Wall Street Week Ahead: Holiday "on standby" as clock ticks on cliff

NEW YORK (Reuters) - The last two weeks of December are traditionally quiet for stocks, but traders accustomed to a bit of time off are staying close to their mobile devices, thanks to the "fiscal cliff."

Last-minute negotiations in Washington on the so-called fiscal cliff - nearly $600 billion of tax increases and spending cuts set to take effect in January that could cause a sharp slowdown in growth or even a recession - are keeping some traders and analysts from taking Christmas holidays because any deal could have a big impact on markets.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

"Next week is going to be a Capitol Hill-driven market."

With talks between President Barack Obama and House Speaker John Boehner at an apparent standstill, it was increasingly likely that Washington will not come up with a deal before January 1.

Gordon Charlop, managing director at Rosenblatt Securities in New York, will also be on standby for the holiday season.

"It's a 'Look guys, let's just rotate and be sensible" type of situation going on," Charlop said.

"We are hopeful there is some resolution down there, but it seems to me they continue to walk that political tightrope... rather than coming up with something."

Despite concerns that the deadline will pass without a deal, the S&P 500 has held its ground with a 12.4 percent gain for the year. For this week, though, the S&P 500 fell 0.3 percent.

BEWARE OF THE WITCH

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

"We could see some heavy selling as there is going to be a lot of re-establishing of positions, reallocation of assets before the year-end," Kinahan said.

RETHINKING APPLE

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, if Congress and the White House don't come up with a solution to avert the fiscal cliff. That possibility could give investors an incentive to unload certain stocks in some tax-related selling by December 31.

Some market participants said tax-related selling may be behind the weaker trend in the stock price of market leader Apple . Apple's stock has lost a quarter of its value since it hit a lifetime high of $705.07 on September 21.

On Friday, the stock fell 3.8 percent to $509.79 after the iPhone 5 got a chilly reception at its debut in China and two analysts cut shipment forecasts. But the stock is still up nearly 26 percent for the year.

"If you owned Apple for a long time, you should be thinking about reallocation as there will be changes in taxes and other regulations next year, although we don't really know which rules to play by yet," Kinahan said.

But one indicator of the market's reduced concern about the fiscal cliff compared with a few weeks ago, is the defense sector, which will be hit hard if the spending cuts take effect. The PHLX Defense Sector Index <.dfx> is up nearly 13 percent for the year, and sits just a few points from its 2012 high.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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News Analysis: China Stays Beside North Korea, a Buffer Against the U.S.

BEIJING — Even though North Korea ignored China’s appeal not to test its new longer-range missile, the new leadership here appears intent on remaining a steadfast supporter of its wayward neighbor because it considers the North a necessary buffer against the United States and its allies.

Analysts said that China’s overriding fear was of a collapse of the hard-line Communist government in Pyongyang, which could lead to the reunification of the Korean Peninsula under a government in Seoul allied with the United States. China, they said, would consider an American presence on its doorstep untenable.

But China’s unyielding support of Kim Jong-un has a serious downside, they added, because it may lead to a result nearly as unpalatable: efforts by the United States and its regional allies Japan and South Korea to contain China.

“It stirs up regional security,” said Zhu Feng, a professor of international relations at Peking University who favors reducing support for North Korea. Without naming the United States, he added that the missile launching “facilitates China-bashers to work on hard-line policies to contain China, or just balance China.”

Obama administration officials were clearly exasperated this week with China’s inability to rein in Mr. Kim, saying that they were considering a stronger military presence in the Asia-Pacific region.

Beneath the official tolerance of North Korea, a debate about the wisdom of remaining loyal to such a world outlier and its defiant young leader simmers among analysts who strive to influence China’s foreign policy.

China runs the risk, Dr. Zhu said, of being bunched together with North Korea as one of “the two bad guys.”

“I feel very frustrated,” Dr. Zhu added. “At least we should distance ourselves from North Korea. The reality is, as long as North Korea can’t change their behavior, then peace and stability on the peninsula will be increasingly vulnerable.”

China has twice asked Mr. Kim, who inherited the leadership of North Korea after the death of his father at the end of last year, not to proceed with missile tests, and twice he has rebuffed the entreaties. Shortly after he came to power, a Chinese vice minister of foreign affairs, Fu Ying, visited Pyongyang to warn him not to conduct a test. In April, Mr. Kim went ahead anyway with a rocket launching, which fizzled. Last month, Li Jianguo, a member of the Politburo, visited North Korea to again urge restraint.

Despite their displeasure, China’s leaders see little choice but to put up with such indignities.

The slight pique expressed by the Foreign Ministry on Wednesday was not a signal that China would alter its course, the analysts said, or back tougher sanctions at the United Nations.

The official reaction was “very hesitant,” said Jin Canrong, a professor of international relations at Renmin University in Beijing.

After the missile test, Washington immediately started pushing for deeper sanctions at the United Nations and for a tightening of existing sanctions that China agreed to after earlier rocket launchings.

“China will not support a resolution; it will favor a president’s statement,” said Cai Jian, the deputy director of the Center for Korean Studies at Fudan University in Shanghai. A president’s statement at the United Nations is considered a much weaker form of condemnation than sanctions.

A major reason for not backing new sanctions is the fear that they would provoke North Korea to test another nuclear weapon, a far worse prospect than the launching of an unarmed rocket like the one on Wednesday, said Jonathan D. Pollack, a North Korea expert at the Brookings Institution in Washington.

“The North Koreans demurred from a third nuclear test in April, very likely under major Chinese pressure,” Dr. Pollack said.

In 2006 and 2009, North Korea tested a nuclear weapon soon after launching missiles. Dr. Pollack said a repeat of that action would pose a major test to the Obama administration, as well as to the new Chinese leader, Xi Jinping.

“Pyongyang may have decided now is the time to put down a major marker as Obama’s second term approaches and as South Korea elects a new president,” he said.

Beyond the hard strategic questions for the new Chinese leadership, the concerns among ordinary Chinese about why China bankrolls such a ruthless government should be considered, several Chinese analysts said.

“Internally in China, many voices are questioning all this spending on rocket launches instead of on improving people’s livelihoods,” said Jia Qingguo, an expert at Peking University.

The South Korean government recently estimated that North Korea had spent $2.8 billion to $3.2 billion since 1998 on its missile program, said Stephan M. Haggard, a professor of Korea-Pacific studies at the University of California, San Diego. That amount of money would have bought enough corn to feed the country for about three years, Dr. Haggard said.

The debate within China about its relationship with North Korea stems from the unusual nature of the alliance. Fundamentally, the two governments do not like each other and harbor deep mutual suspicions, said Stephanie T. Kleine-Ahlbrandt, the China and Northeast Asia project director of the International Crisis Group in Beijing. When North Korean officials visited Singapore this year to get new ideas for Mr. Kim’s government, leaders in Beijing — who have sent teams of their own to Singapore to study its softer form of one-party leadership — became very nervous, she said.

The larger fear is that any fundamental change in North Korea could send waves of refugees into China, who would be considerably more difficult to absorb than people of other nationalities on China’s borders.

“For the Chinese,” Ms. Kleine-Ahlbrandt said, “there are fewer problems keeping North Korea the way it is than having a collapse.”

Bree Feng contributed research.

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The Hobbit Is a Great Adventure That Takes Too Long to Arrive

By Alynda Wheat

12/14/2012 at 10:00 AM EST

    

The elegance of The Hobbit J.R.R. Tolkien's rousing tale of Bilbo Baggins helping a passel of dwarves reclaim their mountain home is that the epic spans just a few hundred pages.

Moviegoers, on the other hand, could have first breakfast, second breakfast and elevenses in the nearly three hours it takes director Peter Jackson to deliver the first third of this trilogy in The Hobbit: An Unexpected Journey. (Part 2 is slated for next year.)

It helps that the cast is so engaging, particularly Martin Freeman as Bilbo, a kind, fussy sort torn between the comforts of his divinely cozy hobbit hole and the promise of adventure.

And what adventure it is!

Bilbo, wizard Gandalf (Ian McKellen) and the dwarves take on Middle-Earth beasts in glorious 3D battles. (Note: Viewers prone to vertigo should see the film in the old-school 24 frames-per-second format.)

Like The Lord of the Rings, The Hobbit is violent, but there are sillier bits meant to appeal to kids. Whether they can stick it out through elevenses is another matter.

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Fewer health care options for illegal immigrants

ALAMO, Texas (AP) — For years, Sonia Limas would drag her daughters to the emergency room whenever they fell sick. As an illegal immigrant, she had no health insurance, and the only place she knew to seek treatment was the hospital — the most expensive setting for those covering the cost.

The family's options improved somewhat a decade ago with the expansion of community health clinics, which offered free or low-cost care with help from the federal government. But President Barack Obama's health care overhaul threatens to roll back some of those services if clinics and hospitals are overwhelmed with newly insured patients and can't afford to care for as many poor families.

To be clear, Obama's law was never intended to help Limas and an estimated 11 million illegal immigrants like her. Instead, it envisions that 32 million uninsured Americans will get access to coverage by 2019. Because that should mean fewer uninsured patients showing up at hospitals, the Obama program slashed the federal reimbursement for uncompensated care.

But in states with large illegal immigrant populations, the math may not work, especially if lawmakers don't expand Medicaid, the joint state-federal health program for the poor and disabled.

When the reform has been fully implemented, illegal immigrants will make up the nation's second-largest population of uninsured, or about 25 percent. The only larger group will be people who qualify for insurance but fail to enroll, according to a 2012 study by the Washington-based Urban Institute.

And since about two-thirds of illegal immigrants live in just eight states, those areas will have a disproportionate share of the uninsured to care for.

In communities "where the number of undocumented immigrants is greatest, the strain has reached the breaking point," Rich Umbdenstock, president of the American Hospital Association, wrote last year in a letter to Obama, asking him to keep in mind the uncompensated care hospitals gave to that group. "In response, many hospitals have had to curtail services, delay implementing services, or close beds."

The federal government has offered to expand Medicaid, but states must decide whether to take the deal. And in some of those eight states — including Texas, Florida and New Jersey — hospitals are scrambling to determine whether they will still have enough money to treat the remaining uninsured.

Without a Medicaid expansion, the influx of new patients and the looming cuts in federal funding could inflict "a double whammy" in Texas, said David Lopez, CEO of the Harris Health System in Houston, which spends 10 to 15 percent of its $1.2 billion annual budget to care for illegal immigrants.

Realistically, taxpayers are already paying for some of the treatment provided to illegal immigrants because hospitals are required by law to stabilize and treat any patients that arrive in an emergency room, regardless of their ability to pay. The money to cover the costs typically comes from federal, state and local taxes.

A solid accounting of money spent treating illegal immigrants is elusive because most hospitals do not ask for immigration status. But some states have tried.

California, which is home to the nation's largest population of illegal immigrants, spent an estimated $1.2 billion last year through Medicaid to care for 822,500 illegal immigrants.

The New Jersey Hospital Association in 2010 estimated that it cost between $600 million and $650 million annually to treat 550,000 illegal immigrants.

And in Texas, a 2010 analysis by the Health and Human Services Commission found that the agency had provided $96 million in benefits to illegal immigrants, up from $81 million two years earlier. The state's public hospital districts spent an additional $717 million in uncompensated care to treat that population.

If large states such as Florida and Texas make good on their intention to forgo federal money to expand Medicaid, the decision "basically eviscerates" the effects of the health care overhaul in those areas because of "who lives there and what they're eligible for," said Lisa Clemans-Cope, a senior researcher at the Urban Institute.

Seeking to curb expenses, hospitals might change what qualifies as an emergency or cap the number of uninsured patients they treat. And although it's believed states with the most illegal immigrants will face a smaller cut, they will still lose money.

The potential impacts of reform are a hot topic at MD Anderson Cancer Center in Houston. In addition to offering its own charity care, some MD Anderson oncologists volunteer at a county-funded clinic at Lyndon B. Johnson General Hospital that largely treats the uninsured.

"In a sense we've been in the worst-case scenario in Texas for a long time," said Lewis Foxhall, MD Anderson's vice president of health policy in Houston. "The large number of uninsured and the large low-income population creates a very difficult problem for us."

Community clinics are a key part of the reform plan and were supposed to take up some of the slack for hospitals. Clinics received $11 billion in new funding over five years so they could expand to help care for a swell of newly insured who might otherwise overwhelm doctors' offices. But in the first year, $600 million was cut from the centers' usual allocation, leaving many to use the money to fill gaps rather than expand.

There is concern that clinics could themselves be inundated with newly insured patients, forcing many illegal immigrants back to emergency rooms.

Limas, 44, moved to the border town of Alamo 13 years ago with her husband and three daughters. Now single, she supports the family by teaching a citizenship class in Spanish at the local community center and selling cookies and cakes she whips up in her trailer. Soon, she hopes to seek a work permit of her own.

For now, the clinic helps with basic health care needs. If necessary, Limas will return to the emergency room, where the attendants help her fill out paperwork to ensure the government covers the bills she cannot afford.

"They always attended to me," she said, "even though it's slow."

___

Sherman can be followed on Twitter at https://twitter.com/chrisshermanAP .

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP .

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Wall Street steady on "cliff" apprehension, Apple drops

NEW YORK (Reuters) - Stocks were little changed on Friday, with the Nasdaq weighed by a 3-percent drop in shares of tech giant Apple, amid investor worries about a lack of progress by politicians in ongoing fiscal negotiations.

Apple was down 2.8 percent at $515.11 as UBS cut its price target to $700 from $780. The stock has tumbled in recent months for a variety of reasons, including investors locking in profits ahead of scheduled capital-gains increases for next year.

President Barack Obama and House of Representatives Speaker John Boehner held a "frank" meeting Thursday to try to break an impasse in negotiations over the "fiscal cliff," tax hikes and spending cuts set to kick in early in 2013.

"The uncertainty that (the fiscal talks) is creating is basically holding the markets hostage in the short term," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds, in New York.

Frustration has mounted over the lack of progress in the discussions, with market participants' worries reflected in a 0.6 percent drop in the S&P 500 on Thursday. Investors are concerned that going over the cliff could tip the economy back into recession. While a deal is expected to ultimately be reached, a drawn-out debate - like the one seen over 2011's debt ceiling - can erode confidence.

Still, expectations of an eventual agreement have helped the S&P 500 bounce back over the last month, and on Wednesday, the index hit its highest intraday level since late October. For the year, the S&P has advanced more than 12 percent.

"For the end of this year, I wouldn't expect a lot of big decisions by investors," Garcia-Amaya said. "It's been a fairly good year for equities and for that reason a lot of people don't want to be a hero going into the end of the year."

The Dow Jones industrial average <.dji> edged up 11.05 points, or 0.08 percent, at 13,181.77. The Standard & Poor's 500 Index <.spx> slipped 2.49 points, or 0.18 percent, to 1,416.96. The Nasdaq Composite Index <.ixic> lost 12.62 points, or 0.42 percent, to 2,979.54.

Best Buy Co Inc slid more than 15 percent to $11.90 after it agreed to extend the deadline for the company's founder to make bid.

Consumer prices fell in November for the first time in six months, indicating U.S. inflation pressures were muted. A separate report showed manufacturing grew at its swiftest pace in eight months in December.

Meanwhile, data out of China was encouraging for its key trading partners, including the U.S., and for the prospects for global growth. It showed manufacturing in the world's second-largest economy grew at its fastest pace in 14 months in December.

(Editing by Bernadette Baum)

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Gérard Depardieu Called ‘Pathetic’ for Leaving France

PARIS — Gérard Depardieu, one of France’s best-known actors, has been accused by the country’s Socialist government of lacking patriotism after he moved to Belgium apparently in a bid to avoid the taxes for which France is also renowned.

Mr. Depardieu’s departure for Néchin, a village just over the border, has drawn mockery and outrage from politicians and the news media at a time of economic belt-tightening, stagnating growth and rising taxes. On Wednesday, Prime Minister Jean-Marc Ayrault weighed in, calling Mr. Depardieu’s choice “rather pathetic.”

“He’s a great star, everyone loves him as an artist,” Mr. Ayrault told the France 2 television channel on Wednesday, but “to pay a tax is an act of solidarity, a patriotic act.”

Mr. Depardieu, 63, is among a handful of celebrities and wealthy business executives who have left France since the May election of President François Hollande, a Socialist.

To reduce the budget deficit and the country’s debt, Mr. Hollande has put in place a 75 percent marginal tax rate for incomes above 1 million euros, or $1.3 million — a largely symbolic measure that will affect only a few thousand individuals, he has said — and has announced additional taxes that are expected to raise 20 billion euros next year.

While Mr. Depardieu has not commented publicly about what led to his move, it is widely suspected that he was attracted more by the Belgian tax code than, say, the weather. (Belgium, wedged between France and the Netherlands, is less sunny and warm than soggy and gray.) Residents there pay no wealth tax and no capital gains tax on stock sales. In France, residents are required to pay a 0.25 percent wealth tax on assets valued at more than 1.3 million euros; those with more than 3 million euros in assets pay twice that.

Mr. Depardieu will by no means be the only Frenchman in Néchin, where he has reportedly bought a home.

Néchin’s mayor, Daniel Senesael, told the French news media that 27 percent of residents are French.

Bernard Arnault, the billionaire chief executive of the luxury group LVMH, was pilloried in the news media in September when it was revealed that he had requested Belgian citizenship.

Mr. Arnault said the request was not for tax purposes, but the left-leaning newspaper Libération featured a front-page headline that read, in polite translation, “Beat it, rich jerk!” (LVMH promptly pulled its advertising from the newspaper and Mr. Arnault filed a lawsuit charging the paper with public insult.)

On Tuesday, the newspaper featured Mr. Depardieu on its front page, along with an editorial deploring his “absence of moral sense” and insisting that the flight of the rich represents “a danger for democracy and solidarity.”

For months there have been reports of wealthy French people taking up residence outside the country, particularly in London, whose mayor, Boris Johnson, has called Mr. Hollande’s tax plan “tyranny.”

French celebrities have left the country for tax reasons for years, though, and it is not altogether clear how politicians and the news media select the ones they vilify, or how countries choose who among them is worthy of citizenship.

The singer Johnny Hallyday, a major French star whose popularity has lasted for decades, has been based in Switzerland for years and once requested Belgian citizenship. He still plays to sellout crowds in France. The actor Alain Delon lives in Switzerland as well, but serves in the nation of his birth as the head of the jury for the Miss France competition.

Appearing on a popular television talk show this week, Mr. Delon was asked for an assessment of Mr. Depardieu’s choice. He smiled and said, “Let’s be serious, I can’t allow myself to make a judgment.”

Everyone laughed.

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Paul McCartney Goes Grunge & 12-12-12 Concert for Sandy Relief's Top Five Moments

By Maggie Coughlan

12/13/2012 at 11:00 AM EST

Mick Jagger and Kanye West

Larry Busacca/Getty; Dave Allocca/Startraks

Let's hear it for New York!

On Wednesday night, some of music's biggest stars came together for the 12-12-12 Concert for Sandy Relief at Madison Square Garden.

The concert – which included performances from Bruce Springsteen, Paul McCartney, Alicia Keys, Kanye West and more – raised money to benefit those affected by the superstorm in New York, New Jersey and Connecticut.

With an all-star lineup, every moment was better than the last but here are our five favorites.

Mick Jagger's Still Got It
Maroon 5 wrote "Moves Like Jagger" for a reason! The 69-year-old Rolling Stones frontman proved on Wednesday night that age is just a number when he performed "You Got Me Rocking" and "Jumpin' Jack Flash."

New Jersey Pride
Two of New Jersey's proudest sons Bon Jovi and Springsteen shared the stage for Bon Jovi's "Who Says You Can't Go home." As they sang the lyrics together, Madison Square Garden witnessed a moment the Garden State won't ever forget.

Kanye West Wears a Kilt
Always fashion forward, West had social media buzzing on Wednesday night when he performed in a leather skirt – his outfit choice even spawned a parody Twitter account, Kanye's Skirt. But girlfriend Kim Kardashian chimed in to let fans know she was supportive of the rapper's ensemble. "Awwwwwwww I'm so excited right now!!!!! He looks so cute!!" she Tweeted.

Chris Martin's Semi-Solo Act
The Coldplay frontman left his band at home to perform "Viva La Vida" followed by "Us Against the World" on piano. When Michael Stipe joined the singer for a duet of R.E.M.'s "Losing My Religion," a new take on the 1991 hit was born.

Nirvana and The Beatles Weren't That Different After All
When news first broke that McCartney would lead a Nirvana reunion 18 years after Kurt Cobain took his own life, fans had no idea what to expect. But Sir Paul delivered! "We're gonna do the song we jammed now," McCartney said introducing a new song with grunge-inspired vocals. Although Dave Grohl energized the set with his drumming, no one seemed to be having more fun than McCartney himself.

But not everyone was impressed by the performance. TMZ reports Cobain's widow Courtney Love was "not amused" by the reunion, saying "if John [Lennon] were alive it would be cool."

And, you can still donate: Visit www.robinhood.org/rhsandy to help.

Krist Novoselic, Dave Grohl and Paul McCartney

Kevin Mazur / WireImage

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Dozens sue pharmacy, but compensation uncertain

NASHVILLE, Tenn. (AP) — Dennis O'Brien rubs his head as he details ailments triggered by the fungal meningitis he developed after a series of steroid shots in his neck: nausea, vomiting, dizziness, drowsiness, blurred vision, exhaustion and trouble with his speech and attention.

He estimates the disease has cost him and his wife thousands of dollars in out-of-pocket expenses and her lost wages, including time spent on 6-hour round trip weekly visits to the hospital. They've filed a lawsuit seeking $4 million in damages from the Massachusetts pharmacy that supplied the steroid injections, but it could take years for them to get any money back and they may never get enough to cover their expenses. The same is true for dozens of others who have sued the New England Compounding Center.

"I don't have a life anymore. My life is a meningitis life," the 59-year-old former school teacher said, adding that he's grateful he survived.

His is one of at least 50 federal lawsuits in nine states that have been filed against NECC, and more are being filed in state courts every day. More than 500 people have gotten sick after receiving injections prepared by the pharmacy.

The lawsuits allege that NECC negligently produced a defective and dangerous product and seek millions to repay families for the death of spouses, physically painful recoveries, lost wages and mental and emotional suffering. Thirty-seven people have died in the outbreak.

"The truth is the chance of recovering damages from NECC is extremely low," said John Day, a Nashville attorney who represents several patients who have been sickened by fungal meningitis.

To streamline the process, attorneys on both sides are asking to have a single judge preside over the pretrial and discovery phases for all of the federal lawsuits.

This approach, called multidistrict litigation, would prevent inconsistent pretrial rulings and conserve resources of all parties. But unlike a class-action case, those lawsuits would eventually be returned to judges in their original district for trial, according to Brian Fitzpatrick, a law professor at Vanderbilt University Law School in Nashville.

Even with this approach, Fitzpatrick noted that federal litigation is very slow, and gathering all the evidence, records and depositions during the discovery phase could take months or years.

"Most of the time what happens is once they are consolidated for pretrial proceedings, there is a settlement, a global settlement between all the lawyers and the defendants before anything is shipped back for trial," he said.

A lawyer representing NECC, Frederick H. Fern, described the consolidation process as an important step.

"A Boston venue is probably the best scenario," Fern said in an email. "That's where the parties, witnesses and documents are located, and where the acts subject to these complaints occurred."

Complicating efforts to recover damages, attorneys for the patients said, NECC is a small private company that has now recalled all its products and laid off its workers. The company's pharmacy licenses have been surrendered, and it's unclear whether NECC had adequate liability insurance.

Fern said NECC has insurance, but they were still determining what the policy covers.

But Day says, "It's clear to me that at the end of the day, NECC is not going to have sufficient assets to compensate any of these people, not even 1 percent."

As a result, many attorneys are seeking compensation from other parties. Among the additional defendants named in lawsuits are NECC pharmacist and co-founder Barry Cadden; co-founder Greg Conigliaro; sister company Ameridose and its marketing and support arm, Medical Sales Management.

Founded in 2006 by Cadden and Conigliaro, Ameridose would eventually report annual revenue of $100 million. An NECC spokesman didn't respond to a request for the pharmacy's revenue.

While Federal Drug Administration regulators have also found contamination issues at Westborough, Mass.-based Ameridose, the FDA has said it has not connected Ameridose drugs to infection or illness.

Under tort law, a lawsuit has to prove a defendant has a potential liability, which in this case could be anyone involved in the medical procedure. However, any such suit could take years and ultimately may not be successful.

"I would not be surprised if doctors, hospitals, people that actually injected the drugs, the people that bought the drugs from the compounding company, many of those people will also be sued," said Fitzpatrick.

Plaintiffs' attorneys said they're considering that option but want more information on the relationships between the compounding pharmacy and the hundreds of hospitals and clinics that received its products.

Day, the attorney in Tennessee, said the clinics and doctors that purchase their drugs from compounding pharmacies or manufacturers could be held liable for negligence because they are in a better position to determine the safety of the medicine than the patients.

"Did they use due care in determining from whom to buy these drugs?" Day said.

Terry Dawes, a Michigan attorney who has filed at least 10 federal lawsuits in the case, said in traditional product liability cases, a pharmaceutical distributor could be liable.

"We are looking at any conceivable sources of recovery for our clients including pharmaceutical supply places that may have dealt with this company in the past," he said.

Ten years ago, seven fungal meningitis illnesses and deaths were linked to injectable steroid from a South Carolina compounding pharmacy. That resulted in fewer than a dozen lawsuits, a scale much smaller than the litigations mounting up against NECC.

Two companies that insured the South Carolina pharmacy and its operators tried unsuccessfully to deny payouts. An appellate court ruled against their argument that the pharmacy willfully violated state regulations by making multiple vials of the drug without specific prescriptions, but the opinion was unpublished and doesn't set a precedent for the current litigation.

The lawsuits represent a way for patients and their families recover expenses, but also to hold the pharmacy and others accountable for the incalculable emotional and physical toll of the disease.

A binder of snapshots shows what life is like in the O'Briens' rural Fentress County, Tenn., home: Dennis hooked up to an IV, Dennis in an antibiotics stupor, bruises on his body from injections and blood tests. He's had three spinal taps. His 11-day stay in the hospital cost over $100,000, which was covered by health insurance.

His wife said she sometimes quietly checks at night to see whether her husband of 35 years is still breathing.

"In my mind, I thought we were going to fight this and get over it. But we are not ever going to get over it," said Kaye O'Brien.

Marjorie Norwood, a 59-year-old grandmother of three who lives in Ethridge, Tenn., has spent just shy of two months total in the hospital in Nashville battling fungal meningitis after receiving a steroid injection in her back. She was allowed to come home for almost a week around Thanksgiving, but was readmitted after her symptoms worsened.

Family members are still dealing with much uncertainty about her recovery, but they have not filed a lawsuit, said their attorney Mark Chalos. He said Norwood will likely be sent to a rehabilitation facility after her second stay in the hospital rather than return home again.

Marjorie Norwood's husband, an autoworker, has taken time off work to care for her and they depend on his income and insurance.

"It doesn't just change her life, it changes everyone else's life around her because we care about her and want her to be happy and well and have everything that she needs," said her daughter, Melanie Norwood.

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Wall Street little changed as caution tempers data

NEW YORK (Reuters) - Stocks opened little changed on Thursday after data showed first time claims for jobless benefits fell sharply last week, but investors were cautious about making aggressive bets in the midst of ongoing "fiscal cliff" negotiations.

Shares of Best Buy Co surged almost 18 percent after a report that the company's founder is expected to make a fully financed offer to buy the consumer electronics retailer by the end of the week. Best Buy was up 17.9 percent at $14.36, making it the biggest gainer on the S&P 500.

Other economic data on Thursday showed retail sales rose in November after an October decline, brightening the picture for consumer spending.

Still, equities gains were constrained as the set of tax hikes and spending cuts that are set to come into effect in the new year remained at the forefront of investors' minds. Negotiators on Wednesday warned the showdown over reaching a deal on the so-called fiscal cliff could drag on past Christmas.

"With the suggestion that they're not any closer than they were a few days ago, we're really just in a market that's trying to figure out what the next catalyst might be," said Kate Warne, investment strategist at Edward Jones in St Louis.

"I think we need to see either an actual plan or signs that they've worked out a way to be sure they don't end up disagreeing at the last minute. Either of those would be positive, but so far we're not seeing anything that suggests either one."

The Federal Reserve on Wednesday announced a fresh bout of stimulus for the U.S. economy, but markets focused on comments from Chairman Ben Bernanke, who reiterated that monetary policy would not be enough to offset going over the fiscal cliff.

Investors are worried that doing so could send the economy back into recession, though most expect a deal will be struck eventually.

The Dow Jones industrial average <.dji> inched up 2.11 points, or 0.02 percent, at 13,247.56. The Standard & Poor's 500 Index <.spx> edged down 0.56 point, or 0.04 percent, at 1,427.92. The Nasdaq Composite Index <.ixic> eased 2.51 points, or 0.08 percent, to 3,011.31.

If the S&P 500 ends the session lower, it would break a six-day winning streak. Some of those days saw only slight gains on lower volume.

In the European Union, finance ministers reached a deal to make the European Central Bank the bloc's top banking supervisor. The move could boost confidence in leaders' ability to tackle the region's sovereign debt crisis.

Initial claims for state unemployment benefits dropped 29,000 to a seasonally adjusted 343,000, pointing to healing in the labor market.

Separate reports released at the same time showed producer prices fell more than expected in November, while retail sales rebounded though not by as much as expected.

CVS Caremark Corp gained 3.4 percent to $49.16 after it said it expects higher earnings next year.

(Editing by Kenneth Barry)

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Top 2012 searches include Whitney, PSY, Sandy

LOS ANGELES (AP) — The world’s attention wavered between the tragic and the silly in 2012, and along the way, Web surfers searched in huge numbers to find out about a royal princess, the latest iPad, and a record-breaking skydiver.

Whitney Houston was the “top trending” search of the year, according to Google Inc.’s year-end “zeitgeist” report. Google‘s 12th annual roundup is “an in-depth look at the spirit of the times as seen through the billions of searches on Google over the past year,” the company said in a blog post Wednesday.

People around the globe searched en masse for news about Houston‘s accidental drowning in a bathtub just before she was to perform at a pre-Grammy Awards party in February.

Google defines topics as “trending” when they garner a high amount of traffic over a sustained period of time.

Korean rapper PSY’s “Gangnam Style” music video trotted into second spot, a testament to his self-deprecating giddy-up dance move. The video is approaching a billion views on YouTube.

Superstorm Sandy, the damaging storm that knocked out power and flooded parts of the East Coast in the midst of a U.S. presidential campaign, was third.

The next biggest trending searches globally were a pair of threes: the iPad 3 tablet from Apple Inc. and Diablo 3, a popular video game.

Rounding out the Top 10 were Kate Middleton, who made news with scandalous photos and a royal pregnancy; the 2012 Olympics in London; Amanda Todd, a Canadian teen who was found dead of an apparent suicide in October after being bullied online; Michael Clarke Duncan, the “Green Mile” actor who died of a heart attack in September at age 54; and “BBB12,” the 12th edition of “Big Brother Brasil,” a reality show featuring scantily clad men and women living together.

Some trending people, according to Google, were:

— Felix Baumgartner, an Austrian skydiver who became the first to break the sound barrier without a vehicle with a 24-mile plummet from Earth’s stratosphere;

— Jeremy Lin, the undrafted NBA star who exploded off the New York Knicks bench and sparked a wave of “Linsanity”;

— Morgan Freeman, the actor whose untimely death turned out not to be true.

The Internet also continued its rise as a popular tool for spreading addictive ideas and phrases known as “memes.” Remember LOL? If you don’t know what it means by now, someone may “Laugh Out Loud” at you.

This year, Facebook said its top memes included “TBH (To Be Honest),” ”YOLO (You Only Live Once),” ”SMH (Shake My Head).” Thanks to an endlessly fascinating U.S. presidential campaign, “Big Bird” made the list after Republican candidate Mitt Romney said he might consider cutting some funds for public broadcasting.

Yahoo said its own top-searched memes for the year included “Kony 2012,” a reference to the short film and campaign against Ugandan militia leader Joseph Kony; “stingray photobomb” for an unusual vacation snapshot that went viral; and “binders full of women,” another nod to Romney for his awkward description of his search for women cabinet members as Massachusetts’ governor.

And people were happy to pass on popular Twitter posts by retweeting them. According to Twitter, the year’s most popular retweets were President Barack Obama‘s “Four more years,” and Justin Bieber’s farewell to six-year-old fan Avalanna Routh, who died of a rare form of brain cancer: “RIP Avalanna. i love you”.

Gadgets News Headlines – Yahoo! News

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