Charlize Theron & Channing Tatum's Oscars Dance - No Practice Makes Perfect!









02/26/2013 at 08:35 AM EST







Channing Tatum and Charlize Theron


Getty


Who knew Charlize Theron could dance? Or that Channing Tatum could do so with his clothes on?

Together they wowed the Academy Awards on Sunday, performing a challenging ballroom dance in front of 40 million viewers – each counting on their background in dance to make up for a frightening lack of rehearsal time.

"They were going to cram and rehearse constantly over two days [right before the Oscars]. But then they both simultaneously got the flu," producer Neil Meron tells PEOPLE.

"We were going, 'Oh my God.' Literally at the last minute they got to rehearse and miraculously got up there and they killed."

It helped that both know a little something about dance.

Theron, 37, studied at the Joffrey Ballet School in New York before embarking on her Oscar-winning acting career. "We reached out to Charlize first, and there was no hesitation. She absolutely jumped on board," says Meron.

Tatum, 32, was less sure of himself, despite loads of dance experience in movies like Step Up and Magic Mike, the latter loosely based on his own experiences as a male stripper.

"Chan said to us, 'Look, I have danced in all these movies, but I have never really done honest-to-God choreography. I don't know that I can do that,' " Meron says. "We told him, 'We believe you are a great dancer, and that you will be able to do it.' He said he would give it a try."

In the end, they dazzled with a Fred Astaire and Ginger Rogers style number choreographed by Rob Ashford.

And Chan even kept his tux on.

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Koop, who transformed surgeon general post, dies


With his striking beard and starched uniform, former Surgeon General Dr. C. Everett Koop became one of the most recognizable figures of the Reagan era — and one of the most unexpectedly enduring.


His nomination in 1981 met a wall of opposition from women's groups and liberal politicians, who complained President Ronald Reagan selected Koop, a pediatric surgeon and evangelical Christian from Philadelphia, only because of his conservative views, especially his staunch opposition to abortion.


Soon, though, he was a hero to AIDS activists, who chanted "Koop, Koop" at his appearances but booed other officials. And when he left his post in 1989, he left behind a landscape where AIDS was a top research and educational priority, smoking was considered a public health hazard, and access to abortion remained largely intact.


Koop, who turned his once-obscure post into a bully pulpit for seven years during the Reagan and George H.W. Bush administrations and who surprised both ends of the political spectrum by setting aside his conservative personal views on issues such as homosexuality and abortion to keep his focus sharply medical, died Monday at his home in Hanover, N.H. He was 96.


An assistant at Koop's Dartmouth College institute, Susan Wills, confirmed his death but didn't disclose its cause.


Dr. Richard Carmona, who served as surgeon general a decade ago under President George W. Bush, said Koop was a mentor to him and preached the importance of staying true to the science even if it made politicians uncomfortable.


"He set the bar high for all who followed in his footsteps," Carmona said.


Although the surgeon general has no real authority to set government policy, Koop described himself as "the health conscience of the country" and said modestly just before leaving his post that "my only influence was through moral suasion."


A former pipe smoker, Koop carried out a crusade to end smoking in the United States; his goal had been to do so by 2000. He said cigarettes were as addictive as heroin and cocaine. And he shocked his conservative supporters when he endorsed condoms and sex education to stop the spread of AIDS.


Chris Collins, a vice president of amFAR, the Foundation for AIDS Research, said many people don't realize what an important role Koop played in the beginning of the AIDS epidemic.


"At the time, he really changed the national conversation, and he showed real courage in pursuing the duties of his job," Collins said.


Even after leaving office, Koop continued to promote public health causes, from preventing childhood accidents to better training for doctors.


"I will use the written word, the spoken word and whatever I can in the electronic media to deliver health messages to this country as long as people will listen," he promised.


In 1996, he rapped Republican presidential hopeful Bob Dole for suggesting that tobacco was not invariably addictive, saying Dole's comments "either exposed his abysmal lack of knowledge of nicotine addiction or his blind support of the tobacco industry."


Although Koop eventually won wide respect with his blend of old-fashioned values, pragmatism and empathy, his nomination met staunch opposition.


Foes noted that Koop traveled the country in 1979 and 1980 giving speeches that predicted a progression "from liberalized abortion to infanticide to passive euthanasia to active euthanasia, indeed to the very beginnings of the political climate that led to Auschwitz, Dachau and Belsen."


But Koop, a devout Presbyterian, was confirmed after he told a Senate panel he would not use the surgeon general's post to promote his religious ideology. He kept his word.


In 1986, he issued a frank report on AIDS, urging the use of condoms for "safe sex" and advocating sex education as early as third grade.


He also maneuvered around uncooperative Reagan administration officials in 1988 to send an educational AIDS pamphlet to more than 100 million U.S. households, the largest public health mailing ever.


Koop personally opposed homosexuality and believed sex should be saved for marriage. But he insisted that Americans, especially young people, must not die because they were deprived of explicit information about how HIV was transmitted.


Koop further angered conservatives by refusing to issue a report requested by the Reagan White House, saying he could not find enough scientific evidence to determine whether abortion has harmful psychological effects on women.


Koop maintained his personal opposition to abortion, however. After he left office, he told medical students it violated their Hippocratic oath. In 2009, he wrote to Senate Majority Leader Harry Reid, urging that health care legislation include a provision to ensure doctors and medical students would not be forced to perform abortions. The letter briefly set off a security scare because it was hand delivered.


Koop served as chairman of the National Safe Kids Campaign and as an adviser to President Bill Clinton's health care reform plan.


At a congressional hearing in 2007, Koop spoke about political pressure on the surgeon general post. He said Reagan was pressed to fire him every day, but Reagan would not interfere.


Koop, worried that medicine had lost old-fashioned caring and personal relationships between doctors and patients, opened his institute at Dartmouth to teach medical students basic values and ethics. He also was a part-owner of a short-lived venture, drkoop.com, to provide consumer health care information via the Internet.


Koop was born in the New York City borough of Brooklyn, the only son of a Manhattan banker and the nephew of a doctor. He said by age 5 he knew he wanted to be a surgeon and at age 13 he practiced his skills on neighborhood cats.


He attended Dartmouth, where he received the nickname Chick, short for "chicken Koop." It stuck for life.


Koop received his medical degree at Cornell Medical College, choosing pediatric surgery because so few surgeons practiced it.


In 1938, he married Elizabeth Flanagan, the daughter of a Connecticut doctor. They had four children, one of whom died in a mountain climbing accident when he was 20.


Koop was appointed surgeon-in-chief at Children's Hospital in Philadelphia and served as a professor at the University of Pennsylvania School of Medicine.


He pioneered surgery on newborns and successfully separated three sets of conjoined twins. He won national acclaim by reconstructing the chest of a baby born with the heart outside the body.


Although raised as a Baptist, he was drawn to a Presbyterian church near the hospital, where he developed an abiding faith. He began praying at the bedside of his young patients — ignoring the snickers of some of his colleagues.


Koop's wife died in 2007, and he married Cora Hogue in 2010.


He was by far the best-known surgeon general and for decades afterward was still a recognized personality.


"I was walking down the street with him one time" about five years ago, recalled Dr. George Wohlreich, director of the College of Physicians of Philadelphia, a medical society with which Koop had longstanding ties. "People were yelling out, 'There goes Dr. Koop!' You'd have thought he was a rock star."


___


Ring reported from Montpelier, Vt. Cass reported from Washington. AP Medical Writers Lauran Neergaard in Washington and Mike Stobbe in New York contributed to this report.


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Anne Hathaway's Oscar Dress Had You Talking









02/25/2013 at 08:30 AM EST



The Oscars may honor the best in film, but they'd be nothing without the fashion.

When Anne Hathaway stepped on to the red carpet in a light pink backless Prada gown at Sunday's 85th Annual Academy Awards, she made quite the fashion statement.

While the gown seemed simple from the front, at second glance, an open back and thigh-high slit gave it a sexy edge. Hathaway, 30, told Kristin Chenoweth on ABC's red carpet that her mom called the dress "business in front, party in the back."

Viewers had their own opinions on the dress – which seemed to emphasize Hathaway's bust – which later inspired its own parody Twitter account.

But the dress may have served as a lucky charm for Hathaway, who took home the Oscar for Best Supporting Actress for her role in Les Misérables.

"It came true. Thank you so much to the Academy for this and for nominating me with Helen Hunt, Jacki Weaver, Amy Adams and Sally Field. I look up to you all so much and it's just been such an honor. Thank you," Hathaway said upon receiving her Oscar.

She continued, "There are so many people whose generosity and support is the reason I'm standing here right now. I must thank Hugh Jackman. Hugh, you're the best. The cast, the crew, especially Simon Hayes and the sound wizards. Congratulations on tonight, you guys."

Hathaway continued thanking the cast and the crew before giving a romantic shout out to her husband, Adam Shulman.

"By far and away, the greatest moment of my life is the one when you walked into it. I love you so much. And thank you for this. Here's hoping that someday in the not too distant future the misfortunes of Fantine will only be found in stories and never in real life. Thank you."

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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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Stock futures rise, Barnes & Noble up on bid report

NEW YORK (Reuters) - U.S. stock index futures pointed to a higher open on Monday, suggesting the equity rally was intact despite concerns that the Federal Reserve could curtail its stimulus for the economy sooner than many expected.


Stocks have been strong performers so far this year, with the S&P 500 jumping 6.2 percent in 2013 to hover around its highest levels since 2007. That has prompted many to predict a pullback, but so far declines have been neutralized as investors use any dip as a buying opportunity.


Barnes & Noble Inc will be in focus after the Wall Street Journal reported that Chairman Leonard Riggio was considering a bid for the company's bookstore business. The stock jumped 13 percent to $15.25 in premarket trading.


While the S&P fell last week, the decline was a slight 0.3 percent and was the first weekly drop after a seven-week string of gains, suggesting many may still be looking for a consolidation.


"People are cautious about investing near five-year highs, especially given the pace at which we got here, but there's still room to grow and any pullback should be shallow," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.


S&P 500 futures rose 7 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 57 points and Nasdaq 100 futures rose 18.25 points.


The gains have come on strong corporate earnings. With 83 percent of the S&P 500 having reported results, 69 percent of beat profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.


In addition, the market has risen against a backdrop of stimulus from the Federal Reserve. Last week stocks faltered when some Fed officials seemed to suggest the stimulus may be curtailed earlier than many expected, though subsequent comments seemed to allay those concerns.


Another test for equities will come with the looming debate over massive U.S. government budget cuts that will take effect on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts. referred to as sequester are likely to inflict on the economy if enacted.


"Right now we're looking past the sequester, but as we go forward we may see more anxiety if it doesn't look like our leaders can get anything together," Pavlik said.


More government-related uncertainty came from Italy, where a close election left questions about how the country would handle its three-year debt crisis. Last year, inconclusive Greek elections sparked a protracted selloff and a period of uncertainty in U.S. equity markets as well.


Still, European shares <.fteu3> were higher on Monday, rising 0.4 percent after a smooth Italian debt auction.


Lowe's Cos Inc reported earnings that beat expectations, helped by rebuilding efforts after Hurricane Sandy in the United States. Shares rose 0.6 percent to $37.90 before the bell.


Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to Thomson Reuters data, above a 1.9 percent forecast at the start of the earnings season.


Dow component Johnson & Johnson forecast a negative impact to its first-quarter earnings as a result of a Venezuelan currency devaluation, though the charge wouldn't impact its full-year guidance.


Dynavax Technologies Inc shares plunged 27 percent to $2.18 before the bell after the Food and Drug Administration denied approval for the company's adult hepatitis B vaccine and sought additional data for evaluate its safety.


U.S. stocks closed higher on Friday, boosted by strong results from Hewlett-Packard Co , as well as allayed concerns over Fed policy.


(Editing by Chizu Nomiyama and Kenneth Barry)



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Frustrated Italians vote in crucial election for euro zone


ROME (Reuters) - Italians voted on Sunday in one of the most closely watched and unpredictable elections in years, with pent-up fury over a discredited elite adding to concern it may not produce a government strong enough to lead Italy out of an economic slump.


The election, which concludes on Monday afternoon, is being followed closely by investors; their memories are still fresh of the potentially catastrophic debt crisis that saw Mario Monti, an economics professor and former bureaucrat, summoned to serve as prime minister in place of Silvio Berlusconi 15 months ago.


A weak Italian government could, many fear, prompt a new dip in confidence in the European Union's single currency.


Opinion polls give the center-left a narrow lead but the result has been thrown completely open by the prospect of a huge protest vote against the painful austerity measures imposed by Monti's government and deep anger over a never-ending series of corruption scandals. Berlusconi's centre-right has also revived.


"I'm not confident that the government that emerges from the election will be able to solve any of our problems," said Attilio Bianchetti, a 55-year-old builder in Milan, who voted for the anti-establishment 5-Star Movement of comic and blogger Beppe Grillo.


The 64-year-old Grillo, heavily backed by a frustrated generation of young Italians hit by record unemployment, has been one of the biggest features of the last stage of the campaign, packing rallies in town squares up and down Italy.


"He's the only real new element in a political landscape where we've been seeing the same faces for too long," said Vincenzo Cannizzaro, 48, in the Sicialian capital Palermo.


Italians started voting at 8 a.m. (0700 GMT). Polling booths will remain open until 10 p.m. on Sunday and open again between 7 a.m. and 3 p.m. on Monday. Exit polls will come out soon after voting ends and official results are expected by early Tuesday.


Snow in northern regions is expected to last into Monday and could discourage some of the 47 million people eligible to vote in Italy to head out to polling stations, though the Interior Ministry has said it is fully prepared for bad weather.


Monti and his wife cast their votes at a polling booth in a Milan school on Sunday morning and centre-left leader Pier Luigi Bersani, the leader opinion polls suggest will have to form a new government, voted in his home town of Piacenza.


A small group of women's rights demonstrators greeted former prime minister Berlusconi when he voted in Milan. They bared their breasts in protest at the conservative leader, who is on trial at present for having sex with an underage prostitute.


Whichever government emerges from the election will have to tackle reforms needed to address problems that have given Italy one of the most sluggish economies in the developed world for the past two decades.


But the widespread despair over the state of the country, where a series of corruption scandals has highlighted the stark divide between a privileged political elite and millions of ordinary Italians, has left deep scars.


"It's our fault, Italian citizens. It's our closed mentality. We're just not Europeans," said Luciana Li Mandri, a 37-year-old public servant in Palermo.


"We're all about getting favors when we study, getting a protected job when we work. That's the way we are and we can only be represented by people like that as well," she said.


FRUSTRATION


Final polls published two weeks ago showed center-left leader Bersani with a 5-point lead, but analysts disagree about whether he will be able to form a stable majority that can make the economic reforms they believe Italy needs.


While the center left is still expected to gain control of the lower house, thanks to rules that guarantee a strong majority to whichever party wins the most votes nationally, a much closer battle will be fought for the Senate, which any government also needs to control to be able to pass laws.


The euro zone's third-largest economy is stuck in deep recession, struggling under a public debt burden second only to Greece in the 17-member currency bloc and with a public weary of more than a year of austerity policies.


Bersani is now thought to be just a few points ahead of media magnate Berlusconi, the four-times prime minister who has promised tax refunds and staged a media blitz in an attempt to win back voters.


Think-tank consultant Mario, 60, who was on his way to vote in Bologna, said Bersani's Democratic Party was the only serious grouping that could help solve the country's economic woes.


"They're not perfect," he said. "But they've got the organization and the union backing that will help them push through the structural reforms."


A strong fightback by Berlusconi, who has promised to repay a widely hated housing tax, the IMU, imposed by Monti last year, saw his support climb during a campaign that relentlessly attacked the "German-centric" austerity policies of the former European Union commissioner.


"I won't vote for Monti, and I don't think a lot of people will. He made a huge blunder with IMU," said 35-year-old hairdresser Marco Morando, preparing to vote in Milan.


But the populist frustration Berlusconi's campaign tapped into has also benefitted Grillo and many pollsters said his 5-Star Movement, made up of political novices, was challenging the center-right for the position as second political force.


"I'm very worried. There seems to be no way out from a political point of view, or from being able to govern," said Calogero Giallanza, a 45-year-old musician in Rome, who voted for Bersani's Democrats.


"There's bound to be a mess in the Senate because, as far as I can see, the 5-Star Movement is unstoppable."


(Additional reporting by Cristiano Corvino, Lisa Jucca, Jennifer Clark, Matthias Baehr and Sara Rossi in Milan, Stephen Jewkes in Bologna, Wladimir Pantaleone in Palermo, Stefano Bernabei and Massimiliano Di Giorgio in Rome; Editing by Robin Pomeroy and Alastair Macdonald)



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You're Invited to PEOPLE.com's Oscars Party!









02/24/2013 at 08:40 AM EST







From left: Bradley Cooper, Oscar, Jessica Chastain


AFP/Getty; Wireimage; Splash News Online


Oscars host Seth MacFarlane isn't the only one gearing up for Hollywood's biggest night – we are too!

Be a part of the glamour and excitement Sunday at 6 p.m. ET when we roll out the red carpet for our PEOPLE.com VIPs.

Here's what you can expect:
• Tune in to our red carpet preshow for exclusive A-list interviews
• Be the first to see the gorgeous gowns – and make your own best-dressed list
• Download your own Oscars ballot – and make your own Academy Awards picks
• Tweet with our editors at #PeopleOscars
• Take our up-to-the-minute Oscars polls

And come back the next day for so much more ...
• See the night's best dresses from all angles with our 360º slideshow
• Come inside the most exclusive Oscars after-parties
• Relive the most memorable quotes of the show
• Get the scoop on the night's biggest shockers and funniest moments everyone is talking about

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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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Abe vows to revive Japanese economy, sees no escalation with China


WASHINGTON (Reuters) - Japanese Prime Minister Shinzo Abe told Americans on Friday "I am back and so is Japan" and vowed to get the world's third biggest economy growing again and to do more to bolster security and the rule of law in an Asia roiled by territorial disputes.


Abe had firm words for China in a policy speech to a top Washington think-tank, but also tempered his remarks by saying he had no desire to escalate a row over islets in the East China Sea that Tokyo controls and Beijing claims.


"No nation should make any miscalculation about firmness of our resolve. No one should ever doubt the robustness of the Japan-U.S. alliance," he told the Center for Strategic and International Studies.


"At the same time, I have absolutely no intention to climb up the escalation ladder," Abe said in a speech in English.


After meeting U.S. President Barack Obama on his first trip to Washington since taking office in December in a rare comeback to Japan's top job, he said he told Obama that Tokyo would handle the islands issue "in a calm manner."


"We will continue to do so and we have always done so," he said through a translator, while sitting next to Obama in the White House Oval Office.


Tension surged in 2012, raising fears of an unintended military incident near the islands, known as the Senkaku in Japan and the Diaoyu in China. Washington says the islets fall under a U.S.-Japan security pact, but it is eager to avoid a clash in the region.


Abe said he and Obama "agreed that we have to work together to maintain the freedom of the seas and also that we would have to create a region which is governed based not on force but based on an international law."


Abe, whose troubled first term ended after just one year when he abruptly quit in 2007, has vowed to revive Japan's economy with a mix of hyper-easy monetary policy, big spending, and structural reform. The hawkish leader is also boosting Japan's defense spending for the first time in 11 years.


"Japan is not, and will never be, a tier-two country," Abe said in his speech. "So today ... I make a pledge. I will bring back a strong Japan, strong enough to do even more good for the betterment of the world."


'ABENOMICS' TO BOOST TRADE


The Japanese leader stressed that his "Abenomics" recipe would be good for the United States, China and other trading partners.


"Soon, Japan will export more, but it will import more as well," Abe said in the speech. "The U.S. will be the first to benefit, followed by China, India, Indonesia and so on."


Abe said Obama welcomed his economic policy, while Deputy Chief Cabinet Secretary Katsunobu Kato said the two leaders did not discuss currencies, in a sign that the U.S. does not oppose "Abenomics" despite concern that Japan is weakening its currency to export its way out of recession.


The United States and Japan agreed language during Abe's visit that could set the stage for Tokyo to join negotiations soon on a U.S.-led regional free trade agreement known as the Trans-Pacific Partnership.


In a carefully worded statement following the meeting between Obama and Abe, the two countries reaffirmed that "all goods would be subject to negotiations if Japan joins the talks with the United States and 10 other countries.


At the same time, the statement envisions a possible outcome where the United States could maintain tariffs on Japanese automobiles and Japan could still protect its rice sector.


"Recognizing that both countries have bilateral trade sensitivities, such as certain agricultural products for Japan and certain manufactured products for the United States, the two governments confirm that, as the final outcome will be determined during the negotiations, it is not required to make a prior commitment to unilaterally eliminate all tariffs upon joining the TPP negotiations," the statement said.


Abe repeated that Japan would not provide any aid for North Korea unless it abandoned its nuclear and missile programs and released Japanese citizens abducted decades ago to help train spies.


Pyongyang admitted in 2002 that its agents had kidnapped 13 Japanese in the 1970s and 1980s. Five have been sent home, but Japan wants better information about eight who Pyongyang says are dead and others Tokyo believes were also kidnapped.


Abe also said he hoped to have a meeting with new Chinese leader Xi Jinping, who takes over as president next month, and would dispatch Finance Minister Taro Aso to attend the inauguration of incoming South Korean President Park Geun-hye next week.


(Additional reporting by Jeff Mason and Doug Palmer; Editing by David Brunnstrom and Paul Simao)



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