Wall Street trips and falls on cloudy Italian election

NEW YORK (Reuters) - Stocks on Monday suffered their biggest drop since November after a strong showing in Italian elections by groups opposed to the country's economic reforms triggered worry that Europe's debt problems could once again destabilize the global economy.

The decline marks the biggest percentage drop for the benchmark Standard & Poor's 500 Index since November7, and drove the S&P down to its lowest close since January 18. The CBOE Volatility Index <.vix> or VIX, Wall Street's favorite barometer of fear, surged 34 percent, its biggest jump since August 18, 2011.

Selling accelerated late in the trading session after the S&P 500 fell below the 1,500 level, which has acted as a significant support point. Monday marked the S&P's first close under 1,500 since February 4.

Italy's center-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's center-right bloc in the election for the lower house of parliament, three TV projections indicated. But any government must also command a majority in the Senate, a race that is decided by region.

The resulting gridlock in parliament could lead to new elections and cast into doubt Italy's ability to pay down its debt.

"Europe hasn't gone away as an issue, it is going to hang around, and it is rearing its ugly head today," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

"If someone gets elected who is simply not going to play by the rules, what are they going to do? It puts them in a real quandary here because their financial support, their monetary support is all stipulated by the fact that these austerity programs are going to be in place."

Earlier polls pointing to a center-left victory boosted stocks in Milan and other European markets, and also helped lift the S&P 500 to a session high of 1,525.84 on optimism that Italy would continue down its austerity path.

After a strong start to the year, equities have retreated more recently. The S&P 500's slight fall last week was its first weekly drop after a seven-week string of gains.

In Monday's volatile session, banks and other financial stocks were among the worst performers on worries about the sector's exposure to Italy's massive debt. The KBW Bank Index <.bkx> fell 2.7 percent.

The CBOE Volatility Index <.vix> ended at 18.99, up 34.02 percent.

The Dow Jones industrial average <.dji> dropped 216.40 points, or 1.55 percent, to 13,784.17 at the close. The Standard & Poor's 500 Index <.spx> lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index <.ixic> fell 45.57 points, or 1.44 percent, to 3,116.25.

Although the overall market lost ground on Monday, there were a few bright spots.

Barnes & Noble Inc shares shot up 11.5 percent to $15.06 after the bookseller's chairman offered to buy its declining retail business.

Amgen Inc shares climbed 3.1 percent to $89.55, after rival Affymax issued a voluntary recall of its only drug, an anemia treatment that competes with Amgen's top-selling red blood cell booster, Epogen. Affymax shares lost 85.4 percent to $2.42.

The FTSEurofirst-300 index of top European shares <.fteu3> edged up 0.04 percent and Italy's main FTSE MIB <.ftmib> ended up 0.7 percent after earlier gaining nearly 4 percent.

Political uncertainty on the home front, though, is also on Wall Street's mind.

U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted.

"Sitting out there is the one-thousand-pound gorilla - the sequester issue - and certainly nothing is happening there," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

Lowe's Companies Inc lost 4.8 percent to $35.86 after the home improvement retailer posted fourth-quarter earnings.

With 83 percent of the S&P 500 companies having reported results so far, 69 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 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Volume was active with about 7.27 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, above the daily average of 6.46 billion.

Declining stocks outnumbered advancing ones on both the NYSE and the Nasdaq by a ratio of about 4 to 1.

(Editing by Kenneth Barry, Nick Zieminski and Jan Paschal)

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Ikea Recalls Its Meatballs Horse Meat Is Detected

LONDON — The furniture giant Ikea joined a growing list of brands that have been touched by Europe’s food scandal on Monday and withdrew its signature Swedish meatballs from its markets and cafeterias across most of Europe after one batch was found to contain traces of horse meat.

Ikea’s decision — which followed a recall by the Swiss food maker Nestlé last week — demonstrated that even closely guarded brand names have found themselves vulnerable.

In weeks of tracing the problem, European Union and national officials have conceded that their oversight had not been aimed at authenticating food products. Now that governments and companies have undertaken more extensive testing, the results appear to indicate that food adulteration may be more commonplace and widespread than previously believed.

“Clearly there has been fraud on a massive scale across multiple countries in the E.U.,” Simon Coveney, the agriculture minister for Ireland, which holds the union’s rotating presidency, told a news conference after a meeting with colleagues in Brussels on Monday.

Noting that “big brands and big names that people trust” have been caught up in the issue, Mr. Coveney said, “We are all eager to get to the bottom of this.”

The detection of horse meat, which began in Ireland and spread quickly, has raised questions about the quality and oversight of Europe’s complex chain of slaughterhouses, processed meat producers, distributors and retailers.

Already millions of products have been withdrawn, and new cases of adulteration are being discovered almost daily, involving some of the best-known food makers — including Findus and Iglo — and most prominent supermarket chains.

Ikea’s announcement underlined how few retailers can rest easy as more scrutiny is applied. The recall risks denting the homely Scandinavian image of Ikea, one of Sweden’s best-known companies.

A traditional part of Swedish cuisine, meatballs are consumed in huge quantities — 150 million a year, according to the company’s Web site — by customers in Ikea cafeterias and are also sold for consumption at home.

The company said its action concerned meatballs manufactured by one supplier in Sweden and applies to all European countries except Norway and Russia and to a limited number of products in Switzerland and Poland. The United States is not affected, the company said.

Clive Black, a retail analyst at Shore Capital, an investment banking company in London, said that Ikea’s announcement was “another left-field random outcome of the whole situation. Did Ikea want to sell horse meat? No. Have they been caught out by rogue elements? Yes.”

“The breadth with which contamination has been found clearly shows that there has been substantial rogue activity,” he added.

Ikea first said that it would not sell or serve any meatballs at its stores in Sweden after the Czech authorities detected horse meat in frozen meatballs that were labeled beef and pork, even though Ikea’s own tests two weeks ago had not detected horse DNA.

The company also said it was stopping sales in Slovakia, the Czech Republic, Hungary, France, Britain, Portugal, Italy, the Netherlands, Belgium, Spain, Greece, Cyprus and Ireland. The meatballs were produced by Ikea’s main supplier of the product, a Swedish company called Familjen Dafgard.

In a statement later in the day, Anders Lennartsson, a spokesman for Ikea Food Services, said, “We take seriously the test result from the Czech Republic authorities, indicating presence of horse meat in one batch of our meatballs.”

Results of DNA tests conducted by the food industry in Britain, released last week, showed that 1 percent of beef products were tainted with horse meat. But that news was offset by the discovery of tainted beef products destined for school meals in Scotland.

And, while the issue is primarily seen as one of fraud and mislabeling, there is concern that a powerful equine painkiller, phenylbutazone, or bute, may have entered the food chain.

Stephen Castle reported from London, and Andrew Higgins from Brussels.

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Hackers circulate tainted version of China cyber security report

BOSTON (Reuters) – Unknown hackers are trying to infect computers by capitalizing on strong interest in a recent report by a security firm that accuses the Chinese military of supporting widespread cyber attacks on U.S. companies.

Tainted digital versions of the report from cyber forensics firm Mandiant infect PCs with computer viruses that allow hackers to gain remote control of computers after users attempt to read those documents, according to security researchers.

Anti-virus software maker Symantec Corp said on its blog that some of those tainted documents were attached to Japanese-language emails purporting to be from someone recommending the report.

Security engineer Brandon Dixon said on his blog that he had identified a similar document on the Internet, which appeared to have originated in India.

“It was only a matter of time,” Mandiant said on its blog, adding that its own network had not been compromised. “Reports downloaded, previously and currently from our website, do not contain exploits.”

The report, which is available from Mandiant at http://intelreport.mandiant.com/ charges that a secretive Chinese military unit is behind a series of hacking attacks. It prompted a strong denial from Beijing and accusations that China was in fact the victim of U.S. hacking.

(Reporting By Jim Finkle; editing by Andrew Hay)

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Kristen Stewart Uses Crutches at Academy Awards

By Maggie Coughlan and Michelle Ward

02/24/2013 at 09:45 PM EST

That's an unexpected accessory!

Kristen Stewart attended the 85th Annual Academy Awards on Sunday sporting quite the fashion statement – crutches.

The On the Road actress was forced to use them to help her make her way onto the red carpet after she stepped on glass.

The star's makeup artist, Beau Nelson, tells PEOPLE she "cut the ball of her foot, quite severely on glass two days ago." But a true pro, Stewart, 22, managed to pose for photographs without any crutches, showing off her cream-colored Reem Acra gown. Nelson adds that Stewart is "a little bit of pain" and it was a scramble to find suitable flats!

While she isn't nominated for any Oscars, Stewart's film Breaking Dawn Part 2 did sweep the 33rd annual Golden Raspberry Awards – better known as the Razzies – with seven awards.

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Asian shares edge higher, yen falls on Bank of Japan report

TOKYO (Reuters) - Asian shares edged higher on Monday, with investors still picking up shares battered by last week's steep plunge, while the yen fell to fresh lows on news a reflationary advocate could head the Bank of Japan next month.

The news Japan's government is likely to nominate Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, as its next central bank governor, is set to be a major factor in financial markets this week.

Markets are pondering whether Italy's weekend elections will produce a stable government, and the implications of that for euro zone cohesion, while Moody's credit downgrade on Britain will play on confidence in the pound and government bonds.

Investors also await testimony on Tuesday from Fed Chairman Ben Bernanke for further clues of when the Fed may slow or stop buying bonds. Financial markets were rattled last week after minutes of the Fed's January meeting suggested some Fed officials were mulling scaling back its strong monetary stimulus earlier than expected.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.1 percent, pulled higher by Australian shares <.axjo> which gained 0.6 percent on reassuring comments from U.S. Federal Reserve officials on the bank's current stimulus program, which has helped underpin risk sentiment globally.

South Korean shares <.ks11> opened up 0.2 percent, with the nation's new leader, who has shown willingness to talk down the won, being sworn in on Monday.

Tokyo's Nikkei stock average <.n225> opened 1.6 percent higher. <.t/>

Early on Monday, the yen touched its lowest since May 2010 of 94.61 yen against the dollar, while the euro rose to a high of 124.83 yen, still off its 34-month peak of 127.71 set early this month.

The Nikkei newspaper reported the Japanese government is likely to nominate Haruhiko Kuroda and Kikuo Iwata, both vocal advocates of aggressive monetary expansion, as BOJ governor and deputy governor.

The dollar fell sharply to below 93 yen last week on media reports that Toshiro Muto, a former financial bureaucrat perceived as less willing to take unconventional steps, was the frontrunner candidate for the top BOJ job.

"The dollar's move this morning is merely a rebound from disappointment on Muto last week. I don't think this topic will be enough to hoist the dollar above 95 yen," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo. "No matter who is elected at the BOJ, it will not affect the longer-term trend of a weak yen," he said.

Speculation over the BOJ has been a key factor driving the yen lower recently due to anticipation for strong reflationary measures, but other fundamental factors such as Japan's deteriorating trade balances and signs of firmer U.S. growth also supported a weakening yen trend.

Abe told Americans on Friday "I am back and so is Japan" and vowed to get the world's third biggest economy growing again.

Investors remained cautious before the full official results of Italy's elections come out on Tuesday, worried a potential political stalemate could impede Rome's progress on fiscal reforms.

The euro was up 0.1 percent to $1.3192, off Friday's six-week low of $1.31445.

Sterling fell to a 31-month low of $1.5073 early on Monday and a record low against the New Zealand dollar at NZ$1.8025 following Friday's one-notch downgrade of Britain's prized triple-A sovereign rating by Moody's.

Investors will also seek signs of recovery from the flash estimate of China's manufacturing PMI from HSBC/Markit due later in the session.

Wall Street ended higher on Friday, boosted strong earnings from Dow component Hewlett-Packard , but the benchmark Standard & Poor's Index <.spx> posted its first weekly decline of the year. European shares rose on Friday after data showed German business morale surged at its fastest pace in over two years in February.

Hedge funds and other big speculators cut their bullish bets on U.S. commodities by nearly $13 billion, the most in about 10 months, in the week to February 19 to $69 billion, just before oil and metals prices tumbled last week on rumors a commodities fund was dumping positions, trade data showed on Friday.

U.S. crude was up 0.1 percent to $93.26 a barrel.

(Editing by Eric Meijer)

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News Analysis: U.S. Confronts Cyber-Cold War With China

WASHINGTON — When the Obama administration circulated to the nation’s Internet providers last week a lengthy confidential list of computer addresses linked to a hacking group that has stolen terabytes of data from American corporations, it left out one crucial fact: that nearly every one of the digital addresses could be traced to the neighborhood in Shanghai that is headquarters to the Chinese military’s cybercommand.

Carlos Barria/Reuters

A building that houses a Chinese military unit on the outskirts of Shanghai, believed to be the source of hacking attacks.

That deliberate omission underscored the heightened sensitivities inside the Obama administration over just how directly to confront China’s untested new leadership over the hacking issue, as the administration escalates demands that China halt the state-sponsored attacks that Beijing insists it is not mounting.

The issue illustrates how different the worsening cyber-cold war between the world’s two largest economies is from the more familiar superpower conflicts of past decades — in some ways less dangerous, in others more complex and pernicious.

Administration officials say they are now more willing than before to call out the Chinese directly — as Attorney General Eric H. Holder Jr. did last week in announcing a new strategy to combat theft of intellectual property. But President Obama avoided mentioning China by name — or Russia or Iran, the other two countries the president worries most about — when he declared in his State of the Union address that “we know foreign countries and companies swipe our corporate secrets.” He added: “Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions and our air traffic control systems.”

Defining “enemies” in this case is not always an easy task. China is not an outright foe of the United States, the way the Soviet Union once was; rather, China is both an economic competitor and a crucial supplier and customer. The two countries traded $425 billion in goods last year, and China remains, despite many diplomatic tensions, a critical financier of American debt. As Hillary Rodham Clinton put it to Australia’s prime minister in 2009 on her way to visit China for the first time as secretary of state, “How do you deal toughly with your banker?”

In the case of the evidence that the People’s Liberation Army is probably the force behind “Comment Crew,” the biggest of roughly 20 hacking groups that American intelligence agencies follow, the answer is that the United States is being highly circumspect. Administration officials were perfectly happy to have Mandiant, a private security firm, issue the report tracing the cyberattacks to the door of China’s cybercommand; American officials said privately that they had no problems with Mandiant’s conclusions, but they did not want to say so on the record.

That explains why China went unmentioned as the location of the suspect servers in the warning to Internet providers. “We were told that directly embarrassing the Chinese would backfire,” one intelligence official said. “It would only make them more defensive, and more nationalistic.”

That view is beginning to change, though. On the ABC News program “This Week” on Sunday, Representative Mike Rogers, Republican of Michigan and chairman of the House Intelligence Committee, was asked whether he believed that the Chinese military and civilian government were behind the economic espionage. “Beyond a shadow of a doubt,” he replied.

In the next few months, American officials say, there will be many private warnings delivered by Washington to Chinese leaders, including Xi Jinping, who will soon assume China’s presidency. Both Tom Donilon, the national security adviser, and Mrs. Clinton’s successor, John Kerry, have trips to China in the offing. Those private conversations are expected to make a case that the sheer size and sophistication of the attacks over the past few years threaten to erode support for China among the country’s biggest allies in Washington, the American business community.

“America’s biggest global firms have been ballast in the relationship” with China, said Kurt M. Campbell, who recently resigned as assistant secretary of state for East Asia to start a consulting firm, the Asia Group, to manage the prickly commercial relationships. “And now they are the ones telling the Chinese that these pernicious attacks are undermining what has been built up over decades.”

This article has been revised to reflect the following correction:

Correction: February 24, 2013

An earlier version of this article gave an incorrect month for a visit to the Pentagon by a senior Chinese military leader. The visit took place in May 2011, not April 2011.

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Breaking Dawn - Part 2 Sweeps the Razzies

By Stephen M. Silverman

02/23/2013 at 10:00 PM EST

Taylor Lautner and Mackenzie Foy, in Breaking Dawn – Part 2

Andrew Cooper, SMPSP/Summit

Who's misérable now?

The Twilight Saga: Breaking Dawn – Part 2, Adam Sandler and Rihanna are among the "winners" of the 33rd annual Golden Raspberry Awards – the Razzies – which are not so much handed out as they are thrown at those who are voted as perpetrating Hollywood's worst achievements of the year.

Breaking Dawn – Part 2, the fifth and final installment in Stephenie Meyer's vampire saga, was recognized in seven categories, including worst picture.

The flick's Kristen Stewart was also cited as worst actress; Taylor Lautner, worst supporting actor; Lautner and 12-year-old Mackenzie Foy, worst screen couple; the entire cast, including Robert Pattinson, worst screen ensemble, and Bill Condon, worst director.

In addition, the film, which since opening last November has taken in more than $828 million at the box office, was named worst sequel.

Sandler, who last year monopolized the Razzies – and set a record by winning in 10 categories with the "comedy" Jack & Jill – this year got only two awards: for worst actor of the year and worst screenplay, both for That's My Boy.

Unlike the Oscars, which keep voting tallies a secret and will be handed out Sunday night during a very glamorous event, founder and Head RAZZberry John Wilson announced Razzie recipients Saturday night in the utilitarian Continental Breakfast Room of the Holiday Inn Express Hollywood Walk of Fame hotel, near (and yet so far from) the Dolby Theatre, home of the Academy Awards.

Wilson revealed to the press that although Rihanna, as worst supporting actress in the movie Battleship, won her Razzie by a landslide, worst screenwriter Sandler only beat the authors of Breaking Dawn by a single vote.

It's close shaves like that that really make or break the Razzies.

Adam Sandler, in That's My Boy, and Rihanna, in Battleship

Columbia; Universal

The 85th annual Academy Awards will air live on ABC starting at 7 p.m. ET/4 p.m. PT on Sunday, Feb. 24, from the Dolby Theatre in Hollywood.

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FDA approves new targeted breast cancer drug

WASHINGTON (AP) — The Food and Drug Administration has approved a first-of-a-kind breast cancer medication that targets tumor cells while sparing healthy ones.

The drug Kadcyla from Roche combines the established drug Herceptin with a powerful chemotherapy drug and a third chemical linking the medicines together. The chemical keeps the cocktail intact until it binds to a cancer cell, delivering a potent dose of anti-tumor poison.

Cancer researchers say the drug is an important step forward because it delivers more medication while reducing the unpleasant side effects of chemotherapy.

"This antibody goes seeking out the tumor cells, gets internalized and then explodes them from within. So it's very kind and gentle on the patients — there's no hair loss, no nausea, no vomiting," said Dr. Melody Cobleigh of Rush University Medical Center. "It's a revolutionary way of treating cancer."

Cobleigh helped conduct the key studies of the drug at the Chicago facility.

The FDA approved the new treatment for about 20 percent of breast cancer patients with a form of the disease that is typically more aggressive and less responsive to hormone therapy. These patients have tumors that overproduce a protein known as HER-2. Breast cancer is the second most deadly form of cancer in U.S. women, and is expected to kill more than 39,000 Americans this year, according to the National Cancer Institute.

The approval will help Roche's Genentech unit build on the blockbuster success of Herceptin, which has long dominated the breast cancer marketplace. The drug had sales of roughly $6 billion last year.

Genentech said Friday that Kadcyla will cost $9,800 per month, compared to $4,500 per month for regular Herceptin. The company estimates a full course of Kadcyla, about nine months of medicine, will cost $94,000.

FDA scientists said they approved the drug based on company studies showing Kadcyla delayed the progression of breast cancer by several months. Researchers reported last year that patients treated with the drug lived 9.6 months before death or the spread of their disease, compared with a little more than six months for patients treated with two other standard drugs, Tykerb and Xeloda.

Overall, patients taking Kadcyla lived about 2.6 years, compared with 2 years for patients taking the other drugs.

FDA specifically approved the drug for patients with advanced breast cancer who have already been treated with Herceptin and taxane, a widely used chemotherapy drug. Doctors are not required to follow FDA prescribing guidelines, and cancer researchers say the drug could have great potential in patients with earlier forms of breast cancer

Kadcyla will carry a boxed warning, the most severe type, alerting doctors and patients that the drug can cause liver toxicity, heart problems and potentially death. The drug can also cause severe birth defects and should not be used by pregnant women.

Kadcyla was developed by South San Francisco-based Genentech using drug-binding technology licensed from Waltham, Mass.-based ImmunoGen. The company developed the chemical that keeps the drug cocktail together and is scheduled to receive a $10.5 million payment from Genentech on the FDA decision. The company will also receive additional royalties on the drug's sales.

Shares of ImmunoGen Inc. rose 2 cents to $14.32 in afternoon trading. The stock has ttraded in a 52-wek range of $10.85 to $18.10.

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Investors face another Washington deadline

NEW YORK (Reuters) - Investors face another Washington-imposed deadline on government spending cuts next week, but it's not generating the same level of fear as two months ago when the "fiscal cliff" loomed large.

Investors in sectors most likely to be affected by the cuts, like defense, seem untroubled that the budget talks could send stocks tumbling.

Talks on the U.S. budget crisis began again this week leading up to the March 1 deadline for the so-called sequestration when $85 billion in automatic federal spending cuts are scheduled to take effect.

"It's at this point a political hot button in Washington but a very low level investor concern," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. The fight pits President Barack Obama and fellow Democrats against congressional Republicans.

Stocks rallied in early January after a compromise temporarily avoided the fiscal cliff, and the Standard & Poor's 500 index <.spx> has risen 6.3 percent since the start of the year.

But the benchmark index lost steam this week, posting its first week of losses since the start of the year. Minutes on Wednesday from the last Federal Reserve meeting, which suggested the central bank may slow or stop its stimulus policy sooner than expected, provided the catalyst.

National elections in Italy on Sunday and Monday could also add to investor concern. Most investors expect a government headed by Pier Luigi Bersani to win and continue with reforms to tackle Italy's debt problems. However, a resurgence by former leader Silvio Berlusconi has raised doubts.

"Europe has been in the last six months less of a topic for the stock market, but the problems haven't gone away. This may bring back investor attention to that," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

OPTIONS BULLS TARGET GAINS

The spending cuts, if they go ahead, could hit the defense industry particularly hard.

Yet in the options market, bulls were targeting gains in Lockheed Martin Corp , the Pentagon's biggest supplier.

Calls on the stock far outpaced puts, suggesting that many investors anticipate the stock to move higher. Overall options volume on the stock was 2.8 times the daily average with 17,000 calls and 3,360 puts traded, according to options analytics firm Trade Alert.

"The upside call buying in Lockheed solidifies the idea that option investors are not pricing in a lot of downside risk in most defense stocks from the likely impact of sequestration," said Jared Woodard, a founder of research and advisory firm condoroptions.com in Forest, Virginia.

The stock ended up 0.6 percent at $88.12 on Friday.

If lawmakers fail to reach an agreement on reducing the U.S. budget deficit in the next few days, a sequester would include significant cuts in defense spending. Companies such as General Dynamics Corp and Smith & Wesson Holding Corp could be affected.

General Dynamics Corp shares rose 1.2 percent to $67.32 and Smith & Wesson added 4.6 percent to $9.18 on Friday.

EYES ON GDP DATA, APPLE

The latest data on fourth-quarter U.S. gross domestic product is expected on Thursday, and some analysts predict an upward revision following trade data that showed America's deficit shrank in December to its narrowest in nearly three years.

U.S. GDP unexpectedly contracted in the fourth quarter, according to an earlier government estimate, but analysts said there was no reason for panic, given that consumer spending and business investment picked up.

Investors will be looking for any hints of changes in the Fed's policy of monetary easing when Fed Chairman Ben Bernake speaks before congressional committees on Tuesday and Wednesday.

Shares of Apple will be watched closely next week when the company's annual stockholders' meeting is held.

On Friday, a U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with the iPhone maker, blocking the company from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.

(Additional reporting by Doris Frankel; Editing by Kenneth Barry)

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Catholic Church Fills Growing Void in Africa

LAGOS, Nigeria — The young woman slept soundly on the cool marble floor before the altar, a break from the chaos at home. In the courtyard, neighborhood teenagers filled giant jerrycans with purified water from a stone fountain. In an aisle, a rail-thin young woman from a nearby slum said she had not eaten since yesterday but was expecting sustenance here.

Behind its high spiked iron gates in this frenetic megalopolis of anywhere between 11 million and 21 million, the church of Christ the King is protector, feeder and healer.

In the 6 a.m. darkness, this working-class church is already filled with parishioners in shirt-sleeves and T-shirts, a pool of hymn-singing light in a blacked-out neighborhood. Six Masses are celebrated here each Sunday for up to 10,000 people, and 102 people were baptized last Saturday. The parish priest, the Rev. Ikenna Ikechi, dreams of building a multistory community center to accommodate his growing flock. “Our only limitation is space,” he said.

The Roman Catholic Church’s explosive growth here and across Africa has led to serious talk of the possibility of an African cardinal succeeding Pope Benedict XVI, and clerics from Nigeria, Ghana and the Democratic Republic of Congo, which has the continent’s largest Catholic population, have been mentioned as top contenders.

With 16 percent of the world’s Catholics now living in Africa, the church’s future, many say, is here. The Catholic population in Africa grew nearly 21 percent between 2005 and 2010, far outstripping other parts of the world. While the number of priests in North America and Europe declined during the same period, in Africa they grew by 16 percent. The seminaries, clerical officials here say, are bursting with candidates, and African priests are being sent to take over churches in former colonial powers.

Untainted by the child sexual abuse scandals, the church here draws parishioners, many in their 20s and 30s, who flock eagerly to services, which can last hours, with no complaints.

“After work, a lot of young people come to Mass,” said Chinedu Okani, 29, an engineer in Lagos who was attending a service at the Church of the Assumption in the Falomo neighborhood. “It provides a serene environment.”

He acknowledges another attraction, too: that the church is a functioning institution in a country that lacks them.

“The welfare system is not working here,” Mr. Okani said. “We find a way to make up for it: the family, and the church.”

In Nigeria, at least 70 percent of the people live below the poverty line, and 80 percent of the country’s oil wealth goes to 1 percent of the population. The police do not respond to calls, and electricity is spotty.

Outside Christ the King, on the dirt streets of the Mushin neighborhood, there are armed robbers and no lights. It is little wonder that the priest must gently shoo away parishioners lingering to read or chat in the church’s arcaded meeting spaces under generator-powered lights.

“A lot of it is the challenge of living in Nigeria,” said Father Ikechi, who was educated at Fordham University in New York. “We can’t rely on the government for water, light, security. Whatever you want, you have to provide for yourself.”

For his parishioners, he said, “what they face is huge. So they tend to come to God as their last resort. You can’t go to the police. Who will you go to? You will go to God. Some of them, where they sleep is so bad, they just come to sleep here during the day.”

After a devastating bus accident recently the church paid parishioners’ hospital bills, the priest said. “Otherwise they would die,” he said.

In this way the church is fulfilling a role it played in its distant European past, providing for the people where the state cannot, but some question whether the African church’s growth and size can be sustained as the continent’s institutions develop.

“When people say Africa is the future, I say, ‘Oh, isn’t it the past?’ ” said the Rev. Thomas J. Reese, a senior fellow at the Woodstock Theological Center at Georgetown University. “I see it as a repeat of the past, what happened in Europe centuries ago. What’s going to happen in Africa when everybody gets a television set, when modernity comes?”

For now, that question is largely academic here.

“Almost every system has collapsed,” said Bishop Matthew Hassan Kukah of Sokoto, in northwestern Nigeria. “The entire architecture of governance has collapsed. The church remains the only moral force.

“The church offers the best schools, social services, medicine. The God talk in Africa is a mark of the failure of the economic, social and political system,” Bishop Kukah added, “We are being called left, right and center to mend the broken pieces of what are considered the failing states of Africa.”

In a continent rife with corruption, the church also provides a singular moral voice. Bishop Kukah, for example, has played a large role in good governance and human rights commissions, including the investigation into the 1990s military dictatorship.

In Congo, where the number of Catholics has more than tripled in the past 35 years, Archbishop Laurent Monsengwo Pasinya of Kinshasa has fiercely criticized the government, including the tainted election results that secured President Joseph Kabila’s re-election in 2011. The Catholic Church deployed an extensive network of independent observers during the December elections, and the bishops’ council later denounced the “culture of treachery, lies and terror.”

“It’s the church’s engagement on behalf of the Congolese people, the promotion of the whole man, you’ve got to bring forth bread and the Gospels,” said Bishop Bernard-Emmanuel Kasanda of Mbuji-Mayi in Congo. “We have to be with the people. Moral authority, yes. This is what pushes people towards us.”

In Nigeria, where over $5 billion was reported missing from a minerals ministry on Friday, the latest in a series of seemingly endless government scandals, the church offers an alternative to a life mired in corruption, poverty and hopelessness.

Laurence Emeka, 30, who sells telephone accessories at an open-air stall, rose at 5 a.m. last Sunday to attend Mass at Christ the King before going to work. The service gave him a kind of sanctuary. “Peace, satisfaction, confidence in God,” he said. “It helps me cope with the circumstances of daily life.”

Gaia Pianigiani contributed reporting from Rome.

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