Italy parties seek way out of election stalemate

ROME (Reuters) - Italy's stunned political parties searched for a way forward on Tuesday after an inconclusive election gave none of them a parliamentary majority and threatened prolonged instability and a renewal of the European financial crisis.

The results, notably the dramatic surge of the anti-establishment 5-Star Movement of comic Beppe Grillo, left the center-left bloc with a majority in the lower house but without the numbers to control the upper chamber, the Senate.

Financial markets fell sharply at the prospect of a stalemate that reawakened memories of the crisis that pushed Italy's borrowing costs toward unsustainably high levels and brought the euro zone to the brink of collapse in 2011.

"The winner is: Ingovernability," ran the headline in Rome newspaper Il Messaggero, reflecting the deadlock the country will have to confront in the next few weeks as sworn enemies are forced to work together to form a government.

Ratings agency Standard & Poor's said on Tuesday that policy choices of the next Italian government would be crucial for the country's creditworthiness, underlining the need for a coalition that can agree on new reforms.

Pier Luigi Bersani, head of the center-left Democratic Party (PD), has the difficult task of trying to agree a "grand coalition" with former prime minister Silvio Berlusconi, the man he blames for ruining Italy, or striking a deal with Grillo, a completely unknown quantity in conventional politics.

The alternative is new elections either immediately or within a few months, although both Berlusconi and Bersani have indicated that they want to avoid a return to the polls if possible: "Italy cannot be ungoverned and we have to reflect," Berlusconi said in an interview on his own television station.

For his part, Grillo, whose movement won the most votes of any single party, has indicated that he believes the next government will last no more than six months.

"They won't be able to govern," he told reporters on Tuesday. "Whether I'm there or not, they won't be able govern."

He said he would work with anyone who supported his policy proposals, which range from anti-corruption measures to green-tinted energy measures but rejected suggestions of entering a formal coalition: "It's not time to talk of alliances... the system has already fallen," he said.

The election, a massive rejection of the austerity policies applied by Prime Minister Mario Monti with the backing of international leaders from U.S. President Barack Obama to German Chancellor Angela Merkel, caused consternation across Europe.

German Finance Minister Wolfgang Schaeuble put a brave face on it, saying "that's democracy".

Spanish Foreign Minister Jose Manuel Garcia-Margallo was more pessimistic.

"This is a jump to nowhere that does not bode well either for Italy or Europe," he said.

A long recession and growing disillusionment with mainstream parties and tax-raising austerity fed a bitter public mood and contributed to the massive rejection of Monti, whose centrist coalition was relegated to the sidelines.

Projections by the Italian center for Electoral Studies showed that the center-left will have 121 seats in the Senate, against 117 for the center-right alliance of Berlusconi's PDL and the regionalist Northern League. Grillo would take 54.

That leaves no party with the majority in a chamber which a government must control to pass legislation.

"THE BELL IS RINGING"

On a visit to Germany, President Giorgio Napolitano said he would not comment until the parties had consulted with each other and Bersani called on Berlusconi and Grillo to "assume their responsibilities" to ensure Italy could have a government.

He warned that the election showed austerity policies alone were no answer to the economic crisis and said the result carried implications beyond Italy.

"The bell is ringing for Europe as well," he said in his first public comments since the election.

He said he would present a limited number of reform proposals to parliament, focusing on jobs, institutional reform and European policy.

However forming an alliance may be long and difficult and could test the sometimes fragile internal unity of the mainstream parties.

"The idea of a majority without Grillo is unthinkable. I don't know if anyone in the PD is considering it but I'm against it," said Matteo Orfini, a member of Bersani's PD secretariat.

"The idea of a PD-PDL government, even if it's backed by Monti, doesn't make any sense," he said.

For his part, Berlusconi won a boost when his Northern League ally Roberto Maroni won the election to become regional president of Lombardy, Italy's economic heartland and one of the richest and most productive areas of Europe.

For Italian business, with an illustrious history of export success, the election result brought dismay that there would be no quick change to what they see as a regulatory sclerosis that has kept the economy virtually stagnant for a decade.

"This is probably the worst possible scenario," said Francesco Divella, whose family began selling pasta under its eponymous brand in 1890 in the southern region of Puglia.

Berlusconi's campaign, mixing sweeping tax cut pledges with relentless attacks on Monti and Merkel, echoed many of the themes pushed by Grillo and underlined the increasingly angry mood of the Italian electorate.

But even if the next government turns away from the tax hikes and spending cuts brought in by Monti, it will struggle to revive an economy that has scarcely grown in two decades.

Monti was widely credited with tightening Italy's public finances and restoring its international credibility after the scandal-plagued Berlusconi, who is currently on trial for having sex with an under-age prostitute.

However, Monti struggled to pass the kind of structural reforms needed to improve competitiveness and lay the foundations for a return to economic growth. A weak center-left government may not find it any easier.

The view from some voters, weary of the mainstream parties, was unrepentant: "It's good," said Roger Manica, 28, a security guard in Rome, who voted for the center-left PD.

"Next time I'll vote 5-Star. I like that they are changing things, even if it means uncertainty. Uncertainty doesn't matter to me, for me what's important is a good person who gets things done," he said. "Look how well they've done."

(Additional reporting by Barry Moody, Gavin Jones, Lisa Jucca, Steven Jewkes, Steve Scherer, Catherine Hornby and Massimiliano Di Giorgio, Annika Breidthardt in Berlin. Writing by Philip Pullella and James Mackenzie; Editing by Peter Graff)

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Michelle Williams and Jason Segel Split

By Sarah Michaud

02/26/2013 at 07:45 PM EST

Jason Segel and Michelle Williams

AKM-GSI

The fairytale is over for Michelle Williams and Jason Segel.

The Oz the Great and Powerful star and the How I Met Your Mother actor split a few weeks ago after dating for a year, a source confirms to PEOPLE.

The long distance – Williams, 32, is based in New York City, while Segel, 33, primarily resides in Los Angeles – was the reason behind the breakup, the source adds.

Earlier in the month, the actress told In Style that she cherished public support of her relationship.

"If people are happy about it that makes me feel good ... Any kind sentiment that the world can feed back, well, I won't turn it down," she explained.

The couple, who were often seen out and about with 7-year-old Matilda, Williams' daughter with the late Heath Ledger, began sharing a Brooklyn apartment last fall.

Reps for the actors have not commented.

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C. Everett Koop, 'rock star' surgeon general, dies

NEW YORK (AP) — Dr. C. Everett Koop has long been regarded as the nation's doctor— even though it has been nearly a quarter-century since he was surgeon general.

Koop, who died Monday at his home in Hanover, N.H., at age 96, was by far the best known and most influential person to carry that title. Koop, a 6-foot-1 evangelical Presbyterian with a biblical prophet's beard, donned a public health uniform in the early 1980s and became an enduring, science-based national spokesman on health issues.

He served for eight years during the Reagan administration and was a breed apart from his political bosses. He thundered about the evils of tobacco companies during a multiyear campaign to drive down smoking rates, and he became the government's spokesman on AIDS when it was still considered a "gay disease" by much of the public.

"He really changed the national conversation, and he showed real courage in pursuing the duties of his job," said Chris Collins, a vice president of amfAR, the Foundation for AIDS Research.

Even before that, he had been a leading figure in medicine. He was one of the first U.S. doctors to specialize in pediatric surgery at a time when children with complicated conditions were often simply written off as untreatable. In the 1950s, he drew national headlines for innovative surgeries such as separating conjoined twins.

His medical heroics are well noted, but he may be better remembered for transforming from a pariah in the eyes of the public health community into a remarkable servant who elevated the influence of the surgeon general — if only temporarily.

"He set the bar high for all who followed in his footsteps," said Dr. Richard Carmona, who served as surgeon general a decade later under President George W. Bush.

Koop's religious beliefs grew after the 1968 death of his son David in a mountain-climbing accident, and he became an outspoken opponent of abortion. His activism is what brought him to the attention of the administration of President Ronald Reagan, who decided to nominate him for surgeon general in 1981. Though once a position with real power, surgeon generals had been stripped of most of their responsibilities in the 1960s.

By the time Koop got the job, the position was kind of a glorified health educator.

But Koop ran with it. One of his early steps involved the admiral's uniform that is bestowed to the surgeon general but that Koop's predecessors had worn only on ceremonial occasions. In his first year in the post, Koop stopped wearing his trademark bowties and suit jackets and instead began wearing the uniform, seeing it as a way to raise the visual prestige of the office.

In those military suits, he surprised the officials who had appointed him by setting aside his religious beliefs and feelings about abortion and instead waging a series of science-based public health crusades.

He was arguably most effective on smoking. He issued a series of reports that detailed the dangers of tobacco smoke, and in speeches began calling for a smoke-free society by the year 2000. He didn't get his wish, but smoking rates did drop from 38 percent to 27 percent while he was in office — a huge decline.

Koop led other groundbreaking initiatives, but perhaps none is better remembered than his work on AIDS.

The disease was first identified in 1981, before Koop was officially in office, and it changed U.S. society. It destroyed the body's immune system and led to ghastly death, but initially was identified in gay men, and many people thought of it as something most heterosexuals didn't have to worry about.

U.S. scientists worked hard to identify the virus and work on ways to fight it, but the government's health education and policy efforts moved far more slowly. Reagan for years was silent on the issue. Following mounting criticism, Reagan in 1986 asked Koop to prepare a report on AIDS for the American public.

His report, released later that year, stressed that AIDS was a threat to all Americans and called for wider use of condoms and more comprehensive sex education, as early as the third grade. He went on to speak frankly about AIDS in an HBO special and engineered the mailing of an educational pamphlet on AIDS to more than 100 million U.S. households in 1988.

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

Koop's speeches and empathetic approach made him a hero to a wide swath of America, including public health workers, gay activists and journalists. Some called him a "scientific Bruce Springsteen." AIDS activists chanted "Koop, Koop" at his appearances and booed other officials.

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

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

He got static from some staff at the White House for his actions, but Reagan himself never tried to silence Koop. At a congressional hearing in 2007, Koop spoke about political pressure on the surgeon general post. He said Reagan was pressed to fire him every day.

After his death was reported Monday, the tributes poured forth, including a statement from New York Mayor Michael Bloomberg, who has made smoking restrictions a hallmark of his tenure.

"The nation has lost a visionary public health leader today with the passing of former Surgeon General C. Everett Koop, who was born and raised in Brooklyn," Bloomberg said. "Outspoken on the dangers of smoking, his leadership led to stronger warning labels on cigarettes and increased awareness about second-hand smoke, creating an environment that helped millions of Americans to stop smoking — and setting the stage for the dramatic changes in smoking laws that have occurred over the past decade."

Dr. Anthony Fauci of the National Institutes of Health taught Koop what was known about AIDS during quiet after-hours talks in the early 1980s and became a close friend.

"A less strong person would have bent under the pressure," Fauci said. "He was driven by what's the right thing to do."

Carmona, a surgeon general years later, said Koop was a mentor who preached the importance of staying true to the science in speeches and reports — even when it made certain politicians uncomfortable.

"We remember him for the example he set for all of us," Carmona said.

Koop's nomination originally was met with staunch opposition. Women's groups and liberal politicians complained Reagan had selected him only because of his conservative views, especially his staunch opposition to abortion.

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

But Koop, a devout Presbyterian, was confirmed as surgeon general after he told a Senate panel he would not use the post to promote his religious ideology. He kept his word and eventually won wide respect with his blend of old-fashioned values, pragmatism and empathy.

Koop was modest about his accomplishments, saying before leaving office in 1989, "My only influence was through moral suasion."

The office declined after that. Few of his successors had his speaking ability or stage presence. Fewer still were able to secure the support of key political bosses and overcome the meddling of everyone else. The office gradually lost prestige and visibility, and now has come to a point where most people can't name the current surgeon general. (It's Dr. Regina Benjamin.)

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

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

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

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

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

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

Koop was the only son of a Manhattan banker and the nephew of a doctor. He said by age 5 he knew he wanted to be a surgeon and at age 13 he practiced his skills on neighborhood cats. He attended Dartmouth, where he received the nickname Chick, short for "chicken Koop." It stuck for life.

He received his medical degree at Cornell Medical College, choosing pediatric surgery because so few surgeons practiced it. In 1938, he married Elizabeth Flanagan, the daughter of a Connecticut doctor. They had four children. Koop's wife died in 2007, and he married Cora Hogue in 2010.

He was appointed surgeon-in-chief at Children's Hospital in Philadelphia and served as a professor at the University of Pennsylvania School of Medicine. He pioneered surgery on newborns and successfully separated three sets of conjoined twins. He won national acclaim by reconstructing the chest of a baby born with the heart outside the body.

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

___

Contributing to this report were Associated Press writers Wilson Ring in Montpelier, Vt.; Jeff McMillan in Philadelphia; and AP Medical Writer Lauran Neergaard in Washington.

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PEOPLE Live at the Oscars - Check Out Our Staffers' Tweets!

02/25/2013 at 07:35 PM EST

The Oscars hit the Dolby Theatre in L.A. Sunday night – and PEOPLE was there!

Editor Peter Castro was on the red carpet with Modern Family's Rico Rodriquez for the live pre-show event Backstage Pass – plus we had editors at the after parties and more!

Check out our best Tweets and pics from the show:

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Koop, who transformed surgeon general post, dies

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

___

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

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Wall Street trips and falls on cloudy Italian election

NEW YORK (Reuters) - Stocks on Monday suffered their biggest drop since November after a strong showing in Italian elections by groups opposed to the country's economic reforms triggered worry that Europe's debt problems could once again destabilize the global economy.

The decline marks the biggest percentage drop for the benchmark Standard & Poor's 500 Index since November7, and drove the S&P down to its lowest close since January 18. The CBOE Volatility Index <.vix> or VIX, Wall Street's favorite barometer of fear, surged 34 percent, its biggest jump since August 18, 2011.

Selling accelerated late in the trading session after the S&P 500 fell below the 1,500 level, which has acted as a significant support point. Monday marked the S&P's first close under 1,500 since February 4.

Italy's center-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's center-right bloc in the election for the lower house of parliament, three TV projections indicated. But any government must also command a majority in the Senate, a race that is decided by region.

The resulting gridlock in parliament could lead to new elections and cast into doubt Italy's ability to pay down its debt.

"Europe hasn't gone away as an issue, it is going to hang around, and it is rearing its ugly head today," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

"If someone gets elected who is simply not going to play by the rules, what are they going to do? It puts them in a real quandary here because their financial support, their monetary support is all stipulated by the fact that these austerity programs are going to be in place."

Earlier polls pointing to a center-left victory boosted stocks in Milan and other European markets, and also helped lift the S&P 500 to a session high of 1,525.84 on optimism that Italy would continue down its austerity path.

After a strong start to the year, equities have retreated more recently. The S&P 500's slight fall last week was its first weekly drop after a seven-week string of gains.

In Monday's volatile session, banks and other financial stocks were among the worst performers on worries about the sector's exposure to Italy's massive debt. The KBW Bank Index <.bkx> fell 2.7 percent.

The CBOE Volatility Index <.vix> ended at 18.99, up 34.02 percent.

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

Although the overall market lost ground on Monday, there were a few bright spots.

Barnes & Noble Inc shares shot up 11.5 percent to $15.06 after the bookseller's chairman offered to buy its declining retail business.

Amgen Inc shares climbed 3.1 percent to $89.55, after rival Affymax issued a voluntary recall of its only drug, an anemia treatment that competes with Amgen's top-selling red blood cell booster, Epogen. Affymax shares lost 85.4 percent to $2.42.

The FTSEurofirst-300 index of top European shares <.fteu3> edged up 0.04 percent and Italy's main FTSE MIB <.ftmib> ended up 0.7 percent after earlier gaining nearly 4 percent.

Political uncertainty on the home front, though, is also on Wall Street's mind.

U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted.

"Sitting out there is the one-thousand-pound gorilla - the sequester issue - and certainly nothing is happening there," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

Lowe's Companies Inc lost 4.8 percent to $35.86 after the home improvement retailer posted fourth-quarter earnings.

With 83 percent of the S&P 500 companies having reported results so far, 69 percent beat profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Volume was active with about 7.27 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, above the daily average of 6.46 billion.

Declining stocks outnumbered advancing ones on both the NYSE and the Nasdaq by a ratio of about 4 to 1.

(Editing by Kenneth Barry, Nick Zieminski and Jan Paschal)

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Cuban leader Raul Castro announces he will retire in 2018

HAVANA (Reuters) - Cuban leader Raul Castro announced on Sunday he would step down from power after his second term as president ends in 2018, and the new parliament named a 52-year-old rising star to become his first vice president and most visible successor.

Castro, 81, made the announcement in a nationally broadcast speech shortly after the Cuban National Assembly elected him to a second five-year term in the opening session of the new parliament.

"This will be my last term," Castro said.

In a surprise move, the new parliament named as his first vice president Miguel Diaz-Canel, a member of the political bureau who rose through the party ranks in the provinces to become the most visible possible successor to Castro. Diaz-Canel would succeed Castro if he cannot serve his full term.

The new government will almost certainly be the last headed up by the Castro brothers and their followers who have ruled Cuba since they swept down from the mountains in the 1959 revolution.

Raul Castro starts his second term immediately, leaving him free to retire in 2018, aged 86.

Former president Fidel Castro joined the meeting, in a rare public appearance. Since falling ill in 2006 and ceding the presidency to his brother, the elder Castro, 86, has given up official positions except as a deputy in the National Assembly.

Governments, Cuba watchers and Cubans were keenly observing to see if any new, and younger, faces might appear among the Council of State members, in particular its first vice president and five vice presidents.

Their hopes were partially fulfilled with Diaz-Canel's ascension. He replaces former first vice president, Jose Machado Ventura, 82, who will continue on as one of five vice presidents. Commander of the Revolution Ramiro Valdes, 80, and Gladys Bejerano, 66, the comptroller general were also re-elected as vice presidents.

Two other newcomers, Mercedes López Acea, 48, first secretary of the Havana communist party, and Salvador Valdes Mesa, 64, head of the official labor federation, also earned vice presidential slots.

Former vice president Esteban Lazo, member of the political bureau of the Communist Party, 68, left his post upon being named parliament president on Sunday, replacing Ricardo Alarcon, who served for 20 years.

Six of the Council's top seven members sit on the party's political bureau which is also lead by Castro.

The National Assembly meets for just a few weeks each year and delegates its legislative powers between sessions to the 31-member Council of State, which also functions as the nation's executive through the Council of Ministers it appoints.

Eighty percent of the 612 deputies, who were elected in an uncontested vote February 3 and with an average age under 50, were born after the Revolution.

(Editing by David Adams, Stacey Joyce and Vicki Allen)

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Channing Tatum & Jenna Dewan-Tatum Show Off Baby Bump at Oscars

By Maggie Coughlan

02/24/2013 at 06:45 PM EST

Channing Tatum and Jenna Dewan-Tatum

Jason Merritt/Getty

Who is your bump wearing?

Parents-to-be Channing Tatum and Jenna Dewan-Tatum brought a very special guest to Sunday night's 85th Annual Academy Awards – wearing a black lace, backless dress, Dewan-Tatum, 32, showed off her new curves, while husband Tatum revealed where their baby will be born.

"I'm walking the carpet, trying to keep it together tonight but we're good!" a radiant Dewan-Tatum told Ryan Seacrest on the red carpet Sunday night.

When asked by Seacrest if the couple had any plans to slow down for some "family time," Tatum, 32, replied: "We're gonna actually have the baby in London while I'm shooting so there will be no downtime whatsoever after that."

Tatum – who was named PEOPLE's 2012 Sexiest Man Alive – recently told PEOPLE that he's doing his homework before the baby arrives.

"I have never changed a diaper before, so I may need some help learning," the actor said at the time. "I don't have friends who have kids, so it's going to be an interesting experience to learn how to change a diaper."

The couple's first child is due this summer.

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FDA approves new targeted breast cancer drug

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Asian shares edge higher, yen falls on BOJ report

TOKYO (Reuters) - Asian shares edged higher on Monday, with investors still picking up shares battered by last week's steep plunge, while the yen fell to fresh lows on news a reflationary advocate could head the Bank of Japan next month.

The news Japan's government is likely to nominate Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, as its next central bank governor, is set to be a major factor in financial markets this week.

Markets are pondering whether Italy's weekend elections will produce a stable government, and the implications of that for euro zone cohesion, while Moody's credit downgrade on Britain will play on confidence in the pound and government bonds.

Investors also await testimony on Tuesday from Fed Chairman Ben Bernanke for further clues of when the Fed may slow or stop buying bonds. Financial markets were rattled last week after minutes of the Fed's January meeting suggested some Fed officials were mulling scaling back its strong monetary stimulus earlier than expected.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.1 percent, pulled higher by Australian shares <.axjo> which gained 0.6 percent on reassuring comments from U.S. Federal Reserve officials on the bank's current stimulus program, which has helped underpin risk sentiment globally.

South Korean shares <.ks11> opened up 0.2 percent, with the nation's new leader, who has shown willingness to talk down the won, being sworn in on Monday.

Tokyo's Nikkei stock average <.n225> opened 1.6 percent higher. <.t/>

Early on Monday, the yen touched its lowest since May 2010 of 94.61 yen against the dollar, while the euro rose to a high of 124.83 yen, still off its 34-month peak of 127.71 set early this month.

The Nikkei newspaper reported the Japanese government is likely to nominate Haruhiko Kuroda and Kikuo Iwata, both vocal advocates of aggressive monetary expansion, as BOJ governor and deputy governor.

The dollar fell sharply to below 93 yen last week on media reports that Toshiro Muto, a former financial bureaucrat perceived as less willing to take unconventional steps, was the frontrunner candidate for the top BOJ job.

"The dollar's move this morning is merely a rebound from disappointment on Muto last week. I don't think this topic will be enough to hoist the dollar above 95 yen," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo. "No matter who is elected at the BOJ, it will not affect the longer-term trend of a weak yen," he said.

Speculation over the BOJ has been a key factor driving the yen lower recently due to anticipation for strong reflationary measures, but other fundamental factors such as Japan's deteriorating trade balances and signs of firmer U.S. growth also supported a weakening yen trend.

Abe told Americans on Friday "I am back and so is Japan" and vowed to get the world's third biggest economy growing again.

Investors remained cautious before the full official results of Italy's elections come out on Tuesday, worried a potential political stalemate could impede Rome's progress on fiscal reforms.

The euro was up 0.1 percent to $1.3192, off Friday's six-week low of $1.31445.

Sterling fell to a 31-month low of $1.5073 early on Monday and a record low against the New Zealand dollar at NZ$1.8025 following Friday's one-notch downgrade of Britain's prized triple-A sovereign rating by Moody's.

Investors will also seek signs of recovery from the flash estimate of China's manufacturing PMI from HSBC/Markit due later in the session.

Wall Street ended higher on Friday, boosted strong earnings from Dow component Hewlett-Packard , but the benchmark Standard & Poor's Index <.spx> posted its first weekly decline of the year. European shares rose on Friday after data showed German business morale surged at its fastest pace in over two years in February.

Hedge funds and other big speculators cut their bullish bets on U.S. commodities by nearly $13 billion, the most in about 10 months, in the week to February 19 to $69 billion, just before oil and metals prices tumbled last week on rumors a commodities fund was dumping positions, trade data showed on Friday.

U.S. crude was up 0.1 percent to $93.26 a barrel.

(Editing by Eric Meijer)

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