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 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.


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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U.S. evolves on same-sex marriage


  • The president and the nation have shifted perspectives on same-sex marriage

  • Supreme Court ruling on California's same-sex marriage ban a critical test

  • Growing public support for gay marriage give proponents hope for change

Washington (CNN) -- The nation's growing acceptance of same-sex marriage has happened in slow and painstaking moves, eventually building into a momentum that is sweeping even the most unlikely of converts.

Even though he said in 2008 that he could only support civil unions for same-sex couples, President Barack Obama nonetheless enjoyed strong support among the gay community. He disappointed many with his conspicuously subdued first-term response to the same-sex marriage debate.

Last year, after Vice President Joe Biden announced his support, the president then said his position had evolved and he, too, supported same-sex marriage.

So it was no small matter when on Thursday the Obama administration formally expressed its support of same-sex marriage in a court brief weighing in on California's Proposition 8, which bans same-sex weddings. The administration's effort was matched by at least 100 high-profile Republicans — some of whom in elections past depended on gay marriage as a wedge issue guaranteed to rally the base — who signed onto a brief supporting gay couples to legally wed.

Obama on same-sex marriage: Everyone is equal

Then there are the polls that show that an increasing number of Americans now support same-sex marriage. These polls show that nearly half of the nation's Catholics and white, mainstream Protestants and more than half of the nation's women, liberals and political moderates all support same-sex marriage.

According to Pew Research Center polling, 48% of Americans support same-sex marriage with 43% opposed. Back in 2001, 57% opposed same-sex marriage while 35% supported it.

In last year's presidential election, same-sex marriage scarcely raised a ripple. That sea change is not lost on the president.

"The same evolution I've gone through is the same evolution the country as a whole has gone through," Obama told reporters on Friday.

Craig Rimmerman, professor of public policy and political science at Hobart and William Smith colleges says there is history at work here and the administration is wise to get on the right side.

"There is no doubt that President Obama's shifting position on Proposition 8 and same-sex marriage more broadly is due to his desire to situate himself on the right side of history with respect to the fight over same-sex marriage," said Rimmerman, author of "From Identity to Politics: The Lesbian and Gay Movements in the United States."

"I also think that broader changes in public opinion showing greater support for same-sex marriage, especially among young people, but in the country at large as well, has created a cultural context for Obama to alter his views."

For years, Obama had frustrated many in the gay community by not offering full-throated support of same-sex marriage. However, the president's revelation last year that conversations with his daughters and friends led him to change his mind gave many in that community hope.

Last year, the Obama administration criticized a measure in North Carolina that banned same-sex marriage and made civil unions illegal. The president took the same position on a similar Minnesota proposal.

Obama administration officials point to what they see as the administration's biggest accomplishment in the gay rights cause: repealing "don't ask, don't tell," the military's ban on openly gay and lesbian members serving in the forces.

Then there was the president's inaugural address which placed the gay community's struggle for equality alongside similar civil rights fights by women and African-Americans.

"Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law, for if we are truly created equal, then surely the love we commit to one another must be equal, as well," Obama said in his address after being sworn in.

In offering its support and asserting in the brief that "prejudice may not be the basis for differential treatment under the law," the Obama administration is setting up a high stakes political and constitutional showdown at the U.S. Supreme Court over a fast-evolving and contentious issue.

The justices will hear California's Proposition 8 case in March. That case and another appeal over the federal Defense of Marriage Act will produce blockbuster rulings from the justices in coming months.

Beyond the legal wranglings there is a strong social and historic component, one that has helped open the way for the administration to push what could prove to be a social issue that defines Obama's second term legacy, Rimmerman said.

The nation is redefining itself on this issue, as well.

Pew survey: Changing attitudes on gay marriage

The changes are due, in part, to generational shifts. Younger people show a higher level of support than their older peers, according to Pew polling "Millennials are almost twice as likely as the Silent Generation to support same-sex marriage."

"As people have grown up with people having the right to marry the generational momentum has been very, very strong," said Evan Wolfson, president of Freedom to Marry, a gay rights organization.

That is not to say that there isn't still opposition.

Pew polling found that most Republicans and conservatives remain opposed to same-sex marriage. In 2001, 21% of Republicans were supportive; in 2012 that number nudged slightly to 25%.

Conservative groups expressed dismay at the administration's same-sex marriage support.

"President Obama, who was against same-sex 'marriage' before he was for it, and his administration, which said the Defense of Marriage Act was constitutional before they said it was unconstitutional, has now flip-flopped again on the issue of same-sex 'marriage,' putting allegiance to extreme liberal social policies ahead of constitutional principle," Family Research Council President Tony Perkins said in a statement.

But there are signs of movement even among some high profile Republican leaders

Top Republicans sign brief supporting same-sex marriage

The Republican-penned friend of the court brief, which is designed to influence conservative justices on the high court, includes a number of top officials from the George W. Bush administration, Mitt Romney's former campaign manager and former GOP presidential candidate Jon Huntsman.

It is also at odds with the Republican Party's platform, which opposes same-sex marriage and defines marriage as a union between a man and a woman.

Still, with White House and high-profile Republican support, legal and legislative victories in a number of states and polls that show an increasing number of Americans support same sex-marriage, proponents feel that the winds of history are with them.

"What we've seen is accelerating and irrefutable momentum as Americans have come to understand who gay people are and why marriage matters," Wolfson said. "We now have a solid national majority and growing support across every demographic. We have leaders across the spectrum, including Republicans, all saying it's time to end marriage discrimination."

CNN's Peter Hamby, Ashley Killough and Bill Mears contributed to this report.

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Sinkhole victim 'will be there forever,' brother says

SEFFNER, Fla.  Florida rescue personnel on Saturday searched for a man who disappeared into a sinkhole that swallowed his whole bedroom while he was asleep in his suburban Tampa home.

Jeff Bush, 36, who is presumed dead, was in bed when the other five members of the household who were getting ready for bed on Thursday night heard a loud crash and Jeff screaming.

The sinkhole has compromised the house next door, officials said Saturday.

Officials planned to let family members, accompanied by firefighters, into the threatened  home for about 20 minutes to gather some  belongings, Hillsborough County Fire Rescue spokesman Ronnie Rivera told reporters Saturday.

Bush’s body hadn’t been removed by Saturday afternoon and the ground near the home was still “very, very unsafe,” Rivera said at a televised press conference Saturday.

"At this time we did some testing and we determined that the house right next to the house that’s actually damaged is also compromised by the sinkhole,” Rivera said.

Jeff's brother, 35-year-old Jeremy Bush, jumped into the hole and furiously kept digging to find his brother.

"I really don't think they are going to be able to find him," Jeremy said on Saturday. He "will be there forever."

A small memorial of balloons and flowers for his brother had formed near the house on Saturday morning.

"I thank the Lord for not taking my daughter and the rest of my family," he said.

Jeremy himself had to be rescued from the sinkhole by the first responder to the emergency call, Douglas Duvall of the Hillsborough County Sheriff's Office. When Duvall entered Jeff Bush's bedroom, all he saw was a widening chasm but no sign of Jeff.

"The hole took the entire bedroom," said Duvall. "You could see the bed frame, the dresser, everything was sinking," he said.

Norman Wicker, 48, the father of Jeremy's fiancée who also lived in the house, ran to get a flashlight and shovel.

"It sounded like a car ran into the back of the house," Wicker said.

Authorities have not detected any signs of life after lowering listening devices and cameras into the hole.

"There is a very large, very fluid mass underneath this house rendering the entire house and the entire lot dangerous and unsafe," Bill Bracken, the head of an engineering company assisting fire and rescue officials, told the news conference late on Friday.

"We are still trying to determine the extent and nature of what's down there so we can best determine how to approach it and how to extricate," Bracken said.

After suspending the search overnight, it resumed at daylight on Saturday, with engineering consultants trying to determine the extent of the collapse so that a perimeter boundary can be established for setting up heavy equipment for future excavation.

Several nearby homes were evacuated in case the 30-foot (9-meter) wide sinkhole got larger but officials said Friday it only appeared to be getting deeper.

Soil samples showed that the sinkhole has compromised the ground underneath a home next door, engineers said Saturday.

The residents of that house were allowed 20 minutes in their home on Saturday to gather belongings. Firefighters and residents formed an assembly line to move items out of the house into SUVs and trucks.

Rescue officials said that in addition to soil samples, they were focusing on engineering analysis, ground penetration radar and other techniques to determine the extent of the ongoing collapse. Listening devices were being used to detect any evidence of life although Bush was presumed dead.

The Bush brothers worked together as landscapers, according to Leland Wicker, 48, one of the other residents of the house.

The risk of sinkholes is common in Florida due to the state's porous geological bedrock, according to the Florida Department of Environmental Protection. As rainwater filters down into the ground, it dissolves the rock, causing erosion that can lead to underground caverns, which cause sinkholes when they collapse.

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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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Frustrated McIlroy walks off course at Honda

PALM BEACH GARDENS, Fla. (AP) — Rory McIlroy abruptly walked off the course Friday at the Honda Classic, telling reporters who followed him to his car he's "not in a good place mentally."

He later said it was more dental than mental, releasing a statement that he couldn't concentrate because of a sore wisdom tooth.

The surprising departure raised serious questions about golf's No. 1 player with the Masters just more than a month away. McIlroy has played only four rounds in three tournaments this year, and this was a clear sign of frustration.

McIlroy was asked three times if anything was wrong physically and said there was not.

"There's not really much I can say, guys," he told three reporters before he drove away. "I'm not in a good place mentally, you know."

McIlroy already was 7-over par through eight holes of the second round when he hit his second shot into the water on the par-5 18th at PGA National. He shook hands with Ernie Els and Mark Wilson and was headed to the parking lot before they even finished the hole.

Els also hit into the water on the 18th and was complaining to a rules official about the muddy conditions of the fairway when he realized McIlroy was through.

"I was dropping my ball and I realized he wasn't dropping his ball," Els said. "I thought maybe his ball crossed further up (the hazard). When I hit my fourth shot, he just came up and said, 'Here's my card. I'm out of here.'"

About an hour after he left, McIlroy released a statement that pinned his withdrawal on dental problems.

"I have been suffering with a sore wisdom tooth, which is due to come out in the near future," McIlroy said. "It began bothering me again last night, so I relieved it with Advil. It was very painful again this morning, and I was simply unable to concentrate. It was really bothering me and had begun to affect my playing partners."

He was seen eating a sandwich on the 18th fairway.

McIlroy apologized to the tournament, saying he had every intention of defending his title at the Honda Classic. He said on Twitter he was "gutted."

"I'm a great fan of Rory's, but I don't think that was the right thing to do," Els said.

Told about McIlroy's statement about the sore wisdom tooth, Els softened his stance, not wanting to judge another player's pain.

"I didn't see anything, but if he had a toothache, that's what it is, you know?" Els said. "Hey, it's tough. If you ask him how he's feeling now, he's obviously feeling terrible for what's happened this morning."

"I didn't notice anything," Wilson said. "He wasn't playing the way the world No. 1 plays normally. Didn't hit the ball where he wanted to, and he's a true gentleman, though. He ... wasn't treating Ernie and myself in a different way. He was upset with his golf and I guess he had enough for the week."

McIlroy, coming off a year in which he won a second major in record fashion, already set himself up for scrutiny when he left Titleist to sign an equipment deal with Nike that was said to be worth upward of $20 million a year.

Nike introduced him with blaring music and a laser show in Abu Dhabi, but it's been all downhill from there.

McIlroy missed the cut in the Abu Dhabi Golf Championship with rounds of 75-75. He took a four-week break, and then was eliminated in the opening round of the Match Play Championship to Shane Lowry in one of the most poorly played matches of the round.

McIlroy played 36 holes with Tiger Woods at The Medalist on Sunday and said Tuesday it was no time to panic.

"Even though my results haven't revealed it, I really felt like I was rounding a corner," McIlroy said. "This is one of my favorite tournaments of the year and I regret having to make the decision to withdraw, but it was one I had to make."

It looked more like McIlroy was sinking than rounding the corner, not difficult to do on a course with so many water hazards. And he found plenty of them.

McIlroy, who opened with a 70, hit two poor chips that led to double bogey on No. 11, and a wild tee shot to the right led to a bogey on the 13th. His round really unraveled on the par-4 16th, when he hit his tee shot to the right and into the water, took a penalty drop and then came up short of the green and into the water again. He made a 6-foot putt for a triple bogey.

He three-putted from 40 feet, running his first putt about 10 feet by the hole, for a bogey to go 7 over. And then came the approach on the 18th that found water for the third time on his short day.

McIlroy is scheduled to play next week in the Cadillac Championship at Doral, which has no cut, and then the Houston Open. But on the first day of March, he has completed only four rounds of competition.

Els said the attention on McIlroy was sure to increase.

"I didn't think much of the equipment change. We've all made equipment changes before," said Els, who has used three brands of clubs to win majors. "I think there was a bit of criticism somewhere, and then I think he's furthering responding to that, and I think he's got a bit of pressure coming on him that way. I thought he played quite well yesterday. I thought he was pretty close to playing good golf, and unfortunately this morning ... hopefully he gets it together. We've got next week, got four rounds there. Such a talented player, he'll get it figured out."

It was the second straight year one of golf's biggest stars failed to finish a tournament on the Florida swing. Woods withdrew after 11 holes on the final round at Doral last year because of tightness in his Achilles tendon, raising questions about the seriousness of his recurring leg injuries. He won Bay Hill two weeks later.

McIlroy at least drove off from PGA National without a helicopter camera following him.

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Syria war is everybody's problem

Syrians search for survivors and bodies after the Syrian regime attacked the city of Aleppo with missiles on February 23.


  • Frida Ghitis: We are standing by as Syria rips itself apart, thinking it's not our problem

  • Beyond the tragedy in human terms, she says, the war damages global stability

  • Ghitis: Syria getting more and more radical, jeopardizing forces of democracy

  • Ghitis: Peace counts on moderates, whom we must back with diplomacy, training arms

Editor's note: Frida Ghitis is a world affairs columnist for The Miami Herald and World Politics Review. A former CNN producer and correspondent, she is the author of "The End of Revolution: A Changing World in the Age of Live Television." Follow her on Twitter: @FridaGColumns

(CNN) -- Last week, a huge explosion rocked the Syrian capital of Damascus, killing more than 50 people and injuring hundreds. The victims of the blast in a busy downtown street were mostly civilians, including schoolchildren. Each side in the Syrian civil war blamed the other.

In the northern city of Aleppo, about 58 people -- 36 of them children -- died in a missile attack last week. Washington condemned the regime of Bashar al-Assad; the world looked at the awful images and moved on.

Syria is ripping itself to pieces. The extent of human suffering is beyond comprehension. That alone should be reason enough to encourage a determined effort to bring this conflict to a quick resolution. But if humanitarian reasons were not enough, the international community -- including the U.S. and its allies -- should weigh the potential implications of allowing this calamity to continue.

Frida Ghitis

Frida Ghitis

We've all heard the argument: It's not our problem. We're not the world's policeman. We would only make it worse.

This is not a plea to send American or European troops to fight in this conflict. Nobody wants that.

But before we allow this mostly hands-off approach to continue, we would do well to consider the potential toll of continuing with a failed policy, one that has focused in vain over the past two years searching for a diplomatic solution.

U. S. Secretary of State John Kerry has just announced that the U.S. will provide an additional $60 million in non-lethal assistance to the opposition. He has hinted that President Obama, after rejecting suggestions from the CIA and previous Secretary of State Hillary Clinton to arm Syrian rebels, might be ready to change course. And not a day too soon.

The war is taking longer than anyone expected. The longer it lasts, the more Syria is radicalized and the region is destabilized.

If you think the Syrian war is the concern of Syrians alone, think about other countries that have torn themselves apart over a long time. Consider Lebanon, Afghanistan or Somalia; each with unique circumstances, but with one thing in common: Their wars created enormous suffering at home, and the destructiveness eventually spilled beyond their borders. All of those wars triggered lengthy, costly refugee crises. They all spawned international terrorism and eventually direct international -- including U.S. -- intervention.

The uprising against al-Assad started two years ago in the spirit of what was then referred to -- without a hint of irony -- as the Arab Spring. Young Syrians marched, chanting for freedom and democracy. The ideals of equality, rule of law and human rights wafted in the air.

Al-Assad responded to peaceful protests with gunfire. Syrians started dying by the hundreds each day. Gradually the nonviolent protesters started fighting back. Members of the Syrian army started defecting.

The opposition's Free Syrian Army came together. Factions within the Syrian opposition took up arms and the political contest became a brutal civil war. The death toll has climbed to as many as 90,000, according to Kerry. About 2 million people have left their homes, and the killing continues with no end in sight.

In fairness to Washington, Europe and the rest of the international community, there were never easy choices in this war. Opposition leaders bickered, and their clashing views scared away would-be supporters. Western nations rejected the idea of arming the opposition, saying Syria already has too many weapons. They were also concerned about who would control the weaponry, including an existing arsenal of chemical and biological weapons, after al-Assad's fall.

These are all legitimate concerns. But inaction is producing the worst possible outcome.

The moderates, whose views most closely align with the West, are losing out to the better-armed Islamists and, especially, to the extremists. Moderates are losing the ideological debate and the battle for the future character of a Syria after al-Assad.

Radical Islamist groups have taken the lead. Young people are losing faith in moderation, lured by disciplined, devout extremists. Reporters on the ground have seen young democracy advocates turn into fervent supporters of dangerous groups such as the Nusra Front, which has scored impressive victories.

The U.S. State Department recently listed the Nusra Front, which has close ties to al Qaeda in Iraq and a strong anti-Western ideology, as a terrorist organization.

Meantime, countries bordering Syria are experiencing repercussions. And these are likely to become more dangerous.

Jordan, an important American ally, is struggling with a flood of refugees, as many as 10,000 each week since the start of the year. The government estimates 380,000 Syrians are in Jordan, a country whose government is under pressure from its own restive population and still dealing with huge refugee populations from other wars.

Turkey is also burdened with hundreds of thousands of refugees and occasional Syrian fire. Israel has warned about chemical weapons transfers from al-Assad to Hezbollah in Lebanon and may have already fired on a Syrian convoy attempting the move.

Lebanon, always perched precariously on the edge of crisis, lives with growing fears that Syria's war will enter its borders. Despite denials, there is evidence that Lebanon's Hezbollah, a close ally of al-Assad and of Iran, has joined the fighting on the side of the Syrian president. The Free Syrian Army has threatened to attack Hezbollah in Lebanon if it doesn't leave Syria.

The possible outcomes in Syria include the emergence of a failed state, stirring unrest throughout the region. If al-Assad wins, Syria will become an even more repressive country.

Al-Assad's survival would fortify Iran and Hezbollah and other anti-Western forces. If the extremists inside the opposition win, Syria could see factional fighting for many years, followed by anti-democratic, anti-Western policies.

The only good outcome is victory for the opposition's moderate forces. They may not be easy to identify with complete certainty. But to the extent that it is possible, these forces need Western support.

They need training, funding, careful arming and strong political and diplomatic backing. The people of Syria should know that support for human rights, democracy and pluralism will lead toward a peaceful, prosperous future.

Democratic nations should not avert their eyes from the killings in Syria which are, after all, a warning to the world.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Frida Ghitis.

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Florida man swallowed by sinkhole feared dead

Brother of sinkhole victim talks to reporters at the scene.


A Florida man was feared dead on Friday after a sinkhole suddenly opened up under the bedroom of his suburban Tampa home and swallowed him, police and fire officials said.

Rescuers responded to a 911 call late on Thursday after the family of Jeff Bush, 36, reported hearing a loud crash in the house and rushed to his bedroom.

"All they could see was a part of a mattress sticking out of the hole," said Hillsborough County Fire Rescue Chief Ron Rogers. "Essentially the floor of that room had opened up."

A sheriff deputy rescued Bush's brother who had jumped in the sinkhole to try find him. Three other adults and a two-year-old child were in the house at the time the sinkhole opened up.

"I feel in my heart he didn't make it," Jeremy Bush told Tampa TV station WFTS. "There were six of us in the house, five got out."

Bush said he thought he heard his brother scream for help.

"I didn't see any part of him when I went in there," he said. "I told my father-in-law to grab a shovel and I started digging. Then the cops showed up and pulled me out of the hole and told me the floor was still falling in.

Authorities have not detected any signs life after lowering listening devices and cameras into the hole and ordered the evacuation of several nearby homes out of concern the sinkhole is growing.

Bill Bracken, the head of an engineering company assisting rescuers, said the sinkhole appeared to be as wide as 30 feet and 20 feet deep.

"It started in the bedroom and it has been expanding outward and it's taking the house with it as it opens up," Bracken said.

Officials were trying to determine the exact size of the sinkhole and dropped a camera mounted on wheels into a sewer in front of the one-story, sky blue-colored house to assess whether it could collapse.

The risk of sinkholes is common in Florida due to the state's porous geological bedrock, according to the Florida Department of Environmental Protection.

As rainwater filters down into the ground, it dissolves the rock causing erosion that can lead to underground caverns, which cause sinkholes when they collapse.

Florida suffered one of its worst sinkhole accidents in 1994 when a 15-story-deep sinkhole opened up east of Tampa at phosphate mine.

It created a hole 185 feet deep and as much as 160 feet wide.

Rogers said rescue efforts were suspended on Friday because of concerns about the house's stability.

Workers planned to put up a fence around the house.

"Right now we're trying to determine what if anything we can do. This is a very difficult situation. It's beneath our feet. We can't see anything," he said.

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Syria war is everybody's problem


  • NEW: France considers sending Syrian rebels night-vision gear and body armor, a source says

  • Britain's foreign secretary says the UK will announce new aid soon

  • The statements after European Union loosens restrictions to allow nonlethal aid to rebels

  • The U.S. will also send non-lethal aid to rebels for first time, plus $60 million in administrative aid

Rome (CNN) -- The United States stepped further into Syria's civil war Thursday, promising rebel fighters food and medical supplies -- but not weapons -- for the first time in the two-year conflict that has claimed more than 60,000 lives and laid waste to large portions of the country.

Meanwhile, European nations began to explore ways to strengthen rebel fighters that stop short of arming them after a European Council decision allowing such aid to flow to Syria.

U.S. Secretary of State John Kerry said the aid would help fighters in the high-stakes effort to topple Syrian President Bashar al-Assad, a conflict that has already spawned an enormous humanitarian crisis as refugees flee the fighting.

The ongoing fighting also poses the persistent threat of widening into a destabilizing regional crisis, including concerns that Hezbollah, Iran or others could gain control in Damascus after al-Assad's government falls.

"The United States' decision to take further steps now is the result of the continued brutality of a superior armed force propped up by foreign fighters from Iran and Hezbollah, all of which threatens to destroy Syria," Kerry said after meeting opposition leaders in Rome.

Kerry didn't say how much that aid would be worth, but did announce that the United States would separately give $60 million to local groups working with the Syrian National Council to provide political administration and basic services in rebel-controlled areas of Syria.

READ: U.S. weighing nonlethal aid to Syrian opposition

That's on top of $50 million in similar aid the United States has previously pledged to the council, as well as $385 million in humanitarian assistance, Kerry said.

"This funding will allow the opposition to reach out and help the local councils to be able to rebuild in their liberated areas of Syria so that they can provide basic services to people who so often lack access today to medical care, to food, to sanitation," he said.

Islamist Influence

That aid is partly an effort to hem in radical Islamist groups vying for influence in Syria after the fall of al-Assad, a senior State Department official told CNN.

"If the Syrian opposition coalition can't touch, improve and heal the lives of Syrians in those places that have been freed, then extremists will step in and do it," the official said.

Sheikh Ahmed Moaz al-Khatib, president of the Syrian National Council, said concerns about Islamist influence had been overstated.

"We stand against every radical belief that aims to target Syria's diverse social and religious fabric," he said.

READ: Inside Syria: Exclusive look at pro-Assad Christian militia

U.S. officials hope the aid will help the coalition show what it can do and encourage al-Assad supporters to "peel away from him" and help end the fighting, the official said.

The opposition council will decide where the money goes, Kerry said.

But the United States will send technical advisers through its partners to the group's Cairo headquarters to make sure the aid is being used properly, the senior State Department official said.

Additional aid possible

The European Council carved out an exception in its sanctions against Syria on Thursday to allow for the transfer of nonlethal equipment and technical assistance for civilian protection only.

The council didn't specify what kind of equipment could be involved.

British Foreign Secretary William Hague said Friday on Twitter that his country would be pledging new aid because "we cannot stand still while the crisis worsens and thousands of lives are at stake."

A diplomatic official at the French Foreign Ministry told CNN that France is studying the possibility of supplying night-vision equipment or body armor.

"It is in the scope of the amendment," the official said.

In the United States, President Barack Obama is thinking about training rebels and equipping them with defensive gear such as night-vision goggles, body armor and military vehicles, according to sources familiar with the discussions.

The training would help rebels decide how to use their resources, strategize and maybe train a police force to take over after al-Assad's fall, one of the sources said.

READ: Syrian army in Homs is showing strains of war

Kerry did not announce that sort of aid Thursday, but said the United States and other countries backing the rebels would "continue to consult with each other on an urgent basis."

An official who briefed reporters said the opposition has raised a lot of needs in the Rome meetings and the administration will continue to "keep those under review."

"We will do this with vetted individuals, vetted units, so it has to be done carefully and appropriately," the official said.

Humanitarian crisis

The conflict began with demands for political reform after the Arab Spring movement that swept the Middle East and Africa, but descended into a brutal civil war when the al-Assad regime began a brutal crackdown on demonstrators.

At least 60,000 people have died since the fighting began in March 2011, the United Nations High Commissioner for Human Rights said in early January.

Another 940,000 had fled the country as of Tuesday, while more than one in 10 of Syria's 20 million residents have been forced to move elsewhere inside the country because of the fighting, the Office of the United Nations High Commissioner for Refugees said.

The situation is nearing crisis proportions, with the dramatic influx of refugees threatening to break the ability of host nations to provide for their needs, Assistant High Commissioner Erika Feller told the U.N. Human Rights Council on Tuesday

"The host states, including Jordan, Lebanon, Turkey, Iraq, Egypt and the North African countries, have been exemplary in their different ways, but we fear the pressure will start to overwhelm their capacities," she told the council, according to a text of her remarks posted on the United Nations website.

Al-Khatib said it's time for the fighting to stop.

"I ask Bashar al-Assad for once, just once, to behave as a human being," he said. "Enough massacres, enough killings. Enough of your bloodshed and enough torture. I urge you to make a rational decision once in your life and end the killings."

READ: Syrian war is everybody's problem

Jill Dougherty reported from Rome, and Michael Pearson reported and wrote from Atlanta. CNN's Nick Paton Walsh and Elise Labott also contributed to this report.

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Mason out at Groupon, shares jump

Groupon is replacing its CEO, company co-founder Andrew Mason, with two current executives amid increasing heat about the deal site's disappointing financial performance.

In a letter to employees, Mason said he was fired, with a playful and self-deprecating addition: "If you’re wondering why … you haven’t been paying attention."

"From controversial metrics in our (IPO statement) to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves," Mason continued. "As CEO, I am accountable."

The board said it's searching for a permanent replacement. For now, Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis have been appointed to the newly created Office of the Chief Executive.

The company said its earnings expectations for the first quarter and full year outlined on Wednesday remain unchanged.

Investors appear to applaud the executive change, driving shares up in after-hours trading after a brutal regular session in which the stock lost a quarter of its value. Shares had plummeted in continuing fallout from a weaker than expected earnings report and forecast on Wednesday. The stock jumped 8 percent after hours on the news and was at $4.65, up 2.6 percent, at 3:40 p.m.

Groupon, a once-red-hot company that started in 2008 by marketing discounts on local services such as spas and restaurants to millions of online subscribers, has lost about three-quarters of its value since its IPO. Mason came under fire for not finding a quick enough solution for its problems.

The company posted a fourth-quarter net loss of $81.1 million, or 12 cents a share, missing Wall Street's expectations for a profit. Revenue for the quarter was up 30 percent, in line with analysts' views.

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Wall Street gains on Bernanke comments, S&P above 1,500

NEW YORK (Reuters) - Stocks rose on Wednesday, with major indexes posting their best daily gains since early January, as Federal Reserve Chairman Ben Bernanke remained steadfast in supporting the Fed's stimulus policy and data pointed to economic improvement.

In a second day before a congressional committee, Bernanke defended the Fed's buying of bonds to keep interest rates low to boost growth. The market's jump of more than 1 percent also came on better-than-expected data on business spending plans and the housing market.

Bernanke's remarks helped the market rebound from its worst decline since November and put the S&P 500 index back above 1,500, a closely watched level that has been technical support until recently. The Dow Jones industrial average <.dji> closed at a level not seen since 2007 as it again pulled within striking distance of an all-time high.

Speaking before the House Financial Services Committee, Bernanke downplayed signs of internal divisions at the Fed, saying the policy of quantitative easing, or QE, has the support of a "significant majority" of top central bank officials.

Bernanke removed a headwind from markets arising from concerns the Fed's quantitative easing might end earlier than anticipated. Doubts about the Fed's intentions had broken a seven-week streak of gains by stocks.

"The Fed continues to encourage risk-taking in markets, which is a powerful tool that makes the danger not being long stocks, not in being too long," said Tom Mangan, a money manager at James Investment Research Inc in Xenia, Ohio.

The Dow Jones industrial average <.dji> was up 176.32 points, or 1.27 percent, at 14,076.45. The Standard & Poor's 500 Index <.spx> was up 19.07 points, or 1.27 percent, at 1,516.01. The Nasdaq Composite Index <.ixic> was up 32.61 points, or 1.04 percent, at 3,162.26.

Pending home sales jumped 4.5 percent in January, three times the rate of growth that had been expected. While orders for durable goods fell more than expected in January, non-defense capital goods orders excluding aircraft - a closely watched proxy for business spending plans - showed the biggest gain since December 2011.

About 74 percent of stocks traded on the New York Stock Exchange closed higher while 64 percent of Nasdaq-listed shares closed up.

The S&P turned very slightly higher on the week, recovering from the index's biggest daily drop since November on Monday. That drop came on concerns over Italy's election, as well as 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.

The index had climbed 6.3 percent for the year before pulling back on concerns about Fed policy and inconclusive elections in Italy, which rekindled fears of a new euro zone debt crisis.

"While the rally remains intact and there are reasons to be long-term bullish here, there are also reasons to not be surprised if we get a correction," said Mangan, who helps oversee $3.7 billion.

In earnings news, Priceline.com gained 2.6 percent to $695.91 after reporting adjusted earnings that beat expectations. TJX Cos Inc jumped 2.5 percent to $44.75 after the retail chain operator posted higher fourth-quarter results.

The S&P retail index <.spxrt> climbed 1.6 percent.

Target Corp offered a cautious outlook for consumer spending in 2013 following a weak holiday quarter. The stock dipped 1.1 percent to $63.32.

First Solar Inc plunged 14 percent to $27.04 after failing to give a full-year earnings and sales outlook, though it also swung to a quarterly profit.

Groupon Inc plunged 21 percent to $4.70 after the bell after reporting its fourth-quarter results.

With 93 percent of the S&P 500 companies having reported results so far, 69.5 percent beat 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.

About 6.23 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, slightly below the daily average so far this year of about 6.48 billion shares.

(Editing by Nick Zieminski and Kenneth Barry)

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