Shares, oil steady before U.S. data, Fed meeting

LONDON (Reuters) - European shares consolidated near two-year highs on Tuesday and oil prices steadied as investors awaited data on the strength of U.S. economy and a Federal Reserve policy decision later in the week.

Most markets for riskier assets have risen solidly this year - despite only modest global growth - due to robust corporate earnings reports, signs of an end to the euro zone crisis and renewed momentum in the U.S. and Chinese economies.

But particularly in the equity markets, where many major indexes are close to multi-year highs, investors are looking for reassurance that a lasting economic recovery is underway.

"With markets posting significant gains for the year already, traders are becoming more demanding in their need for positive cues to keep up the buying momentum," said Jonathan Sudaria, a dealer at Capital Spreads in a trading note.

The FTSE Eurofirst 300 index <.fteu3> of top European shares was up 0.2 percent in early trade after hitting a 23-month high on Monday. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were flat to 0.1 percent higher.

U.S. stock futures gained 0.1 percent, pointing to a firm Wall Street start. <.l><.eu><.n/>

Earlier the MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> rallied 0.9 percent to end a four-day losing streak, led by a 1.1 percent jump in Australian shares <.axjo> to a fresh 21-month high.

The major event in investors' sights is the two-day Federal Reserve policy meeting. They are awaiting the Fed's decision and statement on Wednesday for any signs that the recent run of positive economic data would encourage policymakers to consider changing its easing policy.

The first estimate of U.S. fourth-quarter gross domestic product also will be released on Wednesday, followed by non-farm payrolls on Friday.

In Europe investors are looking to Spanish GDP data and Italian and German debt auctions on Wednesday, the first big day of European earnings on Thursday and the month-end.

Official data on China's growth outlook due Friday will also be important, especially for commodities markets.

Brent crude and U.S. oil were edging higher on Tuesday but, in line with equities, gains were limited with Brent crude up 16 cents to $113.64 a barrel and U.S. crude rising 44 cents to $96.88.

The euro was at $1.3450, not far from an 11-month high of $1.3480 hit on Friday when it had gained a boost from news of early repayments by euro zone banks of three-year loans to the European Central Bank, which suggested that parts of the banking system may be on the mend.

The euro, however, faces a series of major resistance levels near $1.35, including its 2012 high of $1.34869.

German government bond prices edged higher on Tuesday, as some investors were attracted by a dip that had followed Friday's announcement that banks would repay 137 billion euros of the ECB money.

Bund futures were 8 ticks higher on the day at 141.87. They hit a two-month low of 141.61 on Monday, having fallen by almost two full points in the past three sessions.

(Reporting by Richard Hubbard. Editing by)

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Effects of Worst Satellite Breakups in History Still Felt Today

The anniversaries of two major space junk events — China‘s anti-satellite test on Jan. 11, 2007, and the destructive fender-bender between a defunct Soviet Union-era satellite with an operating U.S. spacecraft on Feb. 10, 2009 — are receiving special attention in orbital debris circles.

The Chinese anti-satellite test merited a nod by the Air Force Space Command (AFSPC) Public Affairs Office from Peterson Air Force Base in Colorado, labeling it an “Anniversary Milestone: Satellite Shootdown.”

The Jan. 11 AFSPC release noted that the Chinese military used a ground-based missile to hit and destroy its aging Fengyun-1C weather satellite, which was orbiting more than 500 miles (805 kilometers) in space back in 2007.

“The test raised concerns about the vulnerability of U.S. satellites and a possible arms race in space,” the press release stated.

The anti-satellite test created more than 100,000 pieces of debris orbiting the planet, with about 2,600 of them more than 4 inches (10 centimeters) across, according to a NASA estimate.

“We carefully monitor those and the thousands of other bits of orbital debris to help provide for safe passage for those who traverse those orbits,” the AFSPC statement concluded. [Worst Space Debris Events of All Time]

Debris count

Similarly, NASA’s “The Orbital Debris Quarterly News,” a publication of the NASA Orbital Debris Program Office, spotlighted the two anniversaries in its January issue: China’s ASAT test, as well as the upcoming fourth anniversary of the smashup between Russia’s circa-1960s Cosmos 2251 spacecraft and the U.S. Iridium 33 communications satellite.

“The beginning of the year 2013 marks the sixth anniversary of the destruction of the Fengyun-1C (FY-1C) weather satellite as the result of an anti-satellite test conducted by China in January of 2007 and the fourth anniversary of the accidental collision between Cosmos 2251 and the operational Iridium 33 in February of 2009,” the newsletter reported, adding, “These two events represent the worst satellite breakups in history.”

Altogether, the space junk created by these two events accounted for more than a third of the total cataloged satellite population in low-Earth orbit (LEO), where approximately 500 operational spacecraft reside or transit daily.

According to the NASA orbital debris office, a total of 5,579 fragments have been cataloged by the U.S. Space Surveillance Network (SSN) — a worldwide network of space surveillance radar and optical telescopes, both military and civilian — to observe the objects. Almost 5,000 of them still remain in orbit as of January 2013.

Changing the landscape

In addition to these cataloged objects, hundreds of thousands or more pieces of space litter, down to approximately a millimeter in size, were also generated during the breakups. These fragments are too tiny to be tracked by the SSN, but still large enough to be a safety concern for human space activities and robotic missions in low-Earth orbit — the region below 1,243 miles (2,000 km) altitude.

“Just like their cataloged siblings, many of them remain in orbit today. These two breakup events dramatically changed the landscape of the orbital debris environment in LEO,” according to the NASA newsletter.

China’s ASAT destruction of FY-1C and the mess produced, along with the Iridium 33 and Cosmos 2251 fragments, “will continue to be felt for decades to come,” the newsletter points out.

In general, the Iridium 33 and Cosmos 2251 fragments will decay (in other words, be destroyed by falling through Earth’s atmosphere) faster than the FY-1C fragments because of their lower altitudes. In the case of Iridium 33, that shorter lifetime is caused by the lightweight composite materials that were extensively used in the fabrication of the Iridium spacecraft.

Solar cycling

The enormous amounts of debris churned up by the fragmentations of Fengyun 1C, Cosmos 2251 and Iridium 33 will also be affected by our sun’s 11-year cycle of activity, which is currently in what’s called Solar Cycle 24, experts say.

Increased solar activity heats the Earth’s atmosphere, causing it to expand. That expansion increases the density of the atmosphere at any given altitude. This, in turn, increases drag on space junk, as well as satellites, causing these objects to fall back to Earth more quickly.

By mid-2012, more than 570 (10 percent) of the cataloged debris from the ASAT test and the satellite collision had already fallen out of orbit and with an increasing rate. Many of the remaining cataloged bits of debris had also noticeably experienced the effects of atmospheric drag.

NASA predicts that Solar Cycle 24 will peak in early or mid-2013.

Future forecasting

However, Nicholas Johnson, chief scientist for orbital debris at the NASA Johnson Space Center in Houston, said the peak in solar activity expected in 2013 might be the lowest in 100 years.

“Hence, far fewer debris, both large and small, will fall back to Earth compared with a more normal solar cycle. This comes at a time of a record number of known orbital objects,” Johnson said. “If solar activity does not return to normal levels during the next solar cycle (Solar Cycle 25), the rate of growth of the Earth orbital population will increase more rapidly than most forecasts now anticipate,” he reported at last year’s 63rd International Astronautical Congress in Naples, Italy.

Johnson also noted that by the end of Cycle 24 (estimated to come around 2020), about one-third of all debris from the two breakup events might have re-entered, depending upon the peak and duration of the forthcoming solar maximum.

Leonard David has been reporting on the space industry for more than five decades. He is former director of research for the National Commission on Space and a past editor-in-chief of the National Space Society’s Ad Astra and Space World magazines. He has written for SPACE.com since 1999.

Copyright 2013 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Euro, shares stall as investors turn cautious

LONDON (Reuters) - Rallies in European shares and the single currency stalled on Monday after strong gains last week as investors awaited confirmation that financial market conditions and the outlook for the euro area have improved.

Investor sentiment rose strongly on Friday after data showed European banks would repay more than expected of the emergency loans they borrowed from the European Central Bank (ECB) and that business sentiment in Germany was improving sharply.

A solid start to the corporate earnings season has also helped send many equity indexes to pre-financial crisis highs, with the Standard & Poor's 500 index closing last week at its highest level in over five years.

In the equity markets Europe's FTSEurofirst 300 index <.fteu3> shed 0.1 percent in early trade to 1,173.87 points, leveling off near its highest level for almost two years, though traders said there was still strong underlying demand.

"All European benchmarks are at their 2012-2013 highs. Every time there's even a slight pull-back, the buying pressure comes in," Aurel BGC chartist Gerard Sagnier said.

The market's cautious mood on Monday also followed a weaker session in Asia, where falls in technology companies saw the MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> drop 0.4 percent.

The euro held near an 11-month high against the dollar $1.3440

Meanwhile, German government bond futures, a key gauge of investor sentiment, continued to ease, slipping a further 7 ticks to 142.40 on Monday, and gold is languishing near a two-week low as hopes for an economic recovery worldwide dampen the metal's appeal as a safe haven.

Investors are keenly awaiting the ECB's monthly data on bank lending to companies and consumers, due later, for confirmation that growth is returning to the economy. Italy will also provide a test of investor sentiment when it auctions almost 7 billion euros ($9.4 billion) of 2-year and 5-year bonds.

However, the main focus for investors this week will be on the U.S., where the Federal Reserve's Open Market Committee meets on Tuesday and Wednesday, and where the nonfarm payrolls report is due out on Friday.

Oil prices were being held in check by the events coming up in the U.S., with Brent crude unchanged at $113.28 a barrel, while U.S. crude rose 17 cents to $96.05 after seven straight weekly gains - the longest such streak since early 2009.

($1 = 0.7421 euros)

(Reporting by Richard Hubbard; Editing by Will Waterman)

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Energy-Guzzling Cities Changing Weather 1,000 Miles Away

The heat released by everyday activities in energy-guzzling cities is changing the weather in far-away places, scientists report today (Jan. 27).

The released heat is changing temperatures in areas more than 1,000 miles away (1609 kilometers). It is warming parts of North America by about 1 degree Fahrenheit (0.6 degrees Celsius) and northern Asia by as much as 1.8 degrees Fahrenheit (1 degree Celsius), while cooling areas of Europe by a similar amount, scientists report in the journal Nature Climate Change.

The released heat (dubbed waste heat), it seems, is changing atmospheric circulation, including jet streams — powerful narrow currents of wind that blow from west to east and north to south in the upper atmosphere. 

This impact on regional temperatures may explain a climate puzzle of sorts: why some areas are having warmer winters than predicted by climate models, the researchers said. In turn, the results suggest this phenomenon should be accounted for in models forecasting global warming.

“There’s a tendency in climate science to overlook the effects of cities,” Brian Stone, a professor of city and regional planning at Georgia Tech, told LiveScience. “Cities occupy just a few percent of the global land surface, but the amount of energy released as waste heat is contributing downwind to pretty significant changes in climate. I hope this will encourage us to focus more on cities as important drivers of climate change,” added Stone, who was not involved in the current study. [8 Ways Global Warming Is Already Changing the World]

Hot in the city

Cities are known to be warmer than their surroundings due to what’s known as the urban heat island effect — pavement, buildings and other building materials retain heat, preventing it from reradiating into the sky.

In the new study, the researchers looked at another kind of “urban heat,” this one produced directly by transportation, heating and cooling units, and other energy-consuming activities.

“The burning of fossil fuel not only emits greenhouse gases, but also directly affects temperatures because of heat that escapes from sources like buildings and cars,” said study researcher Aixue Hu, of the National Center for Atmospheric Research (NCAR), in a statement. “Although much of this waste heat is concentrated in large cities, it can change atmospheric patterns in a way that raises or lowers temperatures across considerable distances.”

Hu and colleagues studied the energy effect using the National Center for Atmospheric Research (NCAR) model, a widely used climate model that takes into account the effects of greenhouse gases, topography, oceans, ice and global weather. The researchers ran the model with and without the input of human energy consumption, to see whether it could account for large-scale regional warming.

When man-made energy was included in the model, it led to winter and autumn temperature changes of up to 1.8 degrees F (1 degree C) in mid- and high-latitude parts of North America and Eurasia. The modeling is based on estimates, however, and more studies are needed to measure how much heat is actually released by urban areas.

Heat disrupts jet stream

Here’s how the scientists think it works: Energy-hungry metropolitan areas are located on the east and west coasts of North America and Eurasia, beneath major “hot spots” of atmospheric circulation. The waste heat from these cities creates thermal mountains, or taller-than-normal columns of heated air, which cause air jets moving eastward to deflect northward and southward.

As a result, the jet stream in upper latitudes widens and strengthens, bringing up hot air from the south and causing warming far from the urban areas (and concurrent cooling in others).

“The energy consumption in highly populated areas can cause changes in wind patterns, and that causes climate change far away from the heating source,” said meteorologist and study author Ming Cai of Florida State University.

Follow LiveScience on Twitter @livescience. We’re also on Facebook & Google+.

Copyright 2013 LiveScience, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Bulgaria holds nuclear power referendum

SOFIA, Bulgaria (AP) — Bulgarians are voting in a referendum on whether a new nuclear power plant should be built in the European Union‘s poorest member country, a choice also seen as a barometer of the country’s relationship with Russia.

Sunday’s vote was called by the opposition Socialist party in an effort to force the government to reverse its decision to scrap a deal with Russia on the construction of a second nuclear plant.

Bulgaria’s first referendum since the fall of communism in 1989 has polarized opinion along party lines. It has been seen as a test ahead of general elections in July, but also as a chance to loosen Moscow’s energy grip.

The latest polls estimate a low turnout, which could make the referendum invalid. At least 60 percent of the electorate must take part.

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Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Exxon Mobil dethrones Apple as world’s most valuable company

Apple (AAPL) has lost its title as the word’s most valuable company to Exxon Mobil (XOM) only a year after it reached the milestone. Despite reporting strong earnings this week, expectations are high for the company and its guidance has Wall Street investors worried. Shares of Apple have been hit hard in recent weeks and have continued to fall to a 12-month low. On Friday, the company’s market cap fell below $ 416 billion, giving Exxon Mobil the title of world’s most valuable company once again. As of publication, Apple is currently trading down more than 2% at $ 441.36 a share with a market cap of $ 414.26 billion.

[More from BGR: Unlocking your smartphone will be illegal starting next week]

This article was originally published on BGR.com

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Euro jumps ahead of ECB loan repayments

LONDON (Reuters) - The euro hit an 11-month high and European shares dipped on Friday as markets braced for news on how much banks will repay of the one trillion euros in European Central Bank crisis funds that have been keeping them afloat.

Data due showing whether Britain is heading for its third recession since the financial crisis began and on German business sentiment was also in the spotlight after upbeat manufacturing reports from the United States and China.

Estimates of the size of the banks' likely repayment of the cheap ECB money average around 100 billion euros according to a Reuters poll, although some analysts believe it could be as high as 300 billion as stronger banks try to show they are weaning themselves off of central bank life support.

"An initial repayment in excess of 100 billion euro would be a positive surprise for markets and likely supportive for risk assets," said Michael Symonds, a credit analyst at Daiwa Capital Markets.

Ahead of the announcement from the ECB due at 1100 GMT, the euro gained 0.3 percent to be above $1.34 to the dollar, its highest level since February last year. Against the yen, the single currency rose 0.5 percent to 121.48 yen, its highest level since April 2011.

In the equity market the broad FTSEurofirst 300 index <.fteu3> index of pan-European shares dipped to 0.1 percent to be just under 1,170 points, near its 22 month high. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were flat to 0.2 percent higher in early trade. <.l><.eu><.n/>

Earlier the MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> eased 0.5 percent, for a weekly drop of about 1 percent, its biggest loss in two months.

The falls came as tech-heavy markets such as South Korea and Taiwan weakened further following disappointing results from Apple this week, but were expected to be contained.

"The PMI indicators from the U.S., Europe and China should serve to keep markets tracking higher," said Tim Waterer, senior trader at CMC Markets in Sydney.

Manufacturing in China and the U.S. grew this month at the quickest pace in about two years, while data suggesting German growth picked up boosted hopes for a swifter euro zone recovery.

Brent crude held above $113, on track to post a second week of gains on the robust economic data, which has improved the outlook for fuel demand in the world's two largest oil consumers.

(Additional reporting by Marc Jones; editing by Philippa Fletcher)

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Shares dip as investors brace for euro zone data

LONDON (Reuters) - European shares weakened on Thursday as investors braced for the year's first reading on euro zone business activity for 2013 after data showed that France, the region's second-biggest economy, may be in recession.

Markets are hoping for a modest improvement in the estimates for manufacturing and service sector activity across the euro area for January, due later, to support the recent rallies in equities and peripheral European debt markets.

"January's flash PMI data (for France) signals a very disappointing start to 2013," said Jack Kennedy, senior economist at Markit, which compiles the purchasing managers' index (PMI) data.

Europe's FTSEurofirst 300 index <.fteu3> of top company shares fell 0.3 percent to 1,164.30 points after the French data was released, still not far from a peak of 1,170.29 points hit two weeks ago, a level not seen since early 2011.

London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were down by up to 0.5 percent.

"All the major benchmarks are looking overbought, and any short-term correction will be seen as a buying opportunity, but the longer-term trend is still to the upside," said Jawaid Afsar, a sales trader at Securequity.

The euro fell 0.2 percent on the day to hit $1.3286 after Markit said its preliminary composite purchasing managers' index (PMI) for France, covering activity in the services and manufacturing sectors combined, came out at 42.7 for the month, down from 44.6 in December.

The common currency recovered slightly when German PMI data for January showed private-sector activity jumped to its highest level in a year.

APPLE BITES

The main European tech stock index <.sx8p> was down 0.85 percent after the world's largest technology company, Apple , released disappointing earnings figures after the U.S. markets had closed.

The results had earlier fanned earnings worries across the technology sector in Asia, overshadowing positive data on Chinese manufacturing activity.

China's HSBC flash purchasing managers' index (PMI) rose to 51.9 in January to a two-year high, signaling a rebound in manufacturing activity and confirming a recovery in growth in the world's second-largest economy was on track.

(Additional reporting by David Brett; Editing by Will Waterman)

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Deep freeze grips northern U.S. from Minnesota to Maine

MINNEAPOLIS (Reuters) – Frigid arctic air held the U.S. Midwest and Northeast in its icy grip on Wednesday, with the cold so dangerous that municipal emergency warming centers opened up and ski resorts shut down.

The National Weather Service warned the wind chill could make the temperature feel like 40 degrees below zero Fahrenheit(minus 40 degrees Celsius) in parts of Northern Minnesota until noon on Thursday.

Wintry conditions from Minneapolis to Washington marked the coldest conditions in many parts of the United States in four years, but were nowhere near the record lows for January, meteorologists said.

“This cold that we are experiencing right now came straight from the arctic,” said Tom Kines, an AccuWeather.com senior meteorologist.

Washington, D.C., reported its coldest weather in four years, reaching 16 degrees Fahrenheit (minus 9 degrees Celsius)at Reagan National Airport early Wednesday.

The National Weather Service issued a wind chill warning for New Hampshire until Wednesday evening, with values as low as 43 degrees below zero (minus 42 degrees Celsius) because of steady winds up to 20 miles per hour and gusts up to 30 mph.

New Hampshire’s Wildcat Mountain ski area said it would be closed to skiers on Wednesday and Thursday as temperatures, forecast to drop to 10 degrees below zero Fahrenheit (minus 23 degrees Celsius), made for “unsafe conditions” for skiers and workers.

The deep freeze had forced some Minnesota school districts to delay openings or cancel classes and activities on Tuesday, and some ski areas to close early due to the wind chills.

“It won’t take that much wind to get things a little bit colder than they really seem to be,” National Weather Service meteorologist Kevin Kraujalis said.

Temperatures in Minnesota were on par with New York state, New Hampshire, Vermont and Maine.

Connecticut’s governor Dannel Malloy urged towns and cities to open warming centers and at least four municipalities did, including Bristol, Torrington, Meriden and West Haven, said Scott DeVico, spokesman for the Connecticut Department of Emergency Services & Public Protection. At least 22 people seeking shelter called an emergency 211 phone line overnight, he said.

Warming centers were open across New York City.

In Chicago on Wednesday, a five-story warehouse, that caught fire in frigid cold on Tuesday, was covered in ice as water from the fire hoses froze.

(Additional reporting by Scott Malone in Boston and Ian Simpson in Washington; Editing by Barbara Goldberg and Bob Burgdorfer)

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European shares edge up as economic sentiment improves

LONDON (Reuters) - European stocks edged toward 22 month highs on Wednesday, driven by upbeat corporate earnings, an easing in fears about the U.S. hitting its debt ceiling and a better outlook for the global economy.

Strong investor confidence data from Germany, Japan's plans to shore up the world's third largest economy, and improving economic numbers this month from the world's top two economies, the U.S. and China, have all cheered investors.

European Central Bank chief Mario Draghi added his weight to the brighter outlook saying, in a speech in Frankfurt, that "the darkest clouds over the euro area subsided" in 2012.

"The sense of panic experienced in the financial system at times over the last few years looks unlikely to return," said Nick Kounis, head of macro economic research at ABN AMRO.

"We expect global growth to improve gradually this year before gaining strength next year," he said.

After a rally on Wall Street, which saw the widely watched Standard & Poor's 500 index <.spx> hit a fresh five-year closing high, Europe's main share markets all opened higher.

The FTSE Eurofirst 300 index <.fteu3> of top European shares rose 0.1 percent to 1,166.83 While London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> open as much as 0.3 percent higher.

Earnings from likes of tech firms Google and IBM were supporting the gains along with news that BHP Billiton , the world's biggest mining company, had boosted its iron ore output in the December quarter.

However, a slight retreat in Asian shares after they had hit 17-1/2 month highs left the MSCI world equity index <.miwd00000pus> just below the fresh 20-month peak of 352.54 hit on Tuesday.

In the debt market German Bund futures edged higher at Wednesday's open however traders said the gains were unlikely to be sustained with investors still upbeat about higher-yielding euro zone bonds.

Yields fell across the euro zone debt market on Tuesday after Spain sold a new 10-year bond that drew massive demand from foreign investors.

Sentiment is also expected to improve as Republican leaders in the U.S. House of Representatives said they aim to pass on Wednesday a nearly four-month extension of the U.S. debt limit to May 19.

Meanwhile the yen held firm against the dollar and the euro as monetary easing announced on Tuesday by the Bank of Japan failed to provide an immediate a stimulus as some had hoped.

The BOJ doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets starting in 2014, sparking an unwinding of yen short positions from speculators looking for more immediate easing steps.

The dollar fell 0.4 percent to 88.30 yen while the euro slid 0.8 percent to 117.42 yen. The dollar hit a 2-1/2-year high of 90.25 yen on Monday.

(Reporting by Richard Hubbard. Editing by Peter Graff)

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Democratic Senators Pass Torch to EPA on Climate Change

After years of trying—and failing—to get climate-change legislation through Congress, top Senate Democrats are publicly ready to hand over the power to President Obama and the Environmental Protection Agency.

“A lot of people don’t recognize that EPA has huge authority to reduce carbon in the air,” Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif., said at a briefing Tuesday.

“A lot of you press me … on: ‘Where is the bill on climate change? Where is the bill’? There doesn’t have to be a bill,” Boxer told a group of reporters in her office in the Hart Senate Building. “There will be many approaches, but I’m telling you right now, EPA has the authority in the transportation sector, in the electricity sector, and the industrial sector under the Clean Air Act.”

Boxer’s public comments come a few months after another top Democrat, Senate Democratic Policy and Communications Center Chairman Chuck Schumer of New York, made similar comments to another group of reporters shortly after the election in November. Speaking at a Christian Science Monitor breakfast, Schumer noted the significance of EPA’s authority to regulate greenhouse-gas emissions and said that Congress could instead tackle smaller bits of policy, such as energy-efficiency legislation.

The statements by Boxer and Schumer that they won’t push big climate legislation and will defer to EPA on global warming are two of the clearest signals yet that the Democratic Party will not only defend the agency’s authority to regulate carbon emissions but that it will also follow through on the regulations, despite Republican criticism and industry pleas to slow down the rules. Boxer’s statement also came on the heels of Obama’s Inaugural Address, where he gave a full-throttled call to action on climate change.

After spending the past two years fighting over EPA and casting messaging votes on the agency’s carbon rules, Congress is poised for even more intense partisan clashes. This year’s fights will carry more weight as the agency gets closer to rolling out the regulations that will affect coal-fired power plants across the country. Senate Majority Leader Harry Reid, D-Nev., ensured during the last congressional session that no GOP-led efforts to pass legislation delaying or eliminating EPA’s climate rules can succeed. Boxer is confident Senate Democrats can beat back expected GOP efforts this Congress, too.

“We will stop it every time, let me just tell you that,” Boxer said.

A 2007 ruling from the Supreme Court is backing Boxer up. Republicans—with potential support from some moderate Democrats up for reelection in 2014—will nonetheless put up a big fight. Sen. James Inhofe, R-Okla., who has been the ranking member on the Environment and Public Works Committee during Obama’s first term, and GOP leadership in the House have vowed to keep trying to curtail EPA on a whole host of issues, especially climate change. A request for comment to the Environment panel’s new top Republican, Sen. David Vitter of Louisiana, was not returned.

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Shares hit 20-month high as Japan promises open-ended easing

LONDON (Reuters) - World shares hit a new 20-month high on Tuesday after Japan's central bank promised to pump unlimited stimulus into the country's economy to fight the threat of deflation and generate growth.

The Bank of Japan, which has been under intense political pressure to overcome deflation, hiked its inflation target to 2 percent and said that from 2014 it would adopt an open-ended commitment to buy assets.

The move surprised markets, which had expected another incremental increase in its 101 trillion yen ($1.12 trillion) asset-buying and lending program, though the delay until the easing measures kick in dulled the impact and saw the yen edge higher against the dollar.

"From 2014 onwards it's positive ... (but) from now until then, they are not doing anything more aggressive to weaken the yen," said Roy Teo, an FX strategist for ABN Amro.

Equity markets, particularly in Japan, have risen strongly in the run up to Tuesday's meeting, and the confirmation of the plans was enough to lift the MSCI world index <.miwd00000pus> 0.15 percent to a fresh 20-month high of 352.54.

European shares, which have been testing two-year highs in recent days, saw a more subdued start as investors awaited a cue from U.S. corporate earnings figures later in the day.

London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> opened between flat and down 0.1 percent, leaving the FTSEurofirst 300 <.fteu3> down 0.1 percent.

Brent crude rose 0.3 percent to $112.07 a barrel, and gold was up 0.2 percent as the BOJ's latest easing action added to recent positive data from the United States and China, while growing confidence in the strength of China's economic recovery pushed London copper up 0.7 percent to $8,111.75 a metric ton.

General market sentiment was also supported by signs of a compromise to avert a U.S. fiscal crisis.

Republican leaders in the U.S. House of Representatives have scheduled a vote on Wednesday on a nearly four-month extension of U.S. borrowing capacity, aimed at avoiding a fight over the looming federal debt ceiling.

In the European bond market, Bund futures were steady as investors eyed a new 10-year Spanish bond and waited on the ZEW investor sentiment index due at 1000 GMT for the latest gauge on the health of the euro zone's largest economy, Germany.

(Reporting by Marc Jones; Editing by Will Waterman)

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Environmentalists hail Obama climate change focus

WASHINGTON (AP) — Environmental groups hailed President Barack Obama’s warning Monday about climate change, but said the president’s words will soon be tested as he decides whether to approve the Keystone XL oil pipeline from Canada to the Gulf Coast.

Obama pledged in his inaugural speech to respond to what he called the threat of climate change, saying, “Failure to do so would betray our children and future generations.”

By singling out climate change, Obama indicated a willingness to take on an issue that he acknowledges was often overlooked during his first term. He also was setting up a likely confrontation with congressional Republicans who have opposed legislative efforts to curb global warming.

Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works Committee, called Obama’s comments on climate change “exactly right.”

Andrew Hoffman, director of the Erb Institute for Global Sustainable Enterprise at the University of Michigan, said Obama’s focus on climate showed political backbone.

“He finally had the courage to acknowledge the words ‘climate change,’” Hoffman said, adding that Obama and other administration officials have frequently used words such as green jobs or clean energy to describe energy policy, instead of the more politically charged term.

“I find it very interesting that in this second term he’s just coming right out and saying that climate change is exactly what we’re dealing with,” Hoffman said.

Obama, in his address, said some people “may still deny the overwhelming judgment of science” that global warming exists and has human causes, “but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.”

The president has pledged to boost renewable energy sources such as wind and solar power, along with more traditional energy sources such as coal, oil and natural gas.

“The path toward sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition. We must lead it,” Obama said.

He said developing new energy technologies will lead to jobs and new industries. “That is how we will preserve our planet,” he said.

Environmental groups said the president’s first test on climate change could come early this year as he decides whether to approve the Keystone XL oil pipeline that will carry tar sands oil from Alberta, Canada, to Texas.

Obama blocked the pipeline last year, citing uncertainty over the project’s route through environmentally sensitive land in Nebraska. The State Department has federal jurisdiction because the $ 7 billion pipeline begins in Canada.

Republicans and many business groups say the project would help achieve energy independence for North America and create thousands of jobs.

But environmental groups say the pipeline would transport “dirty oil” and produce heat-trapping gases that contribute to global warming. They also worry about a possible spill.

“Starting with rejecting the Keystone XL pipeline, the president must make fighting global warming a central priority,” said Margie Alt, executive director of Environment America.

Alden Meyer, director of strategy and policy at the Union of Concerned Scientists, said Obama’s “clarion call to action” on climate change “leaves no doubt this will be a priority in his second term.”

After Hurricane Sandy and other extreme weather events, there has been more political momentum than ever to address climate change, Meyer said.

“With presidential leadership, that shift will continue and deepen over the next four years, and meaningful progress on climate change will become an important part of Barack Obama’s legacy as president,” he said.

Alt and other environmental leaders said they are counting on Obama to set tough limits on carbon pollution from coal-fired power plants and to continue federal investments in renewable energy sources such as wind and solar power.

Obama tried and failed in his first term to get a climate change bill through Congress. Some Democratic lawmakers and environmentalists have pushed for a tax on carbon pollution, but White House officials say they have no plan to propose one.

Scott Segal, an energy lobbyist who represents utilities and natural gas drillers, said Obama “missed the opportunity to remind listeners that climate change is an international phenomenon” that will require international solutions.

By imposing “inflexible” national policies to curb climate change, Obama could restrain the U.S. economy without delivering promised solutions, Segal said.

___

Follow Matthew Daly on Twitter: https://twitter.com/MatthewDaly

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European shares test two-year highs, yen volatile before BOJ

LONDON (Reuters) - European shares inched towards two-year highs and German Bund futures dipped on Monday, as a political attempt to break a budget impasse in the United States revived appetite for shares and dented appetite for safe-haven assets.

U.S. House Republican leaders said on Friday they would seek to pass a three-month extension of federal borrowing authority in the coming days to buy time for the Democrat-controlled Senate to pass a plan to shrink budget deficits.

European shares <.fteu3> were supported by the news <.eu>, but with no clear response from the Democrats and a thin session expected due to a market holiday in the United States, the impact on other assets such as Bunds is likely to be limited.

London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> opened between 0.4 and 0.5 percent higher, lifting the pan-European FTSEurofirst 300 0.3 percent and MSCI's world index 0.1 percent. <.l><.eu/>

"There's a bit of encouragement coming out of the U.S.," said Toby Campbell-Gray, head of trading at Tavira Securities in Monaco.

He added that equity markets had remained resilient in the face of an uncertain economic outlook as many investors had stepped in to buy "on the dip" on days when shares had fallen.

Ahead of the region's first finance ministers' meeting of the year the euro was steady against the dollar, while the yen firmed after touching a new low, ahead of a Bank of Japan decision expected to deliver bold monetary easing.

The dollar slipped back to a low of 89.42 yen and was last trading at 89.57 yen, while the euro also fell to a low of 119.08 and last traded at 119.27 yen.

With little in the way of economic data or debt issuance and U.S. markets shut for the Martin Luther King Jr. public holiday, it was expected to be a fairly quite market day.

Oil prices took their cues from a report in the United States at the end of last week that showed consumer sentiment at its weakest in a year as a result of the uncertainty surrounding the country's debt crisis.

Concerns about demand overshadowed supply disruption fears reinforced by the Islamist militant attack and hostage-taking at a gas plant in Algeria, a member of the Organization of Petroleum Exporting Countries.

U.S. crude futures fell 0.5 percent to $95.08 a barrel, while Brent fell 0.3 percent to $111.55 early on Monday but had recovered to almost flat as European trading gathered pace.

(Additional reporting by Sudip Kar-Gupta; Editing by Will Waterman)

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NASA’s older Mars rover notches another milestone

LOS ANGELES (AP) — All eyes are on the NASA rover Curiosity. It is poised to begin drilling into a Martian rock soon.

There’s less attention being paid to another Mars rover — Opportunity. The older rover is quietly embarking on its tenth year of exploration.

Compared to Curiosity, Opportunity is smaller and doesn’t carry the same high-tech tools. But since landing in January 2004, it has made many discoveries including that Mars was once warmer and wetter than today.

Opportunity and its twin Spirit were only supposed to explore for three months, but both outlasted their original mission. Opportunity remains healthy and is studying interesting rocks in a massive crater. Spirit lost communication with Earth in 2010 shortly after getting stuck in Martian sand.

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Wall Street Week Ahead: Earnings, money flows to push stocks higher

NEW YORK (Reuters) - With earnings momentum on the rise, the S&P 500 seems to have few hurdles ahead as it continues to power higher, its all-time high a not-so-distant goal.

The U.S. equity benchmark closed the week at a fresh five-year high on strong housing and labor market data and a string of earnings that beat lowered expectations.

Sector indexes in transportation <.djt>, banks <.bkx> and housing <.hgx> this week hit historic or multiyear highs as well.

Michael Yoshikami, chief executive at Destination Wealth Management in Walnut Creek, California, said the key earnings to watch for next week will come from cyclical companies. United Technologies reports on Wednesday while Honeywell is due to report Friday.

"Those kind of numbers will tell you the trajectory the economy is taking," Yoshikami said.

Major technology companies also report next week, but the bar for the sector has been lowered even further.

Chipmakers like Advanced Micro Devices , which is due Tuesday, are expected to underperform as PC sales shrink. AMD shares fell more than 10 percent Friday after disappointing results from its larger competitor, Intel . Still, a chipmaker sector index <.sox> posted its highest weekly close since last April.

Following a recent underperformance, an upside surprise from Apple on Wednesday could trigger a return to the stock from many investors who had abandoned ship.

Other major companies reporting next week include Google , IBM , Johnson & Johnson and DuPont on Tuesday, Microsoft and 3M on Thursday and Procter & Gamble on Friday.

CASH POURING IN, HOUSING DATA COULD HELP

Perhaps the strongest support for equities will come from the flow of cash from fixed income funds to stocks.

The recent piling into stock funds -- $11.3 billion in the past two weeks, the most since 2000 -- indicates a riskier approach to investing from retail investors looking for yield.

"From a yield perspective, a lot of stocks still yield a great deal of money and so it is very easy to see why money is pouring into the stock market," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

"You are just not going to see people put a lot of money to work in a 10-year Treasury that yields 1.8 percent."

Housing stocks <.hgx>, already at a 5-1/2 year high, could get a further bump next week as investors eye data expected to support the market's perception that housing is the sluggish U.S. economy's bright spot.

Home resales are expected to have risen 0.6 percent in December, data is expected to show on Tuesday. Pending home sales contracts, which lead actual sales by a month or two, hit a 2-1/2 year high in November.

The new home sales report on Friday is expected to show a 2.1 percent increase.

The federal debt ceiling negotiations, a nagging worry for investors, seemed to be stuck on the back burner after House Republicans signaled they might support a short-term extension.

Equity markets, which tumbled in 2011 after the last round of talks pushed the United States close to a default, seem not to care much this time around.

The CBOE volatility index <.vix>, a gauge of market anxiety, closed Friday at its lowest since April 2007.

"I think the market is getting somewhat desensitized from political drama given, this seems to be happening over and over," said Destination Wealth Management's Yoshikami.

"It's something to keep in mind, but I don't think it's what you want to base your investing decisions on."

(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak and Caroline Valetkevitch; Editing by Kenneth Barry)

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Latest Inaugural Forecast: Bit Warmer Than in 2009

Consider it the first fact check of a Barack Obama campaign pledge for his second term: Will he, or Mother Nature, deliver on promised warmer Inauguration Day weather?

It’s shaping up as a close call.

In September, while campaigning in Colorado, Obama was talking to a potential voter who mentioned he had been one of the hundreds of thousands of people outdoors at Obama‘s bone-chilling first inaugural in 2009, when the noontime temperature was 28 degrees. Obama promised: “This one is going to be warmer.”

Scientifically, the president doesn’t have control of day-to-day weather. While his policies can lessen or worsen future projected global warming on a large scale, they cannot do anything about Washington‘s daily temperature on Jan. 21.

Still, it’s a promise that for a long time looked close to a sure thing. The history of local weather was on Obama’s side.

On average, the normal high is 43 degrees and the normal low is 28, but that’s just around dawn. There have been 19 traditional January inaugurations and only two were colder. Ronald Reagan‘s second in 1985 was a frigid 7 with subzero wind chills and John F. Kennedy‘s in 1961 was a snow-covered 22. Jimmy Carter’s 1977 inauguration also was 28.

Then there was the general warming trend Washington had been stuck in. The last time the nation’s capital stayed below freezing all day was Jan. 22, 2011. The city has gone a record 700-plus days since it had 2 inches or more of snow.

An Arctic cold front looks to be racing toward the mid-Atlantic, so it will be cooler than normal on Monday, but probably not cooler than 2009, said Nikole Listemaa, a senior forecaster at the National Weather Service office in Sterling, Va., that oversees forecasts for the capital area.

Look for highs around 40 degrees with noon temperatures in the mid- to upper 30s, Listemaa said Saturday. That would keep Obama’s pledge.

There’s also a 30 percent chance of light snow showers for Monday. But the Arctic cold front won’t arrive until Monday night into Tuesday, Listemaa added.

Extreme cold on Inauguration Day, folklore says, can be a killer.

In 1841, newly elected president William Henry Harrison stood outside without a coat or hat as he spoke for an hour and 40 minutes. He caught a cold that day and it became pneumonia and he died one month after being sworn in.

Twelve years later, outgoing first lady Abigail Fillmore got sick from sitting outside on a cold wet platform as Franklin Pierce was inaugurated and she died of pneumonia at the end of the month. Doctors now know that pneumonia is caused by germs, but prolonged exposure to extreme cold weather may hurt the airways and make someone more susceptible to getting sick.

There’s one thing Washington‘s history shows. Bad weather generally creates bad traffic jams.

Kennedy found that out in his 1961 inauguration when 8 inches of snow fell overnight and crippled the city for what at that time was Washington‘s worst traffic jam. Thousands of cars were abandoned in the snow.

———

Seth Borenstein can be followed at http://twitter.com/borenbears

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Wall Street Week Ahead: Earnings, money flows to push stocks higher

NEW YORK (Reuters) - With earnings momentum on the rise, the S&P 500 seems to have few hurdles ahead as it continues to power higher, its all-time high a not-so-distant goal.

The U.S. equity benchmark closed the week at a fresh five-year high on strong housing and labor market data and a string of earnings that beat lowered expectations.

Sector indexes in transportation <.djt>, banks <.bkx> and housing <.hgx> this week hit historic or multiyear highs as well.

Michael Yoshikami, chief executive at Destination Wealth Management in Walnut Creek, California, said the key earnings to watch for next week will come from cyclical companies. United Technologies reports on Wednesday while Honeywell is due to report Friday.

"Those kind of numbers will tell you the trajectory the economy is taking," Yoshikami said.

Major technology companies also report next week, but the bar for the sector has been lowered even further.

Chipmakers like Advanced Micro Devices , which is due Tuesday, are expected to underperform as PC sales shrink. AMD shares fell more than 10 percent Friday after disappointing results from its larger competitor, Intel . Still, a chipmaker sector index <.sox> posted its highest weekly close since last April.

Following a recent underperformance, an upside surprise from Apple on Wednesday could trigger a return to the stock from many investors who had abandoned ship.

Other major companies reporting next week include Google , IBM , Johnson & Johnson and DuPont on Tuesday, Microsoft and 3M on Thursday and Procter & Gamble on Friday.

CASH POURING IN, HOUSING DATA COULD HELP

Perhaps the strongest support for equities will come from the flow of cash from fixed income funds to stocks.

The recent piling into stock funds -- $11.3 billion in the past two weeks, the most since 2000 -- indicates a riskier approach to investing from retail investors looking for yield.

"From a yield perspective, a lot of stocks still yield a great deal of money and so it is very easy to see why money is pouring into the stock market," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

"You are just not going to see people put a lot of money to work in a 10-year Treasury that yields 1.8 percent."

Housing stocks <.hgx>, already at a 5-1/2 year high, could get a further bump next week as investors eye data expected to support the market's perception that housing is the sluggish U.S. economy's bright spot.

Home resales are expected to have risen 0.6 percent in December, data is expected to show on Tuesday. Pending home sales contracts, which lead actual sales by a month or two, hit a 2-1/2 year high in November.

The new home sales report on Friday is expected to show a 2.1 percent increase.

The federal debt ceiling negotiations, a nagging worry for investors, seemed to be stuck on the back burner after House Republicans signaled they might support a short-term extension.

Equity markets, which tumbled in 2011 after the last round of talks pushed the United States close to a default, seem not to care much this time around.

The CBOE volatility index <.vix>, a gauge of market anxiety, closed Friday at its lowest since April 2007.

"I think the market is getting somewhat desensitized from political drama given, this seems to be happening over and over," said Destination Wealth Management's Yoshikami.

"It's something to keep in mind, but I don't think it's what you want to base your investing decisions on."

(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak and Caroline Valetkevitch; Editing by Kenneth Barry)

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