Wall Street edges up, led by McDonald's and tech

NEW YORK (Reuters) - Stocks advanced slightly on Monday, helped by gains in McDonald's after the fast-food giant posted strong sales results, and a move up in technology shares.

Technology stocks were the S&P 500's best-performing sector as Hewlett-Packard Co climbed 2.5 percent to $14.14 on rumors that activist investor Carl Icahn is building a stake in the PC maker. The stock is down 44.5 percent for the year and ranks as the Dow's worst performer.

Tech was also supported by Cisco Systems , which gained 2.2 percent to $19.75 after the company presented its midterm growth strategy on Friday. Monday's rally put the stock on track for its fifth advance in the past six sessions.

U.S. President Barack Obama met with Republican House Speaker John Boehner on Sunday to negotiate a budget deal. A Boehner aide said Monday that talks are continuing. Obama is expected to make remarks at 2 p.m. from Michigan where he is touring an auto plant.

Persistent worries about the negotiations over the "fiscal cliff," a series of automatic tax hikes and spending cuts that could hurt economic growth next year, have kept market moves small of late.

"The funnel is starting to get narrower and narrower at the end of the year. We're waiting for political resolutions, waiting for headlines," said Brian Battle, director of trading at Performance Trust Capital Partners, in Chicago.

The benchmark S&P 500 index has yet to see a move greater than 0.5 percent in either direction for December, and hasn't moved more than 1 percent either way since November 23. However, the market has regained most of the losses incurred post-election as investors refocused on the fiscal cliff.

McDonald's Corp gave the Dow a jolt, gaining 1.3 percent to $89.66, as its November sales were stronger than expected and showed a bounce back from a decline in October.

The Dow Jones industrial average <.dji> rose 22.11 points, or 0.17 percent, to 13,177.24. The Standard & Poor's 500 Index <.spx> gained just 0.75 of a point, or 0.05 percent, at 1,418.82. The Nasdaq Composite Index <.ixic> was up 5.38 points, or 0.18 percent, at 2,983.42.

News out of Italy kept sentiment in check as Prime Minister Mario Monti said he would resign after the approval of the 2013 budget. The move added to uncertainty about progress being made to tackle the euro zone's debt problem and drove Italy's borrowing costs higher.

(Editing by Jan Paschal)

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Fear of Fighting Haunts Once-Tranquil Damascus

Muzaffar Salman/Reuters

A portrait of President Bashar al-Assad outside the venue of a charity concert by the Syrian National Symphony Orchestra in Damascus on Nov. 21.

DAMASCUS, Syria — Business has been terrible for Abu Tareq, a taxi driver, so last week, without telling his wife, he agreed to drive a man to the Damascus airport for 10 times the usual rate. But, he said later, he will not be doing that again.

On the airport road, he could hear the crash of artillery and the whiz of sniper fire. Dead rebels and soldiers lay on the roadsides. Abu Tareq saw a dog eating the body of a soldier.

“I will never forget this sight,” said Abu Tareq, 50, who gave only a nickname for safety reasons. “It is the road of the dead.”

Damascus, Syria’s capital, is one of the world’s oldest continuously inhabited cities, a touchstone of history and culture for the entire region. Through decades of political repression, the city preserved, at least on the surface, an atmosphere of tranquillity, from its wide downtown avenues to the spacious, smooth-stoned courtyard of the Umayyad Mosque and the vine-draped alleys of the Old City, where restaurants and bars tucked between the storehouses of medieval merchants hummed with quiet conversation.

Now, though, the rumble of distant artillery echoes through the city, and its residents are afraid to leave their neighborhoods. Cocooned behind rows of concrete blocks that close off routes to the center, they huddle in fear of a prolonged battle that could bring destruction and division to a place where secular and religious Syrians from many sects — Sunni, Shiite, Alawite, Christian and others — have long lived peacefully.

For more than a week, Syrian rebels and government forces have fought for the airport road, as the military tries to seal off the capital city, the core of President Bashar al-Assad’s power, from a semicircle of rebellious suburbs. Rebels have now kept the pressure on the government for as long as they did during their previous big push toward Damascus last summer. This time, improved supply lines and tactics, some rebels and observers say, may provide a more secure foothold.

But the security forces wield overwhelming firepower, and while it has been unable to subdue the suburbs, some rebel fighters say they lack the intelligence information, arms and communication to advance. That raises the specter of a destructive standoff like the one that has devastated the commercial hub of Aleppo.

“Damascus was the city of jasmine,” Mahmoud, 40, a public-school teacher, said in an interview in the capital. “It is not the city I knew just a few weeks ago.”

Car bombs have ripped through neighborhoods, their targets and perpetrators only guessed at. Checkpoints choke traffic, turning 20-minute jaunts into three-hour ordeals. Wealthy residents find it quicker and safer to drive to Beirut, Lebanon, for a weekend trip than to the Old City.

Shells have been fired from Mount Qasioun overlooking Damascus, a favorite destination from which to admire the city’s sparkling lights. West of downtown, where the palace stands on a plateau, things are relatively quiet. But from the mountain, puffs of smoke can now be seen over suburbs in an arc from northeast to southwest.

Mahmoud, unable to find heating oil and medicine for his sick wife, said his grocer has lectured him daily on shortages and soaring prices. The once-ubiquitous government, he said, now appears to have no role beyond flooding streets with soldiers and security officers, “who are sometimes good and sometimes rude.”

People with roots in other towns have left, he said, “but what about me, who is a Damascene, and has no other city?”

The sense of claustrophobia has grown as rebels have declared the airport a legitimate target and the government has blocked Baghdad Street, a main avenue out of the city. On Sunday, it blocked the highway south to Dara’a.

In some nearby suburbs, the front lines seem to be hardening.

On the route into Qaboun in recent days, less than two miles northeast of Damascus, the last government checkpoint was near the municipal building. Less than a quarter-mile on, rebels controlled the area around the Grand Mosque.

An employee of The New York Times reported from Damascus, Syria, and Anne Barnard from Beirut, Lebanon. Neil MacFarquhar contributed reporting from Beirut.

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Johnny Depp, Jennifer Love Hewitt Bring New Twists to Classic Films & More Casting News

By Julia Haskins

12/09/2012 at 03:00 PM EST

Johnny Depp and Jennifer Love Hewitt

Wireimage(2)

Johnny Depp and Jennifer Love Hewitt are re-imagining stories, both classic and bizarre, in upcoming movies.

Depp will help give life to Miguel de Cervantes's famed character Don Quixote in a modern-day film for Disney, Deadline.com reports. The actor is set to produce the movie about the hero of La Mancha, but no word yet on whether he'll be acting in the project.

Hewitt will executive produce a Lifetime movie based on a post from Heather Gattuccio's blog Derfwad Manor, Deadline.com reports. In the blog post, the happily married mother dreams of polygamy with A-list stars. The movie tells a new version of the story of a bored homemaker's fictional blog about her own polygamy but when she starts getting noticed for her online presence, she must keep up the charade.

Also coming soon:

• True Grit's Hailee Steinfeld will join Kevin Costner for a currently untitled thriller, according to First Showing. Costner will play a dying assassin, who while out on one last job, hopes to reunite with his estranged daughter.

• From dark wizards to suburban scandal! J.K. Rowling will be a collaborator in bringing her latest novel, The Casual Vacancy, to the small screen, The Hollywood Reporter confirms. Rowling says she is excited to bring her latest novel to the BBC. "I always felt that, if it were to be adapted, this novel was best suited to television, and I think the BBC is the perfect home," she said.

• Family Guy's Seth MacFarlane is walking in the footsteps of the classic Blazing Saddles by directing his own Western comedy, A Million Ways to Die in the West, according to The Hollywood Reporter.

• Emma Stone, Ryan Reynolds and Nicolas Cage will all lend their voices to the animated prehistoric comedy The Croods, First Showing reports.

• iCarly has wrapped, but Carly's spunky sidekick Sam Puckett is on to new adventures, The Hollywood Reporter confirms. Sam & Cat stars Jennette McCurdy (who plays Sam Puckett on iCarly) and Ariana Grande (Victorious star Cat Valentine) who are reprising their roles from the respective shows. The actresses will play roommates who start a babysitting business. Production is set to begin in January in Los Angeles, and the show will premiere in 2013.

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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Wall St Week Ahead: "Cliff" worries may drive tax selling

NEW YORK (Reuters) - Investors typically sell stocks to cut their losses at year end. But worries about the "fiscal cliff" - and the possibility of higher taxes in 2013 - may act as the greatest incentive to sell both winners and losers by December 31.

The $600 billion of automatic tax increases and spending cuts scheduled for the beginning of next year includes higher rates for capital gains, making tax-related selling even more appealing than usual.

Tax-related selling may be behind the weaker trend in the shares of market leader Apple , analysts said. The stock is down 20 percent for the quarter, but it's still up nearly 32 percent for the year.

Apple dropped 8.9 percent in the past week alone. For a stock that gained more than 25 percent a year for four consecutive years, the embedded capital gains suddenly look like a selling opportunity if one's tax bill is going to jump sharply just because the calendar changes.

"Tax-loss selling is always a factor (but) tax-gains selling has been a factor this year," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"You have a lot of high-net-worth individuals in taxable accounts, and that could be what's affecting stocks like Apple. If you look at the stocks that people have their largest gains in, they seem to be under a little bit more pressure here than usual."

Of this year's top 20 performers in the S&P 1500 index, which includes large, small and mid-cap stocks, all but four have lost ground in the last five trading sessions.

The rush to avoid higher taxes on portfolio gains could cause additional weakness.

The S&P 500 ended the week up just 0.1 percent after another week of trading largely tied to fiscal cliff negotiation news, which has pushed the market in both directions.

A PAIN PILL FROM THE FED?

This week's Federal Reserve meeting could offer some relief if policymakers announce further plans to help the lackluster U.S. economy. The Federal Open Market Committee will meet on Tuesday and Wednesday. The policy statement is expected at about 12:30 p.m. EST on Wednesday after the conclusion of the meeting - the Fed's last one for the year.

Friday's jobs report showing non-farm payrolls added 146,000 jobs in November eased worries that superstorm Sandy had hit the labor market hard.

"After the FOMC meeting, I think it's going to be downhill from there as worries about the fiscal cliff really take center stage and prospects of a deal become less and less likely," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

"I think we are likely to see an escalation in profit-taking ahead of tax rates going up next year," he said.

MORE VOLUME AND VOLATILITY

Volume could increase as investors try to shift positions before year end, some analysts said.

While most of that would be in stocks, some of the extra trading volume could spill over into options, said J.J. Kinahan, TD Ameritrade's chief derivatives strategist.

Volatility could pick up as well, and some of that is already being seen in Apple's stock.

"The actual volatility in Apple has been very high while the market itself has been calm. I expect Apple's volatility to carry over into the market volatility," said Enis Taner, global macro editor at RiskReversal.com, an options trading firm in New York.

Shares of Apple, the largest U.S. company by market value, on Friday registered their worst week since May 2010. In another bearish sign, the stock's 50-day moving average fell to $599.52 - below its 200-day moving average at $601.38.

"There's a lot of tax-related selling happening now, and it will continue to happen. Apple is an example, even (though) there are other factors involved with Apple," Aama said.

If tax rates are going up, an investor would sell now to book gains and pay lower capital gains taxes, according to Aama. But if an investor has capital losses, then "you take losses and have them count against capital gains or regular income if you do not have any offsetting capital gains.

"In essence, higher capital gains tax rates will give your losses a higher value next year than this year as the income tax shield will be worth more in 2013. So if you have no capital gains this year, you are better off holding off on selling your losers in 2012 and waiting till 2013," he said in an email.

While investors may be selling stocks to avoid higher taxes in 2013, companies may continue to announce special and accelerated dividend payments before year end. Among the latest, Expedia announced a special dividend of 52 cents a share to be paid on December 28.

To be sure, the big sell-off in stocks following the November 6 election was likely related to tax selling, making it hard to judge how much more is to come.

Even with stocks' recent declines, the three major U.S. stock indexes are still up for the year. The Dow Jones industrial average <.dji> is up 7.7 percent for 2012 so far, while the benchmark Standard & Poor's 500 index <.spx> is up 12.8 percent and the Nasdaq Composite Index <.ixic> is up 14.3 percent for the year to date.

Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said there is a decent chance that the market could rally before the year ends.

"Even with little or spotty news that one would put in the positive bucket regarding the (cliff) negotiations, the market has basically hung in there, and I think it's hung in there in anticipation of something coming," he said.

(Wall St Week Ahead runs every Sunday. Questions or comments on this column can be emailed to: caroline.valetkevitch(at)thomsonreuters.com)

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal; Multimedia versions of Reuters Top News are now available for:; 3000 Xtra: visit Reuters Top News; BridgeStation: view story .134; For London stock market outlook please click on <.l>; Pan-European stock market outlook <.eu>; Tokyo stock market outlook <.t>)

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Google launches Snapseed photo editor on Android, makes iOS version free

After acquiring the makers of Snapseed in September, Google (GOOG) on Thursday released the popular photo application for Android smartphones and tablets. Google also updated the iOS version of the app to add Google+ integration and some new filters, and it cut the price of the original app from $ 4.99 to free. Snapseed is a simple yet powerful photo editor from Nik Software that allows users to enhance images with various tweaks and gesture-based touch ups, along Instagram-like filters. Snapseed is available now for the iPhone, iPad and Android smartphones and tablets.

Get more from BGR.com: Follow us on Twitter, Facebook

Gadgets News Headlines – Yahoo! News

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Weekend Holiday Movie Guide: Watch This, Not That

By PEOPLE Movie Critic Alynda Wheat

12/08/2012 at 02:15 PM EST

Daniel Day-Lewis and Bill Murray

Twentieth Century FOX; Nicola Dove/Focus Features

The hectic holidays are almost upon us, which means it's the perfect time of year to head to the movies – provided you don't get stuck with the cinematic equivalent of a fruitcake.

So arm yourself with this handy watch this/skip that weekend movie guide before your Aunt Mildred suggests a Red Dawn/Killing Them Softly double feature. (Seriously, don't even entertain that idea.)

Watch This: Lincoln
Daniel Day-Lewis could win another Oscar playing Lincoln, so you might as well get in on the conversation – especially since his Great Emancipator is so shrewd and funny. (Even so, James Spader is even more hilarious as a presidential influence peddler.) For those looking to actually learn a little something, no worries, the whole movie is one awesome episode of The West Wing: Top Hats and Bonnets. Bonus: Your family will think you're all kinds of classy for suggesting it.

Skip That: Hyde Park on Hudson
You know it's rough when the main character is the dullest person in the movie. Laura Linney plays Daisy Suckley, Franklin Delano Roosevelt's (Bill Murray) cousin/girlfriend, but she's so boring it's impossible to tell why he's into her. Sure, there's a fun subplot about British royals coming to town, but it's not enough to overcome Daisy Downer and President HeyMyEyesAreUpHere.

Be Sure to Catch This Other Thing: Silver Linings Playbook
As funny as it is unhinged, Playbook is an easy winner for (adult) family viewing. Bradley Cooper and Jennifer Lawrence could grab Oscar nods for playing unbalanced neighbors with kooky chemistry. Plus, it's great fun watching hilariously inappropriate people when you're not actually related to them.

And What Do You Mean You Still Haven't Seen: Skyfall
Let's make a rule right now that all movie villains have to be played by Oscar winners, preferably Javier Bardem. You think I jest, but you'll be with me once you see Bardem as the silky, sick Silva in one of the greatest spy thrillers ever made. He's got an eye for the ladies – and one on a certain secret agent man. No wonder, even as a creaky Bond, Daniel Craig fills out the suit beautifully and does a hell of an acting job to boot. (When Bardem is your nemesis and Judi Dench is your boss, you step it up.)

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

Read More..

Wall Street Week Ahead: "Cliff" worries may drive tax selling

NEW YORK (Reuters) - Investors typically sell stocks to cut their losses at year end. But worries about the "fiscal cliff" - and the possibility of higher taxes in 2013 - may act as the greatest incentive to sell both winners and losers by December 31.

The $600 billion of automatic tax increases and spending cuts scheduled for the beginning of next year includes higher rates for capital gains, making tax-loss selling even more appealing than usual.

Tax-related selling may be behind the weaker trend in the shares of market leader Apple , analysts said. The stock is down 20 percent for the quarter, but it's still up nearly 32 percent for the year.

Apple dropped 8.9 percent in this past week alone. For a stock that gained more than 25 percent a year for four consecutive years, the embedded capital gains suddenly look like a selling opportunity if one's tax bill is going to jump sharply just because the calendar changes.

"Tax-loss selling is always a factor (but) tax-gains selling has been a factor this year," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"You have a lot of high-net-worth individuals in taxable accounts, and that could be what's affecting stocks like Apple. If you look at the stocks that people have their largest gains in, they seem to be under a little bit more pressure here than usual."

Of this year's top 20 performers in the S&P 1500 index, which includes large, small and mid-cap stocks, all but four have lost ground in the last five trading sessions.

The rush to avoid higher taxes on portfolio gains could cause additional weakness.

The S&P 500 ended the week up just 0.1 percent after another week of trading largely tied to fiscal cliff negotiation news, which has pushed the market in both directions.

A PAIN PILL FROM THE FED?

Next week's Federal Reserve meeting could offer some relief if policymakers announce further plans to help the lackluster U.S. economy. The Federal Open Market Committee will meet on Tuesday and Wednesday. The policy statement is expected at about 12:30 p.m. on Wednesday after the conclusion of the meeting - the Fed's last one for the year.

Friday's jobs report showing non-farm payrolls added 146,000 jobs in November eased worries that Superstorm Sandy had hit the labor market hard.

"After the FOMC meeting, I think it's going to be downhill from there as worries about the fiscal cliff really take center stage and prospects of a deal become less and less likely," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

"I think we are likely to see an escalation in profit-taking ahead of tax rates going up next year," he said.

MORE VOLUME AND VOLATILITY

Volume could increase as investors try to shift positions before year end, some analysts said.

While most of that would be in stocks, some of the extra trading volume could spill over into options, said J.J. Kinahan, TD Ameritrade's chief derivatives strategist.

Volatility could pick up as well, and some of that is already being seen in Apple's stock.

"The actual volatility in Apple has been very high while the market itself has been calm. I expect Apple's volatility to carry over into the market volatility," said Enis Taner, global macro editor at RiskReversal.com, an options trading firm in New York.

Shares of Apple, the largest U.S. company by market value, registered their worst week since May 2010. In another bearish sign, the stock's 50-day moving average fell to $599.52 - below its 200-day moving average at $601.38.

"There's a lot of tax-related selling happening now, and it will continue to happen. Apple is an example, even (though) there are other factors involved with Apple," Aama said.

While investors may be selling stocks to avoid higher taxes in 2013, companies may continue to announce special and accelerated dividend payments before year end. Among the latest, Expedia announced a special dividend of 52 cents a share to be paid on December 28.

To be sure, the big sell-off in stocks following the November 6 election was likely related to tax selling, making it hard to judge how much more is to come.

Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said there's a decent chance that the market could rally before year end.

"Even with little or spotty news that one would put in the positive bucket regarding the (cliff) negotiations, the market has basically hung in there, and I think it's hung in there in anticipation of something coming," he said.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: caroline.valetkevitch(at)thomsonreuters.com)

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal; Multimedia versions of Reuters Top News are now available for:; 3000 Xtra: visit Reuters Top News; BridgeStation: view story .134; For London stock market outlook please click on .L/O; Pan-European stock market outlook .EU/O; Tokyo stock market outlook .T/O; Wall St Week Ahead runs every Friday.)

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The Lede Blog: Hospital Nurse in Radio Hoax With Kate Middleton Is Found Dead

Video of a statement on Friday from the London hospital where Kate Middleton was treated this week.

A nurse at a London hospital, who took a prank call from two Australian radio disc jockeys pretending to be Queen Elizabeth II and Prince Charles to get details on Kate Middleton’s medical condition, was found dead on Friday, the hospital said.

John Lofthouse, the chief executive of the King Edward VII hospital — where Ms. Middleton, the Duchess of Cambridge, was treated this week for hyperemesis gravidarum, acute morning sickness related to her pregnancy — told reporters:

It is with very deep sadness that we confirm the tragic death of a member of our nursing staff, Jacintha Saldanha. Jacintha has worked at the King Edward VII’s Hospital for more than four years. She was an excellent nurse and well-respected and popular with all of her colleagues.

We can confirm that Jacintha was recently the victim of a hoax call to the hospital. The hospital had been supporting her throughout this difficult time.

London’s Metropolitan Police Service, said in a statement that Ms. Saldanha, 46, was found unconscious on Friday morning “at work-provided accommodation” near the hospital and pronounced dead at the scene by the London Ambulance Service.

Although the police said the nurse’s death “is being treated as unexplained,” the D.J.’s were widely held responsible on social networks.

A husband without a wife and two kids without a mother! All thanks to you two @MelGreigHot30 & @MContheradio SHAME ON YOU! #royalprank

— Vajira Ratnayaka (@vratnay) 7 Dec 12

Lord Glenarthur, the hospital’s chairman, added: “This is a tragic event. Jacintha was a first class nurse who cared diligently for hundreds of patients during her time with us. She will be greatly missed.”

Ms. Middleton was released from the hospital on Thursday morning and went home with her husband, Prince William, for further rest. A statement from St. James’s Palace on behalf of the royal family said:

The Duke and Duchess of Cambridge are deeply saddened to learn of the death of Jacintha Saldanha. Their Royal Highnesses were looked after so wonderfully well at all times by everybody at King Edward VII hospital, and their thoughts and prayers are with Jacintha Saldanha’s family, friends and colleagues at this very sad time.

Audio of the prank phone call to the hospital, in which the D.J.’s Mel Greig and Michael Christian were provided with information on Ms. Middleton’s condition, was removed from the Web site of their radio station, 2DayFM, and the broadcaster’s YouTube channel after the nurse’s death. Excerpts from the phone conversation between the pranksters and hospital staff members were included in a news report from Britain’s ITN.

Before the call to the nursing staff was put through, the D.J.’s laughed on the air about Ms. Greig’s poor impersonation of the queen and expressed surprise about how easy it had been for them to be taken seriously. During the call, Ms. Greig, in the role of the queen, asked when a good time might be to visit, and made comedic references to her pet corgis.

“She’s sleeping at the moment and she has had an uneventful night, she’s been given some fluids … she’s stable at the moment,” the nurse on the call told the pranksters. “I would suggest that any time after 9 o’clock will be suitable.” She added: “We’ll be getting her freshened up.”

The two D.J.’s were reported to have later apologized, but seemed to welcome the international attention at first. Mr. Christian, whose @MContheradio Twitter account was later disabled, initially boasted that Conan O’Brien had noticed the prank.

HOLD UP! Even @ConanOBrien is talking about our #RoyalPrank http://t.co/7j4EKq5c I’ve been named by CONAN O’BRIEN!

— Michael Christian (@MContheradio) 7 Dec 12

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