Afghan Spy Chief’s Attacker Hid Bomb by His Groin

KABUL, Afghanistan — The man who tried to kill Afghanistan’s intelligence chief this week by smuggling a bomb into a guesthouse in Kabul concealed the device “around his groin,” according to a statement released Friday by the government. The statement suggested one reason the bomb might not have been detected during a search.

It called the bombing, which seriously wounded the intelligence director, Asadullah Khalid, “unethical and contrary to principles of Shariah law.”

Shafiqullah Taheri, a spokesman for the National Directorate of Security, the agency headed by Mr. Khalid, said, “It is degrading and insulting to search anyone’s genital area, according to Shariah law.”

The spy agency has not said whether the bomber was searched when he entered the guesthouse on Thursday, where Mr. Khalid was meeting with the head of another government agency.

But if he were searched, the bomber would have forced any security guard who wanted to do his job thoroughly to behave in an un-Islamic fashion and intrude on an area of the body that is usually off limits to anyone other than a very close relative.

The only other information released Friday by the government was that Mr. Khalid, who is in his early 40s, was recovering. Western officials with some knowledge of the case said that while he would survive, he had serious abdominal injuries that would require multiple operations and that it was not yet clear if or when he would be able to return to work. The Taliban have claimed responsibility for the attack.

President Hamid Karzai visited Mr. Khalid on Thursday at a hospital run by the security directorate where he was initially taken, and Gen. John R. Allen, the commander of the international coalition forces in Afghanistan, visited him on Friday at the Bagram Air Base hospital where he was transferred late Thursday.

Other than the location of the bomb, the intelligence agency said little about the attack and released no information about the attacker, including whether he had died in the explosion or had been shot by a guard.

The directorate’s statement about the location of the bomb seemed in part to be a response to questions from the public about how a suicide bomber was able to get so close to Mr. Khalid without being detected.

Afghans have found the notion of security searches, which are routine in the West, extremely difficult to embrace from a religious and a cultural perspective. Muslim cultures generally place great emphasis on modesty, and men and women are reluctant to show any parts of their bodies to strangers. While different schools of Islamic law have somewhat different teachings, revealing any part of the body and touching anyone else’s body is restricted.

In Afghanistan’s extremely conservative culture, a sense of discretion runs even deeper. Even at the height of summer, most Afghan men do not wear shorts; if they were to, the shorts would be knee-length. Outside major cities, a vast majority of women would not leave their homes without wearing a burqa, a veil that completely hides the face and body.

Gradually, searches in Afghanistan have become more thorough as suicide bombers wearing explosive vests have become more prevalent. Afghan security forces have tried to inculcate a more Western approach to searches among their guards, but it has not been easy.

A number of Afghans regard a body search as an insult signifying a lack of trust. So if the bomber who tried to assassinate Mr. Khalid was being brought to meet him by a trusted person, guards might well have been reluctant to offend him with a thorough body search.

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Zynga moves to enter US gambling market

NEW YORK (AP) — Online games company Zynga said it has asked Nevada gambling regulators for a decision that could pave the way for it to enter the U.S. gambling market.

This follows Zynga’s October disclosure that it has signed a deal to offer online poker and casino games, played with real money, in the U.K. It plans to launch those games in the first half of 2013.

Zynga Inc. said in an email late Wednesday that it is seeking an “application for a preliminary finding of suitability” from the Nevada Gaming Control Board. This, the company says, is part of its plan to enter regulated “real-money gaming,” that is, gambling markets.

Zynga has not said what it plans to do with a gaming license. But the company, whose games are played primarily on Facebook, has faltered in recent months and is looking for additional revenue sources beyond online games such as “FarmVille 2″ and “Words With Friends.”

The San Francisco-based company says the process with Nevada regulators should take 12 to 18 months. If Zynga passes the first regulatory hurdle, it can then apply for a gaming license in the state. That, the company said, takes two to three months.

Zynga’s stock rose 17 cents, or 7.1 percent, to close Thursday at $ 2.49. The company went public about a year ago, when its stock priced at $ 10 per share.

Gaming News Headlines – Yahoo! News

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Michelle Obama's Grammy Nod: The Beekeeper Gets Credit, Too!, She Says

By Sandra Sobieraj Westfall

12/06/2012 at 05:45 PM EST

Her husband already has two Grammys on the shelf, but for First Lady Michelle Obama, her first nomination is still an honor – one for which she shares the credit.

Mrs. Obama, who is nominated in the spoken-word category for her book American Grown, says in a statement to PEOPLE: "This nomination is such an honor not just for me, but for everybody who contributed to the garden and the audio book, from the National Parks Service employees to our White House chefs to our beekeeper."

The book – part gardening how-to, part cookbook, part White House history – is, "So close to my heart because it tells the story of our White House Kitchen Garden and gardens all around the country," she says, "as well as what Americans are doing to make sure our kids are growing up healthy."

No official word on whether Mrs. Obama will attend the glittery music-awards ceremony in February (her husband never did; neither did Hillary or Bill Clinton when their audiobooks won), but the First Lady says she hopes the nomination alone "keeps the conversation going about how we can all work together to ensure a healthy future for all our nation's children."

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Celebrations planned as Wash. legalizes marijuana

SEATTLE (AP) — Legal marijuana possession becomes a reality under Washington state law on Thursday, and some people planned to celebrate the new law by breaking it.

Voters in Washington and Colorado last month made those the first states to decriminalize and regulate the recreational use of marijuana. Washington's law takes effect Thursday and allows adults to have up to an ounce of pot — but it bans public use of marijuana, which is punishable by a fine, just like drinking in public.

Nevertheless, some people planned to gather at 12:01 a.m. PST Thursday to smoke in public beneath Seattle's Space Needle. Others planned a midnight party outside the Seattle headquarters of Hempfest, the 21-year-old festival that attracts tens of thousands of pot fans every summer.

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

That law also takes effect Thursday, when gay and lesbian couples can start picking up their wedding certificates and licenses at county auditors' offices. Those offices in King County, the state's largest and home to Seattle, and Thurston County, home to the state capital of Olympia, planned to open the earliest, at 12:01 a.m. Thursday, to start issuing marriage licenses. Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

The Seattle Police Department provided this public marijuana use enforcement guidance to its officers via email Wednesday night: "Until further notice, officers shall not take any enforcement action — other than to issue a verbal warning — for a violation of Initiative 502."

Thanks to a 2003 law, marijuana enforcement remains the department's lowest priority. Even before I-502 passed on Nov. 6, police rarely busted people at Hempfest, despite widespread pot use, and the city attorney here doesn't prosecute people for having small amounts of marijuana.

Officers will be advising people to take their weed inside, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress" — a non-issue, since the measures passed in Washington and Colorado don't "nullify" federal law, which federal agents remain free to enforce.

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Colorado's measure, as far as decriminalizing possession goes, is set to take effect by Jan. 5. That state's regulatory scheme is due to be up and running by October 2013.

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Johnson can be reached at https://twitter.com/GeneAPseattle

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Apple's gains lift tech in quiet day before jobs data

NEW YORK (Reuters) - Stocks closed modestly higher on Thursday, a day ahead of the key monthly jobs report, as a rebound in shares of Apple helped boost technology shares.

Traders were reluctant to bet heavily a day before the Friday release of the November employment report. Just 5.62 billion shares changed hands on U.S. exchanges, shy of the 6.48 billion daily average this year.

Investors are also keeping watch on the "fiscal cliff" negotiations in Washington to see if lawmakers can reach a deal to avoid a series of spending cuts and tax hikes beginning in January.

"Right now we're just drifting, waiting to learn about the cliff and jobs," said Donald Selkin, chief market strategist at National Securities in New York. "The only stabilizing factor is that Apple is higher again, which is lending some support to the broader market."

Apple climbed 1.6 percent to $547.24, reversing losses incurred at the open. The stock was coming off its biggest one-day drop in four years on Wednesday, which occurred on concerns about higher capital gains taxes in 2013 and the company's tablet computer market share.

The S&P technology index <.gspt> was the best performing of the S&P 500's 10 major sectors, gaining 0.8 percent. Semiconductor stocks rallied a day after Broadcom forecast fourth-quarter revenue at the high end of its target range. Broadcom's stock rose 3.2 percent to $33.36 while the PHLX semiconductor index <.sox> rose 1.1 percent.

The Dow Jones industrial average <.dji> rose 39.55 points, or 0.30 percent, to 13,074.04 at the close. The Standard & Poor's 500 Index <.spx> added 4.66 points, or 0.33 percent, to 1,413.94. The Nasdaq Composite Index <.ixic> gained 15.57 points, or 0.52 percent, to close at 2,989.27.

Monthly payroll numbers, which will be released by the Labor Department before the market opens on Friday, are expected to show a sharp slowdown in jobs growth, though that is largely due to the impact of Superstorm Sandy, which devastated the U.S. Northeast in late October and early November. The unemployment rate is seen holding steady at 7.9 percent.

Broader moves were limited, however, as traders focused on the "fiscal cliff" debate. About three weeks remain before higher tax rates would go into effect, which economists worry would dampen economic growth. Legislators are trying to come up with a deal to avoid some of the negative effects on the economy while still reducing the U.S. budget deficit.

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

Without action from Congress, tax cuts on capital gains and dividends will expire at the end of 2012. This has given investors a reason to sell certain stocks such as Apple that have done extremely well in recent years.

The CBOE Volatility Index <.vix>, known as the VIX, rose 0.7 percent, "a reflection of the anxiety people have about the jobs report and skepticism over the cliff," Selkin said.

An S&P index of consumer discretionary shares <.gspd> gained 0.6 percent, lifted by Starbucks Corp shares' advance of 5.7 percent to $53.70 after Baird upgraded the stock to "outperform."

H&R Block climbed 5.1 percent to $18.26 after the company reported a quarterly loss that was narrower than expected.

Sirius XM Radio shares rose 0.7 percent to $2.79 after its board approved a $2 billion stock repurchase and declared a special dividend that gave a big payout to its largest shareholder, Liberty Media . Shares of Liberty climbed 2.7 percent to $109.24.

Garmin shares jumped 5.7 percent to $41.99 after Standard & Poor's said it would add the navigation device maker to the S&P 500 index. Garmin will replace R.R. Donnelley & Sons after the close of trading on December 11.

Slightly more than 50 percent of the stocks traded on the New York Stock Exchange closed higher, while the number of advancing and declining stocks was about even on the Nasdaq.

(Editing by Jan Paschal)

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Afghan Spy Chief Hurt in Attack, Officials Say

KABUL, Afghanistan — A Taliban suicide bomber tried to assassinate the influential new chief of Afghanistan’s intelligence service at an agency guesthouse in Kabul on Thursday, officials said, in a brazen attack that left him seriously wounded and underscored the insurgency’s ability to go after those at the highest levels of the government.

The attack against Asadullah Khalid, who had just taken over the National Directorate of Security in September, has sidelined a man who had emerged as one of the insurgency’s fiercest opponents, as well as an implacable critic of Pakistan.

In his short time at the reins, Mr. Khalid has stepped up clandestine operations against the Taliban’s middle- and upper-level leadership, according to Afghan and coalition officials. He has also put his agency at the forefront of Afghan and Western efforts to clamp down on the killings of coalition troops by Afghan soldiers and the police, some of which have been attributed to Taliban infiltration.

The National Directorate of Security said in a statement that Mr. Khalid had survived a “cowardly terrorist attack.” It offered no details, but his wounds appeared substantial: Afghan and Western officials with knowledge of his condition said that he had sustained injuries to his chest and abdomen. One Afghan official said that he arrived bleeding and unconscious at a hospital run by the intelligence service.

President Hamid Karzai, who is close to Mr. Khalid, visited him soon after the attack and said in a statement that his condition was improving.

Mr. Khalid was later flown to Bagram Air Base, north of Kabul, said Jamie Graybeal, a spokesman for the coalition. The move was made to take advantage of the better medical facilities available at Bagram, one of the largest coalition bases in Afghanistan.

The Taliban claimed responsibility for the attack in an e-mail sent to the news media. Some Afghan officials, aware of Mr. Khalid’s public criticism of Pakistan’s ambitions and influence in Afghanistan, voiced suspicions that Pakistani interests may have approved of the attack — a frequent, though mostly unprovable, pattern of blame after high-profile attacks here in recent years.

The attack took place in the Kabul neighborhood of Taimani, an upscale district that is home to many foreigners, inside one of the guesthouses that Mr. Khalid and the intelligence directorate use, according to two Western officials.

Mr. Khalid, an ethnic Pashtun from Kandahar Province who has long been close to the Karzai family, became a favorite of Western intelligence officials because of his anti-Taliban record, first as governor of Kandahar and then as the minister of border and tribal affairs.

Neighbors on the street where the bombing happened on Thursday, between 2:15 p.m. and 3 p.m., said that it was not a large explosion, but somewhat muffled, and that it appeared to have taken place inside the guesthouse.

Western and Afghan officials said that Mr. Khalid had been meeting there with the head of Department 24, which deals with borders and extraterritorial activities.

That the attack occurred inside the house suggested to some officials that whoever carried it out was trusted enough to enter without being thoroughly searched. Such a tactic would be similar to the one used in the September 2011 assassination of Burhanuddin Rabbani, a former president and the head of the High Peace Council, whose assassin was said to be a courier bringing an important message from the Taliban leadership and thus gained entrance to the house. The bomb, hidden in his turban, detonated within a few feet of Mr. Rabbani.

One neighbor who lives a few houses from the guesthouse said that Mr. Khalid frequently visited there, arriving alone with his driver in an armored vehicle. The man, who refused to give his name, said that Mr. Khalid always greeted his neighbors if they were on the street, shaking their hands.

It was not clear whether anyone was killed in the attack or whether other people were wounded.

Mr. Khalid has many enemies as well as admirers, and he was accused of human rights abuses during his time as governor of Kandahar, leading some Afghans and diplomats to raise objections about his elevation to intelligence chief. However, the potential for an intensified Taliban threat in many areas of the south and east as the Western combat mission deadline nears led many in the Afghan Parliament to eventually agree to his appointment.

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Microsoft #DroidRage Tweet Shows How Malware Has Moved Past Windows

“Do you have an Android malware horror story?” Microsoft asks through its @windowsphone Twitter account, in what may be one of the most ironic tweets of the year.

After all, it wasn’t that long ago that “virus” and “worm” stories made headlines on a regular basis, all of them about “computer viruses” which were really Windows viruses. Just a few years ago, Apple advertised the fact that a Mac “Doesn’t get PC viruses” as a reason to buy one.

But this year, 600,000 Macs were infected by the Flashback trojan, an epidemic which exceeded the scale of history’s single largest Windows infection. And now ​Microsoft​ is implying that its phones don’t get malware, as a way to advertise them. How did things get to be this way, and what will malware and virus authors do next?

​When virii attack

For years, Microsoft’s DOS and Windows operating systems were the biggest targets for virus and malware authors simply because they were the least secure. Today’s PC security best practices had yet to be built into them, and trying to bolt features on to ancient programming code was a half-baked solution at best. HugeWindows malware epidemics spread as the malware programs were able to install themselves without explicit permission and operate without user intervention.

​Network effects

One reason Microsoft Windows dominated the computing world for years and years was simply because it was dominant. More people using Windows meant more profits for Windows app developers, which meant more games and apps for Windows, which meant more people buying Windows PCs so they could use Windows games and apps.

Like with apps, malware is a business that makes money for the people who write it. And while it was theoretically possible to infect a computer running a more secure operating system, like OS X (used on Macs) or Ubuntu (powered by Linux), it was considered impossible to get it to spread far enough to be profitable. Whereas on Windows it was (and still is) possible to infect vast numbers of PCs, even chaining them into zombified “botnets” which act as supercomputers-for-hire.

​How the mighty have fallen?

OS X’s more secure design makes it extremely hard to infect with malware — normally. The Flashback trojan sneaked in this year using the Java web browser plugin, which is bundled with the Mac’s Safari web browser and was poorly maintained.

Plugins like Java and Flash open up new ways to infect a computer, which was one reason why Apple stopped including the Flash plugin (already absent on its iPhone and iPad) by default. Apple created a fix for the problem, but not before over half a million Macs were infected.

​What about on smartphones?

Unlike Apple and Microsoft’s app stores, the Google Play store allows anyone to submit anything with no review. It’s up to Android smartphone and tablet users to look at the “permissions” each game or app requests, as well as the reputation of their developers, and decide whether or not to install them.

While some consider this approach more “trustworthy” and respectful of users, it’s also helped lead to a comparatively enormous number of malware infections on Android, including “The Mother of All Android Malware,” which completely took over tens of thousands of phones last year.

​Are you #DroidRage-ing yet?

Microsoft’s tweet says “we may have a get-well present” for people who send it their best or worst stories of Android malware. Even if all the apps in the Windows Store are virus-free, however, there are still far fewer of them than there are for Android.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.
Social Media News Headlines – Yahoo! News

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Kate Receives Hospital Visit from Pippa and James

12/05/2012 at 07:30 PM EST

James and Pippa Middleton

Alpha /Landov; Inset:Allpix/ plash News Online

The Duchess of Cambridge had more hospital visitors on Wednesday.

Just two days after husband Prince William, 30, was photographed leaving the King Edward VII Hospital in Central London where a pregnant Kate, 30, was admitted for hyperemesis gravidarum, her sister, Pippa Middleton, brother James and mom Carole (not pictured), also dropped by to keep the mom-to-be company.

Pippa was bundled up in a coat, sporting a tan-colored ensemble, while her brother was casually dressed in jeans and layered tops.

The Palace announced the Duchess's pregnancy Monday in a statement. "Their Royal Highnesses The Duke and Duchess of Cambridge are very pleased to announce that The Duchess of Cambridge is expecting a baby," it said. "The Queen, The Duke of Edinburgh, The Prince of Wales, The Duchess of Cornwall and Prince Harry and members of both families are delighted with the news."

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Study could spur wider use of prenatal gene tests

A new study sets the stage for wider use of gene testing in early pregnancy. Scanning the genes of a fetus reveals far more about potential health risks than current prenatal testing does, say researchers who compared both methods in thousands of pregnancies nationwide.

A surprisingly high number — 6 percent — of certain fetuses declared normal by conventional testing were found to have genetic abnormalities by gene scans, the study found. The gene flaws can cause anything from minor defects such as a club foot to more serious ones such as mental retardation, heart problems and fatal diseases.

"This isn't done just so people can terminate pregnancies," because many choose to continue them even if a problem is found, said Dr. Ronald Wapner, reproductive genetics chief at Columbia University Medical Center in New York. "We're better able to give lots and lots of women more information about what's causing the problem and what the prognosis is and what special care their child might need."

He led the federally funded study, published in Thursday's New England Journal of Medicine.

A second study in the journal found that gene testing could reveal the cause of most stillbirths, many of which remain a mystery now. That gives key information to couples agonizing over whether to try again.

The prenatal study of 4,400 women has long been awaited in the field, and could make gene testing a standard of care in cases where initial screening with an ultrasound exam suggests a structural defect in how the baby is developing, said Dr. Susan Klugman, director of reproductive genetics at New York's Montefiore Medical Center, which enrolled 300 women into the study.

"We can never guarantee the perfect baby but if they want everything done, this is a test that can tell a lot more," she said.

Many pregnant women are offered screening with an ultrasound exam or a blood test that can flag some common abnormalities such as Down syndrome, but these are not conclusive.

The next step is diagnostic testing on cells from the fetus obtained through amniocentesis, which is like a needle biopsy through the belly, or chorionic villus sampling, which snips a bit of the placenta. Doctors look at the sample under a microscope for breaks or extra copies of chromosomes that cause a dozen or so abnormalities.

The new study compared this eyeball method to scanning with gene chips that can spot hundreds of abnormalities and far smaller defects than what can be seen with a microscope. This costs $1,200 to $1,800 versus $600 to $1,000 for the visual exam.

In the study, both methods were used on fetal samples from 4,400 women around the country. Half of the moms were at higher risk because they were over 35. One-fifth had screening tests suggesting Down syndrome. One-fourth had ultrasounds suggesting structural abnormalities. Others sought screening for other reasons.

"Some did it for anxiety — they just wanted more information about their child," Wapner said.

Of women whose ultrasounds showed a possible structural defect but whose fetuses were called normal by the visual chromosome exam, gene testing found problems in 6 percent — one out of 17.

"That's a lot. That's huge," Klugman said.

Gene tests also found abnormalities in nearly 2 percent of cases where the mom was older or ultrasounds suggested a problem other than a structural defect.

Dr. Lorraine Dugoff, a University of Pennsylvania high-risk pregnancy specialist, wrote in an editorial in the journal that gene testing should become the standard of care when a structural problem is suggested by ultrasound. But its value may be incremental in other cases and offset by the 1.5 percent of cases where a gene abnormality of unknown significance is found.

In those cases, "a lot of couples might not be happy that they ordered that test" because it can't give a clear answer, she said.

Ana Zeletz, a former pediatric nurse from Hoboken, N.J., had one of those results during the study. An ultrasound suggested possible Down syndrome; gene testing ruled that out but showed an abnormality that could indicate kidney problems — or nothing.

"They give you this list of all the things that could possibly be wrong," Zeletz said. Her daughter, Jillian, now 2, had some urinary and kidney abnormalities that seem to have resolved, and has low muscle tone that caused her to start walking later than usual.

"I am very glad about it," she said of the testing, because she knows to watch her daughter for possible complications like gout. Without the testing, "we wouldn't know anything, we wouldn't know to watch for things that might come up," she said.

The other study involved 532 stillbirths — deaths of a fetus in the womb before delivery. Gene testing revealed the cause in 87 percent of cases versus 70 percent of cases analyzed by the visual chromosome inspection method. It also gave more information on specific genetic abnormalities that couples could use to estimate the odds that future pregnancies would bring those risks.

The study was led by Dr. Uma Reddy of the National Institute of Child Health and Human Development.

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Online:

Medical journal: http://www.nejm.org

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

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Dow, S&P rise, but Nasdaq sours with Apple in wild day

NEW YORK (Reuters) - A volatile trading session ended with U.S. stocks mostly higher on Wednesday, even as Apple, the most valuable company in the United States, suffered its worst day of losses in almost four years.

In a strange occurrence, Apple accounted for the entirety of the Nasdaq 100's <.ndx> fall of 1.1 percent, while the Dow industrials - which do not include Apple as a component - enjoyed the best day since November 28.

With the drop, Apple shed nearly $35 billion in market capitalization, its biggest one-day market-cap loss ever. The company's market value, or market capitalization, now stands at $506.85 billion.

"Today's move is because of index weightings, with the Nasdaq down because of Apple's decline," said Rex Macey, chief investment officer of Wilmington Trust in Atlanta. "The S&P is up because Apple isn't as big a weight in that index, and the Dow is up even more because it isn't there at all."

The broad market seesawed, with the S&P 500 dropping into negative territory before it rebounded off the 1,400 level, seen as a key support point over the past two weeks. Investors cited comments from President Barack Obama suggesting a potential near-term resolution to the "fiscal cliff" wrangling in Washington as a catalyst for the rebound.

Shares of The Travelers Cos Inc rose 4.9 percent to $74. The stock ranked as the Dow's top percentage gainer after the insurance company said it intended to resume stock buybacks it had temporarily suspended while it assessed its exposure to Superstorm Sandy. The company also said a preliminary estimate of net losses from Sandy was about $650 million after tax.

The Dow Jones industrial average <.dji> rose 82.71 points, or 0.64 percent, to 13,034.49 at the close. The Standard & Poor's 500 Index <.spx> gained 2.23 points, or 0.16 percent, to 1,409.28. But the Nasdaq Composite Index <.ixic> fell 22.99 points, or 0.77 percent, to end at 2,973.70.

Apple, the largest U.S. company by market capitalization and a big weight in both the S&P 500 and the Nasdaq, fell 6.4 percent to $538.79. Apple is down more than 20 percent from an all-time high reached in late September, putting the stock into bear market territory.

Banking shares were led higher by a 6.3 percent jump in Citigroup to $36.46 after the company said it would cut 4 percent of its workforce. The S&P financial sector index <.gspf> climbed 1.3 percent, and Bank of America hit a 52-week high of $10.55 before pulling back slightly. The stock, a Dow component, ended at $10.46, up 5.7 percent for the day.

Cyclical sectors, which are tied to the pace of economic growth, rallied on optimism about progress on a solution to avoid the fiscal cliff. An S&P index of industrial stocks <.gspi> rose 1.1 percent, buoyed by Caterpillar Inc , up 2.2 percent at $86.05, while an S&P index of energy shares <.gspe> climbed 0.7 percent. The Dow Jones Transportation Average <.djt> gained 0.9 percent, with CSX Corp jumping 2.7 percent to $20.16.

Still, Apple struggled throughout the session. Market participants cited a host of reasons for the drop in the iPad maker's stock, including a consultant's report about the company losing share in the tablet market and reports that margin requirements had been raised by at least one clearing firm, as well as year-end tax selling ahead of a possible rise in capital-gains tax rates next year.

On the Washington front, Obama told the Business Roundtable, a group of chief executives, on Wednesday that a fiscal cliff deal was possible "in about a week" if Republicans acknowledged the need to raise taxes on the wealthiest Americans.

Equities have struggled to gain ground recently because of concerns over the fiscal cliff - a series of mandatory spending cuts and tax increases effective in early January that could push the U.S. economy into recession next year. Recently equities have moved on any whiffs of sentiment from Washington in headlines about negotiations.

"Obama's comments generated a lot of optimism, but to the extent the market believes them, that's how much we're setting ourselves up for a decline if that deadline passes with no progress," said Macey, who helps oversee about $20 billion in assets.

In an interview on CNBC after the market closed, U.S. Treasury Secretary Tim Geithner said that uncertainty over the fiscal cliff was standing in the way of stronger economic growth, and that there was no prospect for an agreement if tax rates didn't rise on the wealthiest taxpayers.

The stock of Freeport-McMoRan Copper & Gold Inc fell 16 percent to $32.17 and ranked as the S&P 500's biggest percentage decliner. The company said it was acquiring Plains Exploration & Production Co and McMoRan Exploration Co in two separate deals for $9 billion in cash and stock in a major expansion into energy.

McMoRan Exploration soared 87 percent to $15.82 and Plains surged 23.4 percent to $44.50.

About half of the stocks traded on the New York Stock Exchange closed in positive territory, while about 54 percent of Nasdaq-listed shares ended lower.

Volume was higher than it has been in recent sessions, with about 6.93 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, above the daily average so far this year of about 6.48 billion shares.

(Editing by Jan Paschal)

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