With record highs in sight, stocks face roadblocks

NEW YORK (Reuters) - If Wall Street needs to climb a wall of worry, it will have plenty of opportunity next week.

Major U.S. stock indexes will make another attempt at reaching all-time records, but the fitful pace that has dominated trading is likely to continue. Next Friday's unemployment report and the hefty spending cuts that look like they about to take effect will be at the forefront.

The importance of whether equities can reach and sustain those highs is more than Wall Street's usual fixation on numbers with psychological significance. Breaking through to uncharted territory is seen as a test of investors' faith in the rally.

"It's very significant," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"The thinking is, there's just not enough there for an extended bull run," he said. "If we do break through (record highs), then maybe the charts and price action are telling us there's something better ahead."

Flare-ups in the euro zone's sovereign debt crisis and next Friday's report on the U.S. labor market could jostle the market, though U.S. job indicators have generally been trending in a positive direction.

Small- and mid-cap stocks hit lifetime highs in February. Now the Dow Jones industrial average <.dji> and the S&P 500 <.spx> are racing each other to the top. The Dow, made up of 30 stocks, is about 75 points - less than 1 percent - away from its record close of 14,164.53, which it hit on October 9, 2007. The broader S&P is still 3 percent away from its closing high of 1,565.15, also reached on October 9, 2007.

The advantage may be in the Dow's court. So far in 2013, it has gained 7.5 percent, beating the S&P 500 by about 1 percent.

THE RALLY AND THE REALITY CHECK

The Dow's relative strength owes much to its unique make-up and calculation, as well as to investors' recent preference for buying value stocks likely to generate steady reliable gains, rather than growth stocks.

But the more defensive stance illustrates how stock buyers are getting concerned about this year's rally. While investors don't want to miss out on gains, they're picking up companies that are less likely to decline as much as high-flying names - if a market correction comes.

The Russell Value Index <.rav> is up 7.6 percent for the year so far, outpacing the Russell Growth Index's <.rag> 5.7 percent rise. Within the realm of the S&P 500, the consumer staples sector led the market in February, gaining 3.1 percent.

There is some concern that growth-oriented names are being eclipsed by defensive bets, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

"This isn't a be-all and end-all sell signal by any means, but we would feel much more comfortable if some of the more aggressive areas, like technology and small caps, would start to gain some leadership here," Detrick said.

Signs that investors are becoming concerned about the rally's pace is evident in the options market, where the ratio of put activity to call activity has recently shifted in favor of puts, which represent expectations for a stock to fall.

"We are seeing some put hedging in the financials, building up for the past month," said Henry Schwartz, president of options analytics firm Trade Alert in New York.

The put-to-call ratio representing an aggregate of about 562 financial stocks is 1:1, when normally, calls should be outnumbering puts.

Investors have no shortage of reasons to crave the relative safety of blue chips and defensive stocks. Although markets have mostly looked past uncertainty over Washington's plans to cut the deficit, fiscal policy negotiations still pose a risk to equities.

The $85 billion in spending cuts set to begin on Friday is expected to slow economic growth this year if policymakers do not reach a new deal. Markets so far have held firm despite the wrangling in Washington, but tangible economic effects could pinch stock prices going forward.

The International Monetary Fund warned that full implementation of the cuts would probably take at least 0.5 percentage point off U.S. growth this year.

EASY MONEY AND TEPID HIRING

Investors will also take in a round of economic data at a time when concerns are percolating that the market is being pushed up less by fundamentals and more by loose monetary policy around the world.

The main economic event will be Friday's non-farm payrolls report for February. The U.S. economy is expected to have added 160,000 jobs last month, only a tad higher than in January, in a sign the labor market is healing at a slow pace. The U.S. unemployment rate is forecast to hold steady at 7.9 percent.

While lackluster data has been a catalyst in the past for stock market gains as investors bet it would ensure continued stimulus from the Federal Reserve, that sentiment may be wearing thin.

Markets stumbled last week following worries that the Fed might wind down its quantitative easing program sooner than expected.

"It shows the underpinning of the market is being driven at this point by monetary policy," Hellwig said.

With investors questioning what is behind the rally, it will make a run to record highs even more significant, Hellwig added.

"There's smart people that are in the bull camp and the bear camp and the muddle-through camp," Hellwig said. "The fact that you can statistically, using historical evidence, make a case for going higher, lower, or staying the same makes this number very important this time around."

(Wall St Week Ahead runs every Friday. Comments or questions on this column can be emailed to: leah.schnurr(at)thomsonreuters.com)

(Reporting by Leah Schnurr; Additional reporting by Doris Frankel in Chicago; Editing by Jan Paschal)

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At War Blog: Remembering a Silent Success in Afghanistan

December in the mountains of southern Afghanistan greeted me and my men with strong and seemingly endless gusts of wind. The frigid temperatures were equally unforgiving. Our living quarters were constructed out of cardboard boxes and plastic sheeting, which didn’t create much of an escape. The highlight of my day, despite the obvious threat, was leading patrols as a squad leader. The physical activity kept me comfortably warm and allowed me to distance my mind from our frosty reality.

Despite daily patrols, it took me a few months to build rapport with the residents of Kunjak in Helmand Province. During the first month of my deployment in 2010, barely any villagers talked to me. This is when my interpreter, who we called H.B., suggested I start inviting the elders to our base for a meeting, or shura. He assured me this would build a mutual trust.

Soon, my Sunday mornings consisted of two to three hours of conversing with dozens of village elders. At 9 a.m., my interpreter and I would greet them as they climbed the steep and sandy hill to my remote outpost. To present a less hostile environment, I chose to meet them without my body armor or weapon.

We sat outside, suffering in the wind together. My interpreter would make chai, but I always brewed a pot of Starbucks coffee and offered some to my guests. Some liked it, some didn’t. I would like to think my generosity was appreciated.

The shuras were full of requests for new wells and mosques. But if there are two things Afghanistan has a plethora of, it’s those two things. I chose to propose something different, which thrilled them all.

We would build a school.

The Taliban had prevented them from being able to send their kids to school for years. With one suggestion, I had won over the villagers.

As the sun rose the following day, despite not having a school yet, I had over a dozen children waiting outside my base. Many had traveled from afar to attend what they thought was the first day of class. The last thing I wanted to do was send the children away. We invited them on the base, and H.B. taught them the Pashtu alphabet on our dry-erase board. It was on that Monday morning I realized I had to do something fast.

Our supplies were stored in a small tent at the back of our outpost, but I made the decision to move the tent to the base of our hill to serve as the school. By positioning it there, we could maintain its security, protecting it from Taliban attacks.

At 8:45 every morning, my Marines patrolled the school and used our metal detectors to sweep for improvised explosive devices. The safety of the children had to be paramount or our efforts would be for nothing. As the days passed, a growing number of children ranging in the age from 4 to 10 arrived for school. Within weeks we were teaching more than 40 boys and girls. During our time in Afghanistan, not a single child was injured at our school, and for the last four months of my deployment, the school was a giant success.

The Afghan National Police officers attached to my outpost did not participate much in the security of the school. In fact, many of them disapproved of it because it catered to girls as well as boys. I fear that as the American military presence draws down in Afghanistan, initiatives like our school will be abandoned by the Afghan government or destroyed by the Taliban. While the district mayor of Musa Qala knew of our efforts at the school, we received little to no local government support. Requests for a teacher, supplies and a permanent structure were either ignored or forgotten.

Stories like the one of our school tend to never make the limelight. Far too often the news is only about the horrors of war, or mistakes made by NATO troops, rather than their successes. It is easy to focus on the negative, especially as the United States plans to withdraw most of its forces by the end of 2014.

As I left Afghanistan in the spring of 2011, dozens of Afghans were attending our shuras, and they were full of varying requests. They no longer asked for wells and mosques. Now they wanted a community center and a larger school. I left before I could make those dreams come true for them. But I hoped the Marines who relieved me would be able to fulfill them.

I came home and listened and watched the news a lot. I kept hoping I would see or hear something good from Afghanistan. To no avail; the stories were depressing. After spending seven months in Afghanistan, I now knew good things were happening, but they just weren’t being shown.

I hope that my school wasn’t short-lived, and I would like to think that it is still operating safely. Whether it is or not, I still fondly remember our efforts. They led to one of the silent successes that have happened and, I believe, will continue to happen in Afghanistan.

Thomas James Brennan is a military affairs reporter with the Daily News in Jacksonville, N.C. Before being medically retired this fall, he was a sergeant in the Marine Corps stationed at Camp Lejeune, N.C. He served in Iraq and Afghanistan with the First Battalion, Eighth Marines, and is a member of the Military Order of the Purple Heart. Follow him on Twitter at @thomasjbrennan.

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Jesse Tyler Ferguson Gives a Wedding Planning Update

By Paul Chi

03/01/2013 at 11:30 AM EST

Jesse Tyler Ferguson and Justin Mikita

Desiree Navarro/Wireimage

Wedding bells will soon be ringing for Modern Family actor Jesse Tyler Ferguson and his fiancé, lawyer Justin Mikita.

The couple is getting married this summer.

"We are in the middle of wedding planning. It's a process, but it's been a lot of fun," Ferguson told PEOPLE at Wednesday's Tie the Knot spring collection celebration party in New York.

Fortunately for Ferguson, who got engaged to Mikita last July while vacationing in Mexico, the stresses of preparing for the big day have not taken a toll on him.

"No Groomzilla here," Ferguson, 37, says with a laugh. "We have a really great wedding planner who is managing everything. It's been very exciting. I'm very picky about things, and everything is coming together nicely."

One thing to expect at the wedding: good drinks.

"We really want a great mixologist for a craft cocktail bar," says Mikita, 27. "We are looking around for one. There are some great New York speakeasies like Milk and Honey. … So we're trying to bring a cool vibe like that to our wedding."

As for the guest list, "We want Beyoncé to perform at our wedding," jokes Mikita.

Ferguson has an aim high approach to the guest list, too. "We want the Obamas to be our guests," he says, but adds, "It's going to be a small ceremony."

Amid the wedding planning, the two have created a new line of bow tiesnow available at The Tie Bar for their Tie the Knot Foundation that benefits marriage equality organizations. Working together on their passion project "has only helped and made our relationship and our love for each other grow," says Ferguson.

After dating for two years, the pair hit it off quickly.

"First of all, he's incredibly attractive and he's a lawyer and he's sweet. That's all those things you look for, but on top of that he has an amazing family who he loves so much, he's good to his siblings and his best friends," explains Ferguson. "I've always wanted someone like that."

"Justin is one of the most loving people I know," he continues. "If I didn't snatch him up, I would be an idiot. You want to tie that up immediately."

And what kind of partner is the Emmy-nominated Modern Family star?

"He's caring and kind and thoughtful," says Mikita. "We both bring a lot to the table and help each other in many ways, and I think that's the reason why it's right."

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Wall Street flat, losses trimmed after data

PARIS, March 1 (Reuters) - Alex Ferguson's philosophy is behind the longevity of Manchester United's homegrown players, says Paris St Germain midfielder David Beckham. The former England captain and United player is still active at 37, having joined PSG on a five-month loan at the end of January. Former team mate Phil Neville, 36, plays at Everton and the 39-year-old Ryan Giggs, who started his youth career at Manchester City but ended it at United, is still at Old Trafford after signing his first professional contract there in 1990. ...

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IHT Rendezvous: Q and A: Keeping ‘A Chorus Line’ in Step

LONDON — For a musical that’s all about dancers, there’s not a huge amount of dancing in “A Chorus Line,” which opened last week at the London Palladium — the first West End revival of the musical since it opened here in 1976, a year after its smash-hit debut on Broadway.

But the most dance-intensive moments are fundamental to our very idea of “A Chorus Line”: the “Aaaah-5-6-7-8!” that unleashes the explosion of movement with which the musical opens, and the slow sideways-moving line of gold-clad top-hatted dancers with which it closes. In between those moments is the meat of the show; the passage from anonymity as the dancers begin the audition, to individuality as they tell their stories — and then back again, to an impersonal line of identically dressed, identically moving performers.

On opening night at the Palladium, the audience greeted those first moments with a roaring cheer, a salute to the love-story that “A Chorus Line” tells — not between its characters, but between them and showbiz. The choreography may look stylized, but it doesn’t really matter. Watching, we are both in 1975 (as the opening projection tells us) and in 2013; leotard and dance styles might have changed, but the desire to be on Broadway has not.

Michael Bennett, who conceived of the show, choreographed and directed it, died in 1987, and it is his co-choreographer, Bob Avian, who has been responsible for directing the major “Chorus Line” revivals since.

So how much does the dance (and the dancing) matter in “A Chorus Line”? Two days after the London opening — greeted by a positive storm of approval by the critics — Mr. Avian flew to Fort Lauderdale, Florida, for a well-earned rest after several months of putting the musical together in London. Speaking by telephone, he discussed the choreography, his approach to staging the work, and why “A Chorus Line” still speaks to a contemporary audience.

Q.

How did you and Michael Bennett approach the choreography? Is the opening number really the kind of routine you would have asked an audition group to do?

A.

Michael and I were a good team, because he was a jazz dancer, and my training was classical. Between us we came up with a lot of choreography that was more integrated. A lot of it was based on dance crazes of the time — disco, the toe-heel-heel, the body shifts that go along with that. We pulled on elements of popular dancing as we were doing it; we were children of our times, dance-wise. There’s actually not much contemporary dance in there; there is ballet, typical broadway and tap. The only jazz combos are in the opening sequence and the montage sections.

Q.

Did you initially think it would be more of a dance show?

A.

Well, it was a very slow process and I’m not sure we had an idea of how it would be. We had the original tapes of the stories from our dancers and once we decided to put those stories in the framework of an audition, we were able to construct the piece. But it took us a very long time. We did four workshops, which no one did in those days — we were the first ones ever to do it. The montage, which is 22 minutes, took us six weeks. You wouldn’t be able to do that today, it would be too expensive.

Q.

Is the routine we see at the beginning a realistic idea of what you might see at a Broadway audition today?

A.

A dance call is still pretty much the same. When we have an open call, you might get 700 people. We divide them into groups of 10 and make them all do double pirouettes — you can immediately see people’s training. We keep 2 or 3 people from each group, then we teach them the opening combination, a shortened version, then the full one, then the ballet combination. You get a feel for their jazz style, and the ballet combination is very revealing in terms of technique.

Q.

Are you strict about remaining faithful to the original choreography? Do you adapt to different dancers or, perhaps, a more contemporary style of dancing today?

A.

The ensemble stuff is set in stone, but with the solo work, we are very open. For Cassie’s dance, for instance, we try to pull on the strengths of the dancer performing the role. If she has a great extension, or very supple back, we make tons of adjustments along the way. In structure it’s still the same, because it’s about the music and the storytelling — it’s about narcissism, about the need to have her gifts recognized.

In the individual stuff, the staging of the songs, I make adjustments all the time. At the beginning of the rehearsal process, I just let them do the number and see what they will bring to it. In that way, I suppose it becomes more contemporary because they are performers of today.

Q.

Have the technical capacities of dancers changed since you first staged the musical in 1975?

A.

Undoubtedly. The quality of the dancing is much higher than it was when we made it. Also, then you still had a singing chorus, or a dancing chorus; it was hard to get people who could do everything really well, and now that is the norm.

It’s still hard to get a woman who can do Cassie’s big song-and-dance solo; we’ve had performers who are great dancers, but can’t really sing it. It’s a very difficult song and you need a lot of stamina. But every time I return to the show, the caliber is higher in general.

Q.

Is there a difference between the U.S. and the U.K in the quality of musical theater performers, given that there is more of a conventional theater tradition here?

A.

Not essentially. They were perhaps a little behind America in the past, but that’s mostly to do with the fact that we pull from a population that is so much bigger — it’s a numbers thing. But now they have the same all-around training, and they are fully the equals of U.S. performers. In fact, I think this London cast is the finest company we’ve had in 35 years. Every time I do “Chorus Line,” I think, not again! But this was all pleasure.

Q.

The audience was beyond rapturous at the performance I attended. Why do you think people identify so strongly with “A Chorus Line”?

A.

I think it speaks to everyone because it’s really about people on an assembly line. They are not stars, and they aren’t trying to be stars — they are trying to succeed in essentially a humble way. And the musical talks about things that weren’t discussed on Broadway before: homosexuality, plastic surgery, angry or troubled or loving relationships with parents. Even though much has changed socially since we made it, those issues don’t go away.

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Rachel McAdams Finds Unlikely Suitor at Toronto Raptors Game

By Tim Nudd

02/28/2013 at 11:15 AM EST

Rachel McAdams and the Toronto Raptors's velociraptor mascot

IPHOTO

Rachel McAdams's last boyfriend was a little older than her. Now it looks like she's keeping company with someone from the Cretaceous Period.

The actress, 34, who recently split with her beau of two years, actor Michael Sheen, was courted by the Toronto Raptors's velociraptor mascot on Monday night.

He presented the Midnight in Paris actress with flowers and a stuffed dinosaur as the Toronto public-address announcer introduced the London, Ontario, native to the crowd, who cheered wildly.

McAdams, sporting newly red locks, seemed charmingly embarrassed by the whole episode, but took it in stride, grinning her famous smile as she accepted the presents.

As NBA mascots go, the Raptor would be a prize catch for any Hollywood actress. Described as "165 lbs. of pure solid fur," he's been voted the most popular NBA mascot in each of the past three seasons.

He also "enjoys making people laugh, whether with him or at him, usually at him," according to his bio.

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Medicare paid $5.1B for poor nursing home care

SAN FRANCISCO (AP) — Medicare paid billions in taxpayer dollars to nursing homes nationwide that were not meeting basic requirements to look after their residents, government investigators have found.

The report, released Thursday by the Department of Health and Human Services' inspector general, said Medicare paid about $5.1 billion for patients to stay in skilled nursing facilities that failed to meet federal quality of care rules in 2009, in some cases resulting in dangerous and neglectful conditions.

One out of every three times patients wound up in nursing homes that year, they landed in facilities that failed to follow basic care requirements laid out by the federal agency that administers Medicare, investigators estimated.

By law, nursing homes need to write up care plans specially tailored for each resident, so doctors, nurses, therapists and all other caregivers are on the same page about how to help residents reach the highest possible levels of physical, mental and psychological well-being.

Not only are residents often going without the crucial help they need, but the government could be spending taxpayer money on facilities that could endanger people's health, the report concluded. The findings come as concerns about health care quality and cost are garnering heightened attention as the Obama administration implements the nation's sweeping health care overhaul.

"These findings raise concerns about what Medicare is paying for," the report said.

Investigators estimate that in one out of five stays, patients' health problems weren't addressed in the care plans, falling far short of government directives. For example, one home made no plans to monitor a patient's use of two anti-psychotic drugs and one depression medication, even though the drugs could have serious side effects.

In other cases, residents got therapy they didn't need, which the report said was in the nursing homes' financial interest because they would be reimbursed at a higher rate by Medicare.

In one example, a patient kept getting physical and occupational therapy even though the care plan said all the health goals had been met, the report said.

The Office of Inspector General's report was based on medical records from 190 patient visits to nursing homes in 42 states that lasted at least three weeks, which investigators said gave them a statistically valid sample of Medicare beneficiaries' experiences in skilled nursing facilities.

That sample represents about 1.1 million patient visits to nursing homes nationwide in 2009, the most recent year for which data was available, according to the review.

Overall, the review raises questions about whether the system is allowing homes to get paid for poor quality services that may be harming residents, investigators said, and recommended that the Centers for Medicare & Medicaid Services tie payments to homes' abilities to meet basic care requirements. The report also recommended that the agency strengthen its regulations and ramp up its oversight. The review did not name individual homes, nor did it estimate the number of patients who had been mistreated, but instead looked at the overall number of stays in which problems arose.

In response, the agency agreed that it should consider tying Medicare reimbursements to homes' provision of good care. CMS also said in written comments that it is reviewing its own regulations to improve enforcement at the homes.

"Medicare has made significant changes to the way we pay providers thanks to the health care law, to reward better quality care," Medicare spokesman Brian Cook said in a statement to AP. "We are taking steps to make sure these facilities have the resources to improve the quality of their care, and make sure Medicare is paying for the quality of care that beneficiaries are entitled to."

CMS hires state-level agencies to survey the homes and make sure they are complying with federal law, and can require correction plans, deny payment or end a contract with a home if major deficiencies come to light. The agency also said it would follow up on potential enforcement at the homes featured in the report.

Greg Crist, a Washington-based spokeswoman for the American Health Care Association, which represents the largest share of skilled nursing facilities nationwide, said overall nursing home operators are well regulated and follow federal guidelines but added that he could not fully comment on the report's conclusions without having had the chance to read it.

"Our members begin every treatment with the individual's personal health needs at the forefront. This is a hands-on process, involving doctors and even family members in an effort to enhance the health outcome of the patient," Crist said.

Virginia Fichera, who has relatives in two nursing homes in New York, said she would welcome a greater push for accountability at skilled nursing facilities.

"Once you're in a nursing home, if things don't go right, you're really a prisoner," said Fichera, a retired professor in Sterling, NY. "As a concerned relative, you just want to know the care is good, and if there are problems, why they are happening and when they'll be fixed."

Once residents are ready to go back home or transfer to another facility, federal law also requires that the homes write special plans to make sure patients are safely discharged.

Investigators found the homes didn't always do what was needed to ensure a smooth transition.

In nearly one-third of cases, facilities also did not provide enough information when the patient moved to another setting, the report found.

___

On the Web:

The OIG report: http://1.usa.gov/VaztQm

The Medicare nursing home database: http://www.medicare.gov/NursingHomeCompare/search.aspx?bhcp=1&AspxAutoDetectCookieSupport=1

___

Follow Garance Burke on Twitter at —http://twitter.com/garanceburke.

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India Ink: Image of the Day: Feb. 27

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Meet the Biggest Star in Music Right Now: A Goat!

By Cara Lynn Shultz

02/27/2013 at 11:15 AM EST

The biggest duet partner for music's biggest stars right now? A goat.

We're not kidding.

If your coworker bleating with joy, he or she has probably stumbled upon a new meme, which mashes up pop hits with an old clip of a goat screaming as if it were a human. (Some might argue that the goat improves the songs, but we'll leave that discussion to the comments section.) So far, Taylor Swift's "I Knew You Were Trouble," Justin Bieber's "Baby" and Katy Perry's "Firework" have all gotten the wooly treatment.

Put on your headphones (our goat pal is loud), throw your hooves in the air, and wave them like you just don't care to some of our favorites – before this goat gets a record deal!

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Vt. lye victim gets new face at Boston hospital

BOSTON (AP) — A Vermont woman whose face was disfigured in a lye attack has received a face transplant.

Doctors at Boston's Brigham and Women's Hospital say 44-year-old Carmen Blandin Tarleton underwent the surgery earlier this month.

A team worked 15 hours to transplant the facial skin, including the neck, nose, lips, facial muscles, arteries and nerves.

The 44-year-old Tarleton, of Thetford, Vt., was attacked by her former husband in 2007. He doused her with industrial strength lye. She suffered chemical burns over 80 percent of her body. The mother of two wrote a book about her experience that describes her recovery.

It was the fifth face transplant at the Boston hospital.

Physicians are planning to discuss the case Wednesday at the hospital.

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