Hillary Clinton Suffers a Concussion After Fainting

WASHINGTON — Secretary of State Hillary Rodham Clinton suffered a concussion early last week after fainting and striking her head, the State Department disclosed on Saturday.

As a result, Mrs. Clinton will not testify as scheduled on Thursday before Congressional committees investigating the September attack on the American diplomatic outpost in Benghazi, Libya.

The fainting episode occurred after Mrs. Clinton, who is being widely discussed as a possible presidential candidate in 2016, became dehydrated because of a stomach virus she contracted during a trip to Europe, according to statements released by Philippe Reines, a close adviser to Mrs. Clinton, and by her doctors.

“Secretary Clinton developed a stomach virus, leading to extreme dehydration, and subsequently fainted,” her doctors, Dr. Lisa Bardack of the Mount Kisco Medical Group and Dr. Gigi El-Bayoumi of George Washington University, said in their statement on Saturday. “Over the course of this week we evaluated her and ultimately determined she had also sustained a concussion.”

One State Department official said Mrs. Clinton fainted when she was alone at her home in Washington but added that the concussion was not diagnosed until Thursday. He said the concussion was not severe.

Acting on the advice of her doctors, Mrs. Clinton will not go to the State Department this week but will work from home, the State Department’s statement said.

William J. Burns and Thomas R. Nides, both deputy secretaries of state, will testify before the Senate Foreign Relations Committee in place of Mrs. Clinton, according to a spokesman for the panel. They are also expected to testify before a House committee about the attack, in which Ambassador J. Christopher Stevens and three other Americans were killed.

Besides the Congressional hearings, the State Department is preparing for an eventful week on the Benghazi attack, which had led to considerable partisan fighting about what precipitated the attack and what arrangements were made to defend the compound.

On Monday, an independent panel that was established to investigate the attack is expected to present its report to the State Department. The panel, called an accountability review board, is led by Thomas R. Pickering, a veteran diplomat. It includes four other members, including Mike Mullen, the retired admiral who formerly served as chairman of the Joint Chiefs of Staff. The board is authorized by a 1986 law intended to strengthen security at United States diplomatic missions.

The State Department plans to share the report with Congress and will also provide its own recommendations on how security for diplomats can be improved. Mr. Pickering and Admiral Mullen are expected to meet with lawmakers in closed sessions on Wednesday.

Then on Thursday, Mr. Burns and Mr. Nides will testify before the Senate committee, which is led by Senator John Kerry, the Massachusetts Democrat who is expected to succeed Mrs. Clinton as secretary of state.

Mrs. Clinton has said that she takes responsibility for the failure to successfully defend the Benghazi compound in the Sept. 11 attack. But she has never been questioned by lawmakers about how decisions were made by the Obama administration to establish the compound and protect it.

When a House oversight committee held a hearing on the Benghazi attack in October, the State Department was represented by a senior management official and a midlevel official from the department’s Bureau of Diplomatic Security. The former chief security officer for the embassy in Libya, Eric A. Nordstrom, told that panel that some of his requests for additional security were ignored. But the State Department’s under secretary for management, Patrick Kennedy, countered that none of the steps proposed by Mr. Nordstrom would have altered the outcome in Benghazi because the embassy was based in Tripoli.

The political debate over the Benghazi attack has already claimed one victim: the ambassador to the United Nations, Susan E. Rice. Ms. Rice had been the Obama administration’s top choice to succeed Mrs. Clinton as secretary of state, but last week she withdrew her name from consideration for the job because of the controversy over her initial description of the attack as a spontaneous demonstration that spun out of control.

On Tuesday, Mrs. Clinton canceled a planned trip to Morocco, where she was expected to formally recognize a new Syrian opposition coalition as the legitimate representative of the Syrian people. President Obama conveyed the recognition instead in an interview with ABC News.

Last week, State Department officials gave a mixed picture about the severity of Mrs. Clinton’s illness. On Wednesday, a State Department spokeswoman, Victoria Nuland, described Mrs. Clinton as having a “very uncomfortable stomach virus.”

The next day, Ms. Nuland said Mrs. Clinton was “under the weather.” Ms. Nuland did say that Mrs. Clinton’s illness had prevented her from making any calls to foreign leaders.

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Connecticut Shooting: Hero Teacher Died Saving Students

By Sara Hammel and Mike Fleeman

12/15/2012 at 06:30 PM EST

Out of the chaos and horror emerged an incredible act of selflessness and bravery by one teacher, who spent her final moments trying to protect her young students from harm.

Victoria Soto, 27, a first-grade teacher at Sandy Hook Elementary School in Newtown, Conn., ushered her students into a closet and in so doing placed her body between them and the assailant.

"She was found huddled over her children, her students, doing instinctively what she knew was the right thing," her cousin Jim Wiltsie tells ABC News. "I'm just proud that Vicki had the instincts to protect her kids from harm,” he continued. “It brings peace to know that Vicki was doing what she loved, protecting the children and in our eyes she's a hero.”

Soto was among the six adults – all women – killed in Friday morning's massacre that also took the lives of 20 children – 12 girls and eight boys. The gunman, identified as 20-year-old Adam Lanza, took his own life. His mother was also found killed in a different location.

"It doesn't surprise me at all she would do this," Sabeena Ali, the parent of a girl who was in Soto's class two years ago, tells PEOPLE.

Ali calls Soto a "vibrant woman who loved the kids and would be with the kids and spend time with them and sit on the floor with them. "

Two years later, her daughter – now a third-grader – still idolized Soto.

"Every day there was some new Miss Soto story we had to listen to: 'This is what she did, this is how wonderful she was today,'" says Ali. "She would bring in snacks for the kids and do special days.

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Fewer health care options for illegal immigrants

ALAMO, Texas (AP) — For years, Sonia Limas would drag her daughters to the emergency room whenever they fell sick. As an illegal immigrant, she had no health insurance, and the only place she knew to seek treatment was the hospital — the most expensive setting for those covering the cost.

The family's options improved somewhat a decade ago with the expansion of community health clinics, which offered free or low-cost care with help from the federal government. But President Barack Obama's health care overhaul threatens to roll back some of those services if clinics and hospitals are overwhelmed with newly insured patients and can't afford to care for as many poor families.

To be clear, Obama's law was never intended to help Limas and an estimated 11 million illegal immigrants like her. Instead, it envisions that 32 million uninsured Americans will get access to coverage by 2019. Because that should mean fewer uninsured patients showing up at hospitals, the Obama program slashed the federal reimbursement for uncompensated care.

But in states with large illegal immigrant populations, the math may not work, especially if lawmakers don't expand Medicaid, the joint state-federal health program for the poor and disabled.

When the reform has been fully implemented, illegal immigrants will make up the nation's second-largest population of uninsured, or about 25 percent. The only larger group will be people who qualify for insurance but fail to enroll, according to a 2012 study by the Washington-based Urban Institute.

And since about two-thirds of illegal immigrants live in just eight states, those areas will have a disproportionate share of the uninsured to care for.

In communities "where the number of undocumented immigrants is greatest, the strain has reached the breaking point," Rich Umbdenstock, president of the American Hospital Association, wrote last year in a letter to Obama, asking him to keep in mind the uncompensated care hospitals gave to that group. "In response, many hospitals have had to curtail services, delay implementing services, or close beds."

The federal government has offered to expand Medicaid, but states must decide whether to take the deal. And in some of those eight states — including Texas, Florida and New Jersey — hospitals are scrambling to determine whether they will still have enough money to treat the remaining uninsured.

Without a Medicaid expansion, the influx of new patients and the looming cuts in federal funding could inflict "a double whammy" in Texas, said David Lopez, CEO of the Harris Health System in Houston, which spends 10 to 15 percent of its $1.2 billion annual budget to care for illegal immigrants.

Realistically, taxpayers are already paying for some of the treatment provided to illegal immigrants because hospitals are required by law to stabilize and treat any patients that arrive in an emergency room, regardless of their ability to pay. The money to cover the costs typically comes from federal, state and local taxes.

A solid accounting of money spent treating illegal immigrants is elusive because most hospitals do not ask for immigration status. But some states have tried.

California, which is home to the nation's largest population of illegal immigrants, spent an estimated $1.2 billion last year through Medicaid to care for 822,500 illegal immigrants.

The New Jersey Hospital Association in 2010 estimated that it cost between $600 million and $650 million annually to treat 550,000 illegal immigrants.

And in Texas, a 2010 analysis by the Health and Human Services Commission found that the agency had provided $96 million in benefits to illegal immigrants, up from $81 million two years earlier. The state's public hospital districts spent an additional $717 million in uncompensated care to treat that population.

If large states such as Florida and Texas make good on their intention to forgo federal money to expand Medicaid, the decision "basically eviscerates" the effects of the health care overhaul in those areas because of "who lives there and what they're eligible for," said Lisa Clemans-Cope, a senior researcher at the Urban Institute.

Seeking to curb expenses, hospitals might change what qualifies as an emergency or cap the number of uninsured patients they treat. And although it's believed states with the most illegal immigrants will face a smaller cut, they will still lose money.

The potential impacts of reform are a hot topic at MD Anderson Cancer Center in Houston. In addition to offering its own charity care, some MD Anderson oncologists volunteer at a county-funded clinic at Lyndon B. Johnson General Hospital that largely treats the uninsured.

"In a sense we've been in the worst-case scenario in Texas for a long time," said Lewis Foxhall, MD Anderson's vice president of health policy in Houston. "The large number of uninsured and the large low-income population creates a very difficult problem for us."

Community clinics are a key part of the reform plan and were supposed to take up some of the slack for hospitals. Clinics received $11 billion in new funding over five years so they could expand to help care for a swell of newly insured who might otherwise overwhelm doctors' offices. But in the first year, $600 million was cut from the centers' usual allocation, leaving many to use the money to fill gaps rather than expand.

There is concern that clinics could themselves be inundated with newly insured patients, forcing many illegal immigrants back to emergency rooms.

Limas, 44, moved to the border town of Alamo 13 years ago with her husband and three daughters. Now single, she supports the family by teaching a citizenship class in Spanish at the local community center and selling cookies and cakes she whips up in her trailer. Soon, she hopes to seek a work permit of her own.

For now, the clinic helps with basic health care needs. If necessary, Limas will return to the emergency room, where the attendants help her fill out paperwork to ensure the government covers the bills she cannot afford.

"They always attended to me," she said, "even though it's slow."

___

Sherman can be followed on Twitter at https://twitter.com/chrisshermanAP .

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP .

Read More..

Wall Street Week Ahead: Holiday "on standby" as clock ticks on cliff

NEW YORK (Reuters) - The last two weeks of December are traditionally quiet for stocks, but traders accustomed to a bit of time off are staying close to their mobile devices, thanks to the "fiscal cliff."

Last-minute negotiations in Washington on the so-called fiscal cliff - nearly $600 billion of tax increases and spending cuts set to take effect in January that could cause a sharp slowdown in growth or even a recession - are keeping some traders and analysts from taking Christmas holidays because any deal could have a big impact on markets.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

"Next week is going to be a Capitol Hill-driven market."

With talks between President Barack Obama and House Speaker John Boehner at an apparent standstill, it was increasingly likely that Washington will not come up with a deal before January 1.

Gordon Charlop, managing director at Rosenblatt Securities in New York, will also be on standby for the holiday season.

"It's a 'Look guys, let's just rotate and be sensible" type of situation going on," Charlop said.

"We are hopeful there is some resolution down there, but it seems to me they continue to walk that political tightrope... rather than coming up with something."

Despite concerns that the deadline will pass without a deal, the S&P 500 has held its ground with a 12.4 percent gain for the year. For this week, though, the S&P 500 fell 0.3 percent.

BEWARE OF THE WITCH

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

"We could see some heavy selling as there is going to be a lot of re-establishing of positions, reallocation of assets before the year-end," Kinahan said.

RETHINKING APPLE

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, if Congress and the White House don't come up with a solution to avert the fiscal cliff. That possibility could give investors an incentive to unload certain stocks in some tax-related selling by December 31.

Some market participants said tax-related selling may be behind the weaker trend in the stock price of market leader Apple . Apple's stock has lost a quarter of its value since it hit a lifetime high of $705.07 on September 21.

On Friday, the stock fell 3.8 percent to $509.79 after the iPhone 5 got a chilly reception at its debut in China and two analysts cut shipment forecasts. But the stock is still up nearly 26 percent for the year.

"If you owned Apple for a long time, you should be thinking about reallocation as there will be changes in taxes and other regulations next year, although we don't really know which rules to play by yet," Kinahan said.

But one indicator of the market's reduced concern about the fiscal cliff compared with a few weeks ago, is the defense sector, which will be hit hard if the spending cuts take effect. The PHLX Defense Sector Index <.dfx> is up nearly 13 percent for the year, and sits just a few points from its 2012 high.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Man Stabs 22 Children in China

BEIJING (AP) — A man wielding a knife wounded 22 children and one adult outside a primary school in central China as students were arriving for classes on Friday, the police said.

The attack, in the village of Chengping in Henan Province, happened shortly before 8 a.m., said a police officer from Guangshan County, where the village is located.

The attacker, Min Yingjun, 36, was subdued by security guards and taken into custody by the police, said the officer, who declined to give her name, which is customary among Chinese civil servants. Guards have been posted at schools across China after a spate of attacks in recent years.

A Guangshan County hospital administrator said there were no deaths among the nine students admitted to the hospital, although two badly wounded children were transferred to better-equipped hospitals outside the county.

A doctor at Guangshan’s hospital of traditional Chinese medicine said that seven students had been admitted there, but that none were seriously injured.

It was not clear how old the wounded children were, but Chinese primary school students are generally 6 to 11.

A notice on the Guangshan County government’s Web site confirmed the number of wounded and said an emergency response team had been set up to investigate the stabbings.

No motive was given for the attack, which resembled a string of similar assaults against Chinese schoolchildren in 2010 that killed nearly 20 and wounded more than 50. The most recent such attack took place in August, when a man broke into a middle school in the southern city of Nanchang and stabbed two students before fleeing.

Most of the attackers have been mentally disturbed men involved in personal disputes or unable to adjust to the rapid pace of social change in China, underscoring grave weaknesses in the antiquated Chinese medical system’s ability to diagnose and treat psychiatric illness.

In one of the worst attacks, a man described as an unemployed, middle-aged doctor killed eight children with a knife in March 2010 to vent his anger over a thwarted romantic relationship.

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McAfee says will not return to Belize, willing to talk to police

(Reuters) – U.S. software pioneer John McAfee said that he will not return to Belize where police want to question him about a murder case, but that he is willing to let authorities from the Central American nation interview him in a “neutral country.”

McAfee, 67, went into hiding after his American neighbor Gregory Faull was fatally shot in November. He made his way secretly to neighboring Guatemala, but the authorities there deported him to Miami on Wednesday.

“I will not go back to Belize. I had nothing to do with the murder,” a relaxed-looking McAfee said in an interview on CNBC.

Police in Belize want to question McAfee as a “person of interest” in Faull’s killing, though authorities there say he is not a prime suspect. McAfee said he barely knew Faull and had “absolutely nothing” to do with his death.

Belize police say their country’s extradition treaty with the United States extends only to suspected criminals, a designation that does not apply to McAfee.

McAfee, an eccentric tech pioneer, made a fortune from the anti-virus software bearing his name and had lived in Belize for four years.

He has charged that authorities have persecuted him because he refused to pay $ 2 million in bribes, and that the extortion attempt occurred after armed soldiers shot one of his dogs, smashed up his property and falsely accused him of running a methamphetamine laboratory.

Belize’s prime minister has rejected the allegations, calling McAfee paranoid and “bonkers.”

(Reporting by Jim Finkle; Editing by Nick Zieminski)

Tech News Headlines – Yahoo! News

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Principal Dawn Lafferty Hochsprung Was Loved By Kids: Friend

By Julia Haskins

12/14/2012 at 07:30 PM EST

Dawn Lafferty Hochsprung, the Sandy Hook Elementary School principal killed in Friday's mass shooting, will be remembered as a committed educator who was loved by her students.

The principal of the Newtown, Conn., school died trying to protect the students she cared for every day. The gunman, identified as 20-year-old Adam Lanza, started his rampage in the school's main office, where Hochsprung had reportedly come out of a meeting.

Hochsprung was killed in the shooting, the sound of which was reportedly broadcast over the school's PA system.

"She was really nice and very fun, but she was also very much a tough lady in the right sort of sense," Tom Prunty, a friend whose niece goes to Sandy Hook and was uninjured Friday, told CNN. "She was the kind of person you'd want to be educating your kids. And the kids loved her."

In all, the death toll in the tragedy has been put at 28 total: 20 children, six adults – including Hochsprung – the gunman and the gunman's mother, who was a kindergarten teacher, at a secondary location.

Safety In Mind

Hochsprung was committed to school safety, having recently installed a visual monitoring system on the campus. Visitors had to wait to be let in after the school doors locked at 9:30 a.m., and then sign in at the main office. In a letter to parents about the security system, Hochsprung said the lengthy process of the new system would take some getting used to, but that it was for the greater good of the school. And Hochsprung would have done anything to make Sandy Hook Elementary School a great place to be.

"I don't think you could find a more positive place to bring students to every day," she told the Newtown Bee when she was first hired.

Vito Kala, the owner and manager of The Villa, an Italian restaurant down the road from Sandy Hook Elementary School that was frequented by Hochsprung and other staff members, tells PEOPLE he had no doubt about Hochsprung's courage.

"It doesn't surprise me at all to hear the principal was a hero," he said. "That's [in line] with what I know. That is what she would have done, no question."

Danbury Deputy superintendent William Glass would agree. "She had a tremendous intellect and a wonderful way with children," Glass said of the always-smiling principal. "She was an amazing educator. She was everything you would want."

And a dad of triplets who go the school says of Dawn: "Every year she'd do a sock hop at the school, and she'd dress up in hoop skirts and bobby socks. She really got into it. She was so great with the kids. They loved her. It does not surprise me at all she'd do something heroic."

Hochsprung maintained an active Twitter account, where she updated followers with news about the school. Her last Tweet expressed her excitement about a school event. "Setting up for the Sandy Hook nonfiction book preview for staff... Common Core, here we come!"

Hochsprung, of Waterbury, Conn., came to Sandy Hook Elementary School in 2010 with 12 years of administrative experience. She received a bachelor's degree in special education from Central Connecticut State University in 1993, a master's in special education from Southern Connecticut State University in 1997, and a sixth-year degree in educational leadership from Southern in 1998, according to NewsTimes.

She had two daughters and three stepdaughters, according to CNN.

– With reporting from Sara Hammel

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Fewer health care options for illegal immigrants

ALAMO, Texas (AP) — For years, Sonia Limas would drag her daughters to the emergency room whenever they fell sick. As an illegal immigrant, she had no health insurance, and the only place she knew to seek treatment was the hospital — the most expensive setting for those covering the cost.

The family's options improved somewhat a decade ago with the expansion of community health clinics, which offered free or low-cost care with help from the federal government. But President Barack Obama's health care overhaul threatens to roll back some of those services if clinics and hospitals are overwhelmed with newly insured patients and can't afford to care for as many poor families.

To be clear, Obama's law was never intended to help Limas and an estimated 11 million illegal immigrants like her. Instead, it envisions that 32 million uninsured Americans will get access to coverage by 2019. Because that should mean fewer uninsured patients showing up at hospitals, the Obama program slashed the federal reimbursement for uncompensated care.

But in states with large illegal immigrant populations, the math may not work, especially if lawmakers don't expand Medicaid, the joint state-federal health program for the poor and disabled.

When the reform has been fully implemented, illegal immigrants will make up the nation's second-largest population of uninsured, or about 25 percent. The only larger group will be people who qualify for insurance but fail to enroll, according to a 2012 study by the Washington-based Urban Institute.

And since about two-thirds of illegal immigrants live in just eight states, those areas will have a disproportionate share of the uninsured to care for.

In communities "where the number of undocumented immigrants is greatest, the strain has reached the breaking point," Rich Umbdenstock, president of the American Hospital Association, wrote last year in a letter to Obama, asking him to keep in mind the uncompensated care hospitals gave to that group. "In response, many hospitals have had to curtail services, delay implementing services, or close beds."

The federal government has offered to expand Medicaid, but states must decide whether to take the deal. And in some of those eight states — including Texas, Florida and New Jersey — hospitals are scrambling to determine whether they will still have enough money to treat the remaining uninsured.

Without a Medicaid expansion, the influx of new patients and the looming cuts in federal funding could inflict "a double whammy" in Texas, said David Lopez, CEO of the Harris Health System in Houston, which spends 10 to 15 percent of its $1.2 billion annual budget to care for illegal immigrants.

Realistically, taxpayers are already paying for some of the treatment provided to illegal immigrants because hospitals are required by law to stabilize and treat any patients that arrive in an emergency room, regardless of their ability to pay. The money to cover the costs typically comes from federal, state and local taxes.

A solid accounting of money spent treating illegal immigrants is elusive because most hospitals do not ask for immigration status. But some states have tried.

California, which is home to the nation's largest population of illegal immigrants, spent an estimated $1.2 billion last year through Medicaid to care for 822,500 illegal immigrants.

The New Jersey Hospital Association in 2010 estimated that it cost between $600 million and $650 million annually to treat 550,000 illegal immigrants.

And in Texas, a 2010 analysis by the Health and Human Services Commission found that the agency had provided $96 million in benefits to illegal immigrants, up from $81 million two years earlier. The state's public hospital districts spent an additional $717 million in uncompensated care to treat that population.

If large states such as Florida and Texas make good on their intention to forgo federal money to expand Medicaid, the decision "basically eviscerates" the effects of the health care overhaul in those areas because of "who lives there and what they're eligible for," said Lisa Clemans-Cope, a senior researcher at the Urban Institute.

Seeking to curb expenses, hospitals might change what qualifies as an emergency or cap the number of uninsured patients they treat. And although it's believed states with the most illegal immigrants will face a smaller cut, they will still lose money.

The potential impacts of reform are a hot topic at MD Anderson Cancer Center in Houston. In addition to offering its own charity care, some MD Anderson oncologists volunteer at a county-funded clinic at Lyndon B. Johnson General Hospital that largely treats the uninsured.

"In a sense we've been in the worst-case scenario in Texas for a long time," said Lewis Foxhall, MD Anderson's vice president of health policy in Houston. "The large number of uninsured and the large low-income population creates a very difficult problem for us."

Community clinics are a key part of the reform plan and were supposed to take up some of the slack for hospitals. Clinics received $11 billion in new funding over five years so they could expand to help care for a swell of newly insured who might otherwise overwhelm doctors' offices. But in the first year, $600 million was cut from the centers' usual allocation, leaving many to use the money to fill gaps rather than expand.

There is concern that clinics could themselves be inundated with newly insured patients, forcing many illegal immigrants back to emergency rooms.

Limas, 44, moved to the border town of Alamo 13 years ago with her husband and three daughters. Now single, she supports the family by teaching a citizenship class in Spanish at the local community center and selling cookies and cakes she whips up in her trailer. Soon, she hopes to seek a work permit of her own.

For now, the clinic helps with basic health care needs. If necessary, Limas will return to the emergency room, where the attendants help her fill out paperwork to ensure the government covers the bills she cannot afford.

"They always attended to me," she said, "even though it's slow."

___

Sherman can be followed on Twitter at https://twitter.com/chrisshermanAP .

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP .

Read More..

Wall St Week Ahead: Holiday "on standby" as clock ticks on cliff

NEW YORK (Reuters) - The last two weeks of December are traditionally quiet for stocks, but traders accustomed to a bit of time off are staying close to their mobile devices, thanks to the "fiscal cliff."

Last-minute negotiations in Washington on the so-called fiscal cliff - nearly $600 billion of tax increases and spending cuts set to take effect in January that could cause a sharp slowdown in growth or even a recession - are keeping some traders and analysts from taking Christmas holidays because any deal could have a big impact on markets.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

"Next week is going to be a Capitol Hill-driven market."

With talks between President Barack Obama and House Speaker John Boehner at an apparent standstill, it was increasingly likely that Washington will not come up with a deal before January 1.

Gordon Charlop, managing director at Rosenblatt Securities in New York, will also be on standby for the holiday season.

"It's a 'Look guys, let's just rotate and be sensible" type of situation going on," Charlop said.

"We are hopeful there is some resolution down there, but it seems to me they continue to walk that political tightrope... rather than coming up with something."

Despite concerns that the deadline will pass without a deal, the S&P 500 has held its ground with a 12.4 percent gain for the year. For this week, though, the S&P 500 fell 0.3 percent.

BEWARE OF THE WITCH

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

"We could see some heavy selling as there is going to be a lot of re-establishing of positions, reallocation of assets before the year-end," Kinahan said.

RETHINKING APPLE

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, if Congress and the White House don't come up with a solution to avert the fiscal cliff. That possibility could give investors an incentive to unload certain stocks in some tax-related selling by December 31.

Some market participants said tax-related selling may be behind the weaker trend in the stock price of market leader Apple . Apple's stock has lost a quarter of its value since it hit a lifetime high of $705.07 on September 21.

On Friday, the stock fell 3.8 percent to $509.79 after the iPhone 5 got a chilly reception at its debut in China and two analysts cut shipment forecasts. But the stock is still up nearly 26 percent for the year.

"If you owned Apple for a long time, you should be thinking about reallocation as there will be changes in taxes and other regulations next year, although we don't really know which rules to play by yet," Kinahan said.

But one indicator of the market's reduced concern about the fiscal cliff compared with a few weeks ago, is the defense sector, which will be hit hard if the spending cuts take effect. The PHLX Defense Sector Index <.dfx> is up nearly 13 percent for the year, and sits just a few points from its 2012 high.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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European Leaders Hail Accord on Banking Supervision

BRUSSELS — European leaders gathering here on Thursday for their year-end summit meeting hailed an agreement to place euro zone banks under a single supervisor, calling it a concrete measure to maintain the viability of the currency as well as a step in laying the groundwork for a broader economic union.

The agreement was reached during an all-night negotiating session of finance ministers that ended early Thursday after France and Germany made significant compromises. Under the agreement, 100 to 200 large banks in the euro zone will fall under the direct supervision of the European Central Bank.

A round of talks a week earlier broke up because of French and German discord over how many banks in the currency union should be covered by the new system.

In a concession to Germany, the finance ministers agreed that thousands of smaller banks would be primarily overseen by national regulators. But to satisfy the French, who wanted all euro zone banks to be held accountable, the central bank will be able to take over supervision of any bank in the region at any time.

The agreement by the finance ministers, which still requires the approval of the European Parliament and some national parliaments including the German Bundestag, made it possible for European Union leaders arriving here later Thursday to gather in a spirit of unity.

“It’s a good day for Europe,” said President François Hollande of France. “The crisis came from the banks, and mechanisms have been put in place that will mean nothing is as it was before.”

Angela Merkel, the German chancellor, said the agreement was “a big step toward more trust and confidence in the euro zone.” The summit meeting could now focus on “strengthening economic coordination” and “set out a road map for the coming months,” she added.

In another measure to shore up the euro, the finance ministers approved the release of nearly 50 billion euros, or $65 billion, in further aid to Greece, including long-delayed payments, support that is crucial for the government to avoid defaulting on its debts.

“Today is not only a new day for Greece, it is indeed a new day for Europe,” Antonis Samaras, the Greek prime minister, said ahead of the summit meeting.

But threatening to spoil the upbeat atmosphere were questions over the future leadership of Italy, where the economy is contracting, debt levels are rising and Silvio Berlusconi, the former prime minister, has threatened to try to reclaim the office in an election next year.

It remained unclear on Thursday whether Mr. Berlusconi would run and, if that were to happen, whether he would campaign on promises to reverse reforms put in place by Mario Monti, the current prime minister. Even so, the re-emergence of Mr. Berlusconi — who attended a summit meeting of center-right parties in Brussels on Thursday — could destabilize markets and even rekindle the financial crisis.

The bank supervision plan was first discussed in June and wrapped up in a matter of months — record time by the glacial standards of European Union rule-making. The agreement should serve as a springboard for leaders to weigh further steps toward economic integration during their meeting.

Such measures could include a unified system, and perhaps shared euro area resources, to ensure failing banks are closed in an orderly fashion. This could be followed, in time, by actions intended to reinforce economic and monetary union, including, possibly, the creation of a shared fund that could be used to shore up the economies of vulnerable members of the euro zone.

Mario Draghi, the president of the European Central Bank, said the agreement on banking supervision was “an important step towards a stable economic and monetary union, and toward further European integration.” But he noted that governments and the European Commission still had to work on the details of the supervision mechanism.

The new system should be fully operational by March 2014, but the ministers left the door open for the central bank to push that date back if it would “not be ready for exercising in full its tasks.”

A series of compromises was needed for finance ministers to reach agreement on banking supervision.

Initially, France and the European Commission had asked that all 6,000 banks in the euro area be closely regulated by the central bank. But in a concession, France agreed that only banks holding more than 30 billion euros in assets, or assets greater than 20 percent of their country’s gross domestic product, would be directly regulated by the central bank.

Germany, seeking to make the central bank’s job more manageable and facing pressure from a powerful domestic banking lobby trying to shield many small savings banks from closer scrutiny, sought a reduced portfolio for the bank. But Germany agreed to let the central bank, at its discretion, step in and take over supervision of any euro zone bank.

The Germans and Swedes also had concerns that the central bank could be tempted to alter its decisions on monetary policy to make its supervisory job easier. As a compromise, member states are to be given greater scope than originally foreseen to challenge central bank decisions.

Britain, which is not a member of the euro zone, sought assurances that the new banking supervisor would not have influence over banks operating in the City of London. Britain agreed to a formula that should allow it and other European Union members outside the euro zone to counteract most — but probably not all — rule-making by the central bank. These countries will also be able to challenge decisions pertaining to cross-border banking.

The supervisor is a prerequisite for a new European bailout fund, the European Stability Mechanism, to provide aid directly to the troubled banks of countries including Spain and Ireland. Such aid would allow those governments to avoid weighing down their national balance sheets with yet more debt. Those countries, along with France, successfully lobbied for direct recapitalization of banks to be mentioned in the agreement.

But in a concession to Germany, which is wary about spending more money on bailouts ahead of national elections in late 2013, and to assuage similar concerns by the Dutch and Finns, the agreement underlined the need for unanimity among states contributing to the bailout fund before any such measures can go ahead.

Niki Kitsantonis contributed reporting from Athens.

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