Twitter, Washington Post targeted by hackers

SAN FRANCISCO (AP) — Social media giant Twitter is among the latest U.S. companies to acknowledge that it is among a growing list of victims of Internet security attacks, saying that hackers may have gained access to information on 250,000 of its more than 200 million active users. And now, The Washington Post is joining the chorus, saying that it discovered that it was the target of a sophisticated cyberattack in 2011.

Twitter said a blog post on Friday it detected attempts to gain access to its user data earlier in the week. It shut down one attack moments after it was detected.

But Twitter discovered that the attackers may have stolen user names, email addresses and encrypted passwords belonging to 250,000 users they describe as ‘a very small percentage of our users.”

Nonetheless, the company reset the pilfered passwords and sent emails advising the affected users.

The online attack comes on the heels of recent hacks into the computer systems of U.S. media and technology companies, including The New York Times and The Wall Street Journal. Both American newspapers reported this week that their computer systems had been infiltrated by China-based hackers, likely to monitor media coverage the Chinese government deems important.

On Friday, The Washington Post disclosed in an article published on its website that it was the target of a sophisticated cyberattack, which was discovered in 2011. The company’s spokeswoman, Kris Coratti, didn’t offer any details including the duration of the attack or the origins. But according to sources that the paper quoted, who it said spoke on condition of anonymity, the intruders gained access as early as 2008 or 2009.

The cyberattack was first reported by an independent cybersecurity blog on Friday.

“Like other companies in the news recently, we face cybersecurity threats,” Coratti was quoted as saying. “We have a number of security measures in place to guard against cyberattacks on an ongoing basis.”

According to Coratti’s comments made to the newspaper, the company worked with security company Mandiant to “detect, investigate and remediate the situation promptly at the end of 2011.”

Coratti couldn’t be reached immediately for comment by The Associated Press.

China has been accused of mounting a widespread, aggressive cyber-spying campaign for several years, trying to steal classified information and corporate secrets and to intimidate critics. The Chinese foreign ministry could not be reached for comment Saturday, but the Chinese government has said those accusations are baseless and that China itself is a victim of cyber-attacks.

“Chinese law forbids hacking and any other actions that damage Internet security,” the Chinese Defense Ministry recently said. “The Chinese military has never supported any hacking activities.”

Twitter’s director of information security, Bob Lord, said in the blog that the attack “was not the work of amateurs, and we do not believe it was an isolated incident.”

“The attackers were extremely sophisticated, and we believe other companies and organizations have also been recently similarly attacked,” Lord said. “For that reason we felt that it was important to publicize this attack while we still gather information, and we are helping government and federal law enforcement in their effort to find and prosecute these attackers to make the Internet safer for all users.”

One expert said that the Twitter hack probably happened after an employee’s home or work computer was compromised through vulnerabilities in Java, a commonly used computing language whose weaknesses have been well publicized.

Ashkan Soltani, an independent privacy and security researcher, said such a move would give attackers “a toehold” in Twitter’s internal network, potentially allowing them either to sniff out user information as it traveled across the company’s system or break into specific areas, such as the authentication servers that process users’ passwords.

The relatively small number of users affected suggested either that attackers weren’t on the network long or that they were only able to compromise a subset of the company’s servers, Soltani said.

Twitter is generally used to broadcast messages to the public, so the hacking might not immediately have yielded any important secrets. But the stolen credentials could be used to eavesdrop on private messages or track which Internet address a user is posting from.

That might be useful, for example, for an authoritarian regime trying to keep tabs on a journalist’s movements.

“More realistically, someone could use that as an entry point into another service,” Soltani said, noting that since few people bother using different passwords for different services, a password stolen from Twitter might be just as handy for reading a journalist’s emails.

___

AP reporters Anne D’Innocenzio in New York, Raphael Satter in London and Didi Tang in Beijing contributed to this report.

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Rihanna & Chris Brown Make Readers Mad, Ashley Judd Split Makes Them Sad

By Andrea Billups

02/02/2013 at 03:00 PM EST

Rihanna (left) and Ashley Judd

Michael Kovac/Getty; Jon Kopaloff/FilmMagic

What's on the minds of PEOPLE readers this week? We love getting your feedback, and as always, you weighed in with plenty of strong reactions.

From your anger over Rihanna's confession that she and Chris Brown are once again in a relationship, to your love as a Houston waiter refused to serve a customer who'd insulted a boy with Down syndrome, you told us what got you talking – and also laughing out loud.

Check out the articles with the top reactions on the site this week, and keep clicking on the emoticons at the bottom of every story to tell us what you think!

After posting plenty of photos of them together, Rihanna finally came clean, much to readers' chagrin, that she and Chris Brown are back on as a couple. The pop star, 24, and Brown, 23, have had a rocky past after he was charged with assaulting her in 2009. She told Rolling Stone magazine, in a cover story, that the reconciled relationship was important to her, despite any public scrutiny it would invite. "Even if it's a mistake, it's my mistake," she says. "After being tormented for so many years, being angry and dark, I'd rather just live my truth and take the backlash. I can handle it."

Readers felt the love for Houston waiter Michael Garcia of Laurenzo's Prime Rib who put his job on the line when he came to the defense of a 5-year-old boy with Down syndrome, the son of Garcia's regular customers. When Milo Castillo, who has delayed speech issues, began to chat loudly about his recent birthday, a male customer nearby announced: "Special needs children need to be special somewhere else." An angry Garcia was angered refused to serve the man, and the story later lit up the restaurant's Facebook page with support.

They're famous and beautiful and now, New England Patriots quarterback Tom Brady and his supermodel wife Gisele Bündchen own a $20 million, 22,000-square-foot castle-style Los Angeles home, replete with a moat. Wow, indeed. Brady, 35, and Bündchen, 32, will have plenty of room for their growing family, which includes son Benjamin, 3, and daughter Vivian, born Dec. 5, along with Brady's son, John, 5, from a previous relationship.

Fans were saddened by the split this week of longtime couple Ashley Judd, 44, and her husband of more than a decade, auto racing star Dario Franchitti, 39. Their exclusive statement to PEOPLE came as a surprise: "We have mutually decided to end our marriage. We'll always be family and continue to cherish our relationship based on the special love, integrity, and respect we have always enjoyed."

Outspoken Miley Cyrus, 20, drew laughs from readers when she referred to herself in a recent interview as already married. The singer, who's been engaged to actor Liam Hemsworth, 23, since May of last year, had also hinted at marriage in the past, posting photos on Twitter (since removed) of the couple wearing rings on their left hands. But she seems to just be jumping the gun. Hemsworth's rep confirmed to PEOPLE that the couple had not yet wed. "Definitely NOT married," said the rep.

Check back next week for another must-read roundup, and see what readers are reacting to here.

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New rules aim to get rid of junk foods in schools

WASHINGTON (AP) — Most candy, high-calorie drinks and greasy meals could soon be on a food blacklist in the nation's schools.

For the first time, the government is proposing broad new standards to make sure all foods sold in schools are more healthful.

Under the new rules the Agriculture Department proposed Friday, foods like fatty chips, snack cakes, nachos and mozzarella sticks would be taken out of lunch lines and vending machines. In their place would be foods like baked chips, trail mix, diet sodas, lower-calorie sports drinks and low-fat hamburgers.

The rules, required under a child nutrition law passed by Congress in 2010, are part of the government's effort to combat childhood obesity. While many schools already have improved their lunch menus and vending machine choices, others still are selling high-fat, high-calorie foods.

Under the proposal, the Agriculture Department would set fat, calorie, sugar and sodium limits on almost all foods sold in schools. Current standards already regulate the nutritional content of school breakfasts and lunches that are subsidized by the federal government, but most lunchrooms also have "a la carte" lines that sell other foods. Food sold through vending machines and in other ways outside the lunchroom has never before been federally regulated.

"Parents and teachers work hard to instill healthy eating habits in our kids, and these efforts should be supported when kids walk through the schoolhouse door," Agriculture Secretary Tom Vilsack said.

Most snacks sold in school would have to have less than 200 calories. Elementary and middle schools could sell only water, low-fat milk or 100 percent fruit or vegetable juice. High schools could sell some sports drinks, diet sodas and iced teas, but the calories would be limited. Drinks would be limited to 12-ounce portions in middle schools and to 8-ounce portions in elementary schools.

The standards will cover vending machines, the "a la carte" lunch lines, snack bars and any other foods regularly sold around school. They would not apply to in-school fundraisers or bake sales, though states have the power to regulate them. The new guidelines also would not apply to after-school concessions at school games or theater events, goodies brought from home for classroom celebrations, or anything students bring for their own personal consumption.

The new rules are the latest in a long list of changes designed to make foods served in schools more healthful and accessible. Nutritional guidelines for the subsidized lunches were revised last year and put in place last fall. The 2010 child nutrition law also provided more money for schools to serve free and reduced-cost lunches and required more meals to be served to hungry kids.

Sen. Tom Harkin, D-Iowa, has been working for two decades to take junk foods out of schools. He calls the availability of unhealthful foods around campus a "loophole" that undermines the taxpayer money that helps pay for the healthier subsidized lunches.

"USDA's proposed nutrition standards are a critical step in closing that loophole and in ensuring that our schools are places that nurture not just the minds of American children but their bodies as well," Harkin said.

Last year's rules faced criticism from some conservatives, including some Republicans in Congress, who said the government shouldn't be telling kids what to eat. Mindful of that backlash, the Agriculture Department exempted in-school fundraisers from federal regulation and proposed different options for some parts of the rule, including the calorie limits for drinks in high schools, which would be limited to either 60 calories or 75 calories in a 12-ounce portion.

The department also has shown a willingness to work with schools to resolve complaints that some new requirements are hard to meet. Last year, for example, the government relaxed some limits on meats and grains in subsidized lunches after school nutritionists said they weren't working.

Schools, the food industry, interest groups and other critics or supporters of the new proposal will have 60 days to comment and suggest changes. A final rule could be in place as soon as the 2014 school year.

Margo Wootan, a nutrition lobbyist for the Center for Science in the Public Interest, said surveys by her organization show that most parents want changes in the lunchroom.

"Parents aren't going to have to worry that kids are using their lunch money to buy candy bars and a Gatorade instead of a healthy school lunch," she said.

The food industry has been onboard with many of the changes, and several companies worked with Congress on the child nutrition law two years ago. Major beverage companies have already agreed to take the most caloric sodas out of schools. But those same companies, including Coca-Cola and PepsiCo, also sell many of the non-soda options, like sports drinks, and have lobbied to keep them in vending machines.

A spokeswoman for the American Beverage Association, which represents the soda companies, says they already have greatly reduced the number of calories that kids are consuming at school by pulling out the high-calorie sodas.

___

Follow Mary Clare Jalonick on Twitter at http://twitter.com/mcjalonick

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"Great Rotation"- A Wall Street fairy tale?

NEW YORK (Reuters) - Wall Street's current jubilant narrative is that a rush into stocks by small investors has sparked a "great rotation" out of bonds and into equities that will power the bull market to new heights.

That sounds good, but there's a snag: The evidence for this is a few weeks of bullish fund flows that are hardly unusual for January.

Late-stage bull markets are typically marked by an influx of small investors coming late to the party - such as when your waiter starts giving you stock tips. For that to happen you need a good story. The "great rotation," with its monumental tone, is the perfect narrative to make you feel like you're missing out.

Even if something approaching a "great rotation" has begun, it is not necessarily bullish for markets. Those who think they are coming early to the party may actually be arriving late.

Investors pumped $20.7 billion into stocks in the first four weeks of the year, the strongest four-week run since April 2000, according to Lipper. But that pales in comparison with the $410 billion yanked from those funds since the start of 2008.

"I'm not sure you want to take a couple of weeks and extrapolate it into whatever trend you want," said Tobias Levkovich, chief U.S. equity strategist at Citigroup. "We have had instances where equity flows have picked up in the last two, three, four years when markets have picked up. They've generally not been signals of a continuation of that trend."

The S&P 500 rose 5 percent in January, its best month since October 2011 and its best January since 1997, driving speculation that retail investors were flooding back into the stock market.

Heading into another busy week of earnings, the equity market is knocking on the door of all-time highs due to positive sentiment in stocks, and that can't be ignored entirely. The Standard & Poor's 500 Index <.spx> ended the week about 4 percent from an all-time high touched in October 2007.

Next week will bring results from insurers Allstate and The Hartford , as well as from Walt Disney , Coca-Cola Enterprises and Visa .

But a comparison of flows in January, a seasonal strong month for the stock market, shows that this January, while strong, is not that unusual. In January 2011 investors moved $23.9 billion into stock funds and $28.6 billion in 2006, but neither foreshadowed massive inflows the rest of that year. Furthermore, in 2006 the market gained more than 13 percent while in 2011 it was flat.

Strong inflows in January can happen for a number of reasons. There were a lot of special dividends issued in December that need reinvesting, and some of the funds raised in December tax-selling also find their way back into the market.

During the height of the tech bubble in 2000, when retail investors were really embracing stocks, a staggering $42.7 billion flowed into equities in January of that year, double the amount that flowed in this January. That didn't end well, as stocks peaked in March of that year before dropping over the next two-plus years.

MOM AND POP STILL WARY

Arguing against a 'great rotation' is not necessarily a bearish argument against stocks. The stock market has done well since the crisis. Despite the huge outflows, the S&P 500 has risen more than 120 percent since March 2009 on a slowly improving economy and corporate earnings.

This earnings season, a majority of S&P 500 companies are beating earnings forecast. That's also the case for revenue, which is a departure from the previous two reporting periods where less than 50 percent of companies beat revenue expectations, according to Thomson Reuters data.

Meanwhile, those on the front lines say mom and pop investors are still wary of equities after the financial crisis.

"A lot of people I talk to are very reluctant to make an emotional commitment to the stock market and regardless of income activity in January, I think that's still the case," said David Joy, chief market strategist at Columbia Management Advisors in Boston, where he helps oversee $571 billion.

Joy, speaking from a conference in Phoenix, says most of the people asking him about the "great rotation" are fund management industry insiders who are interested in the extra business a flood of stock investors would bring.

He also pointed out that flows into bond funds were positive in the month of January, hardly an indication of a rotation.

Citi's Levkovich also argues that bond investors are unlikely to give up a 30-year rally in bonds so quickly. He said stocks only began to see consistent outflows 26 months after the tech bubble burst in March 2000. By that reading it could be another year before a serious rotation begins.

On top of that, substantial flows continue to make their way into bonds, even if it isn't low-yielding government debt. January 2013 was the second best January on record for the issuance of U.S. high-grade debt, with $111.725 billion issued during the month, according to International Finance Review.

Bill Gross, who runs the $285 billion Pimco Total Return Fund, the world's largest bond fund, commented on Twitter on Thursday that "January flows at Pimco show few signs of bond/stock rotation," adding that cash and money markets may be the source of inflows into stocks.

Indeed, the evidence suggests some of the money that went into stock funds in January came from money markets after a period in December when investors, worried about the budget uncertainty in Washington, started parking money in late 2012.

Data from iMoneyNet shows investors placed $123 billion in money market funds in the last two months of the year. In two weeks in January investors withdrew $31.45 billion of that, the most since March 2012. But later in the month money actually started flowing back.

(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

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Deadly Firefight on Lebanon’s Border With Syria

BEIRUT, Lebanon — At least three Lebanese Army soldiers were killed on Friday in a shootout as they tried to arrest a resident of a village that has become a hub of refugees and where Syrian rebel fighters often cross the border. Their target was also fatally shot.

There were conflicting reports about the nature of the clash, in which security forces were ambushed as they pursued a wanted man, but the episode played into fears that the accelerating influx of Syrians could spread the conflict into Lebanon.

The village, Aarsel, lies in the eastern Bekaa Valley, a mountainous region bordering Syria, and is a stronghold of support for the rebellion against the Syrian president, Bashar al-Assad. Syrian refugees who prefer to avoid areas of the Bekaa closely controlled by Hezbollah, an ally of Mr. Assad, have also crammed into the town.

In a statement, the Lebanese Army said that a captain was among those killed and declared without elaborating, “There will be no compromises on attempts to hide armed militants.”

Some reports, citing unnamed security sources, said that the soldiers were attacked by Syrian rebels, while residents said that villagers chased down and attacked plainclothes security personnel who arrived to arrest a Lebanese suspect without coordinating with local leaders.

The suspect, a resident of Aarsel, was identified as Khaled Hummayed. Lebanon’s national news agency said that he was wanted for involvement in the kidnapping of Estonian tourists in the Bekaa in 2011.

Several Lebanese media outlets said that members of the Free Syrian Army, the loose-knit rebel coalition, attacked the soldiers, while Reuters reported that Mr. Hummayed was believed to be a member of a jihadist rebel group that has been active in Syria, Al Nusra Front, who traveled frequently in and out of the country.

The deputy mayor of Aarsel said that Mr. Hummayed was driving a pickup truck when security personnel in civilian cars confronted him, shot him, and left with his body. He said he did not know if Mr. Hummayed was involved with Syrian rebels, but added, “90 percent of Aarsel’s people support the revolution.”

A smuggler from Aarsel, who gave only a nickname, Abu Hussein, said he was on the way to Friday Prayer and witnessed the shootout. He said that Mr. Hummayed’s pickup truck was left behind, smeared with blood, as angry residents pursued the cars. He said that Mr. Hummayed had once draped the flag of the Syrian revolution around his body.

Supporters of the revolution are deeply suspicious of Lebanese security forces, which they see as aiding the Syrian government. Lebanon has officially adopted a policy of “disassociation” from the Syrian conflict.

But in practice, many Lebanese have taken sides, with many Sunni Muslims supporting the rebellion led by Syria’s Sunni majority, while Hezbollah, a Shiite Muslim movement that relies on Syria as an arms conduit, has supported the government dominated by Mr. Assad’s Alawite sect, an offshoot of Shiism.

The border area has been tense, with rebels hiding and resting on the Lebanese side, and Syrian troops sometimes shelling Lebanese territory, crossing the border to fight rebels or shooting civilian refugees as they flee.

New pressures are growing as the flow of refugees — there are already more than 200,000 in Lebanon, a country of 4 million — overtaxes Sunni areas that have hosted most of them and pushes refugees into new areas.

More than 2 million people are displaced inside Syria, and on Friday, the United Nations children’s agency said 420,000 people — half of them children — needed urgent help in the province of Homs.

A spokeswoman for Unicef, Marixie Mercado, told reporters in Geneva that 200 of Homs’s 1,500 schools were damaged, with 65 more housing refugees, news agencies reported.

The United Nations refugee agency said it had for the first time reached the town of Azaz, near the Turkish border, to deliver tents with Syrian government permission, and found 45,000 people living in makeshift tents.

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This Week’s Social Media Power Rankings: The Return of Swatch

The social media sphere is an increasingly noisy place, especially for brands. But hiding somewhere in the static are strong signals from companies reaching their customers in innovative ways. The Social Business Index from the Dachis Group provides a (free) real-time ranking of more than 30,000 global brands based on their social performance. Every week we’re taking a tally of who’s getting heard, what they’re saying, and why it matters.

RELATED: This Week’s Social Media Power Rankings: Cisco Has a Warrior

As you can see, there wasn’t much movement in the top 10. But if you look at number 17, you’ll see Diageo had the biggest jump this week. If that name doesn’t sound familiar, it’s the company that owns more familiar brands like Guiness, Johnnie Walker and Ketel One. So props to them and our livers—now let’s look at what happened outside the top 20:

RELATED: This Week’s Social Media Power Rankings: Cheers to Heineken

“Cisco’s rise in the Social Business Index this week was supported by the social efforts behind ‘the world’s largest classroom.’” Lizzie Steen of the Dachis Group told us. What she’s referring to is the  The Cisco Networking Academy— a public/private program that provides technology and career education to more than four million students across 10,000 academies in 165 countries.  And that sounds serious, but as Steen points out, part of its success is there’s an emphasis on fun. Steen writes: 

Two engineers, Ian and Dan, set up two servers and decorated them with flower lights while studying for their certification from Cisco. The photo received more than 1,200 likes and 186 shares from the the site’s 460 thousand fans.  Overall, the CNA page has balanced a dense subject matter with a collaborative and fun posts, making the learning process more global and human.

Swatch proved that it’s never too early to start prepping for Valentine’s Day.  As the Dachis Group’s Joe Pinaire points out, their very popular True Love (has nothing to hide) campaign and its new A la Folie watch contributed to Swatch’s boost this week. “From Taiwan to Chile, the brand has leveraged countless regional Facebook presences to let their fans know the clock is ticking on the seasonal special,” Pinaire told us. “And fans have taken to this messaging, as the brand’s bevy of original and creative photo content has garnered love from around the globe,” he added. That photo content was specified and regionalized for their fans,  featuring pictures of a Spanish store floor redesign promoting the watch and the watch thriving in the hustle of Vienna city-life and the new O’Hare airport store. “Swatch also launched a Twitter contest using their global handle (@swatch), encouraging Belgian, Dutch, English, Spanish, and Swiss fans to declare their #TrueLove (because it has nothing to hide–right?) in exchange for a chance to win the seasonal watch and a travel voucher.” And if there’s something people love more than Valentine’s Day, it’s a free contest.

So, no cheating, but do you know how many Facebook fans Intel and its Ultrabooks have? Over 16.5 million. That also means a lot of social media juice. “Last week, the Ultrabook took in the sights in New York City and Paris. In New York, an Ultrabook posed within view of the inimitable Empire State Building with the caption, ‘Empire State of Mind’, showing off its amazing form factor and the Intel i7 chip that powers it,” the Dachis Group’s Charles Lim told us.  The photo generated more than 130 thousand likes, 1,600 comments and six thousand shares—it’s a photo of a computer people.  Lim explains:

Like car lovers, electronics enthusiasts react positively to photos of gear that they already own or would like to own. This is because electronics, like cars, are aspirational and functional and inspire lust and passion.  It also helped that the photo was a shout-out to the cultural hub of America.  …

These posts are well tuned to a global brand campaign that appeals the traveler, gets local voices involved, inspires contests and instills the notion that the Ultrabook can go anywhere you go.

Methodology: A project of the Dachis Group, a social business professional services group, the Social Business Index analyzes the conversations on social platforms such as Twitter, Facebook, YouTube, and others. The index, which currently covers approximately 25,0000 companies and 27,000 brands, detects behaviors and activities exhibited by these companies and analyzes their execution and effectiveness at driving outcomes such as brand awareness, brand love, mind share, and advocacy. The Atlantic Wire takes a snapshot of the rankings at the end of the day on Sundays.

Social Media News Headlines – Yahoo! News

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Kristin Chenoweth Slams American Airlines Over Spat with Her Dog

People Pets

02/01/2013 at 03:35 PM EST

Kristin Chenoweth and Maddie

Richie Buxo/Splash News Online

Kristin Chenoweth and her Maltese Maddie are a high-flying team – most of the time.

The actress was recently departing a flight from Dallas, Texas, when an American Airlines attendant refused her entry on board the plane because of her canine companion.

Though Chenoweth insisted she had all of the necessary paperwork, the airline employee went on to scold the star in front of other passengers at the boarding gate, before an official realized a mistake had been made and allowed the actress and Maddie to board.

"American Airlines: Dallas flight attnt supservisor: Ms Kidwell. Abuse not ok," Chenoweth Tweeted on Tuesday, calling the experience the "trip from hell."

While the actress hasn't commented further on the incident – thought she did retweet a follower who said she also experienced "unpleasant flights" on American – a spokesperson for the airline told TMZ the company regrets the incident.

"We have been in touch with Ms. Chenoweth to offer our apologies for the misunderstanding," the rep said. "We refunded the [$125] cabin pet charge as soon as we realized the mistake. We hope she will consider flying American again in the future."

Chenoweth's longtime canine companion, Maddie is also the inspiration for the star's philanthropic organization, named Maddie's Corner, which supports animal causes.

"Show business can make you so self-focused, even if you're not that kind of person," she told Prevention magazine in 2011. "Since I wasn't married and didn't have a child, I needed something to take care of. So I got a dog."

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Obama offers faith groups new birth control rule

WASHINGTON (AP) — Facing a wave of lawsuits over what government can tell religious groups to do, the Obama administration on Friday proposed a compromise for faith-based nonprofits that object to covering birth control in their employee health plans.

Some of the lawsuits appear headed for the Supreme Court, threatening another divisive legal battle over President Barack Obama's health care overhaul law, which requires most employers to cover birth control free of charge to female workers as a preventive service. The law exempted churches and other houses of worship, but religious charities, universities, hospitals and even some for-profit businesses have objected.

The government's new offer, in a proposed regulation, has two parts.

Administration officials said it would more simply define the religious organizations that are exempt from the requirement altogether. For example, a mosque whose food pantry serves the whole community would not have to comply.

For other religious employers, the proposal attempts to create a buffer between them and contraception coverage. Female employees would still have free access through insurers or a third party, but the employer would not have to arrange for the coverage or pay for it. Insurers would be reimbursed for any costs by a credit against fees owed the government.

It wasn't immediately clear whether the plan would satisfy the objections of Roman Catholic charities and other faith-affiliated nonprofits nationwide challenging the requirement.

Kyle Duncan, general counsel for the Becket Fund for Religious Liberty, which is representing religious nonprofits and businesses in lawsuits, said many of his clients will still have serious concerns.

"This is a moral decision for them," Duncan said. "Why doesn't the government just exempt them?"

Neither the Catholic Health Association, a trade group for hospitals, nor the U.S. Conference of Catholic Bishops had an immediate reaction, saying the regulations were still being studied.

Some women's advocates were pleased.

"The important thing for us is that women employees can count on getting insurance that meets their needs, even if they're working for a religiously affiliated employer," said Cindy Pearson, executive director of the National Women's Health Network.

Policy analyst Sarah Lipton-Lubet of the American Civil Liberties Union said the rule appeared to meet the ACLU's goal of providing "seamless coverage."

Health and Human Services Secretary Kathleen Sebelius said in a statement that the compromise would provide "women across the nation with coverage of recommended preventive care at no cost, while respecting religious concerns."

The birth-control rule, first introduced a year ago, became an election issue, with some advocates for women praising the mandate as a victory but some religious leaders decrying it as an attack on faith groups.

The health care law requires most employers, including faith-affiliated hospitals and nonprofits, to provide preventive care at no charge to employees. Scientific advisers to the government recommended that artificial contraception, including sterilization, be included in a group of services for women. The goal, in part, is to help women space out pregnancies to promote health.

Under the original rule, only those religious groups that primarily employ and serve people of their own faith — such as churches — were exempt. But other religiously affiliated groups, such as church-affiliated universities, Catholic Charities and hospitals, were told they had to comply.

Catholic bishops, evangelicals and some religious leaders who have generally been supportive of Obama's policies lobbied fiercely for a broader exemption. The Catholic Church prohibits the use of artificial contraception. Evangelicals generally accept the use of birth control, but some object to specific methods such as the morning-after contraceptive pill, which they argue is tantamount to abortion, and is covered by the policy.

Obama had promised to change the birth control requirement so insurance companies — and not faith-affiliated employers — would pay for the coverage, but religious leaders said more changes were needed to make the plan work.

Since then, more than 40 lawsuits have been filed by religious nonprofits and secular for-profit businesses contending the mandate violates their religious beliefs. As expected, this latest regulation does not provide any accommodation for individual business owners who have religious objections to the rule.

Questions remain about how the services ultimately will be funded. The Health and Human Services Department has not tallied an overall cost for the plan, according to Chiquita Brooks-LaSure, an HHS deputy policy director.

However, in its new version of the rule, the department argues that the change won't impose new costs on insurers because it will save them money "from improvements in women's health and fewer child births."

The latest version of the mandate is now subject to a 60-day public comment period. The overall mandate is to take effect for religious nonprofits in August.

___

Zoll reported from New York. Associated Press writer David Crary in New York contributed.

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Wall Street rises on jobs, factory data, Dow passes 14,000

NEW YORK (Reuters) - Stocks rose to five-year highs on Friday after jobs and manufacturing data showed the economy's recovery remains on track.

The Dow industrials rose above 14,000 for the first time since mid-October 2007 and the S&P touched its highest since December of that year. The S&P advanced 5 percent in January for its best start to a year since 1997 and is now just about 60 points away from its all-time intraday high of 1,576.09.

Analysts attributed the market's robust showing so far this year partly to a deluge of cash flowing into equities.

Investors poured $12.7 billion into U.S.-based stock mutual funds and exchange-traded funds in the latest week, concluding the strongest four-week flows into stock funds since 1996, data showed on Thursday.

"Fundamentals are looking good today after the data, but overall the money that was on the sidelines is finally coming into the market again," said Doug Cote, chief market strategist at ING Investment Management.

Employment grew modestly in January, with 157,000 jobs added in the month, slightly below expectations for 160,000. But Labor Department revisions showed 127,000 more jobs were created in November and December than previously reported.

Other reports released Friday showed the pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months, U.S. consumer sentiment rose more than expected last month, while December construction spending also beat forecasts.

"All the data seems to keep pointing to a slowly, steadily improving economy," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

The Dow Jones industrial average <.dji> was up 150.14 points, or 1.08 percent, at 14,010.72. The Standard & Poor's 500 Index <.spx> was up 15.11 points, or 1.01 percent, at 1,513.22. The Nasdaq Composite Index <.ixic> was up 38.50 points, or 1.23 percent, at 3,180.63.

With the day's gains, major equity indexes were on track for a fifth straight week of gains. The S&P 500 is also coming off its best monthly performance since October 2011.

Google shares briefly hit an all-time high of $774.92 before retreating to trade 2.5 percent higher at $774.54.

Investors were also attuned to corporate earnings, with a trio of Dow components reporting profits that beat expectations.

Exxon Mobil was little changed at $89.95 after its results while Chevron added 1 percent to $116.34.

Drugmaker Merck & Co fell 2.7 percent to $42.10 after a cautious 2013 outlook.

Generic drugmaker Perrigo reported a better-than-expected second-quarter profit and its shares jumped 5.5 percent to $106.01.

Of the 252 companies in the S&P 500 that have reported earnings so far, 69 percent have exceeded expectations, according to Thomson Reuters data. That is a higher proportion than over the past four quarters and above average since 1994.

Overall, S&P 500 fourth-quarter earnings are estimated to have grown 4.4 percent, according to the data, up from a 1.9 percent forecast at the start of the earnings season but well below a 9.9 percent profit growth forecast on October 1.

Dell Inc gained 4.2 percent to $13.80 after sources said the company was nearing an agreement to sell itself to a buyout consortium led by its founder, Michael Dell, and private equity firm Silver Lake Partners.

Shares of General Motors and Ford Motor rose after the two largest American automakers posted better-than-expected U.S. auto sales for January.

GM gained 1.2 percent to $28.42 and Ford added 0.9 percent to $13.07.

Shares of Zoetis surged on its trading debut on the New York Stock Exchange after its shares were priced at $26, above the expected range. Zoetis was trading at $30.67 at midday after earlier climbing as high as $31.74.

(Reporting By Angela Moon; Editing by Kenneth Barry)

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Syria’s Confirmation of Airstrike May Undercut Israel’s Strategy of Silence

Jim Hollander/European Pressphoto Agency

In East Jerusalem, Israelis distributed gas masks on Wednesday as worries about security spread. More Photos »

JERUSALEM — Israeli officials remained silent on Thursday about their airstrike in Syrian territory the day before, a tactic that experts said was part of a longstanding strategy to give targeted countries face-saving opportunities to avoid conflict escalation. But Syria’s own confirmation of the attack, followed by harsh condemnation not only by Israel’s enemies Iran and Hezbollah but also by Russia, may have undercut that effort, analysts said, increasing the likelihood of a cycle of retaliation.

“From the moment they chose to say Israel did something, it means someone has to do something after that,” said Giora Eiland, a former head of Israel’s National Security Council and a longtime military leader. “Contrary to what I could hope and believe yesterday, that this round of events would end soon, now I am much less confident.”

The Iranian deputy foreign minister warned Thursday that Israel’s strike would lead to “grave consequences for Tel Aviv,” while the Russian Foreign Ministry issued a statement saying that the strike “blatantly violates the United Nations Charter and is unacceptable and unjustified, whatever its motives.”

American officials said Israel hit a convoy before dawn on Wednesday that was ferrying sophisticated antiaircraft missiles called SA-17s to Lebanon. The Syrians and their allies said the target was actually a scientific research facility in the Damascus suburbs. It remained unclear Thursday whether there was one strike or two, and what involvement the research outpost might have had in weapons production or storage for Syria or Hezbollah, the militant Lebanese Shiite organization that has long battled with Israel.

Most experts agree that Syria, Hezbollah and Israel each have strong reasons to avoid a new active conflict right now: the Syrian president, Bashar al-Assad, is fighting for his survival in a violent and chaotic civil war; Hezbollah is struggling for political legitimacy at home and battling its label as a terrorist organization internationally; and Israel is trying to keep its head down in an increasingly volatile region.

But it is equally clear that Hezbollah — backed by Syria and Iran — wants desperately to upgrade its arsenal in hopes of changing the parameters for any future engagement with the powerful Israeli military, and that Israel is determined to stop it. And Hezbollah is perhaps even more anxious to gird itself for future challenges to its primacy in Lebanon, especially if a Sunni-led revolution triumphs next door in Syria.

Benjamin Netanyahu, the Israeli prime minister, and his deputies said loud and clear in the days leading up to the strike that they saw any transfer of Syria’s extensive cache of chemical weapons, or of sophisticated conventional weapons systems, as a “red line” that would prompt action. Now that Israel has followed through on that threat, even without admitting it, analysts expect the country — perhaps backed by its Western allies — to similarly target any future convoys attempting the same feat.

“Once this red line has been crossed, it’s definitely going to be crossed time and again from now on, especially as the situation of the Assad regime will deteriorate,” said Boaz Ganor, head of the International Institute for Counterterrorism at the Interdisciplinary Center in Herzliya, Israel. “They will do the utmost to gain control of those weapons. In that case, I don’t see why Israel wouldn’t have the same type of calculation that Israel had two days ago into the future.”

Mr. Ganor said the United States and Europe should be as concerned as Israel, because Syria’s chemical weapons could end up in the hands not just of Hezbollah but of jihadist organizations like Al Qaeda or its proxies. “If one organization will put their hands on this arsenal, then it will change hands in no time and we’ll see it all over the world,” he said. “We, the international community, are marching into a new era of terrorism.”

Eyal Zisser, a historian at Tel Aviv University who specializes in Syria and Lebanon, said that if there was no retaliation to Wednesday’s airstrike, “Why not repeat it? For Israel it’s going to be the practice.” The question, Professor Zisser said, “is what they will try to do next, Syria and Hezbollah, if there is another Israeli attack, whether they will avoid any retaliation the next time as well.”

Israel’s steadfast silence on the airstrike was reminiscent of its posture after it destroyed a Syrian nuclear reactor in 2007 — an attack it has never acknowledged, though many officials discuss it with winks and nods. But in that case, President Assad bought into the de-escalation strategy by saying the attack had hit an unused — and implicitly unimportant — military building, relieving the pressure for a response.

Reporting was contributed by Irit Pazner Garshowitz from Jerusalem, Ellen Barry from Moscow, Thomas Erdbrink from Tehran and Anne Barnard from Beirut, Lebanon.

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