Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.

A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.

Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.

Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.

"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.

"The markets still basically believe that something will be done," he said.

If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.

For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.

Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.

IT COULD GET A LITTLE CRAZY

Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.

If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.

"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.

"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."

Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.

Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.

"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.

"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."

Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.

The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.

Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.

U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)

(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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La.-Lafayette tops ECU in New Orleans Bowl, 43-34

NEW ORLEANS (AP) — Whether Terrance Broadway was throwing, running, or throwing on the run, he gave East Carolina fits and justified Louisiana-Lafayette coach Mark Hudspeth's decision to let his sophomore quarterback finish the season as his starter.

Broadway passed for 316 yards and ran for 108, helping Louisiana-Lafayette repeat as winners of the New Orleans Bowl with a 43-34 victory against East Carolina on Saturday.

The performance capped a 2012 campaign which opened with Broadway backing up senior Blaine Gautier, who broke a bone in his throwing hand in late September.

"Terrance comes in and just has a phenomenal season," Hudspeth said, describing the difficult decision not to give Gautier, the New Orleans Bowl MVP a year ago, his job back when he was healthy again late in the season. "We really had hit our stride and the best thing about Blaine is he understood."

Broadway had to sit out last season after transferring from Houston, and saw this year's New Orleans Bowl as his first real chance to add some kind of championship to his name after coming up short as a high school standout in Baton Rouge, La.

"My main goal was to get our team a big win in this bowl game and just to get that monkey off my back that I didn't have a ring from high school and last year," Broadway said. "I was very focused on that."

Alonzo Harris rushed for 120 yards, including touchdowns of 6 and 68 yards for the Ragin' Cajuns (9-4), who briefly squandered a three-touchdown lead before moving back in front for good on Broadway's 14-yard scoring pass to Javone Lawson late in the third quarter.

"Nothing fazes our team," said Broadway, who also ran for a 12-yard score. "Everybody on our team responds to adversity well. So when they came back on us and made a game out of it, our team is still upbeat and saying we're going to win this game."

And they did, with Brett Baer adding his second and third field goals in the fourth quarter to seal the victory.

Shane Carden passed for 278 yards and two touchdowns for East Carolina (8-5) but was intercepted in Cajuns territory by Jemarlous Moten in the fourth quarter as ECU drove for a potential tying or go-ahead score.

"They did a good job of changing, I guess, the coverage throughout the game," Carden said of ULL. "But I think our offense could execute a lot better. It was nothing really they were doing. It was a lot of us just not executing routine plays."

The Pirates' Reggie Bullock rushed for 104 yards and two touchdowns.

"The game plan was fine. We just needed the execution of the calls. We've always played hard. That was not a problem," East Carolina coach Ruffin McNeill said. "We had a chance there late in the game. ... I was proud of our guys."

Carden's touchdowns went to Justin Hardy for 19 yards and Danny Webster for 16 yards. Hardy finished with five catches for 59 yards. East Carolina's Andrew Bodenheimer had five catches for a team-high 65 yards, but could not secure a crucial fourth-down pass in the final minutes as defensive back T.J. Worthy ripped the ball away in ECU territory. That allowed the Cajuns to run the clock down to 15 seconds before setting up Baer's final field goal from 40-yards out.

Jamal Robinson had six catches for 116 yards for ULL, including a 39-yarder that was Broadway's longest completion. Lawson finished with four catches for 71 yards.

The Cajuns carried a 37-31 lead into the fourth quarter after Lawson juggled but secured the ball for a sprawling, rolling TD catch. The point-after kick failed, however, and East Carolina made it 37-34 on Warren Harvey's 26-yard field goal.

Broadway's interception on a tipped pass gave East Carolina the ball on the Cajuns 39, but Moten stepped in front of Carden's long pass over the middle to help preserve the slim lead.

Red-clad Ragin' Cajuns fans made up the bulk of a record New Orleans Bowl crowd of 48,828, and they were celebrating early.

Broadway's scoring run, his ninth rushing TD of the season, gave ULL a 7-0 lead and Harry Peoples' 10-yard scoring made it 14-0.

ECU didn't get a first down until early in the second quarter, when Carden converted on third-and-long with Jabril Solomon for a 45-yard gain. That set up Bullock's first touchdown from 5 yards out to make it 14-7.

Harris' two scores had the Cajuns seemingly in command at 28-7, but ECU responded with two touchdowns in a span of 13 seconds to make it a one-score game.

First came Hardy's leaping, outstretched grab in the back of the end zone. Then Darryl Surgent fumbled a kickoff return, giving ECU the ball on the Cajuns 16. Carden found Webster over the middle for a score on the next play.

Louisiana-Lafayette was able to regain some momentum in the final 37 seconds of the first half, driving 47 yards on five plays to set up Baer's 50-yard field goal, which was the same distance and direction as his game-winner at the end of last year's New Orleans Bowl.

The Pirates tied it in the third quarter on Harvey's 45-yard field goal and Bullock's 13-yard scoring run, capping a drive that included a converted fourth-and-3.

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Dec. 21: The Winter Solstice Explained

At 6:12 a.m. EST on Friday (Dec. 21), the sun will reach a point where it will appear to shine farthest to the south of the equator, over the Tropic of Capricorn, thus marking the moment of the winter solstice — the beginning of winter.

Since June 20, the altitude of the midday sun has been lowering as its direct rays have been gradually migrating to the south. 

The sun’s altitude above the horizon at noontime is 47 degrees lower now, compared to six months ago.  Your clenched fist held at arm’s length measures roughly 10 degrees, so the sun at midday is now nearly “five fists” lower in the southern sky compared to on June 21.

The ancient skywatchers had no understanding of the sun’s migration; they thought this celestial machinery might break down someday, and the sun would continue southward, never to return. As such, the lowering of the sun was cause for fear and wonder. 

As “armistice” is defined as a staying of the action of arms, “solstice” is a staying of the sun’s apparent motion over the latitudes of the Earth. At the summer solstice, the sun stops its northward motion and begins heading south. 

At the winter solstice, it turns north. Technically, at one minute past the moment of the solstice, the sun has turned around and started north. It will cross the equator at the vernal equinox, passing into the Northern Hemisphere on March 20, at 7:02 a.m. EDT.  [Top 10 Winter Sky Targets for Skywatchers]

When the ancients saw the sun stop and slowly climb to a higher midday location, people rejoiced; here was a promise that spring would return. Most cultures had winter solstice celebrations and some adapted it to other events. In Persia, the solstice marked the birthday of Mithra, the Sun King. 

In ancient times, Dec. 25 was the date of the lavish Roman festival of Saturnalia, a sort of bacchanalian thanksgiving. Saturnalia was celebrated around the time of the winter solstice. And in 275 A.D., the Roman Emperor Aurelian commemorated a feast day coinciding with the winter solstice: Die Natalis Invicti Solis (“The birthday of the Unconquered Sun”).  

Among the many varied customs linked with this special season for thousands of years, the exchanging of gifts is almost universal. Mother Nature herself offers the sky observer in north temperate latitudes the two gifts of long nights and a sky more transparent than usual. 

One reason for the clarity of a winter’s night is that cold air cannot hold as much moisture as warm air can. Hence, on many nights in the summer, the warm moisture-laden atmosphere causes the sky to appear hazier. By day it is a milky, washed-out blue, which in winter becomes a richer, deeper and darker shade of blue. For us in northern climes, this only adds more luster to that part of the sky containing the beautiful wintertime constellations.

Indeed, the brilliant stars and constellations that now adorn our evening sky, such as Sirius, Orion, Capella, Taurus, and many others, plus as an added bonus this winter season of the planet Jupiter, all seem like Nature’s holiday decorations to commemorate the winter solstice and enlighten the long cold nights of winter.

Joe Rao serves as an instructor and guest lecturer at New York’s Hayden Planetarium. He writes about astronomy for The New York Times and other publications, and he is also an on-camera meteorologist for News 12 Westchester, New York.

Copyright 2012 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Will media stay on gun story?

STORY HIGHLIGHTS

• Howard Kurtz: Conventional wisdom is that media will lose interest in guns


• He says that's been the pattern of media behavior after Columbine, other shootings


• This time seems like it might be different, he says


• Kurtz: Reporters profoundly shaken by story, should stay on it

Editor's note: Howard Kurtz is the host of CNN's "Reliable Sources" and is Newsweek's Washington bureau chief. He is also a contributor to the website Daily Download.

(CNN) -- The conventional wisdom is that Newtown has just a few more days to run as a major media story.

The reporters are pulling out of the grief-stricken Connecticut town, which means no more live shots every hour. The White House press corps responded to President Obama's announcement Wednesday of a task force on gun control with the first three reporters asking about the impending fiscal cliff. And after every previous mass shooting, from Columbine to Aurora, the media's attention has soon drifted away.

But I believe this time will be different.

Howard Kurtz

I believe the horror of 20 young children being gunned down has pricked the conscience of those in the news business, along with the rest of America.

I could be wrong, of course. The press is notorious for suffering from ADD.

But every conversation I've had with journalists has quickly drifted to this subject and just as quickly turned intense. Most have talked about how their thoughts have centered on their children, and grandchildren, and the unspeakable fear of anything happening to them. All have spoken about how hard it is to watch the coverage, and many have recalled crying as they watch interviews with the victims' families, or even when Obama teared up while addressing the nation.

Watch: Blaming Jon Stewart for the Newtown Shootings?

I've watched Fox's Megyn Kelly choke back tears on the air after watching an interview from Newtown. I've heard CNN's Don Lemon admit that he is on the verge of crying all the time. I've seen MSNBC's Joe Scarborough, a former Republican congressman, say that day in Connecticut "changed everything" and prompted him to rethink his longstanding opposition to gun control, which earned him top ratings from the NRA.

Maybe Newtown will be the 9/11 of school safety.

Watch: Media Fantasy: Touting Ben Affleck (Uh Huh) for the Senate

The media paid scant attention to gun control in the past, in part because of a conviction that the NRA would block any reform on Capitol Hill. At the same time, they took their cue from the fact that officeholders in both parties were avoiding the issue at all costs—Republicans because they mainly support the status quo, Democrats because they mostly deem it political poison.

But since when is it our job solely to take dictation from pols? When it comes to subjects like climate change and same-sex marriage, the press has been out ahead of the political establishment. Given the carnage in Newtown as the latest example, journalists should demand whether we can do better. The fact that Obama now promises to submit gun legislation to Congress will help the narrative, but it shouldn't be a mandatory requirement for coverage.

Watch: From Joe Scarborough to Rush Limbaugh, the conservative media meltdown

This is not a plea for a press-driven crusade for gun control. In fact, it's imperative that journalists be seen as honest brokers who are fair to all sides. MSNBC anchor Thomas Roberts, in an interview with Republican Rep. Jack Kingston of Georgia, who opposes gun restrictions, said: "So we need to just be complacent in the fact that we can send our children to school to be assassinated." That is demonization, just as some conservative pundits are unfairly accusing liberal commentators who push for gun control of "politicizing" a tragedy or of pushing God out of the public schools.

The question of school safety extends beyond guns to mental illness and societal influences. With even some NRA supporters asking why law-abiding hunters need automatic rifles with high-capacity magazines, it's time for a nuanced debate that goes beyond the usual finger-pointing. Bob Costas got hammered for using an NFL murder-suicide to raise the gun issue during a halftime commentary, but he was right to broach the subject.

Here is where the media have not just an opportunity but a responsibility. The news business has no problem giving saturation coverage to such salacious stories as David Petraeus' dalliance with Paula Broadwell. Isn't keeping our children safe from lunatics far more important by an order of magnitude?

I think the press is up to the challenge. Based on what I've heard in the voices of people in the profession, they will not soon forget what happened in Newtown. And they shouldn't let the rest of us forget either.

Follow @CNNOpinion on Twitter

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The opinions expressed in this commentary are solely those of Howard Kurtz.

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Officials: Children who died in fire were home alone

A 3-year-old boy and 2-year-old girl died this morning after they and two other children were left home alone in the Englewood neighborhood, officials say. (Posted Dec. 22nd, 2012)

A young boy and girl died in a fire this morning after they and two other children were left home alone in the Englewood neighborhood on the South Side, officials say.

The girl, 2, and the boy, 3, were found in a back bedroom after firefighters cut through burglar bars on the brick and stone two-flat in the 6400 block of South Paulina Street.

"Please, sergeant, please," a relative pleaded with an officer outside the home. "They're 2 and 3 years old."

A hot plate being used for heat sparked the fire while the four children, alone in the apartment, slept in two bedrooms, according to fire officials. Police said the children's mother and aunt were being questioned.

The surviving children, a 7-year-old boy and his 4-year-old brother, were rescued by an aunt and interviewed by investigators at a neighbor's home.

Darnell, 7, said he and Marquis, 4, had fallen asleep watching Batman cartoons. The two other children -- his 2-year-old sister and 3-year-old cousin -- were asleep in another bedroom. When he woke up, the fire was already burning.

"When the fire started, everything shut off," Darnell said.

The boy said he and Marquis were in a bedroom by the kitchen and "the fire was in the front room where the couch is at. When we saw the fire, it was like in the front room, then it was by the bathroom door."

Darnell said his aunt came rushing through the front door. "When (she) saw the fire, she called all our names. When I opened the door, she told me, 'Come on, the fire's getting closer.' I coughed, my auntie was choking. My sister was banging on the door.

"When we got outside, police passed us, then drove backward and came up because there was a fire," he said.

Darnell and Marquis were brought to a neighbor's house, where investigators from the Bomb and Arson unit and the Office of Fire Investigations (OFI) talked to them.

The investigator from OFI squatted down while talking to the boys. Only Darnell spoke. Marquis was quiet the entire time. Darnell spoke to a Tribune reporter afterward as he sat with four neighbors, all adults, in their home.

The children were later taken into protective custody by the Department of Children and Family Services.

When firefighters arrived around 3:30 a.m., they weren't able to get into the home because of intense heat and fire, a Chicago Fire Department official said. Fire was heavy throughout the basement and first floor, he said.

Firefighters cut through burglar bars on the windows, he said.

Firefighters eventually found the two children cuddled up in a bed, fire officials said at a news conference.

The basement windows were all shattered. A white Christmas tree, smudged with smoke, stood near front room window.

A neighbor told an investigator that the second-floor tenants recently moved out of the brick and stone two-flat.

pnickeas@tribune.com

Twitter: @PeterNickeas

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Early signs show Egypt's new constitution passing

CAIRO (Reuters) - Early indications showed Egyptians approved an Islamist-drafted constitution after Saturday's final round of voting in a referendum despite opposition criticism of the measure as divisive.

An official from the Muslim Brotherhood's political party, which backs Islamist President Mohamed Mursi, said that after nearly 4 million votes had been counted there was a majority of 74 percent in favor of the constitution.

Exit polls from the opposition National Salvation Front also showed the constitution passing, an official said.

Last week's first round returned 57 percent in favor of the constitution, according to unofficial data. The vote was split over two days as many judges refused to supervise the ballot.

The referendum committee may not declare official results for the two rounds until Monday, after hearing appeals.

Islamist backers of Mursi say the constitution is vital to move to democracy, nearly two years after an Arab Spring revolt overthrew authoritarian ruler Hosni Mubarak. It will provide stability for a weak economy, they say.

But the opposition accuses Mursi of pushing through a text that favors Islamists and ignores the rights of Christians, who make up about 10 percent of the population, as well as women.

"I'm voting 'no' because Egypt can't be ruled by one faction," said Karim Nahas, 35, a stockbroker, heading to a polling station in Giza, in greater Cairo.

At another polling station, some voters said they were more interested in ending Egypt's long period of political instability than in the Islamist aspects of the charter.

"We have to extend our hands to Mursi to help fix the country," said Hisham Kamal, an accountant.

VICE PRESIDENT ANNOUNCES RESIGNATION

Hours before polls closed, Vice President Mahmoud Mekky announced his resignation. He said he wanted to quit last month but stayed on to help Mursi tackle a crisis that blew up when the Islamist leader assumed wide powers.

Mekky, a prominent judge who said he was uncomfortable in politics, disclosed earlier he had not been informed of Mursi's power grab. The timing of his resignation appeared linked to the lack of a vice-presidential post under the draft constitution.

Rights groups reported alleged law violations during voting. They said some polling stations opened late, that Islamists illegally campaigned at some of them, and complained of voter registration irregularities, including listing of a dead person.

The new basic law sets a limit of two four-year presidential terms. It says sharia law principles remain the main source of legislation but adds an article to explain this further. It also says Islamic authorities will be consulted on sharia - a source of concern to Christians and other non-Muslims.

If the constitution passes, there will be parliamentary elections in about two months.

After the first round of voting, the opposition said alleged abuses meant the first stage of the referendum should be re-run.

But the committee overseeing the two-stage vote said its investigations showed no major irregularities in voting on December 15, which covered about half of Egypt's 51 million voters. About 25 million were eligible to vote in the second round.

MORE UNREST

If the charter is approved, the opposition says it is a recipe for trouble since it will not have received sufficiently broad backing and that it will not have been a fair vote.

"I see more unrest," said Ahmed Said, head of the liberal Free Egyptians Party and a member of the National Salvation Front, an opposition coalition formed after Mursi expanded his powers on November 22 and then pushed the constitution to a vote.

Protesters accused the president of acting like a pharaoh, and he was forced to issue a second decree two weeks ago that amended a provision putting his decisions above legal challenge.

Said cited "serious violations" on the first day of voting, and said anger against Mursi was growing. "People are not going to accept the way they are dealing with the situation."

At least eight people were killed in protests outside the presidential palace in Cairo this month. Islamists and rivals hurled stones at each other on Friday in Alexandria, the second-biggest city. Two buses were torched.

Late on Saturday, Mursi announced the names of 90 new members he had appointed to the upper house of parliament, state media reported, and a presidential official said the list was mainly liberals and other non-Islamists.

Mursi's main opponents from liberal, socialist and other parties said they had refused to take any seats.

Two-thirds of the 270-member upper house was elected in a vote early this year, with one third appointed by the president. Mursi, elected in June, had not named them till now. Mursi's Islamist party and its allies dominate the assembly.

(Additional reporting by Tamim Elyan and Shaimaa Fayed; Writing by Edmund Blair and Giles Elgood; Editing by Mark Trevelyan and Jason Webb)

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Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.

A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.

Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats. This only added to worry that the protracted budget talks will stretch into 2013.

Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.

"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.

"The markets still basically believe that something will be done," he said.

If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.

For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.

IT COULD GET A LITTLE CRAZY

Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.

If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.

"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.

"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."

Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.

Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.

"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.

"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."

Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.

The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.

Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.

U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)

(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Douglas wins AP female athlete of the year honors

When Gabby Douglas allowed herself to dream of being the Olympic champion, she imagined having a nice little dinner with family and friends to celebrate. Maybe she'd make an appearance here and there.

"I didn't think it was going to be crazy," Douglas said, laughing. "I love it. But I realized my perspective was going to have to change."

Just a bit.

The teenager has become a worldwide star since winning the Olympic all-around title in London, the first African-American gymnast to claim gymnastics' biggest prize. And now she has earned another honor. Douglas was selected The Associated Press' female athlete of the year, edging out swimmer Missy Franklin in a vote by U.S. editors and news directors that was announced Friday.

"I didn't realize how much of an impact I made," said Douglas, who turns 17 on Dec. 31. "My mom and everyone said, 'You really won't know the full impact until you're 30 or 40 years old.' But it's starting to sink in."

In a year filled with standout performances by female athletes, those of the pint-sized gymnast shined brightest. Douglas received 48 of 157 votes, seven more than Franklin, who won four gold medals and a bronze in London. Serena Williams, who won Wimbledon and the U.S. Open two years after her career was nearly derailed by a series of health problems, was third (24).

Britney Griner, who led Baylor to a 40-0 record and the NCAA title, and skier Lindsey Vonn each got 18 votes. Sprinter Allyson Felix, who won three gold medals in London, and Carli Lloyd, who scored both U.S. goals in the Americans' 2-1 victory over Japan in the gold-medal game, also received votes.

"One of the few years the women's (Athlete of the Year) choices are more compelling than the men's," said Julie Jag, sports editor of the Santa Cruz Sentinel.

Douglas is the fourth gymnast to win one of the AP's annual awards, which began in 1931, and first since Mary Lou Retton in 1984. She also finished 15th in voting for the AP sports story of the year.

Douglas wasn't even in the conversation for the Olympic title at the beginning of the year. That all changed in March when she upstaged reigning world champion and teammate Jordyn Wieber at the American Cup in New York, showing off a new vault, an ungraded uneven bars routine and a dazzling personality that would be a hit on Broadway and Madison Avenue.

She finished a close second to Wieber at the U.S. championships, then beat her two weeks later at the Olympic trials. With each competition, her confidence grew. So did that smile.

By the time the Americans got to London, Douglas had emerged as the most consistent gymnast on what was arguably the best team the U.S. has ever had.

She posted the team's highest score on all but one event in qualifying. She was the only gymnast to compete in all four events during team finals, when the Americans beat the Russians in a rout for their second Olympic title, and first since 1996. Two nights later, Douglas claimed the grandest prize of all, joining Retton, Carly Patterson and Nastia Liukin as what Bela Karolyi likes to call the "Queen of Gymnastics."

But while plenty of other athletes won gold medals in London, none captivated the public quite like Gabby.

Fans ask for hugs in addition to photographs and autographs, and people have left restaurants and cars upon spotting her. She made Barbara Walters' list of "10 Most Fascinating People," and Forbes recently named her one of its "30 Under 30." She has deals with Nike, Kellogg Co. and AT&T, and agent Sheryl Shade said Douglas has drawn interest from companies that don't traditionally partner with Olympians or athletes.

"She touched so many people of all generations, all diversities," Shade said. "It's her smile, it's her youth, it's her excitement for life. ... She transcends sport."

Douglas' story is both heartwarming and inspiring, its message applicable those young or old, male or female, active or couch potato. She was just 14 when she convinced her mother to let her leave their Virginia Beach, Va., home and move to West Des Moines, Iowa, to train with Liang Chow, Shawn Johnson's coach. Though her host parents, Travis and Missy Parton, treated Douglas as if she was their fifth daughter, Douglas was so homesick she considered quitting gymnastics.

She's also been open about her family's financial struggles, hoping she can be a role model for lower income children.

"I want people to think, 'Gabby can do it, I can do it,'" Douglas said. "Set that bar. If you're going through struggles or injuries, don't let it stop you from what you want to accomplish."

The grace she showed under pressure — both on and off the floor — added to her appeal. When some fans criticized the way she wore her hair during the Olympics, Douglas simply laughed it off.

"They can say whatever they want. We all have a voice," she said. "I'm not going to focus on it. I'm not really going to focus on the negative."

Besides, she's having far too much fun.

Her autobiography, "Grace, Gold and Glory," is No. 4 on the New York Times' young adult list. She, Wieber and Fierce Five teammates Aly Raisman and McKayla Maroney recently wrapped up a 40-city gymnastics tour. She met President Barack Obama last month with the rest of the Fierce Five, and left the White House with a souvenir.

"We got a sugar cookie that they were making for the holidays," Douglas said. "I took a picture of it."

Though her busy schedule hasn't left time to train, Douglas insists she still intends to compete through the Rio de Janeiro Olympics in 2016.

No female Olympic champion has gone on to compete at the next Summer Games since Nadia Comaneci. But Douglas is still a relative newcomer to the elite scene — she'd done all of four international events before the Olympics — and Chow has said she hasn't come close to reaching her full potential. She keeps up with Chow through email and text messages, and plans to return to Iowa after her schedule clears up in the spring.

Of course, plenty of other athletes have said similar things and never made it back to the gym. But Douglas is determined, and she gets giddy just talking about getting a new floor routine.

"I think there's even higher bars to set," she said.

Because while being an Olympic champion may have changed her life, it hasn't changed her.

"I may be meeting cool celebrities and I'm getting amazing opportunities," she said. "But I'm still the same Gabby."

___

AP Projects Editor Brooke Lansdale contributed to this report.

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Soyuz capsule docks with space Station

ALMATY, Kazakhstan (AP) — A Soyuz capsule packed with three astronauts successfully docked Friday with the International Space Station, taking the size of the full crew at the orbiting laboratory to six.

American Tom Marshburn, Russian Roman Romanenko and Canadian Chris Hadfield traveled two days in the capsule before linking up with the space station‘s Russian Rassvet research module.

The docking took place around 255 miles (410 kilometers) above the capital of Kazakhstan.

Almost three hours passed before pressure was equalized between the capsule and the space station, allowing for safe entrance.

As the hatches were unlocked, the arriving trio was welcomed by NASA astronaut Kevin Ford and Russian colleagues Oleg Novitsky and Yevgeny Tarelkin.

The six colleagues exchanged hugs and posed for photos as they floated in the weightless atmosphere of the station.

Minutes after entry, Hadfield could be heard saying in English: “I love what you’ve done with the place.”

Hadfield flew to the space station in 2001, when he spent 11 days at the facility and performed two spacewalks. He will take over as the space station’s first ever Canadian commander in its fourteen year history when the crew now onboard prepares to leave in March.

Family members spoke for the first since the launch with the astronauts in a linkup from the Korolyov space center outside Moscow.

“It was just a heck of a ride for the three of us. It’s like being on a crazy dragster, just a fun, crazy zip up to space,” Hadfield said, speaking to his son.

The incoming crew will spend nearly five months at the space station before returning to earth.

Their mission began with a launch from the Russian-leased Baikonur space port in southern Kazakhstan.

The International Space Station is the biggest orbiting outpost ever built and can sometimes be seen from the Earth with the naked eye. It consists of more than a dozen modules built by the U.S., Russia, Canada, Japan and the European Space Agency.

The astronauts will conduct some 50 scientific experiments including a test for a system aimed at predicting natural calamities.

Science News Headlines – Yahoo! News

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Goodbye, U.S. Postal Service?

This Christmas could be the Post Office's last, says John Avlon.

STORY HIGHLIGHTS

• The U.S. Postal Service is bleeding money and heading toward insolvency


• John Avlon: Congress can save the postal service in deal on the fiscal cliff


• He says the urgency is clear, let's hope for a Christmas miracle


• Avlon: But be prepared that Washington dysfunction can doom the postal service

Editor's note: John Avlon is a CNN contributor and senior political columnist for Newsweek and The Daily Beast. He is co-editor of the book "Deadline Artists: America's Greatest Newspaper Columns." He is a regular contributor to "Erin Burnett OutFront" and is a member of the OutFront Political Strike Team. For more political analysis, tune in to "Erin Burnett OutFront" at 7 ET weeknights.

(CNN) -- It's the time of year for dashing through the snow to the crowded post office, with arms full of holiday gifts for family and friends.

Not to break the atmosphere of holiday cheer, but this Christmas could be the last for the U.S. Postal Service. It is losing $25 million dollars a day and staring down insolvency -- unless Congress steps in to pass a reform package that reduces its costs.

With just a few days left in the congressional calendar, there is still some small hope for a Christmas miracle -- maybe the Postal Service can be saved as part of a deal on the fiscal cliff. But with even Hurricane Sandy relief stalled, skepticism is growing.

John Avlon

The real question is, what's taken them so long? After all, back in April the Senate passed an imperfect but bipartisan bill by 62-37. It would have saved some $20 billion, cut some 100 distribution centers, and reduced head count by an additional 100,000 through incentives for early retirement, while reducing red tape to encourage entrepreneurialism and keeping Saturday delivery in place for at least another two years. At the time, Sen. Tom Carper of Delaware said, "The situation is not hopeless; the situation is dire. My hope is that our friends over in the U.S. House, given the bipartisan steps we took this week, will feel a sense of urgency."

To which the House might as well have replied, "Not so much."

In August, the Postal Service defaulted for the first time, unable to make a $5.5 billion payment to fund future retirees' health benefits. The headline in Government Executive magazine said it all: "Postal Service defaults, Congress does nothing."

The usual suspects were at fault -- hyperpartisan politics and the ideological arrogance that always makes the perfect the enemy of the good.

House Oversight Committee Chairman Darrell Issa greeted the news of the Senate bill by calling it a "taxpayer-funded bailout." His primary complaint was that the Senate bill did not go far enough. He was not alone -- Postmaster General Patrick Donahoe also expressed disappointment at the scope of the Senate bill, saying that it fell "far short of the Postal Service's plan."

But Issa's alternative couldn't even get to a vote in the Republican-controlled House. And so nothing happened. Even after the USPS defaulted on a second $5.5 billion payment, the response was crickets.

Washington insiders said that action would be taken after the election, when lawmakers would be free to make potentially unpopular decisions. But despite a series of closed-door meetings, nothing has been done.

It's possible that the nearly $20 billion in savings could be part of a fiscal cliff deal. Sen. Joseph Lieberman has suggested that ending Saturday delivery, except for packages, could be part of a compromise that could save big bucks down the road. Another aspect of a savings plan could be suspending the USPS' onerous obligation to fully fund its pension costs upfront, a requirement that would push many businesses into bankruptcy. And last fiscal year, the post office posted a record $15.9 billion loss.

"As the nation creeps toward the 'fiscal cliff,' the U.S. Postal Service is clearly marching toward a financial collapse of its own," says Carper. "The Postal Service's financial crisis is growing worse, not better. It is imperative that Congress get to work on this issue and find a solution immediately. ... Recently key House and Senate leaders on postal reform have had productive discussions on a path forward, and while there may be some differences of opinion in some of the policy approaches needed to save the Postal Service, there is broad agreement that reform needs to happen -- the sooner the better."

The urgency couldn't be clearer -- but even at this yuletide 11th hour, signs of progress are slim to none. If Congress fails to pass a bill, we'll be back to square one in the new year, with the Senate needing to pass a new bill which will then have to be ratified by the House. There is just no rational reason to think that lift will be any easier in the next Congress than in the current lame duck Congress, where our elected officials are supposedly more free to do the right thing, freed from electoral consequences.

So as you crowd your local post office this holiday season, look around and realize that the clock is ticking. The Postal Service is fighting for its life. And Congress seems determined to ignore its cries for help.

"Neither rain nor snow nor sleet nor gloom of night" can stop the U.S. Postal Service from making its appointed rounds -- but congressional division and dysfunction apparently can.

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The opinions expressed in this commentary are solely those of John Avlon.

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Witnesses: 'Big boom,' then arrest of prison escapee

Hezekiah Harper-Bey, 19, describes what he saw last night when FBI agents and Chicago police arrested Joseph Banks, who escaped from federal jail earlier this week. (Posted on: Dec. 21, 2012)

After a brazen escape and three days on the run, Joseph “Jose” Banks was quiet and respectful in court today as he made his initial appearance following his capture overnight on the North Side.

Banks, who was shackled at his wrists and ankles, answered questions from U.S. Magistrate Judge Sidney Schenkier politely – a sharp contrast to his defiant behavior during his trial last week on bank robbery charges in the same Dirksen U.S. Courthouse.

A lawyer did not fight Banks’ detention, knowing that would be futile for a convicted bank robber who had just made a daring escape early Tuesday from a federal jail in the South Loop, scaling down from some 15 stories with a rope fashioned from bedsheets.

Attorney Beau Brindley, who formerly represented Banks on the bank robbery charges and stood with him in court today, called his client a “mild-mannered” individual whose statements at trial were misconstrued as threats toward the court system.

“This is not a violent person,” Brindley told reporters after Banks’ court appearance. “He’s a talented artist and clothing designer.”

Brindley said the news media had misreported Banks’ comment when he told U.S. District Judge Rebecca Pallmeyer after his conviction: “You’ll hear from me.”
 
Brindley said that was a reference to post-trial motions Banks intended to file.
 
“That statement was taken totally out of context,” Brindley said.

Banks faces one count of escaping federal custody that carries a sentence of up to 5 years in prison on conviction. He also faces sentencing in March for his conviction last week on two bank robberies and two attempted holdups.

Banks was taken into custody by FBI agents and Chicago police around 11:30 p.m. Thursday in the 2300 block of North Bosworth Avenue, according to the FBI.

A neighbor, the Rev. Baggett Collier, said she heard a loud bang and looked out her window.

"We heard a big boom first," she said. "We thought a transformer burst or there was a traffic accident. Later, my daughter called and said police were out there. I went out and I saw him. He was cuffed. His head was down. I didn't hear him say anything. They got him into the wagon peacefully. The police were pretty calm bringing him out.

"He was just normal," Collier added. "There were so many police there."

She said agents also took into custody a man who was living in the townhouse where Banks was found. He also was in handcuffs and placed in another squadrol. "A really good guy, well-disciplined, somebody a mother would be proud of."

The man and his two teen-aged sons live in the townhouse with a woman and her two younger sons, Collier said. "Very humble people, they take very good care of their children."

Collier said she saw the woman last evening at a neighborhood store. "She seemed nervous and upset," she said. "Looking back, it's like she wanted to tell me something but was afraid to say anything. She had gotten what she wanted and just stood there. I said, 'How you doing?' She said, 'OK.' But you know when something doesn't seem right. I believe she might have been afraid."

Collier said she was shocked by the arrest. "I had talked to my daughter yesterday. I told her, 'I don't want you walking in the neighborhood because those robbers are out there.' "

Hezekiah Harper-Bey, 19, was watching television in his bedroom when he noticed a man outside wearing a white T-shirt and blue shorts. He heard a “loud boom” and looked outside to see the FBI with their guns pointed at the man, who turned out to be Banks.

“Then I saw him run past a little field and into a house,” he said. Harper-Bey said he walked outside and saw Banks in handcuffs.

“He had a white T-shirt with blue shorts. I saw him but I didn’t pay him no mind,” he said. “I just started to watch TV. That's when I heard the loud boom and that’s when I looked, then I put two and two together. I’m like, that was the bank robber. I never knew I could get the $60,000 (reward). I watched the news so I seen his face, so I knew it was him when I saw him.”

Banks was using a cell phone about 20 minutes before the arrest, Harper-Bey said. “I thought he was a regular person who lived around here,” he said. “Then I saw the FBI with their guns pointed out and they said he ran into a house. Then I went downstairs before he got into the wagon. That's when I saw him.

"It was like 30, 20 of them (FBI agents). There was a lot of them," Harper-Bey said. "He was in handcuffs, tied to the back. There were like three cops with him.

"Before he came out, they (FBI agents) came out with a shoebox and I’m thinking it’s the money. Two seconds later, he came out," Harper-Bey said. "He didn’t put up a fight."

He said he had not noticed Banks in the neighborhood before. Harper-Bey said he believes Banks had stayed inside the townhouse for days and no one in the neighborhood suspected he was there.

Another witness, Colm Marron, said he stepped out of a bar on Fullerton Avenue and saw about a half-dozen unmarked police cars gathering in the Walgreens parking lot around the corner from the building.

“They flew out, just down there,” he said, motioning from inside the bar toward Bosworth Avenue. Seconds later he heard a “huge bang.”

“I was surprised how loud the bang was. It wasn’t like any thunder I’ve ever heard,” he said. “There wasn’t any echo to it, just that loud, off the bat.”

A few minutes later, a handful of marked Chicago police cars arrived, he said.

Banks and his cellmate, Kenneth Conley, both convicted bank robbers awaiting sentencing, were last accounted for at 10 p.m. Monday during a routine bed check at the Metropolitan Correctional Center, authorities said.

About 7 a.m. Tuesday, jail employees arriving for work saw ropes made from bedsheets dangling from a hole in the wall near the 15th floor. The two had put clothing and sheets under blankets in their beds to throw off guards making nighttime checks, authorities said.

Cameras mounted to the side of the 28-story federal jail captured Banks and Conley sliding down the building shortly after 2:30 a.m. Tuesday, according to an employee who wished to remain anonymous.

The men left view briefly, but it was believed they landed on the roof of a garage below. Moments later, footage from a different camera showed them hopping a black fence marking the perimeter of the property, the employee said.

The FBI said a surveillance camera a few blocks from the jail showed the men, wearing light-colored clothing, hailing a taxi at Congress Parkway and Michigan Avenue. They also appeared to be wearing backpacks, according to the FBI.

The manhunt for the inmates included several high-profile raids Tuesday in the southwest suburbs of Tinley Park and New Lenox, where Conley's family and associates lived. Conley is still unaccounted for as of Friday morning.

A $50,000 reward for information leading to the capture of the two fugitives was announced by the FBI.

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Italy PM Monti resigns, elections likely in February

ROME (Reuters) - Italian Prime Minister Mario Monti tendered his resignation to the president on Friday after 13 months in office, opening the way to a highly uncertain national election in February.

The former European commissioner, appointed to lead an unelected government to save Italy from financial crisis a year ago, has kept his own political plans a closely guarded secret but he has faced growing pressure to seek a second term.

President Giorgio Napolitano is expected to dissolve parliament in the next few days and has already indicated that the most likely date for the election is February 24.

In an unexpected move, Napolitano said he would hold consultations with political leaders from all the main parties on Saturday to discuss the next steps. In the meantime Monti will continue in a caretaker capacity.

European leaders including German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso have called for Monti's economic reform agenda to continue but Italy's two main parties have said he should stay out of the race.

Monti, who handed in his resignation during a brief meeting at the presidential palace shortly after parliament approved his government's 2013 budget, will hold a news conference on Sunday at which he is expected clarify his intentions.

Ordinary Italians are weary of repeated tax hikes and spending cuts and opinion polls offer little evidence that they are ready to give Monti a second term. A survey this week showed 61 percent saying he should not stand.

Whether he runs or not, his legacy will loom over an election which will be fought out over the painful measures he has introduced to try to rein in Italy's huge public debt and revive its stagnant economy.

His resignation came a couple of months before the end of his term, after his technocrat government lost the support of Silvio Berlusconi's centre-right People of Freedom (PDL) party in parliament earlier this month.

Speculation is swirling over Monti's next moves. These could include outlining policy recommendations, endorsing a centrist alliance committed to his reform agenda or even standing as a candidate in the election himself.

The centre-left Democratic Party (PD) has held a strong lead in the polls for months but a centrist alliance led by Monti could gain enough support in the Senate to force the PD to seek a coalition deal which could help shape the economic agenda.

BERLUSCONI IN WINGS

Senior figures from the alliance, including both the UDC party, which is close to the Roman Catholic Church, and a new group founded by Ferrari sports car chairman Luca di Montezemolo, have been hoping to gain Monti's backing.

He has not said clearly whether he intends to run, but he has dropped heavy hints he will continue to push a reform agenda that has the backing of both Italy's business community and its European partners.

The PD has promised to stick to the deficit reduction targets Monti has agreed with the European Union and says it will maintain the broad course he has set while putting more emphasis on reviving growth.

Berlusconi's return to the political arena has added to the already considerable uncertainty about the centre-right's intentions and increased the likelihood of a messy and potentially bitter election campaign.

The billionaire media tycoon has fluctuated between attacking the government's "Germano-centric" austerity policies and promising to stand aside if Monti agrees to lead the centre right, but now appears to have settled on an anti-Monti line.

He has pledged to cut taxes and scrap a hated housing tax which Monti imposed. He has also sounded a stridently anti-German line which has at times echoed the tone of the populist 5-Star Movement headed by maverick comic Beppe Grillo.

The PD and the PDL, both of which supported Monti's technocrat government in parliament, have made it clear they would not be happy if he ran against them and there have been foretastes of the kind of attacks he can expect.

Former centre-left prime minister Massimo D'Alema said in an interview last week that it would be "morally questionable" for Monti to run against the PD, which backed all of his reforms and which has pledged to maintain his pledges to European partners.

Berlusconi who has mounted an intensive media campaign in the past few days, echoed that criticism this week, saying Monti risked losing the credibility he has won over the past year and becoming a "little political figure".

(Additional reporting by Gavin Jones, Massimiliano Di Giorgio and Paolo Biondi; Writing by Gavin Jones and James Mackenzie; Editing by Michael Roddy)

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Cerberus to sell Bushmaster maker after shootings

Following pressure from a major investor, U.S. private equity firm Cerberus Capital Management is selling gunmaker Freedom Group, whose Bushmaster AR-15 rifle was used in the Connecticut school massacre last week.

The California State Teachers' Retirement System (CalSTRS) said on Monday it was reviewing its investment with Cerberus in the wake of Friday's shooting, in which a gunman killed 20 children and six adults at Sandy Hook Elementary School and then took his own life.

Before going to the school, the gunman, Adam Lanza, 20, shot dead his mother in the home they shared, according to law enforcement officials.

In addition to Cerberus, some gun retailers also took steps.

Dick's Sporting Goods pulled all guns from its store closest to the site of the massacre in Newtown, Connecticut, and suspended the sale of certain kinds of semi-automatic rifles from its chains nationwide.

Wal-Mart Stores Inc took down an informational website about semi-automatic Bushmaster rifles.

Cabela's Inc continued to sell Bushmaster AR-15 rifles on its website.

CalSTRS, the second-largest pension fund in the United States, had invested $751.4 million with Cerberus by the end of March 2012, according to its website.

Cerberus said on Tuesday it would hire a financial adviser to sell its interests in Freedom Group and return the proceeds to investors.

The private equity firm expressed shock and grief at the killings in Newtown but added that Freedom Group was not responsible.

"We do not believe that Freedom Group or any single company or individual can prevent senseless violence or the illegal use or procurement of firearms and ammunition," it said.

Cerberus bought firearms maker Bushmaster in 2006 and later merged it with other gun companies to create Freedom Group, which reported net sales of $677 million for the nine months ended September, up from $565 million a year earlier.

Founded in 1992 by Stephen Feinberg and William Richter, New York-based Cerberus has more than $20 billion under management and shares its name with a mythical three-headed dog which in Greek mythology guards the entrance to the underworld.

Besides Cerberus, a few other private equity firms also have stakes in firearms companies. Sciens Capital Management, for example, jointly owns small arms maker Colt Defense.

In an opinion piece published on Monday in Slate magazine, former New York Governor Eliot Spitzer said pressure should be stepped up on the owners of gun companies, like Cerberus, to change the way they operate.

"It is time to determine pension fund by pension fund who has invested in Cerberus and bring pressure on those investors either to get out of Cerberus or have Cerberus change the way it runs the gun industry," Spitzer wrote. (http://link.reuters.com/vuf74t)

Popular New York Times columnist Andrew Ross Sorkin, in an opinion piece that was critical of private equity investments in arms makers, took exception to the fact that Freedom Group and other notable gun manufacturers had not commented on the tragedy. (http://link.reuters.com/zuf74t)

Both opinion pieces were published before Cerberus's announcement.

GUN CONTROL DEBATE

Cerberus said the Newtown tragedy was a "watershed event" that has raised the national debate on gun control "to an unprecedented level."

However, it added the firm was responsible for only investment decisions it makes on behalf of its clients and does not play the role of "statesmen or policy makers."

"It is not our role to take positions, or attempt to shape or influence the gun control policy debate. That is the job of our federal and state legislators," it said.

U.S. lawmakers have not approved a major new federal gun law since 1994, and a ban on certain semi-automatic rifles known as assault weapons expired in 2004.

The Newtown massacre has led President Barack Obama and some congressional leaders to reconsider what has been a largely hands-off approach to gun control in recent years.

The percentage of Americans favoring tough gun regulations rose significantly after the killings at the Connecticut school, a Reuters/Ipsos poll showed on Monday.

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