Global shares rally on brighter global economic outlook

LONDON (Reuters) - World share markets extended a week-long rally on Thursday as manufacturing surveys in China and the United States boosted confidence over the growth outlook and euro zone data was not as weak as some had feared.

The single currency also touched a two-week high against the dollar, despite data indicating the euro zone's economy is on course for its deepest downturn since early 2009, on renewed optimism of a deal emerging to provide aid payments to Greece.

"The driving factors behind euro/dollar are that the global macroeconomic backdrop seems to be improving and people are pricing out the tail risk on Greece," said Arne Lohmann Rasmussen, head of currency research at Danske Bank.

The euro rose 0.3 percent to $1.2869, its highest level since November 7.

The prospects of a deal to help Athens were boosted when German Chancellor Angela Merkel said on Wednesday after the failure of overnight talks that an agreement was possible when euro zone ministers meet again on Monday.

The likelihood of a deal, combined with better economic data and a growing view that a resolution can be found to the U.S. fiscal crisis lifted the MSCI's world equity index 0.3 percent to 325.75 points, putting it on track for its best week since mid-September.

Europe's FTSE Eurofirst 300 index rose 0.4 percent to a two-week high of 1,101.90 points, with London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX between 0.3 and 0.7 percent higher.

However, trading across all markets was subdued, with U.S. markets closed for the Thanksgiving holiday.

CHINA BOOST

Confidence in the global economic outlook got its biggest lift from the HSBC flash Manufacturing Purchasing Managers Index (PMI) for China, which pointed to expansion after seven consecutive quarters of slowdown.

"There have been a lot of concerns regarding the outlook for global growth. In this context, any improvement in Chinese data is welcome, given that investors are still risk averse," said Robert Parkes, equity strategist at HSBC Securities.

The Chinese data followed an report on Wednesday showing U.S. manufacturing grew in November at its quickest pace in five months, indicating strong economic growth in the fourth quarter.

PMI data on the manufacturing and services sectors in Europe's two biggest economies of Germany and France added to the better tone, revealing that conditions had not worsened in November, though both economies are still contracting.

However, the PMI numbers for the wider euro zone remain extremely weak, pointing to the recession-hit region shrinking by about 0.5 percent in the current quarter - its sharpest contraction since the first quarter of 2009.

BOND DEMAND

Amid the improving appetite for riskier assets, Spain sold 3.88 billion euros ($4.97 billion) of new government bonds on Thursday, though it has already raised enough funds for this year's needs.

The average yield on the three-year bonds in the auction was 3.617 percent, compared with 3.66 percent at a sale earlier in November and a 2012 average of 3.79 percent.

Ten-year Spanish yields were 6 basis points lower on the day at 5.67 percent, having traded above 6 percent at the start of the week.

German 10-year bonds yields, which tend to rise as investors' anxiety over the euro zone outlook ease, were up slightly at 1.439 percent.

COMMODITIES STEADY

Commodity prices gained some support form the improving outlook for world demand from all the PMI data, but prospects of only modest global growth in 2013 kept gains in check.

London copper rose 0.6 percent to $7,740 a metric tonne, and spot gold inched up to $1,730 an ounce.

Brent crude oil dipped under $111 per barrel as a ceasefire between Israel and Gaza's Hamas rulers eased concerns over the impact the unrest may have on supply from the region.

Brent slipped 34 cents to $110.52 a barrel, while U.S. crude was steady at $87.38.

(Reporting by Richard Hubbard; Editing by Will Waterman)

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Cease-Fire Deal Elusive in Gaza Conflict as U.S. Widens Its Role

JERUSALEM — To a backdrop of air strikes and mounting casualties, American efforts to negotiate a cease-fire in the latest Gaza fighting between Israel and Hamas continued onWednesday but the struggle to achieve even a brief pause in the fighting emphasized the obstacles to finding any lasting solution.

Israeli airstrikes overnight continued into Wednesday morning, hitting government buildings, the smuggling tunnels under the southern Rafah border crossing, and a bridge on the beach road that is one of three linking Gaza City to the central area of the strip. The Hamas healthy ministry said the Palestinian death toll stood at 140 at noon, with 1,100 injured. At least a third of those killed are believed to have been militants.

The eight-day conflict in the Gaza Strip also appeared to have spilled onto the streets of Tel Aviv on Wednesday with what police described as a bomb blast aboard a civilian bus. Eleven people were injured, one of them seriously.

The latest exchanges, which included the interception of at least two rockets fired from Gaza, came as Secretary of State Hillary Rodham Clinton was reported to have held talks with Palestinian leaders in the West Bank and Israeli leaders in Jerusalem. She was scheduled to fly on Wednesday to Cairo where Egyptian-brokered ceasefire talks have thus far been inconclusive.

Around noon on Wednesday in the Gaza Strip, according to the Hamas government media office, a bomb hit the house of Issam Da’alis, an adviser to Ismail Haniya, the Hamas prime minister. The house had been evacuated. Earlier, a predawn airstrike near a mosque in the Jabaliya Refugee Camp killed a 30-year-old militant, a spokesman said, and F-16 bombs destroyed two houses in the central Gaza Strip.

There were 23 punishing strikes against the southern tunnels that are used to bring weapons as well as construction material, cars and other commercial goods into Gaza from the Sinai peninsula.

Within Gaza City, Abu Khadra, the largest government office complex, was obliterated overnight. Damage was also caused to shops, including two banks and a tourism office, and electricity cables fell on the ground and were covered in dust.

Separately, an F-16 bomb created a 20-foot crater in an open area in a stretch of hotels occupied by foreign journalists. Several of the hotels had windows blown out by the strike around 2 a.m., but no one was reported injured. By morning, the hole in the ground had filled with sludgy water, apparently from a burst pipe, appearing almost like a forgotten swimming hole with walls made of sand and cracked cinder block.

Surveying damage near a government complex, Raji Sourani of the Palestinian Center for Human Rights said Gaza civilians were “in the eye of the storm,” accusing Israel of “inflicting pain and terror” on them. Israeli officials accuse Hamas of locating military sites in or close to civilian areas. 

Overnight, as the conflict entered its eighth day, the Israeli military said in Twitter feeds that “more than 100 terror sites were targeted, of which approximately 50 were underground rocket launchers.” The targets included the Ministry of Internal Security in Gaza, described as “one of the Hamas’ main command and control centers.”

While there was no immediate or formal claim of responsibility for the bus bombing in Tel Aviv, a message on a Twitter account in the name of the Al Qassam Brigades, the armed wing of the Hamas authorities in the Gaza Strip, declared: “We told you IDF that our blessed hands will reach your leaders and soldiers wherever they are, ‘You opened the Gates of Hell on Yourselves.’” The letters IDF refer to the Israel Defense Forces.

On several occasions since the latest conflagration seized Gaza last week, militants have aimed rockets at Tel Aviv but they have either fallen short, landed in the sea or been intercepted. Hundreds of rockets fired by militants in Gaza have struck other targets.

But the bombing seemed to mark the first time in the current fighting that violence had spread directly onto the streets of Tel Aviv.

On Tuesday — the deadliest day of fighting in the conflict — Secretary of State Clinton arrived hurriedly in Jerusalem and met with Prime Minister Benjamin Netanyahu of Israel to push for a truce. Her planned visit to Cairo on Wednesday to consult with Egyptian officials in contact with Hamas placed her and the Obama administration at the center of a fraught process with multiple parties, interests and demands.

Before leaving for Cairo, news reports said, Mrs. Clinton headed to the West Bank to meet Mahmoud Abbas, the head of the Palestinian Authority, which is estranged from the Hamas rulers of the Gaza Strip and has increasingly strained ties with Israel over a contentious attempt to upgrade the Palestinian status at the United Nations to that of a nonmember state. Mrs. Clinton was to meet again with Mr. Netanyahu before heading for Egypt, the reports said.

Ethan Bronner reported from Jerusalem, and David D. Kirkpatrick from Cairo. Reporting was contributed by Jodi Rudoren and Fares Akram from Gaza; Isabel Kershner from Jerusalem; Alan Cowell from London; Peter Baker from Phnom Penh, Cambodia; David E. Sanger and Mark Landler from Washington; Andrea Bruce from Rafah, and Rick Gladstone from New York.

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The Voice: Top Eight Contestants Revealed

TV Watch

By Julia Haskins

11/20/2012 at 10:05 PM EST

From left: Adam Levine, Cee Lo Green, Christina Aguilera, Blake Shelton and host Carson Daly

Mark Seliger/NBC

Following what Blake Shelton called the "best episode of The Voice we've ever had", spirited group performances on Tuesday night's show kept the energy up and distracted viewers just long enough from the business at hand – impending eliminations.

Christina Aguilera brought the heat with her song "Let There Be Love." Rascal Flatts shared their hit "Changed." Later, Adam Levine performed a rendition of Queen's "Crazy Little Thing Called Love," followed by the contestants taking on Pat Benatar's "Hit Me with Your Best Shot."

But once again, the decisions about who would stay and who would go were completely up to the viewers. No input from the coaches could save contestants this time. Keep reading to find out which contestants will sing again next week ...

The first round of results turned out to be good news for Nicholas David and Cassadee, later joined by Dez Duron and Cody Belew in the top eight.

America also gave Terry McDermott, Melanie Martinez, Trevin Hunte and Amanda Brown another shot at superstardom.

That means Bryan Keith and Sylvia Yacoub won't be singing again on Monday night's episode.

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OB/GYNs back over-the-counter birth control pills

WASHINGTON (AP) — No prescription or doctor's exam needed: The nation's largest group of obstetricians and gynecologists says birth control pills should be sold over the counter, like condoms.

Tuesday's surprise opinion from these gatekeepers of contraception could boost longtime efforts by women's advocates to make the pill more accessible.

But no one expects the pill to be sold without a prescription any time soon: A company would have to seek government permission first, and it's not clear if any are considering it. Plus there are big questions about what such a move would mean for many women's wallets if it were no longer covered by insurance.

Still, momentum may be building.

Already, anyone 17 or older doesn't need to see a doctor before buying the morning-after pill — a higher-dose version of regular birth control that can prevent pregnancy if taken shortly after unprotected sex. Earlier this year, the Food and Drug Administration held a meeting to gather ideas about how to sell regular oral contraceptives without a prescription, too.

Now the influential American College of Obstetricians and Gynecologists is declaring it's safe to sell the pill that way.

Wait, why would doctors who make money from women's yearly visits for a birth-control prescription advocate giving that up?

Half of the nation's pregnancies every year are unintended, a rate that hasn't changed in 20 years — and easier access to birth control pills could help, said Dr. Kavita Nanda, an OB/GYN who co-authored the opinion for the doctors group.

"It's unfortunate that in this country where we have all these contraceptive methods available, unintended pregnancy is still a major public health problem," said Nanda, a scientist with the North Carolina nonprofit FHI 360, formerly known as Family Health International.

Many women have trouble affording a doctor's visit, or getting an appointment in time when their pills are running low — which can lead to skipped doses, Nanda added.

If the pill didn't require a prescription, women could "pick it up in the middle of the night if they run out," she said. "It removes those types of barriers."

Tuesday, the FDA said it was willing to meet with any company interested in making the pill nonprescription, to discuss what if any studies would be needed.

Then there's the price question. The Obama administration's new health care law requires FDA-approved contraceptives to be available without copays for women enrolled in most workplace health plans.

If the pill were sold without a prescription, it wouldn't be covered under that provision, just as condoms aren't, said Health and Human Services spokesman Tait Sye.

ACOG's opinion, published in the journal Obstetrics & Gynecology, says any move toward making the pill nonprescription should address that cost issue. Not all women are eligible for the free birth control provision, it noted, citing a recent survey that found young women and the uninsured pay an average of $16 per month's supply.

The doctors group made clear that:

—Birth control pills are very safe. Blood clots, the main serious side effect, happen very rarely, and are a bigger threat during pregnancy and right after giving birth.

—Women can easily tell if they have risk factors, such as smoking or having a previous clot, and should avoid the pill.

—Other over-the-counter drugs are sold despite rare but serious side effects, such as stomach bleeding from aspirin and liver damage from acetaminophen.

—And there's no need for a Pap smear or pelvic exam before using birth control pills. But women should be told to continue getting check-ups as needed, or if they'd like to discuss other forms of birth control such as implantable contraceptives that do require a physician's involvement.

The group didn't address teen use of contraception. Despite protests from reproductive health specialists, current U.S. policy requires girls younger than 17 to produce a prescription for the morning-after pill, meaning pharmacists must check customers' ages. Presumably regular birth control pills would be treated the same way.

Prescription-only oral contraceptives have long been the rule in the U.S., Canada, Western Europe, Australia and a few other places, but many countries don't require a prescription.

Switching isn't a new idea. In Washington state a few years ago, a pilot project concluded that pharmacists successfully supplied women with a variety of hormonal contraceptives, including birth control pills, without a doctor's involvement. The question was how to pay for it.

Some pharmacies in parts of London have a similar project under way, and a recent report from that country's health officials concluded the program is working well enough that it should be expanded.

And in El Paso, Texas, researchers studied 500 women who regularly crossed the border into Mexico to buy birth control pills, where some U.S. brands sell over the counter for a few dollars a pack. Over nine months, the women who bought in Mexico stuck with their contraception better than another 500 women who received the pill from public clinics in El Paso, possibly because the clinic users had to wait for appointments, said Dr. Dan Grossman of the University of California, San Francisco, and the nonprofit research group Ibis Reproductive Health.

"Being able to easily get the pill when you need it makes a difference," he said.

___

Online:

OB/GYN group: http://www.acog.org

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Stock futures flat on Greek deal impasse; data on tap

NEW YORK (Reuters) - Stock index futures were little changed on Wednesday ahead of data on the labor market and consumer confidence even after international lenders were unable to come to a deal on emergency aid for Greece.

For the second consecutive week, euro zone finance ministers, the International Monetary Fund and the European Central Bank were unable to agree on how to make the country's debt sustainable, which is needed before the next cash infusion can be made to the fiscally beleaguered nation.

The FTSEurofirst 300 <.fteu3> edged up 0.06 percent at 1,095.13.

Investors will also look to weekly initial jobless claims at 8:30 a.m. (1330 GMT) for signs of improvement in the labor market. Economists in a Reuters survey forecast a total of 410,000 new filings compared with 439,000 in the prior week.

At 8:58 a.m. (1358 GMT), information services company Markit releases U.S. flash Markit Manufacturing PMI for November, expected to show a reading of 51, a repeat of the October number.

The Thomson Reuters/University of Michigan Surveys of Consumers release final November consumer sentiment index is set for release at 9:55 a.m. (1455 GMT). Economists in a Reuters survey expect a reading of 84.5 compared with 84.9 in the final October report.

Shortly after at 10 a.m. (1500 GMT) the Conference Board releases its report on October leading economic indicators. Economists in a Reuters survey forecast a 0.2 percent rise compared with a 0.6 percent rise in September.

S&P 500 futures rose 1.5 points and were roughly even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 6 points, and Nasdaq 100 futures added 2.5 points.

Volume is expected to be light ahead of the Thanksgiving Day holiday on Thursday.

The National Labor Relations Board (NLRB) said it is unlikely to make any decision before Thursday's Thanksgiving Holiday on Wal-Mart Stores Inc's push to stop protests and rallies outside its stores, a blow to Wal-Mart's attempt to stop workers and their supporters from staging major protests at Walmart discount stores on "Black Friday.

Business software provider Salesforce.com Inc beat Wall Street expectations for the third quarter and maintained its earnings outlook for the rest of its fiscal year despite the uncertain economic outlook.

Children's book publisher Scholastic Corp reduced its forecast for the fiscal year ending May 31, 2013 on lower sales in its high-margin educational business.

Asian shares fell after the failure to reach a deal on another bailout for Greece, a day after Federal Reserve Chairman Ben Bernanke highlighted the dangers of a U.S. fiscal crisis.

(Reporting by Chuck Mikolajczak)

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Clinton to Visit Israel in Effort to Defuse Gaza Conflict

PHNOM PENH, Cambodia — President Obama sent Secretary of State Hillary Rodham Clinton to the Middle East on Tuesday to try to defuse the conflict in Gaza, the White House announced.

Jason Reed/Reuters

Secretary of State Hillary Rodham Clinton and President Obama in Phnom Penh on Monday.

Mrs. Clinton, who accompanied Mr. Obama on his three-country Asia trip, left on her own plane immediately for the region, where she will stop first in Jerusalem to meet with Prime Minister Benjamin Netanyahu of Israel, then head to the West Bank to meet with Palestinian leaders and finally to Cairo to consult with Egyptian officials.

The decision to dispatch Mrs. Clinton dramatically deepens the American involvement in the crisis. Mr. Obama, on an Asian tour, made a number of late-night phone calls to the Middle East on Monday night that contributed to his conclusion that he had to become more engaged and that Mrs. Clinton might be able to accomplish something.

With the United Nations Secretary General Ban Ki-moon also scheduled to arrive in Israel on Tuesday, a senior official in the prime minister’s office said Israel decided to give more time to diplomacy before launching a ground invasion into Gaza. But Israel has not withdrawn other options.

“I prefer a diplomatic solution. I hope that we can get one but if not, we have every right to defend ourselves with other means and we shall use them,” Prime Minister Netanyahu said in a statement at the start of a meeting in Jerusalem with German Foreign Minister Guido Westerwelle.

“As you know, we seek a diplomatic unwinding to this, through the discussions of cease-fire,” Mr. Netanyahu added. “But if the firing continues we will have to take broader action, and we won’t hesitate to do so.”

The Health Ministry in Gaza said the death toll had climbed by late Tuesday morning to 112, roughly half of them civilians and including children. Three Israelis died in a rocket attack last week.After an Asian summit dinner in Phnom Penh on Monday night, Mr. Obama called President Mohamed Morsi of Egypt to discuss the situation, then spoke with Mr. Netanyahu and called Mr. Morsi back. He was up until 2:30 a.m. on the phone, the White House said. He consulted with Mrs. Clinton repeatedly on the sidelines of the Asian summit meetings on Tuesday.

“This morning, Secretary Clinton and the president spoke again about the situation in Gaza and the they agreed that it makes sense for the secretary to travel to the region so Secretary Clinton will depart today,” said Benjamin Rhodes, a deputy national security adviser to Mr. Obama. “Her visits will build on the engagement that we’ve undertaken in the last several days.”

Mr. Rhodes said that “any resolution to this has to include an end to that rocket fire” by Hamas militants on Israeli communities but “the best way to solve this is through diplomacy.”

He added: “It’s in nobody’s interest to see an escalation of the military conflict.”

Mrs. Clinton will not meet with Hamas representatives on her trip, but with leaders of the Palestinian leadership in the West Bank, which is at odds with the Hamas rulers of the Gaza Strip. “We do not engage directly with Hamas,” Mr. Rhodes said.

Instead, Mr. Obama is focused on leveraging Egypt’s influence with Hamas to press for a halt to the rocket attacks. “We believe Egypt can and should be a partner in achieving that outcome,” Mr. Rhodes said.

Mr. Rhodes reaffirmed that the United States supports Israel’s right to defend itself and said Mr. Obama did not ask Mr. Netanyahu to hold off a ground incursion into Gaza.

In Jerusalem, an official in the prime minister’s office said that the country’s top nine ministers, who make up the inner security cabinet, held discussions late into the night on the state of the diplomatic efforts and Israel’s military operation in Gaza. The goal of the operation, Israel says, is to end years of rocket fire by Gaza militants against southern Israel.

Egypt has been brokering efforts, with American involvement, for a cease-fire. “What is on the table is not there yet. It does not bring about what we need,” the official said, referring to Israel’s demands for an end to the threat of rocket fire.

Gaza militants fired more than 70 rockets in heavy barrages at southern Israel on Tuesday morning and 8 of them struck in densely populated areas.

Peter Baker reported from Phnom Penh, Cambodia, and Isabel Kershner from Jerusalem. Jodi Rudoren contributed reporting from Gaza City.

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Ashton Kutcher & Mila Kunis Share Romantic (and Rainy) Night in Rome

By Maggie Coughlan

11/20/2012 at 07:45 AM EST

Ashton Kutcher and Mila Kunis

XPosure

Ashton Kutcher and Mila Kunis have taken their romance (and appetites) to the Eternal City.

Shielded by a large umbrella, on Sunday the couple was photographed leaving Antica Pesa restaurant in Rome. (Kunis is in town to shoot her new movie, The Third Person.)

At dinner, the pair ordered a number of the restaurant's specialties, including Parma ham crudo and mozzarella, eggplant parmigiana, mini beef sliders, pasta with chickpeas, a salad with marinated anchovies and much more. They also saved room for dessert: a thousand layer pastry with cream and fresh berries. And the couple washed down their meal with a bottle of red wine.

While in Rome, the two have also been spotted taking evening strolls and holding hands in the cobblestone streets in the center of Rome and sightseeing.

The Rome visit has been just another romantic rendezvous for the couple who have been spotted doing everything from spoon feeding each other to relaxing with foot massages all over the world.

Most recently, Kutcher, 34, and Kunis, 29, visited Sydney, Australia together.

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New push for most in US to get at least 1 HIV test

WASHINGTON (AP) — There's a new push to make testing for the AIDS virus as common as cholesterol checks.

Americans ages 15 to 64 should get an HIV test at least once — not just people considered at high risk for the virus, an independent panel that sets screening guidelines proposed Monday.

The draft guidelines from the U.S. Preventive Services Task Force are the latest recommendations that aim to make HIV screening simply a routine part of a check-up, something a doctor can order with as little fuss as a cholesterol test or a mammogram. Since 2006, the Centers for Disease Control and Prevention also has pushed for widespread, routine HIV screening.

Yet not nearly enough people have heeded that call: Of the more than 1.1 million Americans living with HIV, nearly 1 in 5 — almost 240,000 people — don't know it. Not only is their own health at risk without treatment, they could unwittingly be spreading the virus to others.

The updated guidelines will bring this long-simmering issue before doctors and their patients again — emphasizing that public health experts agree on how important it is to test even people who don't think they're at risk, because they could be.

"It allows you to say, 'This is a recommended test that we believe everybody should have. We're not singling you out in any way,'" said task force member Dr. Douglas Owens of Stanford University and the Veterans Affairs Palo Alto Health Care System.

And if finalized, the task force guidelines could extend the number of people eligible for an HIV screening without a copay in their doctor's office, as part of free preventive care under the Obama administration's health care law. Under the task force's previous guidelines, only people at increased risk for HIV — which includes gay and bisexual men and injecting drug users — were eligible for that no-copay screening.

There are a number of ways to get tested. If you're having blood drawn for other exams, the doctor can merely add HIV to the list, no extra pokes or swabs needed. Today's rapid tests can cost less than $20 and require just rubbing a swab over the gums, with results ready in as little as 20 minutes. Last summer, the government approved a do-it-yourself at-home version that's selling for about $40.

Free testing is available through various community programs around the country, including a CDC pilot program in drugstores in 24 cities and rural sites.

Monday's proposal also recommends:

—Testing people older and younger than 15-64 if they are at increased risk of HIV infection,

—People at very high risk for HIV infection should be tested at least annually.

—It's not clear how often to retest people at somewhat increased risk, but perhaps every three to five years.

—Women should be tested during each pregnancy, something the task force has long recommended.

The draft guidelines are open for public comment through Dec. 17.

Most of the 50,000 new HIV infections in the U.S. every year are among gay and bisexual men, followed by heterosexual black women.

"We are not doing as well in America with HIV testing as we would like," Dr. Jonathan Mermin, CDC's HIV prevention chief, said Monday.

The CDC recommends at least one routine test for everyone ages 13 to 64, starting two years younger than the task force recommended. That small difference aside, CDC data suggests fewer than half of adults under 65 have been tested.

"It can sometimes be awkward to ask your doctor for an HIV test," Mermin said — the reason that making it routine during any health care encounter could help.

But even though nearly three-fourths of gay and bisexual men with undiagnosed HIV had visited some sort of health provider in the previous year, 48 percent weren't tested for HIV, a recent CDC survey found. Emergency rooms are considered a good spot to catch the undiagnosed, after their illnesses and injuries have been treated, but Mermin said only about 2 percent of ER patients known to be at increased risk were tested while there.

Mermin calls that "a tragedy. It's a missed opportunity."

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Stock futures flat after two-day rally, France downgrade

NEW YORK (Reuters) - Stock index futures were little changed on Tuesday, indicating the S&P 500 index may pause after a two-day rally as a credit downgrade of France by Moody's reminded investors of the problems plaguing the global economy.

The benchmark S&P index had risen more than 2 percent in the previous two sessions, spurring by optimism a deal could be reached in the U.S. to stave off the looming "fiscal cliff," a series of tax and spending changes that will begin to take effect in the new year.

Moody's Investors Service cut France's sovereign rating by one notch to Aa1 after the market close on Monday, citing an uncertain fiscal outlook as a result of the weakening economy.

While the move was expected after a similar downgrade by peer Standard & Poor's in January, it served as a reminder of the headwinds faced by the global economy as a result of the region's debt crisis.

Also in the euro zone, finance ministers will give a tentative go-ahead for the disbursement of 44 billion euros in emergency loans to Greece on Tuesday, but the money will only be paid on December 5 if the country meets all remaining conditions.

The S&P 500 index had fallen 5.3 percent between election day and the start of the rebound as angst over the prospects of a deal gave investors reason to sell stocks broadly in an effort to limit the tax hit both this year and in 2013.

President Barack Obama and the U.S. Congress hope to start serious negotiations after this week's Thanksgiving holiday on Thursday on how to avoid the "fiscal cliff," which has politicians and economists worried about the direction of the world's largest economy.

S&P 500 futures rose 1.1 points and were roughly even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 2 points, and Nasdaq 100 futures added 3 points.

Economic data expected on Tuesday includes housing starts and permits data for October at 8:30 a.m. (1330 GMT). Economists in a Reuters survey forecast a 840,000 annualized rate versus 872,000 in September, and a total of 865,000 permits compared with 890,000 in the prior month.

Later in the session at 12:15 p.m (1715 GMT), Federal Reserve's Chairman Ben Bernanke speaks before the Economic Club of New York, a speech that may offer a fresh chance to gauge the Fed's appetite for more monetary stimulus. Market participants currently expect the Fed to step up asset purchases in 2013 after Operation Twist expires.

Best Buy reports quarterly results, expected to show a fall in earnings per shares to $0.12 from $0.47, as the world's largest consumer electronics chain struggles to fend off online and discount rivals. Investors are awaiting word on whether founder and top shareholder Richard Schulze comes through with a formal bid to take the company private.

As earnings season draws to a close, other companies expected to post earnings Tuesday include Salesforce.com Inc , Campbell Soup Co , H.J. Heinz Co and Hewlett-Packard Co .

European shares edged lower on Tuesday, with France's CAC 40 index <.fchi> among the worst hit after ratings agency Moody's stripped the euro zone's No. 2 economy of its top credit rating. <.eu/>

Asian shares rose on hopes of a compromise in the U.S. fiscal cliff negotiations.

(Reporting by Chuck Mikolajczak Editing by W Simon)

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Palestinian Death Toll Rises as Israel Presses Onslaught

GAZA CITY — After a night of sustained Israeli strikes by air and sea and a morning of rocket attacks on Israel, the Health Ministry here said on Monday the Palestinian death toll in six days of conflict had risen to 91 with 700 wounded, including 200 children as the assault ground on unrelentingly despite efforts toward a ceasefire.

The casualties — 19 people reported killed since midnight local time — included Palestinians killed in strikes by warplanes and a drone attack on two men on a motorcycle. Another drone attack killed the driver of a taxi hired by journalists and displaying ‘Press” signs, although it was not clear which journalists hired it, Palestinian officials said. On Sunday, Israeli forces attacked two buildings housing local broadcasters and production companies used by foreign outlets, but Israeli officials denied targeting journalists.

An Israeli bomb pummeled a home deep into the ground here on Sunday, killing 11 people, including nine in three generations of a single family, in the deadliest single strike in six days of cross-border conflict. Members of the fanily were buried Monday in a rite that turned into a gesture of defiance and a rally supporting Gaza’s militant Hamas rulers. A militant leader said Tel Aviv in the Israeli heartland would be hit “over and over” and warned Israelis that their leaders were misleading them and would “take them to hell.”

The airstrikes further indicated that Israel was striking a wide range of targets. Three Israelis have been killed and at least 79 wounded by continued rocket fire into southern Israel and as far north as Tel Aviv.

Israel says its onslaught is designed to stop Hamas launching the rockets but, after an apparent lull overnight, more missiles hurtled toward targets in Israel, some of them intercepted by Israel’s Iron Dome defense system. Of five rockets fired on Monday at the southern Israeli city of Ashkelon, four were intercepted but one smashed through the concrete roof at the entrance to an empty school. There were no reports of casualties. Other rockets rained on areas along the border with Gaza. 

Later a second volley struck Ashkelon. Several rockets were intercepted but one crashed down onto a house causing damage but no casualties.

On Sunday, a new blitz of Palestinian rockets totaled nearly 100 by nightfall, including two that soared toward the population center of Tel Aviv but were knocked out of the sky by Israeli defenses.

In a statement on Monday, the Israel Defense Forces said overnight targets included “underground rocket launchers, terror tunnels, training bases, Hamas command posts and weapon storage facilities.” But news reports said the strikes flattened two houses belonging to a single family, killing two children and two adults and injuring 42 people, while a shrapnel burst from another attack killed one child and wounded others living near the rubble of the former national security compound.

The latest exchanges offered a grim backdrop to Egyptian-led cease-fire efforts that have so far proved inconclusive. United Nations Secretary General Ban Ki-moon was set to join the effort in Cairo on Monday.

Brig. Gen. Yoav Mordechai, the spokesman for the Israel Defense Forces, said there had been a reduction of up to 40 percent in rocket fire from Gaza, while Israeli forces had launched 40 attacks on tunnels between Egypt and Gaza, both at the entrances and along the road leading to them, causing considerable damage.

He said six rocket launching teams and two men on motorcycles were hit while the Israeli forces continued to intercept Palestinian radio signals to urge Gaza residents to steer clear of activists.

In the Israeli strike on Sunday morning, it took emergency workers and a Caterpillar digger more than an hour to reveal the extent of the devastation under the two-story home of Jamal Dalu, a shop owner. Mr. Dalu was at a neighbor’s when the blast wiped out nearly his entire family: His sister, wife, two daughters, daughter-in-law and four grandchildren ages 2 to 6 all perished under the rubble, along with two neighbors, an 18-year-old and his grandmother.

“We were asleep and then there was a terrific blast,” said Abdul-Latif Dahman, who lives nearby and was among more than 100 who stood vigil as the bodies were dug out. “There are no words to describe what happened later, only smoke and dust and heavy silence because the sound shut our ears.”

The smell of bomb residue and the roars of bulldozers filled the air as people clambered over shattered glass and bent iron bars to get a closer look. When two tiny bodies were finally found, rescuers and residents erupted in cries of “God is great!” One worker rushed the girl to an ambulance, while a neighbor grabbed the boy and just ran.

Ismail Haniyeh, the prime minister of the militant Hamas faction that rules Gaza, condemned the attack as a “massacre” that “exceeded all expectations.”

General Mordechai, the spokesman for the Israeli military, said it was “examining the event.”

Fares Akram and Jodi Rudoren reported from Gaza City, and Alan Cowell from London. Reporting was contributed by Isabel Kershner from Ashkelon, Israel; Ethan Bronner, Myra Noveck and Irit Pazner Garshowitz from Jerusalem; Rina Castelnuovo from Ashdod, Israel; Peter Baker from Bangkok; and David D. Kirkpatrick from Cairo.

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