Wall Street Week Ahead: "Fiscal cliff" blues may lead to correction

NEW YORK (Reuters) - Wall Street's post-election sell-off may gather steam in the coming weeks as worries mount about the looming "fiscal cliff" and technical weakness suggests a possible correction ahead.

The benchmark Standard & Poor's 500 <.spx> closed below its 200-day moving average - a measure of the market's long-term trend - on Thursday for the first time in five months, and ended below it again on Friday. More than half of the Dow components are trading below key technical levels.

"I don't think you have to panic here, but I think you really want to be looking for the market to move lower for the next couple of months," said Frank Gretz, market analyst and technician for Wellington Shields & Co., a brokerage in New York. "I think the next rally is the rally you want to sell."

At the heart of the market's worry is whether U.S. leaders can come to agreement on some $600 billion in spending cuts and tax increases that are due to kick in early next year. Some fear dramatic cutbacks could send the U.S. economy into another recession.

The prospect of higher tax rates in 2013 is driving investors to sell shares as they seek to decrease the tax impact from their positions this year and next.

"You would have thought the fiscal cliff scenarios would have been already mulled over and priced in, but they weren't. It's almost like the market has ADD and can only focus on one thing at a time," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, whose firm manages about $13 billion in assets.

The S&P 500 fell 2.4 percent for the week, its worst weekly percentage drop since June. The index is now down 6.4 percent from its intraday high for the year of 1,474.51 reached on September 14. That drop puts the benchmark index below its 50-day moving average, but not yet into correction territory, defined as a 10 percent drop from a peak.

READING THE TECHNICAL SIGNS

The S&P 500 has been trading in a range between the 50-day moving average of 1,433.50 and the 200-day moving average of 1,380.98 for about two weeks. A significant break below that lower level could be a precursor to further weakness, analysts said.

"There's a technical breakdown in the market that indicates further losses," said Adam Sarhan, chief executive of Sarhan Capital in New York. "A 10 percent drop is the next big line in the sand."

The primary driver of stock prices in coming weeks looks likely to be investor concern about the U.S. fiscal situation.

In a sign of the risks involved, comments by President Barack Obama on Friday about the upcoming negotiations caused stocks to sharply cut their gains.

The president, who defeated Republican candidate Mitt Romney in Tuesday's U.S. election, outlined a position for the fiscal issues on Friday that is far apart from that of his political opponents, suggesting a long battle is to come.

"If the market anticipates a resolution to the fiscal cliff or Europe or any of the other bricks in the wall of worry, we could easily take off," Sarhan said.

Seventeen of the Dow's 30 components are trading below both their 50-day and 200-day moving averages, while another eight are under their 50-day levels, but not their 200. Only five components - Bank of America , JPMorgan Chase & Co , Home Depot Inc , Johnson & Johnson and Travelers Cos - are above both support levels.

Another big negative for the market has been heavy selling of Apple shares. The stock of the world's biggest company, ranked by market capitalization, lost 5.2 percent this week, weighing heavily on both the S&P 500 and the Nasdaq <.ixic>. The stock is down 22.4 percent from its September 21 all-time intraday high of $705.07.

BIG RETAILERS' REPORT CARDS

The election and fiscal cliff concerns, which came on the heels of Superstorm Sandy and its devastating effects on many parts of the U.S. Northeast, have captured so much attention that they've overshadowed weakness coming from third-quarter earnings.

With results in from 449 of the S&P 500 companies, third-quarter earnings now are estimated to have declined 0.3 percent from a year ago, which is slightly better than the forecast at the start of the reporting period. Results have been especially weak on the revenue side, however, with just 38 percent of companies beating on sales, Thomson Reuters data showed.

But recent stronger economic data, including a report on Friday showing consumer sentiment at more than a five-year high in early November, suggests that retailers, many of which have yet to report, could be among the stronger performers this earnings period.

Next week, results are expected from such big names as Target , Wal-Mart and Home Depot.

Consumer discretionary companies have outperformed the broader S&P 500 in earnings, with 72 percent of the companies in that sector beating analysts' expectations, compared with 63 percent for the S&P 500 as a whole.

Investors will be paying close attention to those results with the holiday shopping period around the corner, said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey, which oversees about $1 billion in assets.

"It's really the beginning of the Christmas sell season, and I think there's going to be a lot of interest with the outlook for that season and how promotional companies are going to be," Meckler said.

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

(Reporting by Caroline Valetkevitch and Ryan Vlastelica; Editing by Jan Paschal)

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Fleeing fallen Syrian town, refugees fear Assad's air power

CEYLANPINAR, Turkey (Reuters) - Gun and mortar fire could be heard on Saturday from the Syrian border town of Ras al-Ain two days after it fell to rebels fighting to oust President Bashar al-Assad, and refugees who had fled to Turkey said they feared retribution from the air.

Laden with what possessions they could carry, Syrians continued to cross the border into Turkey, some saying they were scared the fighting was not over and Assad's fighter planes and helicopters would be back.

Some 9,000 fled the fighting on Thursday and Friday, the United Nations said, swelling to over 120,000 the registered refugees Turkey is sheltering in camps, testing the country's resources and patience.

"We will stay here until the fighting has completely stopped and all has calmed down," said 40-year-old Gasan Alun, who fled to the Turkish town of Ceylanpinar several days ago with 23 members of his family.

"I hope to God they don't bring the planes," he said. "It's the planes we're scared of."

The rebel flag flew above the town, a Reuters reporter on the Turkish side of the border said, and early on Saturday rebels could be seen driving freely in open pick-up trucks, guns slung across their shoulders.

But as dusk fell, several mortars landed near Ras al-Ain and gunfire grew more intense, according to a Reuters witness in Ceylanpinar, just across the border.

Rebels of the Free Syrian Army have claimed towns before in the 19-month civil war, only to be pounded again by Assad's air force or shelled by his army.

"The fighting has stopped but only for now," said Ahmad, a Syrian teenager who had just crossed into the Turkish border town from Ras al-Ain through a hole in the barbed wire fence marking the border.

"They (Assad's soldiers) will be back," he said. "Assad's helicopters have been circling, identifying where the Free Syrian Army soldiers are based."

Ahmad's friend, Mahdi, said: "We will try and stay in Ceylanpinar but if we can't we will have to go back. But we are scared of the helicopters coming."

SPILLOVER OF VIOLENCE

With winter setting in, the refugee influx is causing alarm in Turkey, and could spur calls for a buffer zone to be set up inside Syria to house refugees and aid the rebels in a war that opposition activists say has killed 38,000 people.

Increasingly critical of world powers for failing to act, Turkey says it is considering lodging a request with its NATO allies to deploy Patriot surface-to-air missiles to its border to guard against a spillover of violence.

Such a move could be a step towards enforcing a no-fly zone within Syria.

The refugee crisis and the threat of spillover risks stretching Turkey's military and resources in a region where it is also fighting an emboldened Kurdish insurgency.

On Saturday, 17 Turkish soldiers were killed when their Sikorsky helicopter crashed due to bad weather conditions on Herekol mountain in the Pervari area of southeastern Siirt province, Siirt Governor Ahmet Aydin said.

The victims were members of the country's gendarmerie special forces and there were no survivors on board, he said.

There has been an upsurge in attacks since the summer in southeast Turkey by the outlawed separatist group the Kurdish Workers Party (PKK), which launched an insurgency in 1984 with the aim of carving out a separate state.

On Friday, authorities said Turkish jets and helicopters had killed 42 militants along the border with Iraq and Iran.

Ankara has accused Syria, where 1 million Kurds also live, of arming the PKK.

"I would like to remind once again, the ones who think that they can subdue our state, our nation through terror, and see instability, and political developments in our region and our neighbors as an opportunity, are greatly mistaken and will regret," Turkish President Abdullah Gul said in a statement.

Kurds in Syria have largely tried to steer clear of the violence triggered by the uprising against Assad.

But over the last three months, the mainly Sunni Muslim Arabs of the Free Syrian Army have captured outposts on the Turkish border, moving towards the northeastern heartland of the Syrian Kurds.

(Additional reporting by Murad Sezer, Seda Sezer in Istanbul and Seyhmus Cakan in Diyarbakir, Writing by Matt Robinson; Editing by Sophie Hares)

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Philip Roth Is Retiring; Amazon Glitch Disables Buy Buttons

Today in books and publishing: Philip Roth confirms his retirement; Amazon‘s mysteriously vanishing buy buttons; Kobo expands to Italy, Kindle considers China; cities in literature.

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Philip Roth wraps it up. One of America’s most celebrated living novelists has been hinting at retirement for a while now. But he didn’t choose to make a big announcement in a prominent stateside literary organ like The New York Review of Books. He chose instead to let it out in interviews with the foreign press over recent weeks. Last month he told Nelly Kaprièlian of French magazine Les Inrockuptibles that he hasn’t written new material in three years, and doesn’t plan to write any new novels. “To tell you the truth, I’m done,” he said frankly, “Nemesis will be my last book … Enough is enough! I no longer feel this fanaticism to write that I have experienced in my life.” He said the same thing in an interview with Italian magazine La Repubblica earlier this month. His publisher Houghton Mifflin confirmed that Roth is entering retirement. It looks the 74-year-old writer will have plenty of time to go over his life story and thoughts on literature with his new biographer, Blake Bailey. [Salon]

RELATED: How to Game Amazon Prime; Random House Consolidates in the Spanish Market

Where did Amazon‘s buy buttons go? Late last night, customers looking to replenish their Kindles with fresh e-books were probably quite frustrated. No matter how hard anyone clicked, there was no way to purchase e-books from Penguin, Random House, Macmillan, Simon & Schuster, Hachette, and HarperCollins through Amazon. A company spokesperson later confirmed that it was just a technical slip-up, and buy buttons were quickly restored. But given Amazon’s propensity to punish publishers that don’t bend to its will with disabled buy buttons, this brief black-out set off a minor panic in publishing land. Why were only Big Six publishers affected? Did it have anything to do with the ongoing agency pricing legal battles or the Penguin Random House merger? Though it seems to have been nothing more serious than a technical goof, it’s a stark reminder that Amazon has the ability—as well as the leverage—to shut down publishers’ most important connection with consumers at the click of a mouse. [New York Observer]

RELATED: Chart: The Rapid Gains of the E-book

E-reading takes a global turn. E-books may be taking firm holds in the U.S., but they have a long way to go before they became the global format of choice for readers. Italy may be going in an increasingly digital direction soon, with the country’s largest bookseller Mondadori Group partnering with Kobo to stock Touch e-readers in its hundreds of stores. 34,000 e-books will be available for Italian readers. China is another largely untapped market, one that Amazon is eyeing enviously. ZDNet’s Liau Yun Qing reports that Kindles may become available there as early as this month. “If Amazon brings its e-reader to China, it will face competition from Chinese e-commerce player Dangdang which launched its e-reader in July at a retail price of 599 yuan (US$ 79),” she writes. “In comparison, the cheapest Kindle Paperwhite e-reader, which includes “Special Offers”, retails at US$ 119 in the United States.” [ZDNet]

RELATED: New Batman Comic Postponed; Books Banned in China Thrive in Hong Kong

Cities in literature. Mark Binelli’s new book Detroit City Is the Place to Be is all about the Motor City—its ascent during America’s industrial golden age, and its struggle to redefine itself. Given his obsession with the urban, Publishers Weekly decided to tap Binelli for a list of his favorite books that take specific cities as a central theme. It’s more interesting than most lists on this subject might have been. For instance, he shines a light on Joan Didion not for her classic takes on San Francisco or New York, but for her book Miami. And his favorite books to take on New York—Ben Katchor’s The Jew of New York and Joseph Mitchell’s Up in the Old Hotel—are refreshing inclusions. His favorite book about Detroit, Elmore Leonard’s City Primeval, is also a bit surprising. [Publishers Weekly]

Gadgets News Headlines – Yahoo! News

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Buzzmakers: Brooke's Cancer Fight & World War Z

What had ET readers buzzing this week?

1. It's Brad vs. Zombies in World War Z

Zombie attack!!! Brad Pitt plays a family man and United Nations employee who faces a deadly zombie pandemic in World War Z -- we gave you an exclusive first look and now we've got the intense trailer!

Just when you thought that the zombie genre may be starting to generate less screams and more Zzzz's, World War Z arrives with an adrenaline shot in the arm for the genre -- complete with insane special effects and a claustrophobic urgency and realism not seen since the introduction of those "speed zombies" in 28 Days Later.

Directed by Marc Forster (Quantum of Solace), World War Z invades theaters June 21, 2013.

2. Oprah Reveals Her 2012 'Favorite Things'

It's officially the holiday season!

Oprah just revealed her "Favorite Things" for 2012, which includes such items as a $1,800 Jetson E-Bike, a $192 hand-picked Tom Ford lipstick palette and a $238 Lafco soap set.

"This luxuriously oversize, deliciously scented soap is my new go-to gift. I even brought a set to Mr. and Mrs. Colbert when I interviewed Stephen for Next Chapter," she says about the pricey soap set.

But of course if you don't have the income of Oprah, you can pick up O's December issue to learn how you can win all 49 of Oprah's favorite things, which hits newsstands November 6.

"Oprah's Favorite Things" is also getting its own two-hour, prime time special airing Nov. 18 on OWN. The special will surprise unsuspecting military spouses with items from the media mogul's exclusive must-have gift selections for the holiday season, and for the first time, viewers of Oprah's Favorite Things: 2012 will have the opportunity to watch and win select items featured in each segment of the show.

3. Brooke Burke-Charvet Reveals Cancer Diagnosis

Brooke Burke-Charvet released a video online Thursday to announce that she was recently diagnosed with a cancerous growth on her thyroid gland. In the video posted on her Modern Mom blog, the 41-year-old actress and TV host explained that a nodule was discovered on her thyroid and after a series of tests over the last few months, it was eventually determined to be cancerous and her thyroid will have to be removed.

"Which means that I'm going to have a nice big scar right her across my neck," Brooke said. "And I don't get to just walk around and pretend like nothing happened or not follow up or not share it, because it's going to be pretty much dead center."

Brooke said the discovery -- which originated from a regular physical -- came as a complete shock because she's otherwise healthy. "As crazy as it is, my head is in the right place, and it's going to be good," she said, adding that the doctors consider this a form of "good cancer" compared to many others and the prognosis is good. "I'm just going to make a positive out of this negative thing."

She said the surgery has been scheduled and she promised to keep her fans updated through her blog. "Now I'm ready to deal with it and I'm going to be fine. And I feel really, really strong."

Speaking on Thursday's episode of The Talk, Brooke's co-host on Dancing with the Stars, Tom Bergeron, commented on her cancer diagnosis. "My love and support are with you -- we are all there with her," he said. Bergeron added that he personally has a very positive outlook. "I've known about this for a few months. I have had experience with this in my family. You never want to hear the word cancer. But thyroid cancer is one of the most treatable cancers. It has an incredibly high success rate."

4. Kirstie on Secret Relationship with Swayze

Kirstie Alley reveals to ET's Chris Jacobs intimate details about what she says was a powerful attraction and hidden relationship with her North and South co-star, Patrick Swayze. Although both stars were married during filming of the mini-series, Alley tells Jacobs when she first saw Swayze, they had an intense attraction and she tried to avoid "going down that road," but they ultimately fell in love.

"Both of us were married. We did not have an affair. But again, I think what I did was worse. Because I think when you fall in love with someone when you're married, you jeopardize your own marriage and their marriage. It's doubly bad," said Alley.

Alley goes on to say that although she's friends with Patrick's wife, Lisa Niemi, who asked Alley to speak at Swayze's funeral, she is uncertain if Lisa is aware of their relationship.

5. One Direction & Drew Brees Play Catch - Exclusive

One Direction and Drew Brees teamed up last month to film an adorable Pepsi spot and during Thursday night's episode of The X Factor, the band will not only perform their newest singles, Live While We're Young and Little Things, but also reveal an alternate ending to the ad!

For those who missed the spot, the original ended with Drew Brees sacrificing his last can of Pepsi in order to become an unofficial member of One Direction. But, according to Angelique Krembs, VP Marketing for Pepsi, they also wanted to show fans what would happen if Drew won the last can of Pepsi. "Our latest Live For Now spot has received an enormous amount of buzz and online excitement," Krembs said. "And of course everyone wants to see the boys from 1D suit up in football gear and have some fun."

While you have to wait until Thursday to see the entire surprise ending to Pepsi's Live For Now television commercial, ETonline scored an exclusive sneak peek of One Direction tossing the pigskin around with Brees!

Tune in to The X Factor on November 8 at 8 p.m. to see the alternate ending!

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Malaria vaccine a letdown for infants

LONDON (AP) — An experimental malaria vaccine once thought promising is turning out to be a disappointment, with a new study showing it is only about 30 percent effective at protecting infants from the killer disease.

That is a significant drop from a study last year done in slightly older children, which suggested the vaccine cut the malaria risk by about half — though that is still far below the protection provided from most vaccines. According to details released on Friday, the three-shot regimen reduced malaria cases by about 30 percent in infants aged 6 to 12 weeks, the target age for immunization.

Dr. Jennifer Cohn, a medical coordinator at Doctors Without Borders, described the vaccine's protection levels as "unacceptably low." She was not linked to the study.

Scientists have been working for decades to develop a malaria vaccine, a complicated endeavor since the disease is caused by five different species of parasites. There has never been an effective vaccine against a parasite. Worldwide, there are several dozen malaria vaccine candidates being researched.

In 2006, a group of experts led by the World Health Organization said a malaria vaccine should cut the risk of severe disease and death by at least half and should last longer than one year. Malaria is spread by mosquitoes and kills more than 650,000 people every year, mostly young children and pregnant women in Africa. Without a vaccine, officials have focused on distributing insecticide-treated bed nets, spraying homes with pesticides and ensuring access to good medicines.

In the new study, scientists found babies who got three doses of the vaccine had about 30 percent fewer cases of malaria than those who didn't get immunized. The research included more than 6,500 infants in Africa. Experts also found the vaccine reduced the amount of severe malaria by about 26 percent, up to 14 months after the babies were immunized.

Scientists said they needed to analyze the data further to understand why the vaccine may be working differently in different regions. For example, babies born in areas with high levels of malaria might inherit some antibodies from their mothers which could interfere with any vaccination.

"Maybe we should be thinking of a first-generation vaccine that is targeted only for certain children," said Dr. Salim Abdulla of the Ifakara Health Institute in Tanzania, one of the study investigators.

Results were presented at a conference in South Africa on Friday and released online by the New England Journal of Medicine. The study is scheduled to continue until 2014 and is being paid for by GlaxoSmithKline and the PATH Malaria Vaccine Initiative.

"The results look bad now, but they will probably be worse later," said Adrian Hill of Oxford University, who is developing a competing malaria vaccine. He noted the study showed the Glaxo vaccine lost its potency after several months. Hill said the vaccine might be a hard sell, compared to other vaccines like those for meningitis and pneumococcal disease — which are both effective and cheap.

"If it turns out to have a clear 30 percent efficacy, it is probably not worth it to implement this in Africa on a large scale," said Genton Blaise, a malaria expert at the Swiss Tropical and Public Health Institute in Basel, who also sits on a WHO advisory board.

Eleanor Riley of the London School of Hygiene and Tropical Medicine, said the vaccine might be useful if used together with other strategies, like bed nets. She was involved in an earlier study of the vaccine and had hoped for better results. "We're all a bit frustrated that it has proven so hard to make a malaria vaccine," she said. "The question is how much money are the funders willing to keep throwing at it."

Glaxo first developed the vaccine in 1987 and has invested $300 million in it so far.

WHO said it couldn't comment on the incomplete results and would wait until the trial was finished before drawing any conclusions.

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