Analysis: Apple’s swoon exposes risk lurking in mutual funds

NEW YORK (Reuters) – The nearly 28 percent decline in shares of Apple Inc since mid-September isn’t just painful to individual shareholders. It’s also being felt by investors who chased hot mutual funds that loaded up on Apple as the stock raced to a record $ 705 per share.

Apple makes up 10 percent or more of assets in 117 out of the 1,119 funds that own its shares, according to data from Lipper, a Thomson Reuters company. Those big stakes have contributed positively to each fund’s annual performance to date, with Apple still up about 32 percent for the year. It was trading at $ 527.73 soon after the opening on Friday.

But that year-to-date outcome may not accurately reflect the performance of the funds for individual investors. All told, approximately $ 4.5 billion has been added to funds with overweight stakes in Apple this year, according to Morningstar data. The majority of these dollars were invested after March and after Apple first exceeded $ 600 per share – meaning many investors have been riding down with the decline.

The $ 302 million Matthew 25 fund, for instance, holds 17.4 percent of its assets in Apple, according to Lipper. The fund’s 31.9 percent gain through Thursday makes it one of the top performing funds for the year.

Most of its Apple shares were bought years ago at a bargain basement price of about $ 125 per share. But $ 158.9 million of the fund’s assets – or 53 percent – were invested after the end of March, when Apple was trading near $ 615 per share, according to Morningstar data.

For those investors that bought after March, all that concentration in Apple hasn’t led to a stellar gain but rather a drag on the portfolio. Someone who invested in Matthew 25 in early April has seen the value of the fund’s Apple stake fall about 19 percent, while someone who invested at the beginning of September has watched that outsized Apple stake drop 27.2 percent.

In turn, the majority of the fund’s investors have reaped a much more modest performance than its year-end numbers suggest. Since the end of March, the fund has gained 6.7 percent, according to Morningstar data, far less than its 31 percent year-to-date gain and about two percentage points more than the benchmark Standard & Poor’s 500 index.

Since, September the fund is down nearly 3 percent through Thursday’s close, compared with a 1.1 percent decline in the S&P 500 in that period.

The impact of Apple’s falling stock price shows some of the drawbacks of portfolio concentration, experts say. These stakes can leave the funds overexposed to the ups and downs of one company – counter to what most mutual funds are supposed to do for investors.

“Any time you get over 10 percent of the portfolio in one company it’s a red flag,” said Michel Herbst, director of active fund research at Morningstar. Many fund managers do have risk management rules that prevent them from devoting more than 5 percent to 6 percent of their portfolio to any one stock, he said.

Then again, some funds purposely invest in just a few stocks. Mark Mulholland, the portfolio manager of the Matthew 25 fund, said that taking concentrated positions in companies is the only way to beat an index over longer periods of time.

‘RIGHT-SIZING’ PORTFOLIOS

Along with concerns about iPhone sales in China and tax-motivated selling among people who want to avoid potentially higher capital gains taxes in 2013, the wide fund ownership of Apple may be a factor in the size of the stock’s recent declines, fund managers said. In addition, with so many funds already heavily invested in the high-priced stock, there may be fewer marginal buyers available to push prices up again when shares begin to dip.

“The stock didn’t go from $ 700 to $ 520 because people didn’t like the new iPad. It’s become a favorite short of hedge funds because they know they can get in on this,” said Mark Spellman, a portfolio manager of the $ 300 million Value Line Income and Growth fund with a small position in Apple.

Short interest in the stock rose to 20.6 million shares at the end of November from 15.1 million shares at the end of September, according to Nasdaq.

“Some of my competitors have 12 percent of their assets in Apple, which I think is ludicrous”, said Spellman, who said the company is no longer trading on its fundamentals.

Sandy Villere, who has a 2.5 percent weighting of Apple in his $ 276 million Villere Balanced fund, said that some mutual fund managers are selling shares because of the over-weighting.

“Right now many people who did take huge overweight positions are right-sizing their portfolios to get it in line with their regular weightings,” he said.

Still, some bullish investors see the stock’s recent declines as a buying opportunity.

Mulholland, the Matthew 25 portfolio manager, continues to say that shares should be priced at over $ 1,000 per share based on his valuation of the company at 10 times enterprise value divided by earnings before interest, taxes, depreciation and amortization (EBITDA). Apple trades at about 7 times that figure now.

Wall Street analysts’ average price target as of Thursday is $ 742.56, according to Thomson Reuters data. But Mulholland is happy to be more bullish than his peers.

“I’m glad that I’m able to get it at these prices,” he said.

(Reporting By David Randall; Editing by Jennifer Merritt)

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Emily VanCamp: My Boyfriend Likes When I Take Off My Makeup

12/22/2012 at 12:15 PM EST

Josh Bowman prefers his girlfriend Emily VanCamp to be au naturel.

"When I take off my makeup, that's my boyfriend's favorite," the Revenge star, 26, tells Women's Health in its January/February issue of her Revenge costar and real-life beau, 24. "And that, to me, is a symbol of a great guy – someone who doesn't care about all that [glamorous] stuff."

VanCamp first realized this special quality her man possessed when she was on a fishing trip with him and his dad in England.

"I was there in my baseball cap and these crappy fishing clothes," she explains. "And I remember thinking, this is when I feel 100 percent comfortable – in these dirty clothes with fish guts all over them. I know it sounds horrendous. I'm at my most confident when I'm in nature and I don't have to dress up."

Emily VanCamp

Courtesy Women's Health

When it comes to her relationship in general, she understands, "It's more about accepting each other as separate people," adding, "Laugh a lot and be really delicate with the other person’s heart, because sometimes you start to take each other for granted. Always remember that neither of you needs to be there. It's a choice every day to stay together."

But even a lady in love appreciates her alone time.

"I like to reflect," she says. "I need that sort of peace and quiet. It's something my friends and I laugh about: 'Oh, Emily’s having a night to herself.' It centers me."

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Predicting who's at risk for violence isn't easy

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

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Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.

A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.

Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.

Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.

"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.

"The markets still basically believe that something will be done," he said.

If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.

For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.

Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.

IT COULD GET A LITTLE CRAZY

Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.

If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.

"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.

"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."

Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.

Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.

"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.

"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."

Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.

The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.

Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.

U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.

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

(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Cluster Bombs Used on Civilians in Syria

A cluster bomb attack on Dec. 12 in the town of Marea, Syria, killed 4 people and injured at least 23. Each bomb disperses bomblets that can cause destruction over hundreds of yards. In Marea, pieces of the finned bomblets and their dispensers were found throughout the town and even on its outskirts.

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Nokia, RIM settle old disputes in new patent pact

HELSINKI (AP) — Nokia Corp. and Canadian smartphone rival Research In Motion have agreed on a new patent licensing pact which will end all existing litigation between the two struggling companies, the Finnish firm said Friday.

The agreement includes a “one-time payment and on-going payments, all from RIM to Nokia,” Nokia said, but did not disclose “confidential” terms.

Last month, Nokia sued the Blackberry maker for breach of contract in Britain, the United States and Canada over cellular patents they agreed in 2003. RIM claimed the license — which covered patents on “standards-essential” technologies for mobile devices— should also have covered patents for non-essential parts, but the Arbitration Institute of Stockholm Chamber of Commerce ruled against RIM’s claims.

Major manufacturers of phones and wireless equipment are increasingly turning to patent litigation as they jockey for an edge to expand their share of the rapidly growing smartphone market.

Nokia is among leading patent holders in the wireless industry. It has already received a $ 565 million royalty payment from Apple Inc. to settle long-standing patent disputes and filed claims in the United States and Germany alleging that products from HTC Corp. and Viewsonic Corp. infringe a number of its patents.

The company says it has invested €45 billion ($ 60 billion) during the last 20 years in research and development and has one of the wireless industry’s largest IPR portfolios claiming some 10,000 patent families.

Nokia’s share price closed down 3.5 percent at €3.05 on the Helsinki Stock Exchange.

Wireless News Headlines – Yahoo! News

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Kim Kardashian Gets Dramatic in Trailer for New Tyler Perry Movie (Video)

12/21/2012 at 12:40 PM EST

She's doing what she does best: standing – pretty in pink – in skin-tight dress in the first few seconds of the new trailer for Tyler Perry's Temptation: Confessions of a Marriage Counselor.

Playing a character named Ava, Kim Kardashian, 32, is taking a stab at a dramatic role in the upcoming movie, alongside stars like Vanessa Williams and one-time frenemy – and sister of ex-boyfriend Ray J – Brandy Norwood.

According to IMDB, the film, due March 29, is about a marriage counselor (played by Jurnee Smollett) whose life changes once she begins a romance with one of her clients. (And smoldering glances aside, no specific word yet what Kim's role in the film entails.)

Still, judging by the brief clip, the movie is full of steamy, melodramatic scenes with a hot cast that also includes Lance Gross and up-and-comer Eric West.

This won't be Kardashian's first time on the silver screen. She made her film debut in 2008's Disaster Movie, and returned to the big screen in 2009's Deep in the Valley.

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AP IMPACT: Big Pharma cashes in on HGH abuse

A federal crackdown on illicit foreign supplies of human growth hormone has failed to stop rampant misuse, and instead has driven record sales of the drug by some of the world's biggest pharmaceutical companies, an Associated Press investigation shows.

The crackdown, which began in 2006, reduced the illegal flow of unregulated supplies from China, India and Mexico.

But since then, Big Pharma has been satisfying the steady desires of U.S. users and abusers, including many who take the drug in the false hope of delaying the effects of aging.

From 2005 to 2011, inflation-adjusted sales of HGH were up 69 percent, according to an AP analysis of pharmaceutical company data collected by the research firm IMS Health. Sales of the average prescription drug rose just 12 percent in that same period.

___

EDITOR'S NOTE — Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the second of a two-part series.

___

Unlike other prescription drugs, HGH may be prescribed only for specific uses. U.S. sales are limited by law to treat a rare growth defect in children and a handful of uncommon conditions like short bowel syndrome or Prader-Willi syndrome, a congenital disease that causes reduced muscle tone and a lack of hormones in sex glands.

The AP analysis, supplemented by interviews with experts, shows too many sales and too many prescriptions for the number of people known to be suffering from those ailments. At least half of last year's sales likely went to patients not legally allowed to get the drug. And U.S. pharmacies processed nearly double the expected number of prescriptions.

Peddled as an elixir of life capable of turning middle-aged bodies into lean machines, HGH — a synthesized form of the growth hormone made naturally by the human pituitary gland — winds up in the eager hands of affluent, aging users who hope to slow or even reverse the aging process.

Experts say these folks don't need the drug, and may be harmed by it. The supposed fountain-of-youth medicine can cause enlargement of breast tissue, carpal tunnel syndrome and swelling of hands and feet. Ironically, it also can contribute to aging ailments like heart disease and Type 2 diabetes.

Others in the medical establishment also are taking a fat piece of the profits — doctors who fudge prescriptions, as well as pharmacists and distributors who are content to look the other way. HGH also is sold directly without prescriptions, as new-age snake oil, to patients at anti-aging clinics that operate more like automated drug mills.

Years of raids, sports scandals and media attention haven't stopped major drugmakers from selling a whopping $1.4 billion worth of HGH in the U.S. last year. That's more than industry-wide annual gross sales for penicillin or prescription allergy medicine. Anti-aging HGH regimens vary greatly, with a yearly cost typically ranging from $6,000 to $12,000 for three to six self-injections per week.

Across the U.S., the medication is often dispensed through prescriptions based on improper diagnoses, carefully crafted to exploit wiggle room in the law restricting use of HGH, the AP found.

HGH is often promoted on the Internet with the same kind of before-and-after photos found in miracle diet ads, along with wildly hyped claims of rapid muscle growth, loss of fat, greater vigor, and other exaggerated benefits to adults far beyond their physical prime. Sales also are driven by the personal endorsement of celebrities such as actress Suzanne Somers.

Pharmacies that once risked prosecution for using unauthorized, foreign HGH — improperly labeled as raw pharmaceutical ingredients and smuggled across the border — now simply dispense name brands, often for the same banned uses. And usually with impunity.

Eight companies have been granted permission to market HGH by the U.S. Food and Drug Administration, which reviews the benefits and risks of new drug products. By contrast, three companies are approved for the diabetes drug insulin.

The No. 1 maker, Roche subsidiary Genentech, had nearly $400 million in HGH sales in the U.S. last year, up an inflation-adjusted two-thirds from 2005. Pfizer and Eli Lilly were second and third with $300 million and $220 million in sales, respectively, according to IMS Health. Pfizer now gets more revenue from its HGH brand, Genotropin, than from Zoloft, its well-known depression medicine that lost patent protection.

On their face, the numbers make no sense to the recognized hormone doctors known as endocrinologists who provide legitimate HGH treatment to a small number of patients.

Endocrinologists estimate there are fewer than 45,000 U.S. patients who might legitimately take HGH. They would be expected to use roughly 180,000 prescriptions or refills each year, given that typical patients get three months' worth of HGH at a time, according to doctors and distributors.

Yet U.S. pharmacies last year supplied almost twice that much HGH — 340,000 orders — according to AP's analysis of IMS Health data.

While doctors say more than 90 percent of legitimate patients are children with stunted growth, 40 percent of 442 U.S. side-effect cases tied to HGH over the last year involved people age 18 or older, according to an AP analysis of FDA data. The average adult's age in those cases was 53, far beyond the prime age for sports. The oldest patients were in their 80s.

Some of these medical records even give explicit hints of use to combat aging, justifying treatment with reasons like fatigue, bone thinning and "off-label," which means treatment of an unapproved condition

Even Medicare, the government health program for older Americans, allowed 22,169 HGH prescriptions in 2010, a five-year increase of 78 percent, according to data released by the Centers for Medicare and Medicaid Services in response to an AP public records request.

"There's no question: a lot gets out," said hormone specialist Dr. Mark Molitch of Northwestern University, who helped write medical standards meant to limit HGH treatment to legitimate patients.

And those figures don't include HGH sold directly by doctors without prescriptions at scores of anti-aging medical practices and clinics around the country. Those numbers could only be tallied by drug makers, who have declined to say how many patients they supply and for what conditions.

First marketed in 1985 for children with stunted growth, HGH was soon misappropriated by adults intent on exploiting its modest muscle- and bone-building qualities. Congress limited HGH distribution to the handful of rare conditions in an extraordinary 1990 law, overriding the generally unrestricted right of doctors to prescribe medicines as they see fit.

Despite the law, illicit HGH spread around the sports world in the 1990s, making deep inroads into bodybuilding, college athletics, and professional leagues from baseball to cycling. The even larger banned market among older adults has flourished more recently.

FDA regulations ban the sale of HGH as an anti-aging drug. In fact, since 1990, prescribing it for things like weight loss and strength conditioning has been punishable by 5 to 10 years in prison.

Steve Kleppe, of Scottsdale, Ariz., a restaurant entrepreneur who has taken HGH for almost 15 years to keep feeling young, said he noticed a price jump of about 25 percent after the block on imports. He now buys HGH directly from a doctor at an annual cost of about $8,000 for himself and the same amount for his wife.

Many older patients go for HGH treatment to scores of anti-aging practices and clinics heavily concentrated in retirement states like Florida, Nevada, Arizona and California.

These sites are affiliated with hundreds of doctors who are rarely endocrinologists. Instead, many tout certification by the American Board of Anti-Aging and Regenerative Medicine, though the medical establishment does not recognize the group's bona fides.

The clinics offer personalized programs of "age management" to business executives, affluent retirees, and other patients of means, sometimes coupled with the amenities of a vacation resort. The operations insist there are few, if any, side effects from HGH. Mainstream medical authorities say otherwise.

A 2007 review of 31 medical studies showed swelling in half of HGH patients, with joint pain or diabetes in more than a fifth. A French study of about 7,000 people who took HGH as children found a 30 percent higher risk of death from causes like bone tumors and stroke, stirring a health advisory from U.S. authorities.

For proof that the drug works, marketers turn to images like the memorable one of pot-bellied septuagenarian Dr. Jeffry Life, supposedly transformed into a ripped hulk of himself by his own program available at the upscale Las Vegas-based Cenegenics Elite Health. (He declined to be interviewed.)

These promoters of HGH say there is a connection between the drop-off in growth hormone levels through adulthood and the physical decline that begins in late middle age. Replace the hormone, they say, and the aging process slows.

"It's an easy ruse. People equate hormones with youth," said Dr. Tom Perls, a leading industry critic who does aging research at Boston University. "It's a marketing dream come true."

___

Associated Press Writer David B. Caruso reported from New York and AP National Writer Jeff Donn reported from Plymouth, Mass. AP Writer Troy Thibodeaux provided data analysis assistance from New Orleans.

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AP's interactive on the HGH investigation: http://hosted.ap.org/interactives/2012/hgh

___

The AP National Investigative Team can be reached at investigate(at)ap.org

EDITOR'S NOTE _ Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the second of a two-part series.

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Wall Street slides as fiscal deal unlikely before 2013

NEW YORK (Reuters) - U.S. stocks tumbled more than 1 percent on Friday after a Republican proposal for averting the "fiscal cliff" failed to pass, diminishing hopes that a deal would be reached soon in Washington.

Trading was volatile as investors reckoned a fiscal agreement between the White House and Republicans before the end of the year was unlikely. Lower volume ahead of the Christmas and New Year holidays exaggerated market swings further, and the CBOE Volatility Index, or VIX, <.vix> was up 6.5 percent.

Late on Thursday, Republican House Speaker John Boehner failed to muster enough votes from his party to pass a tax bill, dubbed "Plan B," to avert the so-called fiscal cliff, $600 billion of tax hikes and spending cuts due to start in January. If U.S. lawmakers don't agree soon on a budget that avoids the cliff, the U.S. economy could tip into recession.

"The failure with Plan B was disappointing, if not terribly surprising, but now there's a real lack of clarity about what will happen and markets hate that," said Mike Hennessy, managing director of investments for Morgan Creek in Chapel Hill, North Carolina.

The lack of support for Plan B, which called for tax increases on those who earn $1 million or more a year, suggested it would be difficult to get Republican support for the more expansive tax increases that President Barack Obama has urged. That, in turn, reduces the possibility of an agreement between the White House and Republicans before the end of the year.

Earlier on Friday, Boehner said congressional leaders and Obama must try to move on and work together.

While Friday's stock market slide reflected investors' anxiety, it wasn't a large enough drop to suggest they believed a deal would be reached too late to avoid damage to the economy, said Mark Lehmann, president of JMP Securities, in San Francisco.

"You could have easily woken up today and seen the market down 300 or 400 points, and everyone would have said, 'That's telling you this is really dire,'" Lehmann said.

"I think if you get into mid-January and (the talks) keep going like this, you get worried, but I don't think we're going to get there."

Banking shares, which outperform in times of economic expansion and have led the market on signs of progress with resolving the fiscal impasse, led declines. Citigroup Inc fell 1.8 percent to $39.44, while Bank of America slid 2.4 percent to $11.24. The KBW Banks index <.bkx> lost 1.4 percent.

The Dow Jones industrial average <.dji> dropped 147.89 points, or 1.11 percent, to 13,163.83. The Standard & Poor's 500 Index <.spx> fell 17.08 points, or 1.18 percent, to 1,426.61. The Nasdaq Composite Index <.ixic> lost 39.90 points, or 1.31 percent, to 3,010.49.

Even with the declines, the S&P 500 is up nearly 1 percent for the week and about 13 percent for the year, though uncertainty over the cliff may prompt many traders to lock in gains as the year draws to a close.

The day's round of data indicated the economy was surprisingly resilient in November; consumer spending rose by the most in three years and a gauge of business investment jumped.

But separate data showed consumer sentiment slumped in December. The S&P Retail Index <.spxrt> fell 1.3 percent.

U.S.-listed shares of Research in Motion sank 19.8 percent to $11.32 after the Canadian company, which makes the BlackBerry, reported its first-ever decline in its subscriber numbers on Thursday. A new fee structure for its high-margin services segment also concerned investors.

Herbalife dropped for an eighth day in a row. Investor Bill Ackman on Thursday ramped up his campaign against the company. Herbalife skidded 17.8 percent to $27.72 and has shed more than 35 percent this week.

(Additional reporting by Ryan Vlastelica; Editing by Bernadette Baum)

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Putin Defends Position on Syria and Chastises U.S. on Libya

MOSCOW — President Vladimir V. Putin on Thursday strongly defended Russia’s implacable opposition to military intervention in Syria and he sharply chastised the United States for its role in toppling Col. Muammar el-Qaddafi of Libya, describing that outcome as a mistake that created chaos and ultimately led to the death of Ambassador J. Christopher Stevens in Benghazi.

Mr. Putin, responding to a question at his annual end-of-year news conference, rejected an assertion that Russia was making a mistake, potentially isolating itself and at risk of losing influence in the Middle East, by opposing intervention in Syria, where the uprising against President Bashar al-Assad is now nearly two years old. Mr. Putin pointed to Libya as his evidence that intervention by the NATO alliance of Western nations had caused more harm than good.

“No matter how they explained their position, the state is falling apart,” he said. “Interethnic, inter-clan and intertribal conflicts continue. Moreover, it went as far as the murder of the United States ambassador.” He added, “I was asked here about mistakes: Isn’t it a mistake? And you want us to constantly repeat these mistakes in other countries?”

Mr. Putin insisted that Russia was not acting in defense of President Assad of Syria, but rather to preserve stability. “We are not concerned with the fate of Assad’s regime,” he said. “Of course, changes are being demanded but it’s something else that concerns – what will happen next?”

His remarks about Syria came as United Nations human rights investigators said in a new report that the Syria crisis had evolved from a battle to oust Mr. Assad into more of a sectarian conflict, pitting entire communities against each other and pulling in fighters from the Middle East and North Africa.

Mr. Putin expressed worry that the Assad government and the Syrian opposition could merely switch places, with the rebels in power but with the fighting unabated.

Later, elaborating on Russia’s position, he said: “We stand for finding a variation of a solution to the problem which would save the region and this country first from collapse and never-ending civil war.”

He continued, “Our position is not for the retention of Assad and his regime in power at any cost but that the people in the beginning would come to an agreement on how they would live in the future, how their safety and participation in ruling the state would be provided for, and then start changing the current state of affairs in accordance with these agreements, and not vice versa.”

Russia, a longtime ally of Syria, has used its veto authority as a permanent member of the United Nations Security Council, both to block more aggressive intervention sought by the United States and many other countries and to defend the sovereignty of the Assad government. But in recent days, the Kremlin has sounded increasingly pessimistic about Mr. Assad’s retention of power, and Russian officials have acknowledged developing contingency plans to evacuate Russia citizens from Syria. Thousands of Syrian men who attended universities in Russia and returned to live in Syria have Russian wives.

While the West has focused closely on any signs that Russia might alter its position on Syria, in the hopes that it might hasten the dislodging of Mr. Assad, it is far from certain that the Kremlin could persuade the Syrian leader to relinquish power.

Russia has been a major Syria arms supplier and trade partner with the Assad government and maintains a small naval refueling installation in the Syrian port of Tartus. But Mr. Putin on Thursday sought to portray the relationship as transactional. “Some special economic relations?” Mr. Putin asked rhetorically. “No. And Assad did not come to Moscow a lot during the period of his presidency. More often he was in Paris and other European capitals than here.”

In Geneva, an interim report on Syria by a panel of the United Nations Human Rights Council said that as the conflict approached the end of its second year, it “has become overtly sectarian in nature.”

The panel, led by Paulo Pinheiro, a veteran human rights investigator from Brazil, said attacks and reprisals had led communities to arm themselves and to be armed by different parties to the conflict. “Entire communities are at risk of being forced out of the country or killed inside the country,” the panel wrote in the report, which covered developments over the past two months.

“Feeling threatened and under attack, ethnic and religious minority groups have increasingly aligned themselves with parties to the conflict, deepening sectarian divides,” the panel said.

The sharpest split is between the ruling minority Alawite sect, a Shiite Muslim offshoot from which President Assad’s most senior political and military associates are drawn, and the country’s Sunni Muslim majority, mostly aligned with the opposition, the panel noted. But it said the conflict had drawn in other minorities, including Armenians, Christians, Druze, Palestinians, Kurds and Turkmens.

Most foreign fighters joining the conflict are Sunni Muslims from neighboring Middle Eastern and North African countries, many of them linked to extremist groups, the panel said, and often operating independently of the opposition Free Syrian Army but coordinating attacks with its forces.

Lebanon’s Shiite group Hezbollah confirmed that its members were fighting for the Assad government, the panel said, and it was investigating reports that Iraqi Shiites had also entered Syria. Iran has also confirmed that members of its Revolutionary Guards Corps are providing the Assad regime with “intellectual and advisory support.”

Making their fourth submission to the Human Rights Council, the panel of four investigators said government forces and supporting militias had attacked Sunni civilians and opposition forces had attacked Alawite and other pro-government communities. It said Kurdish groups had clashed with government and antigovernment forces, Turkmen militias were fighting with antigovernment forces, and Palestinians, increasingly split in their view of the Assad government, were being armed by both pro- and antigovernment forces.

“As the conflict drags on, the parties have become ever more violent and unpredictable, which has led to their conduct increasingly being in breach of international law,” the panel concluded.

David M. Herszenhorn reported from Moscow, and Nick Cumming-Bruce from Geneva. Rick Gladstone contributed reporting from New York.

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