NHL owners to vote on contract Wednesday

NEW YORK (AP) — NHL owners will vote Wednesday on the tentative labor agreement reached with the players' union.
If a majority approves, as expected, the NHL will move one step closer toward the official end of the long lockout that began Sept. 16.
As of Tuesday afternoon, a memorandum of understanding of the deal hadn't been completed, so the union has yet to schedule a vote for its more than 700 members. A majority of players also must approve the deal for hockey to return to the ice.
"We continue to document the agreement," NHL deputy commissioner Bill Daly told The Associated Press in an email Tuesday.
If there are no snags, ratification could be finished by Saturday and training camps can open Sunday if approval is reached on both sides. A 48-game regular season would then be expected to begin on Jan. 19.
"(We) don't need a signed document to complete ratification process," Daly wrote, "but we do need a signed agreement to open camps. The goal is to get that done by Saturday so that we can open camps on Sunday."
The NHL has yet to release a new schedule. The regular season was supposed to begin on Oct. 11.
The deal was reached Sunday on the 113th day of the lockout and seemingly saved the season that was delayed for three months and cut nearly in half. It took a 16-hour final bargaining session in a New York hotel for the agreement to finally be completed at about 5 a.m.
The lockout led to the cancellation of at least 480 games. That brings the total of lost regular-season games to a minimum 2,178 during three lockouts under Commissioner Gary Bettman.
The damage is significant. Perhaps $1 billion in revenue could be lost this season, given about 40 percent of the regular-season schedule won't be played. Players will also lose a large part of their salaries, not to mention time lost in their careers.
Hockey's first labor dispute was an 11-day strike in 1992 that led to the postponement of 30 games. Bettman became the commissioner in February 1993. He presided over a 103-day lockout in 1994-95 that ended with a deal on Jan. 11, then a 301-day lockout in 2004-05 that made the NHL the only major North American professional sports league to lose an entire season. The NHL obtained a salary cap in the agreement that followed that dispute and now wanted more gains.
The NHL's revenue of $3.3 billion last season lagged well behind the NFL ($9 billion), Major League Baseball ($7.5 billion) and the NBA ($5 billion), and the deal will lower the hockey players' percentage from 57 to 50 — owners originally had proposed 46 percent.
This was the third lockout among the major U.S. sports in a period of just more than a year. A four-month NFL lockout ended in July 2011 with the loss of only one exhibition game, and an NBA lockout caused each team's schedule to be cut from 82 games to 66 last season.

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Burundi coffee earnings fall 63 pct in December

BUJUMBURA (Reuters) - Burundi's earnings from coffee exports fell 63 percent in December from the previous month due to lower volumes sold, the country's industry regulator said on Monday.
"Low quantities of coffee were exported in December as most buyers in western countries were off for the holidays," said regulator ARFIC in its monthly report.
Earnings dropped to $2.1 million from $5.7 million in November, as the amount of coffee sold tumbled to 896,547 kg from 1,671,638 kg in the previous month.
ARFIC expects the central African nation to earn a total of$61.4 million from coffee exports during the 2012/2013 (April-March) crop year, slightly up from $61.2 million earned in the 2011/2012 season.
Projected high output from the world's top producers like Brazil, Vietnam and Colombia could lower coffee prices in global markets, ARFIC said.
Coffee is the country's top hard currency earner and the sector employs some 800,000 smallholder farmers in a population of eight million.

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Analysis: Fiscal crisis seen hurting tech earnings

Warning to investors: major U.S. technology companies could miss estimates for fourth-quarter earnings as "fiscal cliff" worries likely led some corporate clients to tighten their belts last month and refrain from spending all of their 2012 IT budgets.
Tech companies usually enjoy a spike in orders in December as corporations use money left over in their budgets to buy goods on their wish lists - information technology products that are nice to have, rather than essential.
But the so-called year-end budget flush was not as deep in 2012 as in typical years, according to tech analysts and other experts citing conversations with corporate technology buyers and sales sources. They said companies held back on IT purchases in December in part because of Washington's protracted negotiations to avoid the fiscal cliff, which is a package of automatic tax hikes and spending cuts that could have pushed the already soft U.S. economy into recession.
It took until late on January 1 for House Republican lawmakers led by John Boehner to agree to a bill to avert the cliff, which President Barack Obama signed into law the next day.
"CIOs and CFOs were not making investments," said Andrew Bartels, an analyst with Forrester Research who advises corporate technology buyers. "If Boehner and Obama had been able to strike a deal by around December 15, we would have had end-of-quarter investments."
Analysts say they expect tech spending to remain subdued through at least the first quarter, as businesses wait to see if Congress can resolve another looming fiscal fight, this time over the debt ceiling and federal spending cuts.
Wall Street has already significantly lowered expectations for the tech sector, which has been underperforming the overall market.
The Street now expects tech companies in the S&P 500 to report a 1.0 percent drop in fourth-quarter earnings, against an average 2.8 percent rise for companies in the full S&P 500. Three months ago, analysts were expecting tech sector earnings to rise 9.4 percent in the fourth quarter, according to Thomson Reuters I/B/E/S.
First-quarter tech profit growth estimates have also been lowered to 2.6 percent, from 9 percent three months ago, according to Thomson Reuters I/B/E/S.
Greg Harrison, a corporate earnings research analyst with Thomson Reuters, said he expects analysts will cut their predictions further after tech companies report fourth-quarter results.
Intel Corp will report its quarterly earnings on January 17, the first of a group of big tech companies reliant on enterprise spending. Intel will be followed by IBM, Microsoft Corp and EMC Corp later in January. Cisco Systems Inc, Dell Inc and Hewlett-Packard Co close their quarterly books in about a month.
Mark Luschini, chief investment strategist at Janney Montgomery Scott, which manages about $54 billion, said he generally expects fourth-quarter tech results to disappoint, but has yet to determine by how much.
He expects the sluggish performance to continue into the first quarter, then improve in the second half of the year, assuming Democrats and Republicans reach a deal on the debt ceiling and spending cuts.
"So far we only have one piece," he said of the fiscal cliff deal.
USE IT OR LOSE IT
Even if Washington politicians eventually resolve their differences over fiscal issues, that is not expected to fully restore losses already caused to tech spending, experts said.
Technology projects that were axed at the end of last year will not likely be resumed any time soon because annual tech budgets are allocated on a "use it or lose it" basis, according to experts who advise companies on technology investments.
"These budgets are based on how the business is doing at the time. All of these are postponable decisions," said Howard Anderson, a senior lecturer at the MIT Sloan School of Management and frequent adviser to chief investment officers at Fortune 500 companies.
Analysts said that makers of hardware, from computers to networking gear, likely missed out on the year-end budget flush because businesses can postpone upgrades for years by buying new software that is compatible with older equipment.
They said they expect some companies to have postponed the purchase of new PCs in the fourth quarter, which could hit the results of Windows and Office maker Microsoft, along with PC makers Dell and HP, as well as chipmakers Intel and Advanced Micro Devices Inc.
Nucleus Research analyst Rebecca Wettemann said some businesses likely delayed buying new PCs to avoid having to upgrade to Windows 8, which was introduced late last year.
"A new operating system causes huge disruptions for businesses," she said. "Who wants to take that on in the face of all the other uncertainty?"
Microsoft, Dell, HP and Intel declined to comment. AMD did not return requests for comment.
Beyond concerns about the U.S. economy, corporate IT buyers are also worried about the potential for further weakness in Europe and Asia.
Last Thursday, Forrester cut its closely watched forecast for 2013 global IT sales, citing the fiscal cliff debacle as one reason. Forrester now expects global IT sales to rise 3.3 percent to $2.2 trillion this year, down from its previous forecast for 4.3 percent growth.
VIRTUAL STORAGE
Analysts say the weak economy may boost adoption of recently introduced data storage technologies that allow companies to put more data on the equipment they already own, reducing the need for them to buy more hardware.
Some companies have already paid for that technology, but have yet to implement it because staff are not yet comfortable using it, said analyst Cindy Shaw of investment research firm Discern.
Shaw said that executives at those companies are likely to tell their IT staff to implement that technology to get full use out of existing equipment before they can buy more.
Storage equipment makers NetApp Inc and EMC, along with hard drive makers Western Digital Corp and Seagate Technology are likely to suffer the most from more use of the new technologies, which include storage virtualization. NetApp and Western Digital declined to comment. EMC and Seagate could not be reached for comment.
Defenders of the tech industry say the fallout from the fiscal cliff is already factored into share prices. The S&P 500 Information Technology Index has climbed 1.6 percent over the past month, below the 4.0 percent increase in the broader S&P 500 Index.
Some technology companies appear poised to outperform the pack.
Oracle Corp said on December 18 that it expects software sales growth to stay strong in 2013 despite fears about the fiscal crisis [ID:nL1E8NIEZM]. The company's earnings beat Wall Street forecasts in its most recent quarter as strong software sales offset a sharp drop in hardware revenue.
Analysts said that IBM, whose quarter ended December 31, may have fared better than other big technology companies, because it is has a large amount of recurring revenue from its services and software divisions.
"Oracle and IBM both have super strong sales teams that can bring home what they need to year after year," said Kim Forrest, senior analyst of Fort Pitt Capital.
IBM and Oracle could not be reached for comment.

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TSX drops as miners weaken, focus on U.S. earnings

TORONTO (Reuters) - Canada's main stock index retreated on Monday as mining stocks were pressured by softer gold prices and investors braced for the upcoming U.S. fourth-quarter earnings season.
The Toronto Stock Exchange's S&P/TSX composite index's <.gsptse> fall tracked declines on U.S. stock markets as cautious investors cashed in recent gains ahead of the earnings season. The U.S. results are expected to be only marginally stronger than the previous quarter's lackluster performance. <.n>
"We're in earnings season in the U.S. That might cause some kind of hesitation," said Michael Gayed, chief investment strategist at Pension Partners.
Gold prices slipped as investors eyed the outlook for U.S. budget talks and the U.S. Federal Reserve's quantitative easing program. Two top Fed officials suggested on Friday the central bank may halt its bullion-friendly asset purchases by the end of the year due to an improving economy.
The Toronto index's materials group, where miners reside, finished 0.97 percent lower.
"There's going to be some kind of noise near term, most of it due to the concern about the (U.S. budget) debt ceiling coming up. That's going to cause some near-term back and forth movement," Gayed said.
The index's energy group gave back 0.65 percent as oil prices steadied after retreating earlier in the session. TD Securities downgraded several Canadian oil and gas companies.
The S&P/TSX composite index finished down 41.26 points, or 0.33 percent, at 12,499.55. Eight of its 10 main sectors fell.
Barrick Gold Corp was the biggest drag, falling 1.67 percent to close at C$33.57, while Suncor Energy Inc slipped 1.04 percent to C$33.23. Goldcorp Inc rounded off the top three negative weights on the index, giving back 1.76 percent to C$34.69.
Canadian Natural Resources was down 1.23 percent at C$29.78, while fellow oil producer Talisman Energy Inc was off 2.27 percent at C$11.62. TD Securities cut its rating on both companies.
Toronto's resource-heavy market pared some of the robust gains it made made the previous week, when the index hit a nine-month high after the landmark U.S. budget deal.
"The markets are coming off a hangover of feeling good from last week," said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
"Until we get a good feel on the fourth-quarter earnings and the guidance for first-quarter earnings, the market will probably trade sideways," he added.
Investors were also taking in news that global regulators gave banks four more years and greater flexibility to build up cash buffers.
The financial sector, the index's biggest, slid 0.04 percent. Royal Bank of Canada was down 0.43 percent at C$60.81. The Bank of Nova Scotia was up 0.1 percent at C$57.65.
In company news, Canada's airlines flew fuller planes in December, with dominant carrier Air Canada and No. 2 WestJet Airlines reporting record monthly passenger levels. Air Canada shares were up 5.08 percent at C$1.86. WestJet shares inched up 0.10 percent to C$20.23.

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Violence in Northern Ireland for 3rd day over flag

BELFAST, Northern Ireland (AP) — Northern Ireland police used water cannons to fend off brick-hurling protesters in Belfast on Saturday as violent demonstrations over flying the British flag stretched into a third straight day.
The Police Service of Northern Ireland said it was investigating reports that a number of shots were fired at police lines. A 38-year-man has been arrested on suspicion of attempted murder, police said.
More than 1,000 demonstrators marched on Belfast's city hall earlier Saturday afternoon amid a heavy police presence. While the rally passed largely without incident, police then came under attack from a mob of more than 100 people hurling bricks and fireworks. Two men were arrested, police said.
Protesters have been out in force — with sometimes violent results — since a Dec. 3 decision by Belfast City Council to stop flying the British flag year-round.
Such issues of symbolism frequently inflame sectarian passions in Northern Ireland, where Protestants mainly want to stay in the United Kingdom and Catholics want to unite with the Republic of Ireland.
Many Protestants want the council to reverse its decision about the flag, and dozens of police have been injured in ensuing demonstrations.
Saturday's flare-up followed a tense Friday night in Belfast when nine police officers were injured and 18 rioters arrested during rioting. Police said that more than 30 petrol bombs were thrown at officers, along with ball bearings, fireworks and bricks as they responded to clashes in Protestant sections of the city.
Similar clashes on Thursday saw 10 police injured in east Belfast.
The controversy has also seen death threats made against politicians.

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Man arrested after shots fired at Northern Irish police in flag riots

BELFAST (Reuters) - Northern Irish police arrested a 38-year-old man on Saturday on suspicion of attempted murder after shots were fired at police officers during protests over the removal of the British flag from Belfast City Hall.
Police used water cannon against more than 100 protesters hurling fireworks, smoke bombs and bricks in the eastern part of the city shortly after a demonstration outside City Hall calling for the flag to be reinstated on a permanent basis.
Pro-British loyalists began rioting a month ago in the most sustained violence in the city for years after a vote by mostly nationalist pro-Irish councillors to end the century-old tradition of flying the British flag from Belfast City Hall.
The violence, which stopped over Christmas, began again on Thursday and 19 police officers have been injured since then, bringing the total number of officers hurt since early December to more than 60.
Loyalists blamed Saturday's fighting on anti-British Catholic nationalists who they said attacked them first.
Militant nationalists, responsible for the killings of three police officers and two soldiers since 2009, have so far not reacted violently to the flag protests, limiting any threat to 15 years of peace in Northern Ireland.
However, Peter Robinson, the British-controlled province's first minister, said on Friday that rioters were playing into the hands of nationalist groups, who would seek to exploit every opportunity "to further their terror aims".
At least 3,600 people were killed during Northern Ireland's darkest period as Catholic nationalists seeking union with Ireland fought British security forces and mainly Protestant loyalists determined to remain part of the United Kingdom.
The violence was mostly ended by a 1998 peace deal.

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Spanish police seize ancient plundered vase

MADRID (AP) — The owner of an antique shop in Spain was arrested after police investigators found a vase there dating back to the late second century B.C., officials said Saturday.
The antiquity had been illegally plundered from an Iberian era archeological site in the province of Alicante, an Interior Ministry statement said.
Inspectors found it in a cardboard box during a routine search of the shop in the eastern town of El Campello.
"We are not yet aware of the full importance of this discovery, but in 20 years' time we will still be talking about this vase," said Jose Luis Simon, an expert from the cultural heritage service of the Ministry of Culture.
Simon said the piece showed decorative paintwork from the Iberian era that tells the story of a hunter who had managed to kill a wild boar, one of the rituals of the time that proved a youth had attained the status of manhood.
He said that while fragments of vases from this antiquity exist in Spain, this was the first to be found whole, making it "of exceptional value."
Simon said the hunting sequences showed similarities to some found on an ancient Greek vase, known as a crater, in the Vatican museum in Rome.
The Interior Ministry said the inspectors who opened the cardboard box knew right away they were dealing with something out of the ordinary and requested technical backup.
"The technicians did not take long to arrive and issue a report confirming the vase's originality," Simon said.
He said it has been moved to the Alicante Archeological Museum for safekeeping.

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Piano maker Steinway takes down "for sale" sign

NEW YORK (Reuters) - Steinway Musical Instruments Inc, the famous manufacturer of pianos, saxophones and trumpets, said on Wednesday it had decided not to sell itself following a 17-month-long exploration of strategic alternatives.
An American icon synonymous with handmade grand pianos, Steinway has struggled to keep its production margins competitive amid stagnant sales, and has seen its shares plunge 10 percent year-to-date. Still, its third-quarter earnings last month offered signs that cost-cutting was paying off.
In a statement on Wednesday, Steinway said it had received several non-binding indications of interest in buying the company, following talks with other companies in the sector as well as private equity, yet these did not offer more value than its own strategic plan.
"We will continue to focus management's efforts on execution of that plan and we look forward to a prosperous 2013," Steinway CEO Michael Sweeney said in the statement.
An in-principle agreement to sell its band instrument division to an investor group led by two of its board members, Dana Messina and John Stoner, was also scrapped in light of the current operating performance of the band division, Steinway said.
In July 2011, Messina, Stoner and other members of management made an offer for Steinway's band instrument and online music divisions, prompting the company to set up a special committee in order to assess it.
Later that month, Steinway asked investment bank Allen & Company LLC to a assist the special committee on exploring strategic alternatives that could also include selling the whole company outright to other interested parties.
By October 2011, Messina had stepped down as CEO of the company after 15 years at the helm to pursue his bid, yet he remained a board member. He was replaced by Sweeney, a chairman of the board of Star Tribune Media Holdings and a former president of Starbucks Coffee Company (UK) Ltd.
Steinway said on Wednesday that it was continuing a separate process to sell its leasehold interest in New York's Steinway Hall building, situated on Manhattan's 57th Street, and was in talks with several parties.
According to its website, Steinway & Sons, the company's piano unit, opened the first Steinway Hall on 14th Street in Manhattan in 1866.
With a main auditorium of 2,000 seats, it became New York City's artistic and cultural center, housing the New York Philharmonic until Carnegie Hall opened in 1891. These days, Steinway Hall is a showroom for the company's instruments.
The Waltham, Massachusetts-based company's pianos have been used by legendary artists such as Cole Porter and Sergei Rachmaninoff and by contemporary ones like Chinese concert pianist Lang Lang.

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RIM shares jump in Toronto, rebound from sharp decline

TORONTO (Reuters) - Shares of Research In Motion Ltd jumped nearly 10 percent on the Toronto Stock Exchange on Thursday, following similar gains in New York on Wednesday, in a rebound from last week's sharp decline.
Last Friday, the volatile stock plunged more than 20 percent after the company said on an earnings conference call that it was rolling out a new fee structure for its services segment, which some investors fear could pressure the high-margin business.
"It got hit so hard after the conference call," said Ed Snyder, an analyst with Charter Equity Research. "People are still fairly optimistic about (BlackBerry 10) coming out in January, so (the rebound is) really just a value play."
The new fee structure overshadowed stronger-than-expected quarterly results.
RIM shares were up 9.7 percent to C$11.42 in midday trade on the Toronto Stock Exchange. The company's Nasdaq-listed stock was down 2 percent to $11.60 after big gains on Wednesday, when Canadian equity markets were closed for Boxing Day.
Through the autumn of 2012, RIM rallied as investors grew optimistic about prospects for its new make-or-break BlackBerry 10 devices, to be formally unveiled January 30. On Thursday, the shares were still up more than 80 percent from the year's low, touched in September.
The Wednesday and Thursday gains also came after several websites posted photos of what they said could be the first BlackBerry 10 phone with a physical keyboard.
Evercore Partners analyst Mark McKechnie said the photos boosted RIM's stock, which he said was depressed from last week's selloff, on a quiet trading day.
"There certainly are folks that believe in the new product cycle," he said. "The whole Wall Street community's been trying to handicap how strong that product cycle will be for RIM."
RIM has said it plans to roll out touchscreen-only devices first, a few weeks before it releases a smartphone with the QWERTY keyboard many longtime BlackBerry users rave about. But some analysts believe devices with hard keyboards will not hit the market until spring.
Management has touted BlackBerry 10's new on-screen keyboard, but some see the company's reputation for building solid, usable physical keyboards as an important competitive advantage as RIM fights for market share against Apple Inc and Samsung Electronics .
McKechnie said volatility is not unusual ahead of big smartphone launches.
"There's so much scale involved in this industry, one way or the other. A successful product versus a failure is going to really change the earnings power of a company," he said.

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A surprisingly good vintage as market logs gains

NEW YORK (AP) — If you'd told investors what was going to happen in 2012 — U.S. economic growth at stall speed, an intensifying European debt crisis, a slowdown in China, fiscal deadlock in Washington, decelerating corporate earnings growth — and asked how the stock market would perform, few would have predicted a good year.
But that's just what they got.
The Dow Jones industrial average, the Standard & Poor's 500 and the Nasdaq composite index all ended the year substantially higher, despite losing ground in the final days of year as concerns about the looming "fiscal cliff" mounted.
The Dow gained 7 percent for the year, its fourth consecutive annual advance, having started the year at 12,217. The S&P 500, which started the year at 1,257, is up 13 percent, beating the 7.8 percent average annual gain of the past 20 years. The Nasdaq also logged a better-than-average gain, 16 percent.
Including dividends, the total return on the S&P 500 index was even better: 16 percent.
Financial companies led the gains among S&P 500 stocks, advancing 26 percent, as banks continued their restructuring efforts after the recession. Bank of America more than doubled, gaining $6.05 to $11.61 and Citigroup advanced $13.25, or 50 percent, to $39.56. Utilities, the best-performing industry group last year, was the only sector of 10 industry groups in the index to decline, dropping 2.9 percent.
"There's been a lot thrown at this market, and it's proven to be very resilient," said Gary Flam, a portfolio manager at Bel Air Investment Advisors in California. "Here we are at the end of the year, and it's still relatively strong."
Stocks started the year on a tear, with optimism about an improving job market and a broader economic recovery providing the backdrop to the S&P 500's best first-quarter rally in 14 years.
The index advanced 12 percent by the end of March, closing the quarter at 1,408, its highest in almost four years, with financial companies and technology firms leading the charge. The Dow ended the first quarter at 13,212, logging an 8 percent gain.
Apple was one of the star performers of the first quarter and was probably the year's most talked-about company.
The popularity of the iPhone and iPad led to staggering sales growth that helped push its stock up 48 percent to almost $600 at the end of March. Apple also announced a dividend and overtook Exxon Mobil as the U.S.'s most valuable company.
At the start of the second quarter, the intensifying European debt crisis and concerns about the impact that it would have on global economic growth prompted a sell-off.
By the start of June, U.S. stocks had given up the year's gains. Borrowing costs for Spain surged and investors fretted over the outcome of Greek elections that had the potential to pull the euro currency bloc apart.
The outlook for growth in China, the world's second-largest economy, also began to weigh on investors' minds. Economic growth there slowed to 8.1 percent in the first quarter as export demand waned, and investors worried that it would keep falling.
The Dow fell as low as 12,101 June 4. The S&P dropped to 1,278 June 1.
The second quarter was also marred by Facebook's initial public offering.
The stock sale was one of the most keenly anticipated initial public offerings in years, but investors didn't "like" the $16 billion market debut. The social network priced its IPO at $38 per share, and the stock started to fall soon after the first day of trading on concern about the company's mobile strategy.
Facebook closed as low as $17.73 on Sept. 4 before recovering some of the ground it lost to close the year at $26.62.
Company earnings reports were also starting to make uncomfortable reading for investors. Earnings growth for S&P 500 companies fell as low as 0.8 percent in the second quarter, according to S&P Capital IQ data.
The stock market only recovered its poise after the European Union put together loans to bail out Spain's banks on June 10 and the head of the European Central Bank, Mario Draghi, pledged to do "whatever it takes" to save the euro.
Speculation that the Federal Reserve was set to provide the economy with more stimulus to prevent it from slipping back into recession also bolstered stocks.
The rally even survived a blip when a software glitch at trading firm Knight Capital threw stock prices into chaos Aug. 1.
The firm said the problem was triggered by new trading software it installed. Erroneous orders were sent to 140 stocks listed on the New York Stock Exchange, causing sudden price swings and surging trading volume.
Apple launched the iPhone 5, the latest version of its smartphone, in September, and the company's stock climbed to a record close of $702.10 on Sept. 19. That gave Apple a market value of $658 billion, and many analysts predicted more gains lay ahead.
By the time Fed Chairman Ben Bernanke announced Sept. 13 that the U.S. central bank would start a third round of its bond-purchase program, which is intended to push longer term interest rates lower and encourage borrowing and investment, the S&P 500 had surged 14 percent from its June 1 low. A day later, the index peaked at five-year high of 1,466. The Dow Jones reached its peak for the year of 13,610, Oct. 5.
As is often the case on Wall Street, investors "bought the rumor and sold the fact," and quickly turned their attention to the challenges that lay ahead.
Analysts had also been cutting their outlook for growth in the final quarter of the year. At the start of the second quarter, estimated earnings growth for the period was 15.7 percent. That forecast had fallen to 3.4 percent by Dec. 27.
"One of the blessings that supported the stock market's moves in prior years was earnings growth," said Lawrence Creatura, a portfolio manager at Federated Investors. "That's true this year, but at a decelerating rate. It's not gone unnoticed that earnings growth is slowing, and many forecasts now include a full stall."
Apple's halo also began to slip in the final three months of the year. Its iPad Mini tablet, launched Nov. 2, met with lukewarm reviews, there were hints of unrest among its executive ranks. Investors began to fret that the intensifying competition in the smartphone market would crimp Apple's profits. The stock tumbled, and despite rallying in recent days is still down 27 percent from its September peak.
The year's final twist came in Washington.
Stocks wavered ahead of a presidential election that at times seemed too close to call, and while President Barack Obama ultimately reclaimed the White House by a comfortable margin, the Republicans retained control of the House.
The divided government set the stage for a tense end to the year as Democrats and Republicans sought to thrash out a budget plan that would avoid the U.S. falling off the "fiscal cliff," a series of tax hikes and government spending cuts that economists say would push the economy back into recession.
Initially, markets fell as much as 5 percent in the 10 days after the elections as investors worried that a divided government would not be able to agree on a budget plan to cut the U.S. deficit.
While the S&P 500 managed to recoup those losses by December on optimism that a deal would be reached, some investors are still urging caution. Any agreement will still be "ill-tasting medicine" to the economy, as it will almost certainly involve both spending cuts and tax hikes, says Joe Costigan, director of equity research at Bryn Mawr Trust Company.
"The question is, how much will the drag from the government be offset by business and personal spending," says Costigan. "The market has reasonable expectations for growth priced in, so I don't think we're going to see a big run-up.

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