Wall Street rebounds on HP results, Fed officials' views

NEW YORK (Reuters) - U.S. stocks rose on Friday as Dow component Hewlett-Packard surged on strong results and comments from Fed officials allayed fears that the central bank would curtail its stimulus measures.

Federal Reserve Chairman Ben Bernanke downplayed worries that the Fed has fueled asset bubbles that could hurt the economy in a private meeting with bond dealers and investors earlier this month, Bloomberg reported on Friday.

Bernanke's view helped ease fears that the central bank may end its easy money policies. Minutes from the Federal Reserve's January meeting hit markets on Wednesday as investors interpreted divergent opinions on the benefit of stimulus as a sign the measures may be halted sooner than thought.

"They are in uncharted territory with divergent views," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "I could see some pretty heated opinions on what the ultimate outcome is, so I do believe there is dissension."

Hewlett-Packard Co shares jumped more than 12 percent and gave one of the biggest boosts to both the Dow and the S&P 500 after the personal computer maker's quarterly revenue and forecasts beat expectations. Hewlett-Packard's stock rose to $19.20 at the close, up 12.3 percent for the day.

The Dow Jones industrial average <.dji> gained 119.95 points, or 0.86 percent, to 14,000.57 at the close. The Standard & Poor's 500 Index <.spx> rose 13.18 points, or 0.88 percent, to 1,515.60. The Nasdaq Composite Index <.ixic> added 30.33 points, or 0.97 percent, to end at 3,161.82.

With Bernanke's reported comments much on their minds in Friday's session, investors will want the Fed chairman to reiterate his remarks publicly when he speaks before the Senate Banking Committee on Tuesday. That would echo comments made by two top Fed officials on Friday.

Boston Fed President Eric Rosengren and Fed Governor Jerome Powell both defended the U.S. central bank's asset-buying program, arguing that the policy helps the U.S. economy.

The S&P 500 shed 1.9 percent over the previous two sessions, its worst two-day drop since early November, following the release of the Fed's minutes on Wednesday. The selloff marked the end of seven back-to-back weeks of gains for stocks.

For the week, the S&P 500 slipped 0.3 percent and the Nasdaq lost nearly 1 percent. Only the Dow ended the week with a gain - up just 0.1 percent.

HP's results come near the end of a relatively strong earnings season in which 70 percent of S&P 500 companies beat analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.

"Overall, the earnings supports were better than expected in this cycle," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. "We may see the market rising during the month of March."

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

But with only a handful of companies left to report earnings, investors are looking ahead to the possibility of hefty automatic budget cuts that could happen on March 1.

A large option investor appeared to be adjusting a bearish view on the SPDR S&P 500 Trust fund while locking in previously established gains, in a possible hedge ahead of the automatic budget cuts that are set to take effect at the beginning of next month. The play involved weekly puts, expiring next Friday.

"An institutional investor appears to be rolling down and increasing in size a defensive hedge timed to match the March 1 deadline for the sequester," said Henry Schwartz, president of options analytics firm Trade Alert.

The trader sold 132,000 $149 to $150 weekly put spreads for 22 cents as shares of the exchange-traded fund had traded near $151.14 on Friday morning. The transaction entailed the sale of $150 weekly puts to buy the $149 weekly puts. In addition, the investor purchased another 42,000 $149 weekly puts, which increases the size of the hedge to 174,000 contracts.

"It is likely this large position protects an existing underlying long position in a portfolio," Schwartz said.

In another political risk factor, Italians go to the polls this weekend in an election that could threaten reforms in the indebted country. Silvio Berlusconi's resurgence has thrown the vote wide open, with deep uncertainty over whether the poll can produce the strong government the country needs.

Inconclusive Greek elections last year sparked a protracted selloff and a period of uncertainty in markets.

In the tech sector, Marvell Technology Group Ltd forecast results this quarter that were largely above analysts' expectations. Marvell gained market share in the hard-disk drive and flash-storage businesses. The stock rose 4.4 percent to $9.89.

Texas Instruments Inc raised its dividend by a third and boosted its stock-buyback program, driving its stock up 5.2 percent to $34.18.

The PHLX semiconductor index <.sox> gained 2.1 percent.

"Dividends growing are another way the market's level is justified, if not especially attractive at these levels," said Rex Macey, chief investment officer of Wilmington Trust in Atlanta, who manages about $20 billion in assets.

On the downside, Abercrombie & Fitch dropped 4.5 percent to $46.86 after the youth-oriented clothing retailer reported a drop in fourth-quarter comparable sales, even as its latest quarterly earnings topped estimates.

Insurer American International Group Inc posted fourth-quarter results that beat analysts' expectations. AIG's stock advanced 3.1 percent to $38.45.

About three stocks rose for every one that fell on both the New York Stock Exchange and Nasdaq.

Around 5.8 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the 20-day moving average of around 6.51 billion shares.

(Additional Reporting by Ryan Vlastelica and Doris Frankel; Editing by Kenneth Barry and Jan Paschal)

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The Lede: Syrian Television's Most Outraged Bystander

Last Update, 4:47 p.m. In the aftermath of a deadly bombing in Damascus on Thursday, a man emerged from a small knot of bystanders crowded around a camera crew from Syrian state television to vent his anger at the foreign Islamist fighters he held responsible. “We the Syrian people,” he said, “place the blame on the Nusra Front, the Takfiri oppressors and armed Wahhabi terrorists from Saudi Arabia that are armed and trained in Turkey.”

A report on Thursday’s bombing in Damascus from Syrian state television’s YouTube channel.

Pointing at the ruined street near the headquarters of President Bashar al-Assad’s ruling Baath Party, the man described the location as “a civilian place — a mosque, an elementary school, the homes of local families.”

Watching a copy of the report online, Rime Allaf, a Syrian writer monitoring the conflict from Vienna, noticed that this man on the street, whose views so closely echoed those of the Syrian government, had a very familiar face. That is because, as opposition activists demonstrated last June, the same man had already appeared at least 18 times in the forefront or background of such reports since the start of the uprising.

Man who appears on #Syria TV as “innocent bystander” with every Damascus car bomb has again appeared today. http://t.co/PmPRhzUUBN

— Rime Allaf (@rallaf) 21 Feb 13

After she posted a screenshot of the man’s latest appearance, Ms. Allaf observed on Twitter that “it would be funny if there weren’t so many victims of Syria regime terrorism!”

As The Lede noted last year, the man was even featured in two reports the same day during a small pro-Assad rally in Damascus.

Two pro-Assad television channels in Syria interviewed the same man on the street at a rally in July 2012.

Mocking the dark comedy of government-run channels recycling the same die-hard Assad supporter in so many reports, activists put together several video compilations of his appearances in the state media. The most comprehensive, posted online last June, featured excerpts from 18 reports.

A compilation of Syrian state media reports featuring the same Assad supporter again and again.

Another highlight reel, uploaded to YouTube 13 months ago by a government critic, showed that after the man had spoken at least five times on state-run television, he appeared in the background of a BBC report wearing a military uniform.

A man who is frequently interviewed on Syrian state television in civilian dress appeared in the background of a BBC report wearing a military uniform.

As longtime readers of The Lede may recall, during the dispute over Iran’s 2009 presidential election, opposition bloggers noticed that one particularly die-hard supporter of Mahmoud Ahmadinejad also appeared again and again and again in photographs of pro-government rallies.

While there is no way to determine just who is responsible for Syrian television’s frequent interviews with this same man on the street, there is some evidence that Iran has advised Syria on how to report bombings on state television.

Last year, when The Guardian published a trove of hacked e-mails taken from the in-boxes of Syrian officials, one message forwarded to the president appeared to include advice from Iranian state television’s bureau chief in Damascus on what his Syrian counterparts should report after bombings. That e-mail, from Hussein Mortada, a Lebanese journalist who runs coverage of Syria for the Iranian government’s satellite news channels, complained that the government was not heeding directions he had received “from Iran and Hezbollah,” the Lebanese militant group, about who Syria should blame for bomb attacks. “It is not in our interest to say that Al Qaeda is behind” every bombing, Mr. Mortada wrote, “because such statements clear the U.S. administration and the Syrian opposition of any responsibility.”

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Do the Hemsworth Brothers Have a Type?

Stylewatch
Style News Now

02/20/2013 at 04:30 PM ET

AKM-GSI (2)

Miley Cyrus has been very open about fiancé Liam Hemsworth’s fondness for her bold new do — and he’s obviously a fan of her increasingly funky ensembles as well.

And now that we’ve spotted Hemsworth’s brother Chris out with his wife, Elsa Pataky, who’s rocking a Cyrus-esque ensemble herself, we have to wonder: do the Hemsworth boys have a type?

Both of the Aussie hotties’ significant others share an affinity for shredded denim, chunky engineer boots and choppy, super-short blonde hair.

And when we spotted the tiny girls standing next to the bulky brothers, both clad in V-necks, slouchy jeans and aviators, we admit we had to do a double take to deduce which couple was which.

Fortunately, Chris travels with the ultimate accessory — his adorable baby daughter — which makes them a bit easier to tell apart. But we still have to guess there’s a lot of confusion around the Hemsworth household at holidays.

Tell us: Do you and your siblings go for the same “type?” Are you amused that the Hemsworth boys seem to?

–Alex Apatoff

GET MORE STAR DATE STYLE INSPIRATION HERE!

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Flu shot doing a poor job of protecting elderly

ATLANTA (AP) — It turns out this year's flu shot is doing a startlingly dismal job of protecting senior citizens, the most vulnerable age group.

The vaccine is proving only 9 percent effective in people 65 and older against the harsh strain of the flu that is predominant this season, the Centers for Disease Control and Prevention said Thursday.

Health officials are baffled as to why this is so. But the findings help explain why so many older people have been hospitalized with the flu this year.

Despite the findings, the CDC stood by its recommendation that everyone over 6 months get flu shots, the elderly included, because some protection is better than none, and because those who are vaccinated and still get sick may suffer less severe symptoms.

"Year in and year out, the vaccine is the best protection we have," said CDC flu expert Dr. Joseph Bresee.

Overall, across the age groups studied, the vaccine's effectiveness was found to be a moderate 56 percent, which means those who got a shot have a 56 percent lower chance of winding up at the doctor with the flu. That is somewhat worse than what has been seen in other years.

For those 65 and older, the vaccine was only 27 percent effective against the three strains it is designed to protect against, the worst level in about a decade. It did a particularly poor job against the tough strain that is causing more than three-quarters of the illnesses this year.

It is well known that flu vaccine tends to protect younger people better than older ones. Elderly people have weaker immune systems that don't respond as well to flu shots, and they are more vulnerable to the illness and its complications, including pneumonia.

But health officials said they don't know why this year's vaccine did so poorly in that age group.

One theory, as yet unproven, is that older people's immune systems were accustomed to strains from the last two years and had more trouble switching gears to handle this year's different, harsh strain.

The preliminary data for senior citizens is less than definitive. It is based on fewer than 300 people scattered among five states.

But it will no doubt surprise many people that the effectiveness is that low, said Michael Osterholm, a University of Minnesota infectious-disease expert who has tried to draw attention to the need for a more effective flu vaccine.

Among infectious diseases, flu is considered one of the nation's leading killers. On average, about 24,000 Americans die each flu season, according to the CDC.

This flu season started in early December, a month earlier than usual, and peaked by the end of year. Hospitalization rates for people 65 and older have been some of the highest in a decade, at 146 per 100,000 people.

Flu viruses tend to mutate more quickly than others, so a new vaccine is formulated each year to target the strains expected to be the major threats. CDC officials have said that in formulating this year's vaccine, scientists accurately anticipated the strains that are circulating this season.

Because of the guesswork involved, scientists tend to set a lower bar for flu vaccine. While childhood vaccines against diseases like measles are expected to be 90 or 95 percent effective, a flu vaccine that's 60 to 70 percent effective in the U.S. is considered pretty good. By that standard, this year's vaccine is OK.

For senior citizens, a flu vaccine is considered pretty good if it's in the 30 to 40 percent range, said Dr. Arnold Monto, a University of Michigan flu expert.

A high-dose version of the flu shot was recently made available for those 65 and older, but the new study was too small to show whether that has made a difference.

The CDC estimates are based on about 2,700 people who got sick in December and January. The researchers traced back to see who had gotten shots and who hadn't. An earlier, smaller study put the vaccine's overall effectiveness at 62 percent, but other factors that might have influenced that figure weren't taken into account.

The CDC's Bresee said there is a danger in providing preliminary results because it may result in people doubting — or skipping — flu shots. But the figures were released to warn older people who got shots that they may still get sick and shouldn't ignore any serious flu-like symptoms, he said.

___

Online:

CDC report: http://www.cdc.gov/mmwr

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Wall Street ends lower on growth worries

NEW YORK (Reuters) - U.S. stocks fell for a second straight day on Thursday and the S&P 500 posted its worst two-day loss since November after reports cast doubt over the health of the U.S. and euro-zone economies.

But a late-day rally helped stocks erase some of their losses with most of the pullback concentrated in the technology- heavy Nasdaq. The move suggested investors were still willing to buy on dips even after the sharp losses in the last session.

In Europe, business activity indexes dealt a blow to hopes that the euro zone might emerge from recession soon, showing the downturn across the region's businesses unexpectedly grew worse this month.

"The PMI numbers out of Europe were really a blow to the market," said Jack De Gan, chief investment officer at Harbor Advisory in Portsmouth, New Hampshire. "The market was expecting signs that recovery is still there, but the numbers just highlighted that the euro-zone problem is still persistent."

U.S. initial claims for unemployment benefits rose more than expected last week while the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. mid-Atlantic region fell in February to the lowest in eight months.

Gains in Wal-Mart Stores Inc shares helped cushion the Dow. The shares gained 1.5 percent to $70.26 after the world's largest retailer reported earnings that beat expectations, though early February sales were sluggish.

The Dow Jones industrial average <.dji> fell 46.92 points, or 0.34 percent, to 13,880.62 at the close. The Standard & Poor's 500 Index <.spx> lost 9.53 points, or 0.63 percent, to 1,502.42. The Nasdaq Composite Index <.ixic> dropped 32.92 points, or 1.04 percent, to close at 3,131.49.

The two-day decline marked the U.S. stock market's first sustained pullback this year. The Standard & Poor's 500 has fallen 1.8 percent over the period and just managed to hold the 1,500 level on Thursday. Still, the index is up 5.3 percent so far this year.

The abrupt reversal in markets, which started on Wednesday after minutes from the Federal Reserve's January meeting suggested stimulus measures may end earlier than thought, looks set to halt a seven-week winning streak for stocks that had lifted the Dow and the S&P 500 close to all-time highs.

Wall Street will soon face another test with the upcoming debate in Washington over the automatic across-the-board spending cuts put in place as part of a larger congressional budget fight. Those cuts, set to kick in on March 1 unless lawmakers agree on an alternative, could depress the economy.

Semiconductor stocks ranked among the weakest of the day, pressuring the Nasdaq as the Philadelphia Semiconductor Index <.sox> fell 1.8 percent. Intel Corp fell 2.3 percent to $20.25 while Advanced Micro Devices lost 3.7 percent to $2.60 as the S&P 500's biggest percentage decliner.

The Dow also got a helping hand from personal computer maker Hewlett-Packard Co , which rose 2.3 percent to end the regular session at $17.10. The company was scheduled due to report first-quarter results after the closing bell.

Shares of Boeing Co rose 1.6 percent to $76.01 as a senior executive was set to meet with the head of the U.S. Federal Aviation Administration on Friday and present a series of measures to prevent battery failures that grounded its 787 Dreamliner fleet, according to a source familiar with the plans.

In other company news, shares of supermarket operator Safeway Inc jumped 14.1 percent to $22.97 after the company reported earnings that beat expectations.

Shares of VeriFone Systems Inc tumbled nearly 43 percent to $18.24 after the credit-card swipe machine maker forecast first- and second-quarter profits well below expectations.

Of the 427 companies in the S&P 500 that have reported results so far, 69.3 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data through Thursday morning.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.9 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Berry Petroleum Co jumped 19.3 percent to $46.02 after oil and gas producer Linn Energy LLC said it would buy the company in an all-stock deal valued at $4.3 billion, including debt. Linn Energy shares advanced 2.8 percent to $37.68.

About two stocks fell for everyone that rose on the New York Stock Exchange and Nasdaq. About 7.64 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, well above the 20-day moving average of around 6.6 billion shares.

(Editing by Jan Paschal)

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IHT Special: Women Face Fight to Keep Their Rights in Tunisia

TUNIS — At the funeral this month of Chokri Belaid, the murdered secular opposition leader in Tunisia, his widow Basma Khalfaoui, a prominent feminist, stood on the ambulance carrying his casket, her head uncovered, raising her arm to wave a defiant victory sign.

“My husband was denouncing Ennahda’s double talk and we will continue his struggle,” Ms. Khalfaoui, 42, said at the funeral, referring to the moderate Islamist party that governs the country. “We will not give up the fight.”

Tunisia, perceived by the West as the most secular country in the Arab world and a staunch promoter of women’s rights, has gone through a rocky transition since the revolution two years ago that ousted President Zine el-Abidine Ben Ali. While political pluralism exists for the first time in decades, new freedoms for some are threatening long-cherished ones for others — in particular those for Tunisian women.

After Tunisia gained its independence from France in 1956, the government passed laws to expand women’s rights, including the right to education and gender equality. Over the following decades, Islamists were persecuted and exiled while the government pushed the secularization of society to such an extent that a decree in 1981 banned women from wearing a veil in public buildings and universities.

After the fall of Mr. Ben Ali’s regime, the Ennahda party won elections in October 2011 with a comfortable majority. Since then, worries have grown that one of its aims is to restrict women’s freedoms in a country where, until recently, those rights had been taken for granted for decades.

“I think it’s normal that the Islamists are so vocal — veiled women used to be harassed and the frustration came out all at once,” said Sarah Ben Hamadi, 28, a blogger and journalist. “We are simply paying today for Ben Ali’s mistakes.”

“I don’t think the country is more radical,” she added. “There is more freedom so we see more of the religious people who were hiding in the past.”

Certainly, the religious ultraconservatives known as Salafists are more visible. The University of Manouba, in suburban Tunis, experienced months of tension last year after Salafist students rioted against the ban on the niqab, the face-covering veil.

More worrying are legal overhauls, human rights officials say. As Tunisia’s Constituent Assembly writes a new constitution, there have been repeated confrontations between Islamists, who dominate the assembly and want to roll back some rights acquired by women, and secular liberals, who want an expansion of those rights to include, for example, equal inheritance rights.

“We cannot speak of an obvious rollback since the legal reality is still the same,” said Amna Guellali, the director of Human Rights Watch in Tunis. “But acquired rights are being threatened by repeated attacks by Salafist groups on those they consider infidels or on behavior they deem contrary to Islamic morality.”

When a young woman was allegedly raped by police officers in September, she was charged with indecency and risked six months in prison before the charges were dropped, after a huge uproar. Human rights organizations cite the case as an example of how rights are under threat.

“Under the old regime, there were similar cases,” Ms. Guellali acknowledged. “Now with the new freedoms in the country, the media is paying attention to these kinds of stories.” Still, she said, even allowing for the amplifying effect of the news coverage, something has changed.

Chema Gargouri, the president of the Tunisian Association for Management and Social Stability, a nongovernmental organization that provides training and microloans for women and young people in poor areas, said women were more secure under Mr. Ben Ali.

“What was really striking to me after the revolution was that women started to lose their self-esteem,” Ms. Gargouri said. “The dictatorship was pro-woman. The hatred against the dictatorship is expressed through action against women.”

The rise of social and religious repression and the loss of self-confidence “prevents any entrepreneurial initiative for women,” she added.

Ms. Gargouri, who is in her 40s, said that women of her generation had never previously had to debate or defend their rights. But recent developments had pushed her to work to raise awareness of the challenge now facing them.

“What scares me is that the Tunisian woman seems lost,” she said. “In many places I go to, people ask what the government can do for them. We try to teach them to do it on their own.”

The fact is that Tunisia has an Islamist majority, said Ms. Ben Hamadi, the blogger. “Article 1 of the Tunisian Constitution states that it is an Islamic state,” she said. “If we want real democracy, we must listen to everyone’s voice.”

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Jodi Arias Testifies: I Don't Remember Stabbing My Lover 27 Times

Update

By Howard Breuer

UPDATED
02/20/2013 at 05:45 PM EST

• Originally published 02/20/2013 at 05:00 PM EST

Jodi Arias

Charlie Leight/The Arizona Republic/AP

Nearly two months into her murder trial in a Phoenix courtroom, Jodi Arias told jurors Wednesday morning that she killed Travis Alexander in self-defense – but doesn't remember stabbing him nearly 30 times.

"I just remember dropping the knife and being very freaked out and screaming," Arias, 32, said after two weeks of explicit direct testimony about her sex life with Alexander, including their kinky sex shortly before his death. She says the knife was the same one Alexander had used that afternoon when he tied her up for sex.

Facing the death penalty if convicted, Arias says her memory of June 4, 2008, clears up when she put the knife in the dishwasher. Driving off barefoot, she brought with her the rope she said Alexander had used to tie her up and a gun that she pulled from the top of his walk-in closet before shooting him.

"I was very scared and very upset. ... I just wanted to die," Arias testified. "I thought, 'My life is probably done now.'"

She says she decided to bury those feelings and try to act normal as she drove north into Utah to visit another man with whom she already had plans to see.

She says she tossed the gun in the desert, dropped the rope in a Dumpster near St. George, Utah, washed the blood from her hands with a case of bottled Costco water she kept in her trunk and put on a spare pair of work shoes.

The man she met, Ryan Burns, earlier testified that Arias was frisky and affectionate when she visited on June 5. Arias testified that she kissed Burns and cuddled with him the day after killing Alexander because, "I felt safe right there and, I figured, I just wanted to seem normal, like I didn't just do what I just did."

Centerpiece of Defense

Arias's testimony was the long-anticipated centerpiece of her defense. Once that's done, prosecutors are expected to spend several days trying to pick apart her story.

Arias also talked about how she and Alexander, a charismatic Mormon motivational speaker, had an off-and-on relationship in which he sometimes become violent or sadistic.

She says she had arrived at his Mesa, Ariz. home at 5 a.m. and although they took photos and video of themselves having sex, Alexander repeatedly became enraged with her – first for giving him badly scratched CDs of photographs of their trips together, then for dropping his camera.

She says that as Alexander chased her through a walk-in closet "like a linebacker," she grabbed a gun that she knew he kept on a top shelf. She says that she held up the gun, expecting that Alexander would stop charging at her, but he didn't.

"The gun went off, I didn't even mean to shoot, I didn't know my hand was on the trigger," Arias testified. She says that, as they wrestled on the ground, she assumed that she'd shot a hole in the wall, not that she'd hit Alexander. After that, she says, "there's a lot of that day that I don't remember, there's a lot of gaps.

"I have no memory of stabbing him," Arias told jurors, who have heard graphic testimony that Alexander was shot in the head and repeatedly stabbed, and that his throat was slashed ear to ear.

Arias testified she remembers standing in his bathroom, dropping the knife on the hard floor, and thinking, "that I just couldn't believe what had just happened and I couldn't rewind the clock and take it back." She did not recall dragging him to the bathroom or placing him in the shower, she said.

Arias also testified that she still loves Alexander – "It's a different love but yes, I do."

Since the slaying, Arias has changed her story, first saying she had no connection to the crime, then saying two masked intruders killed Alexander and almost killed her. "I basically told everyone what I could remember of the day, and that the intruder story was all B.S.," Arias said Wednesday afternoon at the close of her testimony.

Prosecutors suggest Arias killed Alexander out of jealousy after he pushed her out of his life and started dating someone else, and that the gun was actually a pistol that she stole from her grandparents' home in Yreka, Calif., weeks earlier.

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Florida governor backs limited Medicaid expansion

MIAMI (Reuters) - Florida Governor Rick Scott backed a limited expansion of healthcare coverage for the poor on Wednesday, joining six other Republican governors who have agreed to the move under President Barack Obama's landmark reform law.

Scott, a vocal critic of the law known as Obamacare who had balked at expanding Medicaid, only agreed to the expansion after the federal government granted Florida a conditional waiver to privatize Medicaid statewide.

Scott said in a statement that he would only agree to the expansion for three years, however, while the federal government picks up all the costs.

"We will support a three year expansion of our Medicaid program under the new healthcare law, as long as the federal government meets their commitment to pay 100 percent of the cost during this time. This legislation would sunset after three years and need to be reauthorized," the statement said.

Scott's conditional endorsement of an expanded Medicaid program in Florida, a move that officials have said could add at least 1 million people to the state's Medicaid rolls, must still be approved by the Florida Legislature.

(Reporting by Tom Brown; editing by Andrew Hay)

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Wall Street ends down sharply after Fed minutes

DEAR ABBY: My boyfriend, "Doug" (24), and I (22) have been in a long-distance relationship for a year, but we were friends for a couple of years before that. I had never had a serious relationship before and lacked experience. Doug has not only been in two other long-term relationships, but has had sex with more than 15 women. One of them is an amateur porn actress.I knew about this, but it didn't bother me until recently. Doug had a party, and while he was drunk he told one of his buddies -- in front of me -- that he should watch a certain porn film starring his ex-girlfriend. ...

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Memo From Mexico City: Mexico Anticrime Plan Challenged by Unabated Violence

Dario Lopez-Mills/Associated Press

A man guarding a roadblock at the entrance to Cruz Quemada, a rural town near Ayutla in the state of Guerrero. A recent spate of violence in the area has led communities to take up arms.

MEXICO CITY — The new Mexican president, Enrique Peña Nieto, campaigned on a promise to reduce the violence spawned by the drug trade and organized crime, and to shift the talk about his nation away from cartels and killings.

But even as he rolled out a crime prevention program last week and declared it the government’s new priority, a rash of high-profile mayhem threatened to undercut his message and raise the pressure to more forcefully confront the lawlessness that bedeviled his predecessor.

The southwestern state of Guerrero, long prone to periodic eruptions of violence, has proved a challenge once again. Gang rapes of several women have occurred in and around the faded resort town of Acapulco, including an attack this month on a group from Spain that garnered worldwide headlines, and an ambush killed nine state police officers in a mountainous no-man’s land. Out of frustration that the state was not protecting them, rural towns in Guerrero have taken up arms to police themselves.

Elsewhere, grenades were set off this month near the United States Consulate in the border town of Nuevo Laredo during a battle among gangs, and 17 members of Kombo Kolombia, a folk band in northern Mexico, were kidnapped and killed last month.

The bloodshed continued despite some indications that the violence leveled off last year, according to a report released on Feb. 5 by the University of San Diego’s Trans-Border Institute, which analyzed a range of government homicide statistics. Mr. Peña Nieto’s government also released statistics this month that it said showed that homicides presumably related to organized crime had dipped from December to January, but analysts have long questioned how those numbers were compiled, given the chronic lack of criminal investigations.

Still, the appetite of criminal groups for shocking violence seems unabated and presents a challenge for the president. Can he manage to avoid being drawn into the iron-fisted approach of his predecessor and effectively change the focus of the national discussion to other matters, like the economy?

“They are trying to have the president not use the crime issue as his political priority,” said Ana Maria Salazar, a security analyst who worked in the American government and now hosts a radio show here. “But at the same time, it doesn’t seem what they are talking about is confronting or going to have an impact on the current violence and criminal organizations.”

She added, “They haven’t laid out what they are going to do in the short term to retake Mexican territory in control of criminal organizations.”

Government officials have asked for patience, saying Mexico’s crime problems cannot be solved overnight.

They have made it clear that they want to break with the approach of former President Felipe Calderón, who heavily enlisted the military and the federal police against crime gangs, but the new government has taken a similar tack in recent flare-ups, including sending a cadre of federal police officers to Acapulco after the attacks there. Government officials have pledged closer coordination between the federal police and the state authorities.

Officials are promoting the less militaristic crime prevention program introduced last week as a linchpin, with Mr. Peña Nieto personally announcing it and Interior Secretary Miguel Ángel Osorio Chong briefing reporters extensively on it. On Thursday, an under secretary presented a slick brochure on the program to foreign journalists and answered questions for 45 minutes.

“It’s clear that we must put special emphasis on prevention, because we can’t only keep employing more sophisticated weapons, better equipment, more police, a higher presence of the armed forces in the country as the only form of combating organized crime,” Mr. Peña Nieto said in announcing the program in Aguascalientes, one of the more peaceful precincts in the country.

The program calls for creating an interagency commission that would spend $9 billion in the coming years in 250 of the most violent cities and towns, beginning with the worst. The plan envisions longer school days, drug addiction programs and other social efforts in addition to public works projects, but officials said specifics were still being worked out and would be detailed later.

It resembles a plan Mr. Calderón put in place a few years ago for Ciudad Juárez, one of the bloodiest cities in Mexico, but government officials said that while they studied that project, they believed that their plan differed in ambition and scope.

Few argue with the need for such programs and alternatives to crime for young people. But security analysts faulted Mr. Calderón for not attacking corruption by building effective, accountable local and state police and judicial institutions, a herculean task that Mr. Peña Nieto so far has not shown much sign of taking on either.

This article has been revised to reflect the following correction:

Correction: February 19, 2013

An earlier version of this article referred incompletely to Chris Kyle’s academic affiliation. He is an anthropologist at the University of Alabama at Birmingham; the University of Alabama’s flagship campus is in Tuscaloosa.

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