Retailers pull stocks lower on poor holiday sales









Retailers pulled stocks lower Wednesday as U.S. markets reopened following the Christmas holiday.

The Dow Jones industrial average fell 49 points to 13,090 as of noon. The Standard & Poor's 500 index fell seven to 1,419 and the Nasdaq composite lost 19 to 2,993.

Trading was quiet. European markets were still closed.

Major U.S. retailers fell following a glum report on U.S. holiday sales. Macy's and Urban Outfitters lost 3 percent. Sears Holdings fell nearly 5 percent.

The MasterCard Advisors SpendingPulse report found that sales of electronics, clothing, jewelry and home goods increased just 0.7 percent in the two months before Christmas compared with the same period last year.

That's well below the growth of 3 to 4 percent growth that analysts had expected and the worst performance since 2008, when spending shrank during the Great Recession. Last year sales climbed 4 to 5 percent during November and December, according to ShopperTrak.

The disappointing holiday sales figures outweighed the latest hopeful indicator on the U.S. housing market.

Home prices rose in most major U.S. cities in October compared with the same month a year ago, according to the latest Standard & Poor's/Case-Shiller national home price index. Sales rose at the same time the supply of available homes declined. The index increased 4.3 percent, the largest year-over-year jump in two and a half years, when a homebuyer tax credit temporarily boosted sales.

Retailers and other consumer discretionary stocks led the market lower. Macy's gave up $1.05 to $36.48, Target fell 73 cents to $58.81, Urban Outfitters fell $1.21 to $38.09 and Sears Holdings fell $1.80 to $38.47. Coach, the luxury handbag maker, sank $3.20 to $54.32, a decline of 6 percent, the biggest in the S&P 500 index.

Traders were also watching to see if a budget agreement materializes in Washington. President Barack Obama cut short his Christmas vacation in Hawaii and was returning to Washington later Wednesday to resume budget talks with Congressional Republicans.

The yield on the benchmark 10-year Treasury note edged down to 1.75 percent from 1.77 percent Monday. Trading was closed Tuesday for the Christmas holiday. Oil prices rose. Benchmark crude gained $2.37 to $90.98 a barrel.

Japanese stocks hit a nine-month high as a pro-business government prepared to assume leadership. The Nikkei 225 index surged 1.5 percent to 10,230.36.

Japan's new prime minister, Shinzo Abe, has put pressure on the Bank of Japan to raise its inflation target. The goal is to extricate the country from two decades of deflation, or declining prices, which has deadened the world's third-largest economy.

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U.S. drone strategy in Yemen is fraught with peril









AL SARRAIN, Yemen — The U.S. drone flew over a cluster of mud houses on a ridge and, according to Yemeni officials, locked onto Adnan Qadhi, a mercurial man of many guises, including radical militant, peace mediator, preacher of violence and army general.


Villagers said Qadhi climbed out of his utility vehicle the night of Nov. 7 to make a cellphone call shortly before the missile struck. His photo — broad face peering from beneath a tilted red beret, stars on his epaulets — now hangs in a small grocery store in a land where farmers work narrow fields below the villas of politicians, tribal leaders and a former president that rise like fortresses on nearby hilltops.


Some here call him a martyr, others a fanatic. But the life and death of Qadhi, a senior officer in the 1st Armored Division who preached holy war in mosques and donned government-issued fatigues, epitomizes the political instability, tribal intrigue, crisscrossing allegiances and radical Islamist passions the United States must sort out when targeting militants in Yemen. At times, Washington risks being drawn into internal conflicts and becoming increasingly despised in the Arab world's poorest nation.





PHOTOS: A new breed of drones


Extremists here have a history of shifting tactics and circumstances. They were pressed into service by the government of former President Ali Abdullah Saleh when needed, then arrested and jailed when the political winds changed. Later they vanished from prisons by the scores, set loose across tribal lands. Yemeni security officials say that era is ending, and they're stepping up military offensives to rout extremists — fighters from Libya, Somalia and other nations, and assassins on motorcycles intent on killing intelligence officials.


At the same time, the Obama administration has intensified airstrikes against the Yemeni group Al Qaeda in the Arabian Peninsula, which plotted in 2009 and 2010 to blow up American airliners. A 2011 drone attack killed Anwar Awlaki, an American-born Muslim preacher and militant recruiter. Weeks later, a U.S. airstrike killed Awlaki's 16-year-old son, who tribesmen and relatives say had no links to terrorism.


The Long War Journal, a website that tracks U.S. drone activity, reports that since 2002, America has launched 57 airstrikes in Yemen, killing 299 militants and 82 civilians. The number of strikes has risen dramatically from four in 2010 to 40 so far this year.


FULL COVERAGE: Drones


"Why do these Americans come and interfere in Yemen?" said Radhwan Dahrooj, the grocer in Al Sarrain. "Why do they kill our people? If they have charges against someone why do they not arrest him and bring him to justice?"


Qadhi was sentenced to prison four years ago for plotting an attack on the U.S. Embassy in Sana, the capital, that killed at least 16 people, no Americans among them. With the help of clansmen and army officials, he was released shortly afterward and resumed his old life: militant and officer in the 1st Armored Division, led by Maj. Gen. Ali Mohsin Saleh Ahmar, a commander described in a 2005 U.S. diplomatic cable as "dealing with terrorists and extremists."


When uprisings against President Saleh swept the country in 2011, the brigade mutinied and battled with competing tribes and security units for control of Sana.


What began as a peaceful revolution against Saleh tipped the nation — already fighting a rebellion in the north and a secessionist movement in the south — into deeper turmoil. Al Qaeda in the Arabian Peninsula and its affiliate Ansar al Sharia exploited the unrest, taking over territory in the south. That gave Qadhi an opportunity to expand his militant ambitions even as he slipped into another of his guises, currying favor with the government by mediating a truce between Yemeni officials and an Al Qaeda faction.


The U.S., which this year has given Yemen $337 million in military and security aid, would not confirm that a drone targeted Qadhi. Yemeni officials and villagers, who heard a plane circling that night, said a U.S. airstrike killed him not far from his home in Beit al Ahmar. Though Qadhi was an active Al Qaeda recruiter and often accused Washington in his sermons of wanting to keep Yemen divided and in chaos, it is not clear what specific danger he was seen as presenting to the United States.


Washington has no precise rules on the criteria for targeting militants with drone strikes. But President Obama has said that an extremist must present an imminent threat to the U.S. or its allies, as Yemen's Al Qaeda branch is considered to do, and that arrest would be impossible.


A former senior U.S. intelligence official said Qadhi's arrest for the 2008 embassy attack would not have been enough to put him on an assassination list. White House counter-terrorism advisor John Brennan has said that militants battling solely to overthrow the government in Sana are not targeted. But Qadhi's 1st Armored Division was certainly a threat to the Yemeni government and the country's stability.


Yemeni officials said the nation's new president, Abdu Rabu Mansour Hadi, approved the strike against Qadhi after determining that an attempt to arrest him in his neighborhood could have led to more deaths. The officials said they were unaware of intelligence linking Qadhi to any active plot.


The danger in the drone program is the potential for U.S. intelligence and airstrikes to be manipulated by Yemenis seeking to weaken the competing clans and political factions. For example, Obama and his top generals felt misled in 2010 when Obama signed off on an airstrike against a senior militant that killed six people, including the deputy governor of Mareb province. The strike was based entirely on intelligence provided by the Yemenis, who had not told the U.S. that the governor would be there, a former senior U.S. official said.


Since Hadi took office in February, the cooperation and trust between the Yemeni government and the U.S. has vastly improved, U.S. and Yemeni officials say.


There are many potential drone targets. For decades, young men have left Yemen to become foot soldiers and bomb makers among the militants in Afghanistan, Algeria, Pakistan, Iraq and Libya. Some of them have come home.


One was Rashad Mohammed Saeed, who left at 15 and became a confidant of Osama bin Laden, fighting beside him in Afghanistan. He returned to Yemen around 2000 and in an interview said he had put aside his weapons to start the Renaissance Union Party, made up of former militants who run for parliament seats.





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Reaction to the death of actor Jack Klugman


Celebrities on Monday reacted to the death of "Odd Couple" star Jack Klugman, who died Monday at age 90. Here are samples of sentiments expressed on Twitter:


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"R.I.P. Jack Klugman, Oscar, Quincy a man whose career spanned almost 50 years. I first saw him on the Twilight Zone. Cool guy wonderful actor." — Whoopi Goldberg.


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"You made my whole family laugh together." — Actor Jon Favreau, of "Swingers," ''Iron Man" and other films.


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"I worked with Jack Klugman several years ago. He was a wonderful man and supremely talented actor. He will be missed" — Actor Max Greenfield, of the "New Girl" on Fox.


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"So sorry to hear that Jack Klugman passed away. I learned a lot, watching him on television" — Dan Schneider, creator of Nickelodeon TV shows "iCarly," ''Drake and Josh" ''Good Burger," ''Drake & Josh."


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Corporate tax rate overhaul may be part of a 'fiscal cliff' deal









WASHINGTON — Amid the wrangling over the so-called fiscal cliff, President Obama and congressional Republicans can agree on something: They want to lower the corporate tax rate.


The U.S. has the highest overall rate of any of the world's developed economies. It took the top spot in March after Japan reduced its rate, mimicking other countries that have lowered taxes to lure new businesses and keep existing companies from leaving.


Negotiations to avert automatic income tax increases and federal spending cuts scheduled to kick in Jan. 1 could provide the impetus for U.S. policymakers to tackle an overhaul of the corporate tax code next year.





The White House wants to put a corporate tax overhaul, along with changes to the individual income tax system, on a fast track as part of any deal to avoid the "fiscal cliff."


The centerpiece of an overhaul would be slashing the 35% corporate tax rate, a goal long sought by corporate executives and lobbyists.


Quiz: How much do you know about the 'fiscal cliff'?


"In the name of global competitiveness, I think that has largely been agreed to," Jim McNerney, chief executive of Boeing Co., said about how both parties view the need for major corporate tax changes.


In February, Obama proposed lowering the federal rate to 25% for manufacturing companies and to 28% for other firms. Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, has been pushing a plan to lower the rate to 25% for all corporations.


In both cases, the rate cuts would be accompanied by the elimination of some of the numerous tax breaks that allow many companies to pay a much lower effective tax rate — and sometimes to avoid paying any corporate taxes at all.


"The administration's position on this is very much in sync with what Republicans say they want, which is a lower rate and a broader base," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and the former chief economist for Vice President Joe Biden.


But there still are some obstacles to a deal.


Some Democrats want to use an overhaul to increase the amount of tax revenue coming from corporations, while Republicans want to keep the amount the same. The White House and congressional Republicans also differ on how the U.S. should treat money earned abroad.


And the business community itself is divided. Many small companies file taxes as individuals. They're opposed to any "fiscal cliff" deal that would raise their rates while giving corporations a rate reduction.


Analysts said the obstacles could be overcome because there is consensus around the broader point that the U.S. needs to bring its corporate tax rate in line with other developed nations.


"Regardless of your political persuasion, it is unquestionably the case that the nominal U.S. corporate tax rate is much higher than that of peer countries," said Edward Kleinbard, a USC law professor and former chief of staff of Congress' Joint Committee on Taxation.


The case for corporate tax reform got a boost when the overall U.S. rate of 39.1%, which includes federal, state and local corporate taxes, became the highest this year among the 34 nations in the Organization for Economic Cooperation and Development. Two decades ago, the U.S. was 13th.


"At one time in the '80s, we had a competitive corporate tax rate," said Dorothy Coleman, vice president of tax and domestic economic policy for the National Assn. of Manufacturers. "We've fallen behind by standing still."


Quiz: The year in business


But the rate in the tax code isn't what many companies pay because of a host of deductions and tax credits. In 2011, the effective corporate tax rate in the U.S. was 29.2%, roughly in line with the 31.9% average of the six other largest developed economies, the Obama administration said.


The White House said that parity does not mean the statutory rate shouldn't be reduced. It simply means that many tax breaks should be eliminated, allowing the rate to be lowered without adding to the deficit.





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Four firefighters shot, two fatally, in western New York









WEBSTER, N.Y. -- A western New York police chief says a gunman who entrapped and shot four volunteer firefighters outside a blazing home is dead.


Webster Police Chief Gerald Pickering says two of the firefighters were killed and two others hospitalized after the ambush on a spit of land on Lake Ontario just northeast of Rochester.


He also says an off-duty police officer who was driving by has injuries from shrapnel. One of the slain firefighters is also a town police lieutenant.











The shooting Monday morning happened in a quiet neighborhood of seasonal and year-round homes.


The West Webster Fire District received a report of a car and house on fire on Lake Road, on a narrow peninsula where Irondequoit Bay meets Lake Ontario, Flynn said.


"When they got there, they started to take on rounds and the initial responders were struck," the sheriff said.


The two wounded firefighters were in critical condition at a Rochester hospital, Flynn said.


The fire appeared from a distance as a pulsating ball of flame glowing against the early morning sky, flames licking into treetops and reflecting on the water, with huge bursts of smoke billowing away in a brisk wind.


Police say four homes in all were destroyed and four damaged by the spreading flames.


Webster, a middle-class, lakeside suburb, now is the scene of violence linked to house fires for two Decembers in a row.


Authorities say that on Dec. 7, 2011,  a 15-year-old boy doused his home with gasoline and set it ablaze, killing his father and two brothers, 16 and 12. His mother and 13-year-old sister escaped with injuries. He is being prosecuted as an adult.





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British retailers start online sales early






LONDON (Reuters) – British retailers have brought forward their Christmas clearance sales online in the hope that shoppers will log on to buy bargains and offset lackluster spending in stores.


Marks & Spencer launched its sale online at midday on Monday, it said on its website, while department store John Lewis said it would cut online prices when its stores close at 1700 GMT. Debenhams has already started its online sale.






Retailers in recent years have started sales online on Christmas Day, ahead of the clearances in stores from Boxing Day, but are increasingly launching their online offers before Christmas after delivery deadlines for the day have passed.


Hard-pressed shoppers have been leaving it later to buy presents in the hope that retailers would slash prices, the British Retail Consortium said.


It was forecasting that 5 billion pounds ($ 8.1 billion) would be spent in the shops on Saturday and Sunday combined, the last weekend before Christmas.


Richard Dodd, the BRC’s head of Media and Campaigns, said weekend trading had met expectations.


Christmas, ultimately once all the final sums are done, will turn out to be acceptable but not exceptional,” he said.


He said the sector expected a modest increase in cash spending against a year go, but not necessarily any significant increase in real terms once inflation was stripped out.


Many British families‘ budgets are stretched, according to a survey from Markit that showed the biggest deterioration in household finances for seven months.


Analyst Howard Archer at IHS Global Insight said the weakening in household finances could not come at a worse time for retailers, and it highlighted why many people appeared to have been careful in their Christmas shopping this year.


“The suspicion has to be that consumers will be especially keen to take advantage of genuine major bargains in the sales to acquire items that they cannot otherwise afford or are reluctant to make at the moment,” he said.


“However, we suspect that people will likely to be more careful in buying – or reluctant to buy – items that they don’t really want or need in the sales.”


($ 1 = 0.6180 British pounds)


(Reporting by Paul Sandle; Editing by Louise Heavens)


Internet News Headlines – Yahoo! News





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Thousands sign US petition to deport Piers Morgan


LONDON (AP) — Tens of thousands of people have signed a petition calling for British CNN host Piers Morgan to be deported from the U.S. over his gun control views.


Morgan has taken an aggressive stand for tighter U.S. gun laws in the wake of the Newtown, Connecticut, school shooting. Last week, he called a gun advocate appearing on his "Piers Morgan Tonight" show an "unbelievably stupid man."


Now, gun rights activists are fighting back. A petition created Dec. 21 on the White House e-petition website by a user in Texas accuses Morgan of engaging in a "hostile attack against the U.S. Constitution" by targeting the Second Amendment. It demands he be deported immediately for "exploiting his position as a national network television host to stage attacks against the rights of American citizens."


The petition has already hit the 25,000 signature threshold to get a White House response. By Monday, it had 31,813 signatures.


Morgan seemed unfazed — and even amused — by the movement.


In a series of Twitter messages, he alternately urged his followers to sign the petition and in response to one article about the petition said "bring it on" as he appeared to track the petition's progress.


"If I do get deported from America for wanting fewer gun murders, are there any other countries that will have me?" he wrote.


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Risks: Pedestrian Accidents More Deadly in Men

More than twice as many men as women die in pedestrian-vehicle accidents. Now researchers have partly determined why.

Writing online last month in the journal Injury Prevention, investigators considered the contribution of three factors: distance walked, number of accidents and fatalities per collision.

Researchers using data from a variety of sources found that men and women walk similar distances and that men are involved in slightly more accidents per mile. Only 1 percent of the difference in death rates is attributable to distance walked, they found, and 20 percent to an increased number of accidents among men.

The rest — 79 percent of the variation — owes to the fact that when there is a collision, men die at roughly twice the rate of women. According to the National Highway Traffic Safety Administration, 4,280 pedestrians died in traffic accidents in 2010, and 2,946 — 69 percent — were men.

Why? No one knows, but the lead author, Dr. Motao Zhu, an assistant professor of epidemiology at West Virginia University, suggested two possibilities: “Maybe males are more likely to cross roads with speed limits higher than 50 miles per hour,” he said. “Also, males may be more likely to be impaired by alcohol and drugs. Most people know it’s not safe to drive drunk, but it’s not safe to walk drunk either.”

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GM recalls Chevrolet Colorado and GMC Canyon trucks


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Raging fire guts Kabul market









KABUL, Afghanistan -- Firefighters battled through the night to contain a raging fire that swept through a market in the Afghan capital.

No injuries were reported, but the blaze destroyed hundreds of stores and millions of dollars worth of merchandise, Afghan police and firefighters said at the scene. 


Dealers at the neighboring currency exchange, the city’s largest, said they evacuated cash, computer equipment and records from their shops as the flames approached during the night. But in the morning, the market was jammed with people haggling over thick stacks of notes as smoke billowed overhead.





Col. Mohammed Qasem, general director of the Kabul fire department, said he suspected an electrical short was to blame for the fire. 


Gas canisters used to heat the stores propelled the flames, along with the cloth and clothing sold by many of the vendors, Qasem said. “It made it very big in a short time.”


Firefighters from the Afghan defense department and NATO forces were sent to assist. But the city’s notorious traffic and the market’s narrow lanes made it difficult for responders to maneuver their vehicles, Qasem said.


Abdulrahman, who like many Afghans has only one name, squatted near a fire truck with his head in his hands  as responders aimed a hose at the blackened ruins of a building still smoldering at noon Sunday, more than 12 hours after the fire broke out.


He said the building had contained three shops that he owned and a warehouse full of glassware, crockery and kitchen utensils. 


“I lost everything,” he said.


Shirali Khan complained that police hadn't allowed him to remove the goods from his four clothing stores.


“They thought we were all robbers,” he said.  “There’s only ashes left.”


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Special correspondent Hashmat Baktash contributed to this report.






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