Wall Street set for higher open after jobs report

NEW YORK (Reuters) - Wall Street was set for a higher open on Friday after a key U.S. jobs report showed the pace of hiring by employers had eased sightly in December but gave signals of some momentum in the labor market's recovery since the 2007-09 recession.
Though the data showed lackluster economic growth was unable to make a dent in the still-high U.S. unemployment rate, it calmed fears about the possibility of the U.S. Federal Reserve ending its highly stimulative monetary policy.
Concerns about the endurance of the Fed's stimulus program prompted investors to pull back from the market Thursday after a two-day rally.
"When it comes to Fed policy, this report should keep policy steady. There was talk of a scaling back of (Quantitative Easing) yesterday, but this number is a snapshot and is basically where it was when the Fed decided to do more QE last month," said Tom Porcelli, chief U.S. economist at RBC Capital markets in New York.
According to the Labor Department, payrolls outside the farming sector grew 155,000 last month, as expected and slightly below the level for November. Gains in employment were distributed broadly throughout the economy, from manufacturing and construction to health care.
Minutes from the Fed's December policy meeting, released Thursday, showed Fed officials were increasingly worried about the risks of asset purchases on financial markets, though they looked set to continue with the open-ended stimulus program for now.
Some policymakers thought asset buying should be slowed or stopped before the end of 2013 while others highlighted the need for further stimulus. The Fed's policy of easy credit has helped push the S&P 500 to a 13.4 percent gain in 2012. Ending that policy would remove an incentive for investors to purchase riskier assets like stocks.
S&P 500 futures added 3.4 points and were slightly higher than fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 15 points, while Nasdaq 100 futures added 4.25 points.
Pharmaceuticals maker Eli Lilly and Co. said on Friday it expects 2013 earnings to increase to $3.75 to $3.90 per share excluding items from $3.30 to $3.40 per share in 2012.
Walgreen is set to report December same-store sales, a day after several major U.S. retailers beat expectations of modest sales increases in December as shoppers wrapped up holiday buying.
Mosaic Co reported that its quarterly operating profit fell 30 percent as international distributors delayed buying potash and phosphate to avert the price risk associated with the fertilizer producer's negotiations with China and India.
Japan's Nikkei share average climbed nearly 3 percent to a 22-month high on its first trading day of 2013 on Friday, as a deal in Washington to avert fiscal disaster buoyed investor risk appetite and the weaker yen lifted exporters such as Toyota Motor Corp . Japan's markets were closed Thursday for a holiday.

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Stocks inch higher following jobs report

NEW YORK (AP) — Stocks are mostly edging higher on Wall Street in early trading after the U.S. government reported that hiring held up last month.
The Dow Jones industrial average rose 11 points to 13,403 shortly after the opening bell Friday. The Standard & Poor's 500 index rose two to 1,461 and the Nasdaq fell a point to 3,099.
The Labor Department said U.S. employers added 155,000 jobs in December. It also said hiring was stronger in November than first thought. The unemployment rate held steady at 7.8 percent.
Accuray plunged 23 percent to $5.21 after the radiation oncology equipment company reported weak sales and said it would cut 13 percent of its staff.
Yoga apparel maker Lululemon dropped 5 percent to $71.10 after Credit Suisse predicted slowing momentum and downgraded its stock.

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Sensex edges up to two-year high on oil, earnings

MUMBAI (Reuters) - The BSE Sensex edged higher on Friday to touch two-year high, posting its strongest weekly performance since the end of November, as oil companies such as ONGC rose on hopes a proposed change in the government's pricing formula would boost gas prices.
Software services exporters such as Tata Consultancy Services also rose on expectations upcoming October-December earnings results would beat expectations and that the sector would guide for an improved outlook in 2013.
Infosys will kick off earnings on January 11, at a time when results are gaining particular relevance given some analysts worry about potential complacency after strong gains in 2012 have continued into the new year.
India VIX <.nifvix>, also considered by some investors as a fear gauge, is just 2.5 percent away from its all-time lowest close.
"We have already seen advance tax numbers, so in the near term one has to see how the earnings season pans out," Kaushik Dani, fund manager at Peerless Mutual Fund, said.
"One has to remain stock specific on how the numbers shape up for the quarter," Dani said.
The benchmark BSE index rose 0.1 percent, or 19.30 points, to end at 19,784.08, marking a fourth consecutive session of gains.
The index rose 1.74 percent for the week, its strongest weekly performance since the end of November.
The broader NSE index rose 0.11 percent, or 6.65 points, to end at 6,016.15, closing above the psychologically important 6,000 level for a second day. It rose 1.8 percent for the week.
Shares in upstream oil and gas companies rallied on hopes that the pricing formula recommended by a government-appointed panel that looked into oil and gas exploration contracts would be approved by the government.
The proposed changes would sharply raise the prices of domestic natural gas, analysts said.
Oil and Natural Gas Corporation shares gained 1.8 percent, while Oil India rose 2 percent.
Reliance Industries Ltd rose 0.13 percent, gaining less than its peers after the market regulator rejected its request to settle a long-pending dispute over the 2007 sale of stock futures in a unit.
State-owned oil companies gained on expectations India could soon announce a potential gradual hike in diesel prices, after a government official last month was quoted in local media saying a proposal was being considered.
Among refiners, Indian Oil Corp rose 3.5 percent, Hindustan Petroleum Corp gained 5.3 percent and Bharat Petroleum Corp ended 2.12 percent higher.
Expectations of better-than-expected quarterly earnings lifted technology stocks.
Tata Consultancy Services Ltd rose 1.45 percent, while Wipro Ltd ended up 1.5 percent higher.
Infosys, which kicks off earnings on Friday, rose 0.5 percent. The company denied a newspaper report it was planning to fire up to 5,000 poorly performing workers was "wrong", although it encourages "chronic underperformers" to leave as part of its routine staff management.
IFCI shares gained 11.4 percent after the government restructured the board of the project finance provider according to a stock filing, sparking hopes of a turnaround in operations.
However, Tata Steel ended 1.9 percent lower while Jindal Steel and Power fell 1.8 percent on profit taking, after gaining on the back of a rise in international metal prices after the end of the US "fiscal cliff" issue.

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Israeli undercover raid sets off violent protests

RAMALLAH, West Bank (AP) — Israeli undercover troops broke into a West Bank apartment building in a failed arrest raid Thursday, igniting a violent protest and signaling that Israeli-Palestinian security coordination may be in trouble, officials said.
Thursday's raid targeted a suspected Islamic militant and marked the second time this week an army operation sparked clashes. Palestinians accused Israel of taking provocative actions in retaliation for their successful bid in November to win U.N. recognition of a state of Palestine in the West Bank, Gaza and east Jerusalem, the territories Israel captured in 1967.
Israel's military denied it was walking away from coordination with the security forces of Palestinian President Mahmoud Abbas, whose self-rule government administers just over one-third of the West Bank, where more than 90 percent of the Palestinians live.
Palestinian officials said Thursday's operation began when undercover troops, followed by uniformed soldiers in more than a dozen jeeps, broke into an apartment building on the outskirts of the West Bank town of Jenin. The apparent target, an activist in the militant Islamic Jihad group, was not in the area.
The Israeli military said several hundred Palestinians began throwing stones, and that some in the crowd hurled firebombs and rolled burning tires toward the soldiers. Troops fired warning shots, and also used tear gas, stun grenades and rubber-coated steel pellets to quell the protest, the military said.
Talal Dweikat, the Palestinian governor of the Jenin district, put the number of stone throwers at several dozen. He said a Palestinian was shot in the leg and an elderly woman was bitten by an army dog. The military confirmed a woman was bitten and taken for medical treatment.
In recent years, the West Bank has been relatively calm, in part because of Israeli-Palestinian coordination in tracking Islamic militants. The coordination came in response to the 2007 takeover of Gaza by the Islamic militant Hamas, Abbas' main political rival.
Trying to prevent a similar takeover in the West Bank, Abbas began cracking down on Hamas and found his interests aligned with Israel's. Abbas has long argued that violence is counterproductive, since Palestinians are bound to lose any armed confrontation with Israel. Hamas believes Israel will make concessions only in response to force.
Security coordination with Israel is unpopular in the West Bank, especially at a time when peace talks are frozen and Palestinian independence appears unlikely anytime soon. U.N. recognition gave the Palestinians a diplomatic boost but changed little on the ground.
Palestinian officials alleged Thursday that the recent Israeli raids are part of Israel's retaliation for the statehood bid. Israel strongly opposed the U.N. recognition, saying it was an attempt to bypass negotiations.
A Palestinian security official said Abbas has ordered his security forces to avoid any confrontations with Israeli troops. Abbas is concerned about an unwanted escalation he believes will not serve Palestinian interests, said the official who spoke on condition of anonymity because he was not authorized to discuss internal deliberations with reporters.
Adnan Damiri, a spokesman for the Palestinian security forces, said Israeli troops have increasingly entered Palestinian-run areas without coordination since November. "There has been an escalation in Israeli raids into our territories since the U.N. bid," he said.
Earlier this week, another undercover raid targeting suspected Islamic Jihad militants in the West Bank prompted clashes that left 10 Palestinians wounded.
Lt. Col. Avital Leibovich, an Israeli army spokeswoman, said Israel has not abandoned security coordination with the Palestinians. "As far as we are concerned, the coordination has not changed," she said. "Our activities are in relation to threats (by militants), and nothing else.

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Israeli library unveils ancient Afghan manuscripts

JERUSALEM (AP) — A trove of ancient manuscripts in Hebrew characters rescued from caves in a Taliban stronghold in northern Afghanistan is providing the first physical evidence of a Jewish community that thrived there a thousand years ago.
On Thursday Israel's National Library unveiled the cache of recently purchased documents that run the gamut of life experiences, including biblical commentaries, personal letters and financial records.
Researchers say the "Afghan Genizah" marks the greatest such archive found since the "Cairo Genizah" was discovered in an Egyptian synagogue more than 100 years ago, a vast depository of medieval manuscripts considered to be among the most valuable collections of historical documents ever found.
Genizah, a Hebrew term that loosely translates as "storage," refers to a storeroom adjacent to a synagogue or Jewish cemetery where Hebrew-language books and papers are kept. Under Jewish law, it is forbidden to throw away writings containing the formal names of God, so they are either buried or stashed away.
The Afghan collection gives an unprecedented look into the lives of Jews in ancient Persia in the 11th century. The paper manuscripts, preserved over the centuries by the dry, shady conditions of the caves, include writings in Hebrew, Aramaic, Judea-Arabic and the unique Judeo-Persian language from that era, which was written in Hebrew letters.
"It was the Yiddish of Persian Jews," said Haggai Ben-Shammai, the library's academic director.
Holding the documents, protected by a laminated sheath, Ben-Shammai said they included mentions of distinctly Jewish names and evidence of their commercial activities along the "Silk road" connecting Europe and the East. The obscure Judeo-Persian language, along with carbon dating technology, helped verify the authenticity of the collection, he said.
"We've had many historical sources on Jewish settlements in that area," he said. "This is the first time that we have a large collection of manuscripts that represents the culture of the Jews that lived there. Until today we had nothing of this."
The documents are believed to have come from caves in the northeast region of modern-day Afghanistan, once at the outer reaches of the Persian empire. In recent years, the same caves have served as hideouts for Taliban insurgents in Afghanistan.
It remains unclear how the ancient manuscripts emerged. Ben-Shammai said the library was contacted by various antiquities dealers who got their hands on them.
Last month, the library purchased 29 out of hundreds of the documents believed to be floating around the world, after long negotiations with antiquities dealers. The library refused to say how much it paid for the collection, adding that it hoped to purchase more in the future and didn't want to drive up prices. The documents arrived in Israel last week.
Comparisons with the other find are inevitable.
The Cairo Genizah was discovered in the late 1800s in Cairo's Ben Ezra Synagogue, built in the ninth century. It included thousands of documents Jews stored there for more than 1,000 years.
Ben-Shammai said it was too early to compare the two, and it would take a long time to sift through the findings from Afghanistan. He said they were already significant since no other Hebrew writings had even been found so far from the Holy Land.
He said the Jewish community in the region at the time lived largely like others in the Muslim world, as a "tolerated minority" that was treated better than under Christian rule. Afghanistan's Jewish community numbered as many as 40,000 in the late 19th century, after Persian Jews fled forced conversion.
By the mid-20th century, only about 5,000 remained, and most emigrated after Israel's creation in 1948. A lone Jewish man remains in Afghanistan, while 25,000 Jews live in neighboring Iran — Israel's bitter enemy.
The library promises the finds will be digitized and uploaded to its website for all to see.
Aviad Stollman, curator of the library's Judaica collection, said much more would be gleaned after intense research on the papers, but already it tells a story of a previously little known community.
"First we can verify that they actually existed — that is the most important point," he said. "And of course their interests. They were not interested only in commerce and liturgy; they were interested also in the Talmud and the Bible," he said.
"They were Jews living a thousand years ago in this place. I think that is the most exciting part."

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Brotherhood official urges Egypt's Jews to return

CAIRO (AP) — A leading Muslim Brotherhood member and adviser to Islamist President Mohammed Morsi created a stir in Egypt when he called on Egyptian Jews in Israel to return home because Egypt is now a democracy and because the Jewish state won't survive.
Essam el-Erian's remarks in a TV appearance put the Brotherhood, which holds power in Egypt, on the spot as opponents — and some allies — jumped on the comments to denounce the group. Morsi's office this week disassociated the president from the comments, saying they were el-Erian's personal opinion.
The criticism ran an unusual gamut of Egyptians' attitudes toward Jews, Israel and the Brotherhood itself.
Some denounced the Brotherhood for trying to put up a veneer of tolerance by inviting Jews to return while Egypt's other religious minorities, particularly Christians, are increasingly worried about persecution under the new Islamist rulers and an Islamist-slanted constitution.
Others saw the comments as a sort of outreach to Zionists, considered the enemy, and as a new example of how the Brotherhood has had a hard time melding its longtime anti-Israeli and anti-Jewish rhetoric with its new responsibilities since coming to power. Under Morsi — who hails from the Brotherhood — the government has continued cooperation with Israel, upheld the two countries' peace deal and Morsi last month helped mediate a cease-fire between Hamas and Israel.
Some warned that el-Erian was opening the door for Egyptian Jews to demand compensation for property taken from them or left behind in Egypt and could even undermine the Palestinians' right to return to homes in Israel. Still others were simply outraged that a Brotherhood official would invite back Jews, and one hardline Islamist politician threatened any Jews who come back.
And there were a few voices calling for Egypt to sincerely look at past treatment of its Jewish community — including why they left or were expelled — and whether they should have the right to return.
Speaking on private ONTV, historian Khaled Fahmy suggested taking el-Erian's comments at face value. "I am taking the call seriously. I would like to see it in part as respectable, as addressing morals and high principles." He said Egyptians should talk about the past "harm to Egyptian Jews" and consider them as still having Egyptian nationality.
"I wish this was put to a public discussion," he said.
Egypt's once thriving Jewish community largely left Egypt more than 60 years ago amid the hostilities between Egypt and Israel. Estimates say about 65,000 Jews left Egypt since the creation of the state of Israel in 1948, most of them to Europe and the West, with a small portion settling in Israel. Their departure was fueled by rising nationalist sentiment during the Arab-Israeli wars, harassment and some direct expulsions by then-President Gamal Abdel-Nasser, and attacks on Jewish properties, some of them blamed on the Brotherhood, which renounced violence in the 1970s.
Now only a handful of Jews, mostly elderly, remain in Egypt, along with a number of heavily guarded synagogues, open only to Jews.
El-Erian, who is also deputy of the Brotherhood's political party, made his comments last week on a late night talk show on the private station Dream TV.
"I wish our Jews return to our country, so they can make room for the Palestinians to return, and Jews return to their homeland in light of the democracy" evolving in Egypt, he said. "I call on them now. Egypt is more deserving of you."
"Why stay in a racist entity, an occupation, and be tainted with war crimes that will be punished, all occupation leaders will be punished," he said. He added in separate comments that the Zionist "project" will end.
The comments didn't make much of an impact in Israel, and there was no official comment about them and little discussion of them in the press. In contrast, they raised widespread ridicule and debate in Egypt on TV shows, newspapers and social websites.
Belal Fadl, a popular Egyptian columnist and satirical writer, said the comments were hypocritical given other Brotherhood officials' statements accusing Egypt's Christians of threatening Morsi's legitimacy as president, fueling anger against the minority community.
"How can we believe the tolerance of el-Erian amid all the sectarian statements by leaders of the groups and other sheiks that all seek to chase away Egypt's Christians in the footsteps of the Jews," Fadl wrote in the daily al-Shorouk Thursday.
Youssef el-Husseini, a prominent TV presenter known for his liberal views and harsh criticism of Morsi and the Brotherhood, said el-Erian was showing a fake tolerance for Jews to impress Israel and the United States — setting aside the anti-Israel parts of his statement. El-Husseini said that if a liberal made the comments he would be branded a traitor and would be accused of inviting Zionists back to Egypt.
"Is el-Erian flirting with the Zionist state to say we are fine and you are friends," el-Husseini said on a Sunday morning talk show. "Or is he flirting with Obama" because of U.S. aid to Egypt. "Is the group taking their political garb bit by bit?"
On Tuesday, Morsi's spokesman said the presidency is not responsible for comments made by el-Erian. "These are his personal opinion," Yasser Ali, the presidential spokesman said.
Mohammed Salmawy, the head of Egypt's Writers Union, called el-Erian's comments "delirium."
"What is this superficial understanding of matters that borders naiveté?" he wrote, saying the problem of Palestinian refugees is not one of "making room" for their return.
"What the Jews who were living in Egypt want is not to return, particularly in the current circumstances. What they want is compensation for their properties" they left behind.
He said el-Erian was recognizing a right of return for Israeli Jews of Arab origin, which he said would allow for a quid-pro-quo forcing Palestinians refugees to drop their demand to return to homes in Israel so that Jews drop demands to return to Arab nations.
"It seems the way to deny the Palestinians the right of return or compensation is to exchange that right for ... the right of the return of Jewish refugees to Arab countries," he wrote Thursday.
The leading member of a former Islamic militant group, Gamaa Islamiya, which is now a political party allied to the Brotherhood, simply said Jews were not welcome back.
Quoted in the Rose el-Youssef newspaper, Tarek el-Zumor said his group will not tolerate their return "except over our dead bodies or after they change their religion and become Muslims.

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Activists: At least 9 killed by Damascus car bomb

BEIRUT (AP) — A car bomb blew up late Thursday in a Damascus gas station, killing at least nine people, a Syrian activist group said.
The Britain-based Syrian Observatory for Human Rights said the death toll in the blast in the capital's Masakin Barzeh neighborhood is expected to rise because many of the wounded were in critical condition.
Syria's state news service also reported the blast but did not give a number of dead or wounded. It said the bomb targeted cars that were lined up to get gas and blamed the attack on "terrorists," the government's shorthand for rebels seeking to topple President Bashar Assad.
The pro-regime Ikhbariyeh TV station said some 30 civilians were killed or wounded in the blast.
Despite gains in other parts of Syria by rebels seeking to topple Assad, he has largely kept his grip on the capital.
But Damascus has been targeted by a number of large bombings, many of which appear to target government buildings. Some have been claimed by the jihadist group Jabhat al-Nusra, which the U.S. has designated a terrorist organization.
There was no immediate claim of responsibility for Thursday's blast.
Masakin Barzeh is a middle-class neighborhood northeast of downtown that is home to many government employees.
The U.N. says more than 60,000 people have been killed in Syria since the start of the uprising in March 2011. The conflict has since evolved into a civil war.

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Rebel area shows limits of rebel push for Damascus

Twin airstrikes by government jets on a large, rebel-held suburb of Damascus on Thursday sheered the sides off apartment towers and left residents digging through rubble for the dead and wounded.
The bombing of Douma came amid a wave of attacks on rebellious districts of the Syrian capital, part of the government's efforts to keep rebel fighters out of President Bashar Assad's seat of power. Late Thursday, a car bomb exploded at a gas station inside the city itself, killing at least nine people, activists said.
Douma, the largest patch of rebel-held ground near Damascus, illustrates why the opposition's advance on the capital has bogged down. Despite capturing territory and setting up committees to provide basic services, the rebels lack the firepower to challenge Assad's forces and remain helpless before his air force.
That stalemate suggests the war will not end soon. The U.N. said Wednesday that more than 60,000 people have been killed since March 2011 — a figure much higher than previous opposition estimates.
Rebels took control of Douma, a suburb of some 200,000 located nine miles (15 kilometers) northwest of Damascus, in mid-October 2011, after launching attacks on military posts throughout the city, activists said.
Less than a week later, the rebels had taken over a half-dozen checkpoints and government buildings, said activist Mohammed Saeed. The army withdrew from others.
"Since then, the city has been totally liberated," he said. "There are no government troops left, but we still suffer from regime airstrikes almost every day."
Today, those entering Douma must pass through rebel checkpoints at the city's main entryways. Rebels with camouflage vests and Kalashnikov rifles zip about on motorcycles, communicating by walkie-talkie. Some belong to the security brigade, an improvised police force to catch looters that works with a judicial council of Muslim clerics and lawyers who run a prison.
In November, residents formed a civilian council to provide services for the estimated one-third of Douma's residents who have not fled the violence.
The council oversees committees for medical issues, bakeries, media relations and other tasks, said its head, Nizar Simadi. A former cleaner at city hall runs a cleanup crew that helps remove rubble from the streets after shell attacks and airstrikes.
The city's electricity went out in November — activists accuse the government of cutting it in revenge — but former electric company employees have strung in power from nearby areas still on the government network, returning power to some of the city.
Douma has more than a dozen rebel brigades, and the city's fighters have joined battles in many other areas around the capital. Most of their support comes from wealthy Syrians abroad who send money to buy arms, said the head of one rebel brigade, the Douma Martyrs, who goes by the name Abu Waleed.
In November, Douma's fighters raided two army bases in the nearby suburb of Otaya, he said, making away with arms that helped them push closer to Damascus. But they can do little about the government's airstrikes.
Rebel forces are currently fighting the government in areas on three sides of the capital. They are closest in the south, where they have pushed into the poor Damascus neighborhood of Hajar al-Aswad. Recent weeks have also seen fierce clashes in the southwestern suburb of Daraya, which the government says it is close to reclaiming.
During Thursday's airstrikes on Douma, a government fighter jet launched two bombing runs on a densely populated residential area near a prominent mosque, said Saeed, the activist.
Videos posted online showed residents rushing though a smoke-filled street and loading wounded people into cars and pickup trucks. One man was buried up to his thigh in debris and helped rescuers dig himself out. Another man emerged from a pile of rubble with blood on his face and covered head-to-toe in gray cement dust.
One group provided videos of 12 people they said were killed in the attack. The videos appeared genuine and corresponded to other AP reporting on the strike.
The Britain-based Syrian Observatory for Human Rights said at least 10 rebel fighters and 32 civilians were killed Thursday in clashes, shelling and airstrikes in the Damascus Countryside province that surrounds the capital, more than anywhere else in Syria.
Late Thursday, a car bomb exploded at a gas station inside the city itself, killing at least nine people, activists said. Syria's state news agency blamed the attack on "terrorists," its shorthand for the rebels, but did not give numbers for the dead and wounded. There was no immediate claim of responsibility.
Despite rebel advances near Damascus, it remains unclear whether they'll be able to turn the tables on Assad's forces. Rebels launched a hasty offensive on Damascus last summer but were swiftly routed by government forces.
Before attempting to take Damascus again, Saeed said the rebels must gather enough ammunition to sustain the battle, take over nearby army bases to prevent attacks from behind and increase coordination between rebel brigades.
He guessed that could take six months.
The Syrian government has not commented on the fall of Douma to rebels, whom it characterizes as terrorists backed by foreign powers seeking to destroy the country.
The chief of staff of Syria's armed forces called on the army to continue its "holy and national task to crush the armed terrorist groups and their hideout," the state news agency reported.
Gen. Abdullah Ayoub said the "conspiracy" against Syria would fail "thanks to the bravery of the Syrian army and the coherence of the Syrian people."
Activists reported clashes in a number of other parts of Syria on Thursday, including inside the Taftanaz helicopter base in the north.
In Jordan, the U.N. refugee agency said that around 1,200 people have fled across Syria's southern border each day for the past three days, an increase reflecting fresh violence in the south. UNHCR reporting officer Danita Topcagic said many shops in the area were shut, making it hard for people to find food, and that electricity and water supplies were short.
About a half-million Syrians have sought refuge from the war in neighboring countries, and many more are displaced inside Syria.
Meanwhile, the parents of an American journalist who has been missing in Syria since he was kidnapped Nov. 22 appealed to his captors for compassion and any information about their son's health and welfare. Thirty-nine-year-old James Foley was in the country contributing videos to Agence France-Press, which has vowed to help secure his release.
Twenty-eight journalists were killed in Syria in 2012, prompting the Committee to Protect Journalists to name Syria the most dangerous country in the world to work in last year.

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Fiscal-cliff deal no recipe for a robust economy

Housing is rebounding. Families are shrinking debts. Europe has avoided a financial crackup. And the fiscal cliff deal has removed the most urgent threat to the U.S. economy.
So why don't economists foresee stronger growth and hiring in 2013?
Part of the answer is what Congress' agreement did (raise Social Security taxes for most of us). And part is what it didn't do (prevent the likelihood of more growth-killing political standoffs).
By delaying painful decisions on spending cuts, the deal assures more confrontation and uncertainty, especially because Congress must reach agreement later this winter to raise the government's debt limit. Many businesses are likely to remain wary of expanding or hiring in the meantime.
One hopeful consensus: If all the budgetary uncertainty can be resolved within the next few months, economists expect growth to pick up in the second half of 2013.
"We are in a better place than we were a couple of days ago," Chad Moutray, chief economist for the National Association of Manufacturers, said a day after Congress sent President Barack Obama legislation to avoid sharp income tax increases and government spending cuts. But "we really haven't dealt with the debt ceiling or tax reform or entitlement spending."
Five full years after the Great Recession began, the U.S. economy is still struggling to accelerate. Many economists think it will grow a meager 2 percent or less this year, down from 2.2 percent in 2012. The unemployment rate remains a high 7.7 percent. Few expect it to drop much this year.
Yet in some ways, the economy has been building strength. Corporations have cut costs and have amassed a near-record $1.7 trillion in cash. Home sales and prices have been rising consistently, along with construction. Hiring gains have been modest but steady. Auto sales in 2012 were the best in five years. The just-ended holiday shopping season was decent.
Bernard Baumohl, chief global economist for the Economic Outlook Group, thinks the lack of finality in the budget fight is slowing an otherwise fundamentally sound economy.
"What a shame," Baumohl said in a research note Wednesday. "Companies are eager to ramp up capital investments and boost hiring. Households are prepared to unleash five years of pent-up demand."
The economy might be growing at a 3 percent annual rate if not for the threat of sudden and severe spending cuts and tax increases, along with the haziness surrounding the budget standoff, says Ethan Harris, co-director of global economics at Bank of America Merrill Lynch.
Still, Congress' deal delivered a walloping tax hike for most workers: the end of a two-year Social Security tax cut. The tax is rising back up to 6.2 percent from 4.2 percent. The increase will cost someone making $50,000 about $1,000 a year and a household with two high-paid workers up to $4,500.
Mark Zandi, chief economist at Moody's Analytics, calculates that the higher Social Security tax will slow growth by 0.6 percentage point in 2013. The other tax increases — including higher taxes on household incomes above $450,000 a year — will slice just 0.15 percentage point from growth, Zandi says.
Congress' deal also postpones decisions on spending cuts for military and domestic programs, including Medicare and Social Security. In doing so, it sets up a much bigger showdown over raising the government's borrowing limit. Republicans will likely demand deep spending cuts as the price of raising the debt limit. A similar standoff in 2011 brought the government to the brink of default and led Standard & Poor's to yank its top AAA rating on long-term U.S. debt.
Here's how key parts of the economy are shaping up for 2013:
— JOBS
With further fights looming over taxes and spending, many companies aren't likely to step up hiring. Congress and the White House will likely start battling over raising the $16.4 trillion debt limit in February.
Many economists expect employers to add an average of 150,000 to 175,000 jobs a month in 2013, about the same pace as in 2011 and 2012. That level is too weak to quickly reduce unemployment.
The roughly 2 million jobs Zandi estimates employers will add this year would be slightly more than the 1.8 million likely added in 2012. Zandi thinks employers would add an additional 600,000 jobs this year if not for the measures agreed to in the fiscal cliff deal.
Federal Reserve policymakers have forecast that the unemployment rate will fall to 7.4 percent, at best, by year's end. Economists regard a "normal" rate as 6 percent or less.
— CONSUMER SPENDING
Consumer confidence fell in December as Americans began to fear the higher taxes threatened by the fiscal cliff. Confidence had reached a five-year high in November, fueled by slowly declining unemployment and a steady housing rebound. Consumer spending is the driving force of the economy.
But the deal to avoid the cliff won't necessarily ignite a burst of spending. Taxes will still rise for nearly 80 percent of working Americans because of the higher Social Security tax rate.
Since the recession officially ended in June 2009, pay has barely kept up with inflation. The Social Security tax increase will cut paychecks further. And with the job market likely to remain tight, few companies have much incentive to hand out raises.
Thanks to record-low interest rates, consumers have whittled their debts to about 113 percent of their after-tax income. That's the lowest share since mid-2003, according to Haver Analytics. And the delinquency rate for users of bank credit cards is at an 18-year low, the American Bankers Association reported Thursday.
Yet that hardly means people are ready to reverse course and ramp up credit-card purchases. Most new spending would have to come from higher incomes, says Ellen Zentner, senior economist at Nomura Securities.
"We don't see the mindset of, 'Let's run up the credit card again,'" she says.
— HOUSING
Economists are nearly unanimous about one thing: The housing market will keep improving.
That's partly because of a fact that's caught many by surprise: Five years after the housing bust left a glut of homes in many areas, the nation doesn't have enough houses. Only 149,000 new homes were for sale at the end of November, the government has reported. That's just above the 143,000 in August, the lowest total on records dating to 1963. And the supply of previously occupied homes for sale is at an 11-year low.
"We need to start building again," says Patrick Newport, an economist at IHS Global Insight.
Sales of new homes in November reached their highest annual pace in 2½ years. They were 15 percent higher than a year earlier. And October marked a fifth straight month of year-over-year price increases in the 20 major cities covered by the Standard & Poor's/Case-Shiller national home price index.
Potential homebuyers "are more likely to buy, and banks are more likely to lend" when prices are rising, says James O'Sullivan, chief U.S. economist at High Frequency Economics. "It feeds on itself."
Higher prices are also encouraging builders to begin work on more homes. They were on track last year to start construction of the most homes in four years.
Ultra-low mortgage rates have helped spur demand. The average rate on the U.S. 30-year fixed mortgage is 3.35 percent, barely above the 3.31 percent reached in November, the lowest on records dating to 1971.
Housing tends to have an outside impact on the economy. A housing recovery boosts construction jobs and encourages more spending on furniture and appliances. And higher home prices make people feel wealthier, which can also lead to more spending.
"When you have a housing recovery, it's nearly impossible for the U.S. economy to slip into recession," Zentner says.
— MANUFACTURING
Factories appear to be recovering slowly from a slump last fall. The Institute for Supply Management's index of manufacturing activity rose last month from November. And a measure of employment suggested that manufacturers stepped up hiring in December. Factories had cut jobs in three of the four months through November, according to government data.
Another encouraging sign: Americans are expected to buy more cars this year. That would help boost manufacturing output. Auto sales will likely rise nearly 7 percent in 2013 over last year to 15.3 million, according to the Polk research firm. Sales likely reached 14.5 million last year, the best since 2007. In 2009, sales were just 10.4 million, the fewest in more than 30 years.
And if Congress can raise the federal borrowing limit without a fight that damages confidence, companies might boost spending on computers, industrial machinery and other equipment in the second half of 2013, economists say. That would help keep factories busy.

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Auto industry posts best U.S. sales year since 2007

U.S. auto sales rose 9 percent in December, led by foreign manufacturers, capping off the best year for the industry since before the recession.
The year's sales were driven by a slowly recovering economy, more available credit and the need for consumers and businesses to replace aging cars and trucks.
General Motors Co posted December U.S. sales growth of 5 percent compared with the year-earlier month, Ford Motor Co increased sales 2 percent and Chrysler Group LLC's sales rose 10 percent.
Wall Street cheered the results, sending GM and Ford stock to their highest levels since July 2011. GM shares ended 2.4 percent higher at $29.82 and Ford shares were up 2 percent to end at $13.46 on Thursday.
Research and consulting firm Polk said it expects U.S. auto sales to hit 15.3 million vehicles in 2013. GM and Ford both predicted industry sales of more than 15 million vehicles, but Toyota Motor Corp offered a more modest forecast of 14.7 million vehicles.
For the year just ended, U.S. auto sales rose 13.5 percent to nearly 14.5 million new vehicles, the best performance since 2007, according to Reuters calculations.
In the decade prior to 2008 when the recession slowed the industry, U.S. auto sales averaged nearly 17 million vehicles a year.
While last month's auto sales showed little impact of jitters caused by the so-called fiscal cliff - which proved largely averted - automakers expressed worry over the fog of uncertainty still emanating from Washington.
The impact of a payroll tax increase that took effect at the start of the year and the upcoming congressional debate over raising the U.S. debt ceiling may keep some consumers out of the market in 2013, several automakers said.
"It would have been nice if all the open questions had been resolved in the 'fiscal cliff' discussion over the holiday, but clearly they weren't, and that does extend this period of uncertainty from a consumer point of view," Jonathan Browning, head of Volkswagen AG's American unit, told reporters on a conference call.
A 2 percentage-point payroll tax increase will take about $1,000 from the average household budget, said Ford economist Ellen Hughes-Cromwick.
"It is something that we're looking at very carefully, as it will crimp the consumer spending scene somewhat in the months ahead," said Hughes-Cromwick.
Jesse Toprak, analyst with TrueCar.com, said the hit to households would be about the same amount as a down payment on a new vehicle.
"The cheap financing and improved income will make up for that, but that's something we're going to have a keep an eye on," he said.
Hughes-Cromwick said the tax increases for the wealthiest Americans will not greatly affect auto sales, because they tend to purchase new vehicles even if taxes change.
Tom Libby, an analyst at Polk, said continued low interest rates along with an improved housing sector and new product offerings from major automakers will make 2013 a bullish year for the industry.
Detroit's automakers showed December U.S. sales gains of 5 percent, slightly better than analysts' expectations, but not enough to stave off market-share gains by Toyota and Honda Motor Co Ltd .
The two largest Japanese automakers in the U.S. market rebounded from poor showings in 2011 when their inventory was constrained after the Japan earthquake and tsunami.
Toyota reported a 9 percent U.S. sales increase for December, which met analysts' expectations. Honda's December sales rose 26 percent but fell short of analysts' expectations. Honda sales are up 24 percent on the year.
Toyota's 2012 U.S. sales rose about 27 percent, compared with gains of 3.7 percent for GM, 4.7 percent for Ford, and 21 percent for Chrysler.
U.S. MARKET SHARE
GM's U.S. market share is now at its lowest level since at least 1960, and probably at a low not seen since 1930, according to industry journal Ward's Auto.
GM and Ford lost market share in 2012, dented by competition from Toyota and Honda which recovered from 2011 earthquake-related setbacks.
GM's 2012 market share fell to 17.9 percent from 19.6 percent in 2011. Its market share was 23.5 percent in 2007, before the recession. Ford's 2012 market share fell to 15.5 percent from 16.8 percent in 2011.
"We're always concerned about market share - always," said Mark Reuss, GM chief in North America. "But we're not going to give it away like we did in the past and burn the residuals and the brand values in anticipation of the biggest product portfolio launch that we've had in history."
Reuss referred to the years before GM's 2009 bankruptcy and taxpayer bailout, when vehicle production outpaced demand and it layered on incentives to lower prices for consumers.
The F-Series pickup truck from Ford, the top-selling vehicle in North America for more than three decades, had its best sales month in December since August 2007.
The F-Series remained the best-selling vehicle in the United States, with annual sales of 645,316, followed again by the full-size Chevrolet Silverado pickup, at 418,312.
BMW WINS LUXURY CROWN
Most luxury brands had a good year. BMW for the second straight year edged German rival Mercedes-Benz for the U.S. sales crown, followed by Toyota's Lexus and Honda's Acura.
The two U.S. luxury brands both saw sales fall in 2012, with Cadillac down 1.7 percent and Lincoln off 4.1 percent.
Japanese models swept the next four places, with Toyota Camry leading the Honda Accord, Honda Civic and Nissan Altima. Chrysler's Ram pickup placed seventh, followed by Toyota Corolla, Ford Escape and Ford Focus.
Both GM and Ford went into the recession that began in late 2007 - and into 2008 when gasoline prices spiked - overladen with low-mileage big pickup trucks and SUVs.
GM said on Thursday that in 2012 it sold in the U.S. market more than 1 million vehicles that get at least 30 miles per gallon in highway driving. And Ford said that in the year it sold the most small cars since 2001.
Sales of high-profile hybrid and electric vehicles were a mixed bag in 2012. GM's Chevrolet Volt tripled sales to 23,461, but still fell well short of the company's original goal of 40,000 vehicles. Nissan's Leaf was virtually flat, at 9,819.
Toyota maintained its lead in the green-car category, with total Prius sales of 236,659, up 73 percent with the addition of three new Prius derivatives in the past year.
Chrysler easily beat analysts' expectations and had its 33rd consecutive month of year-on-year sales gains. Its annual sales rose 21 percent. Its market share in 2012 rose to 11.4 percent from 10.7 percent in 2011. Chrysler is majority-owned by Italian automaker Fiat SpA .
Sales for South Korea's Hyundai Motor Corp and Kia Motors Co rose 5 percent. Hyundai, the larger of the sister companies, reported full-year U.S. sales of 703,007 vehicles, a company record.
Volkswagen reported a monthly increase of 31.5 percent for its namesake brand and luxury brands Audi and Porsche and a 30 percent gain for the full year.
December sales fell 12 percent for Lincoln, Ford's luxury brand.
Aided heavily by consumer incentives that reduce the price of the vehicles, GM in December dramatically trimmed its inventory of full-size pickup trucks to 80 days of supply from 139 days at the end of November. Most automakers like to have about 80 days of supply of these pickup trucks.
For the overall industry, the pace of annual sales increases has been in the double digits since the market bottomed in 2009, when it hit the worst annual sales rate since World War Two, adjusting for population.

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Economy, year-end sales help auto industry in 2012

DETROIT (AP) — A steadily improving economy and strong December sales lifted the American auto industry to its best performance in five years in 2012, especially for Volkswagen and Japanese-brand vehicles, and experts say the next year should be even better.
Carmakers on Thursday announced their final figures, which totaled 14.5 million — 13 percent better than 2011.
More than three years after the federal government's $62 billion auto-industry bailout, Americans had plenty of incentive to buy new cars and trucks in the year just ended.
Unemployment eased. Home sales and prices rose. And the average age of a car topped 11 years in the U.S., a record that spurred people to trade in old vehicles. Banks made that easier by offering low interest rates and greater access to loans, even for buyers with lousy credit.
"The U.S. light vehicle sales market continues to be a bright spot in the tremulous global environment," said Jeff Schuster, senior vice president of forecasting for LMC Automotive, a Detroit-area industry forecasting firm.
Sales were far better than the bleak days after the U.S. economy tanked and GM and Chrysler sought bankruptcy protection. Back then, sales fell to a 30-year low of 10.4 million, and they are still far short of the recent peak of around 17 million set in 2005.
The best part of 2012 came at the end, when special deals on pickup trucks and the usual round of sparkling holiday ads helped December sales jump 9 percent to more than 1.3 million, according to Autodata Corp. That translates to an annual rate of 15.4 million, making December the strongest month of the year.
Volkswagen led all major automakers with sales up a staggering 35 percent, led by the redesigned Passat midsize sedan. VW sold more than five times as many Passats last year as it did in 2011.
Jesse Toprak, vice president of industry trends for TrueCar, said VW has the right mix of value and attractive vehicles and called the company "the force to watch in the next several years in the U.S. market."
Toyota, which has recovered from the earthquake and tsunami in Japan that crimped its factories two years ago, saw sales jump 27 percent for 2012. December sales were up 9 percent. Unlike 2011, the company had plenty of new cars on dealer lots for most of last year.
Honda sales rose 24 percent for the year. Nissan and Infiniti sales were up nearly 10 percent as the Nissan brand topped 1 million in annual sales for the first time. Hyundai sales rose 9 percent for the year to just over 703,000, the Korean automaker's best year in the U.S.
Chrysler, the smallest of the Detroit carmakers, had the best year among U.S. companies. Its sales jumped 21 percent for the year and 10 percent in December. Demand was led by the Jeep Grand Cherokee SUV, Ram pickup and Chrysler 300 luxury sedan.
But full-year sales at Ford and General Motors lagged. Ford edged up 5 percent and GM rose only 3.7 percent for the year. For December, Ford was up 2 percent and GM up 5 percent.
GM executives said the company has the oldest model lineup in the industry, yet it still posted a sales increase and commanded high prices for cars and trucks. The company plans to refurbish 70 percent of its North American models in the next 18 months and expects to boost sales this year.
North American President Mark Reuss said the company won't give away cars and trucks with discounts like it has in the past, especially in the midst of its biggest product update ever.
"Give us 18 months and you're going to see the whole portfolio turned," Reuss said.
Even though the congressional deal to avoid the fiscal cliff deal raised tax rates on the wealthiest Americans, Ford said it doesn't see a huge impact on auto sales.
Its chief economist, Ellen Hughes-Cromwick, said only 2 percent of new-vehicle buyers have income in that upper tax bracket, and they tend to purchase even if there is a change in after-tax income.
She said Ford is more concerned about an increase in the payroll tax, which is scheduled to climb to 6.2 percent this year from 4.2 percent in 2011 and 2012. That amounts to a $1,000 to $1,500 tax increase per household, she said.
"We will look at that closely because it will crimp spending in the months ahead," she said.
December featured year-end deals on GM's big pickup trucks. The company offered discounts up to $9,000 to help clear growing inventory, and it worked. GM cut its full-size pickup supply by more than 20,000 in December to about 222,000.
Overall, though, analysts said the industry eased up on promotions such as rebates and low-interest financing. Car and truck buyers paid an average of $31,228 per vehicle last month, up 1.8 percent from December 2011.
The Polk auto research firm predicted even stronger U.S. sales for 2013, forecasting 15.3 million vehicle sales as the economy continues to improve. Polk, based in Southfield, Mich., expects 43 new models to be introduced, up 50 percent from last year. New models usually boost sales.
The firm also predicts a rebound in sales of large pickups and midsize cars. All eight of the top manufacturers are introducing new vehicles, and that should bring competition and lower prices in those segments, according to Tom Libby, lead North American analyst for Polk.
But the firm's optimistic forecasts hinge on Washington reaching an agreement on government debt limits and spending cuts.

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Fracking can be done safely in New York state: dept report

The natural gas drilling process known as fracking would not be a danger to public health in New York state so long as proper safeguards were put into place, according to a health department report that environmentalists fear could help lift a moratorium on the controversial technique.
Governor Andrew Cuomo is weighing the economic benefits of hydraulic fracturing - commonly known as fracking - against the environmental risks from a technology that could unlock a vast domestic energy supply but also one that environmentalists say pollutes groundwater and the air.
Potential hazards could be avoided by implementing precautions the state has identified, according to a February 2012 preliminary assessment from the New York State Department of Health that became widely reported in the media on Thursday.
"Significant adverse impacts on human health are not expected from routine HVHF," or high volume hydraulic fracturing, the document concluded.
Natural gas drilling in New York state could create $11.4 billion in economic output and raise $1.4 billion in state and local tax revenue, according to a July 2011 report from the Manhattan Institute, a conservative-leaning think tank.
Fracking is the process of releasing natural gas and oil from rock deposits deep underground by fracturing shale formations with chemical-laced water and sand.
The release of the document came as Cuomo's government continued to deliberate whether to overturn a 4-year-old moratorium on fracking originally put in place to assess the effects of the drilling process.
The Department of Environmental Conservation is the lead agency studying fracking, with contributions from other departments such as health.
In late November, the Department of Environmental Conservation was granted a 90-day extension to its original deadline for completing a draft of fracking regulations in order for its environmental impact study to be reviewed by the state health commissioner and outside health experts.
Since the preliminary assessment was put together nearly a year ago, was incomplete, and did not reflect the input of these experts, it does not reflect the final policy of the Department of Environmental Conservation, spokeswoman Emily DeSantis said in an email.
"I sincerely hope that this is not where the administration is going with the health review," said Katherine Nadeau of Environmental Advocates, a group concerned over the state's plans for fracking.
"It is nothing more than a justification for not doing a health review and a defense for the plans and proposals they've already put out there," said Nadeau, who had reviewed the document.
The Independent Oil and Gas Association of New York, which represents oil and gas producers in the state, called on the Cuomo administration to lift the moratorium because the experience of other states has shown that fracking could be done in a way that protects the environment and public health.
"All ongoing environmental reviews, including New York's health assessment, will make similar conclusions," Brad Gill, the group's executive director, said in an emailed statement.
The precautions the health department document proposed for the state to put into place were of varying specificity. For example, the transport of drilling water that flows back out of wells after fracking should be subject to similar requirements to the treatment of medical waste.

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IMF's economist: budget cuts may hurt growth less now

WASHINGTON (Reuters) - Belt-tightening in advanced economies may not be as harmful to growth now as it was during the height of the financial crisis, but governments should still be careful about drastic cuts, an International Monetary Fund research paper found on Thursday.
The IMF came under heavy criticism in October when it conceded that austerity programs it recommended during the global economic crisis were more costly than expected, causing economic damage that was as much as triple the amount forecast.
In a follow-up paper by the IMF's chief economist, Olivier Blanchard, and his colleague, Daniel Leigh, stood by their initial conclusions but said the harshest impact of those programs may be fading as economies start to recover.
The paper in October fueled critics of steep budget cuts in debt-burdened European economies, and prompted the IMF to soften its own recommendations for austerity in the euro zone crisis.
It said that now it believed forcing Greece and other debt-burdened countries to reduce their deficits too quickly would be counterproductive.
"For example, in Portugal, we have relaxed fiscal deficit targets," said Blanchard, the IMF chief economist.
But Germany said at the time that back-tracking on debt-reduction goals would only hurt market confidence.
Some economists also questioned the methodology the IMF had used in its initial research, saying the findings may have been exaggerated, or only applied to certain countries or times.
In the follow-up paper on Thursday, Blanchard and Leight said their research held-up for most advanced economies during the height of the financial crisis in 2009-10. While their views do not represent those of the Fund, the chief economist has a heavy hand in shaping the IMF's economic thinking.
"Forecasters have underestimated fiscal multipliers, that is, the short-term effects of government spending cuts or tax hikes on economic activity," the paper wrote.
The paper found that every dollar of deficit reduction subtracted "substantially" more than a dollar from economic growth, as much at $1.70. Economists had previously estimated that a dollar in government cuts would drain only 50 cents from the economy.
But during the past two years, the negative effect of government cuts on growth may have shrunk as the economy improved and people and businesses were able to borrow more money, making government spending less crucial, the researchers found.
"A decline in actual multipliers ... could reflect an easing of credit constraints faced by firms and households, and less economic slack in a number of economies relative to 2009-10," the paper said.
Blanchard and Leigh said the effect of government spending on the economy could vary depending on the country and the state of the economy. They cautioned that governments should not necessarily delay austerity, but should take into account its negative impact on growth.

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Purported photo of new BlackBerry phone with QWERTY keyboard leaks

Research In Motion (RIMM) CEO Thorsten Heins recently said during the company’s Q3 earnings call that BlackBerry 7 is still a “strong success” in the Asian-Pacific markets. Despite the company putting most of its weight behind BlackBerry 10 and the Z10 and X10, Heins said RIM will continue supporting BB7 and consumers “might expect us to even build one of the other new products” based on it. Heins suggested on the earnings call new BB7 phones will target entry-level markets with lower price points over its BB10 devices; now, MobileSyrup has posted a photo of a mystery BlackBerry phone sitting next to the BB10-powered Z10 and X10. Could this HTC (2498) Status/ChaCha look-alike be a new BB7 smartphone? It could be, but then again, it could also be a prototype that will never be released or another new BB10-powered QWERTY phone.

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Microsoft Surface trampled at the bottom of the tablet pile this Christmas

While it does have drawbacks just like anything else, Microsoft’s (MSFT) Surface is a great slate for those looking for a fresh new take on the modern tablet. Unfortunately, it doesn’t look like very many people were looking for a fresh new take on the modern tablet this holiday season. In a recent note to investors, R.W. Baird analyst William Power recounted recent conversations had at retailers including Best Buy (BBY) and Staples (SPLS). While speaking with sales reps at the stores, Apple’s (AAPL) iPad was the most highly recommended tablet while Amazon’s (AMZN) Kindle Fire line and Samsung’s (005930) Galaxy Tab line were both recommended as alternatives. Microsoft’s Surface tablet, on the other hand, was not pushed by reps at either chain.

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iPad is a Christmas graveyard for ‘Grand Theft Auto’ and ‘Modern Combat’

At the beginning of December, the traditional video game industry attempted another iPad invasion. New versions of “Grand Theft Auto,” “Modern Combat” and “Baldur’s Gate” hit the iOS app market priced between $5 and $10. Over the past years, we have seen repeated attempts by major console and PC industry franchises to tailor their blockbuster games for iPhone and iPad platforms. None have succeeded. As the iOS app market increasingly favors free games with in-app purchases, the old-timers have started failing spectacularly.
[More from BGR: Microsoft Surface trampled at the bottom of the tablet pile this Christmas]
December is the most important month of the year for the iOS app market and the days around Christmas are the hottest period. As consumers upgrade their iPhones or receive their very first iOS devices, they tend to go on mobile app buying binges. That is why mega franchises like GTA and “Modern Combat” launched their latest iOS products at the beginning of the month. The games were supposed to stay alive for at least three weeks. They did not.
[More from BGR: Mark Cuban: Nokia Lumia 920 ‘crushes’ the iPhone 5]
The lavishly marketed “Grand Theft Auto: Vice City” peaked on iPhone app chart at No.2 on December 8th and plunged to No.36 by December 22nd. It rebounded to No.25 on December 25th. On the iPad, the game plummeted to a shocking No.52 by the all-important Christmas Day, when new iPad owners go berserk on iTunes.
Here is the kicker: on the revenue chart for U.S. iPad apps, the new GTA game had tanked to No.75 by December 25th. This is even worse than the No.52 position on the download chart. I find that genuinely fascinating, because it means that a game with a very stiff download price of $5 is showing weaker revenue performance than on raw download volume.
The GTA title is priced at $5 at a time when 80% of the top-grossing iPad games are free downloads. The top free apps have compelling in-game purchase strategies — “Grand Theft Auto: Vice City” does not. As a result, it is getting beaten by titles such as “Fairway Solitaire” and “My Little Pony” in revenue generation. Having massive name recognition and hundreds of millions of units in console game sales helps very little in the brutally competitive iOS game market.
“Modern Combat 4″ has also plunged out of top-50 on the iPad revenue chart just three weeks after its high-profile debut. The $10 update of “Baldur’s Gate” is out of top-200, brought low by its ridiculously high sticker price.
The proud console and PC game champions keep repeating the same gambit in the iOS market: price ‘em high and ignore the in-app purchase angle. They keep failing. When are we going to see a major console game franchise finally adapt to the Apple (AAPL) ecosystem and create an iOS game that is free to download but lures users into an in-app purchase trap effectively?

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Apple still can’t build enough iPad minis

A common issue often presents itself when Apple (AAPL) launches new products: it can’t build them fast enough. We’ve seen it time and time again, most recently when Apple launched the iPhone 5 and 150,000 dedicated factory workers still couldn’t keep up with demand. Now, a report has surfaced claiming that Apple’s manufacturing partners in the Far East can’t build units fast enough to keep pace with Apple’s iPad mini orders.
[More from BGR: Microsoft Surface trampled at the bottom of the tablet pile this Christmas]
According to Digitimes’ supply chain sources, Apple’s parts suppliers have prepared enough components to build between 10 million and 12 million iPad mini tablets in the fourth quarter to accomodate heavy demand. Apple’s manufacturing partners are only expected to ship 8 million assembled units, however.
[More from BGR: Mark Cuban: Nokia Lumia 920 ‘crushes’ the iPhone 5]
The report states that yield rates are improving though, and Apple is expected to ship 13 million iPad mini tablets in the first quarter of 2013.

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Lack of low-end BlackBerry 10 phone could be a serious stumbling block in RIM comeback bid

South Africa is one of Research In Motion’s (RIMM) top five markets in the world, and it is a decent proxy for the entire African market. Leading regional carrier Vodacom’s November smartphone statistics illustrate exactly why BlackBerry 10 cannot arrive soon enough… and why RIM badly needs a cheap new BlackBerry 10 model by spring.
[More from BGR: Apple CEO Tim Cook sees pay drop 99% in 2012]
Vodacom holds more than 50% of the South African handset market and South Africa is the largest mobile phone market in the continent.
[More from BGR: Microsoft Surface trampled at the bottom of the tablet pile this Christmas]
On November 12th, Vodacom announced that it had 2.7 million BlackBerry users on its South African network, a number that increased by 300,000 in three months. The number of Android users grew by 200,000 to 700,000 subscribers. The number of iPhone users grew by 250,000 to 500,000.
Of course, there are many ways at looking at these trends but it’s striking that the growth of the BlackBerry user base has slowed down to 12% in a quarter while Android growth is now at 40% and iPhone growth is 100%. Even though the pool of BlackBerry users is still expanding in the most important African market, we are now close to the tip-off point where the absolute number of both Android and iPhone users added each quarter is going to be larger than the number of new BlackBerry subs.
RIM announced last week that its global customer base has finally started shrinking — the BlackBerry subscriber pool dropped from 80 million to 79 million between the August and November quarters.
During the August quarter, RIM still managed to add 2 million BlackBerry subscribers. The non-U.S. BlackBerry subscriber base is still growing, but too slowly to offset the U.S. erosion. This is the trend that the Vodacom November numbers also reflect. In Africa and Asia, that BlackBerry growth slowdown is unlikely to reverse until RIM launches a cheap, sub-$250 model with the new BlackBerry 10 OS.
In South Africa, affluent buyers are now flocking under the iPhone banner, while Samsung (005930) and Chinese vendors are mopping up middle class consumers with cheap Android models. New high-end phones in the $600 range are not going to change this equation.
RIM must strike hard in the low-end market to regain its African momentum. By Easter, Android and iPhone camps will have pulled ahead of RIM in new subscriber additions at Vodacom. Next spring, South Africa could well be the most important global bellwether of RIM’s struggle to recapture subscriber growth.

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China commentaries demand U.S. responsibility on "fiscal cliff"

 China's official Xinhua news agency demanded on Tuesday that the United States live up to its global economic responsibilities, put political infighting aside and sort out the "fiscal cliff" mess.
"Being the world's only superpower and the issuer of the dominant global reserve currency, the United States has a unique role and an unshirkable duty to help cure the ailing global economy," one of its English-language commentaries said.
"In today's economically interconnected and interdependent world, it is more of a benefit than of a burden that Washington honors its global responsibility," the state-run agency added.
"Should Washington fail to pull itself from the escarpment, the repercussions would throw the whole world into a cold winter of stagnant growth and laggard recovery."
A second commentary said the fiscal cliff debacle was a clear example of how poorly the U.S. political system worked.
"These days, both Democrats and Republicans seem more intent on inflicting damage on their political adversaries than working out a better future for their country," it said.
"Americans may be proud of their mature democracy, but the political gridlock in Washington really looks ugly from an outsider's view."
While such commentaries are not policy statements as such, they can be read as a reflection of government thinking.
The United States was on track to tumble over the fiscal cliff at midnight on Monday, at least for a day, as lawmakers held back from supporting an eleventh-hour plan from Senate leaders to avert severe tax increases and spending cuts.
China sits on the world's biggest pile of foreign exchange reserves worth $3.3 trillion and as much as 70 percent of the holdings are still invested in U.S. dollar assets, including U.S. Treasuries, according to analysts.
China is on course to end 2012 with the slowest full year of growth since 1999 and while the 7.7 percent rate forecast in a benchmark Reuters poll is way above the world's other major economies, it is far below the roughly 10 percent annual growth seen for most of the last 30 years.

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Analysis: Economy would dodge bullet for now under fiscal deal

 A deal worked out by Senate leaders to avoid the "fiscal cliff" was far from any "grand bargain" of deficit reduction measures.
But if approved by the House of Representatives, it could help the country steer clear of recession, although enough austerity would remain in place to likely keep the economy growing at a lackluster pace.
The Senate approved a last-minute deal early Tuesday morning to scale back $600 billion in scheduled tax hikes and government spending cuts that economists widely agree would tip the economy into recession.
The deal would hike taxes permanently for household incomes over $450,000 a year, but keep existing lower rates in force for everyone else.
It would make permanent the alternative minimum tax "patch" that was set to expire, protecting middle-income Americans from being taxed as if they were rich.
Scheduled cuts in defense and non-defense spending were simply postponed for two months.
Economists said that if the emerging package were to become law, it would represent at least a temporary reprieve for the economy. "This keeps us out of recession for now," said Menzie Chinn, an economist at the University of Wisconsin-Madison.
The contours of the deal suggest that roughly one-third of the scheduled fiscal tightening could still take place, said Brett Ryan, an economist at Deutsche Bank in New York.
That is in line with what many financial firms on Wall Street and around the world have been expecting, suggesting forecasts for economic growth of around 1.9 percent for 2013 would likely hold.
At midnight Monday, low tax rates enacted under then-President George W. Bush in 2001 and 2003 expired. If the House agrees with the Senate - and there remained considerable doubt on that score - the new rates would be extended retroactively.
Otherwise, together with other planned tax hikes, the average household would pay an estimated $3,500 more in taxes, according to the Tax Policy Center, a Washington think tank. Budget experts expect the economy would take a hit as families cut back on spending.
Provisions in the Senate bill would avoid scheduled cuts to jobless benefits and to payments to doctors under a federal health insurance program.
AUSTERITY'S BITE
Like the consensus of economists from Wall Street and beyond, Deutsche Bank has been forecasting enough fiscal drag to hold back growth to roughly 1.9 percent in 2013. Ryan said the details of the deal appeared to support that forecast.
That would be much better than the 0.5 percent contraction predicted by the Congressional Budget Office if the entirety of the fiscal cliff took hold, but it would fall short of what is needed to quickly heal the labor market, which is still smarting from the 2007-09 recession.
"We continue to anticipate a significant economic slowdown at the start of the year in response to fiscal drag and a contentious fiscal debate," economists at Nomura said in a research note.
In particular, analysts say financial markets are likely to remain on tenterhooks until Congress raises the nation's $16.4 trillion debt ceiling, which the U.S. Treasury confirmed had been reached on Monday.
While the Bush tax cuts would be made permanent for many Americans under the budget deal, a two-year-long payroll tax holiday enacted to give the economy an extra boost would expire. The Tax Policy Center estimates this could push the average household tax bill up by about $700 next year.
The suspension of spending cuts sets up a smaller fiscal cliff later in the year which still could be enough to send the economy into recession, said Chinn.
He warned that ongoing worries about the possibility of recession could keep businesses from investing, which would hinder economic growth.
"You retain the uncertainty," Chinn said.

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Senate approves "fiscal cliff" deal, crisis eased

 The Senate moved the U.S. economy back from the edge of a "fiscal cliff" on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives.
In a rare New Year's session at around 2 a.m. EST (0700 GMT), senators voted 89-8 to raise some taxes on the wealthy while making permanent low tax rates on the middle class that have been in place for a decade.
But the measure did little to rein in huge annual budget deficits that have helped push the U.S. debt to $16.4 trillion.
The agreement came too late for Congress to meet its own deadline of New Year's Eve for passing laws to halt $600 billion in tax hikes and spending cuts which strictly speaking came into force on Tuesday.
But with the New Year's Day holiday, there was no real world impact and Congress still had time to draw up legislation, approve it and backdate it to avoid the harsh fiscal measures.
That will need the backing of the House where many of the Republicans who control the chamber complain that President Barack Obama has shown little interest in cutting government spending and is too concerned with raising taxes.
All eyes are now on the House which is to hold a session on Tuesday starting at noon (1700 GMT).
Obama called for the House to act quickly and follow the Senate's lead.
"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," he said in a statement.
"There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans," Obama said.
Members were thankful that financial markets were closed, giving them a second chance to return to try to head off the fiscal cliff.
But if lawmakers cannot pass legislation in the coming days, markets are likely to turn sour. The U.S. economy, still recovering from the 2008/2009 downturn, could stall again if Congress fails to fix the budget mess.
"If we do nothing, the threat of a recession is very real. Passing this agreement does not mean negotiations halt, far from it. We can all agree there is more work to be done," Majority Leader Harry Reid, a Democrat, told the Senate floor.
A new, informal deadline for Congress to legislate is now Wednesday when the current body expires and it is replaced by a new Congress chosen at last November's election.
The Senate bill, worked out after long negotiations on New Year's Eve between Vice President Joe Biden and Senate Republican Minority Leader Mitch McConnell, also postpones for two months a $109 billion "sequester" of sweeping spending cuts on military and domestic programs.
It extends unemployment insurance to 2 million people for a year and makes permanent the alternative minimum tax "patch" that was set to expire, protecting middle-income Americans from being taxed as if they were rich.
'IMPERFECT SOLUTION'
The tax hikes do not sit easy with Republicans but conservative senators held their noses and voted to raise rates for the rich because not to do so would have meant increases for almost all working Americans.
"It took an imperfect solution to prevent our constituents from a very real financial pain, but in my view, it was worth the effort," McConnell said.
House Speaker John Boehner - the top Republican in Congress - said the House would consider the Senate deal. But he left open the possibility of the House amending the Senate bill, which would spark another round of legislating.
"The House will honor its commitment to consider the Senate agreement if it is passed. Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members ... have been able to review the legislation," Boehner and other House Republican leaders said in a statement.
Boehner has struggled for two years to get control over a group of several dozen Tea Party fiscal conservatives in his caucus who strongly oppose tax increases and demand that he force Obama to make savings in the Medicare and Social Security healthcare and retirement programs.
A campaign-style event held by Obama in the White House as negotiations with Senate leaders were taking place on Monday may have made it more difficult for Republicans to back the deal. In remarks to a group of supporters that resembled a victory lap, the president noted that his rivals were coming around to his way of seeing things.
"Keep in mind that just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans. Obviously, the agreement that's currently being discussed would raise those rates and raise them permanently," he said to applause before the Senate deal was sealed.
Obama's words and tone annoyed Republican lawmakers who seemed to feel that the Democrat was gloating.
"That's not the way presidents should lead," said Republican Senator John McCain, Obama's rival in the 2008 election.
A deal with the House on Tuesday, while uncertain, would not mark the end of congressional budget fights. The "sequester" spending cuts will come up again in February as will the contentious "debt ceiling," which caps how much debt the federal government can hold.
Republicans may see those two issues as their best chance to try to rein in government spending and clip Obama's wings at the start of his second term.

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Political brinksmanship still threatens US economy

Even if U.S. lawmakers prevent the worst of the so-called fiscal cliff, the brinksmanship in Washington over taxes and spending is likely to continue damaging the fragile economy well into 2013.
A months-long political standoff over fiscal policy has already taken its toll, adding uncertainty that has discouraged consumers from spending and businesses from hiring and investing.
The squabbling seems sure to persist even if the House of Representatives goes along with a partial fix passed by the Senate in the early hours of Jan. 1. Under that plan, taxes will rise on individual incomes over $400,000 and household incomes over $450,000 and on the portion of estates that exceeds $5 million. The House is expected to vote Tuesday or Wednesday.
But lawmakers appear to have postponed tough decisions on government spending, giving themselves a reprieve from cuts that were scheduled to begin taking effect automatically Jan. 1. That just sets the stage for more hard-bargaining later.
And another standoff is likely to arrive as early as February when Congress will need to raise the $16.4 trillion federal borrowing limit so the government can keep paying its bills. House Republicans probably won't agree to raise the debt limit without offsetting spending cuts that Democrats are sure to resist.
"Even if they cut some small deal, the process and what is left undone still means there's a lot of uncertainty," says Stuart Hoffman, chief economist at PNC Financial Services Group.
After Jan. 1, asks Ethan Harris, co-head of global economics at Bank of America Merrill Lynch, "what induces the two sides to stop fighting and start compromising? ... We're kind of in the first act of a three-act play," Harris says. "One of the key messages from the cliff is that this stuff just doesn't get resolved quickly."
The fiscal cliff itself was created to force Democrats and Republicans to compromise.
To end a 2011 standoff over raising the federal debt limit, they agreed to a Jan. 1, 2013 deadline to reach a deal over taxes and spending. If they didn't, more than $500 billion in 2013 tax increases would begin to take effect, along with $109 billion in cuts from the military and domestic spending programs. The sharp tax hikes and spending cut would threaten to send the economy over the cliff and back into recession.
But negotiations to avert catastrophe have highlighted once again how far apart the two parties are on taxes (Republicans don't want to raise them) and spending (Democrats are reluctant to cut government programs).
"We're learning about how deep the impasse is," Harris says. "Both sides have decided that they were willing to go to the last minute."
Political gridlock has been rattling financial markets and shaking consumer and business confidence the past two years.
After a fight over raising the debt limit last year, the credit rating agency Standard & Poor's yanked the U.S. government's blue-chip AAA bond rating because it feared that America's dysfunctional political system couldn't deliver a credible plan to reduce the federal government's debt. S&P cited an overabundance of "political brinksmanship" and warned that "the differences between political parties have proven to be extraordinarily difficult to bridge."
The Dow Jones industrials dropped 635 points in panicked selling the first day of trading after the S&P announcement.
Harris contrasted the latest budget brawls with previous budget agreements in the 1980s and 1990s. Those deals generally included deficit cuts that were spread out over time and were sometimes bipartisan.
That's better for business and consumer confidence than the repeated partisan standoffs and threats of sudden tax hikes and spending cuts that Congress now engages in.
"The process matters almost as much as what they actually do," Harris says.
Outside Washington, the economy has been getting some good news. Europe's financial crisis appears to have eased, reducing the threat of a renewed financial crisis. And the U.S. real estate market finally appears to be recovering from the housing bust.
But the old worries have been replaced by new ones about political gridlock, says Joseph LaVorgna, an economist at Deutsche Bank.
The partisan divide has left businesses and consumers wondering what's going to happen to their taxes and to federal contracts.
Companies have plenty of cash. But they reduced spending on industrial equipment, computers and software from July to September, the first quarterly drop since mid-2009 when the economy was still in recession. And hiring has been stuck at a modest level of about 150,000 new jobs per month this year.
"What we see is fear," says Darin Harris, chief operating for Primrose Schools, an Atlanta company with 250 franchised preschools in 17 states. He says franchise owners have been reluctant to invest in a second or third school until they know what tax rates are going to be and where government spending is headed. "All those things make our small business owners reluctant to reinvest."
Consumer confidence fell in December for the second straight month, according to a survey by the Conference Board, which blamed the drop on worries about the fiscal cliff. The uncertainty is also believed to have dinged holiday shopping, which grew at the slowest pace this year since 2008.
"Every kind of brinksmanship moment is a reminder to people to not trust the economy," Harris says.

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US may skirt 'fiscal cliff' but faces higher taxes

A last-ditch tax deal in the Senate might let the U.S. economy escape the worst of the so-called fiscal cliff and avoid going back into recession. But even if the House goes along, the tax increases likely coming in 2013 will dent economic growth anyway.
In the early hours of the new year, the Senate voted to end a long stalemate and raise taxes on upper-income households, extend long-term unemployment benefits and postpone decisions over government spending cuts, officials said. But any deal needs approval from the House.
About $536 billion in 2013 tax increases were scheduled to take effect Jan. 1, along with $109 billion in cuts from military and domestic-spending programs, if Democrats and Republicans could not reach agreement.
Mark Vitner, senior economist at Wells Fargo, said he expects budget policy, including the higher taxes in the Senate plan, to shave 0.8 percentage points off economic growth in 2013. The economy doesn't have much growth to give. Vitner predicts it will grow just 1.5 percent in 2013, down from 2.2 percent in 2012.
The biggest hit to the economy is expected to come from the end of a two-year Social Security tax cut. The so-called payroll tax is scheduled to bounce back up to 6.2 percent from 4.2 percent in 2011 and 2012, amounting to a $1,000 tax increase for someone earning $50,000 a year.
"Even with this deal, fiscal policy will still be a net drag on economic growth," Vitner said. "The expiration of the payroll tax holiday will reduce after-tax income for all workers and hit lower to middle income families the hardest."
Mark Zandi, chief economist at Moody's Analytics, calculates that the higher payroll tax will reduce economic growth by 0.6 percentage points in 2013. The other possible tax increases — including higher taxes on household incomes above $450,000 a year — will slice just 0.15 percentage points off annual growth, Zandi says.

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