimes on the brink of death, get the crucial drugs and often become healthy and are walking within weeks.
"The ARVs are called the 'Lazarus drug' because people rise up and walk," said Sue Roberts who has been a nurse at the clinic , run by Right to Care in Johannesburg's Helen Joseph Hospital, since it opened its doors in 1992. She said they recently treated a woman who was pushed in a wheelchair for 3 kilometers (1.8 miles) to avoid a taxi fare and who was so sick it was touch and go. Two weeks later, the woman walked to the clinic, Roberts said.
Such stories of hope and progress are readily available on World AIDS Day 2012 in sub-Saharan Africa where deaths from AIDS-related causes have declined by 32 percent from 1.8 million in 2005 to 1.2 million in 2011, according to the latest UNAIDS report.
As people around the world celebrate a reduction in the rate of HIV infections, the growth of the clinic, which was one of only a few to open its doors 20 years ago, reflects how changes in treatment and attitude toward HIV and AIDS have moved South Africa forward. The nation, which has the most people living with HIV in the world at 5.6 million, still faces stigma and high rates of infection.
"You have no idea what a beautiful time we're living in right now," said Dr. Kay Mahomed, a doctor at the clinic who said treatment has improved drastically over the past several years.
President Jacob Zuma's government decided to give the best care, including TB screening and care at the clinic, and not to look at the cost, she said. South Africa has increased the numbers treated for HIV by 75 percent in the last two years, UNAIDS said, and new HIV infections have fallen by more than 50,000 in those two years. South Africa has also increased its domestic expenditure on AIDS to $1.6 billion, the highest by any low-and middle-income country, the group said.
Themba Lethu clinic, with funding from the government, the United States Agency for International Development and the President's Emergency Plan for AIDS Relief, is now among some 2,500 anit-retroviral therapy facilities in the country that treat approximately 1.9 million people.
"Now, you can't not get better. It's just one of these win-win situations. You test, you treat and you get better, end of story," Mahomed said.
But it hasn't always been that way.
In the 1990s South Africa's problem was compounded by years of misinformation by President Thabo Mbeki, who questioned the link between HIV and AIDS, and his health minister, Manto Tshabalala-Msimang, who promoted a "treatment" of beets and garlic.
Christinah Motsoahae first found out she was HIV positive in 1996, and said she felt nothing could be done about it.
"I didn't understand it at that time because I was only 24, and I said, 'What the hell is that?'" she said.
Sixteen years after her first diagnosis, she is now on anti-retroviral drugs and her life has turned around. She says the clinic has been instrumental.
"My status has changed my life, I have learned to accept people the way they are. I have learned not to be judgmental. And I have learned that it is God's purpose that I have this," the 40-year-old said.
She works with a support group of "positive ladies" in her hometown near Krugersdorp. She travels to the clinic as often as needed and her optimism shines through her gold eye shadow and wide smile. "I love the way I'm living now."
Motsoahae credits Nelson Mandela's family for inspiring her to face up to her status. The anti-apartheid icon galvanized the AIDS community in 2005 when he publicly acknowledged his son died of AIDS.
None of Motsoahae's children was born with HIV. The number of children newly infected with HIV has declined significantly. In six countries in sub-Saharan Africa — South Africa, Burundi, Kenya, Namibia, Togo and Zambia —the number of children with HIV declined by 40 to 59 percent between 2009 and 2011, the UNAIDS report said.
But the situation remains dire for those over the age of 15, who make up the 5.3 million infected in South Africa. Fear and denial lend to the high prevalence of HIV for that age group in South Africa, said the clinic's Kay Mahomed.
About 3.5 million South Africans still are not getting therapy, and many wait too long to come in to clinics or don't stay on the drugs, said Dr. Dave Spencer, who works at the clinic .
"People are still afraid of a stigma related to HIV," he said, adding that education and communication are key to controlling the disease.
Themba Lethu clinic reaches out to the younger generation with a teen program.
Tshepo Hoato, 21, who helps run the program found out he was HIV positive after his mother died in 2000. He said he has been helped by the program in which teens meet one day a month.
"What I've seen is a lot people around our ages, some commit suicide as soon as they find out they are HIV. That's a very hard stage for them so we came up with this program to help one another," he said. "We tell them our stories so they can understand and progress and see that no, man, it's not the end of the world."
Cliff fight may knock out December rally
Label: BusinessNEW YORK (Reuters) - In normal times, next week's slew of U.S. economic data could be a springboard for a December rally in the stock market.
December is historically a strong month for markets. The S&P 500 has risen 16 times in the past 20 years during the month.
But the market hasn't been operating under normal circumstances since November 7 when a day after the U.S. election, investors' focus shifted squarely to the looming "fiscal cliff."
Investors are increasingly nervous about the ability of lawmakers to undo the $600 billion in tax increases and spending cuts that are set to begin in January; those changes, if they go into effect, could send the U.S. economy into a recession.
A string of economic indicators next week, which includes a key reading of the manufacturing sector on Monday, culminates with the November jobs report on Friday.
But the impact of those economic reports could be muted. Distortions in the data caused by Superstorm Sandy are discounted.
The spotlight will be more firmly on signs from Washington that politicians can settle their differences on how to avoid the fiscal cliff.
"We have a week with a lot of economic data, and obviously most of the economic data is going to reflect the effects of Sandy, and that might be a little bit negative for the market next week, but most of that is already expected - the main focus remains the fiscal cliff," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Concerns about the cliff sent the S&P 500 <.spx> into a two-week decline after the elections, dropping as much as 5.3 percent, only to rally back nearly 4 percent as the initial tone of talks offered hope that a compromise could be reached and investors snapped up stocks that were viewed as undervalued.
On Wednesday, the S&P 500 gained more than 20 points from its intraday low after House Speaker John Boehner said he was optimistic that a budget deal to avoid big spending cuts and tax hikes could be worked out. The next day, more pessimistic comments from Boehner, an Ohio Republican, briefly wiped out the day's gains in stocks.
On Friday, the sharp divide between the Democrats and the Republicans on taxes and spending was evident in comments from President Barack Obama, who favors raising taxes on the wealthy, and Boehner, the top Republican in Congress, who said Obama's plan was the wrong approach and declared that the talks had reached a stalemate.
"It's unusual to end up with one variable in this industry, it's unusual to have a single bullet that is the causal factor effect, and you are sitting here for the next maybe two weeks or more, on that kind of condition," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago.
"And that is what is grabbing the markets."
BE CONTRARY AND MAKE MERRY
But investor attitudes and seasonality could also help spur a rally for the final month of the year.
The most recent survey by the American Association of Individual Investors reflected investor caution about the cliff. Although bullish sentiment rose above 40 percent for the first time since August 23, bearish sentiment remained above its historical average of 30.5 percent for the 14th straight week.
December is a critical month for retailers such as Target Corp
With consumer spending making up roughly 70 percent of the U.S. economy, a solid showing for retailers during the holiday season could help fuel any gains.
Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, believes the recent drop after the election could be a market bottom, with sentiment leaving stocks poised for a December rally.
"The concerns on the fiscal cliff - as valid as they might be - could be overblown. When you look at a lot of the overriding sentiment, that has gotten extremely negative," said Detrick.
"From that contrarian point of view with the historically bullish time frame of December, we once again could be setting ourselves up for a pretty nice end-of-year rally, based on lowered expectations."
SOME FEEL THE BIG CHILL
Others view the fiscal cliff as such an unusual event that any historical comparisons should be thrown out the window, with a rally unlikely because of a lack of confidence in Washington to reach an agreement and the economic hit caused by Sandy.
"History doesn't matter. You're dealing with an extraordinary set of circumstances that could very well end up in the U.S. economy going into a recession," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
"And the likelihood of that is exclusively in the hands of our elected officials in Washington. They could absolutely drag us into a completely voluntary recession."
(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com )
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)
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