States' choices set up national health experiment

WASHINGTON (AP) — President Barack Obama's health care overhaul is unfolding as a national experiment with American consumers as the guinea pigs: Who will do a better job getting uninsured people covered, the states or the feds?

The nation is about evenly split between states that decided by Friday's deadline they want a say in running new insurance markets and states that are defaulting to federal control because they don't want to participate in "Obamacare." That choice was left to state governments under the law: Establish the market or Washington will.

With some exceptions, states led by Democrats opted to set up their own markets, called exchanges, and Republican-led states declined.

Only months from the official launch, exchanges are supposed to make the mind-boggling task of buying health insurance more like shopping on Amazon.com or Travelocity. Millions of people who don't have employer coverage will flock to the new markets. Middle-class consumers will be able to buy private insurance, with government help to pay the premiums in most cases. Low-income people will be steered to safety net programs like Medicaid.

"It's an experiment between the feds and the states, and among the states themselves," said Robert Krughoff, president of Consumers' Checkbook, a nonprofit ratings group that has devised an online tool used by many federal workers to pick their health plans. Krughoff is skeptical that either the feds or the states have solved the technological challenge of making the purchase of health insurance as easy as selecting a travel-and-hotel package.

Whether or not the bugs get worked out, consumers will be able to start signing up Oct. 1 for coverage that takes effect Jan. 1. That's also when two other major provisions of the law kick in: the mandate that almost all Americans carry health insurance, and the rule that says insurers can no longer turn away people in poor health.

Barring last-minute switches that may not be revealed until next week, 23 states plus Washington, D.C., have opted to run their own markets or partner with the Obama administration to do so.

Twenty-six states are defaulting to the feds. But in several of those, Republican governors are trying to carve out some kind of role by negotiating with federal Health and Human Services Secretary Kathleen Sebelius. Utah's status is unclear. It received initial federal approval to run its own market, but appears to be reconsidering.

"It's healthy for the states to have various choices," said Ben Nelson, CEO of the National Association of Insurance Commissioners. "And there's no barrier to taking somebody else's ideas and making them work in your situation." A former U.S. senator from Nebraska, Nelson was one of several conservative Democrats who provided crucial votes to pass the overhaul.

States setting up their own exchanges are already taking different paths. Some will operate their markets much like major employers run their health plans, as "active purchasers" offering a limited choice of insurance carriers to drive better bargains. Others will open their markets to all insurers that meet basic standards, and let consumers decide.

Obama's Affordable Care Act remains politically divisive, but state insurance exchanges enjoy broad public support. Setting up a new market was central to former Republican presidential candidate Mitt Romney's health care overhaul as governor of Massachusetts. There, it's known as the Health Connector.

A recent AP poll found that Americans prefer to have states run the new markets by 63 percent to 32 percent. Among conservatives the margin was nearly 4-1 in favor of state control. But with some exceptions, including Idaho, Nevada and New Mexico, Republican-led states are maintaining a hands-off posture, meaning the federal government will step in.

"There is a sense of irony that it's the more conservative states" yielding to federal control, said Sandy Praeger, the Republican insurance commissioner in Kansas, a state declining to run its own exchange. First, she said, the law's opponents "put their money on the Supreme Court, then on the election. Now that it's a reality, we may see some movement."

They're not budging in Austin. "Texas is not interested in being a subcontractor to Obamacare," said Lucy Nashed, spokeswoman for Gov. Rick Perry, who remains opposed to mandates in the law.

In Kansas, Praeger supported a state-run exchange, but lost the political struggle to Gov. Sam Brownback. She says Kansans will be closely watching what happens in neighboring Colorado, where the state will run the market. She doubts that consumers in her state would relish dealing with a call center on the other side of the country. The federal exchange may have some local window-dressing but it's expected to function as a national program.

Christine Ferguson, director of the Rhode Island Health Benefits Exchange, says she expects to see a big shift to state control in the next few years. "Many of the states have just run out of time for a variety of reasons," said Ferguson. "I'd be surprised if in the longer run every state didn't want to have its own approach."

In some ways, the federal government has a head start on the states. It already operates the Medicare Plan Finder for health insurance and prescription plans that serve seniors, and the Federal Employees Health Benefits Program. Both have many of the features of the new insurance markets.

Administration officials are keeping mum about what the new federal exchange will look like, except that it will open on time and people in all 50 states will have the coverage they're entitled to by law.

Joel Ario, who oversaw planning for the health exchanges in the Obama administration, says "there's a rich dialogue going on" as to what the online shopping experience should look like. "To create a website like Amazon is a very complicated exercise," said Ario, now a consultant with Manatt Health Solutions.

He thinks consumers should be able to get one dollar figure for each plan that totals up all their expected costs for the year, including premiums, deductibles and copayments. Otherwise, scrolling through pages of insurance jargon online will be a sure turn-off.

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Wall Street ends slightly down, S&P positive for seventh week

NEW YORK (Reuters) - The S&P 500 dipped in a late decline on Friday as Wal-Mart dropped following a report of a weak start to February sales, though the index just barely extended its streak of weekly gains to seven.

Equities were little changed for much of the session, with investors finding few reasons to make big bets following an extended rally on Wall Street, but stocks turned lower in afternoon action.

Wal-Mart Stores Inc dropped 2.1 percent to $69.30 after Bloomberg News reported a weak start to February sales, citing internal company e-mails. The stock was the biggest decliner on the Dow, while the S&P retail index <.spxrt> fell 0.5 percent.

"When a retailer of this size comes out with this kind of lousy news, the whole market can fall off, especially on a Friday afternoon," said Mike Shea, trader at Direct Access Partners in New York. "However, I'm not worried that this is indicative of any larger macro issue with retail."

Equities have struggled for direction recently, with major indexes moving only slightly in the past several sessions. The S&P didn't end a session with a move greater than 0.2 percent at all this week.

The benchmark index, up 6.6 percent so far this year, is facing strong technical resistance near the 1,525 level. But investors, expecting the index to advance further in the quarter, have held back from locking in profits.

"There's no news that suggests the strong underpinning for stocks isn't appropriate. We may have gotten ahead of ourselves, but there's also an absence of bad news," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Many investors are starting to look ahead to a debate in Washington over sequestration, automatic across-the-board spending cuts put in place as part of a larger congressional budget fight. The cuts are due to kick in March 1 unless lawmakers agree to an alternative.

"This had been far enough out to not yet become an impediment for stocks, but it will start to move into the forefront and cause people to take a bit of a jaundiced eye towards the market," said Luschini, who helps oversee about $54 billion in assets.

The Dow Jones industrial average <.dji> was up 11.27 points, or 0.08 percent, at 13,984.66. The Standard & Poor's 500 Index <.spx> was up 0.32 points, or 0.02 percent, at 1,521.70. The Nasdaq Composite Index <.ixic> was up 1.51 points, or 0.05 percent, at 3,200.17.

For the week, both the Dow and Nasdaq fell 0.1 percent while the S&P rose 0.1 percent in its seventh straight week of gains, a period during which the index rose 8.4 percent. The last such seven-week run was between December 2010 and January 2011.

The New York Federal Reserve said manufacturing in New York state expanded for the first time in seven months, while Thomson Reuters/University of Michigan's preliminary reading of consumer sentiment rose from the prior month and beat expectations.

But U.S. manufacturing fell in January after a rise in the prior month.

Wall Street's gain thus far in 2013 has largely been driven by strong corporate earnings, while data indicated some weakening in economic conditions.

A surge in merger and acquisition activity, with more than $158 billion in deals announced so far in 2013, has given further support to the equity market as it points to healthy valuations and bets on the economic outlook.

Herbalife shares cut earlier gains to rise 1.2 percent to $38.74. Late Thursday, billionaire investor Carl Icahn said in a regulatory filing that he now owns 13 percent of Herbalife and was ready to put it in play.

MeadWestvaco Corp climbed 12.5 percent to $35.65 as the biggest percentage gainer on the S&P index after activist investor Nelson Peltz's Trian Fund Management LP said it had bought about 1.6 million shares of the packaging company.

Burger King Worldwide shares gained 4.7 percent to $17.36 after it beat estimates with a 94 percent rise in fourth-quarter profit, thanks to new menu additions.

Oil service stocks declined, weighed by a 5.1 percent drop in shares of Transocean to $56.26, after the rig contractor reported its fleet update and Deutsche Bank cut its rating on the stock to "sell." The PHLX oil service sector <.osx> lost 1.5 percent.

Slightly more stocks fell than rose on the New York Stock Exchange while about 50 percent of Nasdaq shares ended lower. About 6.69 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, above the daily average so far this year of about 6.48 billion shares.

(Editing by Nick Zieminski)

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Vowing Reform, China’s Leader, Xi Jinping, Airs Other Message in Private

HONG KONG — When China’s new leader, Xi Jinping, visited the country’s south to promote himself before the public as an audacious reformer following in the footsteps of Deng Xiaoping, he had another message to deliver to Communist Party officials behind closed doors.

Feng Li/Getty Images

Xi Jinping has came to power at a time when the pressure of public expectations for greater official accountability is growing. 

Despite decades of heady economic growth, Mr. Xi told party insiders during a visit to Guangdong Province in December, China must still heed the “deeply profound” lessons of the former Soviet Union, where political rot, ideological heresy and military disloyalty brought down the governing party. In a province famed for its frenetic capitalism, he demanded a return to traditional Leninist discipline.

“Why did the Soviet Union disintegrate? Why did the Soviet Communist Party collapse? An important reason was that their ideals and convictions wavered,” Mr. Xi said, according to a summary of his comments that has circulated among officials but has not been published by the state-run news media.

“Finally, all it took was one quiet word from Gorbachev to declare the dissolution of the Soviet Communist Party, and a great party was gone,” the summary quoted Mr. Xi as saying. “In the end nobody was a real man, nobody came out to resist.”

In Mr. Xi’s first three months as China’s top leader, he has gyrated between defending the party’s absolute hold on power and vowing a fundamental assault on entrenched interests of the party elite that fuel corruption. How to balance those goals presents a quandary to Mr. Xi, whose agenda could easily be undermined by rival leaders determined to protect their own bailiwicks and on guard against anything that weakens the party’s authority, insiders and analysts say.

“Everyone is talking about reform, but in fact everyone has a fear of reform,” said Ma Yong, a historian at the Chinese Academy of Social Sciences. For party leaders, he added: “The question is: Can society be kept under control while you go forward? That’s the test.”

Gao Yu, a former journalist and independent commentator, was the first to reveal Mr. Xi’s comments, doing so on a blog. Three insiders, who were shown copies by officials or editors at state newspapers, confirmed their authenticity, speaking on the condition of anonymity because of the risk of punishment for discussing party affairs.

The tension between embracing change and defending top-down party power has been an abiding theme in China since Deng set the country on its economic transformation in the late 1970s. But Mr. Xi has come to power at a time when such strains are especially acute, and the pressure of public expectations for greater official accountability is growing, amplified by millions of participants in online forums.

Mr. Xi has promised determined efforts to deal with China’s persistent problems, including official corruption and the chasm between rich and poor. He has also sought a sunnier image, doing away with some of the intimidating security that swaddled his predecessor, Hu Jintao, and demanding that official banquets be replaced by plainer fare called “four dishes and a soup.”

Yet Mr. Xi’s remarks on the lessons of the Soviet Union, as well as warnings in the state news media, betray a fear that China’s strains could overwhelm the party, especially if vows of change founder because of political sclerosis and opposition from privileged interest groups like state-owned conglomerates. Already this year, public outcries over censorship at a popular newspaper and choking pollution in Beijing have given the new party leadership a taste of those pressures.

Some progressive voices are urging China’s leaders to pay more than lip service to respecting rights and limits on party power promised by the Constitution. Meanwhile, some old-school leftists hail Mr. Xi as a muscular nationalist who will go further than his predecessors in asserting China’s territorial claims.

The choices facing China’s new leadership include how much to relax the state’s continuing grip on the commanding heights of the economy and how far to take promises to fight corruption — a step that could alienate powerful officials and their families.

“How can the ruling party ensure its standing during a period of flux?” asked Ding Dong, a current affairs commentator in Beijing. “That’s truly a real challenge, and it’s creating a sense of tension and latent crisis inside the party.”

Mr. Xi and his inner circle have about 18 months to consolidate power and begin any big initiatives before preparations for the next Communist Party Congress and leadership reshuffle in 2017 start to consume elite attention, said Christopher Johnson, an analyst on China at the Center for Strategic and International Studies in Washington.

Edward Wong contributed reporting from Beijing.

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Why Melissa Joan Hart Is Resisting Valentine's Day This Year

Age is more than just a number for mom-of-three Melissa Joan Hart.

The actress, who welcomed her second child, Brady, now 4½, two years after the birth of her first son, Mason, now 7, says waiting until both boys were older to expand her family further was ideal.

“It’s definitely easier to have an infant when the other two boys are potty trained and can dress themselves,” Hart, 36, told PEOPLE at Wednesday’s Operation Shower in Pacific Palisades, Calif.

“I’m able to enjoy every single minute, and that has been great.”

Basking in baby bliss with her now 5-month-old son Tucker, Hart is embracing the opportunity to relive all of the major milestones for a third time.

“[Tucker] is just such a happy baby, lots of smiles and laughing. Like the other boys, he has great motor skills and right now it’s fun to see him grab at things,” she says.

Eddie Spantman

Unlike his older brothers, however, Tucker is already sporting some long locks. “One of the biggest differences is that he has tons of hair,” she says.

Having welcomed three children, Hart is adamant about celebrating every birth, which is why she has teamed up with Operation Shower and Birdies for the Brave, a mission to host baby showers for military families whose partners are serving overseas.

“I can’t even imagine how difficult it is for these military moms going through pregnancy alone while their spouses are in harm’s way. It’s an emotional time, especially with all of the hormones,” she says of the event, hosted by Carousel Designs.

“Operation Shower and Birdies for the Brave do a great job of making these moms feel special and recognizing all of their sacrifices at home. It’s a sincere pleasure to support these two outstanding organizations.”

With Valentine’s Day on Thursday, Hart and her husband Mark Wilkerson are looking forward to toasting to some couple time — only she’ll be phoning it in from the set of her show, Melissa & Joey.

“Valentine’s Day is my first day back at work, so I will be enjoying the day with the great cast and crew,” she says.

Continues Hart: “We usually celebrate the day before or the day after anyhow since it’s difficult getting a babysitter that night and it’s so crowded everywhere.”

– Anya Leon

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Study: Fish in drug-tainted water suffer reaction

BOSTON (AP) — What happens to fish that swim in waters tainted by traces of drugs that people take? When it's an anti-anxiety drug, they become hyper, anti-social and aggressive, a study found. They even get the munchies.

It may sound funny, but it could threaten the fish population and upset the delicate dynamics of the marine environment, scientists say.

The findings, published online Thursday in the journal Science, add to the mounting evidence that minuscule amounts of medicines in rivers and streams can alter the biology and behavior of fish and other marine animals.

"I think people are starting to understand that pharmaceuticals are environmental contaminants," said Dana Kolpin, a researcher for the U.S. Geological Survey who is familiar with the study.

Calling their results alarming, the Swedish researchers who did the study suspect the little drugged fish could become easier targets for bigger fish because they are more likely to venture alone into unfamiliar places.

"We know that in a predator-prey relation, increased boldness and activity combined with decreased sociality ... means you're going to be somebody's lunch quite soon," said Gregory Moller, a toxicologist at the University of Idaho and Washington State University. "It removes the natural balance."

Researchers around the world have been taking a close look at the effects of pharmaceuticals in extremely low concentrations, measured in parts per billion. Such drugs have turned up in waterways in Europe, the U.S. and elsewhere over the past decade.

They come mostly from humans and farm animals; the drugs pass through their bodies in unmetabolized form. These drug traces are then piped to water treatment plants, which are not designed to remove them from the cleaned water that flows back into streams and rivers.

The Associated Press first reported in 2008 that the drinking water of at least 51 million Americans carries low concentrations of many common drugs. The findings were based on questionnaires sent to water utilities, which reported the presence of antibiotics, sedatives, sex hormones and other drugs.

The news reports led to congressional hearings and legislation, more water testing and more public disclosure. To this day, though, there are no mandatory U.S. limits on pharmaceuticals in waterways.

The research team at Sweden's Umea University used minute concentrations of 2 parts per billion of the anti-anxiety drug oxazepam, similar to concentrations found in real waters. The drug belongs to a widely used class of medicines known as benzodiazepines that includes Valium and Librium.

The team put young wild European perch into an aquarium, exposed them to these highly diluted drugs and then carefully measured feeding, schooling, movement and hiding behavior. They found that drug-exposed fish moved more, fed more aggressively, hid less and tended to school less than unexposed fish. On average, the drugged fish were more than twice as active as the others, researcher Micael Jonsson said. The effects were more pronounced at higher drug concentrations.

"Our first thought is, this is like a person diagnosed with ADHD," said Jonsson, referring to attention deficit-hyperactivity disorder. "They become asocial and more active than they should be."

Tomas Brodin, another member of the research team, called the drug's environmental impact a global problem. "We find these concentrations or close to them all over the world, and it's quite possible or even probable that these behavioral effects are taking place as we speak," he said Thursday in Boston at the annual meeting of the American Association for the Advancement of Science.

Most previous research on trace drugs and marine life has focused on biological changes, such as male fish that take on female characteristics. However, a 2009 study found that tiny concentrations of antidepressants made fathead minnows more vulnerable to predators.

It is not clear exactly how long-term drug exposure, beyond the seven days in this study, would affect real fish in real rivers and streams. The Swedish researchers argue that the drug-induced changes could jeopardize populations of this sport and commercial fish, which lives in both fresh and brackish water.

Water toxins specialist Anne McElroy of Stony Brook University in New York agreed: "These lower chronic exposures that may alter things like animals' mating behavior or its ability to catch food or its ability to avoid being eaten — over time, that could really affect a population."

Another possibility, the researchers said, is that more aggressive feeding by the perch on zooplankton could reduce the numbers of these tiny creatures. Since zooplankton feed on algae, a drop in their numbers could allow algae to grow unchecked. That, in turn, could choke other marine life.

The Swedish team said it is highly unlikely people would be harmed by eating such drug-exposed fish. Jonsson said a person would have to eat 4 tons of perch to consume the equivalent of a single pill.

Researchers said more work is needed to develop better ways of removing drugs from water at treatment plants. They also said unused drugs should be brought to take-back programs where they exist, instead of being flushed down the toilet. And they called on pharmaceutical companies to work on "greener" drugs that degrade more easily.

Sandoz, one of three companies approved to sell oxazepam in the U.S., "shares society's desire to protect the environment and takes steps to minimize the environmental impact of its products over their life cycle," spokeswoman Julie Masow said in an emailed statement. She provided no details.

___

Online:

Overview of the drug: http://www.nlm.nih.gov/medlineplus/druginfo/meds/a682050.html

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Wall Street ends slightly higher, helped by acquisitions

NEW YORK (Reuters) - The S&P 500 eked out a small gain for a third straight session on Thursday, helped by a flurry of merger activity, though investors see no catalysts to lift the market further with major averages near multi-year highs.

The market's slowed advance took the S&P 500 to its highest intraday level since November 2007 on Wednesday. While the index notched its third straight day of gains, none was more than 0.2 percent.

Shares of H.J. Heinz Co jumped 20 percent to $72.50 after it said Warren Buffett's Berkshire Hathaway and 3G Capital will buy the food company for $72.50 a share, or $28 billion including debt. Berkshire's class B shares rose 1.3 percent to $99.21.

Also supporting the market was data showing the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The CBOE Volatility index <.vix> fell 2.4 percent, dropping to 12.67.

"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.

Equities have struggled to break above current levels where they have been hovering for almost two weeks. The S&P 500 is up more than 6 percent so far this year.

"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher," said Selkin, who helps oversee about $3 billion in assets.

Stocks fell earlier after a report the euro zone's gross domestic product contracted by the steepest amount since the first quarter of 2009. In addition, Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.

The Dow Jones industrial average <.dji> was down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index <.spx> was up 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index <.ixic> was up 1.78 points, or 0.06 percent, at 3,198.66.

Constellation Brands soared 37 percent to $43.75 after AB InBev's deal to take over Mexican brewer Grupo Modelo was revised to grant Constellation perpetual rights to distribute Corona and other Modelo brands in the United States. U.S. shares of AB InBev gained 5.1 percent to $92.77.

American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 4.6 percent to $13.99.

Weakness in Europe contributed to a 5 percent drop in revenue from the region for Cisco Systems , which nonetheless beat estimates as it reported its results late Wednesday. The company's shares dipped 0.7 percent to $20.99.

General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. The stock was off 3.3 percent to $27.73.

Only five more stocks rose than fell on the New York Stock Exchange, while 51 percent of Nasdaq-listed shares closed higher.

Volume was light, with about 6.36 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.48 billion shares.

(Editing by Nick Zieminski and Kenneth Barry)

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Kerry Says He Is Preparing Proposals on Syria Crisis

WASHINGTON — Secretary of State John Kerry said on Wednesday that he had ideas about how to persuade President Bashar al-Assad to agree to a political transition in Syria and planned to raise them on his first foreign trip this month.

“We need to address the question of President Assad’s calculation currently,” Mr. Kerry said after a meeting with Jordan’s foreign minister, Nasser Judeh. “I believe there are additional things that can be done to change his current perception. I’ve got a good sense of what I think we might propose.”

Mr. Kerry did not say what proposals he had in mind. He is expected to travel to the Middle East and Europe, but the trip has not been formally announced.

“I can assure you my goal is to see us change his calculation, my goal is to see us have a negotiated outcome and minimize the violence,” Mr. Kerry said. “It may not be possible. I am not going to stand here and tell you that’s automatic or easily achievable. There are a lot of forces that have been unleashed here over the course of the last months.”

Mr. Kerry made a similar statement during his Senate confirmation hearing last month. Despite his caution that progress might not be possible, the effect of Mr. Kerry’s comments was to heighten expectations for his trip. Mr. Kerry is also expected to try to make headway on the issues dividing the Palestinians and the Israelis and set the stage for President Obama’s trip to Israel next month.

Mr. Kerry’s comment on Syria came a day after Mr. Obama said little about the Syria crisis in his State of the Union address. In that speech, Mr. Obama said he would keep pressure on the Syrian regime, but he did not voice confidence, as he had in his 2012 address, that Mr. Assad would soon be forced to relinquish power.

Mr. Kerry said that Mr. Obama would begin by listening to Israeli and Arab leaders and would not be bringing a major new proposal.

“The president is not prepared at this point in time to do more than listen to the parties, which is why he has announced he is going to go to Israel,” he said.

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Clues to why most survived China melamine scandal

WASHINGTON (AP) — Scientists wondering why some children and not others survived one of China's worst food safety scandals have uncovered a suspect: germs that live in the gut.

In 2008, at least six babies died and 300,000 became sick after being fed infant formula that had been deliberately and illegally tainted with the industrial chemical melamine. There were some lingering puzzles: How did it cause kidney failure, and why wasn't everyone equally at risk?

A team of researchers from the U.S. and China re-examined those questions in a series of studies in rats. In findings released Wednesday, they reported that certain intestinal bacteria play a crucial role in how the body handles melamine.

The intestines of all mammals teem with different species of bacteria that perform different jobs. To see if one of those activities involves processing melamine, researchers from the University of North Carolina at Greensboro and Shanghai Jiao Tong University gave lab rats antibiotics to kill off some of the germs — and then fed them melamine.

The antibiotic-treated rats excreted twice as much of the melamine as rats that didn't get antibiotics, and they experienced fewer kidney stones and other damage.

A closer look identified why: A particular intestinal germ — named Klebsiella terrigena — was metabolizing melamine to create a more toxic byproduct, the team reported in the journal Science Translational Medicine.

Previous studies have estimated that fewer than 1 percent of healthy people harbor that bacteria species. A similar fraction of melamine-exposed children in China got sick, the researchers wrote. But proving that link would require studying stool samples preserved from affected children, they cautioned.

Still, the research is pretty strong, said microbiologist Jack Gilbert of the University of Chicago and Argonne National Laboratory, who wasn't involved in the new study.

More importantly, "this paper adds to a growing body of evidence which suggests that microbes in the body play a significant role in our response to toxicity and in our health in general," Gilbert said.

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Wall Street pauses after rally to five-year high

NEW YORK (Reuters) - Stocks drifted in light volume on Wednesday, ending little changed, as investors remained cautious after the S&P 500 index briefly hit its highest intraday level since November 2007.

The S&P 500 was buoyed by General Electric after cable company Comcast Corp said it will buy from GE the the part of NBCUniversal it didn't already own for $16.7 billion.

Comcast's stock hit the highest since 1999 before closing up 3 percent at $40.13 and GE gained 3.6 percent to $23.39.

The S&P 500 is up 6.6 percent so far this year, partly due to stronger-than-expected corporate earnings and a better economic outlook. The Dow industrials is about 1 percent away from an all-time intraday high, reached in October 2007.

Volume has been weak in recent days with the S&P moving sideways around 1,520. The index is about 3 percent away from closing at a record high.

A scarcity of sellers after a consistent string of gains is a positive sign and shows the uptrend is intact, King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco, said.

"Last year we had double-digit returns in the first quarter. It's fairly possible we can move higher from here," he said.

The Dow Jones industrial average <.dji> fell 35.79 points or 0.26 percent, to 13,982.91, the S&P 500 <.spx> gained 0.9 point or 0.06 percent, to 1,520.33 and the Nasdaq Composite <.ixic> added 10.38 points or 0.33 percent, to 3,196.88.

The S&P gained 12 percent in the first three months of 2012.

Deere & Co , the world's largest farm equipment maker, forecast a modest increase in sales this year despite the prospect of the biggest corn crop in U.S. history. The forecast fell short of analysts' expectations, sending shares of Deere down 3.5 percent to $90.68.

In extended trading, shares of technology bellwether Cisco Systems fell 2 percent after it posted results.

Dr Pepper Snapple fell 5.8 percent to $42.69 after it forecast profit for the current year below analysts' estimates.

Cliffs Natural Resources lost a fifth of its market value a day after the miner reported a quarterly loss and slashed its dividend by 76 percent. Its shares fell 20 percent to 429.29.

According to the latest Thomson Reuters data, of the 364 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

About 5.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average in February last year of 6.94 billion.

On the NYSE, roughly seven issues rose for every five that fell and on Nasdaq more than six rose for every five decliners.

(Editing by Kenneth Barry and Bernadette Baum)

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News Analysis: As North Korea’s Nuclear Ability Grows, China Faces Dilemma

BEIJING — In the aftermath of Tuesday’s nuclear test by North Korea, China will almost certainly join the United States in supporting tougher sanctions at the United Nations, accompanied by sterner reprimands from Beijing against its recalcitrant ally in Pyongyang.

But as impatient as China might be with North Korea, there is little chance that the new Chinese leader, Xi Jinping, will move quickly to change the nation’s long-held policy of propping up the walled-off government that has long served as a buffer against closer intrusion by the United States on the Korean Peninsula.

The Chinese military, and to a lesser extent the International Liaison Department of the Chinese Communist Party, assert strong influence on China’s Korean policy, and both these powerful entities prefer to keep North Korea close at hand, Chinese and American analysts say.

While the People’s Liberation Army does not even conduct military exercises with the North Koreans — the government in the North forbids such contact with outsiders — Chinese military strategists adhere to the doctrine that they cannot afford to abandon their ally, no matter how bad its behavior, analysts here say.

At the same time, the Chinese Communist Party looks upon the North Korean Communist Party — led by Kim Jong-un, the grandson of the nation’s founder — as a fraternal brotherhood. Indeed, relations between the two countries are conducted largely between the two parties rather than through the more normal diplomatic channels between the two foreign ministries.

But within this basic contour there could be some adjustments by Mr. Xi, according to Zhu Feng, a professor of international relations at Peking University, an advocate of a tougher policy by China against North Korea.

“One nuclear test will not make China’s new administration decide to ‘abandon North Korea’ but it will definitely worsen China-North Korea relations,” Professor Zhu wrote in a recent article in the Straits Times of Singapore. “North Korea’s nuclear test will make the new Xi Jinping administration angry, and give China a headache.”

Mr. Xi, who became head of the Communist Party and military council in November, will ascend to the presidency of the country next month. Already he has shown himself to be more nationalistic than his predecessor, Hu Jintao, displaying China’s determination to prevail in the East China Sea crisis in which China is seeking to wrest control of islands administered by Japan. He has also displayed considerably more interest in China’s military, visiting bases and troops in the last two months with blandishments to soldiers to be combat ready.

To improve China’s strained relationship with the United States, Mr. Xi could start with getting tougher on North Korea, harnessing China’s clout with the outlier government to help slow down its nuclear program. If Mr. Xi does not help in curbing the North Koreans, perhaps by privately threatening to pull the plug on infusions of Chinese oil and investments that keep North Korea afloat, he will almost certainly face an accelerated American ballistic missile defense program in Northeast Asia on behalf of Japan and other allies in the region. That would be an unpalatable situation for China.

The Obama administration excoriated Mr. Hu after North Korea’s second nuclear test in 2009, accusing him of “willful blindness” to that country’s actions.

“With Hu out of the picture, the administration is intent on determining whether Xi Jinping will prove more attentive to U.S. security concerns,” said Jonathan D. Pollack, director of the John L. Thornton China Center at the Brookings Institution.

“How Xi chooses to respond will be an important early signal of his foreign policy priorities and whether he is ready to cooperate much more openly and fully with Washington and Seoul than his predecessor,” he said, referring to South Korea.

A more heightened debate about North Korea is now swirling around China’s foreign policy circles. On one side are those like Professor Zhu who favor some kind of co-operation with the United States in curbing North Korea’s nuclear program. On the other side are the traditionalists in powerful positions in the army and the party who adhere to the buffer zone theory.

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