S&P 500 finishes at 5-year high on economic data

NEW YORK (Reuters) - The benchmark Standard & Poor's 500 index ended at a five-year high on Friday, lifted by reports showing employers kept up a steady pace of hiring workers and the vast services sector expanded at a brisk rate.
The gains on the S&P 500 pushed the index to its highest close since December 2007 and its biggest weekly gain since December 2011.
Most of the gains came early in the holiday-shortened week, including the largest one-day rise for the index in more than a year on Wednesday after politicians struck a deal to avert the "fiscal cliff."
The Dow Jones industrial average <.dji> gained 43.85 points, or 0.33 percent, to 13,435.21. The Standard & Poor's 500 Index <.spx> rose 7.10 points, or 0.49 percent, to 1,466.47. The Nasdaq Composite Index <.ixic> edged up 1.09 points, or 0.04 percent, to 3,101.66.
For the week, the S&P gained 4.6 percent, the Dow rose 3.8 percent and the Nasdaq jumped 4.8 percent to post their largest weekly percentage gains in more than a year.
The CBOE Volatility index <.vix>, a measure of investor anxiety, dropped for a fourth straight session, giving the index a weekly decline of nearly 40 percent, its biggest weekly fall ever. The close of 13.83 on the VIX marks its lowest level since August.
In Friday's economic reports, the Labor Department said non-farm payrolls grew by 155,000 jobs last month, slightly below November's level. Gains were distributed broadly throughout the economy, from manufacturing and construction to healthcare.
Also serving to boost equities was data from the Institute for Supply Management showing U.S. service sector activity expanding the most in 10 months.
With the S&P 500 index at a five-year closing high, analysts said any gains above the index's intraday high near 1,475 in September may be harder to come by.
"We are getting to a point where we need a strong catalyst, which could be earnings, it could be three months of good economic data, it could be a variety of things," said Adam Thurgood, managing director at HighTower Advisors in Las Vegas, Nevada.
"What is going on right now is this conflicting view of fundamentals look pretty good and improving, and then you've got these negative tail risks that could blow everything up," Thurgood said.
He referred to "a fiscal superstorm brewing" of issues still left unresolved in Washington, including tough federal budget cuts and the need to raise the government's debt ceiling all within a couple of months.
The rise in payrolls shown by the jobs data did not make a dent in the U.S. unemployment rate still at 7.8 percent.
A Reuters poll on Friday of economists at Wall Street's top financial institutions showed that most expect the Fed in 2013 to end the program with which it bought Treasury debt in an effort to stimulate the economy.
A drop in Apple Inc shares of 2.6 percent to $528.36 kept pressure on the Nasdaq.
Adding to concerns about Apple's ability to produce more innovative products, rival Samsung Electronics Co Ltd is expected to widen its lead over Apple in global smartphone sales this year with growth of 35 percent. Market researcher Strategy Analytics said Samsung had a broad product lineup.
Eli Lilly and Co was among the biggest boost's to the S&P, up 3.7 percent to $51.56 after the pharmaceuticals maker said it expects its 2013 earnings to increase to $3.75 to $3.90 per share, excluding items, from $3.30 to $3.40 per share in 2012.
Fellow drugmaker Johnson & Johnson rose 1.2 percent to $71.55 after Deutsche Bank upgraded the Dow component to a "Buy" from a "Hold" rating. The NYSEArca pharmaceutical index <.drg> climbed 0.6 percent.
Shares of Mosaic Co gained 3.3 percent to $58.62. Excluding items, the fertilizer producer's quarterly earnings beat analysts' expectations, according to Thomson Reuters I/B/E/S.
Volume was modest with about 6.07 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly below the 2012 daily average of 6.42 billion.
Advancing stocks outnumbered declining ones on the NYSE by 2,287 to 701, while on the Nasdaq, advancers beat decliners 1,599 to 866.

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Stocks gain, pushing the S&P 500 to 5-year high

The Standard & Poor's 500 closed at its highest level in five years Friday after a report showed that hiring held up in December, giving stocks an early lift.
The S&P 500 finished up 7.10 points at 1,466.47, its highest close since December 2007.
The index began its descent from a record close of 1,565.15 in October 2007, as the early signs of the financial crisis began to emerge. The index bottomed out in March 2009 at 676.53 before staging a recovery that has seen it more than double in value and move to within 99 points of its all-time peak.
The remarkable recovery has come despite a halting recovery in the U.S. economy as the Federal Reserve provided huge support to the financial system, buying hundreds of billions of dollars' worth of bonds and holding benchmark interest rates near zero. Last month the Fed said it would keep rates low until the unemployment rate improved significantly.
"Without the Federal Reserve doing what they did for the last few years, there would be no way you'd be near any of these levels in the index," said Joe Saluzzi, co-head of equity trading at Themis Trading. "I would call this the Fed-levitating market."
The Dow Jones industrial average finished 43.85 points higher at 13,435.21. It gained 3.8 percent for the week, its biggest weekly advance since June. The Nasdaq closed up 1.09 point at 3,101.66.
Stocks have surged this week after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the "fiscal cliff." The law passed late Tuesday night averted that outcome, which could have pushed the economy back into recession.
The Labor Department said U.S. employers added 155,000 jobs in December, showing that hiring held up during the tense fiscal negotiations in Washington. It also said hiring was stronger in November than first thought. The unemployment rate held steady at 7.8 percent.
The jobs report failed to give stocks more of a boost because the number of jobs was exactly in line with analysts' forecasts, said JJ Kinahan, chief derivatives trader for TD Ameritrade.
"The jobs report couldn't have been more in line," Kinahan said. "The market had more to lose than to gain from it."
Among stocks making big moves, Eli Lilly and Co. jumped $1.84, or 3.7 percent, to $51.56 after saying that its earnings will grow more than Wall Street expects, even though the drugmaker will lose U.S. patent protection for two more product types this year.
Walgreen Co., the nation's largest drugstore chain, fell 61 cents, or 1.6 percent, to $37.18 after the company said that a measure of revenue fell more than analysts had expected in December, even as prescription counts continued to recover.
Stocks may also be benefiting as investors adjust their portfolios to favor stocks over bonds, said TD Ameritrade's Kinahan. A multi-year rally in bonds has pushed up prices for the securities and reduced the yield that they offer, in many cases to levels below company dividends.
Goldman Sachs reaffirmed its view that stocks "can be an attractive source of income," and warned that there is a risk that bonds may fall. In a note to clients, the investment bank said that an index of AAA rated corporate bonds offers a yield of just 1.6 percent, less than the S&P 500's dividend yield of 2.2 percent.
The 10-year Treasury note fell, pushing its yield higher. The yield on the 10-year note fell 2 basis points to 1.91 percent. The note's yield has now climbed 52 basis points since falling to its lowest in at least 20 years in July.
Other notable stock moves;
— Accuray Inc. plunged $1.37, or 20 percent, to $5.41 after the radiation oncology equipment company reported weak sales and said it would cut 13 percent of its staff.
— Lululemon, a yoga apparel maker, dropped $3.14, or 4.2 percent, to $71.95 after Credit Suisse predicted slowing momentum and downgraded its stock.
— Finish Line Inc., an athletic footwear and clothing company, fell $1.58, or 8.3 percent, to $17.18 after it reported a small loss after sneaker trends changed and customers didn't take to its new web site launched in November. Analysts had forecast a profit.

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US troops arrive in Turkey for Patriot missiles

ANKARA, Turkey (AP) — U.S. troops have started to arrive in Turkey to man Patriot missiles meant to protect the NATO ally from potential Syrian warheads, the U.S. military said Friday.
The United States, Germany and the Netherlands are each deploying two batteries of the U.S.-built defense system to boost ally Turkey's air defenses against any spillover from Syria's nearly 2-year civil war. The Patriot systems are expected to become operational later this month.
The Stuttgart, Germany-based U.S. European Command said in a statement that U.S. personnel and equipment had started arriving at Turkey's southern Incirlik Air Base. Some 400 personnel and equipment from the U.S. military's Fort Sill, Oklahoma-based 3rd Battalion were to be airlifted to Turkey over the coming days, while additional equipment was expected to reach Turkey by sea later in January, the Command said.
NATO endorsed Turkey's request for the Patriots on Nov. 30 after several Syrian shells landed on Turkish territory.
Last month, NATO said the Syrian military has continued to fire Scud-type missiles, although none had hit Turkish territory, and said the alliance was justified in deploying the anti-missile systems in Turkey. Ankara is supporting the Syrian opposition and rebels and is providing shelter to Syrian refugees.
More than 1,000 American, German and Dutch troops are to be based in Turkey to operate the batteries. NATO said the Americans will be based at Gaziantep, 50 kilometers (31 miles) north of Syria. The Germans will be based at Kahramanmaras, located about 100 kilometers (60 miles) north of the Syrian border; the Dutch at Adana, about 100 kilometers (66 miles) west of the border.
Navy Vice Adm. Charles Martoglio, the Command's deputy chief, reiterated that the Patriots' deployment is for defensive purposes only and would not support a no-fly zone "or any offensive operation," in Syria, according to the Command's statement.
"Turkey is an important NATO ally and we welcome the opportunity to support the Turkish government's request in accordance with the NATO standing defense plan," it quoted Martoglio as saying.
Syria is reported to have an array of artillery rockets, as well as medium-range missiles — some capable of carrying chemical warheads. These include Soviet-built SS-21 Scarabs and Scud-B missiles, originally designed to deliver nuclear warheads.
Last month, a top military commander from Iran — a key Syrian ally — warned Turkey against stationing the NATO systems on its territory, saying such a move risks conflict with Syria.

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Church of England ends ban on gay bishops

The Church of England has lifted a ban on gay male clergy who live with their partners from becoming bishops on condition they pledge to stay celibate, threatening to reignite an issue that splits the 80-million-strong global Anglican community.
The issue of homosexuality has driven a rift between Western and African Anglicans since a Canadian diocese approved blessings for same-sex couples in 2002 and U.S. Anglicans in the Episcopal Church appointed an openly gay man as a bishop in 2003.
The Church of England, struggling to remain relevant in modern Britain despite falling numbers of believers, is already under pressure after voting narrowly last November to maintain a ban on women becoming bishops.
The church said the House of Bishops, one of its most senior bodies, had ended an 18-month moratorium on the appointment of gays in civil partnerships as bishops.
The decision was made in late December but received little attention until the church confirmed it on Friday.
Gay clergy in civil partnerships would be eligible for the episcopate - the position of bishop - if they make the pledge to remain celibate, as is already the case for gay deacons and priests.
"The House has confirmed that clergy in civil partnerships, and living in accordance with the teaching of the Church on human sexuality, can be considered as candidates for the episcopate," the Bishop of Norwich Graham James said.
"The House believed it would be unjust to exclude from consideration for the episcopate anyone seeking to live fully in conformity with the Church's teaching on sexual ethics or other areas of personal life and discipline," he added in a statement on behalf of the House of Bishops.
The church teaches that couples can only have sex within marriage, and that marriage can only be between a man and a woman.
CONSERVATIVE OUTCRY
Britain legalised civil partnerships in 2005, forcing the church to consider how to treat clergy living in same-sex unions.
The church ruled that a civil partnership was not a bar to a clerical position, provided the clergy remained celibate, but failed to specifically address the issue of when the appointment was of a bishop.
In July 2011 the church launched a review to deal with this omission, at the same time imposing the moratorium on nominating gays in such partnerships as bishops while the study was conducted.
The review came a year after a gay cleric living in a civil partnership was reportedly blocked from becoming a bishop in south London.
It was the second setback for the cleric, Jeffrey John, who would already have become a bishop in 2003 but was forced to withdraw from the nomination after an outcry from church conservatives.
Rod Thomas, chairman of the conservative evangelical group Reform, said the church's move on gay bishops would provoke further dispute.
"It will be much more divisive than what we have seen over women bishops. If you thought that was a furore, wait to see what will happen the first time a bishop in a civil partnership is appointed," he told BBC television.

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UK police charge Nepalese man with torture

 British police said Friday they have charged a serving colonel in the Nepalese army with two counts of torture allegedly committed during the Himalayan nation's civil war. The case has touched off a diplomatic spat, with the Nepalese government summoning the U.K. ambassador in Kathmandu to protest.
Kumar Lama, 46, was arrested Thursday at a residential address in the English town of St. Leonards-on-Sea, about 70 miles (115 kilometers) southeast of London. Lama was charged Friday with intentionally "inflicting severe pain or suffering" on two separate individuals as a public official — or person acting in official capacity.
Britain's Metropolitan Police said the charges relate to one incident that allegedly occurred between April 15 and May 1, 2005 and another that allegedly occurred between April 15 and Oct. 31, 2005 at the Gorusinghe Army Barracks in Nepal. Lama is due to appear at London's Westminster Magistrates' Court on Saturday, police added.
British authorities claim "universal jurisdiction" over serious offenses such as war crimes, torture, and hostage-taking, meaning such crimes can be prosecuted in Britain regardless of where they occurred.
Scotland Yard has said that the arrest did not take place at the request of Nepalese authorities. Britain's Press Association reported that Nepalese officials said Lama is serving as a military observer under the United Nations Mission in southern Sudan and was on vacation in London.
Britain's Foreign Office confirmed that Nepal's government summoned the U.K. ambassador in Kathmandu because it was upset over the arrest, but declined to comment further.
Thousands died and thousands more were injured or tortured during Nepal's civil war, a decade-long conflict that ended in 2006.

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UK police charge Nepali colonel accused of torture

LONDON/KATHMANDU (Reuters) - British police charged a Nepali army colonel on Friday with two counts of torture during the Himalayan nation's decade-long civil war, despite the Nepali government's demanding his immediate release.
Nepal summoned the British ambassador earlier on Friday to express its "strong objection" to Kumar Lama's detention.
Rights groups accuse both the security forces and former Maoist rebels of committing abuses including torture during the conflict that killed more than 16,000 people.
The Maoists ended the conflict in 2006 under a peace deal with the government, won elections four years ago and are now heading a coalition ruling the young Himalayan republic.
London's Metropolitan Police said it had arrested Lama, 46, in the southern town of St. Leonards-on-Sea and charged him with committing acts of torture in 2005.
Media reports said he was detained while on vacation from a U.N. mission in Sudan.
The police statement accused Lama of intentionally inflicting "severe pain or suffering" on Janak Bahadur Raut between April 15 and May 1, 2005, and on Karam Hussain between April 15 and October 31, 2005.
Lama is due to appear in court in London on Saturday.
"We express strong objection to this mistake and urge that it be corrected ... and Lama be released," Foreign Minister Narayan Kaji Shrestha told reporters in Kathmandu after the colonel's arrest.
Human Rights Watch said the arrest sent a warning to those accused of serious crimes that they cannot hide from the law.
"The UK's move to arrest a Nepali army officer for torture during Nepal's brutal civil war is an important step in enforcing the U.N. Convention against Torture," Brad Adams, Asia director of Human Rights Watch, said in a statement.

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Northern Irish fighting rages on as rioters branded "a disgrace"

BELFAST (Reuters) - Northern Irish police came under attack by pro-British loyalists on Friday as the province's first minister branded rioters "a disgrace" and said they were playing into the hands of rival militant nationalists.
Rioting began a month ago after a vote by mostly nationalist pro-Irish councillors to end the century-old tradition of flying the British flag from Belfast City Hall every day unleashed the most sustained period of violence in the city for years.
On Friday, police said officers came under attack in the east of the city by masked mobs hurling petrol bombs, rocks and fireworks.
A number of officers were injured, several arrests were made and police deployed water cannon to control a crowd that at one point swelled to 400 protesters.
First Minister Peter Robinson, leader of the pre-eminent Protestant group, the Democratic Unionist Party, called the decision to take down the flag "ill-considered and provocative" but said the attacks must end.
"The violence visited on (police) is a disgrace, criminally wrong and cannot be justified," said Robinson, whose party shares power with deputy first minister and ex-Irish Republican Army commander Martin McGuinness' Sinn Fein Party
"Those responsible are doing a grave disservice to the cause they claim to espouse and are playing into the hands of those dissident groups who would seek to exploit every opportunity to further their terror aims."
More than 40 police officers were injured in the initial wave of fighting, which stopped over Christmas, only to resume on Thursday when a further 10 police officers were hurt as the community divisions were exposed once more.
At least 3,600 people were killed during Northern Ireland's darkest period as Catholic nationalists seeking union with Ireland fought British security forces and mainly Protestant loyalists determined to remain part of the United Kingdom.
Anti-British Catholic dissident groups, responsible for the killing of three police officers and two soldiers since 2009, have so far not reacted violently to the flag protests, limiting the threat to Northern Ireland's 15-year-old peace.
Another demonstration calling for reinstating the Union Flag will be held outside City Hall on Saturday while some loyalists have pledged to hold a protest in Dublin the following Saturday.

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Earnings from McDonald's, Microsoft sink stocks

NEW YORK (AP) -- Poor earnings reports from three companies in the Dow Jones industrial average — Microsoft, General Electric and McDonalds — sent indexes down sharply Friday, marking a sour end to an otherwise strong week in the stock market.
McDonald's led a broad drop in the Dow, falling 3 percent. The Dow was down 151 points at 13,397 shortly after noon.
"I'm concerned about corporate earnings, but I'm not alarmed yet," said Doug Cote, chief market strategist at ING Investment Management in New York.
Cote cautions that it's still early in reporting season, but what's worrying is that companies have reported an overall drop in earnings so far. "And once you get one quarter of negative earnings, it's a precursor," he said. "It's the cockroach theory: if you find one, there's probably many more."
The Standard & Poor's 500 sank 17 points to 1,440 and the Nasdaq composite dropped 52 points to 3,020. All 10 industry groups in the S&P 500 fell, led by materials and technology stocks.
McDonald's profit sank as a strong dollar hurt international results, which account for two-thirds of its business. The fast-food giant's stock lost $3.51 to $89.35.
Microsoft's income fell 22 percent as PC sales took a dive and as troubles in Europe took their toll. Its stock lost 67 cents to $28.82.
General Electric, another economic bellwether, fell 3 percent. The company reported stronger profits early Friday but its revenue missed Wall Street's expectations. Orders for new equipment and services sank, mainly because wind turbine orders have fallen because a key U.S. federal subsidy for wind power expires at the end of the year.
GE's stock lost 60 cents to $22.21.
Analysts currently expect companies in the S&P 500 to post their worst earnings results since the third quarter of 2009, according to S&P Capital IQ. Banks and consumer discretionary companies are projected to report the best growth. Analysts expect companies dealing in metals and other materials to report the worst results, followed by energy companies.
But it's technology companies like IBM, Intel and Google whose weak results have grabbed the most attention so far.
Weak earnings from Google and a rise in claims for unemployment benefits helped pull the stock market lower Thursday. That snapped a four-day run of gains for the Dow. Google fell again Friday, giving up $14.14 to $680.86.
The Dow is still up 0.6 percent for the week. The S&P 500 up is up 0.8 percent.
In other Friday trading, the yield on the 10-year Treasury note slipped to 1.77 percent from 1.83 percent late Thursday.
Among other stocks making big moves, Chipotle Mexican Grill plunged 14 percent after the burrito chain forecast that revenue growth would slow sharply next year. The stock had been a favorite among investors thanks to super-fast growth in recent years. The stock fell $41.32 to $244.61.

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McDonald's Canada Reveals How They Make Famous Fries

McDonald's Canada is at it again, demystifying their french fry recipe "from the farm to all the way to the fryer."
In their new behind-the-scenes video, Scott Gibson, manager of the company's supply chain, takes customer questions on their world-famous fries.
Gibson addresses the first question asking whether or not the potatoes used by the fast food restaurant are real. Standing in the middle of the Levesque farm with farmer Angelo Levesque, the two discuss how the potatoes are harvested and sorted at the farm. Then they are then brought to McCain, the company's fries supplier, to be prepped before heading to stores.
SLIDESHOW: Fast Food Ads vs. Reality: How Do They Size Up?
Mario Dupuis, production manager at McCain, describes how they prepare the fries by washing the potatoes to remove the rocks and the dirt and put them through a "peeling system."
Afterwards, they are cut and blanched "to remove the natural sugars from the strips, this will prevent some variation in the color once we cook the product," said McCain.
Next they are washed in a textural solution to give it the "nice even coat we see in the restaurants," said McCain, adding they also use an ingredient on the strips to prevent the fries from greying or oxidizing. Afterwards, they are then dried and fried for 45 to 60 seconds. Finally, they are frozen, packaged and shipped to stores.
Once in stores, the fries are deep-fried in 100 percent vegetable oil. They are salted with about 1 tablespoon of salt per four orders of medium fries. For those concerned about salt intake, Gibson suggests that customers can order their fries without the salt.

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Apple’s New iPad Mini Is Pricey but That Won’t Deter Fans: TechCrunch’s John Biggs

It's officially here: The iPad mini, the subject of endless speculation and rumors over the past year, made its debut Tuesday at the California Theater in San Jose, Calif. The iPad mini starts at $329 and hits store shelves Nov. 2. Pre-sales begin Oct. 26. It boasts a 7.9-inch display, weighs 0.68 pounds and is 7.2mm thick. The design closely resembles the iPod Touch and comes in both black and white.
Related: Get Ready for a Big Week in Tech: Apple & Facebook Earnings, Mini iPad, Windows 8 & More
As is the case with all Apple products, there is an option to pay up for more hardware. Here are the price points:
$329 for 16GB
$429 for 32GB
$529 for 64GB
In mid-November Apple will roll out the Wi-fi and 4G mini for $459 for 16GB, $559 for 32GB, and $659 for 64GB.
The iPad mini screen measures 1,024x768, the same resolution as the iPad 2. It also includes a dual-core A5 processor, a front-facing FaceTime HD camera, Apple's "Lightning" connector and a 5-megapixel back camera. A fully charged iPad mini will get 10 hours of battery life.
Apple (AAPL) stock was trading nearly two percent lower after the iPad mini presentation.
Related: Why Apple's Stock is Dropping
John Biggs, East Coast editor of TechCrunch, says the Apple event lacked the shock and awe of previous product announcements.
"Everybody was expecting an iPad mini and we got an iPad mini," he says in an interview with The Daily Ticker. "To see an iPad mini pop up is no huge surprise."
Biggs says the new mini may be pricey but it would not deter Apple devotees and tech "dorks" from adding to their Apple collections. The smaller screen will attract consumers who use tablet devices for reading -- "it's Apple's e-reader" -- Biggs says, and the new mini is not likely to cut into sales of the larger iPad versions, which still feature bigger screens and a higher resolution display.
The starting price for the iPad mini is $130 more than the Kindle Fire HD and Nexus 7 — Apple's two main competitors in the e-reader space. Most Apple insiders and analysts were expecting a lower entry point for the mini, says CNET's Brian Tong, and consumer sticker shock could drag down sales expectations. The mini's price would have been even higher if Apple made it with a retina display, he adds.
"It will sell well but won't break records," Tong says. "It will sell because it's Apple. Never underestimate the Apple consumer."
Microsoft will unveil its first tablet device, Surface, next week.
Related: Microsoft Launches Its Own Tablet--and Admits Apple Was Right
Biggs says the Surface's size and user-face are more conducive to typing, an important feature for some consumers. The tablet market may be expanding but there's still only one winner, according to Biggs — Apple. "You're getting the premium product," he says.

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