Iran Says Hackers Targeted Power Plant and Culture Ministry





Iran reported a spree of new cyberattacks on Tuesday, saying foreign enemy hackers tried in recent months to disrupt computer systems at a power plant and other industries in a strategically important southern coastal province as well as a Culture Ministry information center.




Accounts of the attacks in the official press did not specify who was responsible, when they were carried out or how they were thwarted. But they strongly suggested that the attacks had originated in the United States and Israel, which have been engaged in a shadowy struggle of computer sabotage with Iran in a broader dispute over whether Iran’s nuclear energy program is for peaceful or military use.


Iran has been on heightened alert against such sabotage since a computer worm known as Stuxnet was used to attack its uranium enrichment centrifuges more than two years ago, which American intelligence officials believe caused many of the machines to spin out of control and self-destruct, slowing the Iranian program’s progress.


Stuxnet and other forms of computer malware have also been used in attacks on Iran’s oil industry and Science Ministry under a covert United States effort, first revealed in January 2009, that was meant to subvert Iran’s nuclear program because of suspicions that the Iranians were using it to develop the ability to make atomic bombs. Iran has repeatedly denied these suspicions.


The latest Iranian sabotage reports raised the possibility that the attacks had been carried out in retaliation for assaults that crippled computers in the Saudi Arabian oil industry and some financial institutions in the United States a few months ago. American intelligence officials have said they believe that Iranian specialists in cybersabotage were responsible for those assaults, which erased thousands of Saudi files and temporarily prevented some American banking customers from accessing their accounts.


Defense Secretary Leon E. Panetta cited those attacks in an Oct. 11 speech in which he warned of America’s vulnerability to a coordinated computer warfare attack, calling such a possibility a “cyber-Pearl Harbor.”


The Iranian Students’ News Agency said the country’s Passive Defense Organization, the military unit responsible for guarding against cyberattacks, had battled a computer virus infection of an electric utility and other unspecified manufacturing industries in southern Hormozgan Province, home to a large oil refinery and container port in the provincial capital of Bandar Abbas.


The news agency quoted Ali Akbar Akhavan, the head of the Passive Defense Organization’s provincial branch, as saying that “with timely measures and the cooperation of skilled hackers in the province, the progress of this virus was halted.” It was unclear from the account whether any Iranian targets had been damaged.


Iran’s Fars News Agency said a cyberattack had also been made against the information center of the Culture Ministry’s Headquarters for Supporting and Protecting Works of Art and Culture, and that the attack had been “repelled by the headquarters’ experts.”


The Fars account said the attack had originated in Dallas and was routed to Iran via Malaysia and Vietnam. It did not elaborate on the significance of that information but noted that a broad array of Iranian targets had recently come under cyberattacks that were “widely believed to be designed and staged by the U.S. and Israel.”


News of the latest cyberattacks came as Western economic sanctions on Iran have been tightening while diplomatic negotiations aimed at resolving the nuclear dispute have remained basically stalled since June. There are expectations that a resumption of those negotiations will be announced soon, possibly next month.


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Sprint salesman refuses to sell iPhone to customer, says his ‘fingers are too fat’ to use it







We’ve known for a while now that some mobile carriers have been instructing their sales staff to start pushing their customers away from Apple’s (AAPL) iPhone and toward Android or Windows Phone devices. The reason is simple: carriers pay a lot more to subsidize Apple’s popular smartphone than they do with other devices and they’d prefer to have higher gross margins at the end of each quarter. But now a Tom’s Hardware reader reports that a Sprint (S) representative has taken pushing non-iPhone products to a whole new level and is actually insulting people who insist on buying the device.


[More from BGR: Online retailers caught using ‘discriminatory’ practices to target shopping discounts]






When the customer told the Sprint representative that he wanted to get an older iPhone 4 for free as part of his upgrade, the representative called the device “a piece of s—” that breaks too easily and is too small for many users.


[More from BGR: First photos of BlackBerry 10 ‘N-Series’ QWERTY smartphone leak]


Instead, the salesman recommended that the customer by a Samsung (005930) Galaxy S III. When the customer again refused, the salesman took things a step farther and told the man that his fingers were simply too fat to use the iPhone and that he’d need a larger screen to use a smartphone properly.


Needless to say, these up-sell-by-insult tactics weren’t exactly effective for the salesperson and the customer angrily stormed out of the store without buying a new phone.


This article was originally published by BGR


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Queen Elizabeth Goes 3D for Her Holiday Message









12/24/2012 at 03:05 PM EST







Queen Elizabeth, in her 3D glasses


John Stillwell/AFP/Getty


Check out the new Queen of Cool – rockin' her shades.

As if her Diamond Jubilee, her Summer Olympics' James Bond stunt and the anticipation of her great-grandchild from William and Kate weren't enough, Queen Elizabeth has capped this very special year by donning some funky glasses to view a new 3D version of her annual seasonal broadcast – the first time her traditional speech has been filmed in the format.

Complete with a blinged-out "Q" in Swarovski crystals decorating the temples of the frames, the specs – which she also once wore for a 3D movie in Canada a couple years ago – are an unlikely addition to the Queen's jewels.

"We wanted to do something a bit different and special in this Jubilee year, so doing it for the first time in 3D seemed a good thing, technology-wise, to do," a spokeswoman says.

The Queen's message will air at 3 p.m. U.K. time on Christmas Day. Looking back on the highlights of the year, she is expected to include her praise of the British Olympians and Paralympians who excelled at the London 2012 games.

Meanwhile, the 86-year-old monarch was absent from a pre-Christmas church service at Sandringham Sunday. It was said by Buckingham Palace that she is nursing a cold.

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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


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Start of "Santa Claus rally" dampened by "cliff' worries

NEW YORK (Reuters) - U.S. stocks edged lower on Monday as caution over the potential for volatility driven by worries about the U.S. "fiscal cliff" dampened enthusiasm at the start of a seasonally strong period for equities.


Investors are betting Congress will reach a deal to avert most of the austerity measures due to come into force at the start of next year. That has led to the best year for stocks since the post-financial crisis rebound. But those gains may be quickly reversed if a deal is not reached soon.


The S&P 500 index posted its biggest drop in more than a month on Friday as a Republican plan to avoid the cliff - $600 billion in tax hikes and spending cuts that could tip the U.S. economy into recession - failed to gain traction on Thursday night.


Sharp moves like that highlight how headlines from Washington can whipsaw markets, especially during the thinly traded period over the Christmas holiday.


Still, with the S&P 500 up 0.7 percent in December and on course for its strongest month since September, some analysts are predicting that stocks will find their footing during a market seasonality known as the "Santa Claus rally."


"Right now we've seen some very constructive action in the market so I think that bodes well for this being a positive seasonal 'Santa' period over the coming seven days," said Ari Wald, a technical analyst at The PrinceRidge Group.


He noted an all-time high in the NYSE advance-decline line, which compares advancing and declining stocks, as indication of strong participation in the rally off November lows.


"Pull-backs are buying opportunities," said Wald. "There has been really great participation on this move, a lot of small- and mid-cap stocks behaving well, pushing out to the upside; we're seeing some good leadership from offensive sectors of the market as well."


A high ratio of advancing stocks to declining issues shows there is broad participation across the equity market.


The Santa seasonality covers the last five trading days of the year and the first two of the new year. Since 1928, the S&P 500 has averaged a gain of 1.8 percent during this period and risen 79 percent of the time, according to data from PrinceRidge.


The Dow Jones industrial average <.dji> dropped 51.76 points, or 0.39 percent, to 13,139.08. The Standard & Poor's 500 Index <.spx> fell 3.49 points, or 0.24 percent, to 1,426.66. The Nasdaq Composite Index <.ixic> lost 8.41 points, or 0.28 percent, to 3,012.60.


The S&P 500 is up more than 13 percent for the year, having recovered nearly all the losses suffered in the wake of the U.S. election. The yearly gain would be the best since 2009.


Some U.S. lawmakers expressed concern on Sunday the country would go over the cliff, as some Republicans charged that was President Barack Obama's goal. Talks are stalled with Obama and House of Representatives Speaker John Boehner out of Washington for the holidays.


"It does seem like we are continuing through the same drift of the same thing we've had the past couple of weeks - 'cliff' talk," said Nick Scheumann, wealth partner at Hefty Wealth Partners in Auburn, Indiana.


"You can't trade on what you don't know and we truly don't know what they are going to do," he said.


Congress is expected to return to Washington next Thursday as President Barack Obama returns from a trip to Hawaii. As the deadline draws closer, a 'stop-gap' deal appears to be the most likely outcome of any talks.


Trading volume was muted, with U.S. equity markets closing at 1 p.m. (1800 GMT) ahead of the Christmas Day holiday on Tuesday.


In addition, a number of European markets operated on a shortened session, with other markets closed.


U.S. retailers may not see a sales surge from this weekend as ho-hum discounts and fears about imminent tax hikes and cuts in government spending give Americans fewer reasons to open their wallets in the last few days before Christmas.


Aegerion Pharmaceuticals Inc said the U.S. Food and Drug Administration approved Juxtapid capsules in patients with homozygous familial hypercholesterolemia, but will conduct a post-approval study to test long-term safety and efficacy. Shares fell 1.8 percent to $25.25.


Herbalife Ltd dipped 4.4 percent to $26.06 after the company said it expects to exceed its previously announced repurchase authorization guidance and has retained Moelis & Company as its strategic adviser. The declines put the stock on track for a ninth straight decline.


Yum Brands Inc advanced 1.8 percent to $65.01 after Shanghai's food safety authority said the level of antibiotics and steroids in the company's KFC chicken was within official limits.


(Reporting By Edward Krudy; Editing by Chizu Nomiyama and Dan Grebler)



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Gaza Cease-Fire Expands Fishing Area, but Risks Remain




Relaxed Rules Restore Old Opportunities:
As a part of last month's cease-fire agreement between Hamas and Israel, Gazans can now fish 6 miles off the coast, doubling the previous limit.







GAZA CITY — Khader Bakr, a 19-year-old fisherman, was thrilled to hear that he could now fish up to six nautical miles from the coast, up from the three-mile limit Israel had had in place since 2009. The change was part of the cease-fire deal that halted last month’s fighting in Gaza between Israel and Hamas.




But testing the waters late last month, Mr. Bakr apparently sailed out too far. An Israeli gunboat patrolling against arms smuggling ordered him to stop and strip to his underwear. As the Israelis sank his boat, he jumped into the sea, and was hauled aboard the Israeli vessel for questioning.


“I spent four hours trembling,” he said, before the Israelis ordered another Palestinian fishing boat to ferry Mr. Bakr back to shore.


Run-ins with Israeli patrols are still the bane of Gaza fishermen. But in most respects, the new arrangement has been a boon.


The fishermen have raced to take advantage of broader fishing grounds, farther from the shore where sewage is pumped into the water untreated. Catches have improved in quantity, quality and freshness, and thus price. The fish are bigger and include desirable species like grouper, red mullet and Mediterranean sea bass that were no longer present closer to land.


But the fisherman risk rapidly overfishing. “In the first few days, I caught fish worth $1,580 to $1,850,” said Yasser Abu al-Sadeq. “Today, I made around $1,050.” But the situation is still better, he said. “Before the cease-fire, I would barely catch $790.”


“It’s like when you come to a house that’s been abandoned for years and start cleaning it,” he said. “When you start cleaning, you get out a lot of trash, but when you clean daily, you get out only a little.” He and his crew go out for 24 hours at a time, he said, cooking the small crabs and squid they catch in the nets. He described an early trip out past the six-mile limit, when an Israeli gunboat circled his boat, shaking it in the wake, and ordered him back toward shore.


He remembers a golden time before the second Palestinian intifada in 2000, when he could go out as far as 12 nautical miles, where he could find sardines and what he called guitarfish, a small ray. “There, it’s a reserve protected by God,” he said.


The fishermen say they estimate their distance, since most of them lack precise navigational systems, but there is usually one indicator. “When we were allowed within 3 miles, the gunboats would attack us at 2.5 miles,” said Monzer Abu Amira, as he repaired his green nylon nets. “Today, they hit us when we are at 5.5 miles.”


The Israelis generally use loudspeakers and water cannons, but sometimes they shoot live ammunition at fishing gear, the motor or the boat itself. Gazans in principle can apply for compensation if boats are damaged or destroyed, but in practice few do.


A senior Israeli official said that there had never been an official announcement that the fishing limit had been extended from three miles to six, but he confirmed that six was the new reality. Israel is continuing to negotiate indirectly with Hamas, the Islamist movement that rules Gaza, with Egypt as an intermediary, to turn the cease-fire agreement into something more permanent, the official said.


“We have an interest in prolonging the longevity of the quiet,” the official said. “We understand that relaxation of some of the restrictions is conducive to that goal. Quiet is in our interest. So we have an interest in showing flexibility where we can, and to show the Egyptians that we’re serious.”


There were problems in the period immediately after the cease-fire, the Israeli official said, because “some in Gaza were interested in testing the limits and pushing the envelope,” and because the expansion of the fishing zone meant deploying more Israeli resources to cover more sea.


“But if people don’t exceed the six-mile limit, it’s O.K.,” he said.


The Israelis are not interested in the smuggling of small-caliber weapons like “Kalashnikovs and bullets,” he added, but in preventing Iran from resupplying longer-range missiles and preventing Hamas from smuggling in foreign experts to aid them in missile development and technology.


“The important thing for us is to prevent Hamas from rearming,” he said.


Ed Ou contributed reporting.



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Sri Lanka arrests 100 Chinese for cyber fraud, police say






COLOMBO (Reuters) – Sri Lanka on Saturday arrested at least 100 Chinese nationals accused of an internet fraud scheme targeting people in their home country, a police spokesman said.


The accused, all in Sri Lanka on tourist visas, are suspected of hacking into computers in China and then demanding their owners transfer them money, police spokesman Prishantha Jayakodi told Reuters.






Chinese police requested help from Sri Lanka, he said.


Officials at the Chinese embassy in Colombo were not available for comment.


China has been the top lender to Sri Lanka since the end of a 25-year war in May 2009 and thousands of Chinese are working in the country on Chinese-funded infrastructure projects.


(Reporting by Shihar Aneez; editing by Jason Webb)


Internet News Headlines – Yahoo! News





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Which Rising Star Did You Select as Best Dressed This Week?







Style News Now





12/22/2012 at 12:00 PM ET











Jessica Chastain
Marion Curtis/Startraks


With a hot new movie and an acclaimed Broadway show, Jessica Chastain has a lot to celebrate this season. And now she has another accolade: she’s this week’s best dressed star!


More than 16,000 of you gave Chastain’s simple, elegant ensemble — a peplum dress and Casadei sandals, worn to a Zero Dark Thirty screening in N.Y.C. — some love, propelling her into the top spot on our best dressed list. Chastain finished her look with natural makeup, minimal jewels and a flawless blowout.


PHOTOS: SEE THE TOP 10 BEST DRESSED STARS ON PEOPLE.COM THIS WEEK!


Coming in second was another fashion favorite, the Duchess of Cambridge, who wore a forest-green Alexander McQueen dress (with a sexy thigh-high split!) for the BBC Sports Personality of the Year Awards in London — her first public outing since her recent hospitalization.


Click here to find out who else ranked in the top 10 and vote for your favorite celeb looks. Tell us: Are you a fan of Chastain’s winning look? Who do you think deserved the title of best dressed star this week?




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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


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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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