Pope shows lifetime jobs aren't always for life

The world seems surprised that an 85-year-old globe-trotting pope who just started tweeting wants to resign, but should it be? Maybe what should be surprising is that more leaders his age do not, considering the toll aging takes on bodies and minds amid a culture of constant communication and change.

There may be more behind the story of why Pope Benedict XVI decided to leave a job normally held for life. But the pontiff made it about age. He said the job called for "both strength of mind and body" and said his was deteriorating. He spoke of "today's world, subject to so many rapid changes," implying a difficulty keeping up despite his recent debut on Twitter.

"This seemed to me a very brave, courageous decision," especially because older people often don't recognize their own decline, said Dr. Seth Landefeld, an expert on aging and chairman of medicine at the University of Alabama at Birmingham.

Age has driven many leaders from jobs that used to be for life — Supreme Court justices, monarchs and other heads of state. As lifetimes expand, the woes of old age are catching up with more in seats of power. Some are choosing to step down rather than suffer long declines and disabilities as the pope's last predecessor did.

Since 1955, only one U.S. Supreme Court justice — Chief Justice William Rehnquist — has died in office. Twenty-one others chose to retire, the most recent being John Paul Stevens, who stepped down in 2010 at age 90.

When Thurgood Marshall stepped down in 1991 at the age of 82, citing health reasons, the Supreme Court justice's answer was blunt: "What's wrong with me? I'm old. I'm getting old and falling apart."

One in 5 U.S. senators is 70 or older, and some have retired rather than seek new terms, such as Hawaii's Daniel Akaka, who left office in January at age 88.

The Netherlands' Queen Beatrix, who just turned 75, recently said she will pass the crown to a son and put the country "in the hands of a new generation."

In Germany, where the pope was born, Chancellor Angela Merkel, who is 58, said the pope's decision that he was no longer fit for the job "earns my very highest respect."

"In our time of ever-lengthening life, many people will be able to understand how the pope as well has to deal with the burdens of aging," she told reporters in Berlin.

Experts on aging agreed.

"People's mental capacities in their 80s and 90s aren't what they were in their 40s and 50s. Their short-term memory is often not as good, their ability to think quickly on their feet, to execute decisions is often not as good," Landefeld said. Change is tougher to handle with age, and leaders like popes and presidents face "extraordinary demands that would tax anybody's physical and mental stamina."

Dr. Barbara Messinger-Rapport, geriatrics chief at the Cleveland Clinic, noted that half of people 85 and older in developed countries have some dementia, usually Alzheimer's. Even without such a disease, "it takes longer to make decisions, it takes longer to learn new things," she said.

But that's far from universal, said Dr. Thomas Perls, an expert on aging at Boston University and director of the New England Centenarians Study.

"Usually a man who is entirely healthy in his early 80s has demonstrated his survival prowess" and can live much longer, he said. People of privilege have better odds because they have access to good food and health care, and tend to lead clean lives.

"Even in the 1500s and 1600s there were popes in their 80s. It's remarkable. That would be today's centenarians," Perls said.

Arizona Sen. John McCain turned 71 while running for president in 2007. Had he won, he would have been the oldest person elected to a first term as president. Ronald Reagan was days away from turning 70 when he started his first term as president in 1981; he won re-election in 1984. Vice President Joe Biden just turned 70.

In the U.S. Senate, where seniority is rewarded and revered, South Carolina's Strom Thurmond didn't retire until age 100 in 2002. Sen. Robert Byrd of West Virginia was the longest-serving senator when he died in office at 92 in 2010.

Now the oldest U.S. senator is 89-year-old Frank Lautenberg of New Jersey. The oldest congressman is Ralph Hall of Texas who turns 90 in May.

The legendary Alan Greenspan was about to turn 80 when he retired as chairman of the Federal Reserve in 2006; he still works as a consultant.

Elsewhere around the world, Cuba's Fidel Castro — one of the world's longest serving heads of state — stepped down in 2006 at age 79 due to an intestinal illness that nearly killed him, handing power to his younger brother Raul. But the island is an example of aged leaders pushing on well into their dotage. Raul Castro now is 81 and his two top lieutenants are also octogenarians. Later this month, he is expected to be named to a new, five-year term as president.

Other leaders who are still working:

—England's Queen Elizabeth, 86.

—Abdullah bin Abd al-Aziz al-Saud, king of Saudi Arabia, 88.

—Sabah al-Ahmad al-Jaber al-Sabah, emir of Kuwait, 83.

—Ruth Bader Ginsburg, U.S. Supreme Court associate justice, 79.

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Associated Press writers Paul Haven in Havana, Cuba; David Rising in Berlin; Seth Borenstein, Mark Sherman and Matt Yancey in Washington, and researcher Judy Ausuebel in New York contributed to this report.

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

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Yen steady, euro dips after G7 urges against FX war

LONDON (Reuters) - The yen hovered near three-year lows against the dollar and the euro fell on Tuesday after the G7 nations urged countries to refrain from competitive devaluations and a U.S. official backed Japan's new anti-deflation policies.

The Group of Seven industrialized nations published a statement saying it remained committed to "market-determined" exchange rates, reacting to weeks of concern that Japan's monetary easing policy, which has also weakened its currency, could trigger far-reaching currency wars.

"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," the group said.

Japan's Finance Minister Taro Aso welcomed the G7 statement, saying it showed the group recognized Japan's new anti-deflation policy was not aimed at affecting foreign exchange markets.

By 5:30 a.m. ET the yen was close to a three-year low of 94.31 to the dollar. The euro was down 0.2 percent versus the dollar and 0.5 percent lower at 125.90 yen after rising over 2 percent on Monday.

Treasury Undersecretary Lael Brainard said on Monday the United States supported Japanese efforts to end deflation, but also noted the G7 has long been committed to exchange rates determined by market forces.

The euro, the main riser among major currencies over the last few months as confidence in the euro zone has rebounded and the yen has slumped, was back at $1.3405 following the G7 statement.

It had risen briefly earlier after ECB Vice President Vitor Constancio said the bank's employment growth and inflation forecasts next month were likely to be close to the December figures.

The comments doused rate cut hopes, only re-kindled last week by the head of the bank, Mario Draghi, who said it was looking to see whether the euro's recent rise risked pushing inflation below its comfort zone.

SPAIN FOCUS

Having started the day down 0.2 percent, European shares were almost level again by 5:30 a.m. ET as London's FTSE 100 <.ftse> and Paris's CAC-40 <.fchi> recovered, though Frankfurt's DAX <.gdaxi> remained down 0.2 percent.

In the bond market, Spanish and Italian bonds inched up as domestic buyers took advantage of a recent sell-off, but the recovery looked fragile given political uncertainty in both countries.

Spain sold 5.6 billion euros ($7.5 billion) of 6- and 12-month Treasury bills, beating the top end of the target amount, but paid a higher yield on the longer-term paper as a political corruption scandal weighed on shaky confidence.

The ECB's Draghi is due to address Spanish lawmakers later on Tuesday to explain and defend the ECB's current monetary policy strategy against a backdrop of heightened concerns about the strong euro.

Draghi is also expected to meet Prime Minister Mariano Rajoy, but the market does not expect them to discuss whether Madrid might need financial aid, which would trigger the ECB's bond purchase scheme.

Financial markets showed a muted reaction, meanwhile, to the news that North Korea has conducted a nuclear test.

The nuclear test monitoring agency said the blast was double the size of its 2009 test. NATO condemned the move, calling it an "irresponsible act" that posed a grave threat to world peace.

"The test was not something that makes your heart pound as much as a pressing situation between Iran and Israel," said Kaname Gokon, research manager at brokerage Okato Shoji, referring to the threat of possible military action to prevent Iran from developing nuclear weapons.

Brent oil dipped to just under $118 a barrel, copper was flat, while spot gold stayed near a one-month low.

(Editing by Will Waterman)

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Letter From Europe: France Takes a Step Back in Its History

PARIS — Many years ago in Ouagadougou, the dusty capital of Burkina Faso, a visiting couple from France ordered dinner in a French-owned restaurant called Le Safari whose offerings included dishes listed as “selon arrivage,” loosely translated as “depending on availability.”

The overhead thunder of a French airliner on final approach to landing offered a more telling definition.

“Not long now,” the owner told the impatient couple. And, as promised, a rickety moped driven by a man in robes arrived from the airport within minutes, bearing chilled oysters to landlocked northwest Africa, fresh from distant Paris.

The episode seemed to say something about the umbilical cord binding France and its former colonies, like Burkina Faso, in a hard-nosed relationship designed to anchor French ways and to secure French benefits in commerce, diplomacy and influence going far beyond a plate of fines de claire.

But the relationship always had its darker, more muscular side. A year before the dinner at Le Safari, in another West African nation, 1,000 French soldiers had deployed to resist a southward advance by Libyan troops in Chad, intent on blocking what was depicted as a vision of Islamic expansionism sponsored by the former Libyan leader, Col. Muammar el-Qaddafi.

Almost 30 years later, the echoes of that moment — and many others like it — resonate through the fighting in Mali, whose desert north has become a crucible of Islamic fervor where French troops now risk being drawn into a protracted campaign to cement at least a semblance of government control.

And, much as President François Hollande of France denies that his country is still the gendarme of francophone Africa, the columns of French soldiers and planeloads of paratroops embroiled in the newest fighting recall much earlier campaigns.

“There was a time when General Faidherbe pursued armed bands attacking the forts of the Sahel, and even then they professed radical Islam,” Bertrand Badie, a political science scholar in Paris, wrote in Le Monde, referring to Gen. Louis Faidherbe, who played a central role in solidifying French interests in the broad swath of desert known as the Sahel in the 19th century. “What have we done since then?”

For many years, French military intervention in Africa functioned as the guardian of French economic interests and of the large expatriate French communities who benefited from them in cities like Libreville in Gabon and Abidjan in Ivory Coast. French troops defined the longevity of protégé African leaders. The French presence was a postcolonial bulwark, too, against British influence in southern and eastern Africa.

When Graham Greene crossed the border between Liberia and what was then the French colony of Guinea in the 1930s, as he recounted in his “Journey Without Maps,” the Liberians did not call their neighbor “Guinea” but “France,” so pervasive was French colonial influence.

But French Socialists, including Mr. Hollande, have long professed unease with the role of post-imperial puppet-masters.

As recently as December, when rebel forces advanced on Bangui, the capital of the Central African Republic, France dispatched 600 soldiers there. “If we’re present, it is not in order to protect a regime,” Mr. Hollande declared. “It’s to protect our citizens and our interests and in no way to intervene in the internal affairs of a country.”

The era of interference, he said, “is over with.”

A few days later, his words might have seemed somewhat premature when French warplanes halted a lightning southward advance by Islamist extremists in northern Mali. Paris deployed 4,000 soldiers for a ground campaign to recapture the insurgents’ northern redoubts.

After the quagmire of Afghanistan, welcome to the shifting sands of Sahelistan.

Mr. Hollande, indeed, had already cast the jihadi presence in northern Mali not in terms of a challenge to Francafrique, as the pervasive French presence in its former African colonies is known, but in the global terms of an international struggle against terrorism. “We face a threat that concerns the entire world,” Mr. Hollande told the United Nations in September.

That assessment, said Patrick Smith, the editor of a London-based newsletter, Africa Confidential, has spread a “geopolitical patina” over the “very, very local” mistakes and miscalculations in Mali and elsewhere.

Indeed, as France seeks an exit strategy based on handing over the fight to Malian and West African troops, “the next part of the war is going to be much more complicated,” Mr. Smith said in an interview.

Many years ago, when the French Foreign Legion had been drawn into an easy contest against rebels in what was called Zaire, a French diplomat in the capital, Kinshasa, concluded that “in Africa, there are never big battles.”

The official may have been making comparisons with cataclysms woven into French history, like the Somme during World War I, or Dien Bien Phu in Vietnam. But, if Mr. Hollande is borne out in his analysis of the jihadi menace, Sahelistan might just put the diplomat’s adage to a critical test.

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Anne Hathaway on Winning An Oscar: Whatever Happens, Happens

By Phil Boucher

02/11/2013 at 07:00 AM EST

She's won big at the Golden Globes and now the BAFTAs, but will Anne Hathaway take home an Oscar?

Hathaway – who is nominated for Best Supporting Actress for her role in Les Misérables – isn't spending too much time worrying about it.

"Whatever happens in two weeks, happens. It won't be the worst thing that happens to me if I don't win, and with my husband by my side it won't be the best thing either. So I am feeling very good about whatever," the actress, 30, told reporters backstage after nabbing a best supporting actress statue at Sunday's British Academy of Film and Television Arts Awards in London.

"I really have to say that getting to do the work, getting to play the character with this cast and to have this opportunity, it is the most sublime experience. I don't know how I got so lucky. ... So I don't think ahead – I am just happy to be in the conversation in two weeks' time," she said.

But should she win, Hathaway has been imagining where to keep her statue.

"I kind of have this fantasy – because this year that I have been lucky enough to receive a few pieces of hardware – that I'm going to get a tool shed and keep it in my garage so that it opens to some music. But for now I am just going to keep it in my kitchen," she said.

While she's earned awards and received critical acclaim for her portrayal of Fantine, she says the best thing to come of filming the musical epic was meeting costar Russell Crowe.

"The biggest surprise of the whole experience was what a sweetie pie Russell Crowe was. The whole cast would kind of gather around his place and we would just sing for hours. We all bonded that way. He has become a dear, dear friend," she said, "and I feel very blessed to have him in our life."

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What heals traumatized kids? Answers are lacking

CHICAGO (AP) — Shootings and other traumatic events involving children are not rare events, but there's a startling lack of scientific evidence on the best ways to help young survivors and witnesses heal, a government-funded analysis found.

School-based counseling treatments showed the most promise, but there's no hard proof that anxiety drugs or other medication work and far more research is needed to provide solid answers, say the authors who reviewed 25 studies. Their report was sponsored by the federal Agency for Healthcare Research and Quality.

According to research cited in the report, about two-thirds of U.S. children and teens younger than 18 will experience at least one traumatic event, including shootings and other violence, car crashes and weather disasters. That includes survivors and witnesses of trauma. Most will not suffer any long-term psychological problems, but about 13 percent will develop symptoms of post-traumatic stress, including anxiety, behavior difficulties and other problems related to the event.

The report's conclusions don't mean that no treatment works. It's just that no one knows which treatments are best, or if certain ones work better for some children but not others.

"Our findings serve as a call to action," the researchers wrote in their analysis, published online Monday by the journal Pediatrics.

"This is a very important topic, just in light of recent events," said lead author Valerie Forman-Hoffman, a researcher at the University of North Carolina-Chapel Hill.

She has two young children and said the results suggest that it's likely one of them will experience some kind of trauma before reaching adulthood. "As a parent I want to know what works best," the researcher said.

Besides the December massacre at Sandy Hook Elementary School in Connecticut, other recent tragedies involving young survivors or witnesses include the fatal shooting last month of a 15-year-old Chicago girl gunned down in front of a group of friends; Superstorm Sandy in October; and the 2011 Joplin, Mo., tornado, whose survivors include students whose high school was destroyed.

Some may do fine with no treatment; others will need some sort of counseling to help them cope.

Studying which treatments are most effective is difficult because so many things affect how a child or teen will fare emotionally after a traumatic event, said Dr. Denise Dowd, an emergency physician and research director at Children's Mercy Hospitals and Clinics in Kansas City, Mo., who wrote a Pediatrics editorial.

One of the most important factors is how the child's parents handle the aftermath, Dowd said.

"If the parent is freaking out" and has difficulty controlling emotions, kids will have a tougher time dealing with trauma. Traumatized kids need to feel like they're in a safe and stable environment, and if their parents have trouble coping, "it's going to be very difficult for the kid," she said.

The researchers analyzed 25 studies of treatments that included anti-anxiety and depression drugs, school-based counseling, and various types of psychotherapy. The strongest evidence favored school-based treatments involving cognitive behavior therapy, which helps patients find ways to cope with disturbing thoughts and emotions, sometimes including talking repeatedly about their trauma.

This treatment worked better than nothing, but more research is needed comparing it with alternatives, the report says.

"We really don't have a gold standard treatment right now," said William Copeland, a psychologist and researcher at Duke University Medical Center who was not involved in the report. A lot of doctors and therapists may be "patching together a little bit of this and a little bit of that, and that might not add up to the most effective treatment for any given child," he said.

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Online:

Pediatrics: http://www.pediatrics.org

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Stock futures tick higher in low volume, volatility eyed

NEW YORK (Reuters) - Stock index futures edged higher on Monday, suggesting equities will extend their multi-year closing highs from Friday, but low volume and the absence of economic indicators on tap could make trading volatile.

Upbeat U.S. and Chinese data last week helped extend the weekly winning streak of the S&P 500 to six weeks. The benchmark is up 6.4 percent so far this year after a steep rally in January that has dwindled as earnings season winds down.

S&P 500 futures rose 3.4 points but were slightly below 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 37 points, and Nasdaq 100 futures added 7.5 points.

Google shares dipped 0.8 percent in premarket trading after news Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the company, a move that could potentially net the former chief executive $2.51 billion.

Celgene Corp shares rose 1.5 percent premarket to $101.60 after U.S. regulators approved its new drug for patients with multiple myeloma whose disease has worsened after being treated with other cancer drugs.

US Airways shares gained 2.9 percent to $15.18 as it nears an $11 billion merger with AMR Corp that would create the world's largest airline.

Three of Dell Inc's largest investors joined Southeastern Asset Management on Friday in objecting to a $24.4 billion buyout of the No. 3 PC maker led by Chief Executive Michael Dell, as opposition grows to the buyout, the largest since the start of the financial crisis. Dell considered many strategic options before opting to go private, the company said in a regulatory filing.

(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama)

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Tiger Woods & Lindsey Vonn Are 'Spending More Time' Together: Source

Buzz

By Steve Helling

02/09/2013 at 06:00 PM EST

Tiger Woods and Lindsey Vonn

Mick Tsikas/Reuters/Landov; Luis Guerra/Ramey

It was quite the gesture.

After Lindsey Vonn suffered a devastating injury during the Alpine World Championships in Austria, she got a bit of help from Tiger Woods. Walking on crutches, Vonn – who tore two ligaments in her right knee and fractured her shin when she crashed on Tuesday ­– boarded Woods's private jet to return home.

Is it a sign that the rumored relationship between Woods and Vonn is heating up?

"Tiger and Lindsey have been friends for a while, and nothing started out romantically at all," a source tells PEOPLE. "But they really have a lot in common and got closer and closer. He still refers to her as 'my very good friend,' but he's been spending more and more time talking to her – and talking about her."

Last month, Vonn's reps kept mum about the rumored relationship, telling PEOPLE that her "focus is solely on competing and on defending her titles and thus she will not participate in any speculation surrounding her personal life at this time."

But the source close to Woods tells PEOPLE that Woods, 37, and Vonn. 28, talk and text frequently.

"Tiger really does want a woman who he can have good conversations with," he says. "He wants shared interests and outlooks. He is finding that with [Lindsey]."

Woods made international headlines in 2009 when he was linked to dozens of women while still married to his ex-wife, Elin Nordegren.

Since then, he has dated sporadically, but struggled to find someone who wanted a relationship for the right reasons.

"She's not freaked out by his past, and that's really appealing to him," says the source. "He really does deserve to be happy. He has been flogging himself for three years, and it's good to see him moving forward."

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After early start, worst of flu season may be over

NEW YORK (AP) — The worst of the flu season appears to be over.

The number of states reporting intense or widespread illnesses dropped again last week, and in a few states there was very little flu going around, U.S. health officials said Friday.

The season started earlier than normal, first in the Southeast and then spreading. But now, by some measures, flu activity has been ebbing for at least four weeks in much of the country. Flu and pneumonia deaths also dropped the last two weeks, the Centers for Disease Control and Prevention reported.

"It's likely that the worst of the current flu season is over," CDC spokesman Tom Skinner said.

But flu is hard to predict, he and others stressed, and there have been spikes late in the season in the past.

For now, states like Georgia and New York — where doctor's offices were jammed a few weeks ago — are reporting low flu activity. The hot spots are now the West Coast and the Southwest.

Among the places that have seen a drop: Lehigh Valley Hospital-Cedar Crest in Allentown, Pa., which put up a tent outside its emergency room last month to help deal with the steady stream of patients. There were about 100 patients each day back then. Now it's down to 25 and the hospital may pack up its tent next week, said Terry Burger, director of infection control and prevention for the hospital.

"There's no question that we're seeing a decline," she said.

In early December, CDC officials announced flu season had arrived, a month earlier than usual. They were worried, saying it had been nine years since a winter flu season started like this one. That was 2003-04 — one of the deadliest seasons in the past 35 years, with more than 48,000 deaths.

Like this year, the major flu strain was one that tends to make people sicker, especially the elderly, who are most vulnerable to flu and its complications

But back then, that year's flu vaccine wasn't made to protect against that bug, and fewer people got flu shots. The vaccine is reformulated almost every year, and the CDC has said this year's vaccine is a good match to the types that are circulating. A preliminary CDC study showed it is about 60 percent effective, which is close to the average.

So far, the season has been labeled moderately severe.

Like others, Lehigh Valley's Burger was cautious about making predictions. "I'm not certain we're completely out of the woods," with more wintry weather ahead and people likely to be packed indoors where flu can spread around, she said.

The government does not keep a running tally of flu-related deaths in adults, but has received reports of 59 deaths in children. The most — nine — were in Texas, where flu activity was still high last week. Roughly 100 children die in an average flu season, the CDC says

On average, about 24,000 Americans die each flu season, according to the CDC.

According to the CDC report, the number of states with intense activity is down to 19, from 24 the previous week, and flu is widespread in 38 states, down from 42.

Flu is now minimal in Florida, Kentucky, Maine, Montana, New Hampshire and South Carolina.

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Online:

CDC: http://www.cdc.gov/flu/

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Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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Berlusconi Remains the Wild Card in Italy Race

ROME — One candidate promised to drop an unpopular new property tax and refund all prior payments in cash. Another called that proposal a “poisoned meatball,” disconnected from reality. A third suggested that Al Qaeda blow up the Italian Parliament — then backtracked — and the man generally considered the front-runner is campaigning on vague promises of stability, so has often been ignored.

With only two weeks to go before national elections, the Italian campaign has become a surreal spectacle in which a candidate many had given up for dead, former Prime Minister Silvio Berlusconi, has surged. Although he is not expected ever to govern again, with his media savvy and pie-in-the-sky offers of tax refunds, Mr. Berlusconi now trails the front-runner, Pierluigi Bersani, the leader of the Democratic Party, by about five or six points, according to a range of opinion polls published on Friday.

The polls found that the former comedian Beppe Grillo, who made the Qaeda quip as part of his antipolitical campaign, is close behind in third place, while the caretaker prime minister, Mario Monti, who made the “poisoned meatball” remark as he stepped up attacks on Mr. Berlusconi in an awkward transition from technocrat to candidate, is taking up the rear with around 10 percent to 15 percent of the vote.

Most analysts predict that the center-left will win, but with not enough votes to govern without forming an alliance with Mr. Monti’s centrists. Yet in a complex political landscape — and with significant policy differences between Mr. Monti and Mr. Bersani, who have been criticizing each other in their campaigns — nothing is a given, and the political uncertainty weighs on financial markets.

Some compare the election to a power struggle on a corporate board. “Mr. Berlusconi knows he can’t govern, but wants a strong seat at the table,” said Marco Damilano, a political reporter for L’Espresso, a weekly. The Democratic Party will have the majority of seats but will not be able to govern without making accords, he said, adding that “Monti wants the golden share,” in which his few seats count for a lot.

Many outsiders marvel at the survival skills of Mr. Berlusconi, who dragged down Italy’s finances and international standing to the point that Mr. Monti was brought on in November 2011 to lead an emergency technocratic government that lasted a year. But at least a good part of Mr. Berlusconi’s success has to do with his competition.

Mr. Monti lacks a strong party and has hit Italians with unpopular taxes, and centrists who might lean left are concerned that Mr. Bersani would be weak on the flagging economy. On top of that, Mr. Berlusconi, whose center-right People of Liberty is more a charismatic movement than a party, has true loyalists who do not know where else to turn.

“Berlusconi is politically dead, but his electorate is still there and it is looking for a new leader, and there isn’t one,” said Massimo Franco, a political columnist for the daily newspaper Corriere della Sera. “So it’s a sort of a nostalgic operation.”

In an auditorium near the Vatican, Mr. Berlusconi was greeted Thursday by rows of adoring fans, most of them retirees. “Ah,” he said. “It reminds me of the good old days.” Joking about his age, the 76-year-old former premier added: “I looked at myself in the mirror and saw someone who didn’t look like me. They don’t make mirrors the way they used to.”

In a two-hour off-the-cuff speech, he returned to familiar themes: depicting the left as unreconstructed, cold-war Communists; magistrates as politically motivated; the euro and Chancellor Angela Merkel of Germany as harming Italy; and Mr. Monti as a leader beholden to foreign interests who did nothing but raise taxes.

His supporters were mostly buying it. “Even if he doesn’t refund us the property tax, at least he’ll take it away,” said Francesca Cipriani, 70, a retiree, as she cheered Mr. Berlusconi.

“My house is worth 20 percent less,” Nicola Manichelli, 75, a retired taxi driver, chimed in.

Marcello Sorgi, a columnist for the Turin daily newspaper La Stampa, said: “Berlusconi voters fear that Monti will raise taxes, and that under Berlusconi that won’t happen. It’s not at all true, but Berlusconi’s propaganda works with his electorate.”

“His electorate still has a messianic, religious rapport with him,” Mr. Sorgi added.“Berlusconi is considered a kind of guru.”

Not so with Mr. Monti, who is beloved in Brussels, Berlin and Washington, but has been less popular with Italian voters. As he learns to campaign, Mr. Monti, an economist with no previous political experience, has sought the services of the political consulting firm AKPD Message and Media, whose co-founder, David Axelrod, President Obama’s key political strategist, visited Mr. Monti in Rome last month.

Mr. Monti, who is trying to capture the civic-minded centrists from both right and left who once voted for the centrist Christian Democrats before the party disbanded in a corruption scandal in the early 1990s, also opened a Facebook page. He uses it to post folksy musings that some critics say are undermining the authority of the slyly ironic but hardly showmanlike candidate instead of humanizing him.

Last week, an interviewer presented Mr. Monti with a puppy on live television, days after Mr. Berlusconi had appeared with one. “This is a mean blackmail,” Mr. Monti said with a smile, before stroking the fluffy pet and saying, “Feel how soft it is.”

Mr. Bersani, a longtime party veteran and former economic growth minister, speaks more to the old guard of the Italian left. He defeated Matteo Renzi, the charismatic 38-year-old mayor of Florence, in a rare party primary and has been running on the slogan “A Just Italy,” a message aimed at reassuring voters but which may not inspire them.

In a half-hour speech on Thursday to party loyalists, including municipal workers and frustrated university adjunct teachers, Mr. Bersani called attention to youth unemployment and the disconnect between the real economy and financial markets, and called for economic stimulation to help more people have steady jobs. “Europe isn’t just the fiscal compact,” he said.

Both Mr. Berlusconi and Mr. Bersani appear to speak more to their own constituencies than to the nation as a whole, long a characteristic of Italian politics. Faced with a political class that seems stuck in the past, Mr. Grillo and his antipolitical Five Star Movement have been gaining ground in the polls, campaigning in piazzas across Italy.

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