Wall Street Week Ahead: Bears sleep as stocks near record highs

NEW YORK (Reuters) - U.S. stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> is up 5.4 percent this year and above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is just 2 percent away from all-time highs reached in October 2007. The Dow ended on Friday at 13,895.98, its highest close since October 31, 2007.

The S&P 500 has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, a technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year's end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there are no concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> led the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big broad-based industrial companies in the United States and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, a portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. Last week, the S&P 500 held steady on Thursday despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The giant tech company is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx>. In the past, Apple's drop has suffocated stocks' broader gains.

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to suggest the rally has perhaps come too far.

THE FED AND JOBS ON THE AGENDA

The Federal Reserve's policymakers will meet this week for the first time this year. The Federal Open Market Committee's meeting will start on Tuesday and end on Wednesday. Most economists polled in late January expect the Fed's ultra-loose monetary policy to stay in place well into next year despite the modest growth forecast for the U.S. economy.

The market's resilience could be tested this week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are forecast to have been added in the month, a Reuters poll showed. The U.S. unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama, said in reference to the S&P 500. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings this week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low. The S&P 500's price-to-earnings ratio sits at 15.66, just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the past week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Wall Street Week Ahead runs every Sunday. Questions or comments on this one can be sent to ryan.vlastelica(at)thomsonreuters.com)

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Fog delays 3rd round at Torrey Pines

SAN DIEGO (AP) — Tiger Woods is going to have to wait to pursue another win at Torrey Pines.

A thick fog shrouded the course along the Pacific bluffs on Saturday and essentially wiped out the entire day at the Farmers Insurance Open. Woods, a six-time winner of this tournament, had a two-shot lead and never even bothered coming to the golf course. Three players completed one hole — and that was after a three-hour delay.

Players were to resume the third round Sunday morning and go as long as daylight allowed, and then finish Monday.

And that's a best-case scenario.

In a bizarre twist, tour officials were hopeful of rain and a little wind Sunday morning, two elements that most golfers dread. That's what is needed, however, to keep the fog away from Torrey Pines and allow the tournament to resume.

"When Mother Nature doesn't want you to play, you can't play," said Mark Russell, the tour vice president of competition.

They did just about everything else.

Lucas Glover warmed up three times, at one point passed the time with a little trickery. He lined up two balls in the direction of the range, and hit them with a wedge so that one ball went straight in the air, and Jerry Kelly took a baseball swing with an inverted club and made contact.

Through four tournaments this year, the PGA Tour already had had its share of weather problems. This will be the second tournament that doesn't finish on the scheduled day. The Tournament of Champions at Kapalua didn't even start until Monday, the day it was supposed to end, because of 40 mph gusts. It had to be reduced to 54 holes and was completed on Tuesday.

Woods was at 11-under 133 and didn't need to come to the course with all the delays because he was in the last group with Billy Horschel and Casey Wittenberg. Horschel spent part of his day getting advice through text messages on how to play with Woods.

He'll get to see plenty of Woods over the next two days.

Russell said there would not be a 54-hole cut for 87 players — typically there is a cut when the field is more than 78 players on Saturday. Instead, they will take a short lunch break and go back out, racing time when fog allows. The groups will stay the same until the tournament is over.

"I think the coolest thing that can come from it is that I think it looks like we're going to be paired together for 36 holes," Horschel said. "So it's a pretty cool thing that's going to happen. It's just going to be a fun day tomorrow and Monday. So we'll see how it goes."

Horschel also is among 17 players who are entered in the qualifier Monday to get into the Phoenix Open, which starts next week. Russell said those players have been given the latest tee times for the qualifier — the latest is 1:36 p.m. MST — with hopes of getting there.

Saturday began with a 30-minute delay that soon stretched into three hours, and the sun broke through the clouds as Hunter Mahan, Robert Garrigus and John Mallinger teed off on the 10th hole at the South Course. Five minutes later, the horn sounded. Because it was for weather, they were able to finish the hole.

Mahan's caddie took a picture of the 11th tee, a 216-yard par 3, and the visibility was no more than 50 yards.

It never got any better.

"That little bit of sun we did get today was overpowered by just the saturation of the atmosphere, so we just couldn't overcome it today," said Stewart Williams, the tour's meteorologist.

Defending champion Brandt Snedeker, seven shots out of the lead, was among those who had the longest day. He was up at 5 a.m., arrived in darkness, warmed up in the fog and never hit a shot.

"It's tough when you prepare one day, and then it's one of those days where preparation is going to be kind of thrown off," he said. "But we have these days from time to time. We kind of know what to do to keep your mind fresh and ready to go. You realize it's a different week, and could be a Monday finish now and be ready for that."

Woods won in 2005 at Torrey Pines when fog interrupted the tournament, though it was completed on Sunday. The last time this event was shortened to 54 holes because of weather was in 1998.

Russell said the Farmers Insurance Open will go 72 holes. He just couldn't promise when 84 players could get to the 37th hole of the tournament. Without rain, there was the chance of more fog Sunday morning.

"If we say we're not going to play because we might have fog in the morning, and we didn't have fog, we'd have tremendous problems," he said. "So we're going to schedule it, and hopefully, we won't have fog and we can play golf. That's all we can do. If Mother Nature doesn't cooperate, we don't have very much control over that. We're going to be out here, ready to play, and see what happens."

That's assuming they can see at all.

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Stunning Photo Captures Reflective Cloud in Orion Constellation

A telescope in South America has captured a spectacular new view of an intricate cloud of interstellar dust in the famed Orion constellation.

The new space cloud photo, taken by the Atacama Pathfinder Experiment (APEX) telescope in Chile, reveals what astronomers call the Orion Molecular Cloud Complex in unprecedented detail. It gives scientists a glimpse into the heart of the closest, most active region of massive star formation to our solar system, researchers said.

The molecular cloud is located about 1,500 light-years from Earth in the Orion constellation. The new APEX image includes a reflection nebula called NGC 1999, which is only part of the vast molecular cloud. The cloud is actually a separate entity from the more well-known Orion nebula, which is located nearby.

Reflection nebulas get their name because their dark dust clouds reflect the light of nearby stars. For NGC 1999, the light stems from the young star V380 Orionis, ESO officials said in an image desciption.

Near the center of new APEX image is a dark spot that stands out against the more colorful background, a feature that surprised some researchers studying the photo.

“Normally, a dark patch such as this would indicate a dense cloud of cosmic dust, obscuring the stars and nebula behind it,” officials with the European Southern Observatory, which oversees the APEX said in a statement. “However, in this image we can see that the patch remains strikingly dark, even when the APEX observations are included.”

Scientists suspect that the dark spot was created when a star sucked up all the material in that part of its stellar nursery, leaving an empty spot in its place.

The extremely sensitive telescope captured the photo by measuring long wavelengths of light that aren’t on the visible spectrum. Most telescopes aren’t able to observe light at these submillimeter wavelengths, and would only see dust and clouds obscuring the star formation in the background.

At 40 feet (12 meters) in diameter, APEX is the largest single dish telescope operating at these hard to detect wavelengths in the Southern Hemisphere. It is a prototype designed to test technology needed for a next-generation submillimeter telescope called the Atacama Large Millimeter/submillimeter Array, or ALMA.

The $ 1.3 billion ALMA observatory will ultimately be a network of 66 telescopes spread across 11 miles (18 kilometers) in Chile. ALMA has already completed its test cycle of experimentation, and will officially open in March.

Follow Miriam Kramer on Twitter @mirikramer or SPACE.com @Spacedotcom. We’re also on Facebook & Google+. 

Copyright 2013 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Women in infantry: Tough challenge?

Hospital Corpsman Shannon Crowley packs for a mission as Lance Cpl.. Kristi Baker sits on her bed in 2010 in Afghanistan.

STORY HIGHLIGHTS

• Maren Leed: Ban on women in combat has hurt operations, women's promotion


• Leed: Integrating women into the physically demanding infantry presents challenges


• Women are already in combat; she says, the "front line" and "rear line" no longer exist


• Leed: Research into women in infantry might show that some limits might be appropriate

Editor's note: Maren Leed is senior adviser, Harold Brown Chair in defense policy studies at the Center for Strategic and International Studies. From 2011 to 2012, she served as senior adviser to the chief of staff of the U.S. Army. Follow the Center for Strategic and International Studies on Twitter.

(CNN) -- In the coming years, lifting the ban on women in combat, announced Thursday by Defense Secretary Leon Panetta, might prove particularly challenging in the most iconic of military occupations -- the infantry, among the most physically demanding and tradition-bound branches of the Marines and the Army.

Determining the best path forward to integrate women into this elite group will require hard-nosed honesty, careful management and compelling leadership.

For the 65 years that women have enjoyed a permanent place in the United States military, they have been subject to restrictions. One rationale is the notion embedded in our culture that women should be shielded from great physical risks. Another is a recognition of the physical superiority of the average male over the average female. A third is the fear that unit cohesion, critical to military performance, would suffer with the introduction of women.

Maren Leed

These three concerns apply to varying degrees in the infantry. But the last 11 years of war have clearly demonstrated that warfare is no longer waged in a linear fashion, and that the concept of "front line" no longer applies.

Opinion: A more equal military? Bring back draft

Historically, logistics operations were conducted "in the rear," where risks were comparatively low. This has changed: In 2006 in Iraq, for example, one in every five truck convoys was attacked. Although infantry clearly remains one of the most dangerous military occupations, the proliferation of homemade bombs and other low-cost, lethal weaponry and tactics have heightened the risk of almost every occupation. War is more uniformly dangerous.

That said, physical differences between the sexes remains a thorny issue. Determining gender-neutral physical standards for an integrated infantry will be one of the most difficult tasks ahead.

Infantry soldiers and Marines are the primary forces for operations on foot. They not only travel long distances, but also frequently carry loads in excess of 50 pounds. Both the short- and long-term health effects of such demands can be significant.

Single mom fought alongside combat troops in Afghanistan

The Defense Department has consistently pursued solutions to lighten the load, from exoskeletons to unmanned vehicles that would serve as "pack mules," to the elusive quest for higher power, lower weight batteries.

The success of these efforts will benefit both men and women. But until that happens, research into the effects these physical demands have on women is necessary before determining the degree to which they can, and should, be part of the full range of infantry.

Whether men serving in the infantry will accept women as peers is another open question.

Those who oppose women in the infantry argue that they would change group dynamics, disrupt bonding and ultimately harm unit cohesion. In the past, these fears have been brought up regarding the participation of minorities and homosexuals, too. But data show these negative predictions don't come true. Instead, successful integration has happened with strong leadership, and, critically, a process that is broadly perceived to be fair.

Opinion: Women in combat a dangerous experiment

Even if the arguments underpinning the ban on women in combat have weakened, is there sufficient justification for change? The Joint Chiefs apparently believe so, as they have unanimously recommended the ban be lifted.

Each of the services already has been taking steps along these lines. This is in part driven by the evolution of the battlefield. When today's senior leaders were serving time in Iraq and Afghanistan, they realized that the restrictions on women sometimes also restricted their missions.

They implemented work-arounds and sought exceptions to policy. But they came home with firsthand experience of the mismatch between modern warfare and the policies limiting women's role. Women are in combat, and senior military leaders believe that future success demands they must remain available to be so, in even greater numbers.

From the institutional viewpoint, there are also concerns that the traditional limitations fail to make the best use of women in the service. Combat experience weighs heavily in promotion decisions, and restrictions have precluded women from gaining experiences equal to those of male counterparts.

Women are also excluded from many of the occupations disproportionately represented in senior leadership, and that automatically limits the number of women who can advance to the highest levels. At the same time, the pool of Americans eligible for military service is shrinking, and competition for high-quality recruits is intensifying. So it's imperative that the military fully leverage the talent of the men and women it has and that it seeks to attract.

By the numbers: Women in the U.S. military

The arguments in favor of lifting the ban on women in combat outweigh those against it. Despite Defense Secretary Leon Panetta's announcement on Thursday, the military services maintain the prerogative to preclude women from serving in certain positions or occupations.

Infantry, or at least some specialties within that branch, could well be a case in which restrictions are warranted. But military leaders have time to evaluate this proposition, and to set the conditions to make any change stick. The path ahead may not be smooth, but it is necessary.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Maren Leed.

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Nightclub fire kills at least 200 in Brazil

A fire swept through a crowded nightclub in southern Brazil early Sunday, killing at least 245 people and leaving at least 200 injured, police and firefighters said. (Jan. 27)

SANTA MARIA, Brazil (Reuters) - A fire in a nightclub killed at least 232 people in southern Brazil on Sunday when a band's pyrotechnics show set the building ablaze and fleeing partygoers stampeded toward blocked and overcrowded exits in the ensuing panic, officials said.

The blaze in the university town of Santa Maria was started by a band member or someone from its production team igniting a flare, which then set fire to the ceiling, said Luiza Sousa, a civil police official. The fire spread "in seconds," she said.

Local fire officials said at least one exit was locked and that bouncers, who at first thought those fleeing were trying to skip out on bar tabs, initially blocked patrons from leaving. The security staff relented only when they saw flames engulfing the ceiling.

The vast majority of the victims, most of them university students, died from asphyxiation, officials said. Others were crushed in the stampede.

"We ran into a barrier of the dead at the building's exit," Colonel Guido Pedroso de Melo, commander of the Santa Maria fire squad, said of the scene firefighters found on arrival. "We had to clear a path to get to the rest of those that were inside."

An estimated 500 people were in the Boate Kiss nightclub when the fire broke out at around 2:30 a.m., police said. Witnesses said the club, which has a 2,000-person capacity, was always busy on weekends but wasn't any more crowded than usual.

The death tally was lowered slightly, with police saying at midafternoon that 232 people had been killed, down from an initial figure of 245.

When the fire began, many revelers were unable to find their way out amid the chaos, confusing restroom doors for exits and finding resistance from bouncers when they did find an exit door.

"It all happened so fast," survivor Taynne Vendrusculo told GloboNews TV. "Both the panic and the fire spread rapidly, in seconds."

Once security guards realized the building was on fire, they tried in vain to control the blaze with a fire extinguisher, according to a televised interview with one of the guards, Rodrigo Moura. He said patrons were getting trampled as they rushed for the doors, describing it as "a horror film."

Television footage showed people sobbing outside the club before dawn, while shirtless firefighters used sledge hammers and axes to knock down an exterior wall to open up an exit.

SAFETY STANDARDS IN SPOTLIGHT

Rescue officials moved the bodies to a local gymnasium, where the deceased were segregated by gender. Male victims were easier to identify, they said, because most of them, unlike the women, whose purses were left scattered in the devastated nightclub, had identification on them.

One of the club's owners had already surrendered to police for questioning, GloboNews reported.

President Dilma Rousseff, who started her political career in the Rio Grande do Sul state where the fire happened, cut short a visit to Chile to return to visit the scene. Before leaving Chile, she broke out in tears as she pledged government help for the victims and their families.

"We are trying to mobilize all possible resources to help in the rescue efforts," Rousseff said. "All I can say at the moment is that my feelings are of deep sorrow."

The disaster recalls other incidents including a 2003 fire at a nightclub in West Warwick, Rhode Island, that killed 100, and a Buenos Aires nightclub blaze in 2004 that killed nearly 200. In both incidents, a band or members of the audience ignited fires that set the establishment ablaze.

Brazil's safety standards and emergency response capabilities are under particular scrutiny as it prepares to host the 2014 World Cup soccer tournament and the 2016 Olympics.

Santa Maria, with a population of more than 275,000, is about 186 miles west of the state capital of Porto Alegre.

Rio Grande do Sul state's health secretary, Ciro Simoni, said emergency medical supplies from all over the state were being sent to the scene.

(Additional reporting by Guillermo Parra-Bernal, Gustavo Bonato, Jeferson Ribeiro, Eduardo Simões and Brian Winter; Writing by Paulo Prada; Editing by Todd Benson, Kieran Murray and Eric Beech)

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Nightclub fire kills at least 232 in Brazil

SANTA MARIA, Brazil (Reuters) - A fire in a nightclub killed at least 232 people in southern Brazil on Sunday when a band's pyrotechnics show set the building ablaze and fleeing partygoers stampeded toward blocked and overcrowded exits in the ensuing panic, officials said.

The blaze in the university town of Santa Maria was started by a band member or someone from its production team igniting a flare, which then set fire to the ceiling, said Luiza Sousa, a civil police official. The fire spread "in seconds," she said.

Local fire officials said at least one exit was locked and that bouncers, who at first thought those fleeing were trying to skip out on bar tabs, initially blocked patrons from leaving. The security staff relented only when they saw flames engulfing the ceiling.

The vast majority of the victims, most of them university students, died from asphyxiation, officials said. Others were crushed in the stampede.

"We ran into a barrier of the dead at the building's exit," Colonel Guido Pedroso de Melo, commander of the Santa Maria fire squad, said of the scene firefighters found on arrival. "We had to clear a path to get to the rest of those that were inside."

An estimated 500 people were in the Boate Kiss nightclub when the fire broke out at around 2:30 a.m., police said. Witnesses said the club, which has a 2,000-person capacity, was always busy on weekends but wasn't any more crowded than usual.

The death tally was lowered slightly, with police saying at midafternoon that 232 people had been killed, down from an initial figure of 245.

When the fire began, many revelers were unable to find their way out amid the chaos, confusing restroom doors for exits and finding resistance from bouncers when they did find an exit door.

"It all happened so fast," survivor Taynne Vendrusculo told GloboNews TV. "Both the panic and the fire spread rapidly, in seconds."

Once security guards realized the building was on fire, they tried in vain to control the blaze with a fire extinguisher, according to a televised interview with one of the guards, Rodrigo Moura. He said patrons were getting trampled as they rushed for the doors, describing it as "a horror film."

Television footage showed people sobbing outside the club before dawn, while shirtless firefighters used sledge hammers and axes to knock down an exterior wall to open up an exit.

SAFETY STANDARDS IN SPOTLIGHT

Rescue officials moved the bodies to a local gymnasium, where the deceased were segregated by gender. Male victims were easier to identify, they said, because most of them, unlike the women, whose purses were left scattered in the devastated nightclub, had identification on them.

One of the club's owners had already surrendered to police for questioning, GloboNews reported.

President Dilma Rousseff, who started her political career in the Rio Grande do Sul state where the fire happened, cut short a visit to Chile to return to visit the scene. Before leaving Chile, she broke out in tears as she pledged government help for the victims and their families.

"We are trying to mobilize all possible resources to help in the rescue efforts," Rousseff said. "All I can say at the moment is that my feelings are of deep sorrow."

The disaster recalls other incidents including a 2003 fire at a nightclub in West Warwick, Rhode Island, that killed 100, and a Buenos Aires nightclub blaze in 2004 that killed nearly 200. In both incidents, a band or members of the audience ignited fires that set the establishment ablaze.

Brazil's safety standards and emergency response capabilities are under particular scrutiny as it prepares to host the 2014 World Cup soccer tournament and the 2016 Olympics.

Santa Maria, with a population of more than 275,000, is about 186 miles west of the state capital of Porto Alegre.

Rio Grande do Sul state's health secretary, Ciro Simoni, said emergency medical supplies from all over the state were being sent to the scene.

(Additional reporting by Guillermo Parra-Bernal, Gustavo Bonato, Jeferson Ribeiro, Eduardo Simões and Brian Winter; Writing by Paulo Prada; Editing by Todd Benson, Kieran Murray and Eric Beech)

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Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Azarenka beats Li, defends Australian Open title

MELBOURNE, Australia (AP) — Victoria Azarenka had the bulk of the crowd against her. The fireworks were fizzling out, and when she looked over the net she saw Li Na crashing to the court and almost knocking herself out.

Considering the cascading criticism she'd encountered after her previous win, Azarenka didn't need the focus of the Australian Open final to be on another medical timeout.

So after defending her title with a 4-6, 6-4, 6-3 victory over the sixth-seeded Li in one of the most unusual finals ever at Melbourne Park, Azarenka understandably dropped her racket and cried tears of relief late Saturday night.

She heaved as she sobbed into a towel beside the court, before regaining her composure to collect the trophy.

"It isn't easy, that's for sure, but I knew what I had to do," the 23-year-old Belarusian said. "I had to stay calm. I had to stay positive. I just had to deal with the things that came onto me."

There were a lot of those things squeezed into the 2-hour, 40-minute match. Li, who was playing her second Australian Open final in three years, twisted her ankle and tumbled to the court in the second and third sets.

The second time was on the point immediately after a 10-minute delay for the Australia Day fireworks — a familiar fixture in downtown Melbourne on Jan. 26, but not usually coinciding with a final.

Li had been sitting in her chair during the break, while Azarenka jogged and swung her racket around before leaving the court to rub some liniment into her legs to keep warm.

The 30-year-old Chinese player had tumbled to the court after twisting her left ankle and had it taped after falling in the fifth game of the second set. Immediately after the fireworks ceased, and with smoke still in the air, she twisted the ankle again, fell and hit the back of her head on the hard court.

The 2011 French Open champion was treated immediately by a tournament doctor and assessed for a concussion in another medical timeout before resuming the match.

"I think I was a little bit worried when I was falling," Li said, in her humorous, self-deprecating fashion. "Because two seconds I couldn't really see anything. It was totally black.

"So when the physio come, she was like, 'Focus on my finger.' I was laughing. I was thinking, 'This is tennis court, not like hospital.'"

Li's injury was obvious and attracted even more support for her from the 15,000-strong crowd.

Azarenka had generated some bad PR by taking a medical timeout after wasting five match points on her own serve in her semifinal win over American teenager Sloane Stephens on Thursday. She came back after the break and finished off Stephens in the next game, later telling an on-court interviewer that she "almost did the choke of the year."

She was accused of gamesmanship and manipulating the rules to get time to regain her composure against Stephens, but defended herself by saying she actually was having difficulty breathing because of a rib injury that needed to be fixed.

That explanation didn't convince everybody. So when she walked onto Rod Laver Arena on Saturday, there were some people who booed, and others who heckled her or mimicked the distinctive hooting sound she makes when she hits the ball.

"Unfortunately, you have to go through some rough patches to achieve great things," she said. "That's what makes it so special for me. I went through that, and I'm still able to kiss that beautiful trophy."

She didn't hold a grudge.

"I was expecting way worse, to be honest. What can you do? You just have to go out there and try to play tennis in the end of the day," she said. "It's a tennis match, tennis battle, final of the Australian Open. I was there to play that.

"The things what happened in the past, I did the best thing I could to explain, and it was left behind me already."

The match contained plenty of nervy moments and tension, and 16 service breaks — nine for Li. But it also produced plenty of winners and bravery on big points.

Azarenka will retain the No. 1 ranking she's mostly held since her first Grand Slam win in Melbourne last year.

Li moved into the top five and is heartened by a recent trend of Australian runner-ups winning the French Open. She accomplished that in 2011, as did Ana Ivanovic (2008) and Maria Sharapova (2012).

"I wish I can do the same this year, as well," Li said.

Later Saturday, Bob and Mike Bryan won their record 13th Grand Slam men's doubles title, defeating the Dutch team of Robin Haase and Igor Sijsling 6-3, 6-4.

Sunday's men's final features two-time defending champion Novak Djokovic and U.S. Open winner Andy Murray. Djokovic is seeking to become the first man in the Open era to win three titles in a row in Australia.

Azarenka was planning a night of partying to celebrate her second major title, with her friend Redfoo and the Party Rock crew, and was hopeful of scoring some tickets to the men's final.

She said she needed to let her hair down after a draining two weeks and hoped that by being more open and frank in recent times she was clearing up any misconceptions the public had of her.

"When I came first on the tour I kind of was lost a little bit," he said. "I didn't know how to open up my personality. It's very difficult when you're alone. I was independent since I was, you know, 10 years old. It was a little bit scary and I wouldn't show my personality.

"So the (last) couple of years I learned how to open up to people and to share the moments. I wasn't really good before. I hope I got better. It's your judgment."

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Antarctic rescue mission for 3 Canadians continues as weather improves

Rescue officials say efforts to locate three Canadians missing in Antarctica will continue today as weather conditions improve.

The Canadians were on a plane that went missing Wednesday during a flight from the South Pole to Terra Nova Bay.

New Zealand’s Rescue Co-ordination Centre says a plane is scheduled to fly to the area today to set up a base camp about 50 kilometres from where the missing plane’s emergency beacon was transmitting.

As soon as the weather clears, two helicopters will then start an aerial search.

Aircraft tried twice to spot the missing plane in the mountainous area, but couldn’t see it because of poor visibility and snow.

The rescue co-ordination centre says the crew of the missing aircraft have survival equipment and are well trained for the harsh environment.

Weather News Headlines – Yahoo! News

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Can sanctions deter North Korea?

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

Kim Jong Un and his military

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STORY HIGHLIGHTS

• N. Korea said Thursday it plans to carry out new nuclear test and more long-range rocket launches


• It said they are part of new phase of confrontation with United States


• George A. Lopez says North Korea's aim is to be recognized as a 'new nuclear nation by fait accompli'


• The Security Council sanctions aim to deteriorate and disrupt N. Korea's programs, says Lopez

Editor's note: George A. Lopez holds the Hesburgh Chair in Peace Studies at the Kroc Institute, University of Notre Dame. He is a former member, UN Panel of Experts on DPRK.

Indiana, U.S. (CNN) -- North Korea has responded to new Security Council sanctions condemning its December 12 rocket launch with a declaration that it plans a third nuclear test and more missile launches. Politically, it has made unambiguous that its "aim" is its enemy, the United States.

In this rapid reaction to U.N. sanctions, the young government of Kim Jong Un underscores what Security Council members have long known anticipated from the DPRK. Their end-game is to create a vibrant, integrated missile and nuclear weapons program that will result - as in the cases of Pakistan and India - in their being recognized as a new nuclear nation by fait accompli.

Read more: North Korea says new nuclear test will be part of fight against U.S.

In light of DPRK defiance - and a soon to occur nuclear test - the Security Council's first set of sanctions on North Korea since 2009 may seem absurd and irrelevant. These sanctions will certainly not prevent a new DPRK nuclear test. Rather, the new sanctions resolution mobilizes regional neighbors and global actors to enforce sanctions that can weaken future DPRK programs and actions.

Read more: U.N. Security Council slams North Korea, expands sanctions

The utility, if not the necessity, of these Security Council sanctions are to deteriorate and disrupt the networks that sustain North Korea's programs. Chances of this degradation of DPRK capabilities have increased as the new sanctions both embolden and empower the member states who regularly observe - but do nothing about - suspicious vessels in their adjacent waterways.

The resolution provides new guidance to states regarding ship interdiction, cargo inspections, and the seizure and disposal of prohibited materials. Regarding nuclear and missile development the sanctions expand the list of material banned for trade to DPRK, including high tech, dual-use goods which might aid missile industries.

Read more: South Korean officials: North Korean rocket could hit U.S. mainland

These new measures provide a better structure for more effective sanctions, by naming new entities, such as a bank and trading companies, as well as individuals involved in the illicit financing of prohibited materials, to the sanctions list. To the surprise of many in the diplomatic community - the Council authorizes states to expose and confiscate North Korea's rather mobile "bulk cash." Such currency stocks have been used in many regions to facilitate purchases of luxury goods and other banned items that sustain the DPRK elites.

Finally, the Security Council frees the Sanctions Committee to act more independently and in a timely manner to add entities to the list of sanctioned actors when evidence shows them to be sanctions violators. This is an extensive hunting license for states in the region that can multiply the costs of sanctions to the DPRK over time.

Read more: North Korea's rocket launches cost $1.3 billion

Whatever their initial limitations, the new round of U.N. sanctions serve as a springboard to more robust measures by various regional and global powers which may lead back to serious negotiations with DPRK.

Despite its bluster and short-term action plan, Pyongyang recognizes that the wide space of operation for its policies it assumed it had a week ago, is now closed considerably. To get this kind of slap-down via this Security Council resolution - when the launch was a month ago - predicts that any nuke test or missile launch from Pyongyang will bring a new round of stronger and more targeted sanctions.

Read more: North Korea silences doubters, raises fears with rocket launch

Although dangerous - a new game is on regarding DPRK. Tougher U.N. measures imposed on the North generated a predictable response and likely new, prohibited action. While DPRK may be enraged, these sanctions have the P5 nations, most notably China, newly engaged. A forthcoming test or launch will no doubt increase tensions on both sides.

But this may be precisely the shock needed to restart the Six Party Talks. Without this institutional framework there is little chance of influencing DPRK actions. And in the meantime, the chances of greater degrading of DPRK capabilities via sanctions, are a sensible next best action.

Read more: Huge crowds gather in North Korean capital to celebrate rocket launch

The opinions expressed in this commentary are solely those of George A. Lopez.

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