Wall Street drops again, data raises growth concerns

NEW YORK (Reuters) - U.S. stocks fell on Thursday and were on track for their biggest two-day decline since November as weak data suggested expectations for economic growth were overly optimistic.

The two-day decline marked the U.S. stock market's first sustained pullback this year. The Standard & Poor's 500 is up 5.2 percent so far this year. The benchmark index has climbed for seven straight weeks, putting it near five-year highs.

In the latest economic data, initial claims for unemployment benefits rose more than expected last week while the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. mid-Atlantic region fell in February to minus 12.5, the lowest in eight months.

"The Philly Fed report was troublingly weak, and adds to concerns about whether growth will remain up," said Brad Sorensen, director of market and sector analysis at Charles Schwab in Denver. "The only growth we're seeing is sluggish."

On Wednesday, the S&P 500 and the Nasdaq posted their worst daily declines of the year after the minutes from the Federal Reserve's most recent meeting sparked concerns that the central bank may rein in its economic stimulus measures.

"The upside momentum in markets appears to be coming to an end as we consolidate recent gains," said Adam Sarhan, chief executive at Sarhan Capital in New York. "If the S&P breaks under its 50-day moving average, something more serious could be in store."

The S&P 500 would need to fall 1.9 percent to reach that level of 1,473.58.

Other reports showed consumer prices were flat in January while existing-home sales edged higher and left the inventory of homes at the lowest level in 13 years.

Wal-Mart Stores Inc shares gained 2.5 percent to $70.94 and helped curb the Dow's decline after the world's largest retailer reported earnings that beat expectations, though early February sales were sluggish.

The Dow Jones industrial average <.dji> was down 70.03 points, or 0.50 percent, at 13,857.51. The Standard & Poor's 500 Index <.spx> was down 11.23 points, or 0.74 percent, at 1,500.72. The Nasdaq Composite Index <.ixic> was down 36.50 points, or 1.15 percent, at 3,127.92.

The benchmark S&P 500 index has dropped 1.9 percent over the past two sessions, the biggest two-day decline since November.

Wall Street will soon face another test with the upcoming debate in Washington over the automatic across-the-board spending cuts put in place as part of a larger congressional budget fight. Those cuts, set to kick in on March 1 unless lawmakers agree on an alternative, are expected to depress economic growth.

Semiconductor stocks ranked among the weakest of the day, pressuring the Nasdaq as the Philadelphia Semiconductor index <.sox> fell 1.8 percent. Intel Corp fell 2.2 percent to $20.27 while Advanced Micro Devices lost 4.8 percent to $2.57 as the S&P's biggest percentage decliner.

The semiconductor sector has performed well so far in 2013, rising 8.4 percent.

In company news, shares of supermarket operator Safeway Inc jumped 13.4 percent to $22.83 and ranked as the S&P 500's top percentage gainer after the company reported earnings that beat expectations.

In contrast, shares of VeriFone Systems Inc tumbled nearly 40 percent to $19.28 after the credit-card swipe machine maker forecast first- and second-quarter profits well below expectations.

Of the 427 companies in the S&P 500 that have reported results so far, 69.3 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data through Thursday morning.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.9 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Berry Petroleum Co jumped 17.3 percent to $45.25 after oil and gas producer Linn Energy LLC said it would buy the company in an all-stock deal valued at $4.3 billion, including debt. Linn Energy shares advanced 1.9 percent to $37.33.

(Editing by Kenneth Barry and Jan Paschal)

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Boiko Borisov, Prime Minister of Bulgaria, Submits Resignation

Prime Minister Boiko Borisov of Bulgaria submitted his government’s resignation on Wednesday after a tumultuous week of public anger over rising electricity prices, corruption and worsening living standards that ignited mass protests nationwide and led to bloody clashes with the police on Tuesday night.

“The people gave us power, and today we are returning it,” Mr. Borisov said on Wednesday morning in Parliament, according to local news reports.

The speaker of Parliament, Tsetska Tsacheva, said the resignation of the prime minister and his cabinet would not be effective until Parliament put it to a vote on Thursday. Since Mr. Borisov controls Parliament, acceptance would seem sure.

The protests — the biggest in at least 15 years — were triggered by electricity price increases and corruption scandals, including one over the nominee to head the state electricity regulatory commission, which sets rates. She was accused of selling cigarettes illegally online and her nomination was later withdrawn.

Tempers were inflamed further when Bulgaria’s finance minister Simeon Djankov, the architect of painful fiscal probity, stepped down on Monday. Rather than allaying anger, analysts said the resignation was greeted by the public as an admission that the government’s economic policies, had not worked.

Tens of thousands of Bulgarians took to the streets across the country to protest. Some yelled “Mafia!” Others burned their utility bills.

While the country’s fiscal prudence has helped it to avoid having to seek an international bailout like Hungary or Romania, analysts said that rising unemployment and weak growth, coupled with wage and pension freezes and tax increases, had mobilized the country’s increasingly disgruntled middle class, who felt themselves squeezed during the financial crisis.

Opposition political parties had been trying to exploit public anger over the government’s austerity measures as general elections planned for July approached. Elections are now expected in April or May, and analysts said the opposition Socialist party was expected to benefit from the turmoil.

Daniel Smilov, program director at the Center for Liberal Strategies, a political research organization, in the Bulgarian capital, Sofia, said that Bulgarians were disillusioned that the overthrow of Communism in 1989 and the country’s subsequent democratization had not delivered the expected prosperity.

Bulgaria has struggled to shed a reputation for lawlessness and corruption. It remains poor, with an average monthly wage of just $480, the lowest in the European Union.

“What we are seeing is the result of a general distrust in government and the political system,” Mr. Smilov said, noting than protests had engulfed wealthy as well as poorer regions of the country. “These are not the bottom layers of society, but people in the middle strata who been hit hardest by the financial crisis. They fear they are losing their status, and they might become poor very fast.”

Trying to appease the protesters, the prime minister said on Tuesday that the license of the Czech utility CEZ, which provides power to many residential customers in Bulgaria, would be withdrawn. Mr. Borisov cited beatings of protesters Tuesday by the police as one reason.

“Every drop of blood for us is a stain,” he said. “I can’t look at a Parliament surrounded by barricades, that’s not our goal, neither our approach, if we have to protect ourselves from the people.”

Mr. Smilov said that after the Parliament accepted the government’s resignation, President Rosen Plevneliev would then appoint a caretaker government. Mr. Borisov said his party would not participate in an interim government.

Mr. Borisov’s resignation could signal the political demise of one of the country’s most colorful political figures. A former karate instructor, bodyguard, fireman and mayor of Sofia with a shaved head and a talk-tough approach, Mr. Borisov was once viewed as being so invincible that Bulgarians called him “Batman.”

As the owner of a private security company, he provided security services for Todor Zhivkov, the former Communist leader of Bulgaria. Mr. Borisov was then the personal bodyguard for Simeon Saxe-Coburg-Gotha, the child czar who returned to be elected prime minister in 2001.

Mr. Borisov rose to oversee the police at the Interior Ministry, before being elected mayor of Sofia and then becoming prime minister in 2009.

“Mr. Borisov is a typical populist leader who came to power promising to take revenge against the transition on behalf of the poor,” says Andrei Raichev, a political analyst at Gallup International in Sofia. “Now the people realize that they were lied to.”

Mr. Raichev said that no one could predict how the public will react to the resignation. “We could even reach the absurd situation that the protests continue against no one,” he said. “Which means that they are against everyone.”

This article has been revised to reflect the following correction:

Correction: February 20, 2013

An earlier version of this article and an accompanying photo caption misspelled the given name of Bulgaria’s prime minister. He is Boiko Borisov, not Boyko.

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Amy Poehler Is the Latest Star to Get Bangs - Who Should Be Next?

Stylewatch
Style News Now

02/20/2013 at 01:30 PM ET

Landov, AKM-GSI, BEImages, Wireimage

We’ve filled out our Oscar ballots and predicted the gowns, now the PEOPLE StyleWatch team is ready to talk hair.

Bold bangs are sizzling hot in Hollywood right now: Amy Poehler’s just the latest star to step out with fringe, which is why we’re hoping for a big bang debut at the Oscars. Now we just have to decide who will follow in the footsteps of Michelle Obama, LeAnn Rimes and Poehler, all who have gotten sassy chops in the last month. Here are our front runners:

Amanda Seyfried: The actress has had these long, layered golden locks since her Mean Girls days, so we’re ready for her to spice it up a bit. Seyfried, call your stylist and request some side-swept bangs. They’re flattering, flirty and not-too-frightening for a first-timer … and let’s be honest, you wouldn’t mind stealing some of that Les Mis spotlight from Anne Hathaway come Sunday night.

Jessica Chastain: Chastain already gives us major mane envy, which is why the star is a prime candidate for a blunt bangs cut à la Jessica Biel. Just think how chic she’d look if she wore her tresses straight with serious statement stunners — and since she’s been sporting dramatic hairstyles throughout awards season, we bet she’d dare to try something similar at the Oscars.

Bradley Cooper: Given that he’s one of the sexiest men alive, we’re not telling him to change much, but a little cleanup to his already face-framing locks could do wonders for Cooper‘s floppy hairdo.

Who do you think should try bangs at the Oscars? Vote below and sound off in the comments!

–Jennifer Cress

PHOTOS: SEE MORE STAR HAIRSTYLES!

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Obama admin. tackles colonoscopy confusion

WASHINGTON (AP) — The new health law requires that most insurance plans cover all costs for preventive care, including colon cancer screening.

But it didn't turn out to be that simple.

Many patients ended up with a bill when the doctor performing the colonoscopy removed precancerous growths known as polyps. Why the bill? Because a preventive screening had turned into a procedure.

Now the Obama administration is trying to straighten out the confusion: Polyp removal is part of preventive care, and therefore free of charge to the patient.

Health plans also must cover an expensive genetic test for breast cancer if a woman's doctor orders it. And the lowly aspirin for heart trouble is covered too, if prescribed.

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Wall Street drops as energy sector drags

NEW YORK (Reuters) - U.S. stocks fell on Wednesday, pressured by a drop in energy shares as investors found few reasons to buy equities following a rally that has propelled indexes close to all-time highs.

Stocks were volatile after minutes from the U.S. Federal Reserve suggested the central bank may have to slow or stop buying assets before seeing a pickup in hiring, raising the prospect of an earlier end to quantitative easing.

"What Wall Street wants to hear is an absolute sign that the Fed will continue with QE for the indefinite future. When it says we may end it faster, that just raises the uncertainty and the market hates that," said Todd Schoenberger, managing partner at Landcolt Capital in New York.

Energy companies' shares were among the weakest, hurt by disappointing results in the sector and a 2.3 percent drop in crude oil prices. The Energy Select Sector SPDR exchange-traded fund fell 1.2 percent.

The Dow Jones industrial average <.dji> slipped 36.65 points, or 0.26 percent, to 13,999.02. The Standard & Poor's 500 Index <.spx> dropped 9.50 points, or 0.62 percent, to 1,521.44. The Nasdaq Composite Index <.ixic> lost 24.63 points, or 0.77 percent, to 3,188.96.

In the energy sector, Newfield Exploration tumbled 7.7 percent to $25.19 while Devon Energy Corp dropped 4.6 percent to $57.75. Both companies posted fourth-quarter losses, with Devon hurt as it wrote down the value of its assets by $896 million because of weak natural gas prices.

Equities have been strong recently. The day's modest decline was the largest for the S&P 500 since February 4. The index has jumped about 7 percent so far this year and is on track for its eighth straight week of gains.

However, many of those weekly gains have been slight, with equities trading within a narrow range for the past few weeks, suggesting valuations may be stretched at current levels.

"The market seems very tired and listless, and investors are prone to take profits now as they wait for the music to stop," said Matt McCormick, money manager at Bahl & Gaynor in Cincinnati.

Earlier in the day, unconfirmed rumors that a troubled hedge fund was selling assets added some downward pressure to the market. The rumors appeared to be unfounded.

"I heard the chatter about a hedge fund liquidating things today but how big, I don't know. Certainly, it sparks concern," said Michael James, senior trader at Wedbush Morgan in Los Angeles.

Housing shares also declined, pressured by weaker-than-expected results at Toll Brothers Inc and a drop in groundbreaking to build new U.S. homes, also known as housing starts, in January.

Toll Brothers' stock fell 6.1 percent to $34.66, but is up about 7 percent so far this year, building on a jump of nearly 60 percent in 2012. The Dow Jones U.S. Home Construction index <.djushb> lost 4.3 percent.

"Valuations appear a bit high at these levels, and if I was in a name that had seen a huge run, I'd want to take some chips off the table," said McCormick, who helps oversee about $8.2 billion in assets.

The Dow's losses were limited by Boeing Co , up 1.2 percent at $75.56 after a source told Reuters that the company had found a way to fix battery problems on its grounded 787 Dreamliner jets. Concerns over that line have weighed on Boeing recently, contributing to a 2 percent drop in the stock's price in January.

In economic data released on Wednesday, permits for future home building rose in January to a 4 1/2-year high while a separate report showed wholesale prices rose last month for the first time in four months. The U.S. Producer Price Index rose in January for the first time in four months.

Shares of OfficeMax Inc fell 8.5 percent to $11.87 while Office Depot slid 18.5 percent to $4.09 as the companies announced a $1.2 billion merger agreement. The shares had surged in Tuesday's session after a source said a deal would be announced. Rival Staples Inc fell 5.5 percent to $13.84 and ranked as one of the S&P 500's biggest decliners.

According to Thomson Reuters data through Tuesday morning, of the 405 companies in the S&P 500 that have reported results so far, 71 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.7 percent, according to the data, exceeding a forecast for a 1.9 percent gain at the start of the earnings season.

(Additional Reporting by Ryan Vlastelica; Editing by Jan Paschal)

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Maoists Block Deal to Break Nepal’s Long Political Deadlock

NEW DELHI — Nepal’s major political parties failed on Tuesday to complete an expected agreement to settle a years-long political standoff, after Maoists insisted that the accord include amnesty for past crimes.

The amnesty issue derailed a tentative deal reached on Monday to appoint as interim prime minister the chief justice of the country’s supreme court, Khil Raj Regmi, to lead the country until elections in June. Now it appears that the wrangling will continue indefinitely, worsening the paralysis of the country’s civic functions.

Nepal has been trying to establish a working representative democracy since 2008, when a constituent assembly was elected to replace the former monarchy. But the assembly has been unable to draw up a constitution or settle on when or how to hold further elections. Maoists, who fought a long civil war against the monarchy, now control the most important government posts, but the ethnic, caste, religious, ideological and regional differences that permeate Nepalese society have made even the most basic political agreements impossible.

Meanwhile, the country’s judiciary has been arresting former Maoist fighters from the bitter civil war, which cost at least 13,000 lives, prompting the Maoist party to call for amnesty and for a less punitive reconciliation process, such as a parliamentary committee that the party could influence.

“Amnesty is still under consideration,” said Devendra Poudel, adviser to the present Maoist prime minister, Baburam Bhattarai. “Instead of addressing one or two issues separately, why not deal with them all in the same package?”

But the country’s other political parties and civil-society organizations have insisted on a process in which war criminals are jailed.

“The Maoists are very much afraid of the regular judiciary of this country,” said Rajendra Dahal, a spokesman for President Ram Baran Yadav, a leader of the centrist Nepalese Congress party. “But until there is an agreement, they will control the government,” he said of the Maoists. “So they benefit from the standoff.”

Mr. Dahal said that the president had welcomed the tentative deal to put the chief justice in charge temporarily. “The president’s single mission is to have elections,” he said early Tuesday. “Any way the parties get some consensus in the goal of having elections, the president will support.”

By late Tuesday evening, however, the optimism surrounding the tentative agreement had faded.

Kanak Mani Dixit, a civil rights activist and commentator, said he was worried that the Maoists supported the deal in hopes of discrediting the Supreme Court, which he said is the last civic institution in Nepal with any credibility.

“The Maoists agreed because they have already destroyed every other important institution of the state,” Mr. Dixit said.

Mr. Regmi was expected to be appointed to a three-month term as prime minister, following which he would return to the court. If Mr. Regmi had been unable to oversee elections in that time, a new agreement would have had to be reached.

The Maoist leader, Mr. Bhattarai, rejected all previous proposals to replace him, and other political parties have refused to allow elections while Mr. Bhattarai and his allies hold the crucial levers of government, saying that his oversight would make the elections unfair.

In the meantime, basic civil functions in Nepal have begun to fail one after another, and the country’s economy, never robust, has stalled. As a result, Nepalese have been emigrating to neighboring countries in large numbers, to the exasperation particularly of India, where many of the migrants settle.

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Maggie Simpson's The Longest Daycare Is Nominated for an Oscar

By Patrick Gomez

02/19/2013 at 02:30 PM EST

Maggie Simpson may not be much of a talker on her FOX cartoon, but this year she plans on making a statement on the red carpet.

The youngest member of The Simpsons clan stars in the Oscar-nominated animated short film The Longest Daycare and the eternal infant is looking for fans to help choose her dress for her big night out Sunday. Scroll through all of her proposed looks in our carousel of images above.

PEOPLE has a sneak peek at Simpson's three potential red carpet looks: a sparkly, red, backless stunner; a purple, tiered, strapless gown; and a leg-barring black number reminiscent of Angelina Jolie's 2012 Oscars dress. All can be paired with complementary pacifiers, of course.

Fans will be able to vote starting Tuesday for their favorite look. The short can be viewed below:

The 85th annual Academy Awards will air live on Sunday, Feb. 24, on ABC from the Dolby Theatre in Hollywood.

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UK patient dies from SARS-like coronavirus

LONDON (AP) — A patient being treated for a mysterious SARS-like virus has died, a British hospital said Tuesday.

Queen Elizabeth Hospital in Birmingham, central England, said the coronavirus victim was also being treated for "a long-term, complex unrelated health problem" and already had a compromised immune system.

A total of 12 people worldwide have been diagnosed with the disease, six of whom have died.

The virus was first identified last year in the Middle East. Most of those infected had traveled to Qatar, Saudi Arabia, Jordan or Pakistan, but the person who just died is believed to have caught it from a relative in Britain, where there have been four confirmed cases.

The new coronavirus is part of a family of viruses that cause ailments including the common cold and SARS. In 2003, a global outbreak of SARS killed about 800 people worldwide.

Health experts still aren't sure exactly how humans are being infected. The new coronavirus is most closely related to a bat virus and scientists are considering whether bats or other animals like goats or camels are a possible source of infection.

Britain's Health Protection Agency has said while it appears the virus can spread from person to person, "the risk of infection in contacts in most circumstances is still considered to be low."

Officials at the World Health Organization said the new virus has probably already spread between humans in some instances. In Saudi Arabia last year, four members of the same family fell ill and two died. And in a cluster of about a dozen people in Jordan, the virus may have spread at a hospital's intensive care unit.

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India Ink: Image of the Day: Feb. 18

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Jerry Buss, Lakers Owner, Dies at 80

By Maggie Coughlan

02/18/2013 at 02:10 PM EST

Jerry Buss, the owner of the Los Angeles Lakers, has died, the Associated Press reports. He was 80.

Buss had been hospitalized for cancer, but died of kidney failure at Cedars-Sinai Medical Center in Los Angeles on Monday, said his assistant, Bob Steiner.

Paying $67.5 million when he first bought the the Lakers from Jack Kent Cooke (in a deal that also included the N.H.L.'s L.A. Kings, the L.A. Forum sports arena and Cooke’s California ranch), Buss saw their value increase to $1 billion, according to a Forbes ranking in January, reports The New York Times. That made the team second in the N.B.A. to the New York Knicks’ $1.1 billion valuation.

During his 32 years with the Lakers, Buss's team made the N.B.A finals 16 times (through 2011), winning 10 titles between 1980 and 2010.

At just 24, Buss earned a Ph.D. in chemistry and later had careers in aerospace and real estate development.

Buss is survived by his six children.

As news of his death traveled, athletes and celebrities took to Twitter to share their condolences.

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