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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The Lede: With Rodman Stunt, American Reality TV and North Korean Propaganda Fuse

Elements of American show business and North Korean propaganda briefly fused on Friday, when the former basketball star Dennis Rodman told reporters in Pyongyang that North Koreans “love” their new leader, Kim Jong-un. “And guess what?” the athlete turned reality TV star added, “I love him — the guy’s awesome.”

An Associated Press video report on the end of Dennis Rodman’s visit to North Korea.

Speaking with the regional knowledge of a man who seemed to believe less than 48 hours ago that the upscale Seoul neighborhood featured in the global pop hit “Gangnam Style” was not in South Korea but somewhere in the impoverished North, Mr. Rodman parted with these words of praise for the heir to the Kim dynasty: “Guess what? His grandfather and his father were great leaders.”

Unsurprisingly, the former Chicago Bull’s visit, along with three current Harlem Globetrotters and a crew from “Vice,” the HBO “news magazine series” that arranged the trip, was extensively covered on North Korean state television, which is no more averse to reporting on staged events as news than the producers of the American reality television shows Mr. Rodman now gets paid to spice up.

North Korean state television footage of Dennis Rodman and his traveling companions arriving in Pyongyang this week.

Footage of the party’s arrival in Pyongyang was broadcast on Wednesday, and Mr. Kim and Mr. Rodman’s watching an exhibition game together, before adjourning to the leader’s palace for sushi, was a featured news item on Thursday.

A news report from North Korean state television on Kim Jong-un and Dennis Rodman watching a basketball game together.

In newsrooms not owned and run by the North Korean government, though, there has been some debate about whether any of these stage-managed events could fairly be described as news.

According to the producers of “Vice,” their new television program — inspired by the “thinking man’s lad magazine” of the same name — promises to be “an honest approach to documentary journalism.” But you don’t have to be Werner Heisenberg to wonder if the fact that they orchestrated this “basketball diplomacy mission” so they could film it raises questions about whether they were observing and documenting life in North Korea as it is or bringing a new form of reality television to the isolated nation.

As readers who watched the observational documentary “Page One: A Year Inside the New York Times” might recall, the founder of Vice magazine who led its expansion into filmmaking, Shane Smith — who is featured in a promotion for the new series — explained to my colleague David Carr in 2010 that his approach was perhaps more like a form of extreme tourism than journalism. “I’m not a journalist,” he said during a particularly salty exchange. “I’m not there to report.”

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Jane Lynch: My Greatest Pleasure Is My Stepdaughter

Alexandra Wyman/Wireimage

Jane Lynch has a whole lot to cheer about – in addition to having a top-three grossing movie, Escape from Planet Earth, she’ll be making her grand debut on the Great White Way this spring, playing the infamous evil orphan matron Miss Hannigan in the newest Annie revival.

Great news for the star known for playing trash-talking cheerleading coach Sue Sylvester on Glee, but it pales in comparison to her real-life role as a stepmom.

“My greatest pleasure is Haden, my stepdaughter, ” Lynch tells PEOPLE recently as she screened her film at The Moms Mamarazzi event in New York City. Lynch voices the character of IO alongside Sarah Jessica Parker, Jessica Alba and Sofia Vergara.

“I am surprised how much love you feel and how you would do anything for your children,” she admits since marrying Lara Embry, a psychologist, in 2010.

The Emmy winner, who hits the stage May 16, jokes that “some may say I know a thing or two about playing intimidating authority figures,” but says that she “knows how important love and acceptance is.”

“I am in love and in awe with Haden. I like watching her walk through the world without fear,” Lynch explains. “She happens to be an exceptional human being and one of the most fair, open-hearted, embracing people I have ever met — grownup or child.”

Her brief foray into parenthood has already taught her many things, Lynch says.

“If one week your child wants to be an actor and the next day a fireman, encourage them. Seeing who your kids are as opposed to what you want them to be is important,” she notes. “It’s not up to you.”

– Debra Lewis-Boothman

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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.

___

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

__

Online:

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

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Wall Street advances as data outweighs budget cuts

NEW YORK (Reuters) - Stocks advanced modestly on Friday, leaving the S&P 500 with slight gains in a volatile week as strong economic data overshadowed growth concerns in China and Europe and let investors discount the impact of expected government spending cuts.

Stocks opened sharply lower for the session as Asian factories slowed and European output fell, but most of the losses evaporated after a report showed manufacturing activity expanded last month at its fastest clip in 20 months.

Consumer sentiment also rose in February as Americans turned more optimistic about the job market.

With $85 billion in government budget cuts set to begin, President Barack Obama blamed Republicans for failure to reach a compromise to avert the cuts, known as sequester. But the stock market appeared to have already priced in the failure by legislators to reach an agreement.

"We were able to dig out of that hole, but not make any great strides on it either," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. "We will probably be in a holding pattern pending some big development on a broader budget deal."

The Dow Jones industrial average <.dji> gained 35.17 points, or 0.25 percent, to 14,089.66 at the close. The Standard & Poor's 500 Index <.spx> added 3.52 points, or 0.23 percent, to 1,518.20. The Nasdaq Composite Index <.ixic> advanced 9.55 points, or 0.30 percent, to 3,169.74.

For the week, the Dow rose 0.6 percent, the S&P 500 edged up 0.2 percent and the Nasdaq gained 0.3 percent.

The slight gains for equities came during a volatile week that saw markets decline on Monday after uncertain Italian elections, only to rebound in the next two sessions as Federal Reserve Chairman Ben Bernanke defended the central bank's stimulus measures.

The low interest rates due to the Federal Reserve's accommodative monetary policy have helped equities continue to attract investors. The Dow is less than 1 percent away from its all-time intraday high of 14,198.10. Declines have been shallow and short-lived, with investors jumping in to buy on dips.

Intuitive Surgical jumped 8.5 percent to $553.40 after Cantor Fitzgerald analyst Jeremy Feffer upgraded the stock, saying the stock's slide of more than 11 percent on Thursday was a gross overreaction to a news report.

Groupon Inc surged 12.6 percent to $5.10 a day after the online coupon company fired its chief executive officer in the wake of weak quarterly results.

Gap Inc rose 2.9 percent to $33.87 after the clothing retailer reported fourth-quarter earnings that beat expectations and boosting its dividend by 20 percent, while Salesforce.com Inc posted sales that beat forecasts, driving its stock up 7.6 percent to $182.

Chesapeake Energy Corp fell 2.4 percent to $19.67 after the U.S. Securities and Exchange Commission escalated its investigation into the company and its Chief Executive Aubrey McClendon for a controversial perk that granted him a share in each of the natural gas producer's wells.

Volume was modest with about 6.72 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly above the daily average of 6.5 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 17 to 13, while on the Nasdaq, seven stocks rose for about every five stocks that fell.

(Editing by Jan Paschal)

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The Lede: Video of Turkish Premier Comparing Zionism to Anti-Semitism and Fascism

One day after Turkey’s prime minister, Recep Tayyip Erdogan, told a United Nations forum the world should consider Islamophobia a crime against humanity, “just like Zionism or anti-Semitism or fascism,” his Israeli counterpart lashed back. “I strongly condemn the remarks made by Prime Minister Erdogan of Turkey, comparing Zionism to fascism,” Prime Minister Benjamin Netanyahu replied on Twitter.

I strongly condemn the remarks made by Prime Minister Erdogan of Turkey, comparing Zionism to Fascism.This is a dark and false statement,

— Benjamin Netanyahu (@netanyahu) 28 Feb 13

Video of Mr. Erdogan’s complete address to the United Nations Alliance of Civilizations forum in Vienna was posted online by the United Nations with simultaneous translation into English.

In his remarks, Mr. Erdogan bemoaned “a lack of understanding between religions and sects” and said that the way ahead was “emphasizing the richness that comes from diversity.” After he praised “countries which see cultural and ethnic differences not as a reason for division or conflict but as a richness,” he complained of what he called the world’s indifference to the suffering of Muslims in Syria and elsewhere.

About seven minutes into the video, Mr. Erdogan said:

Unfortunately the modern world has not passed the test when it comes to Syria. In the last two years, we have seen close to 70,000 people lose their lives, and every single day we see innocent children, women, civilians, killed. And the fact that the world has not reacted to this situation seriously injures the sense of justice. In the same way, rising racism in Europe is a serious, problematic area, vis-à-vis the Alliance of Civilizations project.

In addition to indifference vis-à-vis the Muslim countries, we also see harsh, offending, insulting behavior towards Muslims who live in countries other than their own, and this continues to be an inconscionable act that has been ongoing around the world. We should be striving to better understand the beliefs of others but instead we see that people act based on prejudice and exclude others and despiuse them. And that is why it is necessary that we must consider — just like Zionism or anti-Semitism or fascism — Islamophobia as a crime against humanity.

Mr. Erdogan immediately went on to condemn those, including politicians, who use “the media or mass communication vehicles” for “provoking the sensitivities of a religion or a sect or a society.”

The Turkish prime minister has expressed his anger with Israeli policies in blunt terms at international forums in the past, most notably at Davos in 2009. He stormed off the stage at the end of a heated discussion of Israel’s Gaza offensive, after telling President Shimon Peres, “When it comes to killing, you know well how to kill.”

Video of an argument between Turkey’s prime minister and Israel’s president at Davos in 2009.

Relations between the countries suffered another blow in 2010, when Israeli commandos killed nine Turks during a bloody raid on the ship leading an effort to break the Israeli blockade of Gaza organized by a Turkish aid organization.

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It's Another Boy for American Idol's Justin Guarini

Jeff Ballard PR

A very sleepy-sounding Justin Guarini is a dad again!

He and wife Reina Capodici welcomed their second son, Asher, at 6:40 p.m. on Monday, Feb. 25. He weighed in 7 lbs., 8 oz.

“He’s the sweetest little boy you could ever ever ever ask for,” the American Idol season one runner-up, tells PEOPLE on the phone from the hospital in his hometown of Doyletown, Penn. “He made his way into the world nice and easy.”

And, notes the proud papa, “He is a ravenous eater! He would probably spend 24 hours latched to his mom if he could.”

Still not clear if his newborn will be the mini-me his 22-month-old older brother William Neko was.

“My first son looked like exactly like me,” says Guarini. “We don’t know who Asher will take after. He’s a mystery right now!”

Still, William was very happy to meet his new sibling. “He came to see Asher when he was a day old and all he wanted to do was lean over and kiss him.” (Justin is also stepdad to 8-year-old Lola, from his wife’s first marriage.)

Guarini says he’s busier than ever these days — almost too busy to watch American Idol.

“It’s really crazy,” he says. “I got three kids and I’ll be going back to Broadway soon and I’m still writing new music.”

Still, he tunes in when he can. “It’s so different than when I was on it,” Guarini admits. “It was simpler. I feel like an old man watching it! But my heart goes out to the people on the show. They have to work unbelievably hard to get there.”

He’s not rooting for anyone specific just yet: “I’ve been prepping for the baby,” he says with a laugh.

Besides, he’s got more immediate concerns at the moment — like sleep!

“Well, I’ve gotten more sleep than my wife,” he concedes, “but no more than a few hours. We’re gonna take Asher home today. I can’t wait.”

Jeff Ballard PR

– Liz McNeil

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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.

___

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

__

Online:

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

Read More..

Wall Street ends flat after late fade; S&P up for fourth month

NEW YORK (Reuters) - Stocks ended flat on Thursday, giving up modest gains late in the session, denying the Dow a chance to inch closer to all-time highs.

The S&P 500 still managed to close out February with a fourth straight month of gains. JC Penney Co Inc was the day's biggest loser, falling 17 percent to $17.57 after the department store operator reported a steep drop in sales.

The U.S. economy grew slightly in the fourth quarter, a turnaround from an earlier estimate showing contraction, and a drop in new claims for unemployment benefits last week added to a batch of data suggesting the economy continues its sluggish improvement.

The Dow was within striking distance of its record high after a year-to-date advance of more than 7 percent. The Dow's record closing high, set on October 9, 2007, stands at 14,164.53, while the Dow's intraday record high, set on October 11, 2007, stands at 14,198.10.

The Dow Jones Transportation Average <.djt>, seen as a bet on future growth, is up 12.9 percent this year, and the 20-stock index hit a record intraday high earlier on Thursday.

"To push through to new highs, you would have to see consistent positive economic data in the U.S. and have Europe stabilize - those are two pretty big requirements," said Jeff Morris, head of U.S. equities at Standard Life Investments in Boston.

"It wouldn't surprise me to see us bounce around as we have the past couple of weeks," Morris added.

Volume was low for most of the session until quarterly index-rebalancing activity hit the tape at the very close of trading.

After a strong January with gains of more than 5 percent, both the Dow and the S&P 500 found gains tougher to come by in February. Minutes from the Federal Reserve's January meeting sparked concerns that the central bank may pull back on its stimulus measures sooner than expected, while looming U.S. budget cuts and turbulent Italian elections tempered investors' aggressiveness.

But concerns about Fed policy were eased by testimony from Fed Chairman Ben Bernanke before a congressional committee earlier this week, as he defended the policy of buying bonds to keep interest rates low to boost growth, despite worries some have about possible inflation.

The Dow Jones industrial average <.dji> shed 20.88 points, or 0.15 percent, to 14,054.49 at the close. The Standard & Poor's 500 Index <.spx> lost 1.31 points, or 0.09 percent, to 1,514.68. The Nasdaq Composite Index <.ixic> fell 2.07 points, or 0.07 percent, to end at 3,160.19.

For the month, the Dow rose 1.4 percent, the S&P 500 gained 1.1 percent and the Nasdaq advanced 0.6 percent.

Limited Brands and Netflix ranked among the best-performing consumer stocks. Shares of Limited Brands, the parent of retailers Victoria's Secret and Bath & Body Works, gained 2.3 percent to $45.52. The stock of video streaming service Netflix climbed 2 percent to $$188.08.

In contrast, shares of Groupon Inc fell on weak revenue, with the daily deals company's tumbling 24.3 percent to $4.53.

Cablevision slumped 9.6 percent to $13.99 after the cable provider took a $100 million hit on costs related to Superstorm Sandy and posted deeper video customer losses than expected.

On a positive note, Mylan Inc gained 3.6 percent to $29.61 after the generic drugmaker posted a 25 percent rise in fourth-quarter profit and said it will buy a unit of India's Strides Arcolab Ltd.

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

Volume was modest with about 6.81 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly above the daily average of 6.46 billion.

Advancing stocks slightly outnumbered declining ones on the NYSE by 1,518 to 1,446. On the Nasdaq, the decliners had a slight edge, with 1,247 shares falling and 1,201 stocks rising.

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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IHT Rendezvous: Eve Best Returns to the Globe, This Time as a Director

LONDON — The recent press conference announcing the 2013 season at Shakespeare’s Globe on one level seemed like variations on an ongoing theme.

A onetime Falstaff at this address, Roger Allam, is returning to open the season as Prospero in “The Tempest,” directed by Jeremy Herrin, while the perennial favorite, “A Midsummer Night’s Dream,” will be seen in May in a new staging, this time from the Globe’s artistic director, Dominic Dromgoole. The 2011 Olivier winner Michelle Terry (“Tribes”) will play Titania.

The international season that so galvanized the space for six weeks last spring will return in a greatly pared-down form, and there will be three new plays, including one, “Blue Stockings” by Jessica Swale, that tells of the first female students at Cambridge University.

But it’s the last in the trio of supernaturally charged Shakespeares that promises to break fresh theatrical ground. In what represents her first-ever stab (you’ll forgive the word in context) at directing, the much-laureled actress Eve Best will stage a new production in June of “Macbeth.” Joseph Millson and Samantha Spiro have signed on as the murderous couple at the play’s black, bleak heart.

What prompted one of the most accomplished stage performers of her generation (an actress with an Olivier Award and two Tony nominations) to make the shift? The answer was arrived at via a lengthy phone call to a remote island in Denmark, where Ms. Best, 41, is currently filming “Someone You Love” for the director Lars von Trier’s Zentropa production group. This film’s specific director is Pernille Fischer Christensen.

To hear Ms. Best describe it, she thought her time at the Globe was finished, at least for a while, following a triumphant 2011 production of “Much Ado About Nothing” in which she played Beatrice opposite Charles Edwards’s no less witty and scintillating Benedick. (That staging opened within days of a contrasting commercial production of the same play, with David Tennant and Catherine Tate, and trumped its starrier competitor hands down.)

“I love the Globe so much,” Ms. Best recalled, “and wanted any excuse to spend some time there, having played Beatrice which was just my most favorite part ever. But I did think I was sort of running out of parts to play for a little while until I get into the world of Cleopatra and those kinds of parts” — that’s to say, Shakespeare’s more senior women.

But all that was before Mr. Dromgoole surprised Ms. Best with an offer to take on the directing of the Shakespeare tragedy in which she had made her Globe debut in 2001, opposite Jasper Britton.

“I put myself forward to direct something thinking that they might say yes in a couple of years and that if they did say yes they might start me off with something light or something simpler or more obscure,” she said.

“I was not prepared for them to turn around and say, ‘Yes, all right, and what about “Macbeth?”’ Ms. Best continued, delight evident in her voice. “It took me back. My first response was: ‘Absolutely no way; you must be kidding!’”

The play is particularly challenging at the Globe. Open to the elements, the theater is a tricky fit for a text suffused with darkness, and it can be hard to focus the gathering intensity of the Macbeths’ toxic rise and fall.

“We are in the broad daylight and the open air,” Ms. Best acknowledged, “and that particular circular shape is certainly going to have a significant effect on the kind of production ours is. We can’t set it in the dark with candles, so we just have to embrace what it is that the Globe will give us: I’m very interested in just seeing the play as clearly as we possibly can and focusing on the human relationships within it.”

Mr. Dromgoole for his part said he thought Ms. Best would be able to meet the play head-on without lots of additional mumbo jumbo. “I wanted someone who I thought could just let [“Macbeth”] play itself rather than forcing it down a tunnel of darkness.”

As it happens, Ms. Best has firsthand knowledge of both central roles. In addition to acting Lady Macbeth at the Globe, she participated in workshops of the play in New York with the Scottish actor Alan Cumming in which she played the title role opposite Mr. Cumming’s Lady. Mr. Cumming is soon to open his own solo take on the play on Broadway.

(For those collecting “Macbeths,” the West End is now hosting the film actor James McAvoy in a modern-dress, gory, commendably visceral version. That one, at the Trafalgar Studios, will have finished roughly two months before Ms. Best’s begins.)

“What’s really lovely about this play — and all Shakespeare plays obviously — is that they are so magnificently and eminently flexible,” said Ms. Best, who was sounding in no way deterred by other productions arriving before hers. “They can encompass 6 or 8 or 10 productions all going on at the same time, all equally fascinating, all equally interesting, with all kinds of different approaches.”

Nor was she sounding spooked by a famously hexed play that has on occasion brought disaster in its wake. Whereas theater lore, for instance, often insists that those involved with this text refer to it as “the Scottish play,” Ms. Best was having none of that.

“I’ve been saying it like mad,” she said. “If we’re going to be working on it for two months, life’s too short to be worried.”

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