Chemical Weapons Showdown With Syria Led to Rare Accord


Muzaffar Salman/Reuters


The violence in Syria continued on Monday. Above, Syrians went to the aid of a man who was wounded when a missile hit the al-Mashhad district of Aleppo.







WASHINGTON — In the last days of November, Israel’s top military commanders called the Pentagon to discuss troubling intelligence that was showing up on satellite imagery: Syrian troops appeared to be mixing chemicals at two storage sites, probably the deadly nerve gas sarin, and filling dozens of 500-pounds bombs that could be loaded on airplanes.




Within hours President Obama was notified, and the alarm grew over the weekend, as the munitions were loaded onto vehicles near Syrian air bases. In briefings, administration officials were told that if Syria’s increasingly desperate president, Bashar al-Assad, ordered the weapons to be used, they could be airborne in less than two hours — too fast for the United States to act, in all likelihood.


What followed next, officials said, was a remarkable show of international cooperation over a civil war in which the United States, Arab states, Russia and China have almost never agreed on a common course of action.


The combination of a public warning by Mr. Obama and more sharply worded private messages sent to the Syrian leader and his military commanders through Russia and others, including Iraq, Turkey and possibly Jordan, stopped the chemical mixing and the bomb preparation. A week later Defense Secretary Leon E. Panetta said the worst fears were over — for the time being.


But concern remains that Mr. Assad could now use the weapons produced that week at any moment. American and European officials say that while a crisis was averted in that week from late November to early December, they are by no means resting easy.


“I think the Russians understood this is the one thing that could get us to intervene in the war,” one senior defense official said last week. “What Assad understood, and whether that understanding changes if he gets cornered in the next few months, that’s anyone’s guess.”


While chemical weapons are technically considered a “weapon of mass destruction” — along with biological and nuclear weapons — in fact they are hard to use and hard to deliver. Whether an attack is effective can depend on the winds and the terrain. Sometimes attacks are hard to detect, even after the fact. Syrian forces could employ them in a village or a neighborhood, some officials say, and it would take time for the outside world to know.


But the scare a month ago has renewed debate about whether the West should help the Syrian opposition destroy Mr. Assad’s air force, which he would need to deliver those 500-pound bombs.


The chemical munitions are still in storage areas that are near or on Syrian air bases, ready for deployment on short notice, officials said.


The Obama administration and other governments have said little in public about the chemical weapons movements, in part because of concern about compromising sources of intelligence about the activities of Mr. Assad’s forces. This account is based on interviews with more than half a dozen military, intelligence and diplomatic officials, all of whom spoke on the condition of anonymity because of the intelligence matters involved.


The head of Germany’s foreign intelligence service, the BND, warned in a confidential assessment last month that the weapons could now be deployed four to six hours after orders were issued, and that Mr. Assad had a special adviser at his side who oversaw control of the weapons, the German newsmagazine Der Spiegel reported. Some American and other allied officials, however, said in interviews that the sarin-laden bombs could be loaded on planes and airborne in less than two hours.


“Let’s just say right now, it would be a relatively easy thing to load this quickly onto aircraft,” said one Western diplomat.


How the United States and Israel, along with Arab states, would respond remains a mystery. American and allied officials have talked vaguely of having developed “contingency plans” in case they decided to intervene in an effort to neutralize the chemical weapons, a task that the Pentagon estimates would require upward of 75,000 troops. But there have been no evident signs of preparations for any such effort.


The United States military has quietly sent a task force of more than 150 planners and other specialists to Jordan to help the armed forces there, among other things, prepare for the possibility that Syria will lose control of its chemical weapons.


Israel’s prime minister, Benjamin Netanyahu, was reported to have traveled to Jordan in recent weeks, and the Israeli news media have said the topic of discussion was how to deal with Syrian weapons if it appeared that they could be transferred to Lebanon, where Hezbollah could lob them over the border to Israel. But the plans, to the extent they exist, remain secret.


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Intel bets big on thin PCs and phones at Las Vegas show






LAS VEGAS (Reuters) – Top chipmaker Intel Corp on Monday announced shipments of a new low-power chip and showed off next-generation ultra thin laptops and convertible tablets in its latest bid to prove that the struggling PC industry still has a bright future.


At the 2013 Consumer Electronics Show in Las Vegas , Intel said new energy-efficient processors for tablets and laptops are available now, and it outlined features like voice recognition and drastically improved battery life on future PCs.






“Absolutely all-day battery life where you just don’t have to bring your power brick at all anymore,” Kirk Skaugen, corporate vice president and general manager of Intel’s PC Client Group, said of laptops built with the company’s upcoming Haswell processor.


While macroeconomic troubles have weighed on sales for several quarters, the growing popularity of tablets and smartphones is seen as an existential threat to the PC industry.


Anxious to breathe new life into PCs and prove a recent slump in sales is not permanent, Intel and PC manufactures in Las Vegas this week will display a range of ultra thin laptops, dubbed Ultrabooks, and hybrid devices that convert into tablets.


On a stage flanked by dozens of tablets and laptops with rotatable and detachable screens, Skaugen said Intel’s newly available chip based on its current Ivy Bridge architecture sips just 7 watts of energy, more efficient than a previously planned 10 watts of power.


NO-EXCUSES PHONE


The Santa Clara, California-based company has long been king of the PC chip market, particularly through its historic “Wintel” alliance with Microsoft Corp, which led to breathtakingly high profit margins and an 80 percent market share.


But it has struggled to adapt its powerful PC processors for battery-powered smartphones and tablets, a fast-growing market led by Qualcomm Inc, Samsung Electronics Co Ltd, ARM Holdings Plc and others.


Mike Bell, who co-heads Intel’s mobile and wireless business, introduced a new processor platform, code named Lexington, targeted at low-priced smartphones in emerging markets like Latin America and Asia.


“It’s designed to be a no-excuses multimedia phone,” he said.


Acer, Safaricom and Lava have already agreed to use the new chips in future phones, Bell said.


A handful of manufacturers and telecom carriers in Europe and Asia have already launched smartphones using Intel’s Medfield processors this year. Google’s Motorola Mobility in September launched the Razr i in Europe and Latin America as the first handset of a multi-device agreement between the two groups.


But Intel is fighting an uphill battle in a market where chips made using technology from ARM Holdings have become ubiquitous. Intel also has yet to release a chip for 4G telephone networks, keeping it out of the running for major smartphone design wins in the United States.


Sales of smartphone processors soared 58 percent in the third quarter, but Intel had just 0.2 percent of that market, according to a recent report from Strategy Analytics.


By comparison, worldwide PC shipments fell 8.6 percent in the third quarter, according to IDC.


Intel said 3D cameras would be integrated in future Ultrabooks to allow consumers to use gestures and facial recognition to control their devices. Upcoming Ultrabooks will also include voice interaction, Skaugen said.


“We’re basically going to give the PC the same human senses we’ve all had,” he said.


Intel and other tech companies are increasingly looking for ways to let PCs and other devices use cameras, GPS chips, microphones and other kinds of sensors to predict their users’ needs.


“It’s this combination of computer devices doing things before you ask them to do it, in that they’re smart enough to know based on their sensors,” said Patrick Moorhead, principal analyst at Moor Insights & Strategy.


(Reporting By Noel Randewich; Editing by Dan Grebler)


Tech News Headlines – Yahoo! News





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Justin Bartha Is Dating Trainer Lia Smith















01/07/2013 at 07:00 PM EST







Lia and Justin in Hawaii New Years Day


Pacific Coast News


Justin Bartha's "mystery woman" is in fact his girlfriend, trainer Lia Smith, a source reveals to PEOPLE.

The pair recently enjoyed a cozy trip to Smith's native Hawaii and were snapped basking in the sun on Maui on New Year's Day, which got people buzzing about her identity.

"They were very cute with each other," says an eyewitness. "They had their arms around each other and were kissing."

The couple also spent time with Smith's parents on Oahu. Bartha, who currently stars on The New Normal, was previously linked to Scarlett Johansson and dated Ashley Olsen for two years before breaking up in 2011.

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Report: Death rates from cancer still inching down


WASHINGTON (AP) — Death rates from cancer are continuing to inch down, researchers reported Monday.


Now the question is how to hold onto those gains, and do even better, even as the population gets older and fatter, both risks for developing cancer.


"There has been clear progress," said Dr. Otis Brawley of the American Cancer Society, which compiled the annual cancer report with government and cancer advocacy groups.


But bad diets, lack of physical activity and obesity together wield "incredible forces against this decline in mortality," Brawley said. He warned that over the next decade, that trio could surpass tobacco as the leading cause of cancer in the U.S.


Overall, deaths from cancer began slowly dropping in the 1990s, and Monday's report shows the trend holding. Among men, cancer death rates dropped by 1.8 percent a year between 2000 and 2009, and by 1.4 percent a year among women. The drops are thanks mostly to gains against some of the leading types — lung, colorectal, breast and prostate cancers — because of treatment advances and better screening.


The news isn't all good. Deaths still are rising for certain cancer types including liver, pancreatic and, among men, melanoma, the most serious kind of skin cancer.


Preventing cancer is better than treating it, but when it comes to new cases of cancer, the picture is more complicated.


Cancer incidence is dropping slightly among men, by just over half a percent a year, said the report published by the Journal of the National Cancer Institute. Prostate, lung and colorectal cancers all saw declines.


But for women, earlier drops have leveled off, the report found. That may be due in part to breast cancer. There were decreases in new breast cancer cases about a decade ago, as many women quit using hormone therapy after menopause. Since then, overall breast cancer incidence has plateaued, and rates have increased among black women.


Another problem area: Oral and anal cancers caused by HPV, the sexually transmitted human papillomavirus, are on the rise among both genders. HPV is better known for causing cervical cancer, and a protective vaccine is available. Government figures show just 32 percent of teen girls have received all three doses, fewer than in Canada, Britain and Australia. The vaccine was recommended for U.S. boys about a year ago.


Among children, overall cancer death rates are dropping by 1.8 percent a year, but incidence is continuing to increase by just over half a percent a year. Brawley said it's not clear why.


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Asian shares drift, Basel ruling supports banks

SINGAPORE (Reuters) - Asian stocks drifted on Monday as investors booked profits from a New Year rally that had pushed markets to multi-month highs, but financial stocks gained after global regulators decided to relax draft plans for tough new bank liquidity rules.


Commodity prices mostly held firm, supported by data showing the U.S. economy continuing on a path of slow but steady recovery that propelled Wall Street stocks to a five-year high.


The dollar sat close to a two-and-a-half-year high against the yen as investors adjusted to the possibility of more monetary stimulus in 2013 from the Bank of Japan and less from the U.S. Federal Reserve.


MSCI's broadest index of Asia Pacific shares outside Japan <.miapj0000pus>, which had reached its highest level since August 2011 on Thursday, was flat, while Tokyo's Nikkei share average <.n225> retreated after touching a 23-month high in early trade to stand down 0.2 percent. <.t/>


"Investors have been carefully waiting for the timing to take profits as they believed the market can't keep rising," said Yutaka Miura, a senior technical analyst at Mizuho Securities.


CASH BUFFERS


The MSCI benchmark's financial sector sub-index <.miapjfn00pus> gained 0.5 percent after the Basel Committee of banking supervisors agreed on Sunday to give banks four more years and greater flexibility to build up cash buffers so they can use some of their reserves to help struggling economies.


HSBC Holdings Hong Kong shares rose 1.3 percent, while Australia and New Zealand Banking Corp gained 0.6 percent. <.hk><.ax/>


Shares in Japanese exporters were supported by a weaker yen, which traded around 88.05 to the dollar, a little firmer on the day, after the U.S. currency rose as far as 88.40 yen, its highest in nearly two-and-a-half years, on Friday.


The dollar posted a gain of around 2.7 percent against the yen last week, its biggest weekly rise in more than a year. Its gains had accelerated after minutes from the Federal Reserve's December meeting showed some policymakers has mulled ending the Fed's bond-buying program as early as this year.


By contrast, many investors are now betting that Japan's new government, led by Prime Minister Shinzo Abe, will push to weaken the yen and drive through aggressive fiscal stimulus, and pressure the Bank of Japan to do the same on the monetary side.


The dollar ticked up slightly against the euro, which traded around $1.3060.


The U.S. benchmark S&P 500 index <.spx> closed at its highest level since December 2007 on Friday after data showed a steady pace of jobs growth and brisk expansion of the services sector in the world's biggest economy.


That offered support to growth-sensitive commodities, with copper edging up 0.2 percent to around $8,100 a tonne, while Brent crude oil gained 0.2 percent to around $111.50 a barrel and U.S. crude stood flat just above $93.


(Editing by Eric Meijer)



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Hundreds in Peru Balk at Relocating From Copper Mine Site




Relocation in the Andes:
Perched in the Peruvian Andes is a new town built by a Chinese mining company in which 5,000 people will be relocated.







MOROCOCHA, Peru — High among barren peaks, a Chinese mining company has built the Levittown of the Andes. Long rows of identical attached houses face each other across wide, straight streets, one-third of them still waiting for people to walk through their varnished pine doors and make homes under their slanted red roofs.




The company, Chinalco, which is owned by the Chinese government, built the new town to relocate more than 5,000 people living in nearby Morococha, a century-old mining village. The company plans to demolish Morococha to make way for an enormous open-pit copper mine.


Chinalco has moved close to 700 families since September. But several hundred residents have resisted, staging marches and other protests even as their neighbors load their belongings into moving trucks for the trip to the new town, which has not been named yet; it may ultimately be called Nueva Morococha.


The two towns are only six miles apart — a 15-minute drive — and are at similarly lofty altitudes. Morococha is at about 14,760 feet, and the new settlement is just 650 feet lower, at a spot now called Carhuacoto. But for many, the move is like traveling between two worlds.


Morococha is old, decaying, squalid: a broken window into raw poverty and neglect. It looks as if it had been swept carelessly against the side of an ugly yellow mountain that is full of copper ore, with no regard for where cracked houses and crooked streets came to rest.


Most of the houses have mud walls and leaky, rusting corrugated metal roofs. Residents get water from taps in the streets; in the dry season the taps work only a few hours a day. Many of the townspeople use crude communal latrines.


The new town is all straight lines, fresh paint and smooth paving. There are new schools, churches, a clinic and playgrounds. Each house has running water, supplied by a just-built purification plant. There are showers (though no water heaters), and there are toilets that flush into a new sewage treatment system. Trash is carted away to a new sanitary landfill.


During the day, when most residents are away at work, it is strangely silent and sterile, with the artificial feel of a movie set. Crews of workers in safety orange coveralls and hard hats sweep the otherwise empty streets.


“You can get lost,” said Virginia Vallodolid, 45, one of the street sweepers, who moved in several weeks ago and earns $3 a day from Chinalco. It is the first steady job she has ever had. She has a house with a toilet for the first time in her life. She turns on the tap and the water comes out clear, not yellow, as she said it often did in Morococha.


“I don’t miss anything,” Ms. Vallodolid said, reflecting on the 15 years she lived in Morococha. “I lived uncomfortably there.”


But back in Morococha, the resisters, many of them property owners, are holding out, refusing to move or sell their homes.


In an act of defiance, Marcial Salomé, the mayor of Morococha, has gone on a minor building spree, putting up better public toilets and places for people to wash their clothes.


Mr. Salomé said that he and other residents are not opposed to moving the town, but that they want Chinalco to do more in exchange. They want the company to guarantee jobs in the new mine for residents. And they want the company to pay the people of Morococha $300 million for destroying their town.


Mr. Salomé also voiced a key complaint of many who have moved, who say the new houses, with as little as 430 square feet of space, are simply too small. Mr. Salomé pointed to another foreign mining company, Xstrata Copper, which is planning a similar relocation of a town in Peru’s south and has promised to build houses several times as large.


“We want what’s fair,” Mr. Salomé said.


Sonia Ancieta is one of the staunchest holdouts. Her great-grandparents moved to Morococha perhaps 100 years ago. The cemetery is full of her ancestors. She has a large house that she measures at more than 2,000 square feet, including several rental rooms and a store on what used to be a busy street.


Andrea Zarate contributed reporting.



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Alleged Ohio rapists may not get fair trial: defendant’s lawyer






(Reuters) – Two Ohio high-school football players accused of raping a teenage girl may not get a fair trial after a photo and video allegedly associated with the case were posted on the Internet by the computer hacking group Anonymous, a lawyer for one of the accused said on Friday.


Ma’lik Richmond and Trenton Mays, both 16 and members of the Steubenville High School football team, are charged with raping a 16-year-old fellow student last August, according to statements from their attorneys to local and national media.






Their juvenile court trial is scheduled for February in Steubenville, a city of 19,000 about 40 miles west of Pittsburgh.


The case shot to national prominence this week when Anonymous activists made public a picture allegedly of the rape victim, being carried by her wrists and ankles by two young men, and of a video that showed several other young men joking about an alleged assault.


Richmond’s lawyer, Walter Madison, said on CNN that his client was one of the young men in the photograph, but does not appear in the video.


But the picture “is out of context,” Madison said. “That young lady is not unconscious,” as has been widely reported.


“A right to a fair trial for these young men has been hijacked,” Madison said, adding that social media episodes such as this have become a major threat to a criminal defendant’s right to a fair trial.


“It’s very, very serious and fairness is essential to getting the right decision here,” he said.


Mays’ attorney Adam Nemann could not immediately be reached for comment on Friday. In an interview on Thursday with Columbus, Ohio, broadcaster WBNS-10TV, Nemann raised concerns about the effect the Anonymous postings could have on potential witnesses in the case.


“This media has become so astronomically ingrained on the Internet and within that society, I am concerned witnesses might not want to come forward at this point. I would be surprised now, if there weren’t witnesses now who might want to start taking the Fifth Amendment,” Nemann told the station.


The Fifth Amendment to the U.S. Constitution offers protection against self-incrimination in criminal proceedings.


The case has also been a challenge for local officials because of conflicts of interest. Both the local prosecutor and police have close ties to the school that the defendants attend.


As a result, the case is being investigated and prosecuted by Ohio Attorney General Mike DeWine’s office.


Interviewed on CNN on Friday, DeWine said it was not unusual for his office to prosecute or investigate cases in small towns where close ties within the community caused conflicts of interest to arise.


He also voiced concern about how social media may affect the case.


“This case needs to be tried not in the media, not in social media,” DeWine said.


He said Anonymous’ attempt to shame the alleged attackers had actually harmed the victim.


Not only is the victim hurt by the initial crime, but “every time something goes up on the Internet, the victim is victimized again,” DeWine said.


(Reporting by Dan Burns and Peter Rudegeair; Editing by Bernadette Baum)


Internet News Headlines – Yahoo! News





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Jordana Brewster Is 'Enamored' with the Idea of Having Twins















01/06/2013 at 05:00 PM EST



Jordana Brewster has babies on the brain – yes, you read that right: plural.

The Dallas star, 32, who has been married to movie producer Andrew Form since 2007, tells Latina she "definitely" wants two kids and is "enamored" by the idea of having twins.

"My dad was a twin, so it runs in the family," she explains. "Fingers crossed. We're thinking about having kids but I don't know when it'll happen. I feel very ready now."

When the couple does eventually expand their family, the children will be raised in a loving home.

"We FaceTime all of the time," Brewster says, of keeping the romance alive long distance. "We love that. There are times when I just say, 'I need to see you now.' And so we FaceTime a lot, or I surprise him and visit him or he does the same. It's super important … Couples shouldn't be apart for too long. We've been married for five years now and we know how important that is because otherwise you just lose touch with each other."

A big part of their bond has come from the way Form inspires his wife on a professional level.

"It's so amazing to have a husband in the business who can challenge me and we can talk about his work and my work and understand each other in that way," Brewster says. "I love getting his feedback and he likes getting mine. And of course, that has pushed me more to consider producing in the future."

And she's not just talking about babies!

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Your medical chart could include exercise minutes


CHICAGO (AP) — Roll up a sleeve for the blood pressure cuff. Stick out a wrist for the pulse-taking. Lift your tongue for the thermometer. Report how many minutes you are active or getting exercise.


Wait, what?


If the last item isn't part of the usual drill at your doctor's office, a movement is afoot to change that. One recent national survey indicated only a third of Americans said their doctors asked about or prescribed physical activity.


Kaiser Permanente, one of the nation's largest nonprofit health insurance plans, made a big push a few years ago to get its southern California doctors to ask patients about exercise. Since then, Kaiser has expanded the program across California and to several other states. Now almost 9 million patients are asked at every visit, and some other medical systems are doing it, too.


Here's how it works: During any routine check of vital signs, a nurse or medical assistant asks how many days a week the patient exercises and for how long. The number of minutes per week is posted along with other vitals at the top the medical chart. So it's among the first things the doctor sees.


"All we ask our physicians to do is to make a comment on it, like, 'Hey, good job,' or 'I noticed today that your blood pressure is too high and you're not doing any exercise. There's a connection there. We really need to start you walking 30 minutes a day,'" said Dr. Robert Sallis, a Kaiser family doctor. He hatched the vital sign idea as part of a larger initiative by doctors groups.


He said Kaiser doctors generally prescribe exercise first, instead of medication, and for many patients who follow through that's often all it takes.


It's a challenge to make progress. A study looking at the first year of Kaiser's effort showed more than a third of patients said they never exercise.


Sallis said some patients may not be aware that research shows physical inactivity is riskier than high blood pressure, obesity and other health risks people know they should avoid. As recently as November a government-led study concluded that people who routinely exercise live longer than others, even if they're overweight.


Zendi Solano, who works for Kaiser as a research assistant in Pasadena, Calif., says she always knew exercise was a good thing. But until about a year ago, when her Kaiser doctor started routinely measuring it, she "really didn't take it seriously."


She was obese, and in a family of diabetics, had elevated blood sugar. She sometimes did push-ups and other strength training but not anything very sustained or strenuous.


Solano, 34, decided to take up running and after a couple of months she was doing three miles. Then she began training for a half marathon — and ran that 13-mile race in May in less than three hours. She formed a running club with co-workers and now runs several miles a week. She also started eating smaller portions and buying more fruits and vegetables.


She is still overweight but has lost 30 pounds and her blood sugar is normal.


Her doctor praised the improvement at her last physical in June and Solano says the routine exercise checks are "a great reminder."


Kaiser began the program about three years ago after 2008 government guidelines recommended at least 2 1/2 hours of moderately vigorous exercise each week. That includes brisk walking, cycling, lawn-mowing — anything that gets you breathing a little harder than normal for at least 10 minutes at a time.


A recently published study of nearly 2 million people in Kaiser's southern California network found that less than a third met physical activity guidelines during the program's first year ending in March 2011. That's worse than results from national studies. But promoters of the vital signs effort think Kaiser's numbers are more realistic because people are more likely to tell their own doctors the truth.


Dr. Elizabeth Joy of Salt Lake City has created a nearly identical program and she expects 300 physicians in her Intermountain Healthcare network to be involved early this year.


"There are some real opportunities there to kind of shift patients' expectations about the value of physical activity on health," Joy said.


NorthShore University HealthSystem in Chicago's northern suburbs plans to start an exercise vital sign program this month, eventually involving about 200 primary care doctors.


Dr. Carrie Jaworski, a NorthShore family and sports medicine specialist, already asks patients about exercise. She said some of her diabetic patients have been able to cut back on their medicines after getting active.


Dr. William Dietz, an obesity expert who retired last year from the Centers for Disease Control and Prevention, said measuring a patient's exercise regardless of method is essential, but that "naming it as a vital sign kind of elevates it."


Figuring out how to get people to be more active is the important next step, he said, and could have a big effect in reducing medical costs.


___


Online:


Exercise: http://1.usa.gov/b6AkMa


___


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


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"Cliff" concerns give way to earnings focus

NEW YORK (Reuters) - Investors' "fiscal cliff" worries are likely to give way to more fundamental concerns, like earnings, as fourth-quarter reports get under way next week.


Financial results, which begin after the market closes on Tuesday with aluminum company Alcoa , are expected to be only slightly better than the third-quarter's lackluster results. As a warning sign, analyst current estimates are down sharply from what they were in October.


That could set stocks up for more volatility following a week of sharp gains that put the Standard & Poor's 500 index <.spx> on Friday at the highest close since December 31, 2007. The index also registered its biggest weekly percentage gain in more than a year.


Based on a Reuters analysis, Europe ranks among the chief concerns cited by companies that warned on fourth-quarter results. Uncertainty about the region and its weak economic outlook were cited by more than half of the 25 largest S&P 500 companies that issued warnings.


In the most recent earnings conference calls, macroeconomic worries were cited by 10 companies while the U.S. "fiscal cliff" was cited by at least nine as reasons for their earnings warnings.


"The number of things that could go wrong isn't so high, but the magnitude of how wrong they could go is what's worrisome," said Kurt Winters, senior portfolio manager for Whitebox Mutual Funds in Minneapolis.


Negative-to-positive guidance by S&P 500 companies for the fourth quarter was 3.6 to 1, the second worst since the third quarter of 2001, according to Thomson Reuters data.


U.S. lawmakers narrowly averted the "fiscal cliff" by coming to a last-minute agreement on a bill to avoid steep tax hikes this weeks -- driving the rally in stocks -- but the battle over further spending cuts is expected to resume in two months.


Investors also have seen a revival of worries about Europe's sovereign debt problems, with Moody's in November downgrading France's credit rating and debt crises looming for Spain and other countries.


"You have a recession in Europe as a base case. Europe is still the biggest trading partner with a lot of U.S. companies, and it's still a big chunk of global capital spending," said Adam Parker, chief U.S. equity strategist at Morgan Stanley in New York.


Among companies citing worries about Europe was eBay , whose chief financial officer, Bob Swan, spoke of "macro pressures from Europe" in the company's October earnings conference call.


REVENUE WORRIES


One of the biggest worries voiced about earnings has been whether companies will be able to continue to boost profit growth despite relatively weak revenue growth.


S&P 500 revenue fell 0.8 percent in the third quarter for the first decline since the third quarter of 2009, Thomson Reuters data showed. Earnings growth for the quarter was a paltry 0.1 percent after briefly dipping into negative territory.


On top of that, just 40 percent of S&P 500 companies beat revenue expectations in the third quarter, while 64.2 percent beat earnings estimates, the Thomson Reuters data showed.


For the fourth quarter, estimates are slightly better but are well off estimates for the quarter from just a few months earlier. S&P 500 earnings are expected to have risen 2.8 percent while revenue is expected to have gone up 1.9 percent.


Back in October, earnings growth for the fourth quarter was forecast up 9.9 percent.


In spite of the cautious outlooks, some analysts still see a good chance for earnings beats this reporting period.


"The thinking is you need top line growth for earnings to continue to expand, and we've seen the market defy that," said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs.


Based on his analysis, energy, industrials and consumer discretionary are the S&P sectors most likely to beat earnings expectations in the upcoming season, while consumer staples, materials and utilities are the least likely to beat, Jackson said.


Sounding a positive note on Friday, drugmaker Eli Lilly and Co said it expects profit in 2013 to increase by more than Wall Street had been forecasting, primarily due to cost controls and improved productivity.


(Reporting By Caroline Valetkevitch; Editing by Kenneth Barry)



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