Wall Street drifts after two-day run, Dow record in sight

NEW YORK (Reuters) - U.S. stocks edged higher on Thursday with investors hard-pressed to lift indexes to multi-year highs despite strong economic data.

The U.S. economy ticked up in the fourth quarter, reversing an earlier estimate showing contraction, and a drop in new claims for unemployment benefits last week added to a string of data that suggests the economy improved early this year.

Still, the positive revision to GDP data was expected and the claims continue a trend that is baked into prices. The market lacks catalysts as it digests its recent move higher, according to Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey, where he helps oversee $120 billion in assets under management.

"That's why I think you're seeing a fairly listless trading environment today," Caron said.

The Dow was within striking distance of a record high after a more than 7 percent year-to-date run. The Dow transports index <.djt>, seen as a bet on future growth, is up almost 13 percent this year and hit a record intraday high Thursday before turning slightly negative.

The Dow Jones industrial average <.dji> rose 14.79 points or 0.11 percent, to 14,090.16, the S&P 500 <.spx> gained 3.12 points or 0.21 percent, to 1,519.11 and the Nasdaq Composite <.ixic> added 9.13 points or 0.29 percent, to 3,171.39.

The Dow's intraday record, set October 11, 2007, stands at 14,198.10.

The S&P 500 has gained more than 2 percent in the past three sessions.

Equity markets suffered steep losses earlier in the week on concerns over the impact of an Italian election on the European economy, but bounced back on strong data and recent comments by Federal Reserve Chairman Ben Bernanke that showed continued support for the Fed's economic stimulus policy.

J.C. Penney Co Inc slumped 17.9 percent to $17.38 after the department store reported a steep drop in sales on Wednesday. Groupon Inc also slumped on weak revenue, with the stock off 20 percent at $4.76.

Cablevision shares tumbled nearly 10 percent after the cable provider took a $100 million hit on costs related to Superstorm Sandy and posted deeper video customer losses than expected.

Mylan Inc shares were on track to close at their highest ever after the generic drugmaker posted a 25 percent rise in fourth-quarter profit and said it will buy a unit of India's Strides Arcolab Ltd. Shares were last up 3.8 percent at $29.66.

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

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

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

(Reporting by Rodrigo Campos, additional reporting by Ryan Vlastelica; Editing by Nick Zieminski)

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Syria war is everybody's problem

STORY HIGHLIGHTS

• NEW: The European Union clears the way for nonlethal aid to Syrian rebels


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


• The U.S. announced food and medical aid to fighters, plus $60 million in administrative aid


• Aid is needed because of Syrian regime's "continued brutality," U.S. secretary of state says

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.

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."

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 Elise Labott also contributed to this report.

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Pope Benedict quits Vatican with promise to obey successor

VATICAN CITY (Reuters) - Pope Benedict left the Vatican on Thursday after pledging unconditional obedience to whoever succeeds him to guide the Roman Catholic Church at one of the most crisis-ridden periods in its 2,000-year history.

The first pope in six centuries to step down, Benedict flew off in a white Italian air force helicopter for the papal summer villa south of the capital where he took up temporary residence.

As the helicopter took off, he sent his last message on Twitter: "Thank you for your love and support. May you always experience the joy that comes from putting Christ at the center of your lives".

Bells rang out from St Peter's Basilica and churches all over Rome as the helicopter circled Vatican City and flew over the Colosseum and other landmarks to give the pontiff one last view of the city where he is also bishop.

"As you know, today is different to previous ones," he told an emotional, cheering crowd holding balloons and banners after he arrived in the small town of Castel Gandolfo.

"I will only be the supreme pontiff of the Catholic Church until 8 p.m and then no longer. I will simply be a pilgrim who is starting the last phase of his pilgrimage on this earth."

He then turned and went inside the villa, never to be seen again as pope.

"I wanted to see him for the last time. I hope his successor follows in his footsteps. I feel very moved to be here," said Giuseppe Ercolino, a 19-year-old student from a nearby town.

In an emotional farewell to cardinals on Thursday morning in the Vatican's frescoed Sala Clementina, Benedict appeared to send a strong message to the top echelons of the Church as well as the faithful to remain united behind his successor, whoever he is.

"I will continue to be close to you in prayer, especially in the next few days, so that you are fully accepting of the action of the Holy Spirit in the election of the new pope," he said. "May the Lord show you what he wants. Among you there is the future pope, to whom I today declare my unconditional reverence and obedience."

The pledge, made ahead of the closed-doors conclave where cardinals will elect his successor, was significant because for the first time in history, there will be a reigning pope and a former pope living side by side in the Vatican.

Some Church scholars worry that if the next pope undoes some of Benedict's policies while his predecessor is still alive, Benedict could act as a lightning rod for conservatives and polarize the 1.2 billion-member Church.

Before boarding the helicopter, Pope Benedict said goodbye to monsignors, nuns, Vatican staff and Swiss guards in the San Damaso courtyard of the Holy See's apostolic palace. Many of his staff had tears in their eyes as the helicopter left.

Benedict will spend the first few months of his retirement in the papal summer residence, a complex of villas boasting lush gardens, a farm and stunning views over Lake Albano in the volcanic crater below the town.

Benedict will stay until April when renovations are completed on a convent in the Vatican that will be his new home.

PAPAL PROBLEMS

With the election of the next pope taking place in the wake of sexual abuse scandals, leaks of his private papers by his butler, falling membership and demands for a greater role for women, many in the Church believe it would benefit from a fresh face from a non-European country.

A number of cardinals from the developing world, including Ghanaian Peter Turkson and Antonio Tagle of the Philippines are two names often mentioned as leading candidates from the developing world who listen more.

"At the past two conclaves, the cardinals elected the smartest man in the room. Now, it may be time to choose a man who will listen to all the other smart people in the Church," said Father Tom Resse, a historian and senior fellow at the Woodstock Theological Center at Georgetown University.

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Wall Street climbs on Bernanke, economic data

NEW YORK (Reuters) - Stocks rose 1 percent on Wednesday as Federal Reserve Chairman Ben Bernanke remained steadfast in his support of the Fed's stimulus policy and data pointed to economic improvement.

In his second day before a congressional committee, Bernanke repeated testimony in which he defended the Fed's policy of buying bonds to keep interest rates low in order to promote growth and bring down the unemployment rate.

Adding to the positive tone was economic data which showed a gauge of planned U.S. business spending in January recorded its largest increase in just over a year and contracts to buy new homes neared a three-year high last month.

Bernanke's remarks supporting the Fed's stance before a Senate panel on Tuesday helped the market rebound from its worst decline since November. The S&P 500 <.spx> is now back above 1,500, a closely watched level that has been technical support until recently.

"By and large you can track the turn in the market yesterday and today with Bernanke. He is just adamant," said Keith Bliss, senior vice-president at Cuttone & Co in New York.

"It doesn't matter what the Fed minutes tell you, he is going to keep refilling the punch bowl until we get unemployment down below 6 percent."

The S&P 500 had climbed 6 percent for the year and came within reach of all-time highs before the minutes from the Fed's January meeting were released last Wednesday and raised questions about whether the Fed may slow or halt its economy-stimulating measures soon.

An Italian bond auction that drew solid demand reassured investors after this week's inconclusive elections in Italy, which rekindled fears of a new euro zone debt crisis.

The Dow Jones industrial average <.dji> gained 140.15 points, or 1.01 percent, to 14,040.28. The Standard & Poor's 500 Index <.spx> climbed 16.80 points, or 1.12 percent, to 1,513.74. The Nasdaq Composite Index <.ixic> advanced 38.18 points, or 1.22 percent, to 3,167.82.

In earnings news, discount retailer Target Corp appeared poised for a solid showing in the first quarter and forecast a higher profit for the full year after a weak performance in the key holiday season. The stock dipped 1 percent to $63.44.

But Dollar Tree Inc jumped 12.5 percent to $46.21 after reporting a higher quarterly profit as shoppers spent more and the chain controlled costs.

TJX Cos Inc advanced 1.7 percent to $44.40 after the owner of the low-price T.J. Maxx and Marshalls chains posted higher fourth-quarter results and said it plans to expand its chains abroad and domestically this year and introduce e-commerce.

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

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.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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Pistorius representatives name substance found

JOHANNESBURG (AP) — Oscar Pistorius' representatives have named the substance found in his bedroom after the shooting death of his girlfriend as Testis compositum and said Wednesday it is an herbal remedy used "in aid of muscle recovery."

A product called Testis compositum is also marketed as a sexual enhancer, good for lack of stamina. Some online retailers advertise oral and injectable forms as testosterone boosters and say it can aid sexual performance.

South African police said during Pistorius' bail hearing that they found needles in Pistorius' bedroom along with the substance, which they initially named as testosterone. Prosecutors later withdrew that statement identifying the substance and said it had been sent for laboratory tests and couldn't be named until those tests were completed.

Pistorius family spokesperson Lunice Johnston said in an email to The Associated Press on Wednesday that the athlete's lawyers had confirmed that the substance is Testis compositum. In court last week, Pistorius' defense lawyer Barry Roux said the substance was not banned by sports authorities, but it had been unclear what it was and what the exact name was.

A product called Testis Compositum is made by Biologische Heilmittel Heel GmbH, based in Baden-Baden, Germany. The company website says it is one of the world's leading makers of homeopathic combination medications.

A U.S. subsidiary, Heel USA Inc., markets the product in tablet form only and spokeswoman Joan Sullivan said she didn't know if injectable versions are sold in other countries. Heel USA's website says the product provides temporary relief for men's "sexual weakness" and lack of stamina.

The U.S.-sold tablets contain 23 ingredients, including pig testicles, pig heart, pig embryo and pig adrenal gland, cortisone, ginseng and other botanicals. It also contains several minerals, according to a list Sullivan provided.

Charles Yesalis, a Penn State professor emeritus and expert on steroid use in sports, said animal steroids likely wouldn't have an athletic performance-enhancing effect unless taken in huge quantities. Even so, he said many elite athletes would be wary of using such supplements because they can be laced with banned substances and few would want to risk it.

The company website listed a South African subsidiary as ModHomCo (Pty) Ltd., based in Centurion, near Pretoria. That company couldn't immediately be reached for comment.

Pistorius was charged with premeditated murder in the Feb. 14 shooting death of girlfriend Reeva Steenkamp. He says he shot her by accident after mistaking her for an intruder in his home. Prosecutors allege he intended to kill her.

___

AP Medical Writer Lindsey Tanner in Chicago contributed to this report.

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Benedict: Pope aware of his flaws?

Pope Benedict XVI delivers his last Angelus Blessing to thousands of pilgrims gathered in Saint Peter's Square on February 24.

STORY HIGHLIGHTS

• Sister Mary Ann Walsh: Pope Benedict acknowledged that he made mistakes


• Walsh: In firestorm over scholarly quotes about Islam, he went to great lengths to atone


• Walsh: Similarly, he quickly reversed a decision that had angered Jews and repaired ties


• Even his stepping down is a nod to his humanity and his love of the church, she says

Editor's note: Sister Mary Ann Walsh is director of media relations for the U.S. Conference of Catholic Bishops and a member of the Sisters of Mercy of the Americas Northeast Regional Community. She is a former foreign correspondent at Catholic News Service (CNS) in Rome and the editor of "John Paul II: A Light for the World," "Benedict XVI: Essays and Reflections on his Papacy," and "From Pope John Paul II to Benedict XVI."

(CNN) -- One of the Bible's paradoxical statements comes from St. Paul's Epistle to the Galatians: "Power is made perfect in infirmity."

The poetic statement proclaims that when we are weak, we are strong. Pope Benedict XVI's stepping down from what many consider one of the most powerful positions in the world proves it. In a position associated with infallibility -- though that refers to formal proclamations on faith and morals -- the pope declares his weakness.

Sister Mary Ann Walsh

His acceptance of frailty speaks realistically about humanity: We grow old, weaken, and eventually die. A job, even one guided by the Holy Spirit, as we Roman Catholics believe, can become too much for us.

Acceptance of human frailty has marked this papacy. We all make mistakes, but the pope makes them on a huge stage.

He was barely into his papacy, for example, when he visited Regensburg, Germany, where he once taught theology. Like many a professor, he offered a provocative statement to get the conversation going. To introduce the theme of his lecture, the pope quoted from an account of a dialogue between the Byzantine Emperor Manuel II Paleologus and an unnamed Muslim scholar, sometime near the end of the 14th century -- a quote that was misinterpreted by some as a condemnation of Mohammed and Islam.

Opinion: 'Gay lobby' behind pope's resignation? Not likely

Twice, the pope emphasized that he was quoting someone else's words. Unfortunately, the statement about Islam was taken as insult, not a discussion opener, and sparked rage throughout the Muslim world.

The startled pope had to explain himself. He apologized and traveled two months later to Istanbul's Blue Mosque, where he stood shoeless in prayer beside the Grand Mufti of Istanbul. Later he hosted Muslim leaders at the Vatican at the start of a Catholic-Muslim forum for dialogue. It was a human moment -- a mistake, an apology and atonement -- all round.

A similar controversy erupted when he tried to bring the schismatic Society of St. Pius X back into the Roman Catholic fold.

In a grand gesture toward reconciliation, he lifted the excommunication of four of its bishops, unaware that one, Richard Williamson, was a Holocaust denier. This outraged many Jews. Subsequently the Vatican said the bishop had not been vetted, and in a bow to modernity said officials at least should have looked him up on the Internet.

In humble response, Benedict reiterated his condemnation of anti-Semitism and told Williamson that he must recant his Holocaust views to be fully reinstated. Again, his admission of a mistake and an effort to mend fences.

News: Scandal threatens to overshadow pope's final days

Pope Benedict XVI came from a Catholic Bavarian town. Childhood family jaunts included trips to the shrine of the Black Madonna, Our Lady of Altotting. He entered the seminary at the age of 13. He became a priest, scholar and theologian. He lived his life in service to the church. Even in resigning from the papacy, he embraces the monastic life to pray for a church he has ever loved.

With hindsight, his visit to the tomb of 13th century Pope Celestine V, a Benedictine monk who resigned from the papacy eight centuries before, becomes poignant.

In 2009, on a visit to Aquila, Italy, Benedict left at Celestine's tomb the pallium, a stole-like vestment that signifies episcopal authority, that Benedict had worn for his installation as pope. The gesture takes on more meaning as the monkish Benedict steps down.

We expect the pope to be perfect. Catholics hold him to be the vicar of Christ on earth. He stands as a spiritual leader for much of the world. Statesmen visit him from around the globe. He lives among splendid architecture, in the shadow of the domed St. Peter's Basilica. All testify to an almost surreal omnipotence.

Complete coverage of the pope's resignation

In this world, however, walked a vulnerable, human person. And in a paradox of life, his most human moment -- giving up the power of office -- may prove to be his most potent, delivering a message that, as St. Paul noted many centuries ago, "Power is made perfect in infirmity."

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Mary Ann Walsh.

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Chicago archdiocese laying off 10 percent of work force

The Roman Catholic Archdiocese of Chicago is laying off about 10 percent of its work force and is planning to close or consolidate about five schools to reverse "unsustainable" deficits.

The downsizing, which apparently has been in the works for months, coincides with the arrival of Cardinal Francis George in Rome this week to participate in the conclave to choose a new pope.

In a lengthy letter to parishioners posted on the archdiocese website, George outlines cost-cutting measures for the archdiocese, which has been running operating deficits of more than $30 million every year for the past four years.

"Since this trend is unsustainable, I want to set out the measures we are taking to ensure prudent stewardship of our resources for years to come," George says in the letter.

At the Pastoral Center, 75 positions have been cut, including 55 full-time roles. That reduction is estimated to save $11 million to $13 million annually by fiscal year 2015, according to George.

“Our employees are faith-filled men and women who have worked tirelessly for the good of the Church.  Please keep them in your prayers,” he wrote.

George wrote in his Cardinal’s Column that other cost-cutting measures would include closing or consolidating “a few schools that are no longer sustainable.”

About five schools will be closed or consolidated, some of which have seen demographic changes or other challenges, according to the letter. The Archdiocese plans to give out scholarships to children affected by the change so they can attend nearby Catholic schools.

The Archdiocese will also reduce its annual aid to schools by $10 million next year. “We hope to return to a sustainable level of aid for those schools that will always be facing financial difficulties,” George wrote.

In addition, pastors received letters in the past month informing them there would be no more loans granted from the archdiocese bank.

No parish priests will lose their assignments in the downsizing, the Tribune has learned. But administrative staff at the pastoral center could be cut.

Earlier this year, the school system rolled out a strategic plan to make schools more self-sufficient.

"This review of archdiocesan finances has been necessary but difficult," the cardinal concludes in his letter. "Reductions in some services and in staffing will, of course, be particularly difficult for the persons and parishes directly affected by them.  These actions are being taken now because the financial situation imposes them.  We are also taking them, however, so that the archdiocese will have the resources she needs for her mission."

mbrachear@tribune.com

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Iran upbeat on nuclear talks, West still wary

ALMATY (Reuters) - Iran was upbeat on Wednesday after talks with world powers about its nuclear work ended with an agreement to meet again, but Western officials said it had yet to take concrete steps to ease their fears of a secret weapons program.

The United States, China, France, Russia, Britain and Germany offered to ease sanctions slightly in return for Iran curbing its most sensitive work, but had made clear they expected no breakthrough in the talks in Kazakhstan, the first in eight months.

U.S. Secretary of State John Kerry said the talks had been "useful" and that a serious engagement by Iran could lead to a comprehensive deal in a decade-old dispute that has threatened to trigger a new Middle East war.

Iran's foreign minister said in Vienna he was "very confident" a deal could be reached and its chief negotiator said he believed the Almaty meeting could be a "turning point".

The two sides agreed to hold expert-level talks in Istanbul on March 18 to discuss the offer, and return to Almaty for political discussions on April 5-6, when Western diplomats made clear they wanted to see substantive movement by Iran.

"Iran knows what it needs to do, the president has made clear his determination to implement his policy that Iran will not have a nuclear weapon," Kerry said in Paris.

A senior U.S. official in Almaty added: "What we care about at the end is concrete results."

ISRAELI WARNING

Israel, assumed to be the Middle East's only nuclear-armed power, was watching the talks closely. It has strongly hinted it might attack Iran if diplomacy and sanctions fail to ensure that it cannot build a nuclear weapon. Iran denies any such aim.

Israeli Prime Minister Benjamin Netanyahu said economic sanctions were failing and urged the international community to threaten Iran with military action.

Western officials said the offer presented by the six powers included an easing of a ban on trade in gold and other precious metals, and a relaxation of an import embargo on Iranian petrochemical products. They gave no further details.

In exchange, a senior U.S. official said, Iran would among other things have to suspend uranium enrichment to a fissile concentration of 20 percent at its Fordow underground facility and "constrain the ability to quickly resume operations there".

This appeared to be a softening of a previous demand that Iran ship out its entire stockpile of higher-grade enriched uranium, which it says it needs to produce medical isotopes.

Iran says it has a sovereign right to enrich uranium for peaceful purposes, and wants to fuel nuclear power plants so that it can export more oil.

But 20-percent purity is far higher than that needed for nuclear power, and rings alarm bells abroad because it is only a short technical step away from weapons-grade.

Iran's growing stockpile of 20-percent-enriched uranium is already more than half-way to a "red line" that Israel has made clear it would consider sufficient for a bomb.

ELECTION LOOMING

The U.S. official said the latest proposal would "significantly restrict the accumulation of near-20-percent enriched uranium in Iran, while enabling the Iranians to produce sufficient fuel" for their Tehran medical reactor.

Iran had previously indicated that 20-percent enrichment was up for negotiation if it received the fuel from abroad instead.

Chief negotiator Saeed Jalili suggested Iran could discuss the issue, although he appeared to rule out shutting down Fordow. He said the powers had not made that specific demand.

Western officials were aware that the closeness of Iran's presidential election in June is raising political tensions in Tehran and made rapid progress unlikely.

One diplomat in Almaty said the Iranians appeared to be suggesting at the negotiations that they were opening new avenues, but that it was not clear if this was really the case.

"Everyone is saying Iran was more positive and portrayed the talks as a win," said Iran expert Dina Esfandiary of the International Institute for Strategic Studies. "I reckon the reason for that is that they are saving face internally while buying time with the West until after the elections."

The Iranian rial, which has lost more than half its foreign exchange value in the last year as sanctions bite, rose some 2 percent on Wednesday, currency tracking web sites reported.

(Additional reporting by Fredrik Dahl in Almaty, Georgina Prodhan in Vienna, Zahra Hosseinian in Zurich, Gabriela Baczynska in Moscow, Dan Williams in Jerusalem and Marcus George in Dubai; Writing by Timothy Heritage and Fredrik Dahl; Editing by Kevin Liffey)

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Wall Street up as Bernanke defends policy, warns on cuts

NEW YORK (Reuters) - Stocks advanced on Tuesday after Federal Reserve Chairman Ben Bernanke defended the Fed's bond-buying stimulus before Congress, but he warned forced spending cuts that could be triggered this week represented a headwind for the economy.

Gains in homebuilders and other consumer stocks, following strong economic data, kept the S&P 500 up slightly and a 5 percent jump in Home Depot lifted the Dow industrials. The PHLX housing sector index <.hgx> rose 2.6 percent.

Stocks hit session highs shortly after Bernanke, in testimony before the Senate Banking Committee, strongly defended the Fed's bond-buying stimulus program that has been essential for the stock market's recovery.

However, he also urged lawmakers to avoid sharp spending cuts set to go into effect on Friday, which he warned could combine with earlier tax increases to create a "significant headwind" for the economic recovery.

Bernanke's cautiousness was behind a late morning pullback in stocks, according to Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.

He also said concerns about the Fed's next move are unjustified for the moment.

"The Fed isn't going to be pulling back monetary stimulus any time soon," Pavlik said.

The Dow Jones industrial average <.dji> rose 92.07 points or 0.67 percent to 13,876.24. The S&P 500 <.spx> gained 4.67 points or 0.31 percent to 1,492.52. The Nasdaq Composite <.ixic> added 1.44 points or 0.05 percent to 3,117.69.

The S&P 500 failed to move above 1,500, a closely watched level that was technical support until recently, but could now become a hurdle.

Cable network AMC Networks was among the Nasdaq's biggest percentage decliners after the home of popular shows such as "The Walking Dead" and "Mad Men" reported a quarterly profit way below analysts' estimates. Its stock fell 6.7 percent to $54.19.

Equities continued to be weighed by concerns about a stalemate in Italy after a general election failed to give any party a parliamentary majority, posing the threat of prolonged instability and financial crisis in Europe.

The FTSEurofirst-300 index of top European shares <.fteu3> closed down 1.4 percent. The benchmark Italian index <.ftmib> tumbled 4.9 percent.

Dow component Home Depot was the top gainer in both the Dow and the S&P 500 after the world's largest home improvement chain reported adjusted earnings and sales that beat expectations. Its shares jumped 5.5 percent to $67.43.

Macy's shares climbed 3.5 percent to $39.87 after the department-store chain stated it expects full-year earnings to be above analysts' forecasts because of strong holiday sales.

Economic reports that showed strength in housing and consumer confidence also supported stocks. U.S. home prices rose more than expected in December, according to the S&P/Case-Shiller index. Consumer confidence rebounded in February, jumping more than expected, and new-home sales rose to their highest in 4-1/2 years.

(Reporting by Rodrigo Campos; Additional reporting by Sam Forgione; Editing by Jan Paschal)

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Marlins owner says he didn't renege on promises

JUPITER, Fla. (AP) — A cluster of media stood outside the Miami Marlins clubhouse, awaiting the arrival of owner Jeffrey Loria, when outfielder Bryan Petersen walked past.

"Somebody getting married?" Petersen said.

It was more like somebody trying to salvage a relationship. Loria's three-day public relations campaign to patch things up with angry fans brought him to spring training Tuesday for an interview session that included several testy exchanges before the owner cut it short.

Loria reiterated many of his previous comments regarding the 2012 payroll purge, saying it wasn't about money but about improving the farm system. Ten minutes into the news conference, he bristled when asked why fans should believe him.

"You've said that question in four different ways," Loria said. "My response to you is we have put together some championship-caliber players. We're going to field an excellent team in the next two or three years that you're going to be proud of."

Fans are upset that after only one season of big spending in a new ballpark built mostly with tax money, the Marlins have reverted to their tight budgets of the past. Loria was asked about trying to change the impression the ballpark project was "a con job."

"A con job? I'm not even going to answer that," Loria said.

Many project the Marlins to lose 100 games only a year after they were the talk of baseball and touted as playoff contenders. This year's payroll is expected to be less than $45 million, compared with $90 million in 2012.

Loria denied he reneged on any promise, noting the Marlins finished last in the NL East with their biggest payroll ever.

"I fulfilled my promise in the new ballpark last year," he said. "It didn't work. So what do you do? Go back again and lose more games? We needed to do something to beef up the organization."

A blockbuster trade in November sent to Toronto three of the Marlins' highest-paid players — shortstop Jose Reyes and pitchers Mark Buehrle and Josh Johnson. In exchange Miami acquired mostly prospects.

"We have some very exciting young players here," Loria said. "We need to bring them along and develop our own stars, or else we're going to be a last-place team forever."

As he stepped away from the TV cameras after 15 minutes, a PR aide said the owner would take more questions. Instead, Loria disappeared through a clubhouse door and didn't return.

At some point the team's play will have to speak for itself.

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