Exclusive: U.S. authorities probe SAC for Weight Watchers – sources

(Reuters) – U.S. authorities are investigating Steven A. Cohen’s SAC Capital Advisors hedge fund for possible insider trading in the shares of the popular diet company Weight Watchers International Inc, according to people familiar with the matter.

The investigation focuses on trading in Weight Watchers shares in the first half of 2011, when SAC Capital had taken a sizeable position in the stock, and potentially could implicate the billionaire hedge fund manager, the sources said on Friday.

Regulatory filings show that Cohen’s $ 14 billion fund briefly held 2.1 million shares in Weight Watchers during the period under scrutiny by authorities – at which time the diet company’s stock price roughly doubled.

The inquiry is in its early stages and it is not clear whether anything improper was done either by SAC Capital or Cohen himself, said the people familiar with the matter, who requested anonymity. The trading in Weight Watchers would be permissible as long as it was based on fundamental research or derived from individuals who did not have access to non-public corporate information.

An SAC Capital spokesman said the firm was not aware of any investigation involving Weight Watchers. A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment. A spokesperson for Weight Watchers did not immediately respond to a request for comment.

The new line of pursuit ratchets up pressure on Cohen, 56, one of the hedge fund industry’s most successful and best-known managers. The spotlight the probe casts on SAC Capital and Cohen could further rattle the hedge fund’s investors, who account for roughly 40 percent of the firm’s capital.

Two weeks ago, U.S. prosecutors charged a former SAC Capital employee, Mathew Martoma, with using inside information to generate profits and avoid losses totaling $ 276 million in shares of two drug stocks. The U.S. Securities and Exchange Commission also has formally warned SAC Capital that the firm could face civil charges.

A number of SAC’s investors have said they have not made a decision on whether to redeem money from the firm. Investors have until mid-February to put in a redemption notice.

Martoma has not entered a plea but his lawyer has said he expects to be exonerated. SAC has declined to comment beyond saying, “Mr. Cohen and SAC are confident that they have acted appropriately.”

Martoma is the seventh former SAC Capital employee to be charged or implicated by federal authorities for insider trading. The criminal complaint against Martoma, who last worked for CR Intrinsic, an affiliated fund of SAC Capital in 2010, for the first time alleges that Cohen personally approved the decision to sell-out of a big stake the hedge fund had in shares of Elan Corp and Wyeth, now part of Pfizer Inc.

Separately, U.S. authorities are also investigating SAC for suspicious trading in shares of biotech company InterMune Inc. in 2010, according to one of the people familiar with the probes. Officials at InterMune weren’t immediately available for comment. The SAC spokesman declined to comment on the InterMune investigation.

Federal authorities have not charged Cohen, whose net worth is estimated by Forbes at about $ 8.8 billion as of September this year. The hedge fund manager has told his investors and 900 employees that neither he nor the firm has done anything improper in response to Martoma’s arrest.

It’s not clear what has prompted federal authorities to look into Stamford, Conn.-based SAC Capital‘s trading in shares of Weight Watchers. One of the people familiar with the investigation said authorities are looking at trading that both booked hefty profits and avoided losses for SAC Capital.

BIG MOVE INTO WEIGHT WATCHERS

Over his 20 years in the business, Cohen has emerged as one of the pioneers of sophisticated trading. His funds, which charge some of the highest fees in the $ 2 trillion industry, has boasted an average annual return of 30 percent since launch in 1992.

This year, SAC Capital‘s main fund is up about 12 percent, compared to the industry average of just over 5 percent. SAC Capital‘s only down year was in 2008, when it lost 19 percent of its value.

Cohen has endured federal authorities looking into trading at his firm for about five years now. The investigation into SAC Capital ran parallel with the federal government’s undercover investigation that led to the October 2009 arrest of Galleon founder Raj Rajaratnam, who was convicted by a federal jury on May 2011 on 14 counts of insider trading.

SAC Capital‘s big move into Weight Watcher’s stock in early 2011 gained attention in part because it came at a time that the once-heavyset Cohen had lost about 20 pounds. (It’s not clear if he used Weight Watchers.) The trader has said he lost the weight to help with a chronic bad back.

A first quarter 2011 regulatory filing for SAC Capital showed the firm had acquired 2.1 million shares of the stock. But by the end of the next quarter, a subsequent filing revealed the hedge fund had unloaded nearly all of those shares.

It is not uncommon for a rapid-fire trading firm like SAC Capital to move in and out stocks – even big positions. SAC Capital, in particular, is not known for holding stocks for a long time.

SAC Capital’s trading strategy relies on analysts and portfolio managers gathering information about a company’s prospects before making a trading decision. Cohen has told people privately he believes his firm has drawn unwanted scrutiny from the government because of its long history of success.

Cohen has become an avid art collector in recent years, with a number of Jeff Koons sculptures gracing the grounds of his 30-room mansion in Greenwich, Conn.

Cohen, who grew up on Long Island in Great Neck, New York, is also pursuing the kind of charitable legacy building done by other famous Wall Street money managers. In 2010, the North Shore-LIJ’s pediatric hospital was renamed the Steven and Alexandra Cohen Children’s Medical Center of New York, after Cohen and his second wife in recognition of their donations.

More recently, he took a minority ownership stake in the New York Mets baseball team after failing to win the rights to buy another team, the Los Angeles Dodgers.

(Reporting by Matthew Goldstein, Jennifer Ablan and Emily Flitter; Editing by Tiffany Wu and Bernard Orr)

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Election underscores Ghana’s democratic reputation

ACCRA, Ghana (AP) — Voters in Ghana selected their next president Friday in a ballot expected to mark the sixth transparent election in this West African nation, known as a beacon of democracy in a tumultuous region.

Proud of their democratic heritage, residents of this balmy, seaside capital trudged to the polls more than four hours before the sun was even up, standing inches apart in queues that in some places stretched 1,000-people deep.

By afternoon, some voters were getting agitated, after hitches with the use of a new biometric system caused delays at numerous polling stations.

Each polling station had a single biometric machine, and if it failed to identify the voter’s fingerprint, or if it broke down, there was no backup. At one polling station where the machine had broken down, a local chief said he’d barely moved a few inches: “I’m 58 years old, and I’ve been standing in this queue all day,” Nana Owusu said. “It’s not good.”

Late Friday, when it became clear that large numbers of people had not been able to vote, the election commission announced it would extend voting by a second day. This nation of 25 million is, however, deeply attached to its tradition of democracy, and voters were urging each other to remain calm while they waited their turn to choose from one of eight presidential contenders, including President John Dramani Mahama and his main challenger, Nana Akufo-Addo. The election commission

“Elections remind us how young our democracy is, how fragile it is,” said author Martina Odonkor, 44. “I think elections are a time when we all lose our cockiness about being such a shining light of democracy in Africa, and we start to get a bit nervous that things could go back to how they used to be.”

Ghana was once a troubled nation that suffered five coups and decades of stagnation, before turning a corner in the 1990s. It is now a pacesetter for the continent’s efforts to become democratic. No other country in the region has had so many elections deemed free and fair, a reputation voters hold close to their hearts.

The incumbent Mahama, a former vice president, was catapulted into office in July after the unexpected death of former President John Atta Mills. Before becoming vice president in 2009, the 54-year-old served as a minister and a member of parliament. He’s also written an acclaimed biography, recalling Ghana’s troubled past, called “My First Coup d’Etat.”

Akufo-Addo is a former foreign minister and the son of one of Ghana’s previous presidents. In 2008, Akufo-Addo lost the last presidential election to Mills by less than 1 percent during a runoff vote. Both candidates are trying to make the case that they will use the nation’s oil riches to help the poor.

Besides being one of the few established democracies in the region, Ghana also has the fastest-growing economy. But a deep divide still exists between those benefiting from the country’s oil, cocoa and mineral wealth and those left behind financially.

A group of men who had just voted gathered at a small bar a block away from a polling station in the middle class neighborhood of South Labadi. Danny Odoteye, 36, who runs the bar, said that the country’s economic progress is palpable and that the ruling party, and its candidate, are responsible for ushering in a period of growth.

“I voted for John Mahama,” he said. “Ghana is a prosperous country. Everything is moving smoothly.”

Administrator Victor Nortey, sitting on a plastic chair across from him, disagreed, saying the country’s newfound oil wealth should have resulted in more change.

“I voted for Nana Akufo-Addo,” He said. “Now we have oil. What is Mahama doing with the oil money?” Nortey said. “We can use that money to build schools.”

In an interview on the eve of the vote, Akufo-Addo told The Associated Press that the first thing he will do if elected is begin working on providing free high school education for all. “It’s a matter of great concern to me,” he said, adding that he plans to use the oil wealth to educate the population, industrialize the economy and create better jobs for Ghanaians.

Policy-oriented and intellectual, Akufo-Addo is favored by the young and urbanized voters. He was educated in England and comes from a privileged family. The ruling party has depicted him as elitist.

“The idea that merely because you are born into privilege that automatically means you are against the welfare of the ordinary people, that’s nonsense,” he said.

Ghana had one of the fastest growing economies in the world in 2011. Oil was discovered in 2007 and the country began producing it in December 2010.

Throughout the capital, new condominiums are rising up next to slums and luxury cars creep along narrow alleys lined with open sewers. A mall downtown features a Western-style cinema and is packed on weekends with middle class families. At the same time shantytowns are cropping up, packed with the urban poor.

Polls show that voters are almost evenly split over who can best deliver on the promise of development.

Kojo Mabwa said that he is voting for Akufo-Addo, because he is impressed by his promise of free education. He dismissed critics that say the project is too ambitious. “There is money,” he said. “(The ruling party) has done nothing for us. They are misusing our money.”

Paa Kwesi, a 30-year-old systems analyst, said he doesn’t think Akufo-Addo is making promises he can keep.

“He says he can do free education, but you have to crawl before you can walk. It’s not possible,” he said.

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Associated Press writer Francis Kokutse contributed to this report from Accra, Ghana.

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Crowdfunding websites clamor for clearer regulation

LONDON (Reuters) – A new breed of internet-based financiers are calling for action to end regulatory uncertainty they say is preventing them from getting money to the small and medium-sized businesses that need it.

The so-called crowdfunding sector raises cash from members of the public to fund lending and investment. Regulators, however, have proved resistant to pleas for adjustments to rules that are tailored to more traditional markets.

“Operators of these platforms find it difficult to launch and flourish because existing EU and UK regulation does not fit the new models,” operators within the sector said in an open letter to EU and UK policymakers on Friday.

The plea coincides with a summit to discuss proposals for regulating a market that has developed in reaction to reduced bank lending to small and medium-sized enterprises because of tougher capital rules and greater regulatory scrutiny.

A host of alternative financing models have cropped up online, many allowing individuals to lend to, or invest in, companies with sums from as little as 10 pounds ($ 16). Massolution, a research and advisory firm specializing in the sector, says that 1.2 billion euros ($ 1.6 billion) was raised globally from crowdfunding last year.

Though some crowdfunding websites have tried to fit their operations within the existing regulatory framework, most remain largely outside it.

Part of the problem in drawing up appropriate regulation is the wide range of activities involved. Some offer debt, some equity, while others seek donations for charity or funding for creative projects in return for some non-financial reward.

With little or no expected returns from the latter, the main regulatory focus would be on equity crowdfunding and peer-to-peer lending.

As well as making sure that individuals are aware of the inherent risk involved with putting money in start-ups, the industry wants to avoid the risk of scams by ensuring that platforms vet businesses adequately.

LOST IN THE CROWD

Britain’s Financial Services Authority (FSA) warned in August that inexperienced investors should be aware of the risks in crowdfunding websites. A few days later United States securities regulators put crowdfunding at the top of their annual investment scams list.

Views differ about how to tackle these risks without stifling an increasingly important source of funding, and the matter is complicated by the varying rules already in place in different countries across Europe.

Measures taken by Seedrs, the only crowdfunding website to have received FSA approval, include requiring investors to pass a test to show that they understand the risks.

“It is hard to come up with a whole securities regulation; sometimes it does have to be a bit incremental and adaptive,” Seedrs founder Jeff Lynn said. “There is no question at all this is going to be a space that will continue to move.”

Some would like the operation of such platforms to be a distinct regulated activity, but others argue for smaller steps, such as a cap on the sums that people can invest or lend.

The British government, keen to improve the flow of finance to small businesses to boost the sluggish economy, has set up a working group to look at all aspects of policy on such sites.

The FSA said that it considers authorization of crowdfunding schemes case by case. The European Commission, meanwhile, is considered as so far having had a largely observational role.

Though the introduction of a separate regulated activity could still be some way off, the co-founder of peer-to-peer site Zopa, Simon Deane-Johns, believes that increased engagement with governments and regulators shows that things are moving in the right direction.

“Over the next year or two it should become progressively easier to set up a platform,” he said, “possibly through a combination of the FSA understanding more readily where things fit within the current regime and balancing that with some self-regulation.”

(Editing by Alexander Smith and David Goodman)

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House panel seeks compounder group papers in meningitis probe

WASHINGTON (Reuters) – A U.S. congressional committee that oversees drug safety issues has asked a compounding pharmacists’ industry association to provide documents on the group’s role in helping pharmacies in their interactions with federal and state authorities.

The request to the International Academy of Compounding Pharmacists came as the House Energy and Commerce Committee continues an investigation into a deadly meningitis outbreak caused by contaminated compounded drugs.

In a letter released on Friday, 10 lawmakers cited a media report that the group “tutored pharmacists on how to sidestep” U.S. Food and Drug Administration requests for samples that would help the agency assess the quality of compounded drugs.

“Allegations that your association may have encouraged compounding pharmacists to attempt to impede the FDA from evaluating the efficacy and safety of their products, if true, raise serious concerns,” the lawmakers said.

The meningitis outbreak, linked to steroid injections from the Massachusetts-based New England Compounding Center, has sickened 541 people, 36 of whom have died, according to the U.S. Centers for Disease Control and Prevention.

(Reporting by Ros Krasny; Editing by Lisa Von Ahn)

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The Star is Dead. Her Film Isn’t

Three years after actress Brittany Murphy’s untimely death from pneumonia and anemia in 2009, her final film, an indie thriller called Something Wicked, finally completed post-production this week. The Eugene (Ore.) production company Merchant Films, which is currently seeking a distributor for the film, is caught in the unfortunate position of having to market a film without its most recognizable star. As of now, Merchant does not intend to include Murphy’s image in the main posters, says the movie’s writer and producer, Joe Colleran. Still, he says, many distributors have expressed interest in the past few days, and he is hoping for a spring 2013 release. Bloomberg Businessweek spoke with Colleran about how the filmmakers plan to manage in this difficult situation.

How have you had to change plans to market the film?
We did an original deal with Brillstein Entertainment Partners to represent the movie, and they have relationships with major studios. That hasn’t changed. What has changed is the time we delayed it to avoid exploitation. Normally it would be a two-year process. We shot it in Oregon, which takes longer than if you shoot it in Hollywood. The delay has been close to a year.

How will you walk that delicate line of promoting the film without being exploitative?
We don’t intend to run around marketing it as Brittany’s last movie. People know it is. I don’t think there’s any point in mentioning that any further. Her face is not on the key art. We will market it as a very suspenseful thriller. We’ll be marketing the genre of the movie. …You can go out virally, immediately [after her death] and build fan pages, and we didn’t. We thought that would be distasteful. We’re just starting that process now.

A lot of promoting the film involves doing interviews and red carpets.
That is a big difference. We won’t have [Brittany] promoting the movie nationally and internationally. We will not be able to have Brittany go on Letterman and Leno to do nationwide publicity, which she was excited to do. She was what they would have built the marketing campaign around. The other stars will have to replace her. The lead actress [Shantel VanSanten] is tremendous. They are very excited. They have larger responsibilities now, and they are anxious to promote it, because they really do look good in this movie.

Was the film altered after her death in any way?
No. There was only one scene she shot that was not in the film. It was one of the alternate endings. We’ll probably put it on the DVD so fans can see the different endings.

Tell me about finding a distributor for this film.
Genre movies—which are basically everything besides drama and comedy: action, thrillers, sci-fi—have a very loyal following. There’s a large segment of the younger audience, which is a key audience for distributors, that just goes to genre movies. The movie will probably get an R rating, which means the core audience will be 17 to 29, with a crossover of up to 34, because that’s what Brittany’s fan base is. That is the key audience that distributors go after, because they are easy to market to, they know where to find them, and they are frequent moviegoers.

Are you worried about critics?
Genre movies generally don’t tend to get critical acclaim anyway. Even if you’re a huge success like Twilight, critics trash it. Most critics don’t flock to genre movies. Fortunately, the audience we’re going after is not dependent on critics. They are dependent on word of mouth from their peers.

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Ghana election, test of democratic reputation

ACCRA, Ghana (AP) — Voters in Ghana were selecting their next president and a 275-seat parliament in elections Friday, solidifying the West African nation‘s reputation as a beacon of democracy in the region.

Some 14 million people are expected to turn out. President John Dramani Mahama, in office for only five months, is running against seven contenders. A former vice president, Mahama became president in July after the unexpected death of former President John Atta Mills. The 54-year-old is also a former minister and parliamentarian and has written an acclaimed biography, “My First Coup d’Etat.”

His main challenger is Nana Akufo-Addo, a former foreign minister and the son of one of Ghana’s previous presidents. The contender lost the 2008 election to Mills by less than 1 percent. Both men are trying to make the case that they will use the nation’s newfound oil wealth to help the poor.

Ghana, a nation of 25 million, is one of the few established democracies in the region as well as the fastest-growing economy. But a deep divide still exists between those benefiting from the country’s oil, cocoa and mineral wealth and those left behind financially.

In an interview on the eve of the vote, Akufo-Addo told The Associated Press that the first thing he will do if elected is begin working on providing free high school education for all. “It’s a matter of great concern to me,” he said, adding that he plans to use the nation’s oil wealth to educate the population, industrialize the economy and create better jobs for Ghanaians.

Policy-oriented and intellectual, Akufo-Addo is favored by the young and urbanized voters. He was educated in England and comes from a privileged family. The ruling party has depicted him as elitist, which Akufo-Addo calls “a little PR construct.”

“The idea that merely because you are born into privilege that automatically means you are against the welfare of the ordinary people, that’s nonsense,” he said.

Ghana had one of the fastest growing economies in the world in 2011. Allegations of corruption against the ruling party are rife.

Akufo-Addo said that if elected, he would not be able to weed out corruption in the government overnight.

“It’s a long fight,” he said. “But we build the institutions that can fight it.”

He said that in 30 years in politics he has never been accused of corruption.

Many analysts believe Mahama and Akufo-Addo are neck-and-neck.

Results are expected to be announced by Sunday, but could be delayed. If no one wins an absolute majority, a second round of voting will be held on December 28.

All candidates have signed a peace pact and have promised to accept the results of Friday’s poll.

Ghana, a nation of 25 million, has previously held five transparent elections in a row. Nearby Mali, which was also considered a model democracy, was plunged into chaos this March following a military coup.

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Associated Press writer Francis Kokutse contributed to this report from Accra, Ghana.

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Windows 8: A ‘Christmas gift for someone you hate’

Microsoft (MSFT) is no stranger to criticism these days, and the company’s new Windows 8 platform is once again the target of a scathing review from a high-profile user. Well-known Internet entrepreneur and MIT professor Philip Greenspun handed Windows 8 one of its most damning reviews yet earlier this week, calling the new operating system a “Christmas gift for someone you hate.” Greenspun panned almost every aspect of Microsoft’s new software, noting that Microsoft had four years to study Android and more than five to examine iOS, but still couldn’t build a usable tablet experience.

“The only device that I can remember being as confused by is the BlackBerry PlayBook,” Greenspun wrote on his blog after using Windows 8 on a Dell (DELL) XPS One All-in-One desktop PC. The acclaimed computer scientist noted that Microsoft omitted all of the best features from the most popular touch-focused platforms and instead created a user interface he describes as a “dog’s breakfast.”

“Suppose that you are an expert user of Windows NT/XP/Vista/7, an expert user of an iPad, and an expert user of an Android phone… you will have no idea how to use Windows 8,” Greenspun wrote.

He continued, “Some functions, such as ‘start an application’ or ‘restart the computer’ are available only from the tablet interface. Conversely, when one is comfortably ensconced in a touch/tablet application, an additional click will fire up a Web browser, thereby causing the tablet to disappear in favor of the desktop. Many of the ‘apps’ that show up on the ‘all apps’ menu at the bottom of the screen (accessible only if you swipe down from the top of the screen) dump you right into the desktop on the first click.”

The only praise Greenspun offered was that “some of the supplied apps are wonderful,” pointing to Microsoft’s Bing Finance application as an example.

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Latest James Bond movie breaks UK box office record

LONDON (Reuters) – “Skyfall“, the 23rd official James Bond movie, has become the most successful film in British box office history, earning 94.3 million pounds ($ 152 million), its producers said on Wednesday.

The tally, earned over 40 days, surpasses the previous record of 94.0 million pounds set by 2009 3D adventure film “Avatar” over its 11 month run in UK cinemas, although the figures do not take inflation into account.

Skyfall, which has been well received by critics, stars Daniel Craig in his third outing as 007, and is directed by Sam Mendes.

In it Bond and British spymaster M, played by Judi Dench, are pitted against technological wizard Silva (Javier Bardem) who is bent on revenge.

“We are very proud of this film and thank everybody, especially Daniel Craig and Sam Mendes, who have contributed to its success,” said co-producers Michael G. Wilson and Barbara Broccoli in a statement.

Globally, Skyfall has some way to go to match Avatar. It has earned $ 870 million in ticket sales around the world, according to movie tracking site Boxofficemojo.com, compared with Avatar’s record $ 2.8 billion.

According to the same website, Avatar’s adjusted box office total comes in at 14th in cinema history, with the 1939 classic “Gone With the Wind” in pole position.

(Reporting by Mike Collett-White, editing by Paul Casciato)

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Breast Cancer Vaccine a Reality for Women With HER-2 Negative Cancers

COMMENTARY | NeuVax, a breast cancer vaccine, is entering phase III trials. The drug’s manufacturer, Galena Biopharma, announced on Dec. 5, that it signed a distribution deal with TEVA Pharmaceuticals. TEVA will handle the global commercialization and distribution of the drug once it is out of trials. It is about time this is moving forward. We need to make progress toward ending this disease.

What is NeuVax?

A vaccine called NeuVax is close to being a reality for breast cancer patients. NeuVax is a vaccine, the first of its kind, to prevent breast cancer from recurring. A recurrence is when breast cancer returns to the same breast. If breast cancer appears in the other breast, it is not a recurrence but a new cancer.

Most women have a 15-20 percent chance of breast cancer recurring, even after a mastectomy. The implications of the vaccine are huge. It reduces the chance of breast cancer recurrence in women with node-positive, HER-2 negative breast cancers. About 75 percent of all breast cancer is HER-2 negative. The vaccine is given after the standard course of treatment is completed. It is not a replacement for radiation or chemotherapy. I would gladly try a vaccine over the currently available long-term recurrence preventions — all are hormone based and carry awful side effects.

Phase III trials

Unfortunately for me, there are no trials available in Arkansas. Even if there were, I am not eligible because my cancer is HER-2 positive, and I am thankfully, node-negative. This means that the cancer is not in my lymph system. Phase III trials are when the drug is actually tested in random settings on humans. This drug seems to be very promising. Right now, phase III trials are open in the United States and Canada. Israel will have at least four phase III trials opening soon. You can see if there are trials near you at the NeuVax website.

This vaccine has the potential to replace hormone therapies like tamoxifen and aromatase inhibitors. Both types of drugs have serious side effects. A vaccine, taken over the course of three years, reduces the time a patient needs to take medications and it helps to prevent recurrence. Hopefully the phase III trials go well and we get this vaccine available to breast cancer patients soon.

Lynda Altman was diagnosed with breast cancer in November 2011. She writes a series for Yahoo! Shine called “My Battle With Breast Cancer.”

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Wall Street gains as Apple rebounds; fiscal talks eyed

NEW YORK (Reuters) – Stocks managed slight gains by midday on Thursday as Broadcom‘s upbeat guidance and a turnaround in Apple shares helped lift technology stocks, while investors monitored news from Washington for signs of progress on the “fiscal cliff” negotiations.

Apple erased initial losses of as much as 3.7 percent at the open, which briefly brought the market capitalization of the world’s largest publicly traded company below $ 500 billion. By midday, Apple‘s stock was up 2.3 percent at $ 551.35 – a day after its worst drop in four years.

Tech stocks also got a lift from chipmaker Broadcom , up 2.2 percent at $ 33.06 a day after it forecast fourth-quarter revenue at the high end of its target range, citing slightly better-than-expected sales in its mobile business.

The S&P technology index <.gspt> gained 1 percent and ranked as the best performer among the S&P 500‘s 10 major sectors. The PHLX semiconductor index <.sox> rose 0.9 percent.</.sox></.gspt>

But budget discussions commanded center stage for investors. President Barack Obama said there could be a quick deal to avert the “fiscal cliff” – huge tax hikes and spending cuts set to begin in January, possibly driving the U.S. economy back into recession next year – if Republican leaders agree to raise tax rates for those making more than $ 250,000 a year.

While Republican leaders in the U.S. House of Representatives insist that raising tax rates on the rich is not negotiable, some GOP lawmakers now see it as inevitable to avoid the fiscal cliff.

“It’s really being held hostage to (the fiscal cliff negotiations) and the stock action of Apple,” said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

“We’re back in the mode of there’s a direct correlation between the market and Apple – traders seems to be focused on the movement of Apple, and what its impact is on the indices.”

Without action from Congress in the next few weeks, tax cuts on capital gains and dividends will expire at the end of 2012.

The Dow Jones industrial average <.dji> gained 8.64 points, or 0.07 percent, to 13,043.13. The Standard & Poor’s 500 Index <.spx> added 2.66 points, or 0.19 percent, to 1,411.94. The Nasdaq Composite Index <.ixic> climbed 19.82 points, or 0.67 percent, to 2,993.52.</.ixic></.spx></.dji>

Apple Inc’s rank in China’s smartphone market fell to No.6 in the third quarter as it faces tougher competition from Chinese brands, research firm IDC said on Thursday. Apple‘s 6.4 percent drop on Wednesday was its worst daily performance since December 2008 and dragged the Nasdaq Composite Index down 0.8 percent for the day.

Sirius XM Radio shares rose 1.8 percent to $ 2.83 after its board approved a $ 2 billion stock repurchase and declared a special dividend, giving a big payout to its largest shareholder, Liberty Media .

Garmin shares rose 4.7 percent to $ 41.56 after Standard & Poor’s said it would add the navigation device maker to the S&P 500 index. Garmin will replace R.R. Donnelley & Sons after the close of trading on December 11.

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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