With record highs in sight, stocks face roadblocks

NEW YORK (Reuters) - If Wall Street needs to climb a wall of worry, it will have plenty of opportunity next week.

Major U.S. stock indexes will make another attempt at reaching all-time records, but the fitful pace that has dominated trading is likely to continue. Next Friday's unemployment report and the hefty spending cuts that look like they about to take effect will be at the forefront.

The importance of whether equities can reach and sustain those highs is more than Wall Street's usual fixation on numbers with psychological significance. Breaking through to uncharted territory is seen as a test of investors' faith in the rally.

"It's very significant," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"The thinking is, there's just not enough there for an extended bull run," he said. "If we do break through (record highs), then maybe the charts and price action are telling us there's something better ahead."

Flare-ups in the euro zone's sovereign debt crisis and next Friday's report on the U.S. labor market could jostle the market, though U.S. job indicators have generally been trending in a positive direction.

Small- and mid-cap stocks hit lifetime highs in February. Now the Dow Jones industrial average <.dji> and the S&P 500 <.spx> are racing each other to the top. The Dow, made up of 30 stocks, is about 75 points - less than 1 percent - away from its record close of 14,164.53, which it hit on October 9, 2007. The broader S&P is still 3 percent away from its closing high of 1,565.15, also reached on October 9, 2007.

The advantage may be in the Dow's court. So far in 2013, it has gained 7.5 percent, beating the S&P 500 by about 1 percent.

THE RALLY AND THE REALITY CHECK

The Dow's relative strength owes much to its unique make-up and calculation, as well as to investors' recent preference for buying value stocks likely to generate steady reliable gains, rather than growth stocks.

But the more defensive stance illustrates how stock buyers are getting concerned about this year's rally. While investors don't want to miss out on gains, they're picking up companies that are less likely to decline as much as high-flying names - if a market correction comes.

The Russell Value Index <.rav> is up 7.6 percent for the year so far, outpacing the Russell Growth Index's <.rag> 5.7 percent rise. Within the realm of the S&P 500, the consumer staples sector led the market in February, gaining 3.1 percent.

There is some concern that growth-oriented names are being eclipsed by defensive bets, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

"This isn't a be-all and end-all sell signal by any means, but we would feel much more comfortable if some of the more aggressive areas, like technology and small caps, would start to gain some leadership here," Detrick said.

Signs that investors are becoming concerned about the rally's pace is evident in the options market, where the ratio of put activity to call activity has recently shifted in favor of puts, which represent expectations for a stock to fall.

"We are seeing some put hedging in the financials, building up for the past month," said Henry Schwartz, president of options analytics firm Trade Alert in New York.

The put-to-call ratio representing an aggregate of about 562 financial stocks is 1:1, when normally, calls should be outnumbering puts.

Investors have no shortage of reasons to crave the relative safety of blue chips and defensive stocks. Although markets have mostly looked past uncertainty over Washington's plans to cut the deficit, fiscal policy negotiations still pose a risk to equities.

The $85 billion in spending cuts set to begin on Friday is expected to slow economic growth this year if policymakers do not reach a new deal. Markets so far have held firm despite the wrangling in Washington, but tangible economic effects could pinch stock prices going forward.

The International Monetary Fund warned that full implementation of the cuts would probably take at least 0.5 percentage point off U.S. growth this year.

EASY MONEY AND TEPID HIRING

Investors will also take in a round of economic data at a time when concerns are percolating that the market is being pushed up less by fundamentals and more by loose monetary policy around the world.

The main economic event will be Friday's non-farm payrolls report for February. The U.S. economy is expected to have added 160,000 jobs last month, only a tad higher than in January, in a sign the labor market is healing at a slow pace. The U.S. unemployment rate is forecast to hold steady at 7.9 percent.

While lackluster data has been a catalyst in the past for stock market gains as investors bet it would ensure continued stimulus from the Federal Reserve, that sentiment may be wearing thin.

Markets stumbled last week following worries that the Fed might wind down its quantitative easing program sooner than expected.

"It shows the underpinning of the market is being driven at this point by monetary policy," Hellwig said.

With investors questioning what is behind the rally, it will make a run to record highs even more significant, Hellwig added.

"There's smart people that are in the bull camp and the bear camp and the muddle-through camp," Hellwig said. "The fact that you can statistically, using historical evidence, make a case for going higher, lower, or staying the same makes this number very important this time around."

(Wall St Week Ahead runs every Friday. Comments or questions on this column can be emailed to: leah.schnurr(at)thomsonreuters.com)

(Reporting by Leah Schnurr; Additional reporting by Doris Frankel in Chicago; Editing by Jan Paschal)

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Kerry to chide Turkish PM over Zionism comments

ANKARA (Reuters) - Secretary of State John Kerry will upbraid Turkish Prime Minister Tayyip Erdogan on Friday for his description of Zionism as a crime against humanity, comments which could overshadow his first trip to a Muslim nation since taking office.

Kerry is meeting Turkish leaders in talks meant to focus on Syria's civil war and bilateral interests from energy security to counter-terrorism.

But Erdogan's comment at a U.N. meeting in Vienna this week, condemned by his Israeli counterpart, the White House and U.N. Secretary-General Ban Ki-moon, has clouded his trip.

"This was particularly offensive, frankly, to call Zionism a crime against humanity ... It does have a corrosive effect (on relations)," a senior U.S. official told reporters as Kerry flew to Ankara.

"I am sure the secretary will be very clear about how dismayed we were to hear it," the official, who spoke on condition of anonymity, said.

"To state the obvious, it complicates our ability to do all of the things that we want to do together when we have such a profound disagreement about such an important thing."

Washington needs all the allies it can get as it navigates the political currents of the Middle East, and sees Turkey as the key player in supporting Syria's opposition and planning for the era after President Bashar al-Assad.

But the collapse of its ties with Israel have undermined U.S. hopes that Turkey could play a role as a broker in the broader region.

"The Turkey-Israel relationship is frozen," the U.S. official said. "We want to see a normalization ... not just for the sake of the two countries but for the sake of the region and, frankly, for the symbolism," he said.

"Not that long ago (you) had these two countries demonstrating that a majority Muslim country could have very positive and strong relations with the Jewish state and that was a sign for the region (of what was) possible."

Erdogan told the U.N. Alliance of Civilizations meeting in Vienna on Wednesday: "Just as with Zionism, anti-Semitism and fascism, it has become necessary to view Islamophobia as a crime against humanity."

The head of Europe's main rabbinical group condemned his words as a "hateful attack" on Jews.

Ties between Israel and mostly Muslim Turkey have been frosty since 2010, when Israeli marines killed nine Turks in fighting aboard a Palestinian aid ship that tried to breach Israel's blockade of the Gaza Strip.

In recent weeks, there has been a run of reports in the Turkish and Israeli media about efforts to repair relations, including a senior diplomatic meeting last month in Rome and military equipment transfers.

The reports have not been confirmed by either government.

SUPPORT FOR SYRIAN OPPOSITION

Officials said Syria would top the agenda when Kerry meets Erdogan and President Abdullah Gul, building on the discussions in Rome between 11 mostly European and Arab nations within the "Friends of Syria" group.

After the Rome meeting, Kerry said on Thursday the United States would for the first time give non-lethal aid to the rebels and more than double support to the civilian opposition, although Western powers stopped short of pledging arms.

"We need to continue the discussion which took place in Rome ... in terms of the main goals there is no daylight between us and the Americans," a senior Turkish official said.

"A broad agreement was reached on supporting the opposition. Now our sides need to sit down and really flesh out what we can do to support them in order to change the balance on the ground," he said.

Turkey has been one of Assad's fiercest critics, hosting a NATO Patriot missile defense system, including two U.S. batteries, to protect against a spillover of violence and leading calls for international intervention.

It has spent more than $600 million sheltering refugees from the conflict that began almost two years ago, housing some 180,000 in camps near the border and tens of thousands more who are staying with relatives or in private accommodation.

Washington has given $385 million in humanitarian aid for Syria but U.S. President Barack Obama has so far refused to give arms, arguing it is difficult to prevent them from falling into the hands of militants who could use them on Western targets.

Turkey, too, has been reluctant to provide weapons, fearing direct intervention could cause the conflict to spill across its borders.

(Writing by Nick Tattersall; Editing by Janet Lawrence)

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Connie Britton: 'Being a Single Mom Is Challenging'

Peggy Sirota for MORE

Channeling her Nashville character’s reign over the country scene was not a far stretch for Connie Britton.

Since her big break in Friday Night Lights, the actress, 45, has been shining in her own spotlight, from scoring major onscreen roles to welcoming a new baby — son Yoby — from Ethiopia.

And now, between her hit show and her 2-year-old, Britton is busier — and happier! — than ever.

“The schedule is insane to the point where I lose a lot of sleep at night worrying about how little time I have to sleep and mostly what little time I have to be with my son,” she says in MORE‘s March issue.

But Britton logging long hours at work doesn’t seem to bother baby boy in the least. “The flip side of that is, he’s doing great. He comes to the set every day,” she says. “As working moms go, at least I have that luxury.”

After the death of her father, Britton put the dream of a husband aside and began to pursue adoption. While idea of raising a baby on her own was daunting, the actress wasn’t willing to call it quits on motherhood.

“Being a single mom is challenging, but never in a million years would that have stopped me. You get an idea in your head and you’re going to do it,” she says.

“People can tell you how hard marriage is or how hard it is to birth a baby, but we do these things. We want the journey of that.”

And her determination has paid off in a big way — Britton is completely smitten with her “incredibly openhearted” son.

“One of my favorite qualities is that he has an enormous curiosity about everything, but he’s not stupid about it,” she explains. “He wants to open and close doors, but he immediately learned that he’d better watch where his fingers are.”

With her professional and personal lives having recently reached all new highs, the new mom says her happiness has been a long time coming.

“My whole life has been building to all the good stuff that has happened to me in the last few years,” Britton muses. “I think — and this is ironic when I’m working harder and have more responsibility than ever before — that I now know the importance of grace and sitting back.”

She continues: “I have a deeper understanding of how most people are just trying to do the best they can.”

Peggy Sirota for MORE

– Anya Leon

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WHO: Slight cancer risk after Japan nuke accident

LONDON (AP) — Two years after Japan's nuclear plant disaster, an international team of experts said Thursday that residents of areas hit by the highest doses of radiation face an increased cancer risk so small it probably won't be detectable.

In fact, experts calculated that increase at about 1 extra percentage point added to a Japanese infant's lifetime cancer risk.

"The additional risk is quite small and will probably be hidden by the noise of other (cancer) risks like people's lifestyle choices and statistical fluctuations," said Richard Wakeford of the University of Manchester, one of the authors of the report. "It's more important not to start smoking than having been in Fukushima."

The report was issued by the World Health Organization, which asked scientists to study the health effects of the disaster in Fukushima, a rural farming region.

On March 11, 2011, an earthquake and tsunami knocked out the Fukushima plant's power and cooling systems, causing meltdowns in three reactors and spewing radiation into the surrounding air, soil and water. The most exposed populations were directly under the plumes of radiation in the most affected communities in Fukushima, which is about 150 miles (240 kilometers) north of Tokyo.

In the report, the highest increases in risk are for people exposed as babies to radiation in the most heavily affected areas. Normally in Japan, the lifetime risk of developing cancer of an organ is about 41 percent for men and 29 percent for women. The new report said that for infants in the most heavily exposed areas, the radiation from Fukushima would add about 1 percentage point to those numbers.

Experts had been particularly worried about a spike in thyroid cancer, since radioactive iodine released in nuclear accidents is absorbed by the thyroid, especially in children. After the Chernobyl disaster, about 6,000 children exposed to radiation later developed thyroid cancer because many drank contaminated milk after the accident.

In Japan, dairy radiation levels were closely monitored, but children are not big milk drinkers there.

The WHO report estimated that women exposed as infants to the most radiation after the Fukushima accident would have a 70 percent higher chance of getting thyroid cancer in their lifetimes. But thyroid cancer is extremely rare and one of the most treatable cancers when caught early. A woman's normal lifetime risk of developing it is about 0.75 percent. That number would rise by 0.5 under the calculated increase for women who got the highest radiation doses as infants.

Wakeford said the increase may be so small it will probably not be observable.

For people beyond the most directly affected areas of Fukushima, Wakeford said the projected cancer risk from the radiation dropped dramatically. "The risks to everyone else were just infinitesimal."

David Brenner of Columbia University in New York, an expert on radiation-induced cancers, said that although the risk to individuals is tiny outside the most contaminated areas, some cancers might still result, at least in theory. But they'd be too rare to be detectable in overall cancer rates, he said.

Brenner said the numerical risk estimates in the WHO report were not surprising. He also said they should be considered imprecise because of the difficulty in determining risk from low doses of radiation. He was not connected with the WHO report.

Some experts said it was surprising that any increase in cancer was even predicted.

"On the basis of the radiation doses people have received, there is no reason to think there would be an increase in cancer in the next 50 years," said Wade Allison, an emeritus professor of physics at Oxford University, who also had no role in developing the new report. "The very small increase in cancers means that it's even less than the risk of crossing the road," he said.

WHO acknowledged in its report that it relied on some assumptions that may have resulted in an overestimate of the radiation dose in the general population.

Gerry Thomas, a professor of molecular pathology at Imperial College London, accused the United Nations health agency of hyping the cancer risk.

"It's understandable that WHO wants to err on the side of caution, but telling the Japanese about a barely significant personal risk may not be helpful," she said.

Thomas said the WHO report used inflated estimates of radiation doses and didn't properly take into account Japan's quick evacuation of people from Fukushima.

"This will fuel fears in Japan that could be more dangerous than the physical effects of radiation," she said, noting that people living under stress have higher rates of heart problems, suicide and mental illness.

In Japan, Norio Kanno, the chief of Iitate village, in one of the regions hardest hit by the disaster, harshly criticized the WHO report on Japanese public television channel NHK, describing it as "totally hypothetical."

Many people who remain in Fukushima still fear long-term health risks from the radiation, and some refuse to let their children play outside or eat locally grown food.

Some restrictions have been lifted on a 12-mile (20-kilometer) zone around the nuclear plant. But large sections of land in the area remain off-limits. Many residents aren't expected to be able to return to their homes for years.

Kanno accused the report's authors of exaggerating the cancer risk and stoking fear among residents.

"I'm enraged," he said.

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Mari Yamaguchi in Tokyo and AP Science Writer Malcolm Ritter in New York contributed to this report.

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Online:

WHO report: http://bit.ly/YDCXcb

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Stock futures begin March lower as sequester looms

NEW YORK (Reuters) - Stock index futures were lower on Friday, indicating a weak start to the month of March, as investors looked ahead to U.S. government budget cuts that were widely expected to take effect at the end of the day.

Equities have been on a tear lately, rising for four straight months to approach five-year highs while the Dow climbed to within striking distance of an all-time high. Any declines have been shallow or short-lived, with investors jumping in to buy on any dip.

The gains have come on the back of strong corporate earnings and an accommodative Federal Reserve. In that environment, many investors have shrugged off the potential impact of the sequester, $85 billion in spending cuts across federal government agencies that economists expect will shave half a percentage point off U.S. economic growth.

"Conditions are ripe for anxiety and fear to return to the market, especially given how high we've risen, and the sequester that could be a catalyst that reignites fear in the market," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

Dailey said that if the market drops below lows hit earlier this week, "that could be the start of a pullback that takes us down as much as 10 percent."

The spending cuts will take effect just before midnight Friday unless there is a last-minute deal, which is considered unlikely.

The International Monetary Fund said that if the cuts take effect, it would have to reevaluate its growth forecasts for the U.S. and the global economy.

Cyclical companies like banks and materials stocks, which are closely tied to the pace of economic growth, are likely to be among the hardest hit in the short term. Bank of America fell 1.2 percent to $11.10 in premarket trading while Chevron Corp slid 0.6 percent to $116.43.

S&P 500 futures fell 7.6 points and were 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 slid 58 points and Nasdaq 100 futures lost 12.75 points.

For the week, the Dow is up 0.4 percent while both the S&P and Nasdaq are down less than 0.1 percent. Both the Dow and S&P climbed more than 1 percent in February, slimmer gains than in January as equities grappled with uncertainties in Europe and Federal Reserve policy.

Economic data on tap for Friday includes the final Thomson Reuters/University of Michigan sentiment index, which is seen holding steady at 76.3. Personal income and spending data will also be released, along with January construction spending, which is seen rising 0.4 percent. The Institute for Supply Management's February manufacturing index is expected to dip to 52.5 from 53.1 in the previous month.

Overseas, China's factory growth cooled to multi-month lows in February as domestic demand dipped, and euro zone manufacturing activity appeared no closer to recovery last month, as a dire performance in France offset a return to growth in Germany.

"The weakness in overseas data is increasingly drawing people's attention, and as that gets worse the market will continue to struggle," Dailey said.

Groupon Inc gained 4.2 percent to $4.72 in premarket trading a day after the online coupon company fired its chief executive officer in the wake of weak quarterly results.

Gap Inc reported fourth-quarter earnings that beat expectations and boosted its dividend by 20 percent, while Salesforce.com Inc posted sales that beat consensus forecasts, sending shares up 4.6 percent to $177 before the bell.

U.S. stocks ended flat on Thursday, giving up modest gains late in the session. The Dow Jones Transportation Average <.djt>, seen as a bet on future growth, hit a record intraday high earlier in the session.

(Editing by Bernadette Baum)

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U.S. will give Syrian rebels medical, food aid, not arms

ROME (Reuters) - The United States will send non-lethal aid directly to Syrian rebels for the first time, Secretary of State John Kerry said on Thursday, disappointing opponents of President Bashar al-Assad who are demanding Western weapons.

More than 70,000 Syrians have been killed in a devastating conflict that began with peaceful anti-Assad protests nearly two years ago. Some 860,000 have fled abroad and several million are displaced within the country or need humanitarian assistance.

Kerry, speaking in Rome after a meeting of the mainly Western and Arab "Friends of Syria" group said his country would more than double its aid to the Syrian civilian opposition, giving it an extra $60 million to help provide security.

The United States would now "extend food and medical supplies to the opposition, including to the Syrian opposition's Supreme Military (Council)," Kerry said.

In their final statement, the Friends of Syria pledged more political and material support to the opposition Syrian National Coalition, a fractious group that has struggled to gain traction inside Syria, especially among disparate rebel forces.

Riad Seif, a coalition leader, said on the eve of the Rome talks that it would demand "qualitative military support", though another coalition official welcomed the shift in the U.S. stance.

"We move forward with a great deal of cautious optimism," said Yasser Tabbara. "We heard today a different kind of discourse," he said, adding the opposition need military and political support.

The modest U.S. policy shift may compound the frustration that had prompted the coalition to declare last week it would boycott the Rome talks. It changed its mind under U.S. pressure.

Many in the coalition say Western reluctance to arm rebels only plays into the hands of Islamist militants now widely seen as the most effective forces in the struggle to topple Assad.

However, a European diplomat held out the prospect of possible Western military support, saying the coalition and its Western and Arab backers would meet in Istanbul next week to discuss military and humanitarian support to the rebels.

MEALS READY TO EAT

Kerry's offer of medical aid and Meals Ready to Eat (MREs), the U.S. army's basic ration, fell far short of rebel demands for sophisticated anti-tank and anti-aircraft weapons to help tip the balance against Assad's mostly Russian-supplied forces.

It also stopped short of providing other forms of non-lethal assistance such as bullet-proof vests, armored personnel vehicles and military training to the insurgents.

The Rome talks were the latest evidence that the United States and its allies have no appetite for military intervention in Syria, after the withdrawal of U.S.-led troops from Iraq and the drawdown under way in Afghanistan.

The final communique called for an immediate halt to "unabated" arms supplies to Damascus by third countries, referring mostly to Assad's allies Russia and Iran.

It also said Syria must immediately stop indiscriminate bombardment of populated areas, which it described as crimes against humanity. NATO officials say Assad's military has fired ballistic missiles within Syria, which the government denies.

Human Rights Watch has reported that at least 171 civilians were killed in four Scud missile strikes last week.

The "Friends of Syria" pledged "more political and material support to the coalition as the sole legitimate representative of the Syrian people and to get more concrete assistance inside Syria", but gave no details on exactly what would be provided.

Kerry said earlier this week he would not leave the Syrian opposition "dangling in the wind" unsure of getting support.

But the White House continues to resist providing weaponry to the rebel forces, arguing there was no way to guarantee the arms might not fall into the hands of militants who might eventually use them against Western or Israeli targets.

"HUGE DEBATE"

U.S. officials have said that the U.S. Defense and State Departments, under former Secretary of Defense Leon Panetta and former Secretary of State Hillary Clinton, privately recommended that the White House arm the rebels but were overruled.

"It's a huge debate inside the administration between those that have to deal with Syria on an everyday basis, the State Department and DoD particularly, and the White House, which ... until now has vetoed any kind of outreach to the armed groups," said Andrew Tabler, senior fellow at the Washington Institute for Near East Policy, a think-tank in the U.S. capital.

The United States says it has already provided more than $50 million in non-lethal assistance such as communications gear and governance training to the civilian opposition.

A source in the Syrian coalition, however, said even the extra $60 million promised by Washington was a pittance compared to what he said was the $40 million a day in humanitarian aid needed for Syrian refugees and internally displaced persons.

The United States has provided some $365 million in humanitarian aid for Syrian refugees in countries such as Turkey, Jordan and Lebanon and for internally displaced people, channeling this money through non-governmental organizations.

More than 40,000 people a week are fleeing Syria and the total number of refugees will likely pass 1 million in less than a month, far sooner than the United Nations had forecast, a senior U.N. official told the Security Council on Wednesday.

U.N. High Commissioner for Refugees António Guterres said his agency had registered 936,000 Syrians across the Middle East and North Africa, nearly 30 times as many as in April last year.

"We expected to have 1.1 million Syrian refugees by June. If things continue to accelerate like this, it will take less than a month to reach that number," he told the 15-member council.

(Writing by Alistair Lyon; Editing by Jon Boyle)

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Why Jennifer Aniston Kept Her Hair Down on Oscar Night

Stylewatch
Style News Now

02/26/2013 at 02:30 PM ET

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Her longtime stylist, Living Proof’s Chris McMillan, says the star wanted to stick with what works. “She wanted to keep the makeup natural and the hair natural,” he says in the exclusive clip above. “I think it’s about, at this point, being really comfortable on the red carpet.” Amen!

To hear more on Aniston’s Oscar night look, and to hear McMillan give a how-to on the night’s hot short hairstyles (his faves were Anne Hathaway and Charlize Theron), watch the clip above. Tell us: Did you like Aniston’s natural hair and makeup on Oscar night? 

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Medicare paid $5.1B for poor nursing home care

SAN FRANCISCO (AP) — Medicare paid billions in taxpayer dollars to nursing homes nationwide that were not meeting basic requirements to look after their residents, government investigators have found.

The report, released Thursday by the Department of Health and Human Services' inspector general, said Medicare paid about $5.1 billion for patients to stay in skilled nursing facilities that failed to meet federal quality of care rules in 2009, in some cases resulting in dangerous and neglectful conditions.

One out of every three times patients wound up in nursing homes that year, they landed in facilities that failed to follow basic care requirements laid out by the federal agency that administers Medicare, investigators estimated.

By law, nursing homes need to write up care plans specially tailored for each resident, so doctors, nurses, therapists and all other caregivers are on the same page about how to help residents reach the highest possible levels of physical, mental and psychological well-being.

Not only are residents often going without the crucial help they need, but the government could be spending taxpayer money on facilities that could endanger people's health, the report concluded. The findings come as concerns about health care quality and cost are garnering heightened attention as the Obama administration implements the nation's sweeping health care overhaul.

"These findings raise concerns about what Medicare is paying for," the report said.

Investigators estimate that in one out of five stays, patients' health problems weren't addressed in the care plans, falling far short of government directives. For example, one home made no plans to monitor a patient's use of two anti-psychotic drugs and one depression medication, even though the drugs could have serious side effects.

In other cases, residents got therapy they didn't need, which the report said was in the nursing homes' financial interest because they would be reimbursed at a higher rate by Medicare.

In one example, a patient kept getting physical and occupational therapy even though the care plan said all the health goals had been met, the report said.

The Office of Inspector General's report was based on medical records from 190 patient visits to nursing homes in 42 states that lasted at least three weeks, which investigators said gave them a statistically valid sample of Medicare beneficiaries' experiences in skilled nursing facilities.

That sample represents about 1.1 million patient visits to nursing homes nationwide in 2009, the most recent year for which data was available, according to the review.

Overall, the review raises questions about whether the system is allowing homes to get paid for poor quality services that may be harming residents, investigators said, and recommended that the Centers for Medicare & Medicaid Services tie payments to homes' abilities to meet basic care requirements. The report also recommended that the agency strengthen its regulations and ramp up its oversight. The review did not name individual homes, nor did it estimate the number of patients who had been mistreated, but instead looked at the overall number of stays in which problems arose.

In response, the agency agreed that it should consider tying Medicare reimbursements to homes' provision of good care. CMS also said in written comments that it is reviewing its own regulations to improve enforcement at the homes.

"Medicare has made significant changes to the way we pay providers thanks to the health care law, to reward better quality care," Medicare spokesman Brian Cook said in a statement to AP. "We are taking steps to make sure these facilities have the resources to improve the quality of their care, and make sure Medicare is paying for the quality of care that beneficiaries are entitled to."

CMS hires state-level agencies to survey the homes and make sure they are complying with federal law, and can require correction plans, deny payment or end a contract with a home if major deficiencies come to light. The agency also said it would follow up on potential enforcement at the homes featured in the report.

Greg Crist, a Washington-based spokeswoman for the American Health Care Association, which represents the largest share of skilled nursing facilities nationwide, said overall nursing home operators are well regulated and follow federal guidelines but added that he could not fully comment on the report's conclusions without having had the chance to read it.

"Our members begin every treatment with the individual's personal health needs at the forefront. This is a hands-on process, involving doctors and even family members in an effort to enhance the health outcome of the patient," Crist said.

Virginia Fichera, who has relatives in two nursing homes in New York, said she would welcome a greater push for accountability at skilled nursing facilities.

"Once you're in a nursing home, if things don't go right, you're really a prisoner," said Fichera, a retired professor in Sterling, NY. "As a concerned relative, you just want to know the care is good, and if there are problems, why they are happening and when they'll be fixed."

Once residents are ready to go back home or transfer to another facility, federal law also requires that the homes write special plans to make sure patients are safely discharged.

Investigators found the homes didn't always do what was needed to ensure a smooth transition.

In nearly one-third of cases, facilities also did not provide enough information when the patient moved to another setting, the report found.

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On the Web:

The OIG report: http://1.usa.gov/VaztQm

The Medicare nursing home database: http://www.medicare.gov/NursingHomeCompare/search.aspx?bhcp=1&AspxAutoDetectCookieSupport=1

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Follow Garance Burke on Twitter at —http://twitter.com/garanceburke.

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Stock futures tick higher ahead of GDP, jobless data

NEW YORK (Reuters) - Stock index futures edged modestly higher on Thursday as investors were reluctant to make big bets following a sharp two-day rally and ahead of a rash of data.

Investors will also be keeping an eye on the debate in Washington over sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement on spending and taxes. President Barack Obama and Republican congressional leaders arranged to hold last-ditch talks to prevent the cuts, but expectations were low that any deal would be produced.

Major indexes posted their biggest daily gains since early January on Wednesday, putting the S&P 500 back above the closely watched level of 1,500. Over the past two sessions, the index has gained 1.9 percent, lifted by strong data and comments from Federal Reserve Chairman Ben Bernanke that showed continued support for the Fed's stimulus policy.

Wall Street has largely resisted predictions it would undergo a correction, with the S&P up 6.3 percent so far this year and the Dow Jones industrial average within striking distance of an all-time high. While markets suffered steep losses earlier this week on concerns over European debt, they have since recovered and are flat on the week.

Revised gross domestic product data is expected to show that the U.S. economy grew 0.5 percent in the fourth quarter, rather than contracted 0.1 percent as initially estimated. The data is due at 8:30 a.m. (1330 GMT)

Weekly jobless claims, also on tap for 8:30 a.m., are seen dipping by 2,000 to 360,000 in the latest week, while the February Chicago PMI is seen dipping to 54.3 from 55.6 last month.

Those reports come in the wake of strong pending home sales data Wednesday and a proxy for business spending plans that was more robust than expected, which added to the positive tone in markets.

S&P 500 futures rose 2.7 points and were above 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 added 16 points and Nasdaq 100 futures rose 4.5 points.

J.C. Penney Co Inc shares slumped 15 percent to $18.01 in premarket trading a day after it reported a steep drop in sales, prompting the department store to overhaul its pricing strategy.

Groupon Inc also reported revenue that missed expectations, sending shares down 26 percent to $4.41 before the bell.

Salesforce.com Inc and Gap Inc are on tap to report results later Thursday.

With 93 percent of the S&P 500 companies having reported results so far, 69.5 percent have beaten profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6.2 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Tim Cook, chief executive of Apple Inc , acknowledged widespread disappointment Wednesday in the performance of the tech titan's stock, which is down 16.5 percent so far this year, but urged investors to take a long-term view on the company.

(Editing by Bernadette Baum)

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Jennifer Aniston & Justin Theroux's Wedding Planning Underway

02/27/2013 at 07:50 AM EST

She conquered the Oscars, and now Jennifer Aniston is preparing for another very big day.

The actress, 44, is in the process of planning her wedding to screenwriter-actor Justin Theroux, 41 – and she has already checked off some major tasks on her to-do list, including choosing wedding bands, setting a date and narrowing down dresses.

Just don't expect the wedding, which is likely to take place soon after Aniston wraps her current film in Connecticut on March 8, to be a lavish production.

"It will be a small affair with their closest friends," a source close to Aniston tells PEOPLE in this week's cover story.

In the meantime, the bride-to-be is enjoying life with her future groom.

"Jen seems more confident than ever," says the source, "and they've become a great team."

For much more on Aniston and Theroux's wedding plans, their romantic Oscar night and look inside their relationship, pick up this week's issue of PEOPLE

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