Wall Street rebounds on Bernanke comments, data

NEW YORK (Reuters) - U.S. stocks rebounded from their worst decline since November on Tuesday after Federal Reserve Chairman Ben Bernanke defended the Fed's bond-buying stimulus and sales of new homes hit a 4 1/2-year high.

The S&P 500 had climbed 6 percent for the year and came within reach of all-time highs before the minutes from the Fed's January meeting were released last Wednesday. Since then, the benchmark S&P 500 has fallen 1 percent.

Bernanke, in testimony on Tuesday before the Senate Banking Committee, strongly defended the Fed's bond-buying stimulus program and quieted rumblings that the central bank may pull back from its stimulative policy measures, which were sparked by the release of the Fed minutes last week.

Bernanke's comments helped ease investors' concerns about a stalemate in Italy after a general election failed to give any party a parliamentary majority, posing the threat of prolonged instability and financial crisis in Europe, and sending the S&P 500 to its worst decline since November 7 in Monday's session.

Bernanke "certainly said everything the market needed to feel in order to get comfortable again," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"The fear is we were going to see a rollover, and the first shot over the bow was what we saw out of Italy yesterday with the elections," Kenny said. "When it came to U.S. markets, we saw some of that bleeding stop because our focus shifted from the Italian political circus to Ben Bernanke."

Gains in homebuilders and other consumer stocks, following strong economic data, lifted the S&P 500, and a 5.7 percent jump in Home Depot to $67.56 boosted the Dow industrials. The PHLX housing sector index <.hgx> rose 3.2 percent.

Economic reports that showed strength in housing and consumer confidence also supported stocks. U.S. home prices rose more than expected in December, according to the S&P/Case-Shiller index. Consumer confidence rebounded in February, jumping more than expected, and new-home sales rose to their highest in 4-1/2 years in January.

However, the central bank chairman also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a "significant headwind" for the economic recovery.

The Dow Jones industrial average <.dji> gained 115.96 points, or 0.84 percent, to 13,900.13 at the close. The Standard & Poor's 500 Index <.spx> rose 9.09 points, or 0.61 percent, to 1,496.94. The Nasdaq Composite Index <.ixic> advanced 13.40 points, or 0.43 percent, to close at 3,129.65.

Despite the bounce, the S&P 500 was unable to move back above 1,500, a closely watched level that was technical support until recently, but could now serve as a resistance point.

The CBOE Volatility Index <.vix> or the VIX, a barometer of investor anxiety, dropped 11.2 percent, a day after surging 34 percent, its biggest percentage jump since August 18, 2011.

The uncertainty caused by the Italian elections continued to weigh on stocks in Europe. The FTSEurofirst-300 index of top European shares <.fteu3> closed down 1.4 percent. The benchmark Italian index <.ftmib> tumbled 4.9 percent.

Home Depot gave the biggest boost to the Dow and provided one of the biggest lifts to the S&P 500 after the world's largest home improvement chain reported adjusted earnings and sales that beat expectations.

Macy's shares gained 2.8 percent to $39.59 after the department-store chain stated it expects full-year earnings to be above analysts' forecasts because of strong holiday sales.

Volume was active with about 7.08 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, above the daily average of 6.48 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 2 to 1, while on the Nasdaq, three stocks rose for every two that fell.

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal; Editing by Jan Paschal)

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Skepticism Surrounds Resumption of Nuclear Talks With Iran

ALMATY, Kazakhstan — Talks between Iran and six world powers over its nuclear program resume here on Tuesday after a break of eight months, but there is a general atmosphere of gloom about their prospects for success, even if narrowly defined.

Since talks in Moscow last June, Iran has continued to increase its stockpile of uranium enriched to 20 percent purity, has begun to install a new generation of centrifuges and has not yet completed an agreement on inspection of suspect military sites with the International Atomic Energy Agency, a deal originally advertised as all but done last May.

With presidential elections in Iran scheduled for June, senior Western diplomats involved with these talks expressed skepticism that Tehran’s chief negotiator, Saeed Jalili, would be willing to make compromises that could be portrayed as weakness at home.

Mr. Jalili is the personal representative of Iran’s supreme leader, Ayatollah Ali Khamenei, considered the dominant voice on the nuclear issue. Ayatollah Khamenei has recently expressed continued mistrust of the United States and its intentions, saying that he would not allow the kind of bilateral talks between Washington and Tehran that most analysts think would be crucial to any resolution.

At the same time, Iran has taken some of its stockpile of 20 percent enriched uranium and converted it into reactor fuel, which cannot easily be turned back. The conversion means that Iran now has less of the uranium needed to make a bomb, reducing the sense of urgency among the six powers, and Israel, that its nuclear program needs to be slowed.

But the total Iranian stockpile of 20 percent enriched uranium has nonetheless grown since November to 167 kilograms from 135 kilograms, according to the most recent I.A.E.A. report — closer to, if still significantly below, the 240 kilograms or 250 kilograms many experts consider necessary, once enriched further, to produce a nuclear weapon.

Iran denies that its nuclear program has any military aim. The six world powers, the so-called P5-plus-1 group, which are the five permanent members of the United Nations Security Council — Britain, China, France, Russia and the United States — and Germany, want Iran to obey Security Council resolutions ordering it to suspend enrichment and open itself up fully to I.A.E.A. inspectors, to ensure that there is no effort to build a nuclear weapon.

To press Iran to comply, the Security Council, the United States and the European Union have created an increasingly painful set of economic sanctions on Iran, as part of a dual-track strategy — negotiations and sanctions. Iran has for its part insisted that as a precondition for serious negotiations, the world should lift all the sanctions and recognize Iran’s “right to enrich,” which Iran asserts it has as a signatory to the Nuclear Nonproliferation Treaty.

The negotiations have been tedious, with Iran appearing to be playing for time, diplomats say. The six powers had asked for a resumption of these talks as early as December, but Iran rejected dates and sites before finally suggesting and agreeing upon Almaty. The choice pleased Western diplomats for its symbolic value, since Kazakhstan, when it became independent of the Soviet Union, freely relinquished the nuclear weapons it had inherited from Moscow. American officials are holding up Kazakhstan, one of the world’s largest producers of uranium and a maker of nuclear fuel, as an example to Iran of the benefits of peaceful nuclear energy and compliance with the I.A.E.A.

President Nursultan Nazarbayev of Kazakhstan appealed to Tehran in a New York Times Op-Ed article in March 2012 to abandon what he suggested was its pursuit of nuclear power status. “Kazakhstan’s experience shows that nations can reap huge benefits from turning their backs on nuclear weapons,” he wrote.

While expectations are low, the six hope to leave here with some momentum and signs of Iranian willingness to engage in what all have agreed should be a reciprocal and step-by-step process of lifting sanctions in return for Iranian actions to comply.

“Iran needs to understand that there is an urgent need to make concrete and tangible progress” in these talks, said Michael Mann, the spokesman for Catherine Ashton, the European Union’s foreign policy chief and chairwoman of the P5-plus-1 group.

Mr. Mann said that the six powers have together “prepared a good and updated offer for the talks which we believe is balanced and a fair basis for constructive talks” and that is “also responsive to Iranian ideas.”

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Norah Jones Snaps Exclusive Oscar Photos for PEOPLE

02/25/2013 at 05:30 PM EST

Norah Jones and Sarah Oda

Courtesy Norah Jones

Talk about a whirlwind day!

Singer Norah Jones shared her first-ever Oscar experience with PEOPLE, snapping exclusive shots as she prepared to walk the big red carpet.

Jones, 33, decided to make it a Hollywood weekend, staying in the Roosevelt Hotel right across from the Dolby Theatre, getting ready with pal Sarah Oda.

After conquering the carpet, Jones took the stage to perform the nominated Best Original Song "Everybody Needs a Best Friend" from Ted.

But the busy singer couldn't even enjoy the evening's parties, as she jetted off to Singapore for work directly from the ceremony.

For more on Norah's night and all the details on Hollywood's biggest night, pick up the new issue of PEOPLE, on newsstands Friday.

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Mediterranean-style diets found to cut heart risks

Pour on the olive oil, preferably over fish and vegetables: One of the longest and most scientific tests of a Mediterranean diet suggests this style of eating can cut the chance of suffering heart-related problems, especially strokes, in older people at high risk of them.

The study lasted five years and involved about 7,500 people in Spain. Those who ate Mediterranean-style with lots of olive oil or nuts had a 30 percent lower risk of major cardiovascular problems compared to those who were told to follow a low-fat diet but who in reality, didn't cut fat very much. Mediterranean meant lots of fruit, fish, chicken, beans, tomato sauce, salads, and wine and little baked goods and pastries.

Mediterranean diets have long been touted as heart-healthy, but that's based on observational studies that can't prove the point. The new research is much stronger because people were assigned diets to follow for a long time and carefully monitored. Doctors even did lab tests to verify that the Mediterranean diet folks were consuming more olive oil or nuts as recommended.

Most of these people were taking medicines for high cholesterol and blood pressure, and researchers did not alter those proven treatments, said one study leader, Dr. Ramon Estruch of Hospital Clinic in Barcelona.

But as a first step to prevent heart problems, "we think diet is better than a drug" because it has few if any side effects, Estruch said. "Diet works."

Results were published online Monday by the New England Journal of Medicine and were discussed at a nutrition conference in Loma Linda, Calif.

People in the study were not given rigid menus or calorie goals because weight loss was not the aim. That could be why they found the "diets" easy to stick with — only about 7 percent dropped out within two years. There were twice as many dropouts in the low-fat group than among those eating Mediterranean-style.

Researchers also provided the nuts and olive oil, so it didn't cost participants anything to use these relatively pricey ingredients. The type of oil may have mattered — they used extra-virgin olive oil, which is minimally processed and richer than regular or light olive oil in the chemicals and nutrients that earlier studies have suggested are beneficial.

The study involved people ages 55 to 80, just over half of them women. All were free of heart disease at the start but were at high risk for it because of health problems — half had diabetes and most were overweight and had high cholesterol and blood pressure.

They were assigned to one of three groups: Two followed a Mediterranean diet supplemented with either extra-virgin olive oil (4 tablespoons a day) or with walnuts, hazelnuts and almonds (a fistful a day). The third group was urged to eat a low-fat diet heavy on bread, potatoes, pasta, rice, fruits, vegetables and fish and light on baked goods, nuts, oils and red meat.

Independent monitors stopped the study after nearly five years when they saw fewer problems in the two groups on Mediterranean diets.

Doctors tracked a composite of heart attacks, strokes or heart-related deaths. There were 96 of these in the Mediterranean-olive oil group, 83 in the Mediterranean-nut group and 109 in the low-fat group.

Looked at individually, stroke was the only problem where type of diet made a big difference. Diet had no effect on death rates overall.

The Mediterranean diet proved better even though its followers ate about 200 calories more per day than the low-fat group did. The study leaders now are analyzing how each of the diets affected weight gain or loss and body mass index.

The Spanish government's health research agency initiated and paid for the study, and foods were supplied by olive oil and nut producers in Spain and the California Walnut Commission. Many of the authors have extensive financial ties to food, wine and other industry groups but said the sponsors had no role in designing the study or analyzing and reporting its results.

Rachel Johnson, a University of Vermont professor who heads the American Heart Association's nutrition committee, said the study is very strong because of the lab tests to verify oil and nut consumption and because researchers tracked actual heart attacks, strokes and deaths — not just changes in risk factors such as high cholesterol.

"At the end of the day, what we care about is whether or not disease develops," she said. "It's an important study."

Rena Wing, a weight-loss expert at Brown University, noted that researchers provided the oil and nuts, and said "it's not clear if people could get the same results from self-designed Mediterranean diets" — or if Americans would stick to them more than Europeans who are used to such foods.

Dr. George Bray of the Pennington Biomedical Research Center in Baton Rouge, La., said he would give the study "a positive — even glowing — comment" and called it "the best and certainly one of the largest prospective dietary trials ever done."

"The data are sufficiently strong to convince me to move my dietary pattern closer to the Mediterranean Diet that they outline," he added.

Another independent expert also praised the study as evidence diet can lower heart risks.

"The risk reduction is close to that achieved with statins," cholesterol-lowering drugs, said Dr. Robert Eckel, a diet and heart disease expert at the University of Colorado.

"But this study was not carried out or intended to compare diet to statins or blood pressure medicines," he warned. "I don't think people should think now they can quit taking their medicines."

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Online:

Journal: http://www.nejm.org

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

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Palestinians Dispute Israeli Finding on Prisoner’s Death

JERUSALEM — The Israeli Health Ministry said Sunday night that preliminary autopsy findings could not determine the cause of death of a 30-year-old Palestinian prisoner, which Israeli officials had at first attributed to a heart attack. But Palestinian officials said the lack of heart damage coupled with bruising on the man’s chest, back and neck suggested that he was tortured during interrogation.

“The signs that appeared during the autopsy show clearly that he was subjected to severe torture that led immediately to his death,” Issa Qaraka, the Palestinian minister of prisoner affairs, said at an evening news conference in Ramallah, after being briefed by a Palestinian pathologist who attended the autopsy of the prisoner, Arafat Jaradat, who died Saturday.

“I hold Israel fully responsible for killing Arafat Jaradat,” added Mr. Qaraka, who earlier on Sunday called for an international investigation into the death. “The Israeli story was forged and full of lies.”

The 4,500 Palestinians in Israeli jails refused meals on Sunday to protest Mr. Jaradat’s death, and hundreds of Palestinians demonstrated in several cities and villages in the West Bank and Gaza Strip.

After days of such demonstrations, which have included violent clashes between Palestinians and Israeli soldiers and settlers, Prime Minister Benjamin Netanyahu’s special envoy, Isaac Molho, sent a message to the Palestinian leadership on Sunday that Israeli officials described as an “unequivocal demand to restore quiet.” Israel also transferred to the Palestinian Authority $100 million in tax revenue it had been withholding.

But a senior Israeli official said the government would not accede to Palestinian requests to release four prisoners who have been on a long-term hunger strike or 123 people who have been detained since before the signing of the Oslo Accords in 1993. “Some of these people are accused of very heinous crimes,” the official said, speaking on the condition of anonymity because he was not authorized to discuss the matter with the news media. “They’re saying that every Palestinian hunger striker should have a get-out-of-jail-free card. You can’t have a system like that. It’s not sustainable.”

After weeks of intensifying protests in solidarity with the hunger strikers, attention turned Sunday to Mr. Jaradat, who relatives said worked at a gas station, was the father of a 4-year-old girl and a 2-year-old boy, and came from a family in which all the men had spent time in Israeli jails. He was arrested last Monday over throwing stones at Israeli cars near a West Bank settlement during November’s conflict between Israel and the Gaza Strip.

Palestinian officials said that Mr. Jaradat admitted the stone-throwing but denied heaving fire bombs. He also confessed to tossing rocks in a 2006 protest, they said. His detention was extended 12 days at a hearing on Thursday, during which his lawyer said that Mr. Jaradat complained of severe pain in his back and neck that he attributed to his interrogation.

“When he was under interrogation, the interrogator told him, ‘Say goodbye to your kids,’ ” Mr. Jaradat’s uncle, Musa, said at a news conference on Sunday morning.

Mr. Qaraka, the prisoner affairs minister, said Sunday night that the autopsy showed “severe” bruising in multiple areas: the right side of the chest, the upper right part of the back, upper left shoulder and along the spine near the bottom of the neck. The pathologist reported no blood clotting or sign of heart damage, he added, but did see two broken ribs, an injury inside the lower lip and blood around the nostrils.

The Palestinian prime minister, Salam Fayyad, issued a statement expressing “deep sorrow and shock” over Mr. Jaradat’s death, saying there was a “need to promptly disclose the true reasons that led to his martyrdom.”

Few issues resonate more deeply in Palestinian society than the plight of prisoners: about 800,000 have been detained in Israeli jails since 1967, according to Palestinian leaders; Mr. Jaradat was the 203rd to die in that time.

Several leaders and commentators warned Sunday that the death, coming amid a severe financial crisis in the West Bank, could lead to extended protests, with most predicting a largely nonviolent movement of civil disobedience like the one Palestinians undertook from 1987 to 1993 rather than the campaign of suicide bombings that began in 2000.

“I know these guys and I see the signs,” Binyamin Ben-Eliezer, a left-leaning member of Israel’s Parliament and a former defense minister, said on Israel Radio.

Alex Fishman, a columnist, wrote on Sunday in the newspaper Yediot Aharanot, “The highway leading to an intifada is wide open,” adding that Mr. Jaradat’s death “is liable to become the opening shot.”

Ghassan Khatib, a Palestinian analyst, pointed out that in addition to mounting outrage over the treatment of prisoners and violence by Israeli settlers, the Palestinian Authority’s failure to issue paychecks on time had prompted teachers to call a strike starting Tuesday; health care workers are already in the middle of a two-week walkout.

Nabil A. Shaath, the Palestinian commissioner for international relations, said in an interview that the West Bank leadership was “doing our best to keep calm” and that “violent confrontation absolutely is not our plan.”

“I don’t know how much people can be contained,” Mr. Shaath said of the Jaradat case. “I don’t think anybody is planning an intifada. The question is how much accidents, incidents like this might lead to an anger that can explode.”

Jodi Rudoren reported from Jerusalem, and Khaled Abu Aker from Ramallah, West Bank. Fares Akram contributed reporting from the Gaza Strip.

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Daniel Radcliffe Dances to Nelly in West Hollywood

Caught in the Act

02/24/2013 at 04:00 PM EST

We're not in Hogwarts anymore.

Daniel Radcliffe made an unexpected appearance at Bootsy Bellows in West Hollywood on Friday night. Arriving with a male pal around 1:40 a.m., the Harry Potter star was "in party mode but really friendly," an onlooker tells PEOPLE.

Wearing a long-sleeved black shirt and jeans, the actor hung out at a table in the club's back VIP room, where he made himself vodka cocktails.

As DJ BeeFowl spun hit after hit, Radcliffe "started singing and dancing at the table to Nelly's 'Country Grammar' and 'Ride Wit Me'," the source adds. "He introduced himself to people at his table casually as 'Dan.' "

As the evening progressed, Girl Meets World star Ben Savage chatted up Radcliffe and the two shared a laugh.

The next song to make Radcliffe dance was Nirvana's "Smells Like Teen Spirit."

The source adds, "He was very happy-go-lucky," and Radcliffe "posed for a few photos and stayed at the club until closing time."

– Jennifer Garcia

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FDA approves new targeted breast cancer drug

WASHINGTON (AP) — The Food and Drug Administration has approved a first-of-a-kind breast cancer medication that targets tumor cells while sparing healthy ones.

The drug Kadcyla from Roche combines the established drug Herceptin with a powerful chemotherapy drug and a third chemical linking the medicines together. The chemical keeps the cocktail intact until it binds to a cancer cell, delivering a potent dose of anti-tumor poison.

Cancer researchers say the drug is an important step forward because it delivers more medication while reducing the unpleasant side effects of chemotherapy.

"This antibody goes seeking out the tumor cells, gets internalized and then explodes them from within. So it's very kind and gentle on the patients — there's no hair loss, no nausea, no vomiting," said Dr. Melody Cobleigh of Rush University Medical Center. "It's a revolutionary way of treating cancer."

Cobleigh helped conduct the key studies of the drug at the Chicago facility.

The FDA approved the new treatment for about 20 percent of breast cancer patients with a form of the disease that is typically more aggressive and less responsive to hormone therapy. These patients have tumors that overproduce a protein known as HER-2. Breast cancer is the second most deadly form of cancer in U.S. women, and is expected to kill more than 39,000 Americans this year, according to the National Cancer Institute.

The approval will help Roche's Genentech unit build on the blockbuster success of Herceptin, which has long dominated the breast cancer marketplace. The drug had sales of roughly $6 billion last year.

Genentech said Friday that Kadcyla will cost $9,800 per month, compared to $4,500 per month for regular Herceptin. The company estimates a full course of Kadcyla, about nine months of medicine, will cost $94,000.

FDA scientists said they approved the drug based on company studies showing Kadcyla delayed the progression of breast cancer by several months. Researchers reported last year that patients treated with the drug lived 9.6 months before death or the spread of their disease, compared with a little more than six months for patients treated with two other standard drugs, Tykerb and Xeloda.

Overall, patients taking Kadcyla lived about 2.6 years, compared with 2 years for patients taking the other drugs.

FDA specifically approved the drug for patients with advanced breast cancer who have already been treated with Herceptin and taxane, a widely used chemotherapy drug. Doctors are not required to follow FDA prescribing guidelines, and cancer researchers say the drug could have great potential in patients with earlier forms of breast cancer

Kadcyla will carry a boxed warning, the most severe type, alerting doctors and patients that the drug can cause liver toxicity, heart problems and potentially death. The drug can also cause severe birth defects and should not be used by pregnant women.

Kadcyla was developed by South San Francisco-based Genentech using drug-binding technology licensed from Waltham, Mass.-based ImmunoGen. The company developed the chemical that keeps the drug cocktail together and is scheduled to receive a $10.5 million payment from Genentech on the FDA decision. The company will also receive additional royalties on the drug's sales.

Shares of ImmunoGen Inc. rose 2 cents to $14.32 in afternoon trading. The stock has ttraded in a 52-wek range of $10.85 to $18.10.

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Investors face another Washington deadline

NEW YORK (Reuters) - Investors face another Washington-imposed deadline on government spending cuts next week, but it's not generating the same level of fear as two months ago when the "fiscal cliff" loomed large.

Investors in sectors most likely to be affected by the cuts, like defense, seem untroubled that the budget talks could send stocks tumbling.

Talks on the U.S. budget crisis began again this week leading up to the March 1 deadline for the so-called sequestration when $85 billion in automatic federal spending cuts are scheduled to take effect.

"It's at this point a political hot button in Washington but a very low level investor concern," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. The fight pits President Barack Obama and fellow Democrats against congressional Republicans.

Stocks rallied in early January after a compromise temporarily avoided the fiscal cliff, and the Standard & Poor's 500 index <.spx> has risen 6.3 percent since the start of the year.

But the benchmark index lost steam this week, posting its first week of losses since the start of the year. Minutes on Wednesday from the last Federal Reserve meeting, which suggested the central bank may slow or stop its stimulus policy sooner than expected, provided the catalyst.

National elections in Italy on Sunday and Monday could also add to investor concern. Most investors expect a government headed by Pier Luigi Bersani to win and continue with reforms to tackle Italy's debt problems. However, a resurgence by former leader Silvio Berlusconi has raised doubts.

"Europe has been in the last six months less of a topic for the stock market, but the problems haven't gone away. This may bring back investor attention to that," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

OPTIONS BULLS TARGET GAINS

The spending cuts, if they go ahead, could hit the defense industry particularly hard.

Yet in the options market, bulls were targeting gains in Lockheed Martin Corp , the Pentagon's biggest supplier.

Calls on the stock far outpaced puts, suggesting that many investors anticipate the stock to move higher. Overall options volume on the stock was 2.8 times the daily average with 17,000 calls and 3,360 puts traded, according to options analytics firm Trade Alert.

"The upside call buying in Lockheed solidifies the idea that option investors are not pricing in a lot of downside risk in most defense stocks from the likely impact of sequestration," said Jared Woodard, a founder of research and advisory firm condoroptions.com in Forest, Virginia.

The stock ended up 0.6 percent at $88.12 on Friday.

If lawmakers fail to reach an agreement on reducing the U.S. budget deficit in the next few days, a sequester would include significant cuts in defense spending. Companies such as General Dynamics Corp and Smith & Wesson Holding Corp could be affected.

General Dynamics Corp shares rose 1.2 percent to $67.32 and Smith & Wesson added 4.6 percent to $9.18 on Friday.

EYES ON GDP DATA, APPLE

The latest data on fourth-quarter U.S. gross domestic product is expected on Thursday, and some analysts predict an upward revision following trade data that showed America's deficit shrank in December to its narrowest in nearly three years.

U.S. GDP unexpectedly contracted in the fourth quarter, according to an earlier government estimate, but analysts said there was no reason for panic, given that consumer spending and business investment picked up.

Investors will be looking for any hints of changes in the Fed's policy of monetary easing when Fed Chairman Ben Bernake speaks before congressional committees on Tuesday and Wednesday.

Shares of Apple will be watched closely next week when the company's annual stockholders' meeting is held.

On Friday, a U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with the iPhone maker, blocking the company from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.

(Additional reporting by Doris Frankel; Editing by Kenneth Barry)

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Papal Conclave Accompanied by Reports of Scandals and Intrigue

Osservatore Romano/Reuters

Pope Benedict XVI, right, spoke to cardinals at the Vatican on Saturday.

VATICAN CITY — As cardinals from around the world begin arriving in Rome for a conclave to elect a successor to Pope Benedict XVI, new shadows have fallen over the delicate transition, which the Vatican fears might influence the vote and with it the direction of the Roman Catholic Church.

In recent days, often speculative reports in the Italian news media — some even alleging gay sex scandals in the Vatican, others focusing on particular cardinals stung by the child sex abuse crisis — have dominated headlines, suggesting fierce internal struggles as prelates scramble to consolidate power and attack enemies in the dying days of a troubled papacy.

The reports, which the Vatican has vehemently denied, touch on some of the most vexing issues of Benedict’s reign, including the child sex abuse crisis and international criticisms of the Vatican Bank’s opaque record-keeping. The recent explosion of bad press — which some Vatican experts say is fed by carefully orchestrated leaks meant to weaken some papal contenders — also speak to Benedict’s own difficulties governing, which analysts say he is trying to address, albeit belatedly, with several high-profile personnel changes.

The drumbeat of scandal has reached such a fever pitch that on Saturday, the Vatican Secretariat of State issued a rare pointed rebuke, calling it “deplorable” that ahead of the conclave there was “a widespread distribution of often unverified, unverifiable or completely false news stories, that cause serious damage to persons and institutions.”

The Vatican compared the news reports to past attempts by foreign states to exert pressure on the papal election, saying the latest efforts to skew the choice of the next pope by trying to shape public opinion were “based on judgments that do not typically capture the spiritual aspect of the moment that the Church is living.”

Benedict had hoped to address at least one scandal with the Feb. 15 appointment of a new head of the Vatican Bank. It is less clear why he reassigned a powerful Vatican diplomatic official to a posting outside Rome, though experts say it diminishes the official’s role in helping steer Vatican policy.

On Feb. 11, Benedict made history by announcing that he would step down by month’s end. He said he was worn down by age and was resigning “in full liberty and for the good of the Church.” The volley of news reports since appeared to underscore the backbiting in the Vatican that Benedict was unable to control, and provided a hint of why he might have decided that someone younger and stronger should lead the church.

At the conclusion of the Vatican’s Lenten spiritual retreat, Cardinal Gianfranco Ravasi, the director of the Pontifical Council for Culture and a papal contender, spoke darkly of the “divisions, dissent, careerism, jealousies” that he said plagued the Vatican hierarchy.

The recent spate of news reports were linked to an earlier scandal in which the pope’s butler stole confidential documents that was considered one of the gravest security breaches in the modern history of the church.

Last week, largely unsourced articles in the center-left daily La Repubblica and the center-right weekly Panorama reported that three cardinals whom Benedict had asked last summer to investigate the leaking of the documents, known as the “VatiLeaks” scandal, had found evidence of Vatican officials who had been put in compromising positions.

The newspapers reported that, after interviewing dozens of people inside and outside the Vatican, the cardinals produced a hefty dossier. “The report is explicit. Some high prelates are subject to ‘external influence’ — we would call it blackmail — by nonchurch men to whom they are bound by ‘worldly’ ties,” La Repubblica wrote.

Vatican experts speculated that prelates eager to undermine opponents during the conclave were behind the leaks to the news media over the last week.

“The conclave is a mechanism that serves to create a dynasty in a monarchy without children, so it’s a complicated operation,” said Alberto Melloni, the director of the John XXIII Center in Bologna and the author of a book on conclaves.

This article has been revised to reflect the following correction:

Correction: February 23, 2013

An earlier version of this article misspelled the last name of a cardinal. His name is Roger M. Mahony, not Roger M. Mahoney.

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From Homeless in the Congo to the Oscars Red Carpet: The Story You Must Read Before Tomorrow

Stylewatch
Style News Now

02/23/2013 at 05:40 PM ET

Courtesy Rachel Mwanza

One of the best stories from this year’s Oscars ceremony isn’t taking place on screen, but rather on the red carpet.

Rachel Mwanza, the 16-year-old star of the Best Foreign Language Film nominee War Witch, will be joining her fellow nominees in L.A. after obtaining a visa from the war-torn Democratic Republic of the Congo just days before the Oscars.

The young actress was “discovered” by the War Witch team from a documentary called Kinshasa Kids, which portrayed the life of Mwanza and other children living on the streets in the Congo.

Since being cast in the film, in which she plays a child kidnapped and enslaved to a life of guerilla warfare, her life has changed dramatically — from having a home and education paid for to winning a best actress award at the Berlin Film Festival.

And since her flight arrived late Friday night, she needed a red carpet-worthy dress quickly, which is where Rent the Runway stepped in.

The designer rental service rushed Mwanza several dresses to wear to the Independent Spirit Awards Saturday, from which she chose Kate Spade New York’s “Tiebreaker” style, adding Chamak by Priya Kakkar bangles and a Judith Leiber clutch.

“I’m so excited to be in Los Angeles. I’ve never seen the ocean before!” Mwanza tells PEOPLE through a translator. “I’m tired from my long trip, but way too excited to rest!”

She shared exclusive shots with PEOPLE (above) of her trying-on process, including shots of her caretaker “Mama” helping her zip into her final dress, and the many jewels Rent the Runway sent her to choose from.

And it didn’t take much to get Mwanza ready for her high-profile debut: “I’m going to work it on the red carpet,” she says. “I’ve been practicing my poses!”

The one disappointment from her trip so far? No sightings of a certain superstar. “Beyoncé is my favorite in the whole world. Why is she not here?!” Mwanza jokes.

Below, see a shot of Mwanza and her War Witch producers Marie-Claude Poulin and Pierre Even at the Independent Spirit Awards, and be sure to watch her film, which will be On Demand beginning Tuesday and in select theaters March 1.

And keep an eye out for her at the Oscars Sunday night, where she’ll be wearing a top-secret dress made for her by an African designer. Can’t wait to see her poses!

Courtesy Rachel Mwanza

–Alex Apatoff

PHOTOS: SEE MORE OSCARS STYLE HERE!

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