Investors face another Washington deadline

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

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

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

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

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

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

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

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

OPTIONS BULLS TARGET GAINS

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

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

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

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

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

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

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

EYES ON GDP DATA, APPLE

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

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

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

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

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

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

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U.N. Rejects Claim for Direct Compensation to Victims of Cholera Epidemic in Haiti

There will be no direct financial compensation from the United Nations for the more than 8,000 Haitians who died and the 646,000 sickened by cholera since the disease struck the earthquake-ravaged country in October 2010, Secretary General Ban Ki-moon told the Haitian president this week.

More than 15 months after the United Nations received a legal claim seeking to hold peacekeeping troops responsible for setting off the epidemic, its lawyers declared the claim “not receivable,” citing diplomatic immunity.

At the same time, Partners in Health, the leading nongovernmental health care provider in Haiti, has stepped forward to urge the United Nations to invest more seriously in Mr. Ban’s own largely unfunded anticholera initiative to make amends.

In an Op-Ed article posted Friday night on the Web site of The New York Times, Dr. Louise C. Ivers, the group’s senior health and policy adviser, says the United Nations has “a moral, if not legal, obligation to help solve a crisis it inadvertently helped start.” Evidence, she said, finds the United Nations “largely, though not wholly” culpable for the outbreak of cholera.

To date, Mr. Ban has not acknowledged the reigning scientific theory about the origin of Haiti’s cholera epidemic — that peacekeepers from Nepal imported the cholera and, through a faulty sanitation system at their base, infected a tributary of the country’s largest river.

Dr. Ivers, however, while noting the “causality” of epidemic disease is complex, says that no other reasonable hypothesis for Haiti’s cholera has been put forth.

What makes her comments especially striking is that her organization’s co-founder and chief strategist, Dr. Paul Farmer, served as the United Nations’ deputy special envoy for Haiti for the past three years and was appointed by Mr. Ban in December to lead the very anticholera initiative that she found lacking.

Dr. Farmer declined to comment, but a spokeswoman for Partners in Health said Dr. Ivers’s statements represented the group’s concerns about the 10-year, $2.2 billion anticholera initiative that he was supposed to advise.

The ambitious initiative is intended to upgrade Haiti’s abysmal water and sanitation infrastructure while increasing cholera prevention and treatment efforts, including the expansion of a small cholera vaccination campaign that Partners in Health and a Haitian health care group, Gheskio, undertook last year.

Donors have pledged $215 million. The United Nations said it would contribute $23.5 million — 1 percent of the initiative’s cost, Dr. Ivers said.

In contrast, she said, this year’s budget for the United Nations peacekeeping mission, $648 million, “could more than fund the entire cholera elimination initiative for two years.”

Expressing his “deep sorrow and solidarity with the many Haitian families who lost loved ones in this terrible epidemic,” Nigel Fisher, the new head of the peacekeeping mission, nonetheless said that the United Nations had “mobilized resolutely to combat the disease.” It spent some $118 million on cholera before the initiative was announced, officials have said.

Mr. Ban, through his spokesman, also expressed “his profound sympathy” while announcing on Thursday that the legal claim had been rejected.

Mario Joseph, lead lawyer for the cholera victims, said, “While these sympathies are welcome, they will not stop cholera’s killing or ensure that survivors can go on living after losing breadwinners to cholera.”

The demand, filed in an internal United Nations claims unit, had sought $100,000 for each bereaved family and $50,000 for each cholera survivor.

Mr. Joseph described the United Nations’ terse rejection of a claim filed over a year ago as “disgraceful,” and he and his American colleagues at the Institute for Justice and Democracy in Haiti said they would file a lawsuit in Haiti or abroad.

Though the death rate from cholera has declined significantly since the epidemic initially devastated Haiti, the disease is still coursing through the country. National statistics show a spike of reported cases in December 2012 over that same month in 2011 — 11,220 compared with 8,205.

“The U.N. will not pay,” said a headline Friday on the Web site of Haiti’s Le Nouvelliste newspaper.

“It’s not surprising,” a reader responded.

This article has been revised to reflect the following correction:

Correction: February 23, 2013

An earlier version of this article misrendered a quotation from an Op-Ed article by Dr. Louise C. Ivers. The quotation should have read “largely, though not wholly,” not “largely, if not wholly.”

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FDA approves new targeted breast cancer drug

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Investors face another Washington deadline

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

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

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

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

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

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

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

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

OPTIONS BULLS TARGET GAINS

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

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

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

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

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

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

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

EYES ON GDP DATA, APPLE

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

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

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

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

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

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

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India Ink: Image of the Day: Feb. 22

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Renée Zellweger Puckers Up with Doyle Bramhall II in Hawaii: Photo

By Andrea Billups

02/22/2013 at 11:30 AM EST

Doyle Bramhall II and Renée Zellweger

AKM-GSI

Renée Zellweger was feeling the love – and the surf – during her recent Hawaiian vacation.

Zellweger, 43, joined her boyfriend, musician Doyle Bramhall II, 44, for some kayaking, paddle-boarding and romantic kissing on the beach. Wearing matching black beachwear, the Texas natives were not shy about their happiness, holding hands and smiling broadly as they vacationed together.

But soon it's back to work for Zellweger, who's set to appear on the Oscar telecast Sunday in Los Angeles. The Academy Award winner will reportedly join her Chicago cast as presenters, marking the 10th anniversary of their musical film earning Best Picture honors.

Bramhall, a guitarist and songwriter who toured with Roger Waters and Eric Clapton, was last linked to Sheryl Crow in 2011.

The 85th annual Academy Awards will air live on ABC starting at 7 p.m. ET/4 p.m. PT on Sunday, Feb. 24, from the Dolby Theatre in Hollywood.

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FDA approves new targeted breast cancer drug

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

The drug Kadcyla (kad-SY'-luh) from Roche combines the established drug Herceptin with a powerful chemotherapy drug and a third chemical linking the medicines together. The chemical keeps the cocktail intact until it binds to a cancer cell, delivering a double-shot of anti-tumor poison.

Cancer researchers say the drug may offer a clear advantage over older drugs because it delivers more medication with fewer side effects.

The FDA approved the new treatment for about 20 percent of breast cancer patients with a form of the disease that is typically more aggressive and less responsive to hormone therapy. These patients have tumors that overproduce a protein known as HER-2.

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

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

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

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

FDA specifically approved the drug for patients with advanced breast cancer who have already been treated with Herceptin and taxane, a widely used chemotherapy drug.

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

Kadcyla was co-developed by South San Francisco-based Genentech and ImmunoGen Inc., of Waltham, Mass. ImmunoGen developed the technology that binds the drug ingredients together and is scheduled to receive a $10.5 million payment from Genentech on the FDA decision. The company will also receive additional royalties on the drug's sales.

Shares of ImmunoGen Inc. rose 33 cents, or 2.27 percent, to $14.63 in midday trading.

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Wall Street rises on HP but S&P on track to end week lower

NEW YORK (Reuters) - Stocks rebounded on Friday as Hewlett-Packard, the largest personal computer maker, surged on strong results, but the S&P 500 index was on the way to end a streak of gains that has lasted seven straight weeks.

The S&P shed 1.9 percent over the previous two sessions, its worst two-day drop since early November, putting the index on pace for its first weekly decline of the year. The retreat was triggered when the Federal Reserve's meeting minutes for January suggested stimulus measures may be halted sooner than thought.

Still, the index is up nearly 6 percent for the year and held the 1,500 support level despite the recent declines, a sign of a positive bias in the market.

"The market is addicted to Fed stimulus and gets withdrawal shakes every time that's threatened, but now we're resuming our course and remain much more attractively valued than other asset classes," said Rex Macey, chief investment officer at Wilmington Trust in Atlanta, Georgia.

Hewlett-Packard Co jumped 9.6 percent to $18.74 as the top boost on both the Dow and S&P 500 after the PC maker's quarterly revenue and forecasts beat expectations. The company cut costs under Chief Executive Meg Whitman's turnaround plan. The S&P technology sector <.splrct> was up 0.6 percent.

The Dow Jones industrial average <.dji> was up 52.22 points, or 0.38 percent, at 13,932.84. The Standard & Poor's 500 Index <.spx> was up 5.25 points, or 0.35 percent, at 1,507.67. The Nasdaq Composite Index <.ixic> was up 13.45 points, or 0.43 percent, at 3,144.94.

For the week, the Dow is off 0.3 percent in its third straight week of slight losses, the S&P is off 0.7 percent and the Nasdaq is off 1.4 percent.

Also buoying tech stocks were gains in semiconductor companies after Marvell Technology Group Ltd forecast results this quarter that were largely above analysts' expectations as it gained market share in the hard-disk drive and flash-storage businesses.

In addition, Texas Instruments Inc raised its dividend by a third and boosted its stock buyback program. Texas Instruments rose 4.3 percent at $33.88 while Marvell added 2.2 percent at $9.67. The PHLX semiconductor index <.sox> gained 1.3 percent.

"Dividends growing are another way the market's level is justified, if not especially attractive at these levels," said Macey, who manages about $20 billion in assets.

On the downside, Abercrombie & Fitch dropped 7.3 percent to $45.49 after the clothing retailer reported a drop in fourth-quarter comparable sales, even as its latest quarterly earnings topped estimates.

Insurer American International Group Inc posted fourth-quarter results that beat analysts' expectations. Shares advanced 2.6 percent to $38.26.

According to Thomson Reuters data through Friday morning, of 439 companies in the S&P 500 that have reported results, 70 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(Editing by Kenneth Barry)

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India Ink: Image of the Day: Feb. 21

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Taylor Swift Channels Beyoncé at Brit Awards

By Aaron Parsley

02/21/2013 at 11:40 AM EST

Does Sasha Fierce have a pop-country cousin?

During a sassy performance of "I Knew You Were Trouble" at Wednesday's Brit Awards, Taylor Swift shed a white wedding dress to reveal a black embellished jumpsuit, sexy boots – and some familiar moves.

Striking a pose, tossing her hair and even falling to her knees to belt out the hit song, Swift, 23, resembled Beyoncé in her highly buzzed-about Super Bowl halftime performance on Feb. 3. Flip through a carousel of photos from the performance above.

At the awards ceremony at London's O2 arena, Swift handed out the best British female prize to soulful Scottish singer and songwriter Emeli Sandé, who also took home the best album prize for her debut, Our Version of Events.

A nominee for international female solo artist, Swift lost in that category to another American, Lana Del Rey.

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