Pope's sudden resignation sends shockwaves through Church

VATICAN CITY (Reuters) - Pope Benedict said in a historic announcement he no longer had the mental and physical strength to run the Roman Catholic Church and would become the first pontiff in more than 700 years to resign, leaving his inner circle "incredulous".

Church officials tried to relay a climate of calm confidence in the running of a 2,000-year-old institution but the decision could lead to one of the most uncertain and unstable periods in centuries for a Church besieged by scandal and defections.

The Church has been rocked during Benedict's nearly eight-year papacy by child sexual abuse crises and Muslim anger after the pope compared Islam to violence. Jews were upset over rehabilitation of a Holocaust denier and there was scandal over the leaking of the pope's private papers by his personal butler.

In the announcement read to cardinals in Latin, the German-born pope, 85, said: "Well aware of the seriousness of this act, with full freedom I declare that I renounce the ministry of Bishop of Rome, Successor of St Peter ...

"As from 28 February 2013, at 20:00 hours (2 p.m. ET) the See of Rome, the See of St. Peter will be vacant and a conclave to elect the new Supreme Pontiff will have to be convoked by those whose competence it is."

The pope, known for his conservative doctrine, did not intend to influence the decision of the cardinals who will enter a secret conclave to elect a successor, Vatican spokesman Father Lombardi Federico said.

Benedict stepped up the Church's opposition to gay marriage, underscored the Church's resistance to a female priesthood and to embryonic stem cell research.

A new leader of the world's 1.2 billion Roman Catholics could be elected as soon as Palm Sunday, on March 24 and be ready to take over by Easter a week later, he said.

EX-POPE AND REIGNING POPE

Lombardi said the pope did not fear a possible "schism" but several popes in the past, including Benedict's predecessor John Paul, refrained from stepping down precisely because of the confusion and division that could be caused by having an "ex-pope" and a reigning pope living at the same time.

This could create a particularly difficult problem if the next pope is a progressive who influences such teachings as the ban on women priests and artificial birth control and its insistence on a celibate priesthood.

"This is disconcerting, he is leaving his flock," said Alessandra Mussolini, a parliamentarian who is granddaughter of Italy's wartime dictator.

"The pope is not any man. He is the vicar of Christ. He should stay on to the end, go ahead and bear his cross to the end. This is a huge sign of world destabilization that will weaken the Church."

The pope's elder brother Georg Ratzinger, a frail 89-year-old priest who shares the pope's passion for music, told reporters in the Bavarian town of Regensburg where he once conducted the cathedral choir that he had been "very surprised" to learn of his brother's resignation.

"He alone can evaluate his physical and emotional strength," said Ratzinger.

Lombardi said Benedict would first go to the papal summer residence south of Rome and then move into a cloistered convent inside the Vatican walls. It was not clear if Benedict would have a public life.

The last Pope to resign willingly was Celestine V in 1294 after reigning for only five months, his resignation was known as "the great refusal" and was condemned by the poet Dante in the "Divine Comedy". Gregory XII reluctantly abdicated in 1415 to end a dispute with a rival claimant to the papacy.

NO SPECIFIC ILLNESS, NO DEPRESSION

Lombardi said Benedict's decision showed "great courage". He ruled out any specific illness or depression and said the decision was made in the last few months "without outside pressure".

While the pope had slowed down recently - he started using a cane and a wheeled platform to take him up the long aisle in St Peter's Square - he had given no hint recently that he was mulling such a dramatic decision.

"I am really surprised," said Ricardo Rodriguez, a Portuguese tourist in St Peter's Square. "I hope the next pope can be better than this one doing the best for the world and Catholics," he said.

Elected in 2005 to succeed the enormously popular John Paul, Benedict never appeared to feel comfortable in a job he said he never wanted. He had wanted to retire to his native Germany to pursue his theological writings, something which he will now do from a convent inside the Vatican.

The resignation means that cardinals from around the world will begin arriving in Rome in March and after preliminary meetings, lock themselves in a secret conclave.

There has been growing pressure on the Church for the cardinals to shun European contenders and choose a pope from the developing world in order to better reflect parts of the globe where most Catholics live and where the Church is growing.

"MIND AND BODY"

The pope told the cardinals that in order to govern "...both strength of mind and body are necessary, strength which in the last few months, has deteriorated in me to the extent that I have had to recognize my incapacity to adequately fulfill the ministry entrusted to me."

He referred to "today's world, subject to so many rapid changes and shaken by questions of deep relevance for the life of faith".

Before he was elected pope, the former Cardinal Joseph Ratzinger, was known by such critical epithets as "God's rottweiler" because of his stern stand on theological issues.

After a few months, he showed his mild side but he never drew the kind of adulation that had marked the 27-year papacy of his predecessor John Paul.

The Archbishop of Canterbury, leader of the worldwide Anglican communion at odds with the Vatican over women priests, said he had learned of the pope's decision with a heavy heart but complete understanding.

German Chancellor Angela Merkel said the pope's decision must be respected if he feels he is too weak to carry out his duties. British Prime Minister David Cameron said: "He will be missed as a spiritual leader to millions."

Elected to the papacy on April 19, 2005 when he was 78 - 20 years older than John Paul was when he was elected - Benedict ruled over a slower-paced, more cerebral and less impulsive Vatican.

CHEERS AND SCANDAL

But while conservatives cheered him for trying to reaffirm traditional Catholic identity, his critics accused him of turning back the clock on reforms by nearly half a century and hurting dialogue with Muslims, Jews and other Christians.

Under the German's meek demeanor lay a steely intellect ready to dissect theological works for their dogmatic purity and debate fiercely against dissenters.

After appearing uncomfortable in the limelight at the start, he began feeling at home with his new job and showed that he intended to be pope in his way.

Despite great reverence for his charismatic, globe-trotting predecessor -- whom he put on the fast track to sainthood and whom he beatified in 2011 -- aides said he was determined not to change his quiet manner to imitate John Paul's style.

A quiet, professorial type who relaxed by playing the piano, he managed to show the world the gentle side of the man who was the Vatican's chief doctrinal enforcer for nearly a quarter of a century.

The first German pope for some 1,000 years and the second non-Italian in a row, he travelled regularly, making about four foreign trips a year, but never managed to draw the oceanic crowds of his predecessor.

The child abuse scandals hounded most of his papacy. He ordered an official inquiry into abuse in Ireland, which led to the resignation of several bishops.

Scandal from a source much closer to home hit in 2012 when the pontiff's butler, responsible for dressing him and bringing him meals, was found to be the source of leaked documents alleging corruption in the Vatican's business dealings, causing an international furor.

Benedict confronted his own country's past when he visited the Nazi death camp at Auschwitz.

Calling himself "a son of Germany", he prayed and asked why God was silent when 1.5 million victims, most of them Jews, died there during World War Two.

Ratzinger served in the Hitler Youth during World War Two when membership was compulsory. He was never a member of the Nazi party and his family opposed Adolf Hitler's regime.

(Philip Pullella; editing by Peter Millership, Ralph Boulton, Janet McBride)

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Gisele Bündchen Shows Off Post-Baby Body in Bikini

02/11/2013 at 11:30 AM EST

Whether showing off her baby bump – as she did only last November – or showing off her post-baby body, as she does here – Gisele Bündchen knows how to get heads to turn.

The Brazilian beauty introduced 9-week-old daughter Vivian Lake Brady in a Facebook posting last Friday, when she was also displaying her washboard stomach while vacationing poolside at her hotel in Hawaii.

With the photo of Vivian, Bündchen, who is on the holiday with husband Tom Brady and their two kids (Vivian's brother is Benjamin, 3), wrote, "Love is everything!!! Happy friday, much love to all."

As for her figure, the supermodel said to Vogue U.K. in 2011, "Like I tell my five sisters, who don't work at it very hard at all, whatever you put in, you get out. I'm not afraid of working hard at anything, whatever it is. I just always want to be the best that I can."

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What heals traumatized kids? Answers are lacking

CHICAGO (AP) — Shootings and other traumatic events involving children are not rare events, but there's a startling lack of scientific evidence on the best ways to help young survivors and witnesses heal, a government-funded analysis found.

School-based counseling treatments showed the most promise, but there's no hard proof that anxiety drugs or other medication work and far more research is needed to provide solid answers, say the authors who reviewed 25 studies. Their report was sponsored by the federal Agency for Healthcare Research and Quality.

According to research cited in the report, about two-thirds of U.S. children and teens younger than 18 will experience at least one traumatic event, including shootings and other violence, car crashes and weather disasters. That includes survivors and witnesses of trauma. Most will not suffer any long-term psychological problems, but about 13 percent will develop symptoms of post-traumatic stress, including anxiety, behavior difficulties and other problems related to the event.

The report's conclusions don't mean that no treatment works. It's just that no one knows which treatments are best, or if certain ones work better for some children but not others.

"Our findings serve as a call to action," the researchers wrote in their analysis, published online Monday by the journal Pediatrics.

"This is a very important topic, just in light of recent events," said lead author Valerie Forman-Hoffman, a researcher at the University of North Carolina-Chapel Hill.

She has two young children and said the results suggest that it's likely one of them will experience some kind of trauma before reaching adulthood. "As a parent I want to know what works best," the researcher said.

Besides the December massacre at Sandy Hook Elementary School in Connecticut, other recent tragedies involving young survivors or witnesses include the fatal shooting last month of a 15-year-old Chicago girl gunned down in front of a group of friends; Superstorm Sandy in October; and the 2011 Joplin, Mo., tornado, whose survivors include students whose high school was destroyed.

Some may do fine with no treatment; others will need some sort of counseling to help them cope.

Studying which treatments are most effective is difficult because so many things affect how a child or teen will fare emotionally after a traumatic event, said Dr. Denise Dowd, an emergency physician and research director at Children's Mercy Hospitals and Clinics in Kansas City, Mo., who wrote a Pediatrics editorial.

One of the most important factors is how the child's parents handle the aftermath, Dowd said.

"If the parent is freaking out" and has difficulty controlling emotions, kids will have a tougher time dealing with trauma. Traumatized kids need to feel like they're in a safe and stable environment, and if their parents have trouble coping, "it's going to be very difficult for the kid," she said.

The researchers analyzed 25 studies of treatments that included anti-anxiety and depression drugs, school-based counseling, and various types of psychotherapy. The strongest evidence favored school-based treatments involving cognitive behavior therapy, which helps patients find ways to cope with disturbing thoughts and emotions, sometimes including talking repeatedly about their trauma.

This treatment worked better than nothing, but more research is needed comparing it with alternatives, the report says.

"We really don't have a gold standard treatment right now," said William Copeland, a psychologist and researcher at Duke University Medical Center who was not involved in the report. A lot of doctors and therapists may be "patching together a little bit of this and a little bit of that, and that might not add up to the most effective treatment for any given child," he said.

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Online:

Pediatrics: http://www.pediatrics.org

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Analysis: Accounting risk clouds big U.S. business bets in China

NEW YORK/HONG KONG (Reuters) - Tales of shady business practices abound in China - fake revenues, phony invoices, sham factories - but until recently, the problem seemed confined mostly to Chinese companies.

No longer.

Concern is growing about risks to U.S.-based multinationals in a country where American audit regulators are locked out by the Chinese government and bribery and fraud are routine.

Questions about transparency and integrity weigh heavily on China, the world's second-largest economy, as it assumes greater economic leadership and responsibility. These doubts test its ability to adhere to international standards.

Stories of business deception - confirmed by corporate sleuths, former business executives, court filings and experts on accounting in China - are commonplace.

There was the Chinese company that billed itself as a high-tech television screen manufacturer, but had a factory that turned out to be a man selling fireworks from a shack.

Or there was the Chinese biodiesel plant that sat idle for months, then sprang to life one day - when investors showed up for a tour - only to fall silent again.

Last month, there was the scandal at a Chinese unit of Caterpillar Inc , the world's largest construction equipment manufacturer, based in Peoria, Illinois.

On January 18, Caterpillar disclosed "deliberate, multi-year, coordinated accounting misconduct" at the Siwei unit of ERA Mining Machinery. Caterpillar said it would write off most of the $654 million it had paid to acquire ERA only months earlier.

Caterpillar's Siwei stumble was not the first for a U.S. multinational in China, but the scope of the problem stood out.

Caterpillar has provided few details, but it has disclosed inventory discrepancies, inflated profits and improperly recorded costs and revenue at Siwei.

Caterpillar declined further comment.

Part of Caterpillar's problem may have been inadequate due diligence work prior to the ERA acquisition. Companies often try to keep fees down for this type of work, but in China that may be asking for trouble, says Paul Gillis, an accounting professor at Peking University in Beijing.

Acquiring firms typically do some of their own due diligence while also relying on deal advisers, legal experts and auditors. Due to the risks in China, efforts should be beefed up to uncover fraud, Gillis said. "When you start cutting corners on audits ... you're enabling those who commit fraud."

GOING FOR GROWTH

Of course, it is not as if the United States has not had its own share of egregious accounting frauds over the years. In 2001-2002, a series of major scandals involving the likes of Enron, WorldCom and Tyco shook the U.S. economy.

Legislation followed that strengthened oversight of auditing and accountability of companies' top officers. That has not stopped U.S. accounting fraud, but it has made it easier to identify and deter some of the most egregious behavior.

In China, where large U.S. corporations are making some very big bets, a new frontier of accounting risk is opening up.

Lured by an economy growing much more quickly than the United States, U.S. companies have directly invested $54 billion in Chinese businesses, factories and property, most of it in the past decade, according to U.S. Department of Commerce data.

Despite a cooling off of China's growth last year, demand from its massive consumer class is still lifting revenues at companies that range from coffee seller Starbucks Corp to casino operator Wynn Resorts .

The Caterpillar experience and the growing catalog of smaller instances of deception and abuse have some experts wondering if U.S. companies' Chinese results can be trusted.

Though China is shifting to a market economy, much business is still done on a handshake, China experts say. State secret laws hinder investigations by outsiders. Audits done in China of U.S. corporate units there cannot be inspected by U.S. regulators because the Chinese government refuses to allow them.

A former executive at a large, U.S.-based multinational active in China recalled the firm's auditor being fired for trying to correct improper accounting at a joint venture in China. Managers there were trying to book sales early, sometimes for unassembled products, to avoid a coming tax increase, said the executive, who asked not to be named. He said he had the auditor reinstated and the accounting changed.

Dealings with a Chinese joint venture did not end well for California-based RAE Systems Inc, which makes chemical detection monitors. It had to pay nearly $3 million to the U.S. government to settle complaints in 2010 that it did too little to stop bribery at a Chinese joint venture.

'RED FERRARI' TEST

Despite well-known risks in China, auditors there often are not inquisitive enough or alert to possible fraud, some experts say.

Auditors in China may pore tirelessly over documents and yet "fail to spot the red Ferrari parked on the doorstep and fail to ask who it belongs to, how it was paid for," said Peter Humphrey, founder of ChinaWhys, a Shanghai-based anti-fraud consultancy that has investigated white-collar crime and fraud at scores of multinational firms in China.

China experts said it is difficult to do business there without encountering demands for gifts or kickbacks.

Transparency International, a corruption watchdog, surveyed business executives who said Chinese firms in 2011 were second only to Russian companies in being most likely to pay bribes abroad.

But six U.S. companies, including technology group IBM and drugmaker Pfizer Inc , were charged by the U.S. Securities and Exchange Commission over the past two years for improper payments or gifts in China.

Retailer Wal-Mart Stores has said it is investigating allegations of bribery in China, among other countries, and cosmetics group Avon Products Inc is dealing with probes of possible bribery in China.

There have been plenty of other red flags. For example, U.S. regulators have deregistered dozens of Chinese companies listed on U.S. exchanges after fraud probes, and some major U.S. investors have been caught flat-footed.

Billionaire hedge fund manager John Paulson suffered big losses after a disastrous bet on Chinese forestry company Sino Forest. Sino Forest was rocked by allegations in 2011 that it falsified its timber assets and later filed for bankruptcy.

Chinese software company Longtop Financial Technologies was accused of seizing audit documents when its auditor, Shanghai-based Deloitte Touche Tohmatsu, tried to double-check cash amounts at the company's bank. Longtop admitted cash had been faked. It was deregistered by the SEC.

The U.S. Public Company Accounting Oversight Board, which is responsible for regulating auditors of U.S.-listed companies, has been trying to get access to China to inspect audits there. But China has resisted because of sovereignty concerns.

Being unable to inspect in China "continues to create a gaping hole in investor protection," James Doty, chairman of the Washington, D.C.-based PCAOB, said in a statement.

The PCAOB recently reached deals with France and Finland to inspect in those countries, adding to its growing list of cooperation agreements with 16 nations.

The SEC has hit a wall trying to get documents out of China to investigate fraud. In December the commission began legal proceedings against the Chinese affiliates of five of the world's biggest audit firms - Deloitte , Ernst & Young , KPMG BDO and PricewaterhouseCoopers - over their refusal to turn over audit papers for fear of violating state secrets laws.

Meanwhile, investment in China continues. Over the past five years, U.S. companies and investment groups have announced or completed about $25 billion of whole or partial acquisitions in China, according to Thomson Reuters data.

(Additional reporting by Lisa Baertlein in Los Angeles, Ernest Scheyder in New York, Clare Baldwin in Hong Kong; Editing by Kevin Drawbaugh and Dan Grebler)

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Netanyahu to discuss Iran, Syria, Palestinians with Obama

JERUSALEM (Reuters) - Iran's nuclear ambitions, the civil war in Syria and stalled Israeli-Palestinian peace efforts will top the agenda of U.S. President Barack Obama's visit to Israel, Prime Minister Benjamin Netanyahu said on Sunday.

"It is a very important visit that will emphasize the strong alliance between Israel and the United States," Netanyahu, who has had a testy relationship with Obama, told his cabinet.

The White House announced on Tuesday that Obama plans to visit Israel, the West Bank and Jordan this spring, raising prospects of a new U.S. push to restart Israeli-Palestinian peace efforts frozen for the past two years.

The White House gave no exact dates for the trip, Obama's first to Israel since taking office. Israel's Channel 10 television station cited unnamed sources in Washington last week saying the visit to Israel would start on March 20.

In public remarks at the cabinet session, Netanyahu put Iran at the top of his list of talking points with Obama and referred only in general terms to peace efforts with the Palestinians, stopping short of setting a revival of bilateral negotiations as a specific goal of the visit.

"The president and I spoke about this visit and agreed that we would discuss three main issues ... Iran's attempt to arm itself with nuclear weapons, the unstable situation in Syria ... and the efforts to advance the diplomatic process of peace between the Palestinians and us," Netanyahu said.

U.S.-hosted negotiations between Israel and the Palestinians collapsed in September 2010 in a dispute over Israeli settlement-building in the occupied West Bank, land captured in a 1967 war and which Palestinians seek as part of a future state that includes Gaza and East Jerusalem.

Obama and Netanyahu discussed the coming trip in a January 28 telephone call.

COALITION TALKS

The visit will take place only after Netanyahu puts together a new governing coalition following his narrower-than-expected victory in Israel's January 22 election.

Netanyahu, who heads the right-wing Likud party, has begun talks with prospective political partners and still has up to five weeks to complete the process.

Citing the dangers Israel faces from the "earthquake that is happening around us", a reference to Arab upheaval in the region and the prospect of a nuclear-armed Iran, Netanyahu said Obama's visit now was particularly important.

Obama's tensions with Netanyahu have been aggravated by the Israeli leader's demands for U.S. "red lines" on Iran's nuclear program - something the president has resisted, though he has said military options are on the table if sanctions and diplomacy fail.

Iranian President Mahmoud Ahmadinejad said on Sunday that Tehran would not negotiate about its nuclear program under pressure, and would talk to its adversaries only if they stopped "pointing the gun".

Iran dismisses Western suspicions that its nuclear program is aimed at building weapons. Israel is widely believed to have the Middle East's only nuclear arsenal.

Netanyahu has insisted he will stick to the red line laid down in September, when he told the United Nations that Iran should not have enough enriched uranium to make even a single warhead.

He gave a rough deadline of summer 2013, and Israeli political commentators have speculated that Obama had opted to visit Israel before that date to caution Netanyahu against any go-it-alone attack against Iran's nuclear facilities.

Obama visited Israel as a presidential candidate in 2008 but drew Republican criticism for not travelling there in his first term. His Republican predecessor, former President George W. Bush, also waited until his second term to go to Israel.

(Editing by Matthew Tostevin)

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Mariah Carey Throws a Christmas Party During the Blizzard

By Alison Schwartz

02/10/2013 at 11:30 AM EST

As a midwinter snowstorm left much of the Northeast hunkered down and bundled up indoors for the weekend, Mariah Carey didn't break out a deck of cards or a book or even a movie to ride out of the weather.

Instead, the singer turned a nasty blizzard into a good party – actually more like a belated Christmas celebration.

In a bash she documented on YouTube and Twitter, the famously festive star gathered some pals to mark what she described as "our re-Christmas day."

"It's truly quite fabulous and festive," she told her fans in the video, posted Saturday. "I wish you could all be here." (Seemingly missing from the activities: husband Nick Cannon and 21-month-old twins Monroe and Moroccan.)

With her rendition of "O Come All Ye Faithful/Hallelujah Chorus" playing in the background and a decorated (albeit mini) tree setting the mood, Carey once again brought the North Pole to New York City – this time, without the help of Santa.

And it was a white Christmas, indeed, for her guests, who noshed on candy canes and snowman-shaped cookies, as well as some heart-shaped ones, of course.

"You could say what you want to say," she added, "but we having fun."

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After early start, worst of flu season may be over

NEW YORK (AP) — The worst of the flu season appears to be over.

The number of states reporting intense or widespread illnesses dropped again last week, and in a few states there was very little flu going around, U.S. health officials said Friday.

The season started earlier than normal, first in the Southeast and then spreading. But now, by some measures, flu activity has been ebbing for at least four weeks in much of the country. Flu and pneumonia deaths also dropped the last two weeks, the Centers for Disease Control and Prevention reported.

"It's likely that the worst of the current flu season is over," CDC spokesman Tom Skinner said.

But flu is hard to predict, he and others stressed, and there have been spikes late in the season in the past.

For now, states like Georgia and New York — where doctor's offices were jammed a few weeks ago — are reporting low flu activity. The hot spots are now the West Coast and the Southwest.

Among the places that have seen a drop: Lehigh Valley Hospital-Cedar Crest in Allentown, Pa., which put up a tent outside its emergency room last month to help deal with the steady stream of patients. There were about 100 patients each day back then. Now it's down to 25 and the hospital may pack up its tent next week, said Terry Burger, director of infection control and prevention for the hospital.

"There's no question that we're seeing a decline," she said.

In early December, CDC officials announced flu season had arrived, a month earlier than usual. They were worried, saying it had been nine years since a winter flu season started like this one. That was 2003-04 — one of the deadliest seasons in the past 35 years, with more than 48,000 deaths.

Like this year, the major flu strain was one that tends to make people sicker, especially the elderly, who are most vulnerable to flu and its complications

But back then, that year's flu vaccine wasn't made to protect against that bug, and fewer people got flu shots. The vaccine is reformulated almost every year, and the CDC has said this year's vaccine is a good match to the types that are circulating. A preliminary CDC study showed it is about 60 percent effective, which is close to the average.

So far, the season has been labeled moderately severe.

Like others, Lehigh Valley's Burger was cautious about making predictions. "I'm not certain we're completely out of the woods," with more wintry weather ahead and people likely to be packed indoors where flu can spread around, she said.

The government does not keep a running tally of flu-related deaths in adults, but has received reports of 59 deaths in children. The most — nine — were in Texas, where flu activity was still high last week. Roughly 100 children die in an average flu season, the CDC says

On average, about 24,000 Americans die each flu season, according to the CDC.

According to the CDC report, the number of states with intense activity is down to 19, from 24 the previous week, and flu is widespread in 38 states, down from 42.

Flu is now minimal in Florida, Kentucky, Maine, Montana, New Hampshire and South Carolina.

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Online:

CDC: http://www.cdc.gov/flu/

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Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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Tunisian Islamists rally to show "power of street"

TUNIS (Reuters) - Thousands of Islamists marched in Tunis on Saturday in a show of strength, a day after the funeral of an assassinated secular politician drew the biggest crowds seen on the streets since Tunisia's uprising two years ago.

About 6,000 supporters of the ruling Ennahda movement rallied to back their leader Rachid al-Ghannouchi, who was the target of angry slogans raised by mourners at Friday's mass funeral of Chokri Belaid, a rights lawyer and opposition leader.

"The people want Ennahda again," the Islamists chanted, waving Tunisian and party flags as they marched towards the Interior Ministry on Habib Bourguiba Avenue in the city centre.

The demonstration was dwarfed by the tens of thousands who had turned out in Tunis and other cities to honor Belaid and to protest against the Islamist-led government the day before, shouting slogans that included "We want a new revolution".

Belaid's killing by an unidentified gunman on Wednesday, Tunisia's first such political assassination in decades, has shaken a nation still seeking stability after the overthrow of veteran strongman Zine al-Abidine Ben Ali in January 2011.

The family of the slain politician has accused Ennahda of responsibility for his killing. The party denies any hand in it.

"We are here to support legitimacy, but if you prefer the power of the street, look at the streets today, we have this power," Lotfi Zitoun, an Ennahda leader, said in a speech to the Islamist demonstrators in Tunis.

Tunisia's political transition has been more peaceful than those in other Arab nations such as Egypt, Libya and Syria, but tensions are running high between Islamists elected to power and liberals who fear the loss of hard-won liberties.

FREEDOMS THREATENED

"We have gained things - the freedom of expression, the freedom to meet, to form organizations, parties, to work in the open," said Radhi Nasraoui, a veteran human rights campaigner.

"The problem is that these freedoms are still threatened, and there are attempts (by Islamists) to touch the gains of women," she told Reuters.

After Belaid's death, Prime Minister Hamadi Jebali promised to form a non-partisan, technocratic cabinet to run the country until an election could take place, despite complaints from within his own Ennahda party and its two junior non-Islamist coalition partners that he had failed to consult them.

Jebali told France 24 television on Saturday that he would resign if political parties refused to support his proposal, which he said was intended to "save the country from chaos".

The state news agency TAP said the prime minister would unveil his new government next week.

Secular groups have accused the Islamist-led government of a lax response to attacks by ultra-orthodox Salafi Islamists on cinemas, theatres, bars and individuals in recent months.

Prolonged political uncertainty and street unrest could damage an economy that relies on tourism. Unemployment and other economic grievances fuelled the revolt against Ben Ali in 2011.

Tunisia's stock exchange has fallen 3.32 percent since Belaid's assassination.

France, the former colonial power, ordered its schools in Tunis to stay closed on Friday and Saturday, warning its nationals to stay clear of potential flashpoints in the capital.

Some of the Islamist demonstrators shouted "France, out", in response to remarks by French Interior Minister Manuel Valls which were rejected by Jebali, the prime minister, on Friday.

"We must support all those who fight to maintain values and remain aware of the dangers of despotism, of Islamism that threatened those values today through obscurantism," Valls had said on Europe 1 radio on Thursday in comments on Tunisia.

"There is an Islamic fascism which is on the rise in many places."

Tunisian Foreign Minister Rafik Abdessalem described Valls's remarks as "worrying and unfriendly".

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Katy Perry (Sort Of) Steals Spotlight at Bruce Springsteen Pre-Grammy Tribute

By Patrick Gomez and Marisa Laudadio

02/09/2013 at 11:45 AM EST

Katy Perry at the MusiCares Person of the Year gala

Lester Cohen/WireImage

It may have been a tribute to Bruce Springsteen but Katy Perry seemed to be the main attraction for some at Friday's MusiCares Person of the Year tribute at the Los Angeles Convention Center before Sunday's Grammy Awards.

The singer, who arrived at the charity event which raises money for musicians in need sans beau John Mayer, was interrupted by two young fans who asked to take a picture with her as she was talking to director J.J. Abrams. But that wasn't all: the pop star, who later hung out with Elton John, was approached by even more fans in the lobby at the show.

Other MusiCares attendees included Faith Hill and Tim McGraw, who arrived hand-in-hand before the dinner began. (McGraw and Hill later performed "Tougher Than the Rest" during the concert.)

As for the man of the hour, when the auction slowed The Boss offered up the ultimate prize: himself.

While composer David Foster urged the crowd to bid on a guitar signed live by many of the music stars in attendance, Springsteen grabbed the mic himself and threw in a few very personal extras to amp up the bidding.

First, he offered a one-hour guitar lesson and a ride in the sidecar of his Harley Davidson. Next, he added eight tickets to an E Street Band show of the bidder's choice, plus backstage passes and a backstage tour he promised to conduct personally.

"So dig in you one-percenters," he urged the audience with a smile. Springsteen raised the winning bid to a whopping $250,000 by making it a family affair, promising to also include "a lasagna made by my mother!"

Auction winner Tracey Powell, a "full-time mom," was so thrilled that she ran to Springsteen and kissed him on the lips – twice!

"I'm a Jersey girl and that's why I did it," Powell, who now lives in California, tells PEOPLE of her generous bid. "He's an amazing musician and I've followed him for years. Plus it was for an amazing cause that I'm so happy to support."

Jon Stewart hosted the evening's entertainment, a the Springsteen tribute concert that featured artists Elton John, Mumford & Sons, Sting, Neil Young (who sang "Born in the USA"), John Legend, Natalie Maines, Ben Harper, Emmylou Harris, Kenny Chesney and others, who performed some of Springsteen's classics.

John Legend performing at the MusiCares pre-Grammy tribute to Bruce Springsteen

For more behind-the-scenes photos of your favorite stars, follow @peoplemag on Instagram.

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