Japan’s Next Leader, Shinzo Abe, Shifts Focus


Yoshikazu Tsuno/Agence France-Presse — Getty Images


Shinzo Abe, set to be prime minister, said Monday that there would be no negotiation over Japan’s stake in islands that China also claims, but his position is no tougher than the incumbents’.







TOKYO — Shinzo Abe, set to return as Japan’s prime minister after his party’s landslide victory on Sunday, means it when he says he knows what it feels like to hit rock bottom. His last term in office was marred by political financing scandals, a nationalist agenda that seemed off the mark and rumors — later confirmed — that he had resigned over an intestinal ailment, an ignominious exit that prompted snide jokes about his condition.




Mr. Abe’s impending comeback says more about the spectacular failure of the leaders who succeeded him than about a revival on his part. But Mr. Abe, 58, is in many ways a changed man. Though analysts say he remains deeply nationalistic at heart, he has toned down his hawkish language and instead has focused on reviving Japan’s moribund economy.


It is still possible that China, which has been enmeshed in a territorial quarrel with Japan, could prompt Mr. Abe to show his nationalist colors. He said Monday that there would be no negotiation over Japan’s claims to the set of islands in dispute, but he went no further than the incumbent Democrats, who have also asserted Japanese sovereignty over the islands.


So far, Mr. Abe has reserved his tough talk for the economy, promising public spending largess, a far more aggressive stand against deflation and bolder measures to weaken the strong yen, which has stifled Japan’s export-led economy. He peppered his campaign speeches with promises to rebuild a strong country, emphasizing resilience against natural disasters and economic downturns, rather than dwelling on North Korean rockets or the Chinese Navy.


The economic focus helped Mr. Abe lead his party, the Liberal Democrats, to victory while sidestepping difficult issues like nuclear power. The Liberal Democrats promoted nuclear power during their half-century of almost uninterrupted leadership until the Democrats ousted them from power in 2009, less than two years before the March 2011 earthquake and tsunami, which killed more than 20,000 people and set off the Fukushima nuclear disaster.


Markets have cheered on Mr. Abe’s economic turn, and rallied on Monday after his party’s decisive victory. The United States dollar reached as high as 84.48 yen on Monday, its highest level against the Japanese currency since April 2011. The Nikkei stock average, which surged 10 percent in the monthlong prelude to Sunday’s elections in anticipation of Mr. Abe’s economic policies, gained an additional 0.94 percent on Monday, rising to 9,828.88.


At a news conference on Monday, Mr. Abe said: “I once fell to rock bottom and was hit with a storm of criticism. Now, I want to prove it’s possible to start over again.”


Mr. Abe’s first stint as prime minister, in 2006-7, began on a high note. The Japanese news media hailed him as the first prime minister born after World War II and the handpicked successor to a popular leader, Junichiro Koizumi.


But Mr. Abe made the mistake of focusing on a drive to instill patriotism in schools and elevate the military’s status, an approach that appeared to be out of touch with a population more concerned about the state of the national pension system and other bread-and-butter issues. Mr. Abe quickly became an object of ridicule in the popular media, an embodiment of an expression popular at the time: “K.Y.,” for “kuuki yomenai,” which literally means “can’t read the air,” or “clueless.”


Mr. Abe’s cabinet was weakened by gaffes and a series of money and pension-related scandals that led four of his ministers to resign and a fifth to commit suicide. Overseas, he was criticized for denying that Japan’s wartime army had forced women into sexual slavery, despite historical documents and testimony. The controversy prompted United States lawmakers to pass a bill calling for an apology. And 10 months into his term, Mr. Abe’s governing party suffered a humiliating defeat in elections for Parliament’s upper house; two months later, he was gone.


With upper house elections expected this summer, Mr. Abe is determined not to make the same mistakes, analysts say. He will be especially cautious, they say, because his mandate is not as rock solid as the Liberal Democrats’ supermajority in the lower house might suggest. The party won just 40 percent of the vote in the country’s electoral districts, but benefited from a splintering of the opposition. If the opposition regroups or the Liberal Democrats stumble, the tables could quickly turn against them.


“In the beginning, he will keep a moderate tone,” said Yoshiaki Kobayashi, a professor of political science at Keio University in Tokyo. “He will avoid making waves by staying close to the United States. He knows he must focus on the economy first, for the upper house elections.”


Martin Fackler contributed reporting from Tokyo.



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Judge rejects Apple injunction bid vs. Samsung






(Reuters) – A U.S. judge on Monday denied Apple Inc‘s request for a permanent injunction against Samsung Electronics‘ smartphones, depriving the iPhone maker of key leverage in the mobile patent wars.


Apple had been awarded $ 1.05 billion in damages in August after a U.S. jury found Samsung had copied critical features of the iPhone and iPad. The Samsung products run on the Android operating system, developed by Google.






Apple and Samsung are going toe-to-toe in a patents dispute that mirrors the struggle for industry supremacy between the two companies, which control more than half of worldwide smartphone sales.


For most of the year, Apple had been successful in its U.S. litigation campaign against Samsung. Apple convinced U.S. District Judge Lucy Koh in San Jose, California to impose two pretrial sales bans against Samsung — one against the Galaxy Tab 10.1, and the other against the Galaxy Nexus phone.


Apple then sought to keep up the pressure after its sweeping jury win. It asked Koh to impose a permanent sales ban against 26 mostly older Samsung phones, though any injunction could potentially have been extended to Samsung’s newer Galaxy products.


Yet the jury exonerated Samsung on the patent used to ban Galaxy Tab 10.1 sales, and Koh rescinded that injunction. Then, in October, a federal appeals court reversed Koh’s ban against the Nexus phone.


In her order late on Monday, Koh cited that appellate ruling as binding legal precedent, ruling that Apple had not presented enough evidence that its patented features drove consumer demand for the entire iPhone.


“The phones at issue in this case contain a broad range of features, only a small fraction of which are covered by Apple’s patents,” Koh wrote.


“Though Apple does have some interest in retaining certain features as exclusive to Apple,” she continued, “it does not follow that entire products must be forever banned from the market because they incorporate, among their myriad features, a few narrow protected functions.”


An Apple spokeswoman declined to comment on Koh’s ruling, and a Samsung representative could not immediately be reached.


In a separate order on Monday, Koh rejected a bid by Samsung for a new trial based on an allegation that the jury foreman was improperly biased in favor of Apple.


The case in U.S. District Court, Northern District of California is Apple Inc. vs. Samsung Electronics Co Ltd et al, 11-1846.


(Reporting by Dan Levine in Oakland, California; Editing by Ron Popeski)


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The Voice's Top Three Give Final Performances in the Competition






The Voice










12/17/2012 at 10:25 PM EST







From left: Judges Adam Levine, Cee Lo Green, Christina Aguilera and Blake Shelton


Trae Patton/NBC


Monday night's episode of The Voice gave the final three contestants three chances to earn fans' votes. Each singer revisited a "breakout" song that set them apart in the competition, sang a new song and performed a duet with his or her coach.

But the night opened with a touching tribute to the victims of the Sandy Hook tragedy. Coaches and singers held up the names of each life lost while singing Leonard Cohen's "Hallelujah."

Team Cee Lo's Nicholas David then kicked off the competition with Jerry Lee Lewis's "Great Balls of Fire." Not able to resist a pun, his coach chimed in on his performance: "Your fire tonight burned this house down," Green said. David later revisited his performance of Bill Withers's "Lean On Me," and joined Green for a duet of Wild Cherry's "Play That Funky Music."

Team Blake's two contestants also had the crowd cheering. Terry McDermott's sang his best song, Foreigner's "I Want to Know What Love Is," and took a stab at Mr. Mister's "Take These Broken Wings." But the crowning moment of the night for McDermott was his duet with Shelton of Aerosmith's "Dude (Looks Like a Lady)." Adam Levine played guitar alongside them, decked out in a long rocker wig.

Cassadee Pope sang "Over You," which her coach and his wife, Miranda Lambert, co-wrote. She received huge praise for singing it the first time, but the song about Shelton's late brother had special meaning in the wake of the shootings in Newtown, Conn. "America's heart is heavy, and that's about healing," Shelton said. She also moved the coaches with her take on Faith Hill's "Cry." "I don't care that you weren't on my team," Levine said. "I am so proud of you and so happy that you're here at this moment." Pope finished the night with Shelton for a duet of Sheryl Crow's "Steve McQueen."

The Voice returns Tuesday, when the season's winner will be named. Who will it be? Tell us in the comments below.

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Experts: No link between Asperger's, violence


NEW YORK (AP) — While an official has said that the 20-year-old gunman in the Connecticut school shooting had Asperger's syndrome, experts say there is no connection between the disorder and violence.


Asperger's is a mild form of autism often characterized by social awkwardness.


"There really is no clear association between Asperger's and violent behavior," said psychologist Elizabeth Laugeson, an assistant clinical professor at the University of California, Los Angeles.


Little is known about Adam Lanza, identified by police as the shooter in the Friday massacre at a Newtown, Conn., elementary school. He fatally shot his mother before going to the school and killing 20 young children, six adults and himself, authorities said.


A law enforcement official, speaking on condition of anonymity because the person was not authorized to discuss the unfolding investigation, said Lanza had been diagnosed with Asperger's.


High school classmates and others have described him as bright but painfully shy, anxious and a loner. Those kinds of symptoms are consistent with Asperger's, said psychologist Eric Butter of Nationwide Children's Hospital in Columbus, Ohio, who treats autism, including Asperger's, but has no knowledge of Lanza's case.


Research suggests people with autism do have a higher rate of aggressive behavior — outbursts, shoving or pushing or angry shouting — than the general population, he said.


"But we are not talking about the kind of planned and intentional type of violence we have seen at Newtown," he said in an email.


"These types of tragedies have occurred at the hands of individuals with many different types of personalities and psychological profiles," he added.


Autism is a developmental disorder that can range from mild to severe. Asperger's generally is thought of as a mild form. Both autism and Asperger's can be characterized by poor social skills, repetitive behavior or interests and problems communicating. Unlike classic autism, Asperger's does not typically involve delays in mental development or speech.


Experts say those with autism and related disorders are sometimes diagnosed with other mental health problems, such as depression, anxiety, bipolar disorder or obsessive-compulsive disorder.


"I think it's far more likely that what happened may have more to do with some other kind of mental health condition like depression or anxiety rather than Asperger's," Laugeson said.


She said those with Asperger's tend to focus on rules and be very law-abiding.


"There's something more to this," she said. "We just don't know what that is yet."


After much debate, the term Asperger's is being dropped from the diagnostic manual used by the nation's psychiatrists. In changes approved earlier this month, Asperger's will be incorporated under the umbrella term "autism spectrum disorder" for all the ranges of autism.


__


AP Writer Matt Apuzzo contributed to this report.


___


Online:


Asperger's information: http://1.usa.gov/3tGSp5


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Asian shares inch higher on "fiscal cliff" hopes

TOKYO (Reuters) - Asian shares crept higher on Tuesday, tracking the overnight gains in U.S. stocks, as fresh signs of compromise maintained a new optimism that the U.S. "fiscal cliff" budget tussle could be settled before tax hikes and spending cuts begin to bite early next year.


Oil and copper also firmed on the prospect of progress in the U.S. budget talks, but expectations of more monetary easing in Japan kept the yen soft.


President Barack Obama is seeking higher tax revenues which include increased rates on the wealthy while he is willing to cut some spending by changing the way cost of living adjustments are made to Social Security retirement benefits and other programs.


Obama's offer shows his willingness to give way on an item that some of his supporters had sought to protect, and may help advance negotiations with top Republican John Boehner to avert the fiscal cliff before the end-year deadline.


MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.2 percent, following a rise in global shares on Monday. The index snapped an eight-day winning streak on Monday as investors took profits from last week's rally.


Fears over the U.S. fiscal crisis have dragged on many markets, but regional equities took direction from local factors.


Australian shares <.axjo> led Asia's outperformers with a 0.7 percent gain, lifted by a rise in iron ore prices <.io62-cni> to a five-month high.


"Iron ore is a very key commodity in the Chinese industrial machine, steel usage will bounce back and that is good news for our exporters," said Baillieu Holst director Richard Morrow.


Seoul shares <.ks11> rose marginally but underperformed others in Asia, as investors were reluctant to build positions ahead of South Korea's presidential vote on Wednesday.


In Japan, the Nikkei average <.n225> surged 1.1 percent to an 8-1/2-month high and edged closer to the key 10,000-mark, with sentiment bolstered by a landslide election win for the conservative Liberal Democratic Party on Sunday. <.t/>


LDP leader Shinzo Abe, who is due to be confirmed as Japan's next premier on December 26, is calling for far more aggressive monetary stimulus and huge public works spending to rescue Japan out of decades-long deflation, pledges which are seen pressuring the yen and supporting Japanese stocks by improving earnings for Japanese exporters.


"The Nikkei is up today primarily due to the rise in U.S. stocks overnight, but the 'Abe-effect' is surprisingly longer-lasting as investors seem to be postponing the timing of unwinding their positions until they see the details and specifics in policies," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.


YEN REMAINs PRESSURED


The dollar inched up 0.1 percent to 83.95 yen, off a 20-month high of 84.48 yen hit on Monday but well above its late New York levels on Friday.


Abe applied fresh pressure on the Bank of Japan on Monday, saying that the election result reflected strong public support for his views, which he hoped the BOJ would take into account at its two-day policy meeting starting on Wednesday.


"The dollar has more upside against the yen ahead of the BOJ's meeting, with expectations for some additional easing steps being strengthened after Abe's comments yesterday," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.


"The corrective fall in the dollar/yen after the election was small and it's crawling up because the yen weakening trend is still intact. But after the BOJ meeting, there will likely be pre-holiday profit-taking, pushing the dollar/yen down by 1 to 2 yen," he said, adding that the dollar could temporarily touch 85 yen before profit-taking sets in by the end of the year.


The benchmark 10-year Japanese government bond yield hit a one-month high of 0.750 percent on concerns that big-scale fiscal stimulus could seriously increase the country's debt burden.


U.S. Treasury yields also inched up in Asia, with the 10-year yields briefly reaching 1.796 percent, its highest level since October 26, on hopes for a deal on the U.S. fiscal cliff.


London copper was up 0.2 percent to $8,078.50 a metric ton (1.1023 tons).


U.S. crude rose 0.4 percent to $87.57 a barrel and Brent added 0.5 percent to $108.18.


(Additional reporting by Victoria Thieberger in Melbourne; Editing by Eric Meijer)



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Chávez Party Wins Vote Amid Uncertainty





CARACAS, Venezuela — With President Hugo Chávez cancer-stricken and potentially unable to continue in office, Venezuelans showed overwhelming support for his party in elections for governor on Sunday, giving it control over almost all of the nation’s 23 states.




But voters also delivered an important victory to Mr. Chávez’s main rival, re-electing Henrique Capriles Radonski as governor of one of the most populous states and cementing his position as the opposition’s standard-bearer.


Candidates loyal to Mr. Chávez won in at least 19 states. The opposition, which started the day with governors in eight states, won only two and was leading in a third. In one other state, Bolívar, results were not complete Sunday night.


“This has been an immense victory,” said Jorge Rodríguez, the campaign chief for Mr. Chávez’s United Socialist Party.


Most attention going into the election focused on Mr. Capriles’s state of Miranda, which includes part of Caracas and surrounding areas, and where he faced a difficult race for re-election against an all-out government effort to defeat him.


Mr. Capriles was the candidate of a unified opposition in the presidential race in October, when he ran a strong but losing campaign against Mr. Chávez. He received 6.5 million votes, 44 percent of the total, the best showing by an opposition candidate since Mr. Chávez was first elected in 1998. Mr. Capriles, 40, crisscrossed the nation during his campaign, energizing voters unhappy with the status quo and even finding support in areas that had long been strongholds for Mr. Chávez.


“It’s hard to come here and smile,” Mr. Capriles said on Sunday, referring to the widespread opposition losses. But he added: “This dream we have, I know that it’s around the corner. We will achieve it.”


After the election in October, Mr. Capriles took the politically risky decision to run for re-election in his home state. That made him a target for Mr. Chávez’s government, which saw a chance to weaken him as a serious contender and sow disarray within the opposition.


Mr. Chávez dispatched a former vice president, Elías Jaua, to run against Mr. Capriles, and the government and the United Socialist Party dedicated vast resources to defeat Mr. Capriles.


Mr. Chávez, 58, is in Cuba recovering from what officials have called a complex and difficult cancer operation. If he is not able to begin his new six-year term on Jan. 10, or if he is forced to leave office soon because of poor health, the Constitution says that new elections will have to be called.


If that happens, Mr. Chávez, who has been president for nearly 14 years, has said that Vice President Nicolás Maduro should lead in his place and be his party’s candidate. His blessing is likely to go a long way to shore up support for Mr. Maduro.


But the opposition has never been able to beat Mr. Chávez in a head-to-head race, and running against Mr. Maduro would give it its best chance in years, something that opposition voters had in mind on Sunday.


“This was a trial by fire for him, to show his leadership,” Rubén Colmenares, 24, a university student, said of Mr. Capriles, predicting he could go on to beat Mr. Maduro if a special election was called.


Yet the losses in many other states, especially the large state of Zulia, left the opposition reeling. Supporters of Mr. Chávez in Miranda said they did not think that Mr. Capriles would be able to defeat Mr. Maduro in a special election. “Maduro beats Capriles, the revolution continues — it’s that simple,” said Carlos Bolívar, 40, a street vendor, after voting in Petare, a sprawling Caracas slum. “If Capriles wins, the whole process goes backward 20 years if not 200 years.”


Andrew Rosati contributed reporting.



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Top 5 Apps for Kids This Week






1. PHLIP


Ages 4-up Overall rating: 4.1 out of 5 stars Why we like it: PHLIP is a spatial relations puzzle where you “flip” or turn your screen left or right, like a steering wheel, to change the orientation of the set of tiles, in order to reassemble the picture. You can use photos you take, or choose one from your photo library. Need to know: The more tiles, the harder the puzzle. You can lock any tile by tapping on it. The physical rotation of the device develops motor and cognitive skills and hand-eye coordination. It can also cause your heavy iPad to slip out of your hands. This is a game that works much better on an iPad Mini. Ease of use: 8/10 Educational: 9/10 Entertaining: 7/10 $ 0.99


Click here to view this gallery.






[More from Mashable: How to Crowdsource Your Job Hunt]


Chris Crowell is a veteran kindergarten teacher and contributing editor to Children’s Technology Review, a web-based archive of articles and reviews on apps, technology toys and video games. Download a free issue of CTR here.


In this week’s Top 5 Kids Apps, your kids can play with a spatial puzzle that lets them reassemble photographs they upload themselves. There’s also a chance to learn and have fun with geography trivia and explore Australia with an illustrated story.


[More from Mashable: 4 Benefits of a Job Search Community]


Our friends at Children’s Technology Review shared with us these 5 top apps from their comprehensive monthly database of kid-tested reviews. The site covers everything from math and counting to reading and phonics.


Check back next week for more Top Kids Apps from Children’s Technology Review


Photo via iStockPhoto, cglade


This story originally published on Mashable here.


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Drew Barrymore's Baby & Miley Cyrus's Outfit Get Readers' Top Reactions















12/16/2012 at 09:30 PM EST







Drew Barrymore and Olive. Miley Cyrus


Michael Tran/Filmmagic


We love knowing what's on your mind when you read articles on PEOPLE.com, and as always, you gave us plenty of great feedback this week.

Your emotions ranged from "aww" at the photos of Drew Barrymore's daughter Olive, to "ugh" when it came to Miley Cyrus's questionable outfit choice. You also mourned the loss of a legend, singer Jenni Rivera.

Keep letting us know what's making you smile, frown, or LOL each week by clicking on the buttons at the bottom of every article.

Love You were nearly as thrilled to welcome Drew Barrymore's baby as the proud mom herself! The actress is over the moon about her new daughter Olive, and describes her feelings for her little as "like the biggest crush I've ever had in my life!"

Wow You were highly impressed by professional builder Johan Huibers's latest creation: A full-scale replica of Noah's Ark. The wooden vessel – which is 427 feet long, 95 feet wide and 75 feet high – is a feat of, well, biblical proportions!

Sad You were heartbroken over the news that Mexican-American singer Jenni Rivera was killed in a plane crash shortly after takeoff early Sunday. Rivera, who was known as the Diva of Banda and sold over 20 million albums worldwide, was 43. Her family is also mourning the tragic loss.

Angry Miley Cyrus didn't leave much to the imagination with a revealing outfit worn on stage at a concert in Hollywood. Readers were angry about the young starlet's ensemble, which consisted of tight pants, knee-high snakeskin boots and a peekaboo top that showed more than just a little cleavage.

LOL Well, this is awkward. You weren't too upset about Track Palin filing for divorce from wife Britta Hanson after a year and a half. Their parting made readers LOL. Palin, the oldest son of former Alaska governor Sarah Palin, and Hanson were former high school sweethearts.

Check back next week for another must-read roundup, and see what readers are reacting to every day here.

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Experts: No link between Asperger's, violence


NEW YORK (AP) — While an official has said that the 20-year-old gunman in the Connecticut school shooting had Asperger's syndrome, experts say there is no connection between the disorder and violence.


Asperger's is a mild form of autism often characterized by social awkwardness.


"There really is no clear association between Asperger's and violent behavior," said psychologist Elizabeth Laugeson, an assistant clinical professor at the University of California, Los Angeles.


Little is known about Adam Lanza, identified by police as the shooter in the Friday massacre at a Newtown, Conn., elementary school. He fatally shot his mother before going to the school and killing 20 young children, six adults and himself, authorities said.


A law enforcement official, speaking on condition of anonymity because the person was not authorized to discuss the unfolding investigation, said Lanza had been diagnosed with Asperger's.


High school classmates and others have described him as bright but painfully shy, anxious and a loner. Those kinds of symptoms are consistent with Asperger's, said psychologist Eric Butter of Nationwide Children's Hospital in Columbus, Ohio, who treats autism, including Asperger's, but has no knowledge of Lanza's case.


Research suggests people with autism do have a higher rate of aggressive behavior — outbursts, shoving or pushing or angry shouting — than the general population, he said.


"But we are not talking about the kind of planned and intentional type of violence we have seen at Newtown," he said in an email.


"These types of tragedies have occurred at the hands of individuals with many different types of personalities and psychological profiles," he added.


Autism is a developmental disorder that can range from mild to severe. Asperger's generally is thought of as a mild form. Both autism and Asperger's can be characterized by poor social skills, repetitive behavior or interests and problems communicating. Unlike classic autism, Asperger's does not typically involve delays in mental development or speech.


Experts say those with autism and related disorders are sometimes diagnosed with other mental health problems, such as depression, anxiety, bipolar disorder or obsessive-compulsive disorder.


"I think it's far more likely that what happened may have more to do with some other kind of mental health condition like depression or anxiety rather than Asperger's," Laugeson said.


She said those with Asperger's tend to focus on rules and be very law-abiding.


"There's something more to this," she said. "We just don't know what that is yet."


After much debate, the term Asperger's is being dropped from the diagnostic manual used by the nation's psychiatrists. In changes approved earlier this month, Asperger's will be incorporated under the umbrella term "autism spectrum disorder" for all the ranges of autism.


__


AP Writer Matt Apuzzo contributed to this report.


___


Online:


Asperger's information: http://1.usa.gov/3tGSp5


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

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


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


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


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


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


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


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


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


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


BEWARE OF THE WITCH


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


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


RETHINKING APPLE


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


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


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


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


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


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



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