Stock futures flat after two-day rally, France downgrade

NEW YORK (Reuters) - Stock index futures were little changed on Tuesday, indicating the S&P 500 index may pause after a two-day rally as a credit downgrade of France by Moody's reminded investors of the problems plaguing the global economy.

The benchmark S&P index had risen more than 2 percent in the previous two sessions, spurring by optimism a deal could be reached in the U.S. to stave off the looming "fiscal cliff," a series of tax and spending changes that will begin to take effect in the new year.

Moody's Investors Service cut France's sovereign rating by one notch to Aa1 after the market close on Monday, citing an uncertain fiscal outlook as a result of the weakening economy.

While the move was expected after a similar downgrade by peer Standard & Poor's in January, it served as a reminder of the headwinds faced by the global economy as a result of the region's debt crisis.

Also in the euro zone, finance ministers will give a tentative go-ahead for the disbursement of 44 billion euros in emergency loans to Greece on Tuesday, but the money will only be paid on December 5 if the country meets all remaining conditions.

The S&P 500 index had fallen 5.3 percent between election day and the start of the rebound as angst over the prospects of a deal gave investors reason to sell stocks broadly in an effort to limit the tax hit both this year and in 2013.

President Barack Obama and the U.S. Congress hope to start serious negotiations after this week's Thanksgiving holiday on Thursday on how to avoid the "fiscal cliff," which has politicians and economists worried about the direction of the world's largest economy.

S&P 500 futures rose 1.1 points and were roughly even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 2 points, and Nasdaq 100 futures added 3 points.

Economic data expected on Tuesday includes housing starts and permits data for October at 8:30 a.m. (1330 GMT). Economists in a Reuters survey forecast a 840,000 annualized rate versus 872,000 in September, and a total of 865,000 permits compared with 890,000 in the prior month.

Later in the session at 12:15 p.m (1715 GMT), Federal Reserve's Chairman Ben Bernanke speaks before the Economic Club of New York, a speech that may offer a fresh chance to gauge the Fed's appetite for more monetary stimulus. Market participants currently expect the Fed to step up asset purchases in 2013 after Operation Twist expires.

Best Buy reports quarterly results, expected to show a fall in earnings per shares to $0.12 from $0.47, as the world's largest consumer electronics chain struggles to fend off online and discount rivals. Investors are awaiting word on whether founder and top shareholder Richard Schulze comes through with a formal bid to take the company private.

As earnings season draws to a close, other companies expected to post earnings Tuesday include Salesforce.com Inc , Campbell Soup Co , H.J. Heinz Co and Hewlett-Packard Co .

European shares edged lower on Tuesday, with France's CAC 40 index <.fchi> among the worst hit after ratings agency Moody's stripped the euro zone's No. 2 economy of its top credit rating. <.eu/>

Asian shares rose on hopes of a compromise in the U.S. fiscal cliff negotiations.

(Reporting by Chuck Mikolajczak Editing by W Simon)

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Gaza Clash Escalates With Deadliest Israeli Strike

Bernat Armangue/Associated Press

Smoke rose over Gaza City on Sunday, as Israel widened its range of targets to include buildings used by the news media.

CAIRO — Emboldened by the rising power of Islamists around the region, the Palestinian militant group Hamas demanded new Israeli concessions to its security and autonomy before it halts its rocket attacks on Israel, even as the conflict took an increasing toll on Sunday.

After five days of punishing Israeli airstrikes on the Hamas-controlled Gaza Strip and no letup in the rocket fire in return, representatives of Israel and Hamas met separately with Egyptian officials in Cairo on Sunday for indirect talks about a truce.

The talks came as an Israeli bomb struck a house in Gaza on Sunday afternoon, killing 11 people, in the deadliest single strike since the conflict between Israel and Hamas escalated on Wednesday. The strike, along with several others that killed civilians across the Gaza Strip, signaled that Israel was broadening its range of targets on the fifth day of the campaign.

By the end of the day, Gaza health officials reported that 70 Palestinians had been killed in airstrikes since Wednesday, including 20 children, and that 600 had been wounded. Three Israelis have been killed and at least 79 wounded by unrelenting rocket fire out of Gaza into southern Israel and as far north as Tel Aviv.

Hamas, badly outgunned on the battlefield, appeared to be trying to exploit its increased political clout with its ideological allies in Egypt’s new Islamist-led government. The group’s leaders, rejecting Israel’s call for an immediate end to the rocket attacks, have instead laid down sweeping demands that would put Hamas in a stronger position than when the conflict began: an end to Israel’s five-year-old embargo of the Gaza Strip, a pledge by Israel not to attack again and multinational guarantees that Israel would abide by its commitments.

Prime Minister Benjamin Netanyahu of Israel stuck to his demand that all rocket fire cease before the air campaign lets up, and Israeli tanks and troops remained lined up outside Gaza on Sunday. Tens of thousands of reserve troops had been called up. “The army is prepared to significantly expand the operation,” Mr. Netanyahu said at the start of a cabinet meeting.

Reda Fahmy, a member of Egypt’s upper house of Parliament and of the nation’s dominant Islamist party, who is following the talks, said Hamas’s position was just as unequivocal. “Hamas has one clear and specific demand: for the siege to be completely lifted from Gaza,” he said. “It’s not reasonable that every now and then Israel decides to level Gaza to the ground, and then we decide to sit down and talk about it after it is done. On the Israeli part, they want to stop the missiles from one side. How is that?”

He added: “If they stop the aircraft from shooting, Hamas will then stop its missiles. But violence couldn’t be stopped from one side.”

Hamas’s aggressive stance in the cease-fire talks is the first test of the group’s belief that the Arab Spring and the rise in Islamist influence around the region have strengthened its political hand, both against Israel and against Hamas’s Palestinian rivals, who now control the West Bank with Western backing.

It also puts intense new pressure on President Mohamed Morsi of Egypt, a former leader of the Muslim Brotherhood who was known for his fiery speeches defending Hamas and denouncing Israel. Mr. Morsi must now balance the conflicting demands of an Egyptian public that is deeply sympathetic to Hamas and the Palestinian cause against Western pleadings to help broker a peace and Egypt’s need for regional stability to help revive its moribund economy.

Indeed, the Egyptian-led cease-fire talks illustrate the diverging paths of the Muslim Brotherhood and Hamas, a Palestinian offshoot of the original Egyptian Islamist group. Hamas has evolved into a more militant insurgency and is labeled a terrorist organization by the United States and Israel, while the Brotherhood has effectively become Egypt’s ruling party. Mr. Fahmy said in an interview in March that the Brotherhood’s new responsibilities required a step back from its ideological cousins in Hamas, and even a new push to persuade the group to compromise.

Reporting was contributed by Ethan Bronner, Irit Pazner Garshowitz and Isabel Kershner from Jerusalem, and Peter Baker from Bangkok.

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Online gaming firms urge EU to open up markets

LONDON (Reuters) – Online gaming companies have accused Belgium and Greece of keeping them out of their markets illegally and urged European competition authorities to take action.

A long-running dispute over licenses in Belgium made headlines last week when Belgian authorities questioned one of the co-chief executives of bwin.party, the world’s largest listed online gaming group.

The bwin.party case has underlined the problems faced by companies in the growing online gaming sector when they operate in countries where regulations are unclear or restrictive.

Bwin.party says it is losing 700,000 euros ($ 889,400) in gaming revenue each month after access to its websites was blocked in Belgium.

Executives from 12 gaming companies including bwin.party said the European Commission had failed to follow through on concerns over Belgian laws first raised in 2009.

“We hope that the Commission will now enforce compliance with the European treaty and do so swiftly,” they said in a letter to the Financial Times.

“Countries such as Belgium and Greece that are in clear breach of EU law and that are seeking to enforce those laws domestically are likely to be at the top of the list,” it added.

“The time for polite rhetoric is now over. It is time for deeds not words.”

Belgian rules state that a company must offer the same services both online and offline to obtain a license. Opponents say that favors companies based in Belgium and means pure online providers cannot operate.

In Greece, bookmakers including Britain’s William Hill launched a legal challenge to monopoly operator OPAP after being denied licenses.

(Writing by Keith Weir; Editing by Tom Pfeiffer)

Internet News Headlines – Yahoo! News

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Peta Murgatroyd Blogs: Dancing with the Stars Elimination Left Gilles a 'Bit Devastated'

Only on People.com

By Peta Murgatroyd

11/19/2012 at 07:45 AM EST

Peta Murgatroyd and Gilles Marini

Craig Sjodin/ABC

Peta Murgatroyd is a former Dancing with the Stars champion, winning the coveted mirror-ball trophy in season 14 – only her second season on the series – with Donald Driver. The Australia native blogged for PEOPLE.com about competing with Gilles Marini in the current all-star season. The pair was eliminated during Week 8. Murgatroyd has written her final post.

Elimination is always a little disappointing. Gilles [Marini] really wanted to win badly and he was a bit devastated that he got cut. But he's cool with it now. He's okay. I don't think he expected it. He worked really hard and he's the type of person who believes if you work hard, you get results. But it's not always the case with this TV show. Everyone works hard and everyone was amazing. It was such a tough competition, and I believe we were very lucky to have gotten that far.

It's just more heartbreaking because we had ideas for the next week. We were excited to get started on new things. It's just not going to happen, but we both have other things to look forward to now.

Gilles had the talent to make it to that final. He is an absolutely amazing dancer. But the show is about votes, and that's what really killed us in the end.

Gilles and I definitely bonded over this period. We've become very close friends and I'm become friendly with his wife Carole and his children. We're going to stay in touch and think about work ventures together. He's got great stuff ahead of him. He's an amazing person and I've definitely learned a few lessons from him. He's taught me a few things about life.

I love that we get different partners. You walk away from these relationships staying friends, but also learning about each other and about life. It's one of the best things about the show.

Right now I feel great. I'm a little tired from New York because I just flew in, but it was fun. I met up with a few friends when I got in, and then Gilles and I did the foxtrot together on The View. I stayed a few days extra to catch up with friends and Gilles went home. The View was fun.

I pigged out in New York. I had bagels with cream cheese, gelato and some pizza. I kind of hit all the food groups, which is something I usually don't allow myself to do. I have everything in moderation, but I really splurged over there and it felt good. I don't feel guilty about it at all. I'm going straight back to the gym.

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EU drug regulator OKs Novartis' meningitis B shot

LONDON (AP) — Europe's top drug regulator has recommended approval for the first vaccine against meningitis B, made by Novartis AG.

There are five types of bacterial meningitis. While vaccines exist to protect against the other four, none has previously been licensed for type B meningitis. In Europe, type B is the most common, causing 3,000 to 5,000 cases every year.

Meningitis mainly affects infants and children. It kills about 8 percent of patients and leaves others with lifelong consequences such as brain damage.

In a statement on Friday, Andrin Oswald of Novartis said he is "proud of the major advance" the company has made in developing its vaccine Bexsero. It is aimed at children over two months of age, and Novartis is hoping countries will include the shot among the routine ones for childhood diseases such as measles.

Novartis said the immunization has had side effects such as fever and redness at the injection site.

Recommendations from the European Medicines Agency are usually adopted by the European Commission. Novartis also is seeking to test the vaccine in the U.S.

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Stock futures gain on optimism over budget talk

NEW YORK (Reuters) - Stock index futures started off a holiday-shortened trading week in an upbeat mood on Monday, with investors encouraged by signs of progress in talks to resolve the fiscal crunch in the United States.

Leading U.S. lawmakers expressed confidence on Sunday that they could reach a deal to avert the "fiscal cliff" even as they laid down markers on taxes and spending that may make any agreement more difficult. In response, European stocks also rose from a 3 1/2-month low.

S&P 500 futures rose 7.4 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 61 points and Nasdaq 100 futures rose 16 points.

On the macro-economic front, investors awaited data on U.S. existing home sales for October, due at 10:00 a.m. ET (1500 GMT). Economists in a Reuters survey forecast an annualized 4.75 million units, a repeat of the September total. Investors also eyed the November NAHB housing market index, also due at 10:00 a.m. ET (1500 GMT).

Networking equipment company Cisco Systems Inc said it will buy privately held cloud networking company Meraki for $1.2 billion in cash as part of its cloud and networking strategy.

General Motors Co and its local Chinese partners, intensifying competition in China in the no-frills car market, on Sunday formally opened another plant for its low-cost Baojun brand.

Wal-Mart Stores Inc is taking its first legal step to stop months of protests and rallies outside Walmart stores, targeting the union that it says is behind such actions.

Citigroup Inc has agreed to pay $360 million to the brokerage estate of Lehman Brothers to resolve a dispute over $1 billion in collateral that the investment bank was forced to post in the days leading up to its bankruptcy in 2008.

Rupert Murdoch's News Corp is expected to announce this week that it will acquire a 49 percent stake in the YES Network from the New York Yankees baseball team and its partners, in a deal that would value the sports channel at $3 billion, a person with knowledge of the talks told Reuters.

Online financial services company ETrade Financial Corp will shut down its British brokerage business as the company shifts focus back to its core U.S. operations, the Wall Street Journal reported, citing people familiar with the decision.

Hope that U.S. politicians would find common ground to steer clear of the "fiscal cliff" boosted stocks on Friday, though the gains were not enough to offset the week's losses.

(Reporting by Angela Moon; Editing by Chizu Nomiyama)

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Israel Warns of ‘Expansion’ as Attack Widens to Media Sites

Mohammed Saber/European Pressphoto Agency

Two children look through the rubble of their house after an airstrike in Beit Lahiya, Gaza, on Sunday.

GAZA CITY — Israel pressed its assault on the Gaza Strip for a fifth straight day on Sunday, deploying warplanes and naval vessels to pummel the coastal enclave and striking at two media offices here as Prime Minister Benjamin Netanyahu warned of a possible “significant” expansion in the onslaught.

His words came as militants in Gaza aimed at least one rocket at the Israeli heartland in Tel Aviv, one day after after Israeli forces broadened the attack beyond military targets, bombing centers of government infrastructure including the four-story headquarters of the Hamas prime minister.

“We are exacting a heavy price from Hamas and the terrorist organizations and the Israel Defense Forces are prepared for a significant expansion of the operation,” Mr. Netanyahu told his cabinet at its routine Sunday meeting, referring directly to the call-up of thousands of reservists that, coupled with a massing of armor on the Gaza border, many analysts have interpreted as preparations for a possible invasion.

“I appreciate the rapid and impressive mobilization of the reservists who have come from all over the country and turned out for the mission at hand,” he said. “Reservist and conscript soldiers are ready for any order they might receive.”

Mr. Netanyahu’s remarks were reported shortly after a battery of Israel’s “Iron Dome” defense shield, hastily deployed near Tel Aviv on Saturday in response to the threat of longer-range rockets, intercepted at least one projectile aimed at the city on Sunday, Israeli officials said. The episode was the latest of several salvoes that have illustrated Hamas’s ability to extend the reach of its rocket attacks.

Since Wednesday, when the latest escalation of the conflict began, Iron Dome has knocked 245 rockets out of the sky, the military said on Saturday, while 500 have struck Israel.

The American-financed system is designed to intercept only rockets streaking toward towns and cities and to ignore those likely to strike open ground. But on Sunday a rocket fired from Gaza ploughed through the roof of an apartment building in the southern Israeli city of Ashkelon. There were no immediate reports of casualties there.

In Gaza City, the crash of explosions pierced the quiet several times throughout the early morning.

Hamas health officials said the Palestinian death toll rose to 53 by early Sunday afternoon, the latest victim a 52-year-old woman whose house in the eastern part of Gaza City was bombed around lunchtime.

A few hours earlier, a Hamas militant was killed and seven people were wounded in an attack on the Beach Refugee Camp, where Ismail Haniyeh, the Hamas prime minister, has a home. Those killed on Sunday included 3 children aged between one and 5, the health officials said.

In Israel, 3 civilians have died and 63 have been injured. Four soldiers were also wounded on Saturday.

The onslaught continued despite talks in Cairo that Egyptian President Mohamed Morsi said Saturday night he thought could soon result in a ceasefire. Prime Minister Netanyahu said he would consider a comprehensive ceasefire if the launches from Gaza stop.

Saturday’s attack on Mr. Haniyeh’s office, one of several on government installations, came a day after he hosted his Egyptian counterpart in the same building, a sign of Hamas’s new legitimacy in a radically redrawn Arab world.

That stature was underscored Saturday by a visit to Gaza from the Tunisian foreign minister and the rapid convergence in Cairo of two Hamas allies, the prime minister of Turkey and the crown prince of Qatar, for talks with the Egyptian president and the chairman of Hamas on a possible cease-fire.

As the diplomacy intensifies, a delegation of Arab ministers plans to visit Gaza on Tuesday, Reuters reported, while Ban Ki-moon, the United Nations Secretary General, is expected in Cairo on Monday.

But Mark Regev, a spokesman for Mr. Netanyahu, denied reports on Saturday that a truce was imminent.

It was unclear whether the deal under discussion in Cairo would solely suspend the fighting or include other issues. Hamas — which won elections in Gaza in 2006 and took full control in 2007 but is considered a terrorist organization by Israel and the United States — wants to turn its Rafah crossing with Egypt into a free-trade zone and seeks Israel’s withdrawal from the 1,000-foot buffer it patrols on Gaza’s northern and eastern borders.

Mr. Netanyahu also spoke with the leaders of Britain, Germany, Italy, Greece, Poland, Portugal, Bulgaria and the Czech Republic, according to a statement from his office. On Sunday, he said he appreciated the “understanding they are displaying for Israel’s right to defend itself.”

But some European leaders seemed to be counseling restraint as much as offering support.

Jodi Rudoren reported from Gaza City, Isabel Kershner from Jerusalem and Alan Cowell from London. Reporting was contributed by Fares Akram and Tyler Hicks from the Gaza Strip, Carol Sutherland and Iritz Pazner Garshowitz from Jerusalem, and David D. Kirkpatrick and Mayy El Sheikh from Cairo.

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Taylor Swift and One Direction's Harry Styles: Are They Dating?

By Patrick Gomez

11/17/2012 at 10:40 PM EST

Taylor Swift and Harry Styles

Janet Mayer/Splash News Online; Don Arnold/Wireimage

Taylor Swift appears to be taking her love life in a new direction.

The "Never Ever Getting Back Together" singer is seemingly taking her lyrics to heart as she moves on from recent ex, Conor Kennedy, and enjoys the company of One Direction hottie Harry Styles.

"I had to literally do a double-take," an onlooker tells PEOPLE of finding Styles, 18, with Swift, 22, on the set of The X Factor Thursday morning.

Styles was on hand to watch Swift rehearse the debut of "State of Grace," which she performed later that night on the Fox reality show.

"He was smiling at her while she rehearsed. When she was done he jumped up on stage, picked her up, put her over his shoulder and carried her off stage," the onlooker says. "The whole crew was really surprised."

The young singers were also spotted by X Factor host Mario Lopez, who says he was slapped on the back by Styles during Swift's rehearsal.

"I said, 'What are you doing here,' " Lopez said on his 104.3 MY FM radio show Friday. "And he sort of [pointed] toward Taylor."

Lopez went on to say he later saw the two "hand-in-hand."

A telling sign of the budding relationship may have been a look Styles shared with his bandmate Niall Horan a week earlier after Horan told PEOPLE his favorite song of 2012 was Swift's "Never Ever Getting Back Together."

When asked if he would ever date Swift, Horan gave a small laugh, looked at Styles and answered with a succinct, "no."

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EU drug regulator OKs Novartis' meningitis B shot

LONDON (AP) — Europe's top drug regulator has recommended approval for the first vaccine against meningitis B, made by Novartis AG.

There are five types of bacterial meningitis. While vaccines exist to protect against the other four, none has previously been licensed for type B meningitis. In Europe, type B is the most common, causing 3,000 to 5,000 cases every year.

Meningitis mainly affects infants and children. It kills about 8 percent of patients and leaves others with lifelong consequences such as brain damage.

In a statement on Friday, Andrin Oswald of Novartis said he is "proud of the major advance" the company has made in developing its vaccine Bexsero. It is aimed at children over two months of age, and Novartis is hoping countries will include the shot among the routine ones for childhood diseases such as measles.

Novartis said the immunization has had side effects such as fever and redness at the injection site.

Recommendations from the European Medicines Agency are usually adopted by the European Commission. Novartis also is seeking to test the vaccine in the U.S.

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Wall Street Week Ahead: Going off "cliff" with a bungee cord

NEW YORK (Reuters) - The 1987 crash. The Y2K bug. The debt ceiling debacle of 2011.

All these events, in the end, turned out to be buying opportunities for stocks. So will the "fiscal cliff," some investors say as they watch favorite stocks tumble during the political give-and-take happening in Washington.

The first round of talks aimed at avoiding the "fiscal cliff" caused a temporary rise in equities on Friday, signaling Wall Street's recent declines could be a buying opportunity. The gains were small and sentiment remains weak, but it suggests hope for market bulls.

Though shares ended moderately higher on Friday, it was not enough to offset losses for the week. The S&P was down 1.5 percent, while both the Dow and the Nasdaq fell 1.8 percent.

The S&P 500 is down more than 5 percent in the seven sessions that followed President Barack Obama's re-election. Uncertainty arose as attention turned to Washington's task of dealing with mandated tax hikes and spending cuts that could take the U.S. economy back into recession.

Some see the market's move as an overreaction to hyperbolic headlines about policy gridlock in Washington, believing stocks may start to rebound in what should be a quiet few days ahead of the Thanksgiving holiday next Thursday.

"It just doesn't seem to make any sense that you suddenly wake up the day after the election and realize we've got a fiscal cliff," said Krishna Kumar, partner at New York hedge fund Goose Hollow Alpha Advisors.

Not long ago the S&P was on target for its second-best year in the last 10, riding a 17 percent advance in 2012. That's been halved to about 8 percent, which isn't bad but disappointing compared with just a month ago.

Investors have been selling the year's winners. Apple is down 25 percent from its peak above $700. General Electric is down 14 percent; Google has lost 16 percent. Overall, the stocks that make up the top 10 percent of performers in the month prior to Election Day have been the worst performers since, according to Bespoke Investment Group of Harrison, New York.

"I think it's a good opportunity to be long stocks at these levels," said Kumar.

Hikes on capital gains and dividend taxes are on the line, and Obama has dug in his heels on what he sees as a mandate to make the tax code more progressive.

He seems to have the upper hand in dealings with Congress because Republican lawmakers don't want to see tax rates increase, which is what will happen if no solution is found by the beginning of 2013. Republicans don't want to take the blame for driving the economy over the cliff.

The current crisis is similar to last year's fight to raise the U.S. debt ceiling, which led to the downgrade of the United States' top credit rating in early August 2011.

During the dealings, the S&P 500 lost 18.8 percent between its peak in July 2011 and its bottom in August. As the market slid, the political standoff badly hurt investors' confidence in Washington, setting off a spike in volatility.

In the end a deal was announced that raised the ceiling and put off longer-term fiscal decisions until January 1, 2013, setting the stage for today's "fiscal cliff" crisis.

After staying flat through September 2011, the S&P 500 jumped 31 percent between its October low and the end of March.

BUY THE DIP?

Gridlock in Washington and all that could possibly go wrong with the economy if a deal is not reached have grabbed the headlines, but the negotiations leave room for stock market gains. Congressional leaders said Friday they will work through the Thanksgiving holiday recess to find a solution.

"The debate over how to solve (the fiscal cliff) may be more productive than is commonly recognized," said Brad Lipsig, senior portfolio manager at UBS Financial Services in New York.

"The U.S. is facing a major debt overhang, and serious steps toward addressing it might ultimately be viewed as a positive for future growth," he said. "The market may recognize this and, after a time of hand wringing, recover from the concerns with a renewed sense of optimism."

The recent selling took the S&P 500's relative strength index - a technical measure of internal strength - below 30 this week, indicating the benchmark is oversold and due for a rebound.

The RSI in four of the 10 S&P sectors - utilities, telecoms, consumer staples and technology - is below 30 and the highest RSI reading, for the consumer discretionary sector, is below 40, suggesting a bounce is in store.

"What I want to do is what we did during the decline following the budget negotiations in the summer of 2011: The lower the stock market goes, the more I want to own stock," said Brian Reynolds, chief market strategist at New York-based Rosenblatt Securities.

"If we go off the cliff it will be with a bungee cord attached," he said.

KEEP CALM AND HEDGE

Volatility is expected to rise through the end of November and to spike in late December if no agreement on the fiscal cliff is reached in Congress. Alongside comes opportunity for those with high risk tolerance.

"Recently, volatility has increased in the market overall. You can't really pick it up in the VIX yet, but I think as we get through November, I think you're likely to see the VIX be at a relatively higher level," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

In 2011, the VIX averaged 19.2 in July and 35 in August. So far this month the average is 17.8 and it is expected to spike if negotiations on the cliff drag into late next month.

"Looking at the range of possibilities, I would say any of them would be better than sitting here waiting. I would even put going off the fiscal cliff in that category," said Jill Cuniff, president of Seattle-based Edge Asset Management Inc, which manages about $20 billion.

"But we don't believe Congress will let that happen; there's going to be some middle ground here."

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

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