Asian shares rise; BOJ easing spurs volatile yen, Nikkei trading

TOKYO (Reuters) - Asian shares rose on Tuesday amid optimism over the global growth outlook, but bold easing measures from the Bank of Japan failed to lift Tokyo equities and the yen rebounded from a brief sell-off as investors digested the central bank's actions.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> rose 0.4 percent to a fresh 17-1/2-month high, while Australian shares <.axjo> ended little changed after touching a 20-month high earlier in the session. Hong Kong shares <.hsi> hovered around a 19-1/2-month peak and onshore China markets were on track to gain for a fourth-straight day.

The spotlight in Asia fell on the BOJ, which on Tuesday doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets, surprising markets that had expected another incremental increase in its 101 trillion yen ($1.12 trillion) asset-buying and lending program.

"A stronger Japan is good for the global economy," said Jeremy Friesen, a commodities strategist at Societe Generale in Hong Kong. He added the stimulus plan will be more positive for base metals than energy as Japan will be building infrastructure that will boost demand for metals such as zinc and copper.

The reaction in Japanese markets, however, reinforced market perceptions that the BOJ could have done more.

The yen rebounded from brief losses and the Nikkei turned down from an initial surge as investors digested the details, including the fact that the new scheme for additional purchases will only come into effect next year. Several analysts were also of the opinion the BOJ could have taken more steps, such as scrapping the 0.1 percent floor for short-term interest rates and extending the duration of bonds the central bank buys.

Japan's benchmark Nikkei average <.n225> surged as much as 0.8 percent before giving up all gains to end down 0.4 percent. Tokyo shares have been rising in tandem with the yen's slide against major currencies on expectations for bolder BOJ steps. The Nikkei tumbled 1.5 percent on Monday after investors booked profits from the index's 2.9 percent rally on Friday. <.t/>

The dollar rose as high as 90.18 yen, but was last trading down 0.6 percent at 89.09 yen. It touched a fresh 2-1/2-year high of 90.25 on Monday. The euro rose to 120.18, before falling 0.5 percent to 118.88 yen. The euro hit its peak since May 2011 of 120.73 on Friday.

"The BOJ increase in asset purchases is only commencing in 2014. So no strong immediate increase in easing," said Jeffrey Halley, FX trader for Saxo Capital Markets in Singapore, noting stop-loss selling under 89.50 yen added to the dollar's drop.

Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo, said: "It was more or less within market expectations and was not disappointing. But it also didn't top expectations because there was speculation that the BOJ would do all it can, including removing the 0.1 percent floor on short term interest rates."

Still, there is a perception in markets that even if investors rooting for much bolder BOJ steps cut their yen short positions in disappointment over the outcome, the yen's rebound was likely to be limited relative to its 13 percent decline against the dollar and a 20 percent drop versus the euro over the past two months. Such views were fed by expectations the BOJ will continue to aggressively ease monetary policy to drive Japan out of years of deflation and support the economy.

Brent crude rose 0.3 percent to $112.07 a barrel as the BOJ's latest easing action added to the recent positive data from the United States and China, while growing confidence in the strength of China's economic recovery pushed London copper up 0.7 percent to $8,111.75 a metric ton.

European markets are seen subdued, with financial spread-betters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open flat to down as much as 0.1 percent. U.S. stock futures were up 0.2 percent, pointing to a firm Wall Street start. <.l><.eu><.n/>

General market sentiment was also supported by signs of a compromise to avert a U.S. fiscal crisis.

Republican leaders in the U.S. House of Representatives have scheduled a vote on Wednesday on a nearly four-month extension of U.S. borrowing capacity, aimed at avoiding a fight over the looming federal debt ceiling and shifting their negotiating leverage for spending cuts to other fiscal deadlines.

Gold was up 0.2 percent at $1,693.31 an ounce on the fresh round of easing from the BOJ.

($1 = 89.7950 Japanese yen)

(Additional reporting by Masayuki Kitano and Florence Tan in Singapore; Editing by Shri Navaratnam)

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Center-Left Defeats Merkel’s Party in State Vote

BERLIN — Chancellor Angela Merkel’s main rivals pulled off an upset in a regional election, eking out a one-seat majority that will usher the opposition Social Democrats into power in the state of Lower Saxony, months ahead of balloting for the national Parliament.

Preliminary results released on Monday showed the center-left bloc of the Social Democrats and the Greens securing a one-seat majority in the regional legislature in Hanover.

The shift signaled an end to a decade of center-right government in the state and will have a direct impact at the national level by tipping the balance of power in the upper house of Parliament, the Bundesrat.

The victory in Lower Saxony gives the center-left a majority in the Bundesrat that could allow it to block legislation from the lower house, dominated by Ms. Merkel’s center-right bloc.

“I expect that it will hardly be possible to push through proposals that the S.P.D. opposes,” Volker Kauder, the parliamentary leader for Ms. Merkel’s party told ZDF public television on Monday. “We will have to see if they use it.”

The Social Democrats took 32.6 percent of the vote, while the Greens won 13.7 percent, the preliminary results showed, giving them 69 seats in the regional legislature. Although the Christian Democrats emerged as the strongest party with 36 percent of the vote, combined with their Free Democrat partners, they were able to secure only 68 seats.

The Free Democrats, the junior partner in Ms. Merkel’s governing coalition in Berlin, won 9.9 percent of the vote.

Neither the Pirate Party nor the Left Party cleared the 5 percent hurdle need to secure representation in the Lower Saxony legislature.

It was unclear how much the loss will hurt Ms. Merkel, who enjoys overwhelming popularity in Germany, thanks to a relatively robust economy, low unemployment and her hard-nosed handling of Europe’s debt crisis.

Ms. Merkel made seven appearances in Lower Saxony this month, alongside the state’s governor, David McAllister.

Although he was the incumbent, the campaign was the first for Mr. McAllister, 42, who took over the position in 2010 when his predecessor, Christian Wulff, was called to Berlin to become president. The son of a soldier from Scotland and a German mother, Mr. McAllister insisted throughout the campaign that his tenure had brought prosperity to the region, and he urged voters to support continuity.

He was expected in Berlin for talks at the Christian Democratic headquarters later Monday.

His main challenger, the mayor of Hanover, Stephan Weil, who ran for the Social Democrats, struggled to make himself better known among voters, resorting at one point in the campaign to handing out red roses to prospective voters, which stretches across largely rural countryside from the North Sea to the former inner-German border.

“I am excited about five years of red-green,” Mr. Weil told reporters after realizing his bloc’s success, using the traditional color codes for his party and their partners. “That was a real roller-coaster ride tonight.”

Although local issues tend to dominate regional elections — as was the case in Lower Saxony, where the education system and completion of several infrastructure projects dominated the debate — the outcome could help the Free Democrats improve their image at the national level of a party dogged by a leadership crisis.

Many had blamed the party’s chairman, Philipp Rösler, who also serves as economy minister and consistently ranks among the country’s least popular politicians, for failing to focus on concrete issues.

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RIM mulls licensing out software: CEO in paper

FRANKFURT (Reuters) – Research in Motion will look into strategic alliances with other technology companies once it has launched its new BlackBerry 10 models, its chief executive told a German newspaper.

German-born CEO Thorsten Heins told daily Die Welt in an interview published on Monday that the group’s strategic review could lead to the sale of RIM’s hardware production or the sale of licenses to its software, among other options.

“The main thing for now is to successfully introduce Blackberry 10. Then we’ll see,” Heins was quoted as saying.

RIM hopes its re-engineered line of Blackberry 10 touch-screen and keyboard devices will win back market share lost to rivals such as Apple’s iPhone and devices powered by Google’s market-leading Android operating system.

(Reporting by Ludwig Burger; Editing by Mark Potter)

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It's a Boy for American Idol's Danny Gokey

Mom & Babies
Celebrity Baby Blog

01/21/2013 at 12:00 AM ET

Courtesy Danny Gokey

Now he’s got a little Idol of his own!

American Idol season eight finalist Danny Gokey and his wife Leyicet welcomed their first child, son Daniel Emanuel Gokey, on Sunday, Jan. 20, PEOPLE confirms exclusively.

Weighing in at 8 lbs. 11 oz., Daniel arrived at 9:52 p.m. EST on his due date.

“Leyicet and I are overjoyed to welcome the new member of our family. I’m ecstatic to be a first time dad and to have a new little buddy to hang out with,” Gokey tells PEOPLE.

“Thankfully, because of what I do, it will also allow me the flexibility to spend a lot of quality time with him. I have so many exciting projects ahead this year but a brand new baby is an amazing way to get the new year started. We feel really blessed!”

The timing for their newborn couldn’t be better. Almost exactly one year ago, Gokey, 32, and his model wife, 26, tied the knot in a low-key affair in Florida on January 29. Six months later, they shared the happy news of their pregnancy.

This is the second marriage for Gokey, who tragically lost his first wife Sophia in 2008 after a routine surgery for congenital heart disease. Gokey now runs the Sophia’s Heart Foundation, which helps homeless families, in her honor.

– Kevin O’Donnell

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Flu season fuels debate over paid sick time laws

NEW YORK (AP) — Sniffling, groggy and afraid she had caught the flu, Diana Zavala dragged herself in to work anyway for a day she felt she couldn't afford to miss.

A school speech therapist who works as an independent contractor, she doesn't have paid sick days. So the mother of two reported to work and hoped for the best — and was aching, shivering and coughing by the end of the day. She stayed home the next day, then loaded up on medicine and returned to work.

"It's a balancing act" between physical health and financial well-being, she said.

An unusually early and vigorous flu season is drawing attention to a cause that has scored victories but also hit roadblocks in recent years: mandatory paid sick leave for a third of civilian workers — more than 40 million people — who don't have it.

Supporters and opponents are particularly watching New York City, where lawmakers are weighing a sick leave proposal amid a competitive mayoral race.

Pointing to a flu outbreak that the governor has called a public health emergency, dozens of doctors, nurses, lawmakers and activists — some in surgical masks — rallied Friday on the City Hall steps to call for passage of the measure, which has awaited a City Council vote for nearly three years. Two likely mayoral contenders have also pressed the point.

The flu spike is making people more aware of the argument for sick pay, said Ellen Bravo, executive director of Family Values at Work, which promotes paid sick time initiatives around the country. "There's people who say, 'OK, I get it — you don't want your server coughing on your food,'" she said.

Advocates have cast paid sick time as both a workforce issue akin to parental leave and "living wage" laws, and a public health priority.

But to some business owners, paid sick leave is an impractical and unfair burden for small operations. Critics also say the timing is bad, given the choppy economy and the hardships inflicted by Superstorm Sandy.

Michael Sinensky, an owner of seven bars and restaurants around the city, was against the sick time proposal before Sandy. And after the storm shut down four of his restaurants for days or weeks, costing hundreds of thousands of dollars that his insurers have yet to pay, "we're in survival mode."

"We're at the point, right now, where we cannot afford additional social initiatives," said Sinensky, whose roughly 500 employees switch shifts if they can't work, an arrangement that some restaurateurs say benefits workers because paid sick time wouldn't include tips.

Employees without sick days are more likely to go to work with a contagious illness, send an ill child to school or day care and use hospital emergency rooms for care, according to a 2010 survey by the University of Chicago's National Opinion Research Center. A 2011 study in the American Journal of Public Health estimated that a lack of sick time helped spread 5 million cases of flu-like illness during the 2009 swine flu outbreak.

To be sure, many employees entitled to sick time go to work ill anyway, out of dedication or at least a desire to project it. But the work-through-it ethic is shifting somewhat amid growing awareness about spreading sickness.

"Right now, where companies' incentives lie is butting right up against this concern over people coming into the workplace, infecting others and bringing productivity of a whole company down," said John A. Challenger, CEO of employer consulting firm Challenger, Gray & Christmas.

Paid sick day requirements are often popular in polls, but only four places have them: San Francisco, Seattle, Washington, D.C., and the state of Connecticut. The specific provisions vary.

Milwaukee voters approved a sick time requirement in 2008, but the state Legislature passed a law blocking it. Philadelphia's mayor vetoed a sick leave measure in 2011; lawmakers have since instituted a sick time requirement for businesses with city contracts. Voters rejected a paid sick day measure in Denver in 2011.

In New York, City Councilwoman Gale Brewer's proposal would require up to five paid sick days a year at businesses with at least five employees. It wouldn't include independent contractors, such as Zavala, who supports the idea nonetheless.

The idea boasts such supporters as feminist Gloria Steinem and "Sex and the City" actress Cynthia Nixon, as well as a majority of City Council members and a coalition of unions, women's groups and public health advocates. But it also faces influential opponents, including business groups, Mayor Michael Bloomberg and City Council Speaker Christine Quinn, who has virtually complete control over what matters come to a vote.

Quinn, who is expected to run for mayor, said she considers paid sick leave a worthy goal but doesn't think it would be wise to implement it in a sluggish economy. Two of her likely opponents, Public Advocate Bill de Blasio and Comptroller John Liu, have reiterated calls for paid sick leave in light of the flu season.

While the debate plays out, Emilio Palaguachi is recovering from the flu and looking for a job. The father of four was abruptly fired without explanation earlier this month from his job at a deli after taking a day off to go to a doctor, he said. His former employer couldn't be reached by telephone.

"I needed work," Palaguachi said after Friday's City Hall rally, but "I needed to see the doctor because I'm sick."

___

Associated Press writer Susan Haigh in Hartford, Conn., contributed to this report.

___

Follow Jennifer Peltz at http://twitter.com/jennpeltz

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IHT Rendezvous: China's "Lamborghini" coefficient: Who's Getting Richer, Who Poorer?

BEIJING — Search the word Gini, or “jini,” for Gini coefficient, the well-known measure of income inequality, on China’s biggest microblogging site and the first result today was for Lamborghini, the Italian luxury sports car (in Chinese, the two words share a similar sound in the last part of the car’s name.)

That’s very ironic because the Gini coefficient measures income inequality and the Lamborghini, which can set a buyer back $300,000, is a not uncommon sight on the streets of big Chinese cities, an object of resentment among ordinary people who view it as a symbol of how a few people are amassing tremendous wealth as many struggle with low incomes, low bank deposit rates, high property prices and persistent inflation.

In other words, income inequality in China is politically sensitive.

(The Gini index, of course, is a measure of household income inequality; zero represents perfect income equality and 1 perfect inequality, a situation where one person would own all the wealth, as the World Bank explains.)

So last Friday, when the government announced China’s Gini coefficient figures for the first time in over a decade, there was excitement – and quite a bit of scorn, expressed online and in media reports as well as private conversations. Why?

According to the figures, China today is actually more equal than in 2003, the National Bureau of Statistics said.

From 2003, the Gini coefficient did indeed rise, the bureau said, from 0.479 to a high in 2008 of 0.491. But by 2012 the figure had dropped to 0.474, meaning China is a more equal society today than a decade ago – despite all those Lamborghinis on the street.

At a news conference, Ma Jiantang, the bureau director, called the rate nevertheless “relatively high,” Xinhua reported. “China must accelerate its income distribution reform to narrow the rich-poor gap,” Xinhua said.

Yet the government’s “effective measures” to “bring benefits for its people” after the gobal financial crisis began in 2008 had brought down the measure, it quoted Mr. Ma as saying.

To compare with the United States: in 2011, the Gini coefficient there was also high, at 0.477, according to the U.S. Census Bureau

Xinhua quoted the United Nations as putting the “warning level” on the rich-poor gap at 0.4.

Yet in China this weekend, few believed the new figures.

Here are two lively reactions from microblogs, from a journalist and an economist who together have over six million followers:

“Please choose one: 1. Really, thank you Fatherland; 2. That’s a myth; 3. Not sure, but hurry up and increase my salary,” Shi Shusi, a journalist and social commentator, the director of the state-run Worker’s Daily Weekly, said on his Sina Weibo account to nearly 875,000 followers.

Xu Xiaonian, a professor of finance and economics at the China Europe International Business School, wrote on his Weibo account (5.5 million followers): “A journalist rang to ask me to comment on today’s macroeconomic figures. I’d have to be crazy to truthfully comment on false figures. That Gini coefficient, to use the words of Zheng Yuanjie,” a popular children’s story writer, “‘no-one would even dare to write a fairytale like that.’”

A different report, in December, by researchers at the Southwestern University of Finance and Economics in the city of Chengdu, put China’s Gini at 0.61 for 2010.

While people are by and large glad to see the government once again measuring the figure after a decade-long hiatus (which Mr. Ma explained last year was due to the fact that the government didn’t actually know what people in the cities were earning, as I explored in a Letter from China,) a major problem facing the government is the scale of people’s “hidden income,” estimated by the Beijing-based economist Wang Xiaolu several years ago to be about 9.3 trillion renminbi (nearly $1.5 trillion.)

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Jimmy Kimmel Channels a Cooler Bill Nye

We realize there’s only so much time one can spend in a day watching new trailers, viral video clips, and shaky cell phone footage of people arguing on live television. This is why every day The Atlantic Wire highlights the videos that truly earn your five minutes (or less) of attention. Today:

RELATED: When Chocolate Rain Met ‘Call Me Maybe’; Obama Boy Has a Crush, Too

If our science teachers were this fun in school, we would never have become journalists:

RELATED: Jimmy Kimmel Really Hates Kids; Call Me Again Maybe

RELATED: A Video to Restore Our Faith in Humanity and a Glacier Tsunami

Quick question fans of New Girl: Max Greenfield—funnier scripted, or in the outtakes? We can’t decide:

RELATED: Kelly Clarkson Covers ‘Call Me Maybe’ and Al Roker Gets Frozen

RELATED: ‘Call Me Maybe’ from a Long Time Ago, in a Galaxy Far, Far Away

So we love Google Translate — it makes our job easier, and allows us to read Armenian websites and stuff. But even we know its limitations. For example, here’s what it does to “Call Me, Maybe” or “Relevant National Laws”:

And finally, we dedicate this Friday to the seahorse. Ride on, you majestic (and a little bit sad) creature, ride on:

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Five Things to Know About The Lumineers

By Marisa Laudadio

01/19/2013 at 06:00 PM EST

From left: Wesley Schultz, Neyla Pekarek and Jeremiah Fraites

Alan Poizner/PictureGroup

You already know their hit song "Ho Hey" with its catchy shout-it-out chant that sticks in your head – but what's behind Denver-based band The Lumineers' cool blend of indie rock and Americana?

Here are five things to know about the trio – Wesley Schultz (lead vocals, guitar), 30; Jeremiah Fraites (guitar), 27; and Neyla Pekarek (cello, piano), 26 – who are up for two Grammys (best new artist and best Americana album) and are also performing on Saturday Night Live this week alongside host Jennifer Lawrence.

1. Most people think that 'Ho Hey' – which reached No. 1 on three different charts – is about a romantic relationship, but that's not the whole story.
"The essence of the song was that I was really struggling to make ends meet in the big city when I was living in Brooklyn and working in New York. It was a myth, this idea that you'd go there and get discovered and it would be this great place for music," explains Schultz, who, like Fraites, hails from New Jersey and moved to Denver in recent years, where they met Pekarek.

"It's about a lost love in some ways, but it's also a lost dream. It's funny that a lot of people play it at their weddings because it was written from a different place. But it's kind of a beautiful thing, actually, that people can take something I was feeling really, really down about and turn it into a message of hope."

2. They've only recently been able to quit their day jobs.
"I was working as a busser, a bartender, a barista, a guitar teacher, caterer – a lot of service industry jobs, because it allows you to get away and tour if you need to or take a night off to play," explains Schultz.

"Jer was bussing tables right along beside me. And Neyla was a hostess and a substitute teacher. She'd been offered a full-time teaching position while we were in the midst of touring – and losing a lot of money – and she still stuck with it. Somehow she chose this over that, which is absurd, but we're glad she did!"

3. They named their hit song carefully.
Were they ever concerned people might call it "Hey Ho" in a derogatory way? "Yeah, at some point we laughed about it," says Schultz. "We specifically named it 'Ho Hey' instead of 'Hey Ho' [for that reason]. If people searched for it online, we'd rather it not be something that takes you in that direction."

Do they mind when people get the title wrong? "Oh no, that would be a little pretentious!" says Schultz with a chuckle. "It's kind of a silly name to begin with."

4. That's Schultz's mom on the cover of their debut, self-titled album.
"It's my mom, Judy, as a child, and her mother," he explains. "I'd asked my mom if she had any old photos that I could look through a while back, and I fell in love with it. You know if you set up a child for a picture then can't get out of the frame in time? My mom had a funny take on it: It's our first album, kind of our baby, like this child."

Schultz thanked his mom for all her years of emotional support with some heavy metal when their album went gold. "I had the plaque sent to my mom, because she'd been really supportive of us and believed in us when a lot of people were pretty concerned. And now she's got a platinum one!"

5. Their band name has more than one meaning.
While Schultz and Fraites have been playing music together for more than eight years (previous band names include Free Beer, 6Cheek, and Wesley Jeremiah), they've only been known as The Lumineers for the last four thanks to a mistake.

"We were playing a small club in Jersey City, N.J.," explains Schultz, "and there was a band out there at the time called Lumineers who were slotted for the same time, same day, the next week. The person running the show that night [mistakenly] announced us as The Lumineers."

The name stuck. "It doesn't mean anything literally. It's a made-up word," says Schultz. Another strange coincidence they learned? "It's also the name of a dental veneer company," he adds.

So how are Schultz's teeth? "I have a pretty good smile," he says with a big laugh. "I won 'Best Smile' in high school. It's a pretty big deal."

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Lilly drug chosen for Alzheimer's prevention study

Researchers have chosen an experimental drug by Eli Lilly & Co. for a large federally funded study testing whether it's possible to prevent Alzheimer's disease in older people at high risk of developing it.

The drug, called solanezumab (sol-ah-NAYZ-uh-mab), is designed to bind to and help clear the sticky deposits that clog patients' brains.

Earlier studies found it did not help people with moderate to severe Alzheimer's but it showed some promise against milder disease. Researchers think it might work better if given before symptoms start.

"The hope is we can catch people before they decline," which can come 10 years or more after plaques first show up in the brain, said Dr. Reisa Sperling, director of the Alzheimer's center at Brigham and Women's Hospital in Boston.

She will help lead the new study, which will involve 1,000 people ages 70 to 85 whose brain scans show plaque buildup but who do not yet have any symptoms of dementia. They will get monthly infusions of solanezumab or a dummy drug for three years. The main goal will be slowing the rate of cognitive decline. The study will be done at 50 sites in the U.S. and possibly more in Canada, Australia and Europe, Sperling said.

In October, researchers said combined results from two studies of solanezumab suggested it might modestly slow mental decline, especially in patients with mild disease. Taken separately, the studies missed their main goals of significantly slowing the mind-robbing disease or improving activities of daily living.

Those results were not considered good enough to win the drug approval. So in December, Lilly said it would start another large study of it this year to try to confirm the hopeful results seen patients with mild disease. That is separate from the federal study Sperling will head.

About 35 million people worldwide have dementia, and Alzheimer's is the most common type. In the U.S., about 5 million have Alzheimer's. Current medicines such as Aricept and Namenda just temporarily ease symptoms. There is no known cure.

___

Online:

Alzheimer's info: http://www.alzheimers.gov

Alzheimer's Association: http://www.alz.org

___

Follow Marilynn Marchione's coverage at http://twitter.com/MMarchioneAP

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Wall Street Week Ahead: Earnings, money flows to push stocks higher

NEW YORK (Reuters) - With earnings momentum on the rise, the S&P 500 seems to have few hurdles ahead as it continues to power higher, its all-time high a not-so-distant goal.

The U.S. equity benchmark closed the week at a fresh five-year high on strong housing and labor market data and a string of earnings that beat lowered expectations.

Sector indexes in transportation <.djt>, banks <.bkx> and housing <.hgx> this week hit historic or multiyear highs as well.

Michael Yoshikami, chief executive at Destination Wealth Management in Walnut Creek, California, said the key earnings to watch for next week will come from cyclical companies. United Technologies reports on Wednesday while Honeywell is due to report Friday.

"Those kind of numbers will tell you the trajectory the economy is taking," Yoshikami said.

Major technology companies also report next week, but the bar for the sector has been lowered even further.

Chipmakers like Advanced Micro Devices , which is due Tuesday, are expected to underperform as PC sales shrink. AMD shares fell more than 10 percent Friday after disappointing results from its larger competitor, Intel . Still, a chipmaker sector index <.sox> posted its highest weekly close since last April.

Following a recent underperformance, an upside surprise from Apple on Wednesday could trigger a return to the stock from many investors who had abandoned ship.

Other major companies reporting next week include Google , IBM , Johnson & Johnson and DuPont on Tuesday, Microsoft and 3M on Thursday and Procter & Gamble on Friday.

CASH POURING IN, HOUSING DATA COULD HELP

Perhaps the strongest support for equities will come from the flow of cash from fixed income funds to stocks.

The recent piling into stock funds -- $11.3 billion in the past two weeks, the most since 2000 -- indicates a riskier approach to investing from retail investors looking for yield.

"From a yield perspective, a lot of stocks still yield a great deal of money and so it is very easy to see why money is pouring into the stock market," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

"You are just not going to see people put a lot of money to work in a 10-year Treasury that yields 1.8 percent."

Housing stocks <.hgx>, already at a 5-1/2 year high, could get a further bump next week as investors eye data expected to support the market's perception that housing is the sluggish U.S. economy's bright spot.

Home resales are expected to have risen 0.6 percent in December, data is expected to show on Tuesday. Pending home sales contracts, which lead actual sales by a month or two, hit a 2-1/2 year high in November.

The new home sales report on Friday is expected to show a 2.1 percent increase.

The federal debt ceiling negotiations, a nagging worry for investors, seemed to be stuck on the back burner after House Republicans signaled they might support a short-term extension.

Equity markets, which tumbled in 2011 after the last round of talks pushed the United States close to a default, seem not to care much this time around.

The CBOE volatility index <.vix>, a gauge of market anxiety, closed Friday at its lowest since April 2007.

"I think the market is getting somewhat desensitized from political drama given, this seems to be happening over and over," said Destination Wealth Management's Yoshikami.

"It's something to keep in mind, but I don't think it's what you want to base your investing decisions on."

(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak and Caroline Valetkevitch; Editing by Kenneth Barry)

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