Yen on defensive on U.S. fiscal worry, helps Nikkei

TOKYO (Reuters) - Uncertainty over whether U.S. lawmakers will strike a deal by an end-of-year deadline to avert a severe fiscal retrenchment undermined the yen and bolstered Japanese shares on Tuesday in low volume, with many participants away on Christmas holiday.

The dollar rose to a 20-month high of 84.965 yen early on Tuesday in Asia, as Japanese markets caught up with global investors who had reacted overnight to incoming Japanese Prime Minister Shinzo Abe's weekend comments that raised the pressure on the Bank of Japan.

During a meeting on Tuesday with officials from Japan's major business lobby, Keidanren, Abe reiterated calls on the BOJ to conduct bold monetary easing to beat deflation by setting an inflation target of 2 percent.

The head of Abe's coalition partner said on Tuesday the coalition party and Abe had agreed to set a 2 percent inflation target and compile a large stimulus budget to help the economy return to growth and overcome deflation.

The yen has come under pressure as a result of expectations that the BOJ will be compelled to adopt more drastic monetary stimulus measures next year.

The dollar was expected to stay firm this week as investors repatriate dollars, and as the U.S. fiscal impasse is likely to continue to sap investor appetite for risky assets and raise the dollar's safe-haven appeal.

"The dollar is seen relatively well bid, with all focus on the fiscal cliff," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

"Negotiations may be carried over the weekend, but markets still expect a deal to be struck by December 31. It is unthinkable that the U.S. will risk driving its economic growth sharply lower by not agreeing to avoid it."

U.S. lawmakers and President Barack Obama were on Christmas holiday and talks were unlikely to resume until later in the week.

House of Representatives Speaker John Boehner failed to gain support for a tax plan at the end of last week, raising fears that the United States may face the "fiscal cliff" of some $600 billion in automatic spending cuts and tax increases set to start on January 1.

Japan's Nikkei stock average <.n225> resumed trading after a three-day weekend with a 1.1 percent gain, recapturing the key 10,000 mark it ceded on Friday after Boehner's failure sparked a broad market sell-off and the Tokyo benchmark closed down 1 percent. The Nikkei was likely to be supported as long as the yen stayed weak. <.t/>

"Ongoing optimism about the weak yen is lifting hopes that exporters' earnings will be better than expected," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

Analysts say a near-term correction may be possible as the index is now in "overbought" territory after gaining 16.2 percent over the last six weeks, hitting a nine-month high last Friday. Its 14-day relative strength index was at 72.34, above the 70 level that signals an overbought condition.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> nudged up 0.1 percent, driven higher by surging Shanghai shares, as most Asian bourses were shut for Christmas.

The Shanghai Composite Index <.ssec> soared over 2 percent to five-month highs as investors bought property stocks on mounting optimism about the sector. Taiwan shares <.twii> jumped 1.3 percent on gains in technology and financial shares.

Asset performance in 2012: http://link.reuters.com/muc46s

2012 commodities returns: http://link.reuters.com/faz36s

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U.S. HOLDS 2013 KEY

Goro Ohwada, president and CEO at Japan-based fund of hedge funds Aino Investment Corp, said investors were likely to focus on economic fundamentals and the United States for cues on investment direction in 2013.

"There is a feeling that an investment strategy based on economic fundamentals may finally work next year, with asset prices more closely reflecting fair value. The problem is, we don't know yet which asset is a better bet than others," Ohwada said, adding that oil and gold appeared to be near their highs.

Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory, said commodities and energy prices will likely move in tight ranges in 2013, with investors eyeing political events, including the U.S. fiscal cliff outlook, Italian parliamentary election set for February 24-25, and Germany's elections in September.

"The macroeconomic policies taken this year around the world to support growth are expected to result in a moderate recovery in 2013 to reduce an excessive downside risk to prices. This will likely keep commodities, gold and energy prices near their highs," Niimura said.

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Edmund Klamann and Daniel Magnowski)

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Philippine Law Forbids Abductions by Military

MANILA — The Philippines has enacted a law aimed at stopping the military and police officers from abducting people suspected of antigovernment activity, one of the ugly legacies of years of dictatorship.

The law, which President Benigno S. Aquino III signed late Friday, makes the “arrest, detention, abduction or any other form of deprivation of liberty committed by agents of the state” punishable by life in prison. Congress passed the legislation in October.

Human Rights Watch said the law was “a major milestone in ending this horrific human rights violation.” It was the first major human rights legislation signed by Mr. Aquino, who campaigned on promises of a better human rights climate. Many rights groups say his record since his election in 2010 has been mixed.

The kidnapping of political opponents by the security forces in the Philippines is a legacy of martial law, imposed in the 1970s by the dictator Ferdinand E. Marcos. During that period, political opponents were abducted, tortured and sometimes killed.

Such actions continue today on a smaller scale, despite the restoration of democracy in 1986, according to rights advocates. The organization Families of Victims of Involuntary Disappearance, based in Manila, says that since 1985 more than 2,200 people have disappeared at the hands of the security forces or others linked to the government.

“It is a way for the authorities to short-circuit our laws and Constitution,” said Carlos Isagani Zarate, a vice president of the National Union of Peoples’ Lawyers, which represents people who say they have been abducted by the military. “If they suspect someone is part of an underground organization but they don’t think the case will prosper in court, they abduct them.”

“In a lot of the cases, the victims are innocent civilians who are suspected of having links to underground groups,” Mr. Zarate said.

Under Mr. Aquino — the son of an opposition politician who was assassinated during Mr. Marcos’s rule and former President Corazon C. Aquino, who led the popular uprising that drove Mr. Marcos from power — there have been 17 documented cases of forced disappearances, according to Mary Aileen D. Bacalso, secretary general of the Asian Federation Against Involuntary Disappearances. That, however, is a steep decline from the more than 300 cases alleged during the administration of his predecessor, Gloria Macapagal Arroyo.

“The number of cases has decreased, but we cannot tolerate even one forced disappearance,” Ms. Bacalso said. “The cases continue despite the pronouncements of the administration in support of human rights.”

One notorious case from the previous administration that the Justice Department has yet to resolve is that of Jovito Palparan, a retired general who was given the nickname “The Butcher” during his more than two decades of military service. He was indicted in December 2011 in connection with the abduction in 2006 of two women who were university students and activists for leftist groups. According to a statement filed in court by the prosecution, the women were kept chained in a barracks and were periodically tortured and sexually assaulted by soldiers under General Palparan’s command.

“The girls narrated the circumstances of their abduction to our witness,” said Edre Olalia, a lawyer for the victims’ families. “He saw them being tortured in a restroom. It was a horrible account of physical and sexual abuse.”

Despite a nationwide manhunt, and the offer of a large reward for his capture, General Palparan is still at large.

“It is immensely difficult to prosecute these kinds of cases,” Mr. Olalia said. “I don’t think this new law alone will make prosecution any easier. There must be a strong demonstration to the security forces that they can no longer get away with this. So far, the administration has not done that.”

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Predicting who's at risk for violence isn't easy

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

___

Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

Read More..

Wall Street edges lower in thin trade

SOUTH WAZIRISTAN, Pakistan (Reuters) - This Christmas, pastor Nazir Alam will stoke up a fire, lay a fresh cloth on the altar and welcome parishioners as they arrive at his church in Waziristan, a Pakistani tribal area known as an al-Qaeda haven. "The lights are all up, and the choir boys are ready. The church is looking its best," said 60-year-old Alam, a former missionary who has celebrated his last ten Christmases there. "There's not much left to do but to pray and rejoice." Outsiders might see little cause for joy. ...

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India Ink: India Reacts to Tendulkar's Retirement from One-Day Cricket

The Indian batsman Sachin Tendulkar said Sunday that he was retiring from One Day International cricket.

“I have decided to retire from the One Day format of the game. I feel blessed to have fulfilled the dream of being part of a World Cup winning Indian team,” Tendulkar said in a statement released by the Board of Control for Cricket in India.

With the decision, Tendulkar, who enjoys Godlike stature for many in India and abroad, drew the curtain on a 23-year career in the format, called O.D.I., having played 463 O.D.I.s, scored 18,426 runs and made 49 centuries. He holds the record for being the highest run scorer in this format of the game and has also made the largest number of centuries, played the greatest number of games and, along with the former Indian batsman Rahul Dravid, holds the record for highest partnership (331 runs against New Zealand).

Understandably, his decision has left some very distraught Indian cricket fans, who expressed their grief and almost a sense of bereavement on Twitter and other social media platforms.

“Tendulkar retires from ODI. End of an era. For the past 20 years, we were fortunate to watch & enjoy some amazing cricket, thanks to him,” an orthodontist based in Malaysia, who uses the Twitter handle Sabarinathan, tweeted.

“Finally world Ended in 2012,” a reader named Ashish, from Pune, commented on a Times of India story about the retirement.

B.C.C.I. officials, however, seemed less than perturbed.

“Tendulkar’s decision is not a shocker for B.C.C.I. He was waiting for the right time,” Ratnakar Shetty, the chief administrative officer, told reporters. “What he has expressed is his concern that India has to prepare for the next World Cup. From that point of view, he felt that it was time that he retired.”

“A person of his caliber knows what to do. He has always taken the right decision at the right time. He will continue to do that in future as well,” Sanjay Jagdale, the board’s general secretary, told reporters.

Reaction from the cricketing community in India was mixed.

“Sachin tendulkar a great batsman.great human being.a great friend.great man to look up 2.proud indian.Real son of india.I salute u nd love u,” the cricketer Harbhajan Singh tweeted.

“He has done Indian cricket a favor…. He has played a great deal of cricket and no one can compare to him but all I can say is: better late than never,” the former Indian cricketer Kirti Azad said in an interview with the news channel ABP.

Some fans, too, lauded Tendular’s decision as the right move at the right time.

“A late, but correct decision by Tendulkar. He will be missed but time had come,” Imran Asghar, who according to his Twitter profile is a British Pakistani, tweeted.

Tendulkar, it seems, has a special connection with India’s archrival, Pakistan. He made his debut in O.D.I.s, nearly two decades ago, against Pakistan on Dec. 18, 1989. His last O.D.I. was also against Pakistan, in Dhaka, Bangladesh, during the Asia Cup last March, where he scored 52 runs. India won the match.

Coincidentally his announcement came on a day when the Indian team for the two T20s and three O.D.I. matches with Pakistan, which will start next week, was announced.

“Sachin’s announcement has come as a big surprise,” Krishnamachari Srikkanth, former chairman of the selection committee for the Indian team, told news channel CNN-IBN. “I thought he would play in the one-day series against Pakistan.”

Despite a string of poor performances recently, Tendulkar bid adieu to his home audience in style. His last O.D.I. played in India was the World Cup final match against Sri Lanka in his hometown, Mumbai. India won the match and World Cup 2011, following a nearly three-decade wait after its 1983 World Cup victory.

“I would like to wish the team all the very best for the future. I am eternally grateful to all my well wishers for their unconditional support and love over the years,” he said in his statement.

However, he has announced no plans to retire from Test matches, the longer five-day format of the game.

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News summary: Nintendo’s TVii replaces the remote

TVii LAUNCH: Nintendo if flipping on its TVii service Thursday, a month after sales started for its Wii U game console. The service turns the GamePad controller into a TV remote control, channel guide and Web video surfer.

SALES HOPES: Nintendo hopes the free service boosts sales of the console after recording 425,000 sales in the first week since its Nov. 18 launch.

HEAD START: It’s the first time a game console maker has put live TV controls into a device, but analyst Michael Pachter says competitors will copy the function soon.

Gaming News Headlines – Yahoo! News

Title Post: News summary: Nintendo’s TVii replaces the remote
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Rolling Stones' Ronnie Wood Marries in London: Report

12/23/2012 at 09:45 AM EST

Sally Humphreys and Ronnie Wood on their wedding day

Splash News Online

Talk about a rockin' wedding!

Rolling Stones guitarist Ronnie Wood tied the knot with his theater producer fiancée Sally Humphreys in a private ceremony Friday in London, according to a report in the U.K.'s Sun, which also published photos of the bride and groom on their happy day.

Wood, 65, and Humphreys, 34, announced their engagement in October, just six months after they began dating.

According to the reports out of the U.K., the rocker wore pink socks and a navy suit, and the bride wore her mother's wedding dress.

The low-key ceremony took place in the eighth floor penthouse in London's Dorchester Hotel.

Guests at the wedding included Rod Stewart and wife Penny Lancaster and Paul McCartney and his wife Nancy Shevell.

This is the third marriage for Wood, who just played shows with the Stones in the United States as part of their 50 and Counting tour.

Read More..

Predicting who's at risk for violence isn't easy

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

___

Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

Read More..

Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.

A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.

Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.

Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.

"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.

"The markets still basically believe that something will be done," he said.

If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.

For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.

Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.

IT COULD GET A LITTLE CRAZY

Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.

If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.

"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.

"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."

Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.

Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.

"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.

"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."

Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.

The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.

Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.

U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.

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

(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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In Islamist Bastion, Support Ebbs for Egypt’s Brotherhood

Tara Todras-Whitehill for The New York Times

A school with old posters of Mohamed Morsi, now the president, in Al Talbeya, a neighborhood in Giza, where disaffection with the government is growing. More Photos »

AL TALBEYA, Egypt — Mohamed Salamah used to vote with the Muslim Brotherhood. But in Saturday’s referendum on the Islamist-backed constitution, Mr. Salamah says he is voting against it, mainly because he no longer trusts the movement.

“They aren’t even doing anything very Islamic,” said Mr. Salamah, a 24-year-old waiter in a cafe in Al Talbeya, a working-class neighborhood in Giza across the Nile from Cairo that was an Islamist stronghold in previous votes. “They are just doing things that aren’t very competent.”

Throughout the neighborhood, both loyal supporters and critics of the Brotherhood described a deep erosion in the group’s street-level support. That was evident, they said, even before the low turnout and narrow margin in last weekend’s first round of voting on what residents here call “the Brotherhood constitution.”

The results so far appear to have surprised leaders of the Brotherhood and their opposition. And even if the draft constitution is approved, as expected, on Saturday in the second half of the vote, the new questions about the charter’s popularity and the Brotherhood’s mandate could prolong Egypt’s political turbulence and, as a result, defer badly needed economic reforms as well.

Residents here and around Cairo say the damage to the Brotherhood’s popularity is unrelated to its religious ideology. It reflects a consistent trio of complaints: confusing economic policies of the Brotherhood-led government, a near-monopoly on power and civilian supporters’ use of force against opponents in a street battle two weeks ago. Even so, many say the Brotherhood remains the most potent political force, in part because of the incoherence of the opposition, which has often focused on accusing the Brotherhood of imposing religious rule.

But for now economists say the battle for power is jeopardizing progress on the bread-and-butter issues that are paramount across the ideological spectrum. “What the economy needs are decisions that are politically courageous and credible, and no government can do that now,” said Ragui Assaad, an economist at the University of Minnesota with an office in Cairo.

A critical loan of more than $4 billion from the International Monetary Fund, expected to be signed this month, has been delayed until the political situation settles. The Egyptian pound is slipping against the dollar. And the most obvious step to improve the growth and fairness of the economy requires a government with credibility and political skill. Attempts at overhauling Egypt’s vast subsidies to energy prices have in the past set off riots.

“What we have now is a government that lacks legitimacy but also economic competence,” Mr. Assaad said. “I don’t see anything better coming out of this government.”

Brotherhood leaders have acknowledged the emergence of hostility against them. Mobs attacked more than three dozen Brotherhood offices, including its headquarters, in the prelude to the first round of voting on the constitution. “I am telling everyone, do not hate the Muslim Brotherhood so much that you forget Egypt’s best interest,” said Mohamed Badie, the group’s spiritual leader. “You can be angry at us and hate us as much as you want; we cannot control affection. But I say to you, be rational. Protect Egypt. Its unity cannot survive what is happening.”

For many in Al Talbeya, the defining moment of the prelude to the referendum was the night of Dec. 5, when the Brotherhood called its supporters to defend President Mohamed Morsi against protesters outside his office. Ten died in the fight. And although the Brotherhood has claimed all those killed were its members, seemingly everyone in Al Talbeya still blamed the group for the violence.

“People don’t like the Muslim Brotherhood as much as they used to, because they saw how they tried to control everything and how they beat people up,” said Emad Mohamed Yosri, 37, a tailor who still counts himself a supporter of the group.

Omar Ateh, 30, a shopkeeper and Islamist, said he was trying to defend the Brotherhood. “We are trying to make people understand, they are not from another planet,” he said, “they just like politics more than we do.”

But Ahmed Ragab, 14, interjected, “If they are such good people, why are they beating people up in the streets?”

Mayy El Sheikh contributed reporting from Cairo.

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