Apple drags on S&P, Nasdaq; Dell jumps after report

NEW YORK (Reuters) - The S&P 500 and Nasdaq ended lower on Monday as worries over demand for Apple products drove down its shares and investors braced for earnings disappointments.

Running counter to that was Dell Inc's stock which jumped 13 percent to about a five-month high at $12.29 after Bloomberg reported the No. 3 personal computer maker is in talks with private equity firms to go private. Dell's gains offset some tech-sector weakness.

Tech heavyweight Apple lost 3.6 percent to $501.75 and was the biggest weight on both the S&P 500 and Nasdaq 100 <.ndx> indexes after reports the company has cut orders for LCD screens and other parts for the iPhone 5 this quarter due to weak demand. The stock hit a session low of $498.51, the first dip below $500 since February 16.

"With Apple, it seems as if the sentiment has shifted from this being the one stock that everybody wanted to own to people beginning to look at it as a company (whose) business is slowing down somewhat," said Eric Kuby, chief investment officer of North Star Investment Management Corp in Chicago.

Adding to investor unease, fourth-quarter earnings kick into high gear this week. Analyst estimates for the quarter have fallen sharply since October. S&P 500 earnings growth is now seen up just 1.9 percent from a year ago, Thomson Reuters data showed.

The Dow Jones industrial average <.dji> was up 18.89 points, or 0.14 percent, at 13,507.32. The Standard & Poor's 500 Index <.spx> was down 1.37 points, or 0.09 percent, at 1,470.68. The Nasdaq Composite Index <.ixic> was down 8.13 points, or 0.26 percent, at 3,117.50.

Apple suppliers also lost ground, with Cirrus Logic off 9.4 percent at $28.62 and Qualcomm down 1 percent at $64.24.

The Dow fared better than the other two indexes, helped in part by Hewlett-Packard shares, which rose 4.9 percent to $16.95. The stock, up early in the session after JPMorgan upgraded its rating on the shares and raised its price target to $21 from $15, added to gains following the Dell report.

Tech has "become the arena for private equity or other capital-restructuring type of maneuvers because of the way their valuations and their balance sheets are," Kuby said.

Appliance and electronics retailer Hhgregg Inc slumped 5.7 percent to $7.44 after the company cut its same-store sales forecast for the full year.

Earnings reports are due this week from Goldman Sachs , Bank of America , Intel and General Electric , among other companies. Third-quarter reports ended with a gain of just 0.1 percent, the worst for an S&P 500 profit period in three years, according to Thomson Reuters data.

President Barack Obama warned Congress at a news conference on Monday that a refusal to raise the U.S. debt ceiling next month could mean a government shutdown and trigger economic chaos.

S&P futures had little reaction to comments after the bell by Federal Reserve Chairman Ben Bernanke, who urged lawmakers to lift the country's borrowing limit to avoid a debt default.

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Decliners were about even with advancers on the NYSE while decliners outpaced advancers on the Nasdaq by about 12 to 11.

(Additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry, Nick Zieminski and Andrew Hay)

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Cubans Take Advantage of Day 1 of New Travel Rules

HAVANA — Cubans flocked to immigration offices and travel agencies on Monday, eager to take advantage of a lifting of government travel restrictions that have been in place since Fidel Castro was a dark-bearded firebrand in his 30s.

The new rules eliminate the expensive bureaucratic hurdles long faced by Cubans wishing to go overseas, many of whom know loved ones who lost everything when they emigrated or who left the island in the dead of night on rafts and powerboats.

As of Monday, most Cubans can head for the airport with only a passport, a plane ticket and a visa, if required, from the country they intend to visit.

“We have lived for decades in captivity,” said Marta Rodríguez, 65, a retired office manager who was waiting to pick up a tourist visa from the United States Interests Section in Havana. “It’s a positive move — one they should have taken 50 years ago.”

The reform is not expected to prompt a major exodus, because most countries use entrance visas to control the number of visiting Cubans, and international travel remains way beyond the means of most islanders, who earn state salaries of about $20 per month. There are, of course, Cubans who want to travel from the island and return.

The government says it will continue to limit travel for tens of thousands of Cubans who work in strategic sectors, such as military personnel and scientific workers, as well as those they deem a threat to national security.

How tightly, and for how long, the government will continue to control those sectors’ movements will only become apparent over time, Cubans and outside analysts said. In a development that could signal new government flexibility, Yoani Sanchez, a prominent blogger and activist who says she has been denied an exit visa by the Cuban government at least 19 times in the past, said on Monday that she was one of the first in line at the immigration office and submitted paperwork for a new passport without any problems.

Arturo López-Levy, a Cuban-born academic who left the island 10 years ago and lectures at the University of Denver, said the migration reform was not simply a maneuver to defuse political pressure but a structural shift in the relationship between the island and the diaspora that the government once rejected as traitorous “worms.”

“This is a real change in the way in which the government perceives the relationship between the Cuban population and the outside world,” he said.

At immigration offices, Cubans scrutinized posters clarifying the new rules, stood in line to get new passports and pressed around immigration officials in spearmint-colored uniforms seeking details of what paperwork was now required.

More police were on hand than usual outside immigration offices and near consular offices, particularly the small park near the United States Interests Section — known locally as “the place between life and death” — where Cubans wait each day for appointments with American consular officers.

The Obama administration was watching the developments with interest. “We will see if this is implemented in a very open way and if it means that all Cubans can travel,” said Roberta S. Jacobson, assistant secretary of state for Western Hemisphere affairs, according to The Associated Press.

Despite multiple reports in recent weeks by official Cuban news media, many Cubans seemed unclear about how the new law would work: whether it applied to them, whether they needed a new passport or a special stamp (they do not), how it would work for minors.

Under the old system, most Cubans who applied for an exit permit to travel received it — if they could provide the authorities with an invitation letter from someone in the country they intended to visit — all at a cost of nearly $400.

Caridad Reyes Risse, 69, a retiree who was in line at a downtown travel agency to buy a ticket to visit her daughter in the United States, said she had waited until Monday to avoid that $400 expense.

“The question now is, ‘Will I get a ticket?’ ” she said, gesturing to the gaggles of Cubans that spilled out of the tiny agency.

Ramona María Moreno, 61, a restaurant worker, said that even though most Cubans who sought permission in the past received it, the change had psychological importance.

“It’s the idea you can go,” said Ms. Moreno, who was at an immigration office looking for a list of countries that admit Cubans without a visa. “It’s a freedom that we have never had.”

She acknowledged there were still barriers to travel. “I have no money,” she said with a chuckle.

The news last week that the government would allow members of its jealously guarded medical corps to travel has prompted excitement among doctors who for decades have had to go through a lengthy process to get permission, if they got it at all.

“Everyone is waiting to see what happens,” said Niurka, 45, a doctor who would like to join her family in Miami. Requesting that her last name not be published to avoid riling the authorities, she said she did not believe the tight restrictions on medical professionals would be lifted overnight.

“Still, it gives me hope,” she said.

However the government chose to carry out the new regulations, they signified a new era in Cuba’s relationship with its diaspora and the wider world, said Ms. Rodríguez, the retiree.

“They have realized the island needs to open up to the world,” she said “They can’t go back on this now.”

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Apple stock wilts on worries about iPhone demand

SAN FRANCISCO (AP) — Apple‘s stock slipped below $ 500 for the first time in 11 months on Monday as investors reacted to reports signaling the company’s latest iPhone is falling further behind a slew of sleek alternatives running Google’s Android software.

The latest indication that Apple, the world’s most valuable company, is seeing sluggish demand for its iPhone 5 emerged in separate stories published Monday in the Japanese newspaper Nikkei and The Wall Street Journal. Both publications cited unnamed people familiar with the situation saying Apple has dramatically reduced its orders for the parts needed to build the newest iPhone because the device isn’t selling as well as the company hoped.

The adjustment means Apple will buy about half as many display screens for the iPhone as management originally planned for the opening three months of the year, according to the newspapers.

Apple Inc., which is based in Cupertino, Calif., declined to comment Monday. Spokeswoman Natalie Kerris said Apple executives would share their views on market conditions Jan. 23 when the company is scheduled to release its financial results for the final three months of 2011. The period covers the first full quarter that the iPhone 5 was on sale.

Although Apple hailed the iPhone 5 as the best version yet of a product that has revolutionized the telecommunications and computing industry, the company’s stock has wilted since the device hit the market.

After peaking at $ 705.07 on the day of the iPhone 5′s Sept. 21 release, Apple’s stock has plunged nearly 30 percent. The shares fell $ 18.55, or 3.6 percent, to close Monday’s regular trading at $ 501.75, dragging the company’s market value nearly $ 190 billion below where it stood in late September. The stock traded at $ 498.51 earlier in the day, its lowest price since February.

The stock’s decline hasn’t been entirely caused by concerns about the iPhone 5′s sales performance. Industry analysts are also worried about the recent introduction of a smaller, less expensive iPad cutting into the company’s profits.

But the biggest fears hover around the iPhone because it has become Apple’s most valuable product since the company’s late CEO, Steve Jobs, unveiled the first model in 2007. Apple has sold more than 271 million of the devices since then, and in the company’s last fiscal year ending in September, the iPhone generated $ 80 billion in sales to account for more than half of the company’s total revenue.

But Apple’s upgrades of the iPhone in the past two years have disappointed gadget lovers who have been clamoring for Apple to do more to stay in front of device makers relying on the free Android software made by Google Inc. For instance, there were high hopes for a larger iPhone screen with the release of the 2011 model, but Apple waited until last September to take that leap. And when Apple moved to a larger display screen with the iPhone 5, it didn’t include a special chip to enable users to make mobile payments by tapping the handset on another device at the checkout stand. Such a mobile payment feature is available on some Android phones.

Finally, Apple has insisted that wireless carriers subsidize so much of the iPhone’s cost in exchange for customers’ two-year commitments on data plans that the carriers make little or no money by selling the devices. That has prompted more wireless carriers to tout less expensive Android phones in their stores, undercutting the demand for iPhones, said Darren Hayes, who has been studying the shifting market conditions as chairman of the computing systems program at Pace University in New York.

Through the third quarter of last year, Android devices represented 75 percent of smartphone shipments worldwide according to the research firm International Data Corp. That was up from 58 percent at the same point 2011. Meanwhile, Apple’s share of worldwide smartphone shipments has fallen from a peak of 23 percent in the fourth quarter of 2011 to 15 percent in the third quarter of last year.

Samsung Electronics, in particular, has been benefiting from the growing popularity of its Android-powered phones, led by its Galaxy S line. The company said Monday that it sold more than 100 million Galaxy S phones in less than three years. It took the iPhone nearly four years to reach that milestone.

“This is a real wake-up call for Apple,” Hayes said. “They need to be more flexible in how they do things.” Among other things, Hayes thinks Apple may have to reduce the financial burden on wireless carriers selling the iPhone and spend more money advertising the devices, especially with the recent wave of phones running on Microsoft Corp.’s Windows software. Apple’s efforts to sell more iPhones to companies also could be short-circuited if Research in Motion Ltd.’s upcoming release of a revamped BlackBerry proves to be a hit. The BlackBerry is due out Jan. 30.

In an attempt to regain its competitive edge, Apple already is considering the release of a less expensive version of the iPhone made of cheaper parts to boost sales in less affluent countries, according to a report last week in The Wall Street Journal. The company so far hasn’t commented on that speculation, either. The least expensive iPhone 5 without a wireless contract sells for $ 649. With the subsidy included with a two-year wireless service contract, the iPhone 5 sells for as little as $ 199.

Even as it loses ground to Android products, the iPhone remains a solid seller. Some analysts believe Apple sold more than 50 million iPhones in its last quarter ending in December, which would be far the most units that the company has ever shipped during any previous three-month period.

What’s more, the iPhone 5 got off to a torrid start in China, where Apple expects to eventually sell more devices than it does in the U.S. Apple said it sold more than two million iPhone 5s in the three days after its debut in China last month.

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Flu more widespread in US; eases off in some areas

NEW YORK (AP) — Flu is now widespread in all but three states as the nation grapples with an earlier-than-normal season. But there was one bit of good news Friday: The number of hard-hit areas declined.

The flu season in the U.S. got under way a month early, in December, driven by a strain that tends to make people sicker. That led to worries that it might be a bad season, following one of the mildest flu seasons in recent memory.

The latest numbers do show that the flu surpassed an "epidemic" threshold last week. That is based on deaths from pneumonia and influenza in 122 U.S. cities. However, it's not unusual — the epidemic level varies at different times of the year, and it was breached earlier this flu season, in October and November.

And there's a hint that the flu season may already have peaked in some spots, like in the South. Still, officials there and elsewhere are bracing for more sickness

In Ohio, administrators at Miami University are anxious that a bug that hit employees will spread to students when they return to the Oxford campus next week.

"Everybody's been sick. It's miserable," said Ritter Hoy, a spokeswoman for the 17,000-student school.

Despite the early start, health officials say it's not too late to get a flu shot. The vaccine is considered a good — though not perfect — protection against getting really sick from the flu.

Flu was widespread in 47 states last week, up from 41 the week before, the Centers for Disease Control and Prevention said on Friday. The only states without widespread flu were California, Mississippi and Hawaii.

The number of hard-hit states fell to 24 from 29, where larger numbers of people were treated for flu-like illness. Now off that list: Florida, Arkansas and South Carolina in the South, the first region hit this flu season.

Recent flu reports included holiday weeks when some doctor's offices were closed, so it will probably take a couple more weeks to get a better picture, CDC officials said Friday. Experts say so far say the season looks moderate.

"Only time will tell how moderate or severe this flu season will be," CDC Director Dr. Thomas Frieden said Friday in a teleconference with reporters.

The government doesn't keep a running tally of adult deaths from the flu, but estimates that it kills about 24,000 people in an average year. Nationally, 20 children have died from the flu this season.

Flu vaccinations are recommended for everyone 6 months or older. Since the swine flu epidemic in 2009, vaccination rates have increased in the U.S., but more than half of Americans haven't gotten this year's vaccine.

Nearly 130 million doses of flu vaccine were distributed this year, and at least 112 million have been used. Vaccine is still available, but supplies may have run low in some locations, officials said.

To find a shot, "you may have to call a couple places," said Dr. Patricia Quinlisk, who tracks the flu in Iowa.

In midtown Manhattan, Hyrmete Sciuto got a flu shot Friday at a drugstore. She skipped it in recent years, but news reports about the flu this week worried her.

During her commute from Edgewater, N.J., by ferry and bus, "I have people coughing in my face," she said. "I didn't want to risk it this year."

The vaccine is no guarantee, though, that you won't get sick. On Friday, CDC officials said a recent study of more than 1,100 people has concluded the current flu vaccine is 62 percent effective. That means the average vaccinated person is 62 percent less likely to get a case of flu that sends them to the doctor, compared to people who don't get the vaccine. That's in line with other years.

The vaccine is reformulated annually, and this year's is a good match to the viruses going around.

The flu's early arrival coincided with spikes in flu-like illnesses caused by other bugs, including a new norovirus that causes vomiting and diarrhea, or what is commonly known as "stomach flu." Those illnesses likely are part of the heavy traffic in hospital and clinic waiting rooms, CDC officials said.

Europeans also are suffering an early flu season, though a milder strain predominates there. China, Japan, the West Bank, the Gaza Strip, Algeria and the Republic of Congo have also reported increasing flu.

Flu usually peaks in midwinter. Symptoms can include fever, cough, runny nose, head and body aches and fatigue. Some people also suffer vomiting and diarrhea, and some develop pneumonia or other severe complications.

Most people with flu have a mild illness. But people with severe symptoms should see a doctor. They may be given antiviral drugs or other medications to ease symptoms.

Some shortages have been reported for children's liquid Tamiflu, a prescription medicine used to treat flu. But health officials say adult Tamiflu pills are available, and pharmacists can convert those to doses for children.

___

Associated Press writers Dan Sewell in Cincinnati, Catherine Lucey in Des Moines, and Malcolm Ritter in New York contributed to this report.

___

Online:

CDC flu: http://www.cdc.gov/flu/index.htm

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Yen pressured, Asian stocks subdued

SYDNEY (Reuters) - The yen plumbed a 2-1/2 year low against the dollar on Monday as Japan's central bank faced relentless political pressure to deliver bold stimulus, while Asian stocks got off to subdued start with Tokyo closed for a public holiday.

Prime Minister Shinzo Abe on Sunday said the Bank of Japan (BOJ) must set a 2 percent inflation target and make it a medium-term, not long-term, goal to show markets it was determined to pursue bold monetary easing to end nearly two decades of deflation.

His comments emboldened yen-bears, who took a fresh swipe at the currency. That saw the U.S. dollar hit a high of 89.67 yen, a level not seen since mid-2010, while the euro climbed as far as 119.84 yen, scaling a 20-month peak.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early dealings, but not far from a 17-month peak set on Friday. The index has gained more than 2 percent so far this year on growing optimism about the health of the global economy.

Australian's benchmark S&P/ASX 200 index rose 0.3 percent, while South Korea's KOSPI slipped 0.2 percent, partly weighed by lingering concerns about corporate earnings and a firming local currency.

Analysts at HSBC believe global developments this week will support demand for riskier assets, with U.S. and Chinese data likely to show further momentum in the world's two biggest economies.

"In addition, the Fed speaker calendar is dominated by doves in the early part of the week. These should provide reassurance that the Fed is in no rush to turn off the liquidity tap despite these early signs of encouragement on activity," they said in a client note.

Federal Reserve Chairman Ben Bernanke is due to speak later on Monday at the University of Michigan and investors are eagerly waiting for clues on how long the Fed's latest bond purchase program will last.

Any signs that the Fed is in no hurry to end its quantitative easing program could see the U.S. dollar soften against higher-yielding currencies such as the Australian dollar and those of faster growing emerging economies.

The Aussie dollar traded at $1.0531, still remaining within easy reach of a four-month high of $1.0599 set last week.

Against the euro, the greenback dipped to a fresh nine-month low. The single currency rose 0.1 percent to $1.3357, continuing to outperform after European Central Bank chief Mario Draghi last week gave no indication the bank would ease monetary policy any further.

Optimism about the global economy also helped stem a slide in oil prices. U.S. crude rose 29 cents to $93.85 a barrel, recovering from Friday's 26-cent fall, while Brent crude was little changed at $110.62 a barrel.

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HTC seeks Myanmar edge with local font phones

YANGON (Reuters) – Peter Chou, CEO of Taiwan smartphone company HTC Corp, will on Monday launch what he hopes will be a major boost to both a backward tech sector in Myanmar, his country of birth, and to his company’s share of one of the few untapped mobile markets: a phone that locals can use out of the box.

Until now, Chou says, Myanmarese users of mobile phones and computers must install fonts in their own language, a process that is cumbersome, often invalidates the device’s warranty and has, he says, slowed innovation and the embrace of technology.

HTC has instead teamed up with a local distributor and a software developer to customize Google’s Android operating system so its devices display local fonts and sport a dedicated and, Chou says, intuitive, Myanmar language onscreen keyboard.

“You don’t have to spend two months to learn how to type it,” Chou said in an interview ahead of the launch. “You just type it. We want to give people here a computing device they don’t have to learn. They just try it, they just use it, they just get it.”

Myanmar IT experts say that while the country’s alphabet is no more complex than some other Asian scripts, a failure to agree how to apply an international standard for language symbols called Unicode to existing versions of the computer font has made it difficult to bake the language into software.

As a result, web pages and apps will often be unreadable.

BIG CHALLENGES, LITTLE PENETRATION

The issue of fonts may seem a basic one, but reflects the challenges Myanmar faces in catching up with its neighbors as it sheds decades of military control over politics and the economy. Myanmar has one of the lowest mobile penetration rates in the world, with only 3 percent of the population owning a phone in 2011, according to the World Bank. In neighboring Bangladesh, 56 percent of people have a mobile phone.

When IT enthusiasts met last year for a conference on the future of technology called Barcamp Yangon, much of the discussion revolved around such basic issues, participants said. With at least two competing types of font software available, disagreements remain.

The problem is worse on smartphones, says Soe Ngwe Ya, general manager of KMD, HTC’s distribution partner for the new phones. In order to install such fonts on mobile devices users must first “root” the phone, effectively bypassing the manufacturer’s controls on customizing the phone’s operating system. That often invalidates any warranty. “It’s a major issue,” he says.

HTC also hopes it can claw back some ground from its biggest competitor in Android phones, Samsung Electronics, which has established a first mover advantage in Myanmar.

Samsung has at least two distributors for its handsets and its advertisements are visible around the capital. Soe says KMD will act as HTC’s distributor, open a flagship store and service HTC users.

Chou, who was born in Myanmar but left to work and study in Taiwan more than 30 years ago, says that at least for now the Myanmar fonts and keyboard will only be available on HTC devices. He denied that this undermined his claims of contributing to his homeland.

“While sometimes you can be idealistic,” he said, “the first thing you have to show the people is something to get excited about.”

(Editing by Ian Geoghegan)

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Inside Story: Life Without Lauren Spierer

By Kristen Mascia and Jeff Truesdell

01/12/2013 at 06:30 PM EST

Lauren Spierer

Jeremy Hogan/Bloomington Herald-Times/Polaris

It's the little things, say Robert and Charlene Spierer, that hurt the most.

For Robert it's the flash of a blonde ponytail on a city street that leaves him aching; for Charlene it's the arrival of the cell-phone bill that still bears her daughter's name.

Nineteen months after Lauren disappeared, her boxes from college remain stacked against her parents' den wall. Long ago they gave up hope that Lauren might unpack them herself.

"I can't bear to move them," says Charlene. "I know they're just boxes. But I can't."

It's difficult for the Spierers to grasp that it's been nearly two years since Lauren, 20, a bright, beautiful sophomore at Indiana University Bloomington, left a friend's off-campus apartment after a night out partying and never returned to her own. In that time their lives have utterly transformed.

For seven months in 2011 they lived in Bloomington, helping coordinate search efforts and hiring their own private investigator. And last year they planned a wedding without her, celebrating in October the marriage of their older daughter Rebecca, 26. Yet as much as their lives change, the status of the search for their daughter remains the same.

"They're not getting the same frequency of leads," says Robert of the investigators working on the case. "It's frustrating because 19 months later we still don't have answers, and we still don't have our child."

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Q&A: Scramble for vaccine as flu season heats up

WASHINGTON (AP) — Missed flu-shot day at the office last fall? And all those "get vaccinated" ads? A scramble for shots is under way as late-comers seek protection from a miserable flu strain already spreading through much of the country.

Federal health officials said Friday that there is still some flu vaccine available and it's not too late to benefit from it. But people may have to call around to find a clinic with shots still on the shelf, or wait a few days for a new shipment.

"We're hearing of spot shortages," said Dr. Thomas Frieden, director of the Centers for Disease Control and Prevention.

Colorado offers an example. Kaiser Permanente, which has 535,000 members in the state, stopped giving flu shots this week. But it expected to resume vaccinations when new shipments arrive, expected this weekend.

Some questions and answers about flu vaccines:

Q: Are we running out of vaccine?

A: It's January — we shouldn't have a lot left. The traditional time to get vaccinated is in the fall, so that people are protected before influenza starts spreading.

Indeed, manufacturers already have shipped nearly 130 million doses to doctors' offices, drugstores and wholesalers, out of the 135 million doses they had planned to make for this year's flu season. At least 112 million have been used so far.

The nation's largest manufacturer, Sanofi Pasteur, said Friday that it still has supplies of two specialty vaccines, a high-dose shot for seniors, and an under-the-skin shot for certain adults, available for immediate shipment. But it also is working to eke out a limited supply of its traditional shots — some doses that it initially hadn't packaged into syringes, said spokesman Michael Szumera. They should be available late this month.

And MedImmune, the maker of the nasal spray vaccine FluMist, said it has 620,000 extra doses available.

Q: Can't they just make more?

A: No. Flu vaccine is complicated to brew, with supplies for each winter made months in advance and at the numbers expected to sell. Although health officials recommend a yearly flu vaccination for nearly everybody, last year 52 percent of children and just 39 percent of adults were immunized. Most years, leftover doses have to be thrown out.

Q: Should I still hunt for a vaccine?

A: It does take two weeks for full protection to kick in. Still, health officials say it's a good idea to be vaccinated even this late, especially for older people, young children and anyone with medical conditions such as heart or lung diseases that put them at high risk of dangerous flu complications. Flu season does tend to be worst in January and February, but it can run through March.

Q: I heard that a new flu strain is spreading. Does the vaccine really work?

A: Flu strains constantly evolve, the reason that people need an updated vaccine every year. But the CDC says this year's is a good match to the types that are circulating, including a new kind of the tough H3N2 strain. That family tends to be harsher than other flu types — and health officials warned last fall that it was coming, and meant this winter would likely be tougher than last year's flu season, the mildest on record.

Q: But don't some people get vaccinated and still get sick?

A: Flu vaccine never is 100 percent effective, and unfortunately it tends to protect younger people better than older ones. But the CDC released a study Friday showing that so far this year, the vaccine appears 62 percent effective, meaning it's working about as well as it has in past flu seasons.

While that may strike some people as low, Frieden said it's the best protection available. "It's a glass 62 percent full," he said. "It's well worth the effort."

Q: What else can I do?

A: Wash your hands often, and avoid touching your eyes, nose and mouth. Viruses can spread by hand, not just through the air. Also, cough in your elbow, not your hand. When you're sick, protect others by staying home.

And people who are in those high-risk groups should call a doctor if they develop symptoms, added CDC spokesman Tom Skinner. They might be prescribed antiviral medication, which works best if given within the first 48 hours of symptoms.

___

AP Medical Writers Lindsey Tanner and Mike Stobbe contributed to this report.

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Wall Street Week Ahead: Attention turns to financial earnings

NEW YORK (Reuters) - After over a month of watching Capitol Hill and Pennsylvania Avenue, Wall Street can get back to what it knows best: Wall Street.

The first full week of earnings season is dominated by the financial sector - big investment banks and commercial banks - just as retail investors, free from the "fiscal cliff" worries, have started to get back into the markets.

Equities have risen in the new year, rallying after the initial resolution of the fiscal cliff in Washington on January 2. The S&P 500 on Friday closed its second straight week of gains, leaving it just fractionally off a five-year closing high hit on Thursday.

An array of financial companies - including Goldman Sachs and JPMorgan Chase - will report on Wednesday. Bank of America and Citigroup will join on Thursday.

"The banks have a read on the economy, on the health of consumers, on the health of demand," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

"What we're looking for is demand. Demand from small business owners, from consumers."

EARNINGS AND ECONOMIC EXPECTATIONS

Investors were greeted with a slightly better-than-anticipated first week of earnings, but expectations were low and just a few companies reported results.

Fourth quarter earnings and revenues for S&P 500 companies are both expected to have grown by 1.9 percent in the past quarter, according to Thomson Reuters I/B/E/S.

Few large corporations have reported, with Wells Fargo the first bank out of the gate on Friday, posting a record profit. The bank, however, made fewer mortgage loans than in the third quarter and its shares were down 0.8 percent for the day.

The KBW bank index <.bkx>, a gauge of U.S. bank stocks, is up about 30 percent from a low hit in June, rising in six of the last eight months, including January.

Investors will continue to watch earnings on Friday, as General Electric will round out the week after Intel's report on Thursday.

HOUSING, INDUSTRIAL DATA ON TAP

Next week will also feature the release of a wide range of economic data.

Tuesday will see the release of retail sales numbers and the Empire State manufacturing index, followed by CPI data on Wednesday.

Investors and analysts will also focus on the housing starts numbers and the Philadelphia Federal Reserve factory activity index on Thursday. The Thomson Reuters/University of Michigan consumer sentiment numbers are due on Friday.

Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, said he expected to see housing numbers continue to climb.

"They won't be that surprising if they're good, they'll be rather eye-catching if they're not good," he said. "The underlying drive of the markets, I think, is economic data. That's been the catalyst."

POLITICAL ANXIETY

Worries about the protracted fiscal cliff negotiations drove the markets in the weeks before the ultimate January 2 resolution, but fear of the debt ceiling fight has yet to command investors' attention to the same extent.

The agreement was likely part of the reason for a rebound in flows to stocks. U.S.-based stock mutual funds gained $7.53 billion after the cliff resolution in the week ending January 9, the most in a week since May 2001, according to Thomson Reuters' Lipper.

Markets are unlikely to move on debt ceiling news unless prominent lawmakers signal that they are taking a surprising position in the debate.

The deal in Washington to avert the cliff set up another debt battle, which will play out in coming months alongside spending debates. But this alarm has been sounded before.

"The market will turn the corner on it when the debate heats up," Prudential Financial's Krosby said.

The CBOE Volatility index <.vix> a gauge of traders' anxiety, is off more than 25 percent so far this month and it recently hit its lowest since June 2007, before the recession began.

"The market doesn't react to the same news twice. It will have to be more brutal than the fiscal cliff," Krosby said. "The market has been conditioned that, at the end, they come up with an agreement."

(Reporting by Gabriel Debenedetti; editing by Rodrigo Campos)

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Beijing Air Pollution Off the Charts

Alexander F. Yuan/Associated Press

Fashionably masked women on Saturday outside an amusement park in Beijing. The World Health Organization has standards that judge an air-quality score above 500 to be more than 20 times the level of particulate matter in the air deemed safe.

BEIJING — One Friday more than two years ago, an air-quality monitoring device atop the United States Embassy in Beijing recorded data so horrifying that someone in the embassy called the level of pollution “Crazy Bad” in an infamous Twitter post. That day the Air Quality Index, which uses standards set by the United States Environmental Protection Agency, had crept above 500, which was supposed to be the top of the scale.

So what phrase is appropriate to describe Saturday’s jaw-dropping reading of 755 at 8 p.m., when all of Beijing looked like an airport smokers’ lounge? Though an embassy spokesman said he did not immediately have comparative data, Beijing residents who follow the Twitter feed said the Saturday numbers appeared to be the highest recorded since the embassy began its monitoring system in 2008.

The embassy’s @BeijingAir Twitter feed said the level of toxicity in the air was “Beyond Index,” the terminology for levels above 500; the “Crazy Bad” label was used just once, in November 2010, by an embassy employee using the Twitter account. According to the Environmental Protection Agency, levels between 301 and 500 are “Hazardous,” meaning people should avoid all outdoor activity. The World Health Organization has standards that judge a score above 500 to be more than 20 times the level of particulate matter in the air deemed safe.

In online conversations, Beijing residents tried to make sense of the latest readings.

“This is a historic record for Beijing,” Zhao Jing, a prominent Internet commentator who uses the pen name Michael Anti, wrote on Twitter. “I’ve closed the doors and windows; the air purifiers are all running automatically at full power.”

Other Beijing residents online described the air as “postapocalyptic,” “terrifying” and “beyond belief.”

The municipal government reported levels as high as 478 on Saturday in central Beijing, according to The Associated Press. It was not immediately clear why the number was lower, but even that level is considered hazardous according to the United States Environmental Protection Agency standards. (By comparison, the air quality index in New York City, using the same standard, was 19 at 6 a.m. on Saturday.)

Pollution levels in Beijing had been creeping up for days, and readings were regularly surging above 300 by midweek. The interior of the gleaming Terminal 3 of the Beijing Capital International Airport was filled with a thick haze on Thursday. The next day, people working in office towers in downtown Beijing found it impossible to make out skyscrapers just a few blocks away. Some city residents scoured stores in search of masks and air filters.

Still, there was little warning that the United States Embassy reading would jump above 700 on Saturday. Some people speculated that the monitoring system, which measures fine particles called PM 2.5 because they are 2.5 microns in diameter or smaller, might have malfunctioned once it got beyond 500.

But Nolan Barkhouse, an embassy spokesman, said the monitor was operating correctly.

It was unclear exactly what was responsible for the rise in levels of particulate matter, beyond the factors that regularly sully the air here. Factories operating in neighboring Hebei Province ring this city of more than 20 million. The number of cars on Beijing’s streets has been multiplying at an astounding rate. And Beijing sits on a plain flanked by hills and escarpments that can trap pollution on days with little wind. Meanwhile, one person hiking at the Great Wall in the hills at Mutianyu, north of Beijing, took photographs of crisp blue skies there.

Xinhua, the state news agency, reported on Dec. 31 that Beijing’s air quality had improved for 14 years straight, and the level of major pollutants had decreased. A municipal government spokesman told Xinhua that the annual average concentration of PM 10, or particles 10 microns in diameter or smaller, had dropped by 4 percent in 2012, compared with one year earlier.

Chinese officials prefer to publicly release air pollution measurements that give only levels of PM 10, although foreign health and environmental experts say PM 2.5 can be deadlier and more important to track.

There has been a growing outcry among Chinese for municipal governments to release fuller air quality data, in part because of the United States Embassy Twitter feed. As a result, Beijing began announcing PM 2.5 numbers last January. Major Chinese cities have had the equipment to track those levels, but had refused for a long time to release the data.

The existence of the embassy’s machine and the @BeijingAir Twitter feed have been a diplomatic sore point for Chinese officials. In July 2009, a Chinese Foreign Ministry official, Wang Shu’ai, told American diplomats to halt the Twitter feed, saying that the data “is not only confusing but also insulting,” according to a State Department cable obtained by WikiLeaks. Mr. Wang said the embassy’s data could lead to “social consequences.”

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