Japan stocks rally to near four-year highs, yen resumes fall after G20

TOKYO (Reuters) - Japanese shares surged 2.1 percent on Monday and were on the brink of revisiting four-year highs tapped recently, as the yen slumped after Tokyo dodged direct criticism from G20 peers on its aggressive reflation plans that have weakened the currency.

The G20 opted not to single out Tokyo, but committed members to refrain from competitive devaluations and said monetary policy would be directed only at price stability and growth. Japan said this decision is a green light to pursue its expansionary policies.

The market's focus is now on Prime Minister Shinzo Abe's nominee for the next Bank of Japan governor. Abe is expected to announce his choice in coming days.

Sources told Reuters on Friday that former top financial bureaucrat Toshiro Muto is leading the field of candidates to govern the bank. He may intensify stimulus efforts to energise the economy but might not pursue unconventional easing measures.

"The G20 basically gave tacit approval for currency weakening as a result of monetary easing, and not intervention. So that puts focus on what the BOJ will do next. As long as the BOJ shows its seriousness about stamping out deflation, the yen's decline will likely be tolerated," said Citibank Japan chief FX strategist Osamu Takashima.

The dollar gained 0.5 percent to 93.97 yen inching closer to its highest since May 2010 of 94.465 hit on February 11. The euro added 0.3 percent to 125.34 yen, still below its peak since April 2010 of 127.71 yen touched on February 6.

The Nikkei average <.n225> closed up 2.1 percent as exporters and banks led the pack on the softening yen, after surging as much 2.4 percent earlier to come close to its highest level since September 2008 of 11,498.42 tapped on February 6. <.t/>

"The G20 effect is already seen in Abe's general comments on forex today which steered away from giving specifics on a preferred level or direction for the yen," said Yunosuke Ikeda, a senior FX strategist at Nomura Securities.

Abe said on Monday that the BOJ's monetary easing is aimed at beating deflation, not at manipulating the forex market and weakening the yen, and said correcting excessive yen rises would be an appropriate policy direction. Previously, Japanese officials have noted that the current yen selling was a correction to the past excessive yen strength.

The yen's weakness weighed on emerging Asian currencies while South Korean shares <.ks11> eased 0.3 percent on concerns about the eroding competitive edge for the country's exporters.

Japan will keep pursuing its current policy, said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul. "The rest of Asia will not just wait and see. That will put more pressure on Asian currencies," he said.

A weaker yen would make other currencies relatively stronger against the dollar and fuel speculation that other Asian countries could step in to curb the strength of their currencies, Nomura's Ikeda said.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> paused, after moving in a narrow range. The pan-Asian index briefly hit a 18-1/2-month high on Friday and had its best performance since the week of January 6 with a 1.2 percent weekly gain.

Australian shares led the pan-Asian index with a 0.6 percent rise as a string of earnings reports supported a view that the local economy was in better-than-expected shape.

Markets in China and Taiwan resumed trading after a week-long holiday.

Indonesian stocks <.jkse> inched up 0.1 percent after setting a record high for a fifth straight session on Friday, while shares in Thailand <.seti> were up 0.2 percent as the country's economy grew a robust 3.6 percent in the fourth quarter from the previous three months.

European markets may track lower, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open down 0.1 percent. U.S. stock futures were barely changed. U.S. markets will be closed on Monday for the President's Day holiday. <.l><.eu><.n/>

STOCKS CONSOLIDATE

Data from EPFR Global on Friday underscored that a consolidation was underway in global equities after their recent rally. It showed investors worldwide pulled $3.62 billion from U.S. stock funds in the latest week, the most in ten weeks after taking a neutral stance the prior week. But demand for emerging market equities remained strong, with investors putting $1.81 billion in new cash into stock funds, the fund-tracking firm said.

Commodities markets awaited clues on demand from China, the top consumer.

"China's overall economy is still strong, so the appetite for base metals after Chinese New Year will gradually pick up," said Helen Lau, senior commodity analyst at UOB-Kay Hian in Hong Kong.

London copper fell 0.4 percent to $8,170 a tonne as traders played catch up after a week-long holiday in China, with worries about the euro zone economy weighing on sentiment.

U.S. crude fell 0.2 percent to $95.68 a barrel but Brent inched up 0.1 percent to $117.82.

Gold rebounded from a six-month low on bargain hunting and as jewellers in China returned to the physical market after the Lunar New Year holiday.

(Additional reporting by Jongwoo Cheon; and Melanie Burton in Singapore; Editing by Shri Navaratnam and Eric Meijer)

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Dismissed as Doomsayers, Advocates for Meteor Detection Feel Vindicated

For decades, scientists have been on the lookout for killer objects from outer space that could devastate the planet. But warnings that they lacked the tools to detect the most serious threats were largely ignored, even as skeptics mocked the worriers as Chicken Littles.

Jim Watson/Agence France-Presse — Getty Images

Dr. Edward Lu, a former NASA astronaut and Google executive, has warned about space threats.

No more. The meteor that rattled Siberia on Friday, injuring hundreds of people and traumatizing thousands, has suddenly brought new life to efforts to deploy adequate detection tools, in particular a space telescope that would scan the solar system for dangers.

A group of young Silicon Valley entrepreneurs who helped build thriving companies like eBay, Google and Facebook has already put millions of dollars into the effort and saw Friday’s shock wave as a turning point in raising hundreds of millions more.

“Wouldn’t it be silly if we got wiped out because we weren’t looking?” said Edward Lu, a former NASA astronaut and Google executive who leads the detection effort. “This is a wake-up call from space. We’ve got to pay attention to what’s out there.”

Astronomers know of no asteroids or comets that pose a major threat to the planet. But NASA estimates that fewer than 10 percent of the big dangers have been discovered.

Dr. Lu’s group, called the B612 Foundation after the imaginary asteroid on which the Little Prince lived, is one team of several pursuing ways to ward off extraterrestrial threats. NASA is another, and other private groups are emerging, like Planetary Resources, which wants not only to identify asteroids near Earth but also to mine them.

“Our job is to be the first line of defense, and we take that very seriously,” James Green, the director of planetary science at NASA headquarters, said in an interview Friday after the Russian strike. “No one living on this planet has ever before been hurt. That’s historic.”

Dr. Green added that the Russian episode was sure to energize the field and that an even analysis of the meteor’s remains could help reveal clues about future threats.

“Our scientists are excited,” he said. “Russian planetary scientists are already collecting meteorites from this event.”

The slow awakening to the danger began long ago, as scientists found hundreds of rocky scars indicating that cosmic intruders had periodically reshaped the planet.

The discoveries included not just obvious features like Meteor Crater in Arizona, but wide zones of upheaval. A crater more than a hundred miles wide beneath the Yucatán Peninsula in Mexico suggested that, 65 million years ago, a speeding rock from outer space had raised enough planetary mayhem to end the reign of the dinosaurs.

Some people remain skeptical of the cosmic threat and are glad for taxpayer money to go toward urgent problems on Earth rather than outer space. But many scientists who have examined the issues have become convinced that better precautions are warranted in much the same way that homeowners buy insurance for unlikely events that can result in severe damage to life and property.

Starting in the 1980s and 1990s, astronomers turned their telescopes on the sky with increasing vigor to look for killer rocks. The rationale was statistical. They knew about a number of near misses and calculated that many other rocky threats whirling about the solar system had gone undetected.

In 1996, with little fanfare, the Air Force also began scanning the skies for speeding rocks, giving credibility to an activity once seen as reserved for doomsday enthusiasts. It was the world’s first known government search.

The National Aeronautics and Space Administration took a lead role with what it called the Spaceguard Survey. In 2007, it issued a report estimating that 20,000 asteroids and comets orbited close enough to the planet to deliver blows that could destroy cities or even end all life. Today, with limited financing, NASA supports modest telescopes in the southwestern United States and in Hawaii that make more than 95 percent of the discoveries of the objects coming near the Earth.

Scientists lobbied hard for a space telescope that would get high above the distorting effects of the Earth’s atmosphere. It would orbit the Sun, peering across the solar system, and would have a much better chance of finding large space rocks.

But with the nation immersed in two wars and other earthly priorities, the government financing never materialized. Last year, Dr. Lu, who left the NASA astronaut corps in 2007 to work for Google, joined with veterans of the space program and Silicon Valley entrepreneurs to accelerate the asteroid hunt.

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Beyoncé's Life Is But a Dream: The Best Moments

TV Watch

By Aaron Parsley

02/16/2013 at 11:05 PM EST

I am ... still singing!

Beyoncé's HBO documentary, Life Is But a Dream, aired Saturday night and it was a 90-minute whirlwind of music, dance and emotion. And though the singer, 31, has been everywhere recently (the Inauguration, the Super Bowl halftime show, Oprah's Next Chapter), the film was full of new and exciting moments. Here are my favorites:

Baby Bey: A home movie of Beyoncé as a little girl playing with bees made my jaw drop. The scene seems to prove what her fans believe: that she was born to be a superstar known as Queen B. I also loved seeing her singing – and being a typical, giggling teenager – with her sister Solange and Kelly Rowland.

The Heartbreak: From her frank discussion of firing her father as a manager to hearing "the saddest song" she's ever written after having miscarriage, the film – which Beyoncé produced and directed herself – had raw, emotional moments.

Mrs. Carter: Life is like a dream for Beyoncé and husband Jay-Z, who surprisingly shared intimate moments together – giddy over her pregnancy, singing Coldplay's "Yellow" to each other, enjoying solitude on a boat in an undisclosed, exotic location. You could feel the love when she toasted him on his birthday.

Blue Ivy: How cute is she?! When Beyoncé and Jay's baby girl, who turned 1 in January, appeared on the screen at the premiere of Life Is But a Dream at New York's Ziegfeld Theater, the crowd gasped and then let out a collective "aww." And I jammed my fingers on the TV screen the first time I watched, trying to pinch those cheeks. Seeing Beyoncé at home with a baby on her hip was a powerful reminder that the fierce superstar is human afterall.

The Music: Of course! Seeing her sing "Listen" with a gorgeously altered ending in a car convinced me of one thing: Beyoncé is definitely not human! I also loved seeing everything that went into her epic Billboard Music Awards performance of "Run the World (Girls)." I just wish I could do that dance. And is it me or does "Resentment" get grittier and angrier every time she performs it?

Praise Beysus and long live the Queen B!

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UN warns risk of hepatitis E in S. Sudan grows

GENEVA (AP) — The United Nations says an outbreak of hepatitis E has killed 111 refugees in camps in South Sudan since July, and has become endemic in the region.

U.N. refugee agency spokesman Adrian Edwards says the influx of people to the camps from neighboring Sudan is believed to be one of the factors in the rapid spread of the contagious, life-threatening inflammatory viral disease of the liver.

Edwards said Friday that the camps have been hit by 6,017 cases of hepatitis E, which is spread through contaminated food and water.

He says the largest number of cases and suspected cases is in the Yusuf Batil camp in Upper Nile state, which houses 37,229 refugees fleeing fighting between rebels and the Sudanese government.

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After decent rally, perhaps time for a pause

NEW YORK (Reuters) - Stocks could struggle to extend their seven-week winning streak as the quarterly earnings period draws to a close and the market bumps into strong technical resistance.

Many analysts say the market could spend the next few weeks consolidating gains that have lifted the benchmark Standard & Poor's 500 <.spx> by 6.6 percent since the start of the year.

The S&P 500 ended up 0.1 percent for the week, recovering from a late sell-off on Friday after a Bloomberg report about slow February sales at Wal-Mart triggered a slide in the retailer's shares. It was the index's seventh week of gains.

Odds of a pullback are increasing, with the market in slightly overbought territory, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

"I do suspect the closing of the earnings season will lead to at least a pause and possibly a pullback," Zaro said. The S&P 500 could shave 3 to 5 percent between now and early April, he said.

Fourth-quarter earnings have mostly beaten expectations. Year-over-year profit growth for S&P 500 companies is now estimated at 5.6 percent, up from a January 1 forecast for 2.9 percent growth, and 70 percent of companies are exceeding analyst profit expectations, above the 62 percent long-term average, according to Thomson Reuters data.

On Thursday, Wal-Mart, the world's largest retailer, is due to report results, unofficially closing out the earnings period. Investors will be keen to see its quarterly numbers, especially after the Friday's news report that rattled investors.

The S&P 500 has gained 4.3 percent since Alcoa kicked off the earnings season on January 8.

The approaching March 1 deadline for across-the-board federal budget cuts unless Congress reaches a compromise adds another reason for caution, especially with recent economic data indicating the recovery remains bumpy.

Manufacturing output fell 0.4 percent last month, the Federal Reserve said on Friday, but production in November and December was much stronger than previously thought.

TESTING RESISTANCE

The S&P 500 has been trading near five-year highs, and it notched its highest level since November 2007 this week. But the gains have pushed the benchmark index almost as far as it is likely to go in the near term, with strong resistance hovering around 1,525 and 1,540, one analyst said.

As a result, the index is set to move sideways, said Dave Chojnacki, market technician at Street One Financial in Huntington Valley, Pennsylvania. "We just don't have the volume or the catalyst right now" to go above those levels, he said.

At the same time, other analysts say, the market has not shown significant signs of slowing, including a break below 15- and 30-day moving averages.

Such moves would be needed to show that momentum is slowing or that the market is at risk of a correction, said Todd Salamone, director of research for Schaeffer's Investment Research in Cincinnati, Ohio. The S&P 500's 14-day moving average is at 1,511 while the 30-day is at 1,494. The index closed Friday at 1,519.

Recent M&A activity, including news this week of a merger between American Airlines and US Airways Group , helped provide some strength for the market this week and optimism that more deals may be on the way.

In the coming days, the market will focus on minutes from the latest Federal Reserve meeting, due to be released on Wednesday, which could provide support if they suggest the Fed will remain on its current course of aggressive monetary easing.

The Fed minutes released in January spooked markets a bit when they revealed that some Fed officials thought it would be appropriate to consider ending asset purchases later in 2013. U.S. Treasury yields rose on that news, though market worries about a near-term end to quantitative easing have since faded.

Among other companies expected to report earnings next week are Nordstrom , Hewlett-Packard and Marriott International

(Reporting By Caroline Valetkevitch; Editing by Leslie Adler)

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U.S. Embassy Denies Intervening in Mexico Cabinet Choice

The United States Embassy in Mexico on Friday issued a statement denying an article in The New York Times that reported that Ambassador Anthony Wayne had met with senior Mexican officials to discuss American concerns about the possible appointment of Gen. Moisés García Ochoa of Mexico as that country’s defense secretary.

“Despite significant reporting in the Mexican press during the presidential transition about the potential candidates to head Mexico’s military,” the statement read, “Ambassador Wayne did not discuss Gen. Moisés García Ochoa with Miguel Ángel Osorio Chong, now secretary of government, or Jorge Carlos Ramírez Marín, now secretary for agrarian, territorial and urban development (SEDATU), as reported in the New York Times story.”

The embassy’s statement comes 11 days after the Times article about Washington’s exchanges with Mexico regarding General García Ochoa. It follows an avalanche of outrage in the Mexican news media, whose columnists and commentators have accused the United States of “vetoing” General García’s nomination and of infringing on Mexican sovereignty. Some in the news media have called on Mexico’s new president, Enrique Peña Nieto, to rethink the terms of his government’s cooperation with the Obama administration on security matters.

The embassy statement on Friday also came after an earlier statement by William Ostick, a State Department spokesman, that did not dispute the facts in the Times’ account.

On Feb. 4, The Times reported that some senior American officials suspected General García Ochoa of skimming money from multimillion-dollar defense contracts. It reported that the Drug Enforcement Administration suspected the general of having links to drug traffickers dating back to the late 1990s. And the newspaper reported that Ambassador Wayne discussed those concerns with Mexican officials.

In the end, General García Ochoa was passed over for his government’s top military job. The Times reported that it was unclear whether American concerns played a role in Mexico’s decision.

The Mexican government made no statement to The Times on the article. But Mr. Osorio Chong denied to Mexican newspapers that the United States had vetoed or made suggestions on any appointment, and Mr. Ramírez Marín has told Mexican reporters that while he and Mr. Chong were present at a meeting with the ambassador before the inauguration to discuss relations, the general’s possible appointment was not discussed.

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Molly Sims: I Nursed a Little Vampire!

Mom & Babies
Celebrity Baby Blog

02/15/2013 at 01:00 PM ET

Following the birth of her baby boy, Molly Sims was ready to sink her teeth into breastfeeding.

The only problem? Her son Brooks Alan had beaten her to it.

“Early on in the hospital, they really want you to breastfeed, so I’m trying everything,” the model mama, 39, shared during a Wednesday appearance on Anderson Live.

“And I’m like, ‘Gosh, this really, really hurts.’ And they’re like, ‘Oh, we know.’”

Determined to find the root of the pain, Sims went searching in her newborn’s mouth — and was shocked at her discovery.

“I’m like, ‘Is there any way a baby could be born with a tooth?’” she recalls. “And they went, ‘Oh sweetie, I know you’re a model, but … babies aren’t born with teeth!’”

She continues: “Come to find out, my baby was born with a tooth!”

Courtesy ANDERSON LIVE

Despite countless attempts to successfully nurse — “I did nipple shields, nipple guards, supplemental nursing system, it was horrible,” the new mom says — Sims eventually decided to call it quits.

“He was literally like a vampire on me for three months — it was unbelievable,” she says with a laugh. “Cut to I’m not breastfeeding and I’m proud of it.”

Now Brooks, 7 months, has moved on to other milestones — including crawling — and is already taking after his dad, Scott Stuber.

“He has the hairline of my husband. It’s like an Eddie Munster kind of hairline. It’s not so attractive, but [he'll] end up growing into it,” Sims says.

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States' choices set up national health experiment

WASHINGTON (AP) — President Barack Obama's health care overhaul is unfolding as a national experiment with American consumers as the guinea pigs: Who will do a better job getting uninsured people covered, the states or the feds?

The nation is about evenly split between states that decided by Friday's deadline they want a say in running new insurance markets and states that are defaulting to federal control because they don't want to participate in "Obamacare." That choice was left to state governments under the law: Establish the market or Washington will.

With some exceptions, states led by Democrats opted to set up their own markets, called exchanges, and Republican-led states declined.

Only months from the official launch, exchanges are supposed to make the mind-boggling task of buying health insurance more like shopping on Amazon.com or Travelocity. Millions of people who don't have employer coverage will flock to the new markets. Middle-class consumers will be able to buy private insurance, with government help to pay the premiums in most cases. Low-income people will be steered to safety net programs like Medicaid.

"It's an experiment between the feds and the states, and among the states themselves," said Robert Krughoff, president of Consumers' Checkbook, a nonprofit ratings group that has devised an online tool used by many federal workers to pick their health plans. Krughoff is skeptical that either the feds or the states have solved the technological challenge of making the purchase of health insurance as easy as selecting a travel-and-hotel package.

Whether or not the bugs get worked out, consumers will be able to start signing up Oct. 1 for coverage that takes effect Jan. 1. That's also when two other major provisions of the law kick in: the mandate that almost all Americans carry health insurance, and the rule that says insurers can no longer turn away people in poor health.

Barring last-minute switches that may not be revealed until next week, 23 states plus Washington, D.C., have opted to run their own markets or partner with the Obama administration to do so.

Twenty-six states are defaulting to the feds. But in several of those, Republican governors are trying to carve out some kind of role by negotiating with federal Health and Human Services Secretary Kathleen Sebelius. Utah's status is unclear. It received initial federal approval to run its own market, but appears to be reconsidering.

"It's healthy for the states to have various choices," said Ben Nelson, CEO of the National Association of Insurance Commissioners. "And there's no barrier to taking somebody else's ideas and making them work in your situation." A former U.S. senator from Nebraska, Nelson was one of several conservative Democrats who provided crucial votes to pass the overhaul.

States setting up their own exchanges are already taking different paths. Some will operate their markets much like major employers run their health plans, as "active purchasers" offering a limited choice of insurance carriers to drive better bargains. Others will open their markets to all insurers that meet basic standards, and let consumers decide.

Obama's Affordable Care Act remains politically divisive, but state insurance exchanges enjoy broad public support. Setting up a new market was central to former Republican presidential candidate Mitt Romney's health care overhaul as governor of Massachusetts. There, it's known as the Health Connector.

A recent AP poll found that Americans prefer to have states run the new markets by 63 percent to 32 percent. Among conservatives the margin was nearly 4-1 in favor of state control. But with some exceptions, including Idaho, Nevada and New Mexico, Republican-led states are maintaining a hands-off posture, meaning the federal government will step in.

"There is a sense of irony that it's the more conservative states" yielding to federal control, said Sandy Praeger, the Republican insurance commissioner in Kansas, a state declining to run its own exchange. First, she said, the law's opponents "put their money on the Supreme Court, then on the election. Now that it's a reality, we may see some movement."

They're not budging in Austin. "Texas is not interested in being a subcontractor to Obamacare," said Lucy Nashed, spokeswoman for Gov. Rick Perry, who remains opposed to mandates in the law.

In Kansas, Praeger supported a state-run exchange, but lost the political struggle to Gov. Sam Brownback. She says Kansans will be closely watching what happens in neighboring Colorado, where the state will run the market. She doubts that consumers in her state would relish dealing with a call center on the other side of the country. The federal exchange may have some local window-dressing but it's expected to function as a national program.

Christine Ferguson, director of the Rhode Island Health Benefits Exchange, says she expects to see a big shift to state control in the next few years. "Many of the states have just run out of time for a variety of reasons," said Ferguson. "I'd be surprised if in the longer run every state didn't want to have its own approach."

In some ways, the federal government has a head start on the states. It already operates the Medicare Plan Finder for health insurance and prescription plans that serve seniors, and the Federal Employees Health Benefits Program. Both have many of the features of the new insurance markets.

Administration officials are keeping mum about what the new federal exchange will look like, except that it will open on time and people in all 50 states will have the coverage they're entitled to by law.

Joel Ario, who oversaw planning for the health exchanges in the Obama administration, says "there's a rich dialogue going on" as to what the online shopping experience should look like. "To create a website like Amazon is a very complicated exercise," said Ario, now a consultant with Manatt Health Solutions.

He thinks consumers should be able to get one dollar figure for each plan that totals up all their expected costs for the year, including premiums, deductibles and copayments. Otherwise, scrolling through pages of insurance jargon online will be a sure turn-off.

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After decent rally, perhaps time for a pause

NEW YORK (Reuters) - Stocks could struggle to extend their seven-week winning streak as the quarterly earnings period draws to a close and the market bumps into strong technical resistance.

Many analysts say the market could spend the next few weeks consolidating gains that have lifted the benchmark Standard & Poor's 500 <.spx> by 6.6 percent since the start of the year.

The S&P 500 ended up 0.1 percent for the week, recovering from a late sell-off on Friday after a Bloomberg report about slow February sales at Wal-Mart triggered a slide in the retailer's shares. It was the index's seventh week of gains.

Odds of a pullback are increasing, with the market in slightly overbought territory, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

"I do suspect the closing of the earnings season will lead to at least a pause and possibly a pullback," Zaro said. The S&P 500 could shave 3 to 5 percent between now and early April, he said.

Fourth-quarter earnings have mostly beaten expectations. Year-over-year profit growth for S&P 500 companies is now estimated at 5.6 percent, up from a January 1 forecast for 2.9 percent growth, and 70 percent of companies are exceeding analyst profit expectations, above the 62 percent long-term average, according to Thomson Reuters data.

On Thursday, Wal-Mart, the world's largest retailer, is due to report results, unofficially closing out the earnings period. Investors will be keen to see its quarterly numbers, especially after the Friday's news report that rattled investors.

The S&P 500 has gained 4.3 percent since Alcoa kicked off the earnings season on January 8.

The approaching March 1 deadline for across-the-board federal budget cuts unless Congress reaches a compromise adds another reason for caution, especially with recent economic data indicating the recovery remains bumpy.

Manufacturing output fell 0.4 percent last month, the Federal Reserve said on Friday, but production in November and December was much stronger than previously thought.

TESTING RESISTANCE

The S&P 500 has been trading near five-year highs, and it notched its highest level since November 2007 this week. But the gains have pushed the benchmark index almost as far as it is likely to go in the near term, with strong resistance hovering around 1,525 and 1,540, one analyst said.

As a result, the index is set to move sideways, said Dave Chojnacki, market technician at Street One Financial in Huntington Valley, Pennsylvania. "We just don't have the volume or the catalyst right now" to go above those levels, he said.

At the same time, other analysts say, the market has not shown significant signs of slowing, including a break below 15- and 30-day moving averages.

Such moves would be needed to show that momentum is slowing or that the market is at risk of a correction, said Todd Salamone, director of research for Schaeffer's Investment Research in Cincinnati, Ohio. The S&P 500's 14-day moving average is at 1,511 while the 30-day is at 1,494. The index closed Friday at 1,519.

Recent M&A activity, including news this week of a merger between American Airlines and US Airways Group , helped provide some strength for the market this week and optimism that more deals may be on the way.

In the coming days, the market will focus on minutes from the latest Federal Reserve meeting, due to be released on Wednesday, which could provide support if they suggest the Fed will remain on its current course of aggressive monetary easing.

The Fed minutes released in January spooked markets a bit when they revealed that some Fed officials thought it would be appropriate to consider ending asset purchases later in 2013. U.S. Treasury yields rose on that news, though market worries about a near-term end to quantitative easing have since faded.

Among other companies expected to report earnings next week are Nordstrom , Hewlett-Packard and Marriott International

(Reporting By Caroline Valetkevitch; Editing by Leslie Adler)

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India Ink: Kerala's Tangled Tryst With International Affairs

Indian states, though powerful in matters of internal administration, rarely deal with foreign governments. A bizarre shooting near Kerala’s coast involving Italian marines last year, which killed two Indian fishermen, gave the state a crash course on international diplomacy, one that also tested Kerala’s political standing with the central government.

One year after the shooting, the case appears to be nearing a quiet conclusion in what could have been a messy international fight. Though the outcome may not completely satisfy Keralites, they are not likely to find fault with their government. Kerala fought for as long as it could to handle the case on its own turf, and its determination has strengthened the state’s position in domestic politics.

In the afternoon of Feb. 15, 2012, two impoverished fishermen, returning to the Kerala coast from an exhausting fishing expedition, were shot dead by two Italian marines who were guarding an oil tanker, the Enrica Lexie, on suspicion that the fishermen were pirates.

The Indian authorities say the Italian marines had behaved suspiciously on the fateful day. After the marines killed the two fishermen, their ship sped away, the authorities said, angering the Indian Coast Guard, which pursued the tanker and brought it to the Kochi port under escort.

The Italian authorities, on the other hand, say that the marines warned an approaching boat to keep away, and that when it did not, they had no choice but to fire warning shots into the air. Since the shooting took place in international waters, the ship was not obliged to come to the Indian shore and that the matter would have been investigated back in Italy, the Italian authorities say.

If Italy had admitted its marines had made a mistake and offered compensation out of court in the early days, the case would have ended long ago. But Italy insisted that there was a piracy attempt and that since the shooting took place in international waters, India had no jurisdiction to try the marines on murder charges in India.

Then Kerala’s courts intervened and affirmed jurisdiction. A judge later rejected an out-of-court settlement that the Italians had worked out with some local church leaders.

Emotions ran high in Kerala, accentuated by the suspicion that Italy’s Delhi connections would let the marines off the hook at any time. The two Italians were lodged in prison first and then in a more comfortable guesthouse at the repeated requests of the Italian government at the highest level in Delhi. High-ranking Italian officials visited Kerala multiple times on behalf of the marines.

But Kerala’s courts maintained pressure, and it appeared that the case was moving toward a conviction. Then the Italian government filed a petition with the Supreme Court arguing that because the shooting occurred in international waters that the trial could not be held in India.

The chief minister of Kerala, Oommen Chandy, may have heaved a sigh of relief when the case was moved to the Supreme Court, but the shift initially caused much consternation in the fishing community in Kerala. The victims’ next of kin and the owner of the fishing boat were disappointed that the huge compensation that they had expected to receive through a direct settlement with the Italians or through a court order eluded them.

In fact, when the marines were allowed by the Kerala High Court to go home for Christmas after depositing 60 million rupees ($1.1 million) as surety, the local people were praying that they would not come back. The marines returned ahead of time, much to the disappointment of the next of kin.

Delhi took the line that the whole incident was an unfortunate accident, not involving any machinations by the Italians. It is in that direction that the case has moved.

Last month, the Supreme Court rejected Italy’s argument but ruled that the case should be moved out of Kerala and into a special Indian court under international maritime law. Since the shootings had happened in the contiguous zone and not territorial waters, Kerala had no jurisdiction, the Supreme Court said.

Even if the marines are ultimately convicted, it is likely they will return to Italy. On Monday, India announced that in November it had ratified a treaty with Italy, which was agreed upon before the shooting incident occurred, that allows citizens convicted of crimes in either country to serve their prison sentences in their home country.

Though it wasn’t the outcome it had sought, Kerala is taking a pragmatic view. Moving the legal battle from Kerala itself has brought down the profile of the case and the pressure of public opinion. Now, the state will accept any decision by the Supreme Court as long as adequate compensation is given to the next of kin and the boat owner.

The episode was not without its benefits for Kerala, which emerged with its principles intact. The central government never challenged Kerala, nor did it pressure the state to make concessions, and Mr. Chandy himself emerged as a tough negotiator and a champion of the law, which can only benefit the state in the future.

Ironically, the heroic efforts of the Italian government to get their nationals released from an Indian prison won the appreciation of many Indians, including Keralites. They pointed to the sustained efforts at the highest level by Italy to rescue the marines and criticized the Indian government for not doing enough for its own nationals in prisons abroad, accused of far less serious crimes.

Mr. Sreenivasan, a former Indian diplomat, is the executive vice chairman of the Kerala State Higher Education Council. His views are personal and do not reflect the policy of his state.

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