With record highs in sight, stocks face roadblocks

NEW YORK (Reuters) - If Wall Street needs to climb a wall of worry, it will have plenty of opportunity next week.

Major U.S. stock indexes will make another attempt at reaching all-time records, but the fitful pace that has dominated trading is likely to continue. Next Friday's unemployment report and the hefty spending cuts that look like they about to take effect will be at the forefront.

The importance of whether equities can reach and sustain those highs is more than Wall Street's usual fixation on numbers with psychological significance. Breaking through to uncharted territory is seen as a test of investors' faith in the rally.

"It's very significant," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"The thinking is, there's just not enough there for an extended bull run," he said. "If we do break through (record highs), then maybe the charts and price action are telling us there's something better ahead."

Flare-ups in the euro zone's sovereign debt crisis and next Friday's report on the U.S. labor market could jostle the market, though U.S. job indicators have generally been trending in a positive direction.

Small- and mid-cap stocks hit lifetime highs in February. Now the Dow Jones industrial average <.dji> and the S&P 500 <.spx> are racing each other to the top. The Dow, made up of 30 stocks, is about 75 points - less than 1 percent - away from its record close of 14,164.53, which it hit on October 9, 2007. The broader S&P is still 3 percent away from its closing high of 1,565.15, also reached on October 9, 2007.

The advantage may be in the Dow's court. So far in 2013, it has gained 7.5 percent, beating the S&P 500 by about 1 percent.


The Dow's relative strength owes much to its unique make-up and calculation, as well as to investors' recent preference for buying value stocks likely to generate steady reliable gains, rather than growth stocks.

But the more defensive stance illustrates how stock buyers are getting concerned about this year's rally. While investors don't want to miss out on gains, they're picking up companies that are less likely to decline as much as high-flying names - if a market correction comes.

The Russell Value Index <.rav> is up 7.6 percent for the year so far, outpacing the Russell Growth Index's <.rag> 5.7 percent rise. Within the realm of the S&P 500, the consumer staples sector led the market in February, gaining 3.1 percent.

There is some concern that growth-oriented names are being eclipsed by defensive bets, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

"This isn't a be-all and end-all sell signal by any means, but we would feel much more comfortable if some of the more aggressive areas, like technology and small caps, would start to gain some leadership here," Detrick said.

Signs that investors are becoming concerned about the rally's pace is evident in the options market, where the ratio of put activity to call activity has recently shifted in favor of puts, which represent expectations for a stock to fall.

"We are seeing some put hedging in the financials, building up for the past month," said Henry Schwartz, president of options analytics firm Trade Alert in New York.

The put-to-call ratio representing an aggregate of about 562 financial stocks is 1:1, when normally, calls should be outnumbering puts.

Investors have no shortage of reasons to crave the relative safety of blue chips and defensive stocks. Although markets have mostly looked past uncertainty over Washington's plans to cut the deficit, fiscal policy negotiations still pose a risk to equities.

The $85 billion in spending cuts set to begin on Friday is expected to slow economic growth this year if policymakers do not reach a new deal. Markets so far have held firm despite the wrangling in Washington, but tangible economic effects could pinch stock prices going forward.

The International Monetary Fund warned that full implementation of the cuts would probably take at least 0.5 percentage point off U.S. growth this year.


Investors will also take in a round of economic data at a time when concerns are percolating that the market is being pushed up less by fundamentals and more by loose monetary policy around the world.

The main economic event will be Friday's non-farm payrolls report for February. The U.S. economy is expected to have added 160,000 jobs last month, only a tad higher than in January, in a sign the labor market is healing at a slow pace. The U.S. unemployment rate is forecast to hold steady at 7.9 percent.

While lackluster data has been a catalyst in the past for stock market gains as investors bet it would ensure continued stimulus from the Federal Reserve, that sentiment may be wearing thin.

Markets stumbled last week following worries that the Fed might wind down its quantitative easing program sooner than expected.

"It shows the underpinning of the market is being driven at this point by monetary policy," Hellwig said.

With investors questioning what is behind the rally, it will make a run to record highs even more significant, Hellwig added.

"There's smart people that are in the bull camp and the bear camp and the muddle-through camp," Hellwig said. "The fact that you can statistically, using historical evidence, make a case for going higher, lower, or staying the same makes this number very important this time around."

(Wall St Week Ahead runs every Friday. Comments or questions on this column can be emailed to: leah.schnurr(at)thomsonreuters.com)

(Reporting by Leah Schnurr; Additional reporting by Doris Frankel in Chicago; Editing by Jan Paschal)

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No. 10 Louisville beats No. 12 Syracuse 58-53

SYRACUSE, N.Y. (AP) — Luke Hancock hit a 3-pointer from the corner to break a tie with 99 seconds left, and No. 10 Louisville beat No. 12 Syracuse 58-53 on Saturday, exacting a measure of revenge for a loss to the Orange earlier this season.

It was the third straight loss for Syracuse (22-7, 10-6 Big East), which was humbled 57-46 in a loss to No. 7 Georgetown a week ago before a record Carrier Dome crowd of 35,012. That snapped the Orange's 38-game home winning streak, and they were beaten again, 74-71, at No. 22 Marquette on Monday night to drop into a tie with Notre Dame behind the league-leading Hoyas, Louisville and Marquette.

The Irish were at Marquette later Saturday as the race to get a double-bye into the Big East tournament heated up.

Louisville (24-5, 12-4) snapped a three-game losing streak against Syracuse, and the Cardinals did it before a stunned crowd of 31,173.

Russ Smith led Louisville with 18 points, Hancock had 12, all on 3s, and Gorgui Dieng finished with 11 points and 14 rebounds.

C.J. Fair had 19 points to lead the Orange, James Southerland added 13 and Michael Carter-Williams 11. Syracuse outrebounded Louisville 41-36 but was victimized by eight 3-pointers and shot poorly again (20 of 56 for 35.7 percent). Louisville held a 16-9 edge on points off turnovers and a 14-8 edge at the free throw line.

After Hancock swished a straight-on 3 for Louisville, Fair hit a spinning layup as Dieng fouled him but missed the free throw and Syracuse trailed 41-40 with 7:34 to go.

Louisville began to press and the strategy paid off with two straight turnovers. Southerland lost the ball off the dribble and Triche mishandled an inbounds pass. The Cardinals took advantage as Dieng sank two free throws and Hancock hit a 3 from the wing for a 47-40 lead at 5:35.

Carter-Williams scored six straight points in a span of just over a minute to rally the Orange, hitting four free throws and a shot off the glass as Syracuse trailed 47-46 with 4:27 left. Fair's baseline jumper gave Syracuse the lead and Smith's free throw tied it at 48-all with 1:39 to go.

After Triche missed a baseline layup against Dieng, Hancock stole Triche's ensuing inbounds pass and Hancock drained his fourth 3 to break the tie. Smith then hit two free throws and Triche's turnover sealed the Orange's fate as the Cardinals hit 7 of 8 free throws in the final minute.

Syracuse beat Louisville 70-68 in mid-January in the final seconds when Carter-Williams stole a pass at the top of the key and raced the length of the court, slamming home a two-hander that Dieng couldn't contest and landing hard on his back underneath the backboard. A record crowd of 22,814 at the KFC Yum! Center saw Syracuse beat a No. 1 team for fourth time, and the Cardinals are still the only top-ranked team to lose at home this season.

Syracuse, which trailed 23-19 after a poor first half, found a way to foil Dieng, Louisville's shot-blocking defensive ace, early in the second half. Carter-Williams fed Rakeem Christmas for a slam dunk and less than a minute later Southerland slammed another home to complete a three-way passing play in the lane with Christmas and Triche to move Syracuse within 28-27.

With Dieng on the bench, Southerland, who had just one basket in the first half, then drained a 3 from the top of the arc to give Syracuse just its second lead of the game. It was short-lived as Kevin Ware hit a 3 from the top of the key 24 seconds later.

Carter-Williams tried to electrify the crowd, but his driving two-handed dunk try caromed off the back of the rim. Carter-Williams then stole the ball and fed Southerland for a deep 3 and a 35-33 Orange lead nearing the midpoint of the second half.

It was Southerland's third straight make after an awful first half and he wasn't finished. Triche fed him for another 3 as he curled off a screen in the corner.

Fair's follow with 88 seconds left were the final points of the first half as the Orange trailed 23-19, their fewest points in a first half this season.

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U.S. evolves on same-sex marriage


  • The president and the nation have shifted perspectives on same-sex marriage

  • Supreme Court ruling on California's same-sex marriage ban a critical test

  • Growing public support for gay marriage give proponents hope for change

Washington (CNN) -- The nation's growing acceptance of same-sex marriage has happened in slow and painstaking moves, eventually building into a momentum that is sweeping even the most unlikely of converts.

Even though he said in 2008 that he could only support civil unions for same-sex couples, President Barack Obama nonetheless enjoyed strong support among the gay community. He disappointed many with his conspicuously subdued first-term response to the same-sex marriage debate.

Last year, after Vice President Joe Biden announced his support, the president then said his position had evolved and he, too, supported same-sex marriage.

So it was no small matter when on Thursday the Obama administration formally expressed its support of same-sex marriage in a court brief weighing in on California's Proposition 8, which bans same-sex weddings. The administration's effort was matched by at least 100 high-profile Republicans — some of whom in elections past depended on gay marriage as a wedge issue guaranteed to rally the base — who signed onto a brief supporting gay couples to legally wed.

Obama on same-sex marriage: Everyone is equal

Then there are the polls that show that an increasing number of Americans now support same-sex marriage. These polls show that nearly half of the nation's Catholics and white, mainstream Protestants and more than half of the nation's women, liberals and political moderates all support same-sex marriage.

According to Pew Research Center polling, 48% of Americans support same-sex marriage with 43% opposed. Back in 2001, 57% opposed same-sex marriage while 35% supported it.

In last year's presidential election, same-sex marriage scarcely raised a ripple. That sea change is not lost on the president.

"The same evolution I've gone through is the same evolution the country as a whole has gone through," Obama told reporters on Friday.

Craig Rimmerman, professor of public policy and political science at Hobart and William Smith colleges says there is history at work here and the administration is wise to get on the right side.

"There is no doubt that President Obama's shifting position on Proposition 8 and same-sex marriage more broadly is due to his desire to situate himself on the right side of history with respect to the fight over same-sex marriage," said Rimmerman, author of "From Identity to Politics: The Lesbian and Gay Movements in the United States."

"I also think that broader changes in public opinion showing greater support for same-sex marriage, especially among young people, but in the country at large as well, has created a cultural context for Obama to alter his views."

For years, Obama had frustrated many in the gay community by not offering full-throated support of same-sex marriage. However, the president's revelation last year that conversations with his daughters and friends led him to change his mind gave many in that community hope.

Last year, the Obama administration criticized a measure in North Carolina that banned same-sex marriage and made civil unions illegal. The president took the same position on a similar Minnesota proposal.

Obama administration officials point to what they see as the administration's biggest accomplishment in the gay rights cause: repealing "don't ask, don't tell," the military's ban on openly gay and lesbian members serving in the forces.

Then there was the president's inaugural address which placed the gay community's struggle for equality alongside similar civil rights fights by women and African-Americans.

"Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law, for if we are truly created equal, then surely the love we commit to one another must be equal, as well," Obama said in his address after being sworn in.

In offering its support and asserting in the brief that "prejudice may not be the basis for differential treatment under the law," the Obama administration is setting up a high stakes political and constitutional showdown at the U.S. Supreme Court over a fast-evolving and contentious issue.

The justices will hear California's Proposition 8 case in March. That case and another appeal over the federal Defense of Marriage Act will produce blockbuster rulings from the justices in coming months.

Beyond the legal wranglings there is a strong social and historic component, one that has helped open the way for the administration to push what could prove to be a social issue that defines Obama's second term legacy, Rimmerman said.

The nation is redefining itself on this issue, as well.

Pew survey: Changing attitudes on gay marriage

The changes are due, in part, to generational shifts. Younger people show a higher level of support than their older peers, according to Pew polling "Millennials are almost twice as likely as the Silent Generation to support same-sex marriage."

"As people have grown up with people having the right to marry the generational momentum has been very, very strong," said Evan Wolfson, president of Freedom to Marry, a gay rights organization.

That is not to say that there isn't still opposition.

Pew polling found that most Republicans and conservatives remain opposed to same-sex marriage. In 2001, 21% of Republicans were supportive; in 2012 that number nudged slightly to 25%.

Conservative groups expressed dismay at the administration's same-sex marriage support.

"President Obama, who was against same-sex 'marriage' before he was for it, and his administration, which said the Defense of Marriage Act was constitutional before they said it was unconstitutional, has now flip-flopped again on the issue of same-sex 'marriage,' putting allegiance to extreme liberal social policies ahead of constitutional principle," Family Research Council President Tony Perkins said in a statement.

But there are signs of movement even among some high profile Republican leaders

Top Republicans sign brief supporting same-sex marriage

The Republican-penned friend of the court brief, which is designed to influence conservative justices on the high court, includes a number of top officials from the George W. Bush administration, Mitt Romney's former campaign manager and former GOP presidential candidate Jon Huntsman.

It is also at odds with the Republican Party's platform, which opposes same-sex marriage and defines marriage as a union between a man and a woman.

Still, with White House and high-profile Republican support, legal and legislative victories in a number of states and polls that show an increasing number of Americans support same sex-marriage, proponents feel that the winds of history are with them.

"What we've seen is accelerating and irrefutable momentum as Americans have come to understand who gay people are and why marriage matters," Wolfson said. "We now have a solid national majority and growing support across every demographic. We have leaders across the spectrum, including Republicans, all saying it's time to end marriage discrimination."

CNN's Peter Hamby, Ashley Killough and Bill Mears contributed to this report.

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'Nice neighbor' slain on way to dialysis treatment

WGN-TV: Man fatally shot while waiting for ride to dialysis treatment.

A Far South Side man was in a gangway just steps from his home early Saturday morning when he was shot to death in an apparent robbery attempt while walking toward the ride scheduled to take him to a dialysis appointment.

Neighbors, family members and the driver of the PACE van there for the pickup alike heard the shots that felled 72-year-old William Strickland, who neighbors said had lived in the home in the 400 block of East 95th Street in the Brainerd neighborhood for 30-some years.

He was described by neighbors and friends as friendly and willing to lend a helping hand.

"He was just there for us," said Theolene Shears, 84, who has lived in the area since 1965. "He was a very nice neighbor. We couldn't ask for a better neighbor."

Strickland was shot about 3:30 a.m. and was pronounced dead at the scene about 4 a.m., according to authorities. The motive appears to be robbery, police said, but detectives are still investigating.

Detectives remained at the scene, across from Chicago State University, into the morning.

Police taped off the northeast corner of 95th Street and Eberhart Avenue, surrounding the two houses between which the man was killed.

Strickland's grandson was inside the home and heard the shots; his family later declined to answer questions about Strickland's death. Shears also was inside her home.

"All I heard was three shots. Bang, bang, bang," she said.

Strickland, who went to dialysis three times a week, had been undergoing treatment for about five years, Shears said. Patrick Wilmot, spokesman for PACE, confirmed that Strickland had a scheduled pickup at 3:30 a.m. and that he was being taken to a standing dialysis appointment.

"He seemed to be very happy about it. The way he talked it was like a little social club," Shears said of the dialysis treatments, adding that he eased her own concerns about potentially having to receive treatment.

He preferred to go early on Saturdays to get it out of the way, she said.

Strickland leaves behind a daughter, three grandchildren and a pet Chihuahua, said Shears.

"He was a good man," said Joshua Miles, 14, a friend of the family. "He would help you out if you needed help."

"He always kept you laughing," he said.

Twitter: @peternickeas

Twitter: @nsnix87.com

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Pistorius bought, collected guns in Olympic year

JOHANNESBURG (AP) — In his Olympic year, Oscar Pistorius steadily became an avid firearms collector, joining a gun-collecting club and purchasing a collection of firearms that included a .500 Magnum pistol dubbed by its manufacturer as "the most powerful production revolver in the world" and a civilian version of a military assault rifle.

At the end of 2012, in the first blush of his romance with Reeva Steenkamp, the model he later shot and killed, Pistorius got deeper into his hobby. It was known that Pistorius liked guns but only now, from Associated Press interviews with other collectors, is it becoming clear the extent to which he became a dedicated firearms aficionado in the 12 months before he shot Steenkamp.

The track star not only applied for licenses to own more guns, but actually bought them, too, according to John Beare, vice chairman of the Lowveld Firearm Collectors Association which accepted Pistorius as a paid-up member last April. He and Pistorius were introduced at a Johannesburg hotel in January 2012, and it was there that Beare first explained to the athlete and some of his friends how to become certified collectors.

Had he not become a collector, Pistorius would under South African law have been limited to a maximum of four firearms for self-defense, of which only two could have been handguns, according to Johannesburg attorney Martin Hood, who specializes in firearms law.

Carvel Webb, chairman of the National Arms and Ammunition Collectors Confederation of South Africa, an umbrella group for the country's 2,000 approved private collectors including Pistorius, said that in the wake of Steenkamp's killing his group will now verify that Pistorius fulfilled the necessary requirements to be accepted as a collector and a decision in January to let him start collecting semi-automatic rifles.

"We will review all of those just to see if we are happy with it," Webb said.

Pistorius made no secret of his passion for firearms. Reporters who visited him at home in Pretoria, the capital, saw the pistol he kept by his bed and was licensed to own. He practiced at firing ranges both in South Africa and in Europe where he trained for the London Games. But apparently less well-known was his involvement with gun collectors to start building a firearms collection.

Beare said he twice observed Pistorius shoot at firing ranges and also at a clay pigeon shoot, but saw nothing to suggest he could be a menace with a gun.

"His safety was good," Beare told the AP. "He wouldn't do anything irrational with a firearm, because then I would have nailed him immediately."

Pistorius says he mistook his girlfriend Steenkamp for a home intruder and shot her while she was in his bathroom toilet, firing through the closed door. Pistorius' license for the 9 mm pistol was issued on Sept. 10, 2010, according to the South African Police Service's National Firearms Center. It was registered for self-defense

Prosecutors have charged Pistorius with premeditated murder for killing Steenkamp with three of four shots fired in the early hours of Feb. 14.

"I had no reason to believe that there was anything wrong, that he could have a dark side, that there could be something wrong," said Beare.

However, Roberto Siriu, president of the Tolmezzo shooting range in northeast Italy, said Pistorius did not seem to him to be well-trained with firearms.

"No, I don't think so. He didn't give me that impression," Siriu told the AP.

Pistorius shot at Tolmezzo during breaks from athletic training in the nearby town of Gemona. In November 2011, Pistorius posted a photo of himself firing a rifle at Tolmezzo, with the words: "Had a 96% headshot over 300m from 50shots! Bam!"

Last June, seven weeks before he made history by running at the London Games, Pistorius tweeted that he was going back to Tolmezzo to shoot vintage rifles, adding: "Amped to the max! Yeaaah boi!!"

Gun collecting is regulated by South Africa's stringent Firearms Control Act. Pistorius had to explain to his collecting association, both in writing and in interviews, what types of firearms he wanted to collect and why.

Beare said he and two other association members interviewed Pistorius in June or July 2012, shortly before he became the first double-amputee Olympic runner.

"He was still budding (as a collector) at that stage. He had done his research on it and he was interested in American firearms," Beare said.

The association certified Pistorius as a beginner collector, Beare said. Pistorius bought two Smith & Wesson revolvers and three shotguns and sent photos of the firearms and their serial numbers to the association, as required, Beare said.

But Pistorius couldn't take actual physical possession of his firearms because he didn't have police-issued licenses for them. So the weapons were kept for safekeeping by a gun dealer, Beare said. At firing ranges, Pistorius used other people's guns, he added.

Pistorius eventually applied for the licenses in January, according to the National Firearms Center. It listed his weapons as:

—A Smith & Wesson model 500. With a caliber of .500 Magnum, it is called "the most powerful production revolver in the world" by its manufacturer in Springfield, Massachusetts. "A hunting handgun for any game animal walking," the company's website says. Pistorius was "quite fascinated" with that particular weapon, Beare said.

—A Smith & Wesson .38-caliber revolver.

—Three shotguns: A Mossberg, a Maverick and a Winchester, all American makes.

—A Vektor .223-caliber rifle.

The current status of those applications is unclear. Firearms Center officials said after Pistorius killed Steenkamp that the six license applications were sent back to a Johannesburg police station to be refilled, but the reason for that wasn't given.

For civilian collectors, the Vektor is the closest they can get to the R-series assault rifles used by South Africa's military. For civilian use, the rifle is modified to make it only semi-automatic. Because it is classed as a restricted weapon in South Africa, Pistorius had to upgrade his status from a beginner to a more serious collector.

As part of that upgrading process, Pistorius was interviewed again by his collectors' club this January, Beare said. It accepted the runner's explanation that he wanted to collect weapons linked to South African military history, Beare said. He said that entitled Pistorius to start collecting not just South African firearms but also Russian-made guns that guerrilla groups have used over the years to fight South African forces.

Pistorius bought the Vektor around December, and sent the serial number and a photo to the association, Beare added.

Collecting firearms can be expensive. Vektors sell for US$1,100 to US$1,500 on South African gun-resale websites. Pistorius' athletic success and sponsorships have made him wealthy. Beare said he understood that Pistorius was planning to build on his collection over time.

"You start small and then you start growing," he said.

Some have questioned why Pistorius felt he needed such a variety of weapons and whether the association should have certified him.

Andre Pretorius, president of the Professional Firearm Trainers Council, a regulatory body for South African firearms instructors, said he struggles to see how pistols, shotguns and a semi-automatic rifle could be regarded as a coherent collection.

"The makes differ, the models differ and generally a collection needs to have a theme," said Pretorius. "I don't see there's a theme here."

But Webb, of the collectors' confederation, disagreed.

"There was a logic," Webb told the AP. "He's got three approved areas of interest."


AP Sports Writer Andrew Dampf in Rome contributed to this report.

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Syria war is everybody's problem

Syrians search for survivors and bodies after the Syrian regime attacked the city of Aleppo with missiles on February 23.


  • Frida Ghitis: We are standing by as Syria rips itself apart, thinking it's not our problem

  • Beyond the tragedy in human terms, she says, the war damages global stability

  • Ghitis: Syria getting more and more radical, jeopardizing forces of democracy

  • Ghitis: Peace counts on moderates, whom we must back with diplomacy, training arms

Editor's note: Frida Ghitis is a world affairs columnist for The Miami Herald and World Politics Review. A former CNN producer and correspondent, she is the author of "The End of Revolution: A Changing World in the Age of Live Television." Follow her on Twitter: @FridaGColumns

(CNN) -- Last week, a huge explosion rocked the Syrian capital of Damascus, killing more than 50 people and injuring hundreds. The victims of the blast in a busy downtown street were mostly civilians, including schoolchildren. Each side in the Syrian civil war blamed the other.

In the northern city of Aleppo, about 58 people -- 36 of them children -- died in a missile attack last week. Washington condemned the regime of Bashar al-Assad; the world looked at the awful images and moved on.

Syria is ripping itself to pieces. The extent of human suffering is beyond comprehension. That alone should be reason enough to encourage a determined effort to bring this conflict to a quick resolution. But if humanitarian reasons were not enough, the international community -- including the U.S. and its allies -- should weigh the potential implications of allowing this calamity to continue.

Frida Ghitis

Frida Ghitis

We've all heard the argument: It's not our problem. We're not the world's policeman. We would only make it worse.

This is not a plea to send American or European troops to fight in this conflict. Nobody wants that.

But before we allow this mostly hands-off approach to continue, we would do well to consider the potential toll of continuing with a failed policy, one that has focused in vain over the past two years searching for a diplomatic solution.

U. S. Secretary of State John Kerry has just announced that the U.S. will provide an additional $60 million in non-lethal assistance to the opposition. He has hinted that President Obama, after rejecting suggestions from the CIA and previous Secretary of State Hillary Clinton to arm Syrian rebels, might be ready to change course. And not a day too soon.

The war is taking longer than anyone expected. The longer it lasts, the more Syria is radicalized and the region is destabilized.

If you think the Syrian war is the concern of Syrians alone, think about other countries that have torn themselves apart over a long time. Consider Lebanon, Afghanistan or Somalia; each with unique circumstances, but with one thing in common: Their wars created enormous suffering at home, and the destructiveness eventually spilled beyond their borders. All of those wars triggered lengthy, costly refugee crises. They all spawned international terrorism and eventually direct international -- including U.S. -- intervention.

The uprising against al-Assad started two years ago in the spirit of what was then referred to -- without a hint of irony -- as the Arab Spring. Young Syrians marched, chanting for freedom and democracy. The ideals of equality, rule of law and human rights wafted in the air.

Al-Assad responded to peaceful protests with gunfire. Syrians started dying by the hundreds each day. Gradually the nonviolent protesters started fighting back. Members of the Syrian army started defecting.

The opposition's Free Syrian Army came together. Factions within the Syrian opposition took up arms and the political contest became a brutal civil war. The death toll has climbed to as many as 90,000, according to Kerry. About 2 million people have left their homes, and the killing continues with no end in sight.

In fairness to Washington, Europe and the rest of the international community, there were never easy choices in this war. Opposition leaders bickered, and their clashing views scared away would-be supporters. Western nations rejected the idea of arming the opposition, saying Syria already has too many weapons. They were also concerned about who would control the weaponry, including an existing arsenal of chemical and biological weapons, after al-Assad's fall.

These are all legitimate concerns. But inaction is producing the worst possible outcome.

The moderates, whose views most closely align with the West, are losing out to the better-armed Islamists and, especially, to the extremists. Moderates are losing the ideological debate and the battle for the future character of a Syria after al-Assad.

Radical Islamist groups have taken the lead. Young people are losing faith in moderation, lured by disciplined, devout extremists. Reporters on the ground have seen young democracy advocates turn into fervent supporters of dangerous groups such as the Nusra Front, which has scored impressive victories.

The U.S. State Department recently listed the Nusra Front, which has close ties to al Qaeda in Iraq and a strong anti-Western ideology, as a terrorist organization.

Meantime, countries bordering Syria are experiencing repercussions. And these are likely to become more dangerous.

Jordan, an important American ally, is struggling with a flood of refugees, as many as 10,000 each week since the start of the year. The government estimates 380,000 Syrians are in Jordan, a country whose government is under pressure from its own restive population and still dealing with huge refugee populations from other wars.

Turkey is also burdened with hundreds of thousands of refugees and occasional Syrian fire. Israel has warned about chemical weapons transfers from al-Assad to Hezbollah in Lebanon and may have already fired on a Syrian convoy attempting the move.

Lebanon, always perched precariously on the edge of crisis, lives with growing fears that Syria's war will enter its borders. Despite denials, there is evidence that Lebanon's Hezbollah, a close ally of al-Assad and of Iran, has joined the fighting on the side of the Syrian president. The Free Syrian Army has threatened to attack Hezbollah in Lebanon if it doesn't leave Syria.

The possible outcomes in Syria include the emergence of a failed state, stirring unrest throughout the region. If al-Assad wins, Syria will become an even more repressive country.

Al-Assad's survival would fortify Iran and Hezbollah and other anti-Western forces. If the extremists inside the opposition win, Syria could see factional fighting for many years, followed by anti-democratic, anti-Western policies.

The only good outcome is victory for the opposition's moderate forces. They may not be easy to identify with complete certainty. But to the extent that it is possible, these forces need Western support.

They need training, funding, careful arming and strong political and diplomatic backing. The people of Syria should know that support for human rights, democracy and pluralism will lead toward a peaceful, prosperous future.

Democratic nations should not avert their eyes from the killings in Syria which are, after all, a warning to the world.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Frida Ghitis.

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Sinkhole swallows Florida man inside house

Brother of sinkhole victim talks to reporters at the scene.

TAMPA, Fla. -- A 36-year-old Florida man was feared dead on Friday after a sinkhole suddenly opened beneath the bedroom of his suburban Tampa home swallowing him, police and fire officials said.

Rescuers responded to a 911 call late on Thursday after the man's family reported hearing a loud crash in the house and rushed to his bedroom.

“All they could see was a part of a mattress sticking out of the hole,” said Hillsborough County Fire Rescue Chief Ron Rogers. “Essentially the floor of that room had opened up.”

A sheriff deputy who arrived at the scene rescued the man's brother who jumped in the sinkhole and tried to rescue him. Three other adults and a child were in the house at the time the sinkhole opened up.

"He's down there but we can't hear anything and we can't see anything," said Ronnie Rivera, a Hillsborough County Fire Rescue spokesman. "We can't confirm anything but it's been several hours."

The victim screamed for help and his brother, Jeremy Bush, jumped in to try to save him but was unsuccessful.

Bush tried again using a shovel to dig but was pulled out by deputies as he was being sucked into the hole, Rivera said.

Bush told television reporters on scene, "I know in my heart he's dead."

About five other people reportedly lived inside the home, which has been occupied by the same family since 1974. The residents were taken to a local hotel and were given food.

Authorities have not been able to contact the missing man and ordered the evacuation of several nearby homes out of concern the sinkhole is continuing to grow.

Bill Bracken, the head of an engineering company assisting rescuers, said the sinkhole was as much as 30 feet (9 meters) in diameter and 20 feet (6 meters) deep.

“It started in the bedroom and it has been expanding outward and it's taking the house with it as it opens up,” Bracken said.

The risk of sinkholes is common in the state due to its porous geological bedrock, the Florida Department of Environmental Protection said.

As rainwater filters down it dissolves the rock causing erosion that can lead to underground caverns, which cause sinkholes when they collapse.

Rogers said officials lowered listening devices and cameras into the hole but had so far not detected any signs of life.

Rescue efforts were suspended on Friday over concerns about the house's stability, Rogers said.

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Turkish PM's Zionism comments "objectionable": Kerry

ANKARA (Reuters) - U.S. Secretary of State John Kerry on Friday criticized a comment by Turkey's prime minister likening Zionism to crimes against humanity, as the disagreement cast a shadow over talks between the NATO allies.

Kerry, on his first trip to a Muslim nation since taking office, met Turkish leaders for talks meant to focus on the civil war in neighboring Syria and bilateral interests from energy security and Iran's nuclear program to counter-terrorism.

But the comment by Turkish Prime Minister Tayyip Erdogan at a U.N. meeting in Vienna this week, condemned by his Israeli counterpart, the White House and U.N. Secretary-General Ban Ki-moon, has clouded his visit.

"We not only disagree with it, we found it objectionable," Kerry told a news conference with Turkish Foreign Minister Ahmet Davutoglu, saying he raised the issue "very directly" with Davutoglu and would do so with Erdogan.

Erdogan told the U.N. Alliance of Civilizations meeting in Vienna on Wednesday: "Just as with Zionism, anti-Semitism and fascism, it has become necessary to view Islamophobia as a crime against humanity."

The Turkish prime minister's caustic rhetoric on Israel has in the past won applause from conservative supporters at home but raised increasing concern among Western allies.

Kerry said Turkey and Israel were both key U.S. allies and urged them to restore closer ties.

"Given the many challenges that the neighborhood faces, it is essential that both Turkey and Israel find a way to take steps ... to rekindle their historic cooperation," Kerry said.

"I think that's possible but obviously we have to get beyond the kind of rhetoric that we've just seen recently."

Washington needs all the allies it can get as it navigates the political currents of the Middle East, and sees Turkey as a key player in supporting Syria's opposition and planning for the era after President Bashar al-Assad.

Ties between Israel and Turkey have been frosty since 2010, when Israeli marines killed nine Turks in fighting aboard a Palestinian aid ship that tried to breach Israel's blockade of the Gaza Strip.

"If we must talk about hostile acts, then Israel's attitude and its brutal killing of nine of our civilian citizens in international waters may be called hostile," Davutoglu said, adding Turkey had always stood against anti-Semitism.

"No single statement carries a price higher than the blood of a person ... If Israel wants to hear positive statements from Turkey it needs to reconsider its attitude both towards us and towards the West Bank," he told the news conference.

Turkey has demanded a formal apology for the 2010 incident, compensation for victims and their families and for the Gaza blockade to be lifted. Israel has voiced "regret" and has offered to pay into what it called a "humanitarian fund" through which casualties and relatives could be compensated.


Erdogan appeared displeased when Kerry arrived late for their evening talks, remarking there was not much time left, according to a U.S. pool reporter who attended the picture-taking session at the start of the meeting.

Kerry, in turn, apologized, saying that he had a good meeting with Davutoglu, according to the pool reporter.

Erdogan, speaking through an interpreter, replied that they "must have spoken about everything so there is nothing left for us to talk about." In a joking tone of voice, Kerry said: "We need you to sign off on everything."

Turkey's relations with the United States have always been prickly. And Erdogan's populist rhetoric, sometimes at apparent odds with U.S. interests, is aimed partly at a domestic audience wary of Washington's influence.

But the two have strong common interests. Officials said Syria would top the agenda in Kerry's meetings with Erdogan and President Abdullah Gul, building on the discussions in Rome between 11 mostly European and Arab nations within the "Friends of Syria" group.

After the Rome meeting, Kerry said on Thursday the United States would for the first time give non-lethal aid to the rebels and more than double support to the civilian opposition, although Western powers stopped short of pledging arms.

Turkey has been one of Assad's fiercest critics, hosting a NATO Patriot missile defense system, including two U.S. batteries, to protect against a spillover of violence and leading calls for international intervention.

It has spent more than $600 million sheltering refugees from the conflict that began almost two years ago, housing some 180,000 in camps near the border and tens of thousands more who are staying with relatives or in private accommodation.

Washington has given $385 million in humanitarian aid for Syria but U.S. President Barack Obama has so far refused to give arms, arguing it is difficult to prevent them from falling into the hands of militants who could use them on Western targets.

Turkey, too, has been reluctant to provide weapons, fearing direct intervention could bring the conflict across its borders.

(Additional reporting by Gulsen Solaker; Writing by Nick Tattersall and Arshad Mohammed; Editing by Jason Webb)

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Wall Street edges up; Dow and S&P near records

NEW YORK (Reuters) - Stocks rose modestly on low volume on Thursday after strong economic data, but the proximity of record highs for the Dow and the S&P 500 gave investors a reason to keep gains in check.

The U.S. economy grew slightly in the fourth quarter, reversing an earlier estimate showing contraction, and a drop in new claims for unemployment benefits last week added to a string of data that suggests the economy improved early this year.

Still, an even higher revision to GDP data was expected, and the jobless claims extended a trend baked into stock prices.

The low volume shows a lack of conviction from new buyers, according to Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

Polcari the recent gains are the reaction to Monday's selloff, but there are not enough catalysts to take indexes much higher.

"Don't expect the market to hit new highs today," he said.

In afternoon trading, just over 3 billion shares had changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT.

The Dow was within striking distance of its record high after a year-to-date advance of almost 8 percent. The Dow Jones Transportation Average <.djt>, seen as a bet on future growth, is up 13 percent this year, and the 20-stock index hit a record intraday high earlier on Thursday.

The Dow Jones industrial average <.dji> rose 61.32 points or 0.44 percent to 14,136.69. The S&P 500 <.spx> gained 8.03 points or 0.53 percent to 1,524.02. The Nasdaq Composite <.ixic> added 17.14 points or 0.55 percent, to 3,179.67.

The Dow's record closing high, set on October 9, 2007, stands at 14,164.53, while the Dow's intraday record high, set on October 11, 2007, stands at 14,198.10.

The S&P 500 is up 0.25 percent this week and is on track to post its fourth straight month of gains.

Equity markets suffered steep losses earlier in the week on concerns about the impact of an Italian election on the European economy, but stocks bounced back on strong data and recent comments by Federal Reserve Chairman Ben Bernanke that showed continued support for the Fed's economic stimulus policy.

Gains in Limited Brands and Netflix , both up nearly 4 percent, led the way among consumer stocks. Shares of Limited Brands, the parent of retailers Victoria's Secret and Bath & Body Works, shot up 3.8 percent to $46.21. The stock of video streaming service Netflix jumped 3.8 percent to $191.24.

In contrast, shares of J.C. Penney , however, slid 14.9 percent to $18.01 after the department store operator reported a steep drop in sales on Wednesday. Groupon Inc also fell on weak revenue, with the daily deals company's stock off 19.2 percent at $4.83.

Cablevision shares tumbled 8.8 percent to $14.11 after the cable provider took a $100 million hit on costs related to Superstorm Sandy and posted deeper video customer losses than expected.

On a positive note, Mylan Inc shares were on track to close at their highest ever after the generic drugmaker posted a 25 percent rise in fourth-quarter profit and said it will buy a unit of India's Strides Arcolab Ltd. Mylan's stock gained 4.2 percent to $29.78.

Investors were keeping an eye on the debate in Washington over U.S. government budget cuts that will take effect starting Friday if lawmakers fail to reach agreement on spending and taxes. President Barack Obama and Republican congressional leaders arranged last-ditch talks to prevent the cuts, but expectations were low that any deal would emerge.

With 93 percent of the S&P 500 companies having reported results so far, 69.5 percent have beaten profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6.2 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

(The story corrects to show S&P up 0.25 pct this week, not 2 percent, in paragraph 11.)

(Reporting by Rodrigo Campos; Additional reporting by Ryan Vlastelica; Editing by Nick Zieminski and Jan Paschal)

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Syria war is everybody's problem


  • NEW: France considers sending Syrian rebels night-vision gear and body armor, a source says

  • Britain's foreign secretary says the UK will announce new aid soon

  • The statements after European Union loosens restrictions to allow nonlethal aid to rebels

  • The U.S. will also send non-lethal aid to rebels for first time, plus $60 million in administrative aid

Rome (CNN) -- The United States stepped further into Syria's civil war Thursday, promising rebel fighters food and medical supplies -- but not weapons -- for the first time in the two-year conflict that has claimed more than 60,000 lives and laid waste to large portions of the country.

Meanwhile, European nations began to explore ways to strengthen rebel fighters that stop short of arming them after a European Council decision allowing such aid to flow to Syria.

U.S. Secretary of State John Kerry said the aid would help fighters in the high-stakes effort to topple Syrian President Bashar al-Assad, a conflict that has already spawned an enormous humanitarian crisis as refugees flee the fighting.

The ongoing fighting also poses the persistent threat of widening into a destabilizing regional crisis, including concerns that Hezbollah, Iran or others could gain control in Damascus after al-Assad's government falls.

"The United States' decision to take further steps now is the result of the continued brutality of a superior armed force propped up by foreign fighters from Iran and Hezbollah, all of which threatens to destroy Syria," Kerry said after meeting opposition leaders in Rome.

Kerry didn't say how much that aid would be worth, but did announce that the United States would separately give $60 million to local groups working with the Syrian National Council to provide political administration and basic services in rebel-controlled areas of Syria.

READ: U.S. weighing nonlethal aid to Syrian opposition

That's on top of $50 million in similar aid the United States has previously pledged to the council, as well as $385 million in humanitarian assistance, Kerry said.

"This funding will allow the opposition to reach out and help the local councils to be able to rebuild in their liberated areas of Syria so that they can provide basic services to people who so often lack access today to medical care, to food, to sanitation," he said.

Islamist Influence

That aid is partly an effort to hem in radical Islamist groups vying for influence in Syria after the fall of al-Assad, a senior State Department official told CNN.

"If the Syrian opposition coalition can't touch, improve and heal the lives of Syrians in those places that have been freed, then extremists will step in and do it," the official said.

Sheikh Ahmed Moaz al-Khatib, president of the Syrian National Council, said concerns about Islamist influence had been overstated.

"We stand against every radical belief that aims to target Syria's diverse social and religious fabric," he said.

READ: Inside Syria: Exclusive look at pro-Assad Christian militia

U.S. officials hope the aid will help the coalition show what it can do and encourage al-Assad supporters to "peel away from him" and help end the fighting, the official said.

The opposition council will decide where the money goes, Kerry said.

But the United States will send technical advisers through its partners to the group's Cairo headquarters to make sure the aid is being used properly, the senior State Department official said.

Additional aid possible

The European Council carved out an exception in its sanctions against Syria on Thursday to allow for the transfer of nonlethal equipment and technical assistance for civilian protection only.

The council didn't specify what kind of equipment could be involved.

British Foreign Secretary William Hague said Friday on Twitter that his country would be pledging new aid because "we cannot stand still while the crisis worsens and thousands of lives are at stake."

A diplomatic official at the French Foreign Ministry told CNN that France is studying the possibility of supplying night-vision equipment or body armor.

"It is in the scope of the amendment," the official said.

In the United States, President Barack Obama is thinking about training rebels and equipping them with defensive gear such as night-vision goggles, body armor and military vehicles, according to sources familiar with the discussions.

The training would help rebels decide how to use their resources, strategize and maybe train a police force to take over after al-Assad's fall, one of the sources said.

READ: Syrian army in Homs is showing strains of war

Kerry did not announce that sort of aid Thursday, but said the United States and other countries backing the rebels would "continue to consult with each other on an urgent basis."

An official who briefed reporters said the opposition has raised a lot of needs in the Rome meetings and the administration will continue to "keep those under review."

"We will do this with vetted individuals, vetted units, so it has to be done carefully and appropriately," the official said.

Humanitarian crisis

The conflict began with demands for political reform after the Arab Spring movement that swept the Middle East and Africa, but descended into a brutal civil war when the al-Assad regime began a brutal crackdown on demonstrators.

At least 60,000 people have died since the fighting began in March 2011, the United Nations High Commissioner for Human Rights said in early January.

Another 940,000 had fled the country as of Tuesday, while more than one in 10 of Syria's 20 million residents have been forced to move elsewhere inside the country because of the fighting, the Office of the United Nations High Commissioner for Refugees said.

The situation is nearing crisis proportions, with the dramatic influx of refugees threatening to break the ability of host nations to provide for their needs, Assistant High Commissioner Erika Feller told the U.N. Human Rights Council on Tuesday

"The host states, including Jordan, Lebanon, Turkey, Iraq, Egypt and the North African countries, have been exemplary in their different ways, but we fear the pressure will start to overwhelm their capacities," she told the council, according to a text of her remarks posted on the United Nations website.

Al-Khatib said it's time for the fighting to stop.

"I ask Bashar al-Assad for once, just once, to behave as a human being," he said. "Enough massacres, enough killings. Enough of your bloodshed and enough torture. I urge you to make a rational decision once in your life and end the killings."

READ: Syrian war is everybody's problem

Jill Dougherty reported from Rome, and Michael Pearson reported and wrote from Atlanta. CNN's Nick Paton Walsh and Elise Labott also contributed to this report.

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