Google Enterprise boss says company is ‘doubling down’ on business services, targeting Microsoft

In an interview with AllThingsD, Amit Singh, Google’s (GOOG) VP of Enterprise, said the company is embracing the consumerization of the enterprise in 2013 based on the successes its seen with Google Drive and Google Apps this year. Singh says Google is finally confident that it can deliver enterprise services and tools that rival those of Microsoft (MSFT) with cloud applications that scale better and have stronger security. Not only that, but Singh believes Microsoft is stuck in the past, creating services built around the desktop and not around Web services.
[More from BGR: Microsoft Surface trampled at the bottom of the tablet pile this Christmas]
“It’s time to really embrace [the enterprise],” Singh told AllThingsD. “We’re doubling down on the Enterprise. It’s an increasingly important part of Google, and a place where we plan to invest and to support our customers.”
[More from BGR: Mark Cuban: Nokia Lumia 920 ‘crushes’ the iPhone 5]
So how is Google looking to steal away Microsoft’s enterprise customers? With QuickOffice features that match Microsoft Office point for point.
“Our goal is to get to the 90 percent of users who don’t need to have the most advanced features of Office,” said Singh. ”We know the gaps between our features and theirs. We’re improving them week by week. We’re going to get to the 90 percent.”
Having a carbon-copy of Microsoft Office won’t be enough though, and Singh knows it. In the end, Singh understands that success is directly related to developers and ecosystems.
“The way you look at a successful business is its ecosystem,” said Singh. “For us at Google, it’s all about the ecosystem and developers.”
As a company known for its robust Web services, Google is well-positioned to sway users who are looking to escape Microsoft’s tight grip on the enterprise. Perhaps Singh and Google can finally make the enterprise “sexy.
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Delays litter long road to vehicle rearview rules

 In the private hell of a mother's grief, the sounds come back to Judy Neiman. The SUV door slamming. The slight bump as she backed up in the bank parking lot. The emergency room doctor's sobs as he said her 9-year-old daughter Sydnee, who previously had survived four open heart surgeries, would not make it this time.
Her own cries of: How could I have missed seeing her?
The 53-year-old woman has sentenced herself to go on living in the awful stillness of her West Richland, Wash., home, where she makes a plea for what she wants since she can't have Sydnee back: More steps taken by the government and automakers to help prevent parents from accidentally killing their children, as she did a year ago this month.
"They have to do something, because I've read about it happening to other people. I read about it and I said, 'I would die if it happens to me,'" Neiman says. "Then it did happen to me."
There is, in fact, a law in place that calls for new manufacturing requirements to improve the visibility behind passenger vehicles to help prevent such fatal backing crashes, which the government estimates kill some 228 people every year — 110 of them children age 10 and under — and injures another 17,000.
Congress passed the measure with strong bipartisan backing, and Republican President George W. Bush signed it in 2008.
But almost five years later, the standards have yet to be mandated because of delays by the U.S. Department of Transportation, which faced a Feb. 28, 2011, deadline to issue the new guidelines for car manufacturers. Transportation Secretary Ray LaHood has pushed back that deadline three times — promising this past February that the rules would be issued by the end of 2012.
With still no action, safety advocates and anguished parents such as Neiman are asking: What's taking so long to remedy a problem recognized by government regulators and automakers for decades now?
"In a way, it's a death sentence, and for no good reason," said former Public Citizen president Joan Claybrook, who once directed the federal agency responsible for developing the rules.
The proposed regulations call for expanding the field of view for cars, vans, SUVs and pickup trucks so that drivers can see directly behind their vehicles when in reverse — requiring, in most cases, rearview cameras and video displays as standard equipment.
The National Highway Traffic Safety Administration, charged with completing the new standards, declined requests to discuss the delays. Spokeswoman Karen Aldana said the agency would not comment while the rulemaking process was ongoing but was on track to meet LaHood's latest cutoff date. In a letter to lawmakers in February, LaHood said his agency needed more time for "research and data analysis" to "ensure that the final rule is appropriate and the underlying analysis is robust."
Others insist the issue is money, and reluctance to put any additional financial burdens on an industry crippled by the economic crisis. Development of the new safety standards came even as the Obama administration was pumping billions of dollars into the industry as part of its bailout package.
"They don't want to look at anything that will cost more money for the automobile industry," said Packy Campbell, a former Republican state lawmaker from New Hampshire who lobbied for the law.
NHTSA has estimated that making rear cameras standard on every car would add $58 to $88 to the price of vehicles already equipped with dashboard display screens and $159 to $203 for those without them.
The Alliance of Automobile Manufacturers, a lobbying group that represents automakers, puts the total cost to the industry at about $2 billion a year. The organization endorsed the 2008 law after a series of compromises. But last December, eight days after Sydnee Neiman's death, its leader met with White House budget officials to propose a less expensive alternative: reserving cameras for vehicles with extra-large blind zones and outfitting the rest with curved, wide-angle exterior mirrors.
The alliance declined comment, but earlier this year the group's vice president, Gloria Bergquist, told The Associated Press that it urged the government to explore more options as a way to reduce the costs passed on to consumers.
"There are a variety of tools that could be used," she said, adding that automakers also were concerned that the cumulative effect of federal safety regulations is driving up the average price of a new car, now about $25,000.
Industry analysts also question whether cameras are needed on smaller, entry-level class cars with better rearview visibility.
"It may just be a couple hundred dollars, but it can grow pretty significantly if you are talking about ... an inexpensive car that was not originally conceived to have all these electronics and was only going to have a simple car stereo," said Roger Lanctot, an automotive technology specialist.
Before the delays, all new passenger vehicles were to carry cameras and video displays by September 2014. The industry has now asked for two more years after the final rules are published to reach full compliance.
Despite its resistance, the industry on its own has been installing rearview cameras, a feature first popularized two decades ago in Japan and standard on nearly 70 percent of new cars produced there this year. In the United States, 44 percent of 2012 models came with rear cameras standard, and 27 percent had them as options, according to the automotive research firm Edmunds.
Nine in 10 new cars had console screens available, according to market research firm iSuppli, which would put the price of adding a camera on the low end of the NHTSA's estimates.
These backing crashes are hardly a new phenomenon. Emergency room doctors, the National Centers for Disease Control and Prevention and the NHTSA have produced dozens of papers on the problem since the 1980s.
Researchers at the University of California, Irvine, started looking into the issue in the 1990s after noticing toddlers showing up in hospital databases of injured child pedestrians. They found that many of those children had been killed or hurt by vehicles backing out of home driveways.
In 1993, the NHTSA sponsored several studies that noted the disproportionate effect of backup accidents on child victims. One report explored sensors and cameras as possible solutions, noting the accidents "involve slow closing speeds and, thus, may be preventable." Still another 1993 report estimated that 100 to 200 pedestrians are killed each year from backing crashes, most of them children.
Three years later, Dee Norton, a reporter at The Seattle Times, petitioned the NHTSA to require improved mirrors on smaller commercial trucks and vans after his 3-year-old grandson was killed by a diaper delivery truck that backed over him.
The NHTSA started looking into technology as a solution, but in one proposal — issued in November 2000 — it noted that sensors, cameras and monitors were still expensive and promised to later reevaluate the feasibility of such emerging technologies.
Adding to the scrutiny was the advocacy work of a child safety group called KidsandCars.org, which in 2002 started trying to persuade federal regulators to take on the problem. After the groups' president, Janette Fennell, brought the issue to the attention of Consumer Reports, the magazine started measuring "blind zones" to determine how far away a toddler-sized traffic cone had to be before a driver looking though the rear window, rearview mirror and side mirrors could see it.
The research found an overall trend of worsening rear visibility — due in part to designs favoring small windows and high trunk lines, said Tom Mutchler, the magazine's automotive engineer.
"Cameras are basically the only technology that is going to let you see something right behind the bumper," he said.
With a growing body of research, better statistics and inaction by regulators, advocates such as KidsandCars.org's Fennell and Sally Greenberg, then with Consumers Union, turned to Congress for a solution.
In 2003, U.S. Rep. Peter King, R-New York, introduced the Cameron Gulbransen Kids and Cars Safety Act, named for a 2-year-old Long Island boy whose pediatrician father backed over him in their driveway. Five years later, it finally became law.
While no one doubts that cameras could help reduce deaths, they aren't regarded as a perfect solution either.
One recent study by a researcher at Oregon State University found that only one in five drivers used a rearview camera when it was available, but 88 percent of those who did avoided striking a child-sized decoy.
In its proposed rule, the NHTSA estimated that rearview video systems could substantially reduce fatal backing crashes — by at least 95 a year — and result in at least 7,000 fewer injuries.
Judy Neiman's 2006 Cadillac Escalade didn't have any cameras installed. They weren't added as an optional package until the following model year. Instead, her vehicle was equipped with a "rear parking assist system" — bumper sensors, an alarm and lights that are supposed to go off within 5 feet of objects or people.
Neither Neiman nor the 10-year-old neighbor boy who had accompanied her and her daughter to the bank on Dec. 8, 2011, would recall hearing any alert, according to a police report.
Sydnee was carrying her purple plastic piggy bank and account book, so she could deposit $5 from her weekly allowance. After the transaction, Neiman slid behind the wheel and waited for the children. She heard the door slam, then saw the boy sitting on the right side of the back seat as she put the car into reverse.
She figured Sydnee was seated behind the driver's seat. Instead, the boy had gotten in first, telling Sydnee to go around and get in from the left side. He would later tell a police investigator that the girl had dropped her piggy bank on her way around the SUV.
Even if she were upright, at 4 feet, 3 inches tall, Sydnee would have been practically invisible through the rear window, the bottom edge of which was a few inches taller than she was.
As the first anniversary of her daughter's death passed, Neiman hoped that sharing her story might spare other parents from enduring the pain she feels every day.
She tortures herself by replaying a conversation she had with Sydnee the summer before she died. Her daughter always had taken her heart condition, a congenital defect, in stride. She never complained or showed fear, despite her many surgeries.
Then one night Sydnee started crying, and she wouldn't tell her mother what was troubling her until the next morning.
"She said, 'I don't want to die, Mom,' and when she died, that's all I could think about. She didn't want to die," Neiman says. "She survived four open heart surgeries. If God had taken her at that time, I could accept it. But who could take her with her being hit by my car? And my hitting her
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Chipmaker Marvell loses $1.17 billion patent verdict

A federal jury on Wednesday found that Marvell Technology Group infringed two patents held by Carnegie Mellon University, and ordered the chipmaker to pay $1.17 billion in damages.
The award is one of the largest by a jury in a U.S. patent case, and is nearly twice Marvell's profit in its latest fiscal year. It followed a month-long trial in the U.S. District Court in Pittsburgh, the home of Carnegie Mellon.
Jurors also found that Marvell's patent infringement was willful. This could enable the trial judge, Nora Barry Fischer, to award triple damages, a sum close to the $3.96 billion market value of Marvell, whose chips are used for reading and writing data on hard disk drives.
Shares of Marvell fell 10.3 percent on Wednesday, closing down 85 cents at $7.40 on the Nasdaq.
Carnegie Mellon said it was gratified by the verdict. "Protection of the discoveries of our faculty and students is very important to us," it said.
Marvell and its law firm, Quinn Emanuel Urquhart & Sullivan, did not immediately respond to requests for comment.
The company had argued that it had acted in good faith, and the Carnegie Mellon patents were invalid. In a November 29 regulatory filing, Marvell said it intended to litigate vigorously in any potential appeal if it lost at trial.
Carnegie Mellon had accused Marvell of infringing patents used in technology for hard disk drive circuits to read data from high-speed magnetic disks, according to a statement from the university's law firm, K&L Gates.
The law firm said the patents related to systems and methods developed by Carnegie Mellon Professor Jose Moura and a doctoral student, Aleksandar Kavcic, who is now a professor at the University of Hawaii.
Through its verdict, the jury found that Marvell had sold billions of chips incorporating the technology without being licensed to do so, K&L Gates said.
Marvell is based in Hamilton, Bermuda. Its U.S. operating unit Marvell Semiconductor Inc is based in Santa Clara, California, and was also a defendant in the case.
The company posted a $615.1 million profit on net revenue of $3.39 billion in its most recent fiscal year, which ended on January 28. It counts Western Digital Corp and Seagate Technology Plc among its largest customers.
The trial judge set a May 1, 2013, hearing to consider a final judgment in the case, court records show.
The case is Carnegie Mellon University v. Marvell Technology Group Ltd et al, U.S. District Court, Western District of Pennsylvania, No. 09-00290.
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Phablet wars heat up with ZTE’s quad-core Nubia Z5

2013 is shaping up to be the year of the “phablet” with virtually ever major handset maker preparing to challenge Samsung’s (005930) impressive Galaxy Note lineup. While there’s no clear definition on how large a phablet is, most tend to have screens that hover in the 5-inch range, though Huawei’s upcoming 6.1-inch smartphone will only push that boundary. ZTE’s newly announced Nubia Z5 packs a 5-inch display with full-HD 1,920 x 1,080 resolution, an aluminum case, a 1.5GHz Qualcomm Snapdragon S4 Pro quad-core processor, 2GB of RAM, 32GB of internal storage, a 13-megapixel rear, a 2-megapixel front camera, Dolby sound and Android 4.1 Jelly Bean. It even edges out HTC’s (2498) slim DROID DNA in terms of size with slightly thinner dimensions and a larger battery: 2,300 mAh versus the DNA’s 2,020 mAh. The only deal-breaker is the Nubia Z5 likely won’t be available in the U.S., but importers drooling over its specs can pick one up in China for about $554.
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Temple Run was downloaded more than 2.5 million times on Christmas Day

Millions of men, woman and children awoke on December 25th to find a smartphone or tablet under their Christmas tree. After opening these gifts, users are typically quick to fire up their new devices and download the most popular apps. Keith Shepherd, founder of Imangi Studios, announced on Wednesday that the company’s Temple Run game saw unprecedented attention on Christmas Day. The executive revealed on his Twitter page that the Indiana Jones-esque ”runner” game was downloaded more than 1 million times on iOS, more than 1 million times on Android and over 500,000 times on Amazon’s Appstore during the 24-hour period. Earlier this year, Temple Run was the top free and top grossing app on Apple’s (AAPL) App Store with over 40 million downloads and 7 million daily active users.
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Fixing the GOP: Party Like It's 1949

Americans by a 15-point margin in the latest ABC News/Washington Post poll say the Republican Party needs less conservative policies that are more focused on middle- and lower-income Americans, rather than better leaders to sell its existing positions.
And 63 years ago, Americans by an 11-point margin said precisely the same thing.
See PDF with full results, charts and tables here.
Mark it up to the swinging pendulum of American politics: Six decades after Republican presidential nominee Thomas Dewey's unexpected loss to incumbent Democrat Harry S. Truman, the GOP is back in the same doghouse.
The question last was asked in 1949, months after Truman's victory in what's widely considered to be the greatest upset in presidential election history. The GOP, at that point, had lost five presidential races in a row, leading Gallup to ask:
"One group holds that the Republican Party is too conservative - that it needs a program concerned more directly with the welfare of the people, particularly those in the lower- and middle-income levels. The other group says that the policies of the Republican party are good - but the party needs a better leader to explain and win support for these policies."
In 1949, respondents, asked which view best fit their own, took the first option by 41-30 percent, with an additional 12 percent volunteering that both applied equally.
Fast forward to 2012. Defeated last month by an incumbent Democrat, the Republican Party has lost the popular vote in five of the last six presidential elections. After hitting a 20-year high in 2003, allegiance to the GOP has dropped and shows no sign of recovery.
This poll, produced for ABC by Langer Research Associates, repeated the 1949 Gallup question. The result: Fifty-three percent of Americans say the Republicans need to work on their policies. Thirty-eight percent see it, instead, as a leadership problem.
THEN/NOW - There are other parallels between 2012 and 1948. Mitt Romney came across as a stiff candidate, lacking the common touch - much the same commentary that described Dewey. Truman directed his fire at the "do-nothing" 80th Congress; Barack Obama, while stressing it less, benefitted from comparisons to the deeply unpopular 112th Congress.
And the 1948 economy was recovering after the recession of 1946-7; in the run-up to the 2012 vote the economy was recovering as well, with newly revised figures showing a 3.1 percent gain in GDP in the third quarter.
Finally, there was the sense in the 2012 election that Romney, one of the wealthiest men ever to seek the presidency, would, if elected, pursue policies that favored the well-off - a view expressed in the results of this survey, as it was about the Republican Party in 1949.
It should be noted that both parties have had their share of soul-searching: The Democrats also lost five of six presidential elections in recent times, from 1968 to 1988.
GROUPS - There are differences, of course, among groups. It's noteworthy that even among conservatives, 30 percent say the GOP is too conservative and insufficiently focused on lower- and middle-income Americans, as do 35 percent of evangelical white Protestants, a core Republican group, and nearly a quarter of Republicans themselves.
Those numbers rise sharply among other groups, for instance, to 53 percent of independents and 60 percent of moderates, peaking at 79 percent of Democrats and 77 percent of liberals. There was, notably, much less partisan polarization on this question in 1949.
Other differences largely follow partisan and ideological patterns. While 49 percent of whites say the Republican Party needs less conservative policies and a greater focus on middle- and lower-income Americans, that jumps to 66 percent among nonwhites, a growing share of the electorate. It's also much higher in the Northeast than in the South or Midwest, and higher among younger and the most highly educated Americans.
There's less of a difference, perhaps surprisingly, by income levels. Among people earning less than $50,000 a year, 55 percent say the GOP needs greater focus on lower- and middle-income Americans. But among $100,000-plus earners, essentially as many, 53 percent, say the same.
METHODOLOGY - This ABC News/Washington Post poll was conducted by telephone Dec. 13-16, 2012, among a random national sample of 1,002 adults, including landline and cell-phone-only respondents. Results have a margin of sampling error of 3.5 points, including design effect. Partisan divisions are 31-24-38 percent, Democrats-Republicans-independents.
The survey was produced for ABC News by Langer Research Associates of New York, N.Y., with sampling, data collection and tabulation by Abt-SRBI of New York, N.Y.
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Obama nominating Kerry for secretary of state

 President Barack Obama on Friday will nominate Sen. John Kerry as his next secretary of state, a senior administration official said, making the first move in an overhaul of his national security team heading into a second term.
If confirmed, Kerry would take the helm at the State Department from outgoing Secretary Hillary Rodham Clinton, who has long stated her intention to leave early next year. Kerry, a longtime Massachusetts senator, is expected to be easily approved for the Cabinet post by his Capitol Hill colleagues.
That would open up the Senate seat Kerry has held for nearly three decades. Recently defeated Republican Sen. Scott Brown might contest it.
Obama will announce Kerry's nomination from the White House Friday afternoon, said the official, who requested anonymity to discuss the president's decision before the announcement. Clinton was not expected to attend. The secretary fell and suffered a concussion last week, State Department officials said, and hasn't made public appearances since.
Word about Kerry's nomination — Washington's latest worst-kept secret — came at a somber and unusual time, with both the president and Kerry attending a memorial service for Democratic Sen. Daniel Inouye of Hawaii. At the same time, leaders of the nation's divided government were in utter limbo about how to head off the "fiscal cliff" looming Jan. 1.
Kerry's nomination could bring to a close what has become for the White House a contentious and distracting effort to find a new secretary of state.
Kerry was the Democratic nominee for president in 2004, losing a close election to incumbent George W. Bush. He's a decorated Vietnam veteran who was critical of the war when he returned to the U.S., even testifying in front of the Senate committee he eventually chaired.
Kerry's only other rival for the job, U.N. Ambassador Susan Rice, faced harsh criticism from congressional Republicans for her initial accounting of the deadly September attack on Americans in Benghazi, Libya. Obama vigorously defended Rice, a close friend and longtime adviser, but GOP senators dug in, threatening to hold up her nomination if the president tapped her for the post.
Rice withdrew her name from consideration last week, making Kerry all but certain to become the nominee. People familiar with the White House's decision-making said support within the administration was moving toward Kerry even before Rice pulled out.
The Cabinet nomination of Kerry, 69, is the first Obama has made since winning a second term, and the first piece in an extensive shuffle of his national security team. The president is also expected to nominate a new defense secretary soon to take over for retiring Leon Panetta and a new director of the Central Intelligence Agency to replace former spy chief David Petreaus, who resigned last month after admitting to an affair with his biographer.
The White House had hoped to introduce Obama's national security team in a package announcement. But those plans were scrapped as the fiscal cliff negotiations consumed the administration and questions arose about the front-runner for the Pentagon post, former Republican Sen. Chuck Hagel of Nebraska. Hagel has been dogged by questions about his support for Israel and where he stands on gay rights, with critics calling on him to repudiate a comment in 1998 that a former ambassadorial nominee was "openly, aggressively gay."
As the nation's top diplomat, Kerry will be tasked with not only executing the president's foreign policy objectives, but also shaping Obama's approach. The senator offered some insight into his world view on Thursday during a Senate Foreign Relations committee hearing he chaired on the deadly September attack on a U.S. consulate in Benghazi, Libya.
Kerry called on Congress to put enough money into America's foreign policy objectives and said doing so is an investment "in our long-term security and more often than not it saves far more expensive expenditures in dollars and lives for the conflicts that we failed to see or avoid."
And he emphasized the importance of U.S. diplomats being able to work freely in places like Benghazi, despite its dangers.
"There will always be a tension between the diplomatic imperative to get 'outside the wire' and the security standards that require our diplomats to work behind high walls," he said. "Our challenge is to strike a balance between the necessity of the mission, available resources and tolerance for risk."
Kerry, the son of a diplomat, has long sought the nation's top diplomatic post. Obama considered him for the job after the 2008 election before picking Clinton, his defeated rival for the Democratic presidential nomination, in a surprise move.
Since then, Obama has dispatched Kerry around the world on his behalf numerous times, particularly to tamp down diplomatic disputes in Afghanistan and Pakistan. He was also part of Obama's debate preparations team during the 2012 election, playing Republican challenger Mitt Romney in mock debates.
Kerry also won praise from Obama aides for his sharp national security-focused speech at the Democratic National Convention in August. He told delegates: "Ask Osama bin Laden if he's better off now than he was four years ago."
Before nominating Kerry, the White House consulted with congressional Democrats about the fate of the Senate seat he has held for five terms. Democrats have sought to assure the White House that the party has strong potential candidates in the state.
Kerry has pushed the White House's national security agenda in the Senate with mixed results. He ensured ratification of a nuclear arms reduction treaty in 2010 and most recently failed to persuade Republicans to back a U.N. pact on the rights of the disabled.
The senator was also outspoken in pushing for a 2011 no-fly zone over Libya as Moammar Gadhafi's forces attacked rebels and citizens.
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Obama nominates Kerry for secretary of state

 President Barack Obama on Friday nominated Massachusetts Sen. John Kerry, one of Washington's most respected voices on foreign policy, as his next secretary of state.
The move is the first in an expected overhaul of Obama's national security team heading into his second term.
As the nation's top diplomat, Kerry will not only be tasked with executing the president's foreign policy objectives, but will also have a hand in shaping them. The longtime lawmaker has been in lockstep with Obama on issues like nuclear non-proliferation, but ahead of the White House in advocating aggressive policies in Libya, Egypt and elsewhere that the president later embraced.
"He is not going to need a lot of on-the-job training," Obama said, standing alongside Kerry in a Roosevelt Room ceremony. "Few individuals know as many presidents and prime ministers or grasp our foreign policies as firmly as John Kerry."
He is expected to win confirmation easily in the Senate, where he has served since 1985, the last six years as chairman of the Foreign Relations Committee.
Kerry would take the helm at the State Department from Secretary Hillary Rodham Clinton, who has long planned to leave the administration early next year. Clinton is recovering from a concussion sustained in a fall and did not attend the White House event.
In a statement, Clinton said, "John Kerry has been tested — in war, in government, and in diplomacy. Time and again, he has proven his mettle."
Obama settled on Kerry for the job even though it could cause a political problem for Democrats in Massachusetts. Kerry's move to State would open the Senate seat he has held for five terms, giving Republicans an opportunity to take advantage. Recently defeated GOP Sen. Scott Brown would be his party's clear favorite in a special election.
Kerry would join a national security team in flux, with Obama expected to choose a new defense secretary and director of the Central Intelligence Agency in the coming weeks.
The 69-year-old Kerry already has deep relationships with many world leaders, formed both during his Senate travels and as an unofficial envoy for Obama. The president has called upon Kerry in particular to diffuse diplomatic disputes in Afghanistan and Pakistan, two countries that will be at the forefront of Obama's foreign policy agenda early in his second term.
At times, Kerry has been more forward-leaning than Obama on foreign policy issues. He was an early advocate of an international "no-fly zone" over Libya in 2011 and among the first U.S. lawmakers to call for Egyptian strongman Hosni Mubarak to leave power as pro-democracy protests grew. Obama later backed both positions.
Kerry would take over at a State Department grappling with the deaths of the U.S. ambassador to Libya and three other Americans during a September attack on the consulate in Benghazi, Libya. Kerry, during a hearing on the attacks Thursday, hinted at how he would manage U.S. diplomatic personnel working in unstable regions.
"There will always be a tension between the diplomatic imperative to get 'outside the wire' and the security standards that require our diplomats to work behind high walls," he said. "Our challenge is to strike a balance between the necessity of the mission, available resources and tolerance for risk."
His only other rival for the job, U.N. Ambassador Susan Rice, faced harsh criticism from congressional Republicans for her initial accounting of the consulate attack. Obama vigorously defended Rice, a close friend and longtime adviser, but GOP senators dug in, threatening to hold up her nomination if the president tapped her for the post.
Rice withdrew her name from consideration last week, making Kerry all but certain to become the nominee. People familiar with the White House's decision-making said support within the administration was moving toward Kerry even before Rice pulled out.
The son of a diplomat, Kerry was first elected to the Senate in 1984. He is also a decorated Vietnam veteran who was critical of the war effort when he returned to the U.S. He ran for president in 2004, losing a close race to incumbent Republican President George W. Bush.
Obama and Kerry have developed close ties in recent years. It was Kerry, during his 2004 presidential run, who tapped Obama as the party's convention keynote speaker, a role that thrust the little-known Illinois politician into national prominence.
Kerry served on Obama's debate preparation team during the 2012 election, playing Republican challenger Mitt Romney in mock debates.
"Nothing brings two people closer together than two weeks of debate prep," Obama joked on Friday. "John, I'm looking forward to working with you rather than debating you."
Kerry is Obama's first Cabinet appointee following the November election. The president is also mulling replacements for retiring Defense Secretary Leon Panetta and former CIA director David Petraeus, who resigned last month after admitting to an affair with his biographer.
Former Republican Sen. Chuck Hagel of Nebraska is a front-runner for the Pentagon post, but has been dogged by questions about his support for Israel and where he stands on gay rights, with critics calling on him to repudiate a comment in 1998 that a former ambassadorial nominee was "openly, aggressively gay."
Hagel apologized for that comment Friday.
Former Pentagon official Michele Flournoy and current Deputy Defense Secretary Ashton Carter are also under consideration to replace Panetta. Obama is also considering promoting acting CIA Director Michael Morell or naming White House counterterrorism adviser John Brennan as the nation's spy chief.
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Son says Romney was reluctant to run for president again: report

 Republican Mitt Romney's family had to convince him to make a second bid for the presidency because he was reluctant to run again after failing to secure his party's nomination in 2008, Romney's son told the Boston Globe on Sunday.
In an article that examined what went wrong with Romney's losing 2012 presidential campaign, Tagg Romney said his father Mitt said he had no intention of running again after he did not become the Republican presidential nominee in 2008.
Arizona Senator John McCain secured the Republican nomination that year and lost to Democrat Barack Obama in the presidential election.
In order to overcome his father's reluctance, Tagg Romney told the Globe he and his mother Ann worked to change his mind.
"He wanted to be president less than anyone I've met in my life," Tagg Romney told the paper. "If he could have found someone else to take his place ... he would have been ecstatic to step aside."
Despite predictions that the 2012 election would be close, Romney, a former Massachusetts governor and businessman, fell well short of the 270 electoral votes needed to defeat President Obama.
In November, Obama won re-election with 332 electoral votes and won most of the battleground states, including Ohio and Florida.
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Deportations of illegal immigrants in 2012 reach new US record

The Obama administration deported at least 400,000 illegal immigrants in fiscal year 2012, a new record. It emphasizes deporting 'criminal aliens' to protect public safety, but the high figure serves to remind Latinos of the president's unfilled pledge to reform immigration policy.
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Existing home sales rise to fastest pace in three years

Home resales rose sharply in November to their fastest pace in three years, a sign the recovery in the housing market is gaining steam.
The National Association of Realtors said on Thursday that existing home sales climbed 5.9 percent last month to a seasonally adjusted annual rate of 5.04 million units.
That was the fastest since November 2009, when a federal tax credit for home buyers was due to expire. Sales were well above the median forecast of a 4.87 million-unit rate in a Reuters poll.
The U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation has helped the housing sector this year, when it is expected to add to economic growth for the first time since 2005.
NAR economist Lawrence Yun said superstorm Sandy, which slammed in the U.S. East Coast in late October and disrupted the regional economy for weeks, had only a slight negative impact on home resales.
The NAR expects some purchases delayed by the storm to add a slight boost to resales over the next few months, Yun said.
Nationwide, the median price for a home resale was $180,600 in November, up 10.1 percent from a year earlier as fewer people sold their homes under distressed conditions compared to the same period in 2011. Distressed sales include foreclosures.
The nation's inventory of existing homes for sale fell 3.8 percent during the month to 2.03 million, the lowest level since December 2001.
At the current pace of sales, inventories would be exhausted in 4.8 months, the lowest rate since September 2005.
Distressed sales fell to 22 percent of total sales from 29 percent a year ago.
The share of distressed sales, which also include those where the sales price was below the amount owed on the home, was also down from 24 percent in October.
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New York City should hike taxes on big business-comptroller

 New York City's top financial officer and possible contender for mayor in 2013, John Liu, proposed on Thursday tax hikes for big businesses and an end to Madison Square Garden's $15 million annual property tax exemption.
The proposals by New York City Comptroller John Liu include tax hikes on private equity firms, which would help offset his plan for $500 million in tax breaks and lowered fines for 90 percent of the city's small businesses.
Liu is expected to vie for the Democratic mayoral nomination for the election in November 2013.
The city could end tax breaks for big companies - more than $250 million of which were handed out last year, Liu said.
The city could also eliminate its $15 million annual property tax exemption for Madison Square Garden, the indoor arena in midtown Manhattan that's home to the New York Knicks basketball team. Madison Square Garden has been exempt from paying taxes on real property since 1982 under New York state law.
The arena is owned by The Madison Square Garden Co, which also owns the Knicks and other professional sports teams. The company also owns Radio City Music Hall, the Beacon Theatre and others venues, as well as television networks.
Liu also proposed examining tax breaks for special interests. Insurance companies, for instance, have not paid the general corporation tax since 1974, at a cost of $300 million annually to the city, he said.
Private equity firms could also start paying the unincorporated business tax for carried interest or gains from assets being held for investment. The exemption costs New York City about $200 million a year, Liu said.
Liu's package would use the revenue generated by those measures to offset his plan to ease the tax burden for small businesses.
He proposed ending the city's general corporation tax for all businesses with liabilities under $5,000 -- about 240,000 business in the city, or 85 percent of those that currently pay the tax.
His plan would also reduce some fines, as well as exempt businesses that make less than $250,000 in annual income from the city's unincorporated business tax.
The proposals would have to be approved by the governor and state legislature after a request by the city council.
The city is facing a possible $2.7 billion gap in fiscal 2014 that could grow to $3.8 billion the following year, Liu said.
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Republicans push own "fiscal cliff" plan; talks frozen

 Republicans in the Congress pushed ahead on Thursday with a "fiscal cliff" plan that stands no chance of becoming law as time runs short to reach a deal with President Barack Obama to avert a Washington-induced economic recession.
House of Representatives Speaker John Boehner's "Plan B" to limit income-tax increases to the wealthiest sliver of the population appeared likely to pass the House on Thursday evening after it narrowly cleared a procedural hurdle in the afternoon.
However, Obama has vowed to veto the plan, and Senate Majority Leader Harry Reid said he will not bring it up for a vote in the Democratic-controlled chamber. White House spokesman Jay Carney called it a "multi-day exercise in futility."
Still, passage of Plan B could give Boehner the political cover he needs to strike a deal that would break with decades of Republican anti-tax orthodoxy.
"Time's running short. I'm going to do everything I can to protect as many Americans from an increase in taxes as I can," Boehner told a news conference.
Though it does not raise taxes on as many affluent Americans as Obama wants, the bill would put Republicans on record as supporting a tax increase on those who earn more than $1 million per year - a position the party opposed only weeks ago.
That could make it easier eventually to split the difference with Obama, who wants to lower the threshold to households that earn more than $400,000 annually. Obama also faces resistance on his left flank from liberals who oppose cuts to popular benefit programs, which Republicans say must be part of any deal.
Obama and Boehner will need to engage in more political theater to get lawmakers in both parties to sign on to the painful concessions that will have to be part of any deal to avert the cliff and rein in the national debt, analysts say.
"They are now in the mode where they have to demonstrate how hard they're trying to get everything they can," said Joe Minarik, a former Democratic budget official now with the Committee For Economic Development, a centrist think tank.
Even as he pressured Obama and the Democratic Senate to approve his plan, Boehner indicated that he was not willing to walk away from the bargaining table.
"The country faces challenges, and the president and I, in our respective roles, have a responsibility to work together to get them a result," Boehner said.
TIME RUNNING OUT
Obama and Boehner aim to reach a deal before the end of the year, when taxes will automatically rise for nearly all Americans and the government will have to scale back spending on domestic and military programs. The $600 billion hit to the economy could push the U.S. economy into recession, economists say.
Investors so far have assumed the two sides will reach a deal, but concerns over the fiscal cliff have weighed on markets in recent weeks. The S&P 500 index of U.S. stocks was up 0.4 percent in Thursday trading, despite a round of strong data on economic growth and housing.
"The closer we get to the end of the year without a deal, the more optimism is going to evaporate," said Todd Schoenberger, managing partner at LandColt Capital in New York.
Shares crept up after Boehner said he was prepared to work with Obama to prevent the fiscal cliff from kicking in.
Lawmakers are eager to wrap up their work and return home for the Christmas holiday, but congressional leaders kept the door open for last-minute action.
The Senate was expected to leave town on Thursday or Friday, but Reid said it could return next week to vote on any deal.
Boehner indicated the House would stay in session after Thursday's vote, scheduled for 7:45 p.m. EST (0045 GMT on Friday).
Several influential conservative groups have condemned Plan B, and some Republicans are expected to vote against it. But passage appeared likely after the House narrowly voted by 219 to 197 to bring the bill to the floor for debate.
The U.S. Chamber of Commerce, an influential business group that has often tangled with the Obama administration, offered grudging support.
"We are not comfortable allowing tax increases on anyone in this environment. However, we understand that, at times, politics requires compromise," the Chamber's top lobbyist, Bruce Josten, wrote in a letter to lawmakers.
To placate conservatives, Boehner also scheduled a vote on legislation that would shift $55 billion in scheduled defense cuts to cuts in food and health benefits for the poor and other domestic programs.
That measure also would roll back some of the Dodd-Frank financial regulation reforms of 2010. It is not expected to become law.
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Canada's seven-month budget gap narrows to C$10.6 billion

Canada's federal budget deficit narrowed in the first seven months of the fiscal year to C$10.57 billion ($10.68 billion) from C$13.90 billion in the same period last year as personal and corporate income tax revenues rose and debt charges were lower.
The monthly shortfall in October was C$1.68 billion, compared with a gap of C$2.13 billion a year earlier, the Department of Finance said in a report on Friday.
The Conservative government in October pushed back by one year, to 2016-17, the date it expects to eliminate the deficit. Most economists believe that if the economy continues to grow, the books could be balanced sooner.
Ottawa has estimated a 2012-13 deficit of C$26 billion, including a C$1 billion cushion for risk.
In the April-October period, revenues increased by 3.6 percent, or C$4.9 billion, from the same period in 2011, pushed up by personal income tax and corporate income tax. Program expenses rose by 2 percent, or C$2.7 billion, on increases in elderly benefits and direct program expenses.
Public debt charges decreased 6.1 percent, or C$1.1 billion, on a lower effective interest rate.
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"Fiscal cliff" creates waiting game for payrolls firms

At payroll processing businesses across the United States, the "fiscal cliff" stalemate in Washington means uncertainty over tax-withholding tables just days before the start of 2013.
The U.S. Internal Revenue Service still has not issued the tables for next year that show how much money employers should hold back from workers' paychecks to cover federal income taxes.
Payroll processors need the tables to get their systems geared up for the new year. The tables are set by many factors, including tax rates and annual inflation adjustments.
In anticipation of late-breaking developments, Rochester, New York-based Paychex Inc will be serving Buffalo chicken wings for staffers working late on New Year's Eve, said Frank Fiorille, an executive at the payroll processing giant.
"Our systems are flexible enough that we can wait almost up until the last minute and still make changes," he said.
The IRS appreciates of the impact of Congress' inaction.
"Since Congress is still considering changes to the tax law, we continue to closely monitor the situation," IRS spokesman Terry Lemons said in a statement. "We intend to issue guidance by the end of the year on appropriate withholding for 2013."
Tax rates are slated to rise sharply for most Americans if Congress and President Barack Obama fail to reach an agreement that averts the "fiscal cliff" approaching at year-end.
"The political process will determine one way or the other what" the IRS must do, said Scott Hodge, president of the Tax Foundation, a business-oriented tax research group.
For now, he said, from the tax-collection agency's viewpoint, "doing nothing is probably the best course." This would be because withholding tables distributed now might only have to be revised if Congress acts in the next few days.
Some payroll servicers are not waiting for formal IRS guidance. The American Payroll Association, which represents about 23,000 payroll professionals, told members on Friday to rely on 2012 withholding tables until the IRS releases the new forms for 2013.
The association said its decision was based on a statement earlier this month from an IRS official.
The agency would not confirm that policy on Friday.
Tax preparer H&R Block Inc said it will use 2012 tax-withholding tables if the 2013 tables are not issued.
Executives said they were frustrated with the uncertainty in Washington, but were doing their best to cope.
"We are not doctors or surgeons and this is not life threatening," said Rob Basso with Advantaged Payroll Services, an Auburn, Maine-based payroll processor that serves 30,000 businesses. "It is annoying and disruptive to people's lives, but we will get through it.
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Meeting delay a sign of cooling US-Vietnam ties

The U.S. and Vietnam, former enemies who share concerns about China's rise, are finding that one issue — human rights — is keeping them from becoming closer friends.
Stress between the nations is clear from a delay in an annual meeting between Washington and Hanoi on human-rights concerns. Such consultations have been held every year since 2006, but the last ones in November 2011 produced little, and a senior State Department official said the two sides were still working to "set the parameters" of the next round so it would yield progress.
The U.S. is frustrated over Vietnam's recent crackdown on bloggers, activists and religious groups it deems a threat to its grip on power, and over the detention of an American citizen on subversion charges that carry the death penalty.
"We have not seen the improvements that we would like," the State Department official said last week on condition of anonymity because he was not authorized to comment publicly. "We would very much like to see concrete actions."
The delay in holding the meeting, to be hosted by Hanoi, could just be a matter of weeks. But it underscores how Vietnam's worsening treatment of dissidents over the last two years has complicated efforts to strengthen its ties with the U.S.
Vietnam's foreign affairs ministry spokesman Luong Thanh Nghi said the human rights dialogues had "contributed to enhancing trust" between the two countries and that both sides were in discussion on the timing of the next round. A U.S. Embassy spokesman also said the countries were discussing when to hold the talks.
Like Washington, Vietnam wants deeper trading and security relations, but the U.S. says it must be accompanied by improvements in human rights. Some influential members of Congress are also pressing the Obama administration to get tougher on Hanoi's suppression of dissent and religious freedom.
Vietnam's relationship with the U.S. has improved greatly in recent years, largely because of shared concerns over China's increasing assertiveness in Southeast Asia. Their shared strategic interests are reflected most clearly in U.S. diplomacy in the South China Sea, where Beijing's territorial claims clash with those of Vietnam and four other countries in the region.
Since the fall of the Soviet Union, Vietnam has opened its economy but has been unwilling to grant religious or political freedom to its 87 million people. The U.S. and Vietnam restored diplomatic relations in 1995, 20 years after the end of the Vietnam War, and their rapprochement has accelerated as President Barack Obama has prioritized stronger ties with Southeast Asia.
Vietnam's crackdown on dissent follows a downturn in its once-robust economy. Analysts say Hanoi's leadership is defensive about domestic criticism of its economic policies, corruption scandals and infighting, much of it being spread on the Internet, out of their control.
Last year, Vietnam locked up more than 30 peaceful activists, bloggers and dissidents, according to Human Rights Watch. This year, 12 activists have been convicted in short, typically one-day trials, and sentenced to unusually long prison terms. Seven others are awaiting trial. The country is also preparing laws to crackdown on Internet freedoms.
"The internal party ructions have trumped everything," said Carl Thayer, an expert on Vietnam from the University of New South Wales. "They are so paranoid about criticism they don't care about the U.S."
The detention and looming trial of American democracy activist Nguyen Quoc Quan may be the clearest example of Hanoi's unwillingness to listen to American concerns over human rights.
Quan, 59, was arrested at Ho Chi Minh City airport in April soon after arriving on a flight from the United States, where he has lived since fleeing Vietnam by boat as a young man. Quan's family and friends say he is a leading member of Viet Tan, a nonviolent pro-democracy group that the Vietnamese authorities have labeled a terrorist outfit. He was detained in 2007 in Vietnam for six months.
Authorities initially accused Quan of terrorism, but he is now charged with subversion against the state, which carries a punishment ranging from 12 years in prison to death.
With the investigation now complete, his trial could be near. Court dates are typically released only a few days in advance.
According to a copy of the indictment obtained by The Associated Press, Quan met with fellow Vietnamese activists in Thailand and Malaysia between 2009 and 2010 and discussed Internet security and nonviolent resistance. The indictment said he traveled to Vietnam under a passport issued under the name of Richard Nguyen in 2011, when he recruited four other members of Viet Tan.
His wife doesn't deny that Quan wants to change Vietnam's political system.
"He wanted to talk to the young people and bring up the idea of democracy in Vietnam," Huong Mai Ngo, said in an interview with The Associated Press by phone from Sacramento. "He has lived in the U.S., he has had freedom here and he wants them to have the same."
Congress members with large Vietnamese-American constituencies are pressuring the Obama administration.
Rep. Frank Wolf, a leading critic, maintains the government has neglected human rights as it looks to forge economic and security ties. With three Republican colleagues, the Virginia congressman has demanded the sacking of U.S. Ambassador David Shear, accusing him of failing to invite democracy and rights activists to the July 4 celebration at the U.S. Embassy in Hanoi after giving assurances he would.
"The administration's approach has been a disaster. All they care about are economic and defense issues," said Wolf, who also took aim at Shear for failing to visit Quan in prison. "Human rights and religious freedom should be the number one priority."
U.S. officials have visited Quan five times in jail, mostly recently in late September.
"We believe no one should be imprisoned for peacefully expressing their political views or their aspirations for a freer, more democratic and prosperous future," embassy spokesman Christopher Hodges said. "We continue to call on the government of Vietnam to quickly and transparently resolve this case."
Wolf and other lawmakers interested in Vietnam do not have much say in setting policy, but can make life awkward for the Obama administration. Wolf hinted that he could propose amendments to budget legislation to put more pressure on the administration over its Vietnam policy. Wolf is a senior member of the powerful House Appropriations Committee, which oversees much of the federal budget.
The U.S. has some leverage if it wishes to try and get Vietnam to improve its human rights record: Vietnam is one of the largest recipients of American aid in Asia and is currently negotiating a free trade deal with Washington and seven other countries.
The Vietnamese government declined to comment on the charges against Quan, but Hanoi is aware of U.S. sensitivities in this case. Many observers say Quan is likely to be convicted but sentenced to time served and quickly expelled, though even that is likely to raise congressional pressure on the White House to tie the trade deal and aid to progress on human rights.
"It would be a disaster for Vietnam if they come down on U.S. citizen with an extreme sentence for peacefully advocating human rights," said Linda Malone, a professor at William and Mary Law School who is advising Quan's local counsel on his defense. "They will lose tremendous ground on what they seek to advance themselves."
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Court OKs sale of U.S. government-backed A123 to Chinese firm

China's largest auto parts maker got court approval on Tuesday for its controversial purchase of A123 Systems Inc, a bankrupt maker of electric car batteries, but the judge said he was troubled that a U.S. rival might be working to kill the deal.
A123, which was partly funded with U.S. government money, was sold at an auction on Saturday for $256.6 million to Wanxiang Group of China, which outbid Johnson Controls Inc of Milwaukee.
The auction result prompted outcry from U.S. politicians who objected to A123's taxpayer-financed lithium-ion technology ending up in the hands of an economic rival. Johnson Controls has said it remains interested in A123 if Wanxiang fails to get approval from the U.S. government, which is coming under pressure to block the deal.
"I'm troubled by suggestions that someone who participated in the auction may in fact already be working against it," said Delaware Bankruptcy Judge Kevin Carey at the end of Tuesday's hearing.
Carey ordered into escrow a $5.5 million fee from the sale that was earmarked for Johnson Control's in return for it being the lead bidder to support the A123 auction. The money will be released when the sale closes or after an investigation by A123 creditors.
William Baldiga of Brown Rudnick, who represents the official committee of unsecured creditors, had told Carey he had a confidential letter that suggested Johnson Controls planned to undermine Wanxiang if the Chinese company won the auction.
Johnson Controls attorney, Joshua Feltman of Wachtell, Lipton, Rosen & Katz, said the company should not be punished "because we sympathize with Michigan Congressional delegation."
A123 has several facilities in Michigan and its politicians have been vocal in opposing the sale to Wanxiang.
A123 has never turned a profit and received a $249 million grant from the U.S. Department of Energy to develop lithium-ion batteries.
A Department of Energy official said on Monday the grant, which has about $120 million remaining, would not be transferred to Wanxiang.
Opposition to the deal will now shift to Committee on Foreign Investment in the United States (CFIUS).
Pressure has been building on Treasury Secretary Timothy Geithner, the head of the panel, to block the takeover.
Chinese firms have been pouring cash into overseas investments, and with that money has come concerns around the globe that firms with ties to Beijing may not play by free-market rules.
CFIUS recently rejected a bid to build wind farms in Oregon by Ralls Corp, owned by two executives of China's Sany Group, and has blocked multiple deals by Huawei Technologies Co, a Chinese telecom equipment manufacturer.
China's state-owned oil company CNOOC Ltd received approval on Monday for the country's biggest foreign takeover, a $15.1 billion acquisition of Nexen Inc after intense scrutiny. CNOOC withdrew its bid for California-based Unocal Corp in 2005 in the face of political opposition.
Wanxiang has tried to blunt some of the political opposition by excluding A123's defense contracts from its bid.
A123 filed for bankruptcy in October as demand for electric vehicles did not live up to expectations and it was forced to recall defective car batteries. Its customers include Fisker Automotive, General Motors Co and BMW.
If the foreign investment committee does not approve the sale in the coming weeks, Wanxiang could walk away, although it would forfeit a $25 million deposit that would go toward repaying A123's creditors.
If that were to happen, A123 could then go back on the block. Johnson Controls and NEC Corp of Japan made a final runner-up bid of about $251 million, according to Alex Molinaroli, president of Johnson Controls Power Solutions.
The only other company that qualified for the auction, Siemens AG of Germany, does not appear to have made a bid, according to a transcript of the auction.
If the foreign investment committee has not approved the sale by January 15, the deal could still close by transferring A123 to a trust controlled by U.S. citizens, which would not need CFIUS approval.
Wanxiang's money would then be turned over to repay the creditors of A123, which filed for bankruptcy with $376 million in liabilities.
The Chinese company is no stranger to investing in the United States.
Wanxiang generates about $1 billion in revenue in the United States by supplying parts to GM and Ford Motor Co and has bought or invested in more than 20 U.S. companies, many of them in bankruptcy, said a congressional report published in October.
The case is A123 Systems Inc, Delaware Bankruptcy Court, No. 12-12859.
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Google explains cause of massive Gmail, Chrome outages

Users took to social networks on Monday to vent their displeasure with Google (GOOG) following a 40-minute disruption of service affecting the company’s Chrome Web browser and Gmail service. It was previously unclear what caused the services to simultaneously crash and some suspected the company was hit with a denial-of-service attack. Google engineer Tim Steele took to the company’s developer forums to clear up the confusion and confirmed what some developers had already suspected: The reason for the crash had to do with the Google Sync servers getting overwhelmed following a change in the code, not a DDoS attack.
“It’s due to a backend service that sync servers depend on becoming overwhelmed, and sync servers responding to that by telling all clients to throttle all data types,” he said, noting that the “throttling” messed things up in the browser and caused it to crash.
Google Sync keeps bookmarks, extensions, apps and settings in the Chrome browser synchronized across a variety of devices and services. Along with Chrome and Gmail, the worldwide outage also affected Google Docs, Drive and Apps, all of which rely heavily on Google Sync.
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Facebook helps FBI bust cybercriminals blamed for $850 million losses

 Investigators led by the Federal Bureau of Investigation and aided by Facebook Inc, have busted an international criminal ring that infected 11 million computers around the world and caused more than $850 million in total losses in one of the largest cybercrime hauls in history.
The FBI, working in concert with the world's largest social network and several international law enforcement agencies, arrested 10 people it says infected computers with "Yahos" malicious software, then stole credit card, bank and other personal information.
Facebook's security team assisted the FBI after "Yahos" targeted its users from 2010 to October 2012, the U.S. federal agency said in a statement on its website. The social network helped identify the criminals and spot affected accounts, it said.
Its "security systems were able to detect affected accounts and provide tools to remove these threats," the FBI said.
According to the agency, which worked also with the U.S. Department of Justice, the accused hackers employed the "Butterfly Botnet". Botnets are networks of compromised computers that can be used in a variety of cyberattacks on personal computers.
The FBI said it nabbed 10 people from Bosnia and Herzegovina, Croatia, Macedonia, New Zealand, Peru, the United Kingdom, and the United States, executed numerous search warrants and conducted a raft of interviews.
It estimated the total losses from their activities at more than $850 million, without elaborating.
Hard data is tough to come by, but experts say cybercrime is on the rise around the world as PC and mobile computing become more prevalent and as more and more financial transactions shift online, leaving law enforcement, cybersecurity professionals and targeted corporations increasingly hard-pressed to spot and ward off attacks.
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As China handset makers upgrade chips, pressure remains on profit margins

Chinese mobile phone makers chasing market share with lower prices in the world's biggest smartphone market will see their margins continue to be pressured as they upgrade to quad-core chips to satisfy demand from users for faster speeds and flashier graphics.
Most smartphones now are equipped with single and dual-core chips, but Chinese handset makers are planning quad-core powered devices as consumers get more picky with the speed of screen swipes, how fast they can download movies, send a photo via WeChat messaging or seal a purchase on Taobao online mall.
"The Chinese handset vendors have now extended their reach and low-price strategy to the quad-core phone segment," Lisa Soh, an analyst with Macquarie, said in a report. "This hurts the hope that the Chinese handset makers can improve margins through moving up product segments."
Already, Huawei Technologies Co Ltd, ZTE Corp, Lenovo Group Ltd and Xiaomi Technology, have unveiled quad-core smartphones running on Google Inc's Android operating system. They are using chips mainly from Samsung, Qualcomm and Nvidia.
Industry executives expect more quad-core models next year as chipmakers such as Qualcomm and Mediatek introduce processors customized with Chinese applications that will make it easier, quicker and cheaper for handset makers to launch new products.
U.S.-based Qualcomm Inc and Taiwan's Mediatek Inc have unveiled the high-end chips with designs that will help Chinese mobile phone makers launch smartphones in a shorter time at lower costs.
On Wednesday, Mediatek, Taiwan's biggest chip designer that sells more than 80 percent of its mobile phone processors to Chinese vendors, launched its quad-core chip and expects its partners to unveil handsets early next year, executives said.
Smartphone sales are booming in China, which has more than 1 billion subscribers. Sales will grow to 165-170 million units this year from 78 million a year earlier, research firm Gartner said, helped by the proliferation of Internet use.
Currently, Samsung is the top smartphone brand in China, but Chinese vendors are fast gaining traction. China's Lenovo, Coolpad and Huawei are now ranked No. 2, 3 and 5 respectively in the Chinese smartphone market, IDC said.
"The only gap between the smartphone versus the consumer in emerging countries is the price," said David Ku, CFO of Mediatek, which expects to ship more than 110 million smartphone chips this year.
Jeff Lorbeck, senior vice president for Qualcomm's product management told Reuters this month that it was likely that some of the quad-core powered smartphones could sell below 1,000 yuan ($160).
"I like to use my phone to buy things online, update my status on Renren (a social networking site) and read what friends are up to on weibo microblogs," said Liu Liang, a 24-year-old financial executive who lives in Beijing and uses a quad-core Samsung Galaxy Note II.
"I haven't bought a Chinese smartphone. But if my friends start recommending me good models and Chinese smartphones step up in their branding, I'll definitely consider one."
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Mother loses legal fight to stop son's cancer radiotherapy

LONDON (Reuters) - A mother in Britain, who was so desperate to stop her cancer-stricken son having to undergo conventional medical treatment that she went into hiding with him, lost a court battle on Friday to prevent him receiving radiotherapy.
The case of Sally Roberts, 37, a New Zealander living in Brighton, southern England, and the plight of her seven-year-old son has made headlines in Britain.
Roberts wants to try alternative treatments first, including immunotherapy and photodynamic therapy for her son Neon. She has been told the boy needs treatment fast but fears the side-effects of conventional medicine.
Doctors treating the boy had warned that without radiotherapy he could die within three months
Judge David Bodey told the High Court in London the life-saving radiotherapy treatment could start against the mother's wishes, the Press Association reported.
"The mother has been through a terrible time. This sort of thing is every parent's nightmare," the judge said.
"But I am worried that her judgment has gone awry on the question of the seriousness of the threat which Neon faces."
The story of the sick blue-eyed blonde boy came to public attention earlier this month when Roberts prompted a nationwide police hunt by going into hiding with Neon for four days to stop him from undergoing the treatment.
The mother's relentless battle in court also cast a light on the dilemmas parents can face when dealing with the illness of a loved one, considering the short-term and long-term risks of a treatment and handling conflicting medical information available at the click of a mouse.
Roberts said in court she had researched on the Internet her son's condition - a fast-growing, high-grade brain tumour called medulloblastoma - and sought advice from specialists around the world because she did not trust British experts.
She feared radiotherapy would stunt the boy's growth, reduce his IQ, damage his thyroid and potentially leave him infertile.
Earlier this week, a judge ruled that Neon could undergo emergency surgery to remove a tumour which had resisted an initial operation in October, despite opposition from his mother, who found he appeared to be recovering after what she said was a "heartbreaking" stay in hospital.
"EXPERIMENTAL AND UNPROVEN"
Surgeons said Neon's operation on Wednesday had been successful but that radiotherapy was needed to ensure no residual tumour was left behind.
Neon's father Ben, who lives in London and is separated from Roberts, has sided with his son's doctors.
But his wife suggested exploring several alternative treatments, including immunotherapy, which mainly consists of stimulating the body's immune system to fight cancerous cells, and photodynamic therapy, which uses a photosensitizing agent and a source of light to kill malignant cells.
The hospital treating Neon slammed "experimental and unproven" methods which entered "unchartered territory". The hospital, which cannot be named, also questioned the credentials of some of the private specialists contacted by Roberts's team.
The court heard that at least one of these could not even correctly spell medulloblastoma.
Radiotherapy is used to prevent cancer from spreading or striking back after surgery but it can damage nerve tissue and healthy brain cells.
Long-term side effects tend to be more common in children, whose nervous systems are still developing.
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Instant View - Third quarter GDP revised down, public finances worsen

LONDON (Reuters) - The Office for National Statistics released revised third-quarter GDP figures and November public sector finances data on Friday.
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KEY POINTS
- Biggest quarterly increase in GDP since Q3 2007
- Biggest quarterly increase in industrial output since Q2 2010
- Biggest quarterly increase in services output since Q3 2007
- Biggest quarterly increase in gross operating surplus of corporations since Q3 2010
- Highest household savings ratio since Q3 2009
- Highest level on record of public sector net debt excluding financial sector interventions as a share of GDP, at 68.5 percent
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ECONOMISTS' VIEWS
HOWARD ARCHER, IHS GLOBAL INSIGHT
"The modest revisions to the GDP data do not fundamentally change the story of an economy that is likely to have been essentially flat overall in 2012, with the quarterly performances distorted since the second quarter by a number of factors, notably including the Queen's Diamond Jubilee and the Olympics.
"It currently looks touch and go as to whether the economy can avoid renewed contraction in the fourth quarter as it faces the unwinding of the Olympics boost.
"News that service sector output only edged up 0.1 percent month-on-month in October reinforces (the) belief that the economy is having a difficult fourth quarter, but at least services output was marginally positive and that gives a small boost to hopes that the economy will avoid renewed contraction.
"While it really makes little difference whether the economy grows marginally in the fourth quarter, is flat or contracts marginally, it would be good for confidence if the economy could avoid a GDP decline and avert headlines of a 'triple dip'.
"With economic recovery likely to remain fragile and limited, we believe there is still a very real possibility that the Bank of England will ultimately decide to give the economy a further helping hand with a final 50 billion pounds of QE (quantitative easing)during the first half of 2013. However, this seems unlikely to happen before the second quarter, if at all."
ROSS WALKER, RBS
"We had 0.9, it looked quite a close call between 0.9 and 1.0. But, with the monthly industrial production numbers showing small downward revisions, we thought it would probably be trimmed. I suppose the Q3 number reinforces the weakness.
"The more significant figure is the October services sector output number. This is the first official estimate we have for any Q4 month. It is not a great number but it is positive and it is better than the decline that had been expected.
"On the basis of all the published data it looks like the fourth quarter will be broadly flat, rather than negative - based on the published data.
"I think the Bank of England's policy is on hold in terms of QE, probably the focus is more on the Funding for Lending Scheme.
"They could easily come back to it, but I think it is probably a second half of next year story once Mr Carney is in place, and his nine member committee. You could get a slight change in emphasis or focus when he comes in. We don't expect more QE, but if it comes it is a second half of next year story."
TOM VOSA, NATIONAL AUSTRALIA BANK
On GDP: "Not entirely surprised, that was our forecast. The partials that we'd had from retail sales, from industrial production, all pointed to this. To some degree this is old news and 0.9 or 1.0 percent doesn't really matter, it's still very strong growth."
On public finances: "It does make us wonder how the Chancellor is going to meet his borrowing targets when in reality borrowing tends to be running now a little bit above where we were last year.
"They must be hoping for a very big increase in revenues in January, which given the weakness of corporation tax and the reduction in financial sector pay I find very difficult."
PHILIP SHAW, INVESTEC
"There's a lot of data being released and there's no single overriding trend. We're not surprised to see GDP revised down a touch but what matters a lot more are prospects for the fourth quarter and because of last week's construction data, we're more optimistic that a decline will be avoided.
"Current account again, it's reassuring to see that there's been a narrowing of the deficit over the third quarter. Effectively, as earnings from direct investment have bounced back after two quarters of weakness. Nonetheless, one would still reach the conclusion that imbalances in the economy remain."
Public finances: "It's another month of disappointing deficit data and it's pretty clear now that barring unexpected positive developments, that the underlying deficit will widen this year, compared with 2011-12.
"We wouldn't say that the releases as a whole have that many implications for economic prospects.
"Although we suspect that the GDP figures will be a bit better than expected over the next quarter, perhaps next couple of quarters, it is clear that the underlying pace of growth will remain weak for some time to come.
"I think what's important here is whether the Bank of England's Funding for Lending Scheme has a positive effect on credit flows that the housing market picks up and that we see a sustained recovery in business investment as well."
DAVID TINSLEY, BNP PARIBAS
"The headline GDP figure is a shade disappointing, but 0.1 percentage point is not a big deal in the grand scheme of things. The fact that the service sector output rose in October is at least as important.
"It does suggest that, while some of the production data has been weak in the fourth quarter, the service sector momentum looks, at the outset of the quarter, to be holding up."
Public finances: "The data continue to show a worrying slippage against the government forecasts.
(To achieve the OBR forecasts) there has got to be either some improvement in the numbers or back revisions, or at the end of the financial year the under spends of government departments needs to be quite significant. All that we will see in due course but for now the figures still look like they are worse than OBR was expecting."
JAMES KNIGHTLEY, ING
"All in all, the UK appears to be ending 2012 not in particularly great shape and as such we suspect the Bank of England has more work to do with further policy stimulus likely in early 2013, especially if the worst fears over the U.S. fiscal cliff materialise."
Public finances: "For the financial year to date (2012/13), income tax revenues, corporation tax revenues and VAT revenues are all down on the same period for financial year 2011/12.
"This highlights the weak state of the UK economy and the fact that austerity measures are failing to generate the improvement in government finances that were hoped for.
"Government cash outlays are down as well, but this is purely down to lower interest costs resulting from the plunge in yields, helped by BoE purchases and the UK's relative safe haven status."
ALAN CLARKE, SCOTIABANK
"I actually think the monthly services (figure) was the most important one. That makes it all the more likely that the UK did not slip into a triple dip recession at the end of the year.
"The chances are that we could grow by 0.3 percent, maybe even more, because we had stonkingly good construction data and some growth in services, although clearly that could change in November and December.
"Notwithstanding the drop in industrial production, I think we probably grew. So it has been a great end to the year."
Public finances: "The public finances are going in the wrong direction. But we know that there is all sorts of jiggery pokery going on with the transfer of coupons by the ONS (Office for National Statistics), probably next month. So, it is very hard to read too much into that data."
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Budget deficit worsens, credit rating at risk

LONDON (Reuters) - Britain's budget deficit worsened in November, data showed on Friday, increasing the risk it will lose its top-notch credit rating and overshoot this year's borrowing forecast.
The data - which showed public sector net borrowing, excluding financial sector interventions, hit 17.5 billion pounds last month - is gloomy news for Britain's coalition government.
Deficit reduction and preserving Britain's credit rating have been top goals for the coalition of Conservatives and Lib Dems, which came to power in June 2010, just after the country's budget deficit peaked at 11.2 percent of GDP.
Last year, the budget deficit totalled 8 percent of GDP, and the government's own budget watchdog forecasts it will take until 2017 before it falls below 3 percent and the government manages to run a surplus on cyclically-adjusted non-investment spending.
Chancellor George Osborne had originally planned to meet this goal by the next election in 2015, but far weaker than expected growth since 2010 now makes that look impossible.
While other official data released on Friday showed Britain's economy may avoid a forecast contraction in the last three months of 2012, analysts say the borrowing numbers could see the country's credit rating revised early next year.
"The disappointing November public finance data fuel mounting expectations that at least one of the credit rating agencies will strip the UK of its AAA rating in 2013," said Howard Archer, chief UK economist at IHS Global Insight.
Standard & Poor's last week joined Fitch and Moody's and put a negative outlook on its triple-A rating for Britain. The latter two agencies - which have had a negative outlook since early this year - will review their ratings in early 2013.
Last month's public sector net borrowing figure of 17.5 billion pounds exceeded economists' expectations. They had forecast it would come in just below the 16.3 billion pounds reached in November 2011.
Borrowing since the start of the tax year in April is now nearly 10 percent higher than at the same point in 2011.
This calls into question forecasts issued earlier this month by the government's budget watchdog which estimated borrowing will fall 11 percent to total 108.5 billion pounds in the 2012-13 tax year.
Some of the fall in borrowing forecast by the Office for Budget Responsibility (OBR) was due to money expected from the auction of next-generation mobile phone frequencies and a deal with the Bank of England to return interest paid on its bond holdings - cash that will not boot the public finances until early 2013.
But even disregarding this, some economists think Osborne, the finance minister, may struggle to hit the OBR's targets.
Archer expects an overshoot of some 14 billion pounds, while economists at Barclays see an overshoot of 6.5 billion pounds, assuming the radio spectrum auction brings in the 3.5 billion pounds pencilled in by the OBR.
WEAKER GROWTH
Britain's economy shrank for nine months between late 2011 and mid-2012, but revised figures from the Office for National Statistics showed on Friday that growth rebounded by 0.9 percent in the third quarter of 2012, a little less than the 1.0 percent first estimated.
There was slightly brighter news from Britain's dominant services sector, which grew 0.1 percent in October after a 0.6 percent decline in September.
This was better than many economists had expected, and raises the prospect that the economy will avoid a return to contraction that the OBR and the Bank of England have predicted.
"It's not a great number but it is positive," said Ross Walker, an economist at Royal Bank of Scotland. "On the basis of all the published data it looks like the fourth quarter will be broadly flat, rather than negative."
Another bright spot was third-quarter current account data, which showed Britain's deficit with the rest of the world narrowed more than expected to 12.8 billion pounds, equivalent to 3.3 percent of GDP, from 17.4 billion in the second quarter.
However, economic growth will need to translate into stronger tax revenues and lower spending on social benefits if the government is to meet its budget goals.
November's budget overshoot was driven by a 6.3 percent year-on-year rise in central government spending, while tax revenues grew just 0.6 percent.
The closure of a North Sea oil field earlier this year has done major damage to corporation tax revenues, but Barclays economist Blerina Uruci said she was more concerned about signs that spending by government departments was rising more than expected.
"It could suggest difficulties with delivering efficiency savings as austerity fatigue sets in," she said.
The OBR said it expected to see underspending by government departments towards the end of the fiscal year, as well as stronger future growth in income tax and sales tax revenues.
Business minister Vince Cable sought to play down worries about the state of public finances, saying more austerity than planned could tip the economy back into recession.
"The fact that there has been a temporary increase in borrowing I don't think is a matter for criticism," he told BBC radio. "The government ... have been flexible, just accepting that when the economy slows down you are going to get bigger deficits (and) the government has to borrow to cover them."
However, the Labour Party said Friday's data showed there had already been too much austerity.
"By squeezing families and businesses too hard, choking off the recovery and so pushing borrowing up, not down, (Prime Minister) David Cameron and George Osborne's economic plan has completely backfired," said Labour legislator Rachel Reeves.
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Stalin's birthday marked in Russia and beyond

TBILISI, Georgia (AP) — People across the vast territory where Josef Stalin once imposed his terror have marked the 133rd anniversary of the dictator's birth, some in hatred but others in reverence.
In Moscow, several hundred Russian Communists led by their leader Gennady Zuyganov laid flowers at Stalin's grave at the Red Square Friday, while smaller rallies were held across Russia and several former Soviet republics.
Leftists in neighboring Belarus said they found a Stalin statue that was buried after denunciation of his personality cult in 1956, but refused to specify its whereabouts because they fear authorities will order its destruction. Authorities in Stalin's hometown of Gori, Georgia, they will reinstall his statue that was removed in 2010.
In southern Ukraine, several ethnic Crimean Tatars trashed a small street exhibition on Stalin. The entire Crimean Tatar population of Ukraine was hastily deported in cattle trains on Stalin's orders in 1944 for their alleged collaboration with Nazi Germans during World War II. Of the 200,000 Crimean Tatars, almost a fifth died of starvation and diseases, and the survivors were allowed to return only in the late 1980s.
According to the prominent Russian right group Memorial, Stalin ordered the deaths of at least 724,000 people during the purges and repression of the 1930s, while millions died as a result of the forced labor system in Gulags, the Soviet prison system.
But, some people believe he was a strong and valiant leader whose grip on the nation was needed for security and his popularity in Russia has been climbing amid Kremlin-backed efforts to defend his image.
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Margaret Thatcher in hospital after operation

LONDON (Reuters) - Former British prime minister Margaret Thatcher, the country's first woman elective leader, is in hospital recovering from surgery to remove a growth on her bladder, a source close to the family said on Friday.
After experiencing pain in her bladder earlier in the week, he 87-year-old went to hospital where she underwent a minimally invasive operation, Tim Bell, a public relations executive who once served as image maker to Thatcher, said.
"The operation was completely satisfactory. She's now recovering in hospital and as soon as she's recovered she'll go home," Bell said.
Known as the "Iron Lady," Thatcher, who stepped down in 1990, embraced free market policies, challenged trade unions and privatised many state-owned companies during her 11 years in power, polarising British voters.
Britain's only woman prime minister, who led her country in a war with Argentina over the Falkland Islands in 1982 and was close to the late U.S. President Ronald Reagan, was forced to step down by her own party.
Thatcher suffered a series of mild strokes in late 2001 and 2002, after which she cut back on public appearances and later cancelled her speaking schedule.
She was hospitalised in 2010 for tests relating to a flu illness.
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Waiting on fiscal cliff compromise, stocks inch up

NEW YORK (AP) — The stock market ended higher Thursday after flipping between small gains and losses throughout the morning. Uncertainty about the "fiscal cliff," just days away, was top of mind for many traders.
The Republican-controlled House pushed ahead with a bill aimed at averting the "fiscal cliff," but President Barack Obama has threatened to veto it and Democratic leaders in the Senate vowed to let it die.
Many traders now expect that the Republicans and Democrats won't reach an agreement before Christmas. The political haggling kept markets muted, and trading volume was low.
"Every time someone makes a speech, you get another move in the market," said Ben Fischer, founder and managing director of NFJ Investment Group in Dallas. "Everyone's just tracking it on a very short-term basis."
The Dow Jones industrial average fell as much as 36 points before ending the day higher, rising 59.75 points to close at 13,311.72. Other indexes followed similar patterns. The Standard & Poor's 500 rose 7.88 to 1,443.69. The Nasdaq composite index rose 6.02 to 3,050.39.
In Washington, the Republicans offered in their "Plan B" to raise taxes on the wealthy, but Democrats complained that it would not address the steep budget cuts that are automatically set to occur for military and domestic agencies.
If the Republicans and Democrats don't work out a compromise before the end of the month, the U.S. could go over the "fiscal cliff," a reference to big tax increases and government spending cuts that would automatically kick in if no budget deal is in place. Some economists fear that would push the U.S. back into recession.
But even a successful compromise is no guarantee that the market will soar. The market already assumes that a budget compromise will be reached, Fischer and others said, evidenced by its more-or-less steady increase since mid-November.
A compromise "doesn't make everything better," said Tim Biggam, market strategist with the brokerage TradingBlock in Chicago. "It just stops things from getting worse."
Biggam predicted that the economy's growth next year will remain anemic. Problems that the headlines over budget impasse have pushed out of the public consciousness, like the European debt crisis, still need to be resolved, he said.
"All the fears that we were worried about not too long ago," he said, "have not gone away."
Also at the forefront for many traders was the news that NYSE Euronext, the parent of the New York Stock Exchange, planned to sell itself to IntercontinentalExchange, an upstart and lesser-known exchange operator based in Atlanta.
NYSE Euronext's stock surged $8.20 to $32.25. The boost at IntercontinentalExchange was much more modest, with the stock rising $1.79, or just more than 1 percent, to $130.10. That signals traders think the proposed deal could be more beneficial to NYSE Euronext than to its potential buyer.
Even without the complications of the budget negotiations, the U.S. economy has been difficult to read, a pattern that continued Thursday.
The government said the U.S. economy grew at an annual rate of 3.1 percent over the summer, higher than the previous estimate of 2.7 percent. But growth is likely to slow in the current quarter and early next year.
The government also reported that the number of Americans applying for unemployment benefits rose last week, a disappointment after four straight weeks of declines. The four-week moving average of jobless claims, a less volatile measurement, fell.
The yield on the 10-year Treasury note was unchanged at 1.80 percent. World markets were also mixed. Major stock indexes in Britain and Japan edged lower, while France and China rose.
A slate of companies reported earnings, with varied results:
—Darden Restaurants, the parent of Olive Garden and Red Lobster, fell $1.34 to $45.47 after the company reported sharply lower profits. New ad campaigns meant to attract younger customers haven't done as well as the company hoped.
—Rite Aid, the drugstore chain, soared 16 percent, rising 17 cents to $1.21, after the company reported its first quarterly profit since 2007. The pharmacies filled more prescriptions, and an influx of generic drugs helped profitability.
—Scholastic slipped 50 cents to $28.79 after reporting lower profit and revenue, with demand fading for its popular "Hunger Games" trilogy.
—CarMax shot up 9 percent, rising $3.13 to $37.97, after reporting higher profit and revenue. Sales of used cars helped push results higher.
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News Summary: NYSE plans a sale, Scholastic slips

A CHRISTMAS MIRACLE?: In Washington, hopes faded that Republicans and Democrats would work out a budget compromise before Christmas. If they don't reach a deal before the end of the month, higher taxes and government spending cuts will kick in.
A BIG DEAL: The parent of the New York Stock Exchange announced that it plans to sell itself to IntercontinentalExchange, a lesser-known exchange operator based in Atlanta.
DYSTOPIA: Shares for book publisher Scholastic slipped after it reported lower quarterly profit and revenue. The company was hurt by fading demand for the best-selling "Hunger Games" trilogy and weaker sales of its profitable education technology.
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Well-timed options trades before NYSE deal raise eyebrows

(Reuters) - A surge in bullish options bets on NYSE Euronext shares ahead of Thursday's announced merger has raised eyebrows among options strategists.
IntercontinentalExchange said on Thursday it planned to buy NYSE Euronext for $8.2 billion, or $33.12 per NYSE share. The deal's value represents a 37.7 percent premium over NYSE's closing stock price on December 19, the companies said.
NYSE Euronext option trading volume on Wednesday was below average. But in the two-week period before the news, overall volume was about 27 percent above normal turnover, with a buildup of call options, according to Trade Alert, an options analytics firm in New York. A call option is a contract that gives the right to buy the company's stock at a fixed price by a certain date.
A total of 51,000 calls and 8,600 puts changed hands during the period from December 6 through December 19.
"It looks to me there may have been some information leakage earlier this month, given the heavy call volume and shift in skew," Trade Alert President Henry Schwartz said.
The U.S. Securities and Exchange Commission, which looks into unusual stock and options activity, declined to comment.
TURN OF THE SKEW
Over the two weeks from December 6 through December 19, there were more than 9,100 new positions in the January $24 calls. Buyers on December 6 were paying a premium of 44 cents per contract for those calls. That cost rose to $8 apiece by Thursday's session - a 1,700 percent increase, Schwartz said.
As of Thursday, open interest in the January $24 strike NYX calls stood at 10,343 contracts, the greatest of any call across all expirations for NYSE Euronext, according to data from Livevol, an options analytics firm in San Francisco.
That open interest has accumulated over the last 14 days, with the NYSE Euronext stock's price ranging from $23 to $24 throughout the December 6 - December 19 period.
"This suggests suspicious activity, given the timing of the announcement of the merger," said Ophir Gottlieb, managing director of Livevol.
Livevol data showed about 9,000 January $24 strike calls were bought for about 50 cents per contract during that time.
"So a $500,000 bet turned into a potential $6.5 million gain in 14 days," Gottlieb said.
In addition, there has been a recent shift in the pricing of NYX upside calls, compared with NYX downside puts. For most of this year, NYX bearish put options were more expensive than call options.
But since early December, the price of the calls outstripped the price of the puts and has stayed that way consistently. This measure, known as the "skew," or the difference in premiums paid between puts and calls, fell to its lowest level of the year on Wednesday, according to Trade Alert's Schwartz.
This inverted skew is unusual and is "typically associated with takeover candidates," Schwartz said. Participants were willing to pay more for out-of-the-money calls compared with out-of-the-money puts that are at a similar distance from the stock price.
"The put-call skew suggests traders were pricing in a higher chance of an upside move in the shares than a downside move in the short term," he said.
When traders buy out-of-the-money calls, which are contracts with strike prices way above the stock's value, they are looking for a big premium to be paid for the takeover candidate, risking the least amount of money for the biggest return.
Underscoring the interest in bullish options, total open interest in NYSE Euronext calls has been rising at a faster clip than outstanding put contracts since December 1. Call open positions rose to 87,000 contracts this month so far from 53,000 contracts on December 1, Schwartz said, while put open interest climbed to 39,000 contracts this month so far from 36,000 at the beginning of December.
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ICE to buy NYSE Euronext for $8.2 bln

REUTERS - In October, Jeff Sprecher, chief executive of upstart IntercontinentalExchange , approached NYSE Euronext CEO Duncan Niederauer with a modest proposal to team up on clearing trades in London.
As the men continued talking, Sprecher grew bolder, instead suggesting that ICE buy NYSE in what became an $8.2 billion deal announced on Thursday.
The deal will link up two powerful derivatives exchange and clearing house operators, but threatens to further reduce the clout of the New York Stock Exchange. While the New York Stock Exchange has stood for 200 years as an iconic symbol of U.S. capitalism, it is almost an afterthought in this deal.
For ICE, the crown jewel of NYSE Euronext is Liffe, Europe's second-largest derivatives market, analysts said. Niederauer had long felt that NYSE's shareholders did not appreciate the true value of the London-based futures and options exchange, and had talked to bankers about how to improve NYSE's stock price, a person familiar with the matter said.
Liffe will help ICE compete against U.S.-based CME Group, owner of the Chicago Board of Trade. Derivatives trading remains highly profitable for the exchanges, and new rules next year will dramatically expand the demand for clearing over-the-counter contracts.
The stock market businesses are less valuable to ICE. The company said it will try to spin off the Euronext European stock market businesses in a public offering, generating speculation it may also have little interest in the NYSE trading floor. Profits from stock trading have been significantly eroded by new technology and the rise of other places for investors to trade, including venues known as "dark pools."
ICE's Sprecher will be CEO of the combined organization, and the NYSE Euronext CEO will be president, a ceremonial title at many U.S. companies. In an interview, Niederauer said he would remain at least through 2014 as an "important senior member" of Sprecher's management team.
Niederauer will also be CEO of the NYSE Group. The combined company will be based in New York and Atlanta, where ICE is headqurtered.
Sprecher and Niederauerhave been friends for years, but the two stopped talking for about six weeks in 2011 when ICE teamed up with Nasdaq OMX Group to make an unsolicited bid for NYSE Euronext. That bid came even as the New York Stock Exchange operator was trying to sell itself to Deutsche Bourse . Regulatory concerns killed both deals.
Without the Nasdaq or Deutsche Bourse's huge equity operations, ICE alone has far less overlapping business and should face easy approvals, antitrust lawyers said.
The deal values each NYSE Euronext share at $33.12, a 28 percent premium to the stock's closing price on Wednesday. NYSE Euronext stock rose 34 percent to end at $32.25 on Thursday. ICE's shares fell as much as 4 percent but finished regular trading at $127.60, up 1.4 percent on the day.
ICE said it would pay annual dividends of $300 million to the companies' shareholders once the deal closes, about what NYSE pays its shareholders now.
IN THE DOLDRUMS
The deal reflected Niederauer's inability to get his company's share price out of the doldrums. Before the latest ICE offer emerged, NYSE Euronext's shares had fallen by nearly a third since ICE and Nasdaq launched their thwarted joint bid.
Further consolidation of exchanges was "inevitable" and ICE was a "great partner," Niederauer said on a call with analysts, so continuing on alone did not make sense.
"We can sit here and keep slugging away and keep working hard, but the bottom line is we had not delivered, in my mind, sufficient returns to shareholders," Niederauer said. NYSE bought Euronext, including Liffe, for 8 billion euros in 2007.
Sprecher incorporated the stalled stock price - and the unrecognized value of Liffe - as part of his pitch.
"The reason that we were prepared to pay $33 a share for a company that was trading at $24 a share was that there is a $33 company in here and the market was just not either seeing it or willing to give credit for," he said in an interview. "We said, 'let's just force the credit.'"
The two sides negotiated in secret for about eight to 10 weeks, the two CEOs said. In options markets, there were some signs that word might have leaked out, with a sudden upswing in the demand for call options on NYSE, which perform well when a company's share price rises.
ICE started out as an online marketplace for energy trading before Sprecher initiated a string of acquisitions from the London-based International Petroleum Exchange in 2001, to the New York Board of Trade and, most recently, a handful of smaller deals, including a climate exchange and a stake in a Brazilian clearing house.
ICE's current main operations are in energy futures trading and, it has steered clear of stocks and stock-options trading, key businesses for NYSE Euronext.
"This deal is probably not going to generate a lot of concern from an antitrust perspective," said Warren Rosborough, a veteran of the U.S. Justice Department's antitrust division who is now with the law firm McDermott Will & Emery.
In clearing, ICE has a popular U.S. over-the-counter and listed business, while Liffe's operation is strong in futures and based in Europe.
Concerns over a small amount of competing derivatives business could be addressed with straightforward divestitures, Rosborough said. "It's an open question about whether it will generate questions," he added. "If there is a fix, it will be relatively easy fix."
Sprecher said the deal had been "well received" by regulators after he and Niederauer completed a "whirlwind tour" in the United States and Europe ahead of Thursday's announcement. Officials at the European Commission, the Department of Justice and Securities and Exchange Commission declined to comment.
Last year, Justice Department objections blocked ICE and Nasdaq OMX's $11 billion bid on concerns the tie-up would dominate U.S. stock listings. The rival $9.3 billion bid by Deutsche Boerse fell afoul of European regulators.
A combined ICE-NYSE Euronext would leap-frog Deutsche Boerse to become the world's third-largest exchange group with a combined market value of $15.2 billion. CME Group has a market value of $17.5 billion, Thomson Reuters data shows.
Hong Kong Exchanges and Clearing is the world's largest exchange group with a market cap of $19.5 billion.
ICE said it expected to achieve $450 million in cost savings from the takeover. In the first year after the deal closes, additional earnings of 15 percent are expected.
Long-time Wall Street traders saw the potential takeover of the venerable stock exchange by a 12-year-old derivatives upstart as fraught with symbolism.
"It's the end of an era," said a director on the board of a rival exchange who did not have clearance to speak to the press and asked not to be named. "I think ultimately the floor will be closed, because Jeff (Sprecher) has shut every floor he's ever had," the person said.
With the deal still a long way from completed, Sprecher and Niederauer said they planned to keep the high-profile NYSE trading floor running. "The floor has value and in particular, it has a lot of brand value," Niederauer said. "So we are committed. Jeff is committed."
The exchange was prepared to shut down the floor temporarily during superstorm Sandy and trade completely electronically, Wall Street executives said.
Shareholders will have the option of accepting $33.12 in cash per NYSE Euronext share or 0.2581 ICE share or a mix of $11.27 in cash and 0.1703 ICE share, subject to a maximum cash consideration of $2.7 billion.
Morgan Stanley was the lead financial adviser to ICE, with assistance from BMO Capital Markets Corp, Broadhaven Capital Partners, JPMorgan Chase & Co , Lazard Group LLC , Societe Generale Corporate & Investment Banking, and Wells Fargo Securities LLC . ICE legal advisers are Sullivan & Cromwell LLP and Shearman & Sterling LLP.
The main financial advisers to NYSE Euronext are Perella Weinberg Partners and BNP Paribas. Further financial advice to NYSE Euronext was provided by Blackstone Advisory Partners, Citigroup , Goldman Sachs & Co. and Moelis & Co. Legal advisers to NYSE Euronext are Wachtell, Lipton, Rosen & Katz, Slaughter & May, and Stibbe NV.
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