The Bachelor's Sean Lowe Reveals Final Two






The Bachelor










02/25/2013 at 10:30 PM EST







From left: AshLee, Lindsay and Catherine


Kevin Foley/ABC(3)


And then there were two.

After three incredible dates in Thailand with the remaining women, The Bachelor's Sean Lowe faced a difficult decision at the end of Monday's episode: Would he send home AshLee, Catherine or Lindsay?

Keep reading to find out who got a rose – and who was left heartbroken ...

Sean said goodbye to early favorite AshLee in a surprising elimination that left her virtually speechless.

Visibly upset, AshLee left Sean's side without saying goodbye. She even asked him to not walk her to the waiting car that would take her away.

But Sean did get to explain. "I thought it was you from the very beginning," he said. "This was honestly the hardest decision I've ever had to make ... I think the world of you. I did not want to hurt you."

"This wasn't a silly game for me," AshLee said as the car drove away. "This wasn't about a joy ride. It wasn't about laughing and joking and having fun."

She added: "It's hard to say goodbye to Sean because I let him in ... It's the ultimate [rejection]."

Check back Tuesday morning for Sean Lowe's blog post to read all about his Thailand dates and why he chose to send AshLee home

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Koop, who transformed surgeon general post, dies


With his striking beard and starched uniform, former Surgeon General Dr. C. Everett Koop became one of the most recognizable figures of the Reagan era — and one of the most unexpectedly enduring.


His nomination in 1981 met a wall of opposition from women's groups and liberal politicians, who complained President Ronald Reagan selected Koop, a pediatric surgeon and evangelical Christian from Philadelphia, only because of his conservative views, especially his staunch opposition to abortion.


Soon, though, he was a hero to AIDS activists, who chanted "Koop, Koop" at his appearances but booed other officials. And when he left his post in 1989, he left behind a landscape where AIDS was a top research and educational priority, smoking was considered a public health hazard, and access to abortion remained largely intact.


Koop, who turned his once-obscure post into a bully pulpit for seven years during the Reagan and George H.W. Bush administrations and who surprised both ends of the political spectrum by setting aside his conservative personal views on issues such as homosexuality and abortion to keep his focus sharply medical, died Monday at his home in Hanover, N.H. He was 96.


An assistant at Koop's Dartmouth College institute, Susan Wills, confirmed his death but didn't disclose its cause.


Dr. Richard Carmona, who served as surgeon general a decade ago under President George W. Bush, said Koop was a mentor to him and preached the importance of staying true to the science even if it made politicians uncomfortable.


"He set the bar high for all who followed in his footsteps," Carmona said.


Although the surgeon general has no real authority to set government policy, Koop described himself as "the health conscience of the country" and said modestly just before leaving his post that "my only influence was through moral suasion."


A former pipe smoker, Koop carried out a crusade to end smoking in the United States; his goal had been to do so by 2000. He said cigarettes were as addictive as heroin and cocaine. And he shocked his conservative supporters when he endorsed condoms and sex education to stop the spread of AIDS.


Chris Collins, a vice president of amFAR, the Foundation for AIDS Research, said many people don't realize what an important role Koop played in the beginning of the AIDS epidemic.


"At the time, he really changed the national conversation, and he showed real courage in pursuing the duties of his job," Collins said.


Even after leaving office, Koop continued to promote public health causes, from preventing childhood accidents to better training for doctors.


"I will use the written word, the spoken word and whatever I can in the electronic media to deliver health messages to this country as long as people will listen," he promised.


In 1996, he rapped Republican presidential hopeful Bob Dole for suggesting that tobacco was not invariably addictive, saying Dole's comments "either exposed his abysmal lack of knowledge of nicotine addiction or his blind support of the tobacco industry."


Although Koop eventually won wide respect with his blend of old-fashioned values, pragmatism and empathy, his nomination met staunch opposition.


Foes noted that Koop traveled the country in 1979 and 1980 giving speeches that predicted a progression "from liberalized abortion to infanticide to passive euthanasia to active euthanasia, indeed to the very beginnings of the political climate that led to Auschwitz, Dachau and Belsen."


But Koop, a devout Presbyterian, was confirmed after he told a Senate panel he would not use the surgeon general's post to promote his religious ideology. He kept his word.


In 1986, he issued a frank report on AIDS, urging the use of condoms for "safe sex" and advocating sex education as early as third grade.


He also maneuvered around uncooperative Reagan administration officials in 1988 to send an educational AIDS pamphlet to more than 100 million U.S. households, the largest public health mailing ever.


Koop personally opposed homosexuality and believed sex should be saved for marriage. But he insisted that Americans, especially young people, must not die because they were deprived of explicit information about how HIV was transmitted.


Koop further angered conservatives by refusing to issue a report requested by the Reagan White House, saying he could not find enough scientific evidence to determine whether abortion has harmful psychological effects on women.


Koop maintained his personal opposition to abortion, however. After he left office, he told medical students it violated their Hippocratic oath. In 2009, he wrote to Senate Majority Leader Harry Reid, urging that health care legislation include a provision to ensure doctors and medical students would not be forced to perform abortions. The letter briefly set off a security scare because it was hand delivered.


Koop served as chairman of the National Safe Kids Campaign and as an adviser to President Bill Clinton's health care reform plan.


At a congressional hearing in 2007, Koop spoke about political pressure on the surgeon general post. He said Reagan was pressed to fire him every day, but Reagan would not interfere.


Koop, worried that medicine had lost old-fashioned caring and personal relationships between doctors and patients, opened his institute at Dartmouth to teach medical students basic values and ethics. He also was a part-owner of a short-lived venture, drkoop.com, to provide consumer health care information via the Internet.


Koop was born in the New York City borough of Brooklyn, the only son of a Manhattan banker and the nephew of a doctor. He said by age 5 he knew he wanted to be a surgeon and at age 13 he practiced his skills on neighborhood cats.


He attended Dartmouth, where he received the nickname Chick, short for "chicken Koop." It stuck for life.


Koop received his medical degree at Cornell Medical College, choosing pediatric surgery because so few surgeons practiced it.


In 1938, he married Elizabeth Flanagan, the daughter of a Connecticut doctor. They had four children, one of whom died in a mountain climbing accident when he was 20.


Koop was appointed surgeon-in-chief at Children's Hospital in Philadelphia and served as a professor at the University of Pennsylvania School of Medicine.


He pioneered surgery on newborns and successfully separated three sets of conjoined twins. He won national acclaim by reconstructing the chest of a baby born with the heart outside the body.


Although raised as a Baptist, he was drawn to a Presbyterian church near the hospital, where he developed an abiding faith. He began praying at the bedside of his young patients — ignoring the snickers of some of his colleagues.


Koop's wife died in 2007, and he married Cora Hogue in 2010.


He was by far the best-known surgeon general and for decades afterward was still a recognized personality.


"I was walking down the street with him one time" about five years ago, recalled Dr. George Wohlreich, director of the College of Physicians of Philadelphia, a medical society with which Koop had longstanding ties. "People were yelling out, 'There goes Dr. Koop!' You'd have thought he was a rock star."


___


Ring reported from Montpelier, Vt. Cass reported from Washington. AP Medical Writers Lauran Neergaard in Washington and Mike Stobbe in New York contributed to this report.


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Stock index futures point to small rebound

LONDON (Reuters) - U.S. stock index futures pointed to a slightly higher open on Wall Street on Tuesday, with futures for the S&P 500, the Dow Jones and the Nasdaq 100 up 0.3-0.4 percent at 0916 GMT.


U.S. stocks had suffered their biggest drop since November on Monday after later results pointed to a strong showing in Italian elections by groups opposed to the country's economic reforms. That triggered worry that Europe's debt problems could once again destabilize the global economy.


European markets were playing catchup with that move in early trade on Tuesday, falling sharply as a result.


Standard & Poor's releases its S&P Case/Shiller Home Price Index for December at 1400 GMT, expected to show a rise of 0.5 percent versus a 0.6 percent rise in the previous month.


One hour later, the Conference Board's February consumer confidence was forecast to come in at 61.0 compared with 58.6 in January.


Also at 1500 GMT, new home sales data for January were seen at 381,000 annualized units, compared with 369,000 in December.


Ben Bernanke delivers the first of two days of congressional testimony on the Federal Reserve's semi-annual monetary policy report. Investors will examine Bernanke's words before the Senate Banking Committee closely for any sign he is growing nervous that the potential costs of the U.S. central bank's bond buying might soon outweigh its benefits.


Goldman Sachs Group Inc will begin its annual job cutting process as early as this week, sources familiar with the matter said on Monday, with its equities-trading business bracing for bigger cuts than fixed-income trading.


JPMorgan Chase chief executive Jamie Dimon leads his new team of managers in an annual day of presentations to Wall Street about the outlook for businesses operated by the biggest U.S. bank. The firm named a new head of auto finance on Monday.


Intel Corp has agreed to make chips on behalf of Altera ALTR.O, a significant step toward opening its prized manufacturing technology to customers on a larger scale, potentially including Apple .


Fuelled by a 48 percent rise in fourth-quarter earnings, the top executive of securities firm Stifel Financial Corp's defended his aggressive acquisition spree on Monday.


Retailer Home Depot is expected to post a $0.14 rise in quarterly earnings per share, seen at of $0.64, one day after rival Lowe's reported better-than-expected profit and boosted its outlook for revenue this year.


The Dow Jones industrial average <.dji> dropped 216.40 points, or 1.55 percent, to 13,784.17 on Monday. The Standard & Poor's 500 Index <.spx> lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index <.ixic> fell 45.57 points, or 1.44 percent, to 3,116.25.


(Reporting by Francesco Canepa; editing by Patrick Graham)



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South Korea's new president demands North drop nuclear ambitions


SEOUL (Reuters) - South Korea's new president Park Geun-hye urged North Korea on Monday to abandon its nuclear ambitions, and to stop wasting its scarce resources on arms, less than two weeks after the country carried out its third nuclear test.


In her inauguration speech, the country's first female president, also called on South Koreans to help revive the nation's export-dependent economy whose trade is threatened by neighboring Japan's weak yen policy.


Park, the 61-year-old daughter of South Korea's former military ruler Park Chung-hee, met with the father of North Korea's current ruler in 2002 and offered the impoverished and isolated neighbor aid and trade if it abandoned its nuclear program.


"I urge North Korea to abandon its nuclear ambitions without delay and embark on the path to peace and shared development," Park said after being inaugurated on Monday.


Park, usually an austere and demure figure in her public appearances, wore an olive-drab military style jacket and lavender scarf on Monday and smiled broadly and waved enthusiastically as a 70,000 strong crowd cheered her.


Rap sensation Psy was one of the warm up acts on an early spring day outside the country's parliament and performed his "Gagnam Style" hit, but without some of the raunchier actions.


Park's tough stance was supported by the partisan and largely older crowd at her inauguration.


"I have trust in her as the first female president ... She has to be more aggressive on North Korea," said Jeong Byung-ok, 44, who was at the ceremony with her four-year-old daughter.


PARK FACES CHOICE: PAY OFF PYONGYANG OR ISOLATE NORTH


North Korea is ruled by 30-year-old Kim Jong-un, the third of his line to hold power in Pyongyang and the grandson of a man who tried to assassinate Park's father.


The North, which is facing further U.N. sanctions for its latest nuclear test, which was its biggest and most powerful to date, is unlikely to heed Park's call and there is little Seoul can do to influence its bellicose neighbor.


Park's choices boil down to paying off Pyongyang to abandon its nuclear weapons plan, which would cost hundreds of millions of dollars and failed in 2006 when the North exploded its first nuclear bomb. Alternatively, Seoul could try to further isolate the North, a move that resulted in the 2010 sinking of a South Korean ship and the shelling of a South Korean island.


Referring to the fast economic growth under her father's rule, which drove war-torn South Korea from poverty to the ranks of the world's richest nations, Park urged Koreans to re-create the spirit of the "Miracle on the Han".


Park wants to create new jobs, in a country where young people often complain of a lack of opportunities, and boost welfare, although she hasn't spelled out how she will do either.


Growth in South Korea has fallen sharply since the days of Park's father who oversaw periods of 10 percent plus economic expansion. The Bank of Korea expects the economy to grow just 2.8 percent this year and 2.8 percent in 2014.


Park also faces a challenge from a resurgent Japan whose exports have risen sharply after new Prime Minister Shinzo Abe embarked on a policy to weaken the yen currency.


The won has jumped five percent in 2013 against the yen after a 23 percent gain in 2012, boosting the competitiveness of Japanese exports of cars and electronics against the same goods that South Korean firms produce.


Park last week said she would take "pre-emptive" action on the weak yen, but has yet to specify what action she will take.


(Additional reporting by Jack Kim; Editing by David Chance and Michael Perry)



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Relive the Best One-Liners and Tweets from the Oscars!









02/25/2013 at 12:00 AM EST



Jennifer Lawrence tumbled – to a standing ovation. Ben Affleck tearfully won Best Picure for Argo. And you all loved – or loved to hate – Oscar host Seth MacFarlane.

Yep, the Oscars are over, but it doesn't mean we're done talking about it! You can relive the best of the night! Check out what celebs, readers (and you!) had to say about the musical numbers, speeches – and a certain reigning Sexiest Man Alive! – on Twitter last night.

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Stock index futures point to flat to higher open

LONDON (Reuters) - Stock index futures pointed to a mixed open on Wall Street on Monday, with futures for the S&P 500 and Nasdaq 100 up 0.1 and 0.2 percent respectively by 0856 GMT, while those for Dow Jones were steady.


* The U.S. stock market closed higher on Friday, with the S&P 500 adding 13.18 points, or 0.88 percent, to 1,515.60 <.spx>, after comments from Fed officials allayed fears that the central bank would curtail stimulus measures.


* Prospects of continued stimulus also lifted Asian and European equity markets on Monday, with the EuroSTOXX 50 benchmark of euro zone blue chips up 0.7 percent <.stoxx50e>. However, uncertainty over the outcome of Italian elections, which close on Monday, kept a lid on the gains.


* With days left before $85 billion is slashed from U.S. government budgets, the White House on Sunday issued more dire warnings about the harm the cuts will do to Americans. But Republicans, who advocate budget cuts, said the warning was overplayed and called on President Barack Obama to apply what is known as the "sequester" in a more careful way, rather than slashing budgets across the board.


* A relatively light calendar features the Chicago Fed's national activity index for February at 1330 GMT, alongside earnings from Autodesk Inc and Lowe's Companies.


* Barnes & Noble Inc Chairman Leonard Riggio is considering a bid for the company's bookstore business, the Wall Street Journal reported on Sunday, citing people familiar with the situation.


* Disney's movie "Brave" won the Oscar on Sunday for Best Animated Feature.


* BlackRock Inc. , the world's largest money manager, has got approval from the U.S. securities regulator to list a copper-backed exchange-traded fund, potentially getting the jump on JPMorgan, whose listing of a similar product has been delayed by industry objections.


* Knight Capital Group , which recently agreed to be bought for $1.4 billion by Getco Holding Co, has struck a deal to sell its credit-brokerage unit to Stifel Financial Corp , according to a person familiar with the matter.


* Hewlett-Packard Chairman Ray Lane and fellow board members plan to meet with about 20 of the computer maker's big investors Monday in hopes of heading off a campaign to unseat Lane and two other directors, the Wall Street Journal reports.


* Office Depot Inc said late on Friday that following talks with the largest holder of its common stock, Starboard Value LP, it is extending the deadline for nominating candidates for its board at its annual meeting.


* Dick's Sporting Goods Inc shares could rise 23 percent within the next year if the largest publicly traded U.S. sporting goods retailer continues to boost profit at a mid-teens percentage rate, Barron's said.


(Reporting By Toni Vorobyova; Editing by Hugh Lawson)



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Italians vote in crucial election for euro zone


ROME (Reuters) - Italians began voting on Sunday in one of the most closely watched elections in years, with markets nervous about whether it can produce a strong government to pull Italy out of recession and help resolve the euro zone debt crisis.


Some of the first people to cast their ballots expressed fears that no clear winner would emerge, leading to political stalemate and a coalition that may not govern for long.


"I think we will have to go to elections again ... I expect instability for the next two years," said Vincenzo D'Ouria, voting in Milan.


Italians started voting at 8 a.m. (0700 GMT). Polling booths will remain open until 10 p.m. on Sunday and open again between 7 a.m. and 3 p.m. on Monday. Exit polls will come out soon after voting ends and official results are expected by early Tuesday.


The election is being followed closely by financial markets with memories still fresh of the potentially catastrophic debt crisis that brought technocrat Prime Minister Mario Monti to power more than a year ago.


Monti and his wife cast their votes at a polling booth in a Milan school on Sunday morning. His centrist bloc would only enter a future government as a junior partner of a bigger party.


Final polls published two weeks ago showed center-left leader Pier Luigi Bersani with a 5-point lead, but analysts disagree about whether he will be able to form a stable majority that can make the economic reforms Italy needs.


Bersani is now thought to be just a few points ahead of center-right rival Silvio Berlusconi, the four-times prime minister who has promised tax refunds and staged a media blitz in an attempt to win back voters.


A huge final rally by anti-establishment-comedian-turned-politician Beppe Grillo on Friday highlighted public anger at traditional parties.


Grillo's 5-Star movement, made up of political novices, is in third place in its first general election, polls suggest, and popular support from voters across the political spectrum has increased uncertainty about the outcome.


"Italians want change, but you cannot achieve that with Grillo. They are far too inexperienced for the Italian parliamentary machine," said Cristina Rossi, 40, a civil engineer who was on her way to vote for Bersani's Democratic Party in Milan.


"I fear the outcome will be a weak government, but maybe this is just a necessary transition to be able, in one or two years, to chose someone who can really govern Italy."


Italy, the euro zone's third-largest economy, is stuck in deep recession, struggling under a public debt burden second only to Greece's in the 17-member currency bloc and with a public weary of more than a year of austerity policies.


BERLUSCONI CRITICISM


Berlusconi hogged the headlines on Sunday after he used news conference at his soccer club AC Milan's training ground to break the campaign silence imposed on politicians in the day before polls open.


He told reporters that Italy's magistrates were "more dangerous than the Sicilian mafia" and had invented allegations he had held sex parties in order to discredit him.


The 76-year-old billionaire, who is appealing a jail sentence for tax fraud and is on trial accused of having sex with an underage prostitute, was criticized by his rivals for making a political statement during a ban on campaigning.


While the center left is still expected to gain control of the lower house, thanks to rules that guarantee a strong majority to whichever party wins the most votes nationally, a much closer battle will be fought for the Senate, which any government also needs to control to be able to pass laws.


Seats in the upper house are awarded on a region-by-region basis, meaning that support in key areas can decisively influence the overall result.


Pollsters still believe the most likely outcome is a center-left government headed by Bersani and possibly backed by Monti.


But strong campaigning by Berlusconi and the fiery Grillo, have thrown the election wide open. Surveys showed up to 5 million voters will make up their minds at the last minute.


The Interior Ministry urged some 47 million eligible voters in Italy not to let bad weather put them off, and said it was prepared to handle snowy conditions in some northern regions to ensure everyone had a chance to vote.


STAGNANT ECONOMY


Whatever government emerges from the vote will have the task of pulling Italy out of its longest recession for 20 years and reviving an economy largely stagnant for two decades.


The main danger for Italy and the euro zone is a weak government incapable of taking firm action, which would rattle investors and could ignite a new debt crisis.


Monti replaced Berlusconi in November 2011 after Italy came close to Greek-style financial meltdown while the center-right government was embroiled in scandals.


The former European Commissioner launched a tough program of spending cuts, tax hikes and pension reforms which won widespread international backing and helped restore Italy's credibility abroad after the scandals of the Berlusconi era.


Italy's borrowing costs have since fallen sharply after the European Central Bank pledged it was prepared to support countries undertaking reforms by buying unlimited quantities of their bonds on the markets.


But economic austerity has fuelled anger among Italians grappling with rising unemployment and shrinking disposable incomes, encouraging many to turn to Grillo, who has tapped into a national mood of disenchantment.


(Additional reporting by Cristiano Corvino and Lisa Jucca in Milan; Editing by Robin Pomeroy)



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See the Mini Balenciaga Bag Kim Kardashian Gifted Niece Penelope




Celebrity Baby Blog





02/22/2013 at 05:00 PM ET



Mom Kourtney Kardashian has one! Aunts Kim and Khloé own one too. And now Penelope Disick is the latest family member to add Balenciaga‘s chic city tote to her closet.


“Penelope is wearing the little Balenciaga bag that I got her for Christmas!” Kim posted on Instagram Friday, along with an adorable photo of the mom-to-be with her 7½-month-old niece and her mini yellow handbag.


Is Kim gearing up for her little one? If she has a little girl, we have no doubt her wardrobe will be the envy of the playground. Although the expectant reality star recently revealed that if it’s up to dad-to-be Kanye West, their baby will be wearing lots of “big chains and leather pants.”


And to be fair, Penelope wasn’t the only Kardashian-Jenner kid to receive luxe fashions for Christmas. Kylie and Kendall also scored during the holidays.


Kim Kardashian, Penelope Disick and Her Mini Balenciaga Bag
Courtesy Kim Kardashian; Inset: Rex USA



– Shanelle Rein-Olowokere


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FDA approves new targeted breast cancer drug


WASHINGTON (AP) — The Food and Drug Administration has approved a first-of-a-kind breast cancer medication that targets tumor cells while sparing healthy ones.


The drug Kadcyla from Roche combines the established drug Herceptin with a powerful chemotherapy drug and a third chemical linking the medicines together. The chemical keeps the cocktail intact until it binds to a cancer cell, delivering a potent dose of anti-tumor poison.


Cancer researchers say the drug is an important step forward because it delivers more medication while reducing the unpleasant side effects of chemotherapy.


"This antibody goes seeking out the tumor cells, gets internalized and then explodes them from within. So it's very kind and gentle on the patients — there's no hair loss, no nausea, no vomiting," said Dr. Melody Cobleigh of Rush University Medical Center. "It's a revolutionary way of treating cancer."


Cobleigh helped conduct the key studies of the drug at the Chicago facility.


The FDA approved the new treatment for about 20 percent of breast cancer patients with a form of the disease that is typically more aggressive and less responsive to hormone therapy. These patients have tumors that overproduce a protein known as HER-2. Breast cancer is the second most deadly form of cancer in U.S. women, and is expected to kill more than 39,000 Americans this year, according to the National Cancer Institute.


The approval will help Roche's Genentech unit build on the blockbuster success of Herceptin, which has long dominated the breast cancer marketplace. The drug had sales of roughly $6 billion last year.


Genentech said Friday that Kadcyla will cost $9,800 per month, compared to $4,500 per month for regular Herceptin. The company estimates a full course of Kadcyla, about nine months of medicine, will cost $94,000.


FDA scientists said they approved the drug based on company studies showing Kadcyla delayed the progression of breast cancer by several months. Researchers reported last year that patients treated with the drug lived 9.6 months before death or the spread of their disease, compared with a little more than six months for patients treated with two other standard drugs, Tykerb and Xeloda.


Overall, patients taking Kadcyla lived about 2.6 years, compared with 2 years for patients taking the other drugs.


FDA specifically approved the drug for patients with advanced breast cancer who have already been treated with Herceptin and taxane, a widely used chemotherapy drug. Doctors are not required to follow FDA prescribing guidelines, and cancer researchers say the drug could have great potential in patients with earlier forms of breast cancer


Kadcyla will carry a boxed warning, the most severe type, alerting doctors and patients that the drug can cause liver toxicity, heart problems and potentially death. The drug can also cause severe birth defects and should not be used by pregnant women.


Kadcyla was developed by South San Francisco-based Genentech using drug-binding technology licensed from Waltham, Mass.-based ImmunoGen. The company developed the chemical that keeps the drug cocktail together and is scheduled to receive a $10.5 million payment from Genentech on the FDA decision. The company will also receive additional royalties on the drug's sales.


Shares of ImmunoGen Inc. rose 2 cents to $14.32 in afternoon trading. The stock has ttraded in a 52-wek range of $10.85 to $18.10.


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Investors face another Washington deadline

NEW YORK (Reuters) - Investors face another Washington-imposed deadline on government spending cuts next week, but it's not generating the same level of fear as two months ago when the "fiscal cliff" loomed large.


Investors in sectors most likely to be affected by the cuts, like defense, seem untroubled that the budget talks could send stocks tumbling.


Talks on the U.S. budget crisis began again this week leading up to the March 1 deadline for the so-called sequestration when $85 billion in automatic federal spending cuts are scheduled to take effect.


"It's at this point a political hot button in Washington but a very low level investor concern," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. The fight pits President Barack Obama and fellow Democrats against congressional Republicans.


Stocks rallied in early January after a compromise temporarily avoided the fiscal cliff, and the Standard & Poor's 500 index <.spx> has risen 6.3 percent since the start of the year.


But the benchmark index lost steam this week, posting its first week of losses since the start of the year. Minutes on Wednesday from the last Federal Reserve meeting, which suggested the central bank may slow or stop its stimulus policy sooner than expected, provided the catalyst.


National elections in Italy on Sunday and Monday could also add to investor concern. Most investors expect a government headed by Pier Luigi Bersani to win and continue with reforms to tackle Italy's debt problems. However, a resurgence by former leader Silvio Berlusconi has raised doubts.


"Europe has been in the last six months less of a topic for the stock market, but the problems haven't gone away. This may bring back investor attention to that," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.


OPTIONS BULLS TARGET GAINS


The spending cuts, if they go ahead, could hit the defense industry particularly hard.


Yet in the options market, bulls were targeting gains in Lockheed Martin Corp , the Pentagon's biggest supplier.


Calls on the stock far outpaced puts, suggesting that many investors anticipate the stock to move higher. Overall options volume on the stock was 2.8 times the daily average with 17,000 calls and 3,360 puts traded, according to options analytics firm Trade Alert.


"The upside call buying in Lockheed solidifies the idea that option investors are not pricing in a lot of downside risk in most defense stocks from the likely impact of sequestration," said Jared Woodard, a founder of research and advisory firm condoroptions.com in Forest, Virginia.


The stock ended up 0.6 percent at $88.12 on Friday.


If lawmakers fail to reach an agreement on reducing the U.S. budget deficit in the next few days, a sequester would include significant cuts in defense spending. Companies such as General Dynamics Corp and Smith & Wesson Holding Corp could be affected.


General Dynamics Corp shares rose 1.2 percent to $67.32 and Smith & Wesson added 4.6 percent to $9.18 on Friday.


EYES ON GDP DATA, APPLE


The latest data on fourth-quarter U.S. gross domestic product is expected on Thursday, and some analysts predict an upward revision following trade data that showed America's deficit shrank in December to its narrowest in nearly three years.


U.S. GDP unexpectedly contracted in the fourth quarter, according to an earlier government estimate, but analysts said there was no reason for panic, given that consumer spending and business investment picked up.


Investors will be looking for any hints of changes in the Fed's policy of monetary easing when Fed Chairman Ben Bernake speaks before congressional committees on Tuesday and Wednesday.


Shares of Apple will be watched closely next week when the company's annual stockholders' meeting is held.


On Friday, a U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with the iPhone maker, blocking the company from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.


(Additional reporting by Doris Frankel; Editing by Kenneth Barry)



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