State Department made "grievous mistake" over Benghazi: Senate report


WASHINGTON (Reuters) - The State Department made a "grievous mistake" in keeping the U.S. mission in Benghazi open despite inadequate security and increasingly alarming threat assessments in the weeks before a deadly attack by militants, a Senate committee said on Monday.


A report from the Senate Homeland Security Committee on the September 11 attacks on the U.S. mission and a nearby CIA annex, in which the U.S. ambassador to Libya and three other Americans died, faulted intelligence agencies for not focusing tightly enough on Libyan extremists.


It also faulted the State Department for waiting for specific warnings instead of improving security.


The committee's assessment, "Flashing Red: A Special Report On The Terrorist Attack At Benghazi," follows a scathing report by an independent State Department accountability review board that resulted in a top security official resigning and three others at the department being relieved of their duties.


Joseph Lieberman, an independent senator who chairs the committee, said that in thousands of documents it reviewed, there was no indication that Secretary of State Hillary Clinton had personally denied a request for extra funding or security for the Benghazi mission. He said key decisions were made by "midlevel managers" who have since been held accountable.


Republican Senator Susan Collins said it was likely that others needed to be held accountable, but that decision was best made by the Secretary of State, who has the best understanding "of how far up the chain of command the request for additional security went."


The attacks and the death of U.S. Ambassador Christopher Stevens put diplomatic security practices at posts in risky areas under scrutiny and raised questions about whether intelligence on militant activity in the region was adequate.


The Senate report said the lack of specific intelligence of an imminent threat in Benghazi "may reflect a failure" by intelligence agencies to focus closely enough on militant groups with weak or no operational ties to al Qaeda and its affiliates.


"With Osama bin Laden dead and core al Qaeda weakened, a new collection of violent Islamist extremist organizations and cells have emerged in the last two to three years," the report said. That trend has been seen in the "Arab Spring" countries undergoing political transition or military conflict, it said.


NEED FOR BETTER INTELLIGENCE


The report recommended that U.S. intelligence agencies "broaden and deepen their focus in Libya and beyond, on nascent violent Islamist extremist groups in the region that lack strong operational ties to core al Qaeda or its main affiliate groups."


Neither the Senate report nor the unclassified accountability review board report pinned blame for the Benghazi attack on a specific militant group. The FBI is investigating who was behind the assaults.


President Barack Obama, in an interview on NBC's "Meet the Press" on Sunday, said the United States had "very good leads" about who carried out the attacks. He did not provide details.


The Senate committee said the State Department should not have waited for specific warnings before acting on improving security in Benghazi.


It also said it was widely known that the post-revolution Libyan government was "incapable of performing its duty to protect U.S. diplomatic facilities and personnel," but the State Department failed to fill the security gap.


"Despite the inability of the Libyan government to fulfill its duties to secure the facility, the increasingly dangerous threat assessments, and a particularly vulnerable facility, the Department of State officials did not conclude the facility in Benghazi should be closed or temporarily shut down," the report said. "That was a grievous mistake."


The Senate panel reviewed changing comments made by the Obama administration after the attack, which led to a political firestorm in the run-up to the November presidential election and resulted in U.S. Ambassador to the United Nations Susan Rice withdrawing her name from consideration to replace Clinton, who is stepping down early next year.


Rice had said her initial comments that the attack grew out of a spontaneous protest over an anti-Islam film were based on talking points provided by intelligence agencies.


Lieberman said it was not the job of intelligence agencies to formulate unclassified talking points and they should decline such requests in the future.


The report said the original talking points included a line saying "we know" that individuals associated with al Qaeda or its affiliates participated in the attacks. But the final version had been changed to say: "There are indications that extremists participated," and the reference to al Qaeda and its affiliates was deleted.


The report said that while James Clapper, the director of national intelligence, had offered to provide the committee with a detailed chronology of how the talking points were written and evolved, this had still not been delivered to Capitol Hill because the administration had spent weeks "debating internally" whether or not it should turn over information considered "deliberative" to Congress.


(Editing by Warren Strobel and David Brunnstrom)



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Sony No Longer Shipping PlayStation 2 in Japan






You may have grown up with it. Your children may have, too.


Sony‘s PlayStation 2 home game console, released in 2000, was one of the most popular game consoles of all time, rivaled in sales only by the different kinds of Nintendo DS handheld console. It continued to be sold new on store shelves until just recently, even years after Sony launched its PlayStation 3 successor.






Now, however, Sony’s sent out its last shipment of new “PS2″ consoles for the Japanese market, according to Japanese gaming news site Famitsu (as reported by Polygon’s Emily Gera). Some other regions are continuing to receive shipments for now, but the heart of the PlayStation 2 phenomenon has finally stopped beating.


A gaming legend


Japanese PlayStation fans saw thousands more titles released in their language than English-speaking players. The PlayStation 2 was especially well-known for its role-playing games, such as the MMORPG Final Fantasy XI, which was designed so closely around the PS2′s capabilities that its Windows PC version uses almost entirely the same graphics and controller-based interface.


New PS2 games continue to ship; Final Fantasy XI is even getting a full-fledged, retail-boxed expansion pack this March. It’ll only support the PS2 in Japan, however, where dedicated players continue to use the original “fat” PS2 consoles with the hard drive expansion slot. Internationally, it will only support the PC and Xbox 360.


PS2 games in a post-PS2 world


The first PlayStation 3 consoles — infamous for the silence which ensued at the Sony event where their price at launch was announced to be “599 U.S. dollars” — were backwards-compatible with the vast majority of PlayStation 2 and original PSOne games. Sony achieved PS2 backwards compatibility, however, by including the PS2′s actual “Emotion Engine” and “Graphics Synthesizer” chips inside each PS3, essentially making it two game consoles in one (and helping to drive up that launch price).


A redesign bumped down the price some, but at the cost of removing the Emotion Engine chip, which caused the redesigned PS3 consoles to sometimes have bugs or fail to play certain games. Today’s PS3 consoles lack both chips, which means that while they play PSOne games just fine, they don’t support PS2 game discs at all and can’t be upgraded to do so.


The legend lives on?


Sony has made HD remakes of certain PS2 titles, and republished others for the PS3 under the “PlayStation 2 Classics” brand. Dozens of such titles have been re-released as digital downloads in the PlayStation Network store.


This method of playing a PS2 game on the PS3, however, involves essentially buying the game again (assuming that it’s even in the store), sort of like Sony’s method of playing PlayStation Portable games on the Vita. Even rebuying the games for the PS3 doesn’t ensure continued playability on modern Sony consoles; the upcoming “PlayStation 4″ (not its actual name) reportedly won’t be able to play games made for the PS3.


Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.
Linux/Open Source News Headlines – Yahoo! News





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Kim Kardashian: From Divorce Drama to Baby Mama in 5 Clicks





Follow her odyssey from her messy split with Kris Humphries to her great expectation with Kanye West








Credit: INF



Updated: Monday Dec 31, 2012 | 11:45 AM EST




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Kenya hospital imprisons new mothers with no money


NAIROBI, Kenya (AP) — The director of the Pumwani Maternity Hospital, located in a hardscrabble neighborhood of downtown Nairobi, freely acknowledges what he's accused of: detaining mothers who can't pay their bills. Lazarus Omondi says it's the only way he can keep his medical center running.


Two mothers who live in a mud-wall and tin-roof slum a short walk from the maternity hospital, which is affiliated with the Nairobi City Council, told The Associated Press that Pumwani wouldn't let them leave after delivering their babies. The bills the mothers couldn't afford were $60 and $160. Guards would beat mothers with sticks who tried to leave without paying, one of the women said.


Now, a New York-based group has filed a lawsuit on the women's behalf in hopes of forcing Pumwani to stop the practice, a practice Omondi is candid about.


"We hold you and squeeze you until we get what we can get. We must be self-sufficient," Omondi said in an interview in his hospital office. "The hospital must get money to pay electricity, to pay water. We must pay our doctors and our workers."


"They stay there until they pay. They must pay," he said of the 350 mothers who give birth each week on average. "If you don't pay the hospital will collapse."


The Center for Reproductive Rights, which filed the suit this month in the High Court of Kenya, says detaining women for not paying is illegal. Pumwani is associated with the Nairobi City Council, one reason it might be able to get away with such practices, and the patients are among Nairobi's poorest with hardly anyone to stand up for them.


Maimouna Awuor was an impoverished mother of four when she was to give birth to her fifth in October 2010. Like many who live in Nairobi's slums, Awuor performs odd jobs in the hopes of earning enough money to feed her kids that day. Awuor, who is named in the lawsuit, says she had saved $12 and hoped to go to a lower-cost clinic but was turned away and sent to Pumwani. After giving birth, she couldn't pay the $60 bill, and was held with what she believes was about 60 other women and their infants.


"We were sleeping three to a bed, sometimes four," she said. "They abuse you, they call you names," she said of the hospital staff.


She said saw some women tried to flee but they were beaten by the guards and turned back. While her husband worked at a faraway refugee camp, Awuor's 9-year-old daughter took care of her siblings. A friend helped feed them, she said, while the children stayed in the family's 50-square-foot shack, where rent is $18 a month. She says she was released after 20 days after Nairobi's mayor paid her bill. Politicians in Kenya in general are expected to give out money and get a budget to do so.


A second mother named in the lawsuit, Margaret Anyoso, says she was locked up in Pumwani for six days in 2010 because she could not pay her $160 bill. Her pregnancy was complicated by a punctured bladder and heavy bleeding.


"I did not see my child until the sixth day after the surgery. The hospital staff were keeping her away from me and it was only when I caused a scene that they brought her to me," said Anyoso, a vegetable seller and a single mother with five children who makes $5 on a good day.


Anyoso said she didn't have clothes for her child so she wrapped her in a blood-stained blouse. She was released after relatives paid the bill.


One woman says she was detained for nine months and was released only after going on a hunger strike. The Center for Reproductive Rights says other hospitals also detain non-paying patients.


Judy Okal, the acting Africa director for the Center for Reproductive Rights, said her group filed the lawsuit so all Kenyan women, regardless of socio-economic status, are able to receive health care without fear of imprisonment. The hospital, the attorney general, the City Council of Nairobi and two government ministries are named in the suit.


___


Associated Press reporter Tom Odula contributed to this report.


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Fiscal deal stalls as clock ticks to deadline


WASHINGTON (Reuters) - Efforts to prevent the economy from tumbling over a "fiscal cliff" stalled on Sunday as Democrats and Republicans remained at loggerheads over a deal that would prevent taxes for all Americans from rising on New Year's Day.


One hour before they had hoped to present a plan, Democratic and Republican Senate leaders said they were still unable to reach a compromise that would stop the automatic tax hikes and spending cuts that could push the U.S. economy back into recession.


"There are still serious differences between the two sides," said Senate Democratic leader Harry Reid.


Progress still appeared possible after the two sides narrowed their differences on tax increases and Republicans indicated they would withdraw a contentious proposal to slow the growth of Social Security retirement benefits.


Failure to secure a deal would deliver a heavy blow to the U.S. economy just as it is showing signs of a quicker recovery. Planned tax increases and spending cuts would suck $600 billion out of the economy and again force up unemployment, which had shown signs of improving.


Senate Republican leader Mitch McConnell talked several times to Vice President Joe Biden by phone in the hope of breaking the standstill. "I'm willing to get this done, but I need a dance partner," McConnell said.


Any agreement needs to be rushed through both chambers of Congress before midnight on Monday. But, even if the two sides reach a deal, procedural barriers in the Senate and the House of Representatives make quick action difficult.


Buoyed by his re-election in November, President Barack Obama has insisted that any deal must include a tax increase on the wealthiest Americans, who have seen their earnings rise steadily over the past decade at a time when income has stalled for the less affluent.


Many conservative Republicans in the House of Representatives oppose a tax hike on anyone, no matter how wealthy.


The two sides were close to agreeing to raise taxes on households earning around $400,000 or $500,000 a year - higher than Obama's preferred threshold of $250,000 - several senators told reporters.


Republicans aim to pair any tax increase with government spending cuts to benefit programs that are projected to grow ever more expensive as the population ages in coming decades.


But their proposal to slow the growth of Social Security benefits by changing the way they are measured against inflation met fierce resistance from Democrats. Obama included the proposal, known as "chained CPI," in an earlier proposal, but many of his fellow Democrats remain opposed.


'POISON PILL'


"We consider it a poison pill - they know we can't accept it. It is a big step back from where we were on Friday," a Senate Democratic aide said.


Several Senate Republicans said they would support taking that idea out of the discussion. "Most of us agree the chained CPI is off the table in these negotiations," Senator John McCain said on Twitter.


In a rare appearance on NBC's "Meet the Press," Obama pressured lawmakers to reach a deal.


"If people start seeing that on January 1st this problem still hasn't been solved... then obviously that's going to have an adverse reaction in the markets," he said, adding that he had offered Republicans significant compromises that had been rejected repeatedly.


Obama said he would try to reverse the tax hikes for most Americans if Congress fails to act.


John Boehner, the House speaker, rejected Obama's accusations that Republicans were not being amenable to compromise.


"The president's comments today are ironic, as a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party," he said in a statement. (Additional reporting by Tabassum Zakaria, Jeff Mason, David Lawder, Fred Barbash and Richard Cowan. Writing by Andy Sullivan; editing by Alistair Bell and Jackie Frank)



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Body of India rape victim cremated in New Delhi


NEW DELHI (Reuters) - The body of a woman, whose gang rape provoked protests and rare national debate about violence against women in India, arrived back in New Delhi on Sunday and was cremated at a private ceremony.


Scuffles broke out in central Delhi between police and protesters who say the government is doing too little to protect women. But the 2,000-strong rally was confined to a single area, unlike last week when protests raged up throughout the capital.


Riot police manned barricades along streets leading to India Gate war memorial - a focal point for demonstrators - and, at another gathering point - the centuries-old Jantar Mantar - protesters held banners reading "We want justice!" and "Capital punishment".


Most sex crimes in India go unreported, many offenders go unpunished, and the wheels of justice turn slowly, according to social activists, who say that successive governments have done little to ensure the safety of women.


The unidentified 23-year-old victim of the December 16 gang rape died of her injuries on Saturday, prompting promises of action from a government that has struggled to respond to public outrage.


The medical student had suffered brain injuries and massive internal injuries in the attack and died in hospital in Singapore where she had been taken for treatment.


She and a male friend had been returning home from the cinema, media reports say, when six men on a bus beat them with metal rods and repeatedly raped the woman. The friend survived.


New Delhi has the highest number of sex crimes among India's major cities, with a rape reported on average every 18 hours, police figures show. Reported rape cases rose by nearly 17 percent between 2007 and 2011, according to government data.


Six suspects were charged with murder after her death and face the death penalty if convicted.


In Kolkata, one of India's four biggest cities, police said a man reported that his mother had been gang-raped and killed by a group of six men in a small town near the city on Saturday.


She was killed on her way home with her husband, a senior official said, and the attackers had thrown acid at the husband, raped and killed her, and dumped her body in a roadside pond.


Police declined to give any further details. One officer told Reuters no criminal investigation had yet been launched.


"MISOGYNY"


The leader of India's ruling Congress party, Sonia Gandhi, was seen arriving at the airport when the plane carrying the woman's body from Singapore landed and Prime Minister Mannmohan Singh's convoy was also there.


A Reuters correspondent saw family members who had been with her in Singapore take her body from the airport to their Delhi home in an ambulance with a police escort.


Her body was then taken to a crematorium and cremated. Media were kept away but a Reuters witness saw the woman's family, New Delhi's chief minister, Sheila Dikshit, and the junior home minister, R P N Singh, coming out of the crematorium.


The outcry over the attack caught the government off guard. It took a week for the prime minister to make a statement, infuriating many protesters. Last weekend they fought pitched battles with police.


Issues such as rape, dowry-related deaths and female infanticide rarely enter mainstream political discourse.


Analysts say the death of the woman dubbed "Amanat", an Urdu word meaning "treasure", by some Indian media could change that, though it is too early to say whether the protesters can sustain their momentum through to national elections due in 2014.


U.N. Secretary General Ban Ki-Moon added his voice to those demanding change, calling for "further steps and reforms to deter such crimes and bring perpetrators to justice".


Commentators and sociologists say the incident earlier this month has tapped into a deep well of frustration many Indians feel over what they see as weak governance and poor leadership on social issues.


Newspapers raised doubts about the commitment of both male politicians and the police to protecting women.


"Would the Indian political system and class have been so indifferent to the problem of sexual violence if half or even one-third of all legislators were women?" the Hindu newspaper asked.


The Indian Express said it was more complicated than realizing that the police force was understaffed and underpaid.


"It is geared towards dominating citizens rather than working for them, not to mention being open to influential interests," the newspaper said. "It reflects the misogyny around us, rather than actively fighting for the rights of citizens who happen to be female."


(Additional reporting by Ross Colvin and Diksha Madhokin New Delhi and Sujoy Dhar in Kolkata; Editing by Louise Ireland)



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Autonomy’s Lynch defends record as HP confirms Federal probe






LONDON (Reuters) – Mike Lynch, the founder of the software firm sold to Hewlett-Packard last year in a deal tainted by accusations of accounting fraud, said he would defend the company’s accounts to U.S. Federal investigators.


HP confirmed in a filing late on Thursday that the U.S. Department of Justice was investigating Autonomy‘s books.






The PC and printer maker bought the British company for $ 11 billion last year to lead its push into the more profitable software sector.


Autonomy did not deliver the growth expected, resulting in Lynch’s departure earlier this year.


But worse was to come last month when HP wrote off some $ 5 billion of the company’s value and accused its former management of accounting improprieties that inflated its value.


The Silicon Valley company said it had passed information from a whistleblower to the U.S. Department of Justice, the SEC and Britain’s Serious Fraud Office.


“On November 21, 2012, representatives of the U.S. Department of Justice advised HP that they had opened an investigation relating to Autonomy,” it said in the filing.


“HP is cooperating with the three investigating agencies.”


Lynch launched a robust defense of his track record almost immediately after HP made the accusations.


He said on Friday that he was still waiting for a detailed calculation of HP’s $ 5 billion writedown of Autonomy’s value and a published explanation of the allegations.


“Simply put these allegations are false, and in the absence of further detail we cannot understand what HP believes to be the basis for them,” he said in a statement.


“We continue to reject these allegations in the strongest possible terms. Autonomy’s financial accounts were properly maintained in accordance with applicable regulations, fully audited by Deloitte and available to HP during the due diligence process.”


Lynch said he had not been approached by any regulatory authority, but he would co-operate with any investigation and looked forward to the opportunity to explain his position.


HP has refused to concede to Lynch’s demands for more information about the allegations.


“While Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders,” it said in response to an open letter from Lynch last month


“In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury.”


(Reporting by Paul Sandle; Editing by Helen Massy-Beresford)


Tech News Headlines – Yahoo! News





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Dick Clark New Year's Eve Love Story - Same Couple Dancing Since 1972















12/30/2012 at 02:45 PM EST



This New Year's Eve will be just like any other for Kathy and Louie Novoa, except without their dear friend Dick Clark, who passed away in April.

The pair met on American Bandstand and have since taken part in every one of his New Year's Rockin' Eves since they began on the Queen Mary in 1972.

"To be there from the very first one he did and to still be a part of it, I think, wow, I can't believe it," Louie tells PEOPLE. "I still have the original invitation to the very first one."

As for being a part of Rockin' Eve for the first time since Clark's death, Kathy says, "It's very sad and heartbreaking to know he started this tradition and was so important in so many homes. Everybody watches Dick Clark's New Year's Eve. It's very hard [with him gone], but it's also great knowing that it's still going on. That's what he would want."

Dick Clark New Year's Eve Love Story – Same Couple Dancing Since 1972| Dick Clark's New Year's Rockin' Eve, Dick Clark

Kathy and Louie Novoa with Dick Clark in 1976

Courtesy Louie Novoa

Now officially a couple for 36 years, Louie says that starting the New Year with a kiss is his favorite tradition on the show, which kicks off at 8 p.m. ET/PT this year on ABC.

"Kathy and I started doing it, and right after that, Dick's wife Kari [Wigton] goes, 'Why don't we follow up with that?' " he says. "It became a tradition. We had a lot of clips of that. That's what we're going to miss. We always looked forward to that."

The happy pair, who declined to provide their age, would only joke about it.

"People ask us, 'How old are you? You don't look that old,' " Louie explained with a chuckle. "I say, 'We've been around for a while. We are [old].' We really are. You can tell on the dance floor. We're out there dancing with the kids. We call them kids because we try to blend in with them. We still have it though."

Although Louie says they miss Clark "every day," he is a big fan of his replacement, Ryan Seacrest.

"He's incredible," he says. "He's awesome. He does a great job and he has the same personality as Dick Clark. He gets along with everybody."

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Kenya hospital imprisons new mothers with no money


NAIROBI, Kenya (AP) — The director of the Pumwani Maternity Hospital, located in a hardscrabble neighborhood of downtown Nairobi, freely acknowledges what he's accused of: detaining mothers who can't pay their bills. Lazarus Omondi says it's the only way he can keep his medical center running.


Two mothers who live in a mud-wall and tin-roof slum a short walk from the maternity hospital, which is affiliated with the Nairobi City Council, told The Associated Press that Pumwani wouldn't let them leave after delivering their babies. The bills the mothers couldn't afford were $60 and $160. Guards would beat mothers with sticks who tried to leave without paying, one of the women said.


Now, a New York-based group has filed a lawsuit on the women's behalf in hopes of forcing Pumwani to stop the practice, a practice Omondi is candid about.


"We hold you and squeeze you until we get what we can get. We must be self-sufficient," Omondi said in an interview in his hospital office. "The hospital must get money to pay electricity, to pay water. We must pay our doctors and our workers."


"They stay there until they pay. They must pay," he said of the 350 mothers who give birth each week on average. "If you don't pay the hospital will collapse."


The Center for Reproductive Rights, which filed the suit this month in the High Court of Kenya, says detaining women for not paying is illegal. Pumwani is associated with the Nairobi City Council, one reason it might be able to get away with such practices, and the patients are among Nairobi's poorest with hardly anyone to stand up for them.


Maimouna Awuor was an impoverished mother of four when she was to give birth to her fifth in October 2010. Like many who live in Nairobi's slums, Awuor performs odd jobs in the hopes of earning enough money to feed her kids that day. Awuor, who is named in the lawsuit, says she had saved $12 and hoped to go to a lower-cost clinic but was turned away and sent to Pumwani. After giving birth, she couldn't pay the $60 bill, and was held with what she believes was about 60 other women and their infants.


"We were sleeping three to a bed, sometimes four," she said. "They abuse you, they call you names," she said of the hospital staff.


She said saw some women tried to flee but they were beaten by the guards and turned back. While her husband worked at a faraway refugee camp, Awuor's 9-year-old daughter took care of her siblings. A friend helped feed them, she said, while the children stayed in the family's 50-square-foot shack, where rent is $18 a month. She says she was released after 20 days after Nairobi's mayor paid her bill. Politicians in Kenya in general are expected to give out money and get a budget to do so.


A second mother named in the lawsuit, Margaret Anyoso, says she was locked up in Pumwani for six days in 2010 because she could not pay her $160 bill. Her pregnancy was complicated by a punctured bladder and heavy bleeding.


"I did not see my child until the sixth day after the surgery. The hospital staff were keeping her away from me and it was only when I caused a scene that they brought her to me," said Anyoso, a vegetable seller and a single mother with five children who makes $5 on a good day.


Anyoso said she didn't have clothes for her child so she wrapped her in a blood-stained blouse. She was released after relatives paid the bill.


One woman says she was detained for nine months and was released only after going on a hunger strike. The Center for Reproductive Rights says other hospitals also detain non-paying patients.


Judy Okal, the acting Africa director for the Center for Reproductive Rights, said her group filed the lawsuit so all Kenyan women, regardless of socio-economic status, are able to receive health care without fear of imprisonment. The hospital, the attorney general, the City Council of Nairobi and two government ministries are named in the suit.


___


Associated Press reporter Tom Odula contributed to this report.


Read More..

Wall Street ends sour week with 5th straight decline

NEW YORK (Reuters) - Stocks fell for a fifth straight day on Friday, dropping 1 percent and marking the S&P 500's longest losing streak in three months as the federal government edged closer to the "fiscal cliff" with no solution in sight.


President Barack Obama and top congressional leaders met at the White House to work on a solution for the draconian debt-reduction measures set to take effect beginning next week. Stocks, which have been influenced by little else than the flood of fiscal cliff headlines from Washington in recent days, extended losses going into the close with the Dow Jones industrial average and the S&P 500 each losing 1 percent, after reports that Obama would not offer a new plan to Republicans. The Dow closed below 13,000 for the first time since December 4.


"I was stunned Obama didn't have another plan, and that's absolutely why we sold off," said Mike Shea, managing partner at Direct Access Partners LLC in New York. "He's going to force the House to come to him with something different. I think that's a surprise. The entire market is disappointed in a lack of leadership in Washington."


In a sign of investor anxiety, the CBOE Volatility Index <.vix>, known as the VIX, jumped 16.69 percent to 22.72, closing at its highest level since June. Wall Street's favorite fear barometer has risen for five straight weeks, surging more than 40 percent over that time.


The Dow Jones industrial average <.dji> dropped 158.20 points, or 1.21 percent, to 12,938.11 at the close. The Standard & Poor's 500 Index <.spx> lost 15.67 points, or 1.11 percent, to 1,402.43. The Nasdaq Composite Index <.ixic> fell 25.59 points, or 0.86 percent, to end at 2,960.31.


For the week, the Dow fell 1.9 percent. The S&P 500 also lost 1.9 percent for the week, marking its worst weekly performance since mid-November. The Nasdaq finished the week down 2 percent. In contrast, the VIX jumped 22 percent for the week.


Pessimism continued after the market closed, with stock futures indicating even steeper losses. S&P 500 futures dropped 26.7 points, or 1.9 percent, eclipsing the decline seen in the regular session.


All 10 S&P 500 sectors fell during Friday's regular trading, with most posting declines of 1 percent, but energy and material shares were among the weakest of the day, with both groups closely tied to the pace of growth.


An S&P energy sector index <.gspe> slid 1.8 percent, with Exxon Mobil down 2 percent at $85.10, and Chevron Corp off 1.9 percent at $106.45. The S&P material sector index <.gspm> fell 1.3 percent, with U.S. Steel Corp down 2.6 percent at $23.03.


Decliners outnumbered advancers by a ratio of slightly more than 2 to 1 on the New York Stock Exchange, while on the Nasdaq, two stocks fell for every one that rose.


"We've been whipsawing around on low volume and rumors that come out on the cliff," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, who helps oversee $7 billion in assets.


With time running short, lawmakers may opt to allow the higher taxes and across-the-board federal spending cuts to go into effect and attempt to pass a retroactive fix soon after the new year. Standard & Poor's said an impasse on the cliff wouldn't affect the sovereign credit rating of the United States.


"We're not as concerned with January 1 as the market seems to be," said Richard Weiss, senior money manager at American Century Investments, in Mountain View, California. "Things will be resolved, just maybe not on a good timetable, and any deal can easily be retroactive."


Trading volume was light throughout the holiday-shortened week, with just 4.46 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Friday, below the daily average so far this year of about 6.48 billion shares. On Monday, the U.S. stock market closed early for Christmas Eve, and the market was shut on Tuesday for Christmas. Many senior traders were absent this week for the holidays.


Highlighting Wall Street's sensitivity to developments in Washington, stocks tumbled more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned that a deal was unlikely before the deadline. But late in the day, stocks nearly bounced back when the House said it would hold an unusual Sunday session to work on a fiscal solution.


Positive economic data failed to alter the market's mood.


The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest expanded in December.


"Economic reports have been very favorable, and once Congress comes to a resolution, the market should resume an upward trend, based on the data," said Weiss, who helps oversee about $125 billion in assets. "All else being equal, we see any further decline as a buying opportunity."


Barnes & Noble Inc rose 4.3 percent to $14.97 after the top U.S. bookstore chain said British publisher Pearson Plc had agreed to make a strategic investment in its Nook Media subsidiary. But Barnes & Noble also said its Nook business will not meet its previous projection for fiscal year 2013.


Shares of magicJack VocalTec Ltd jumped 10.3 percent to $17.95 after the company gave a strong fourth-quarter outlook and named Gerald Vento president and chief executive, effective January 1.


The U.S.-listed shares of Canadian drugmaker Aeterna Zentaris Inc surged 13.8 percent to $2.47 after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for a Phase 3 registration trial in endometrial cancer with AEZS-108 treatment.


(Reporting by Ryan Vlastelica; Editing by Jan Paschal)



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