Yen off lows vs dollar, Asian shares ease in subdued trade

TOKYO (Reuters) - The yen recovered from lows against the dollar and Tokyo stocks jumped closer to a 33-month high on Tuesday after markets took comments from a U.S. official as approval for Japan to pursue anti-deflation policies that weaken the yen.

U.S. Treasury Undersecretary Lael Brainard said on Monday the United States supports Japanese efforts to end deflation, but she noted that the G7 has long been committed to exchange rates determined by market forces, "except in rare circumstances where excess volatility or disorderly movements might warrant cooperation.

"Her (Brainard's) comments gave confidence to the market. It was surprising, and was taken as the Obama Administration giving a green light to 'Abenomics'," said Takuya Takahashi, a market analyst at Daiwa Securities.

Japan has faced some overseas criticism that it is intentionally trying to weaken the yen with monetary easing, but talk of a so-called currency war was dialled back ahead of a Group of 20 meeting in Moscow on Friday and Saturday.

G20 officials said on Monday the Group of Seven nations are considering a statement this week reaffirming their commitment to "market-determined" exchange rates.

European Central Bank council member Jens Weidmann also said the euro was not overvalued at current levels.

The dollar fell 0.4 percent to 93.94 yen after marking its highest level since May 2010 of 94.465 on Monday . The euro shed 0.6 percent to 125.68 yen after rising over 2 percent on Monday. It hit its highest since April 2010 of 127.71 yen last week.

"I think the yen's weakening is a function of (playing)catch-up," and not Japan resorting to deliberate devaluation of its currency, said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York. "It's the market's way of saying:'We're convinced there is a movement afoot to reinflate Japan.'"

The yen is pressured by anticipation that Prime Minister Shinzo Abe will endorse a far more dovish Bank of Japan regime when the current leadership's term ends next month, although the BOJ is expected to refrain from taking fresh easing steps when it meets this week.

Share trading was subdued with many regional bourses shut for holidays. Encouraging trade data from China late last week was lending support to sentiment but non-Japan markets lacked momentum as investors awaited key events such as the U.S. president's State of the Union address for trading cues.

European markets are seen inching lower, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open down 0.2 percent. A 0.2 percent drop in U.S. stock futures also suggested a soft Wall Street start. <.l><.eu><.n/>

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> fell 0.1 percent, with Australian shares closing flat ahead of corporate earnings due this week.

The weaker yen in turn hoisted the Nikkei stock average <.n225> to close 1.9 percent higher on improving earnings prospects for exporters. <.t/>

Trading resumed in Japan and South Korea but markets in Singapore, Hong Kong, mainland China, Malaysia and Taiwan remained closed.

STATE OF UNION ADDRESS

Currency and equities markets were also looking ahead to President Barack Obama's State of the Union address later on Tuesday night, for any signs of a deal to avert automatic spending cuts due to take effect March 1.

"We believe that the G20's take on currency wars, Mr. Obama's upcoming state of the union address, and data on the current condition of the U.S. economy should help markets assess where the global recovery stands and where we are heading," Barclays Capital said in a research report.

U.S. and Chinese data last week lifted the tech-focused Nasdaq Composite Index <.ixic> to a 12-year closing high and the Standard & Poor's 500 Index <.spx> to a five-year peak on Friday.

Financial markets showed a muted reaction to the news that North Korea has conducted a nuclear test.

"The test was not something that makes your heart pound as much as a pressing situation between Iran and Israel," said Kaname Gokon, research manager at brokerage Okato Shoji, referring to the threat of possible military action to prevent Iran from developing nuclear weapons.

U.S. crude futures edged down 0.1 percent to $96.92 a barrel while Brent steadied around $118.15.

Spot gold stayed near a one-month low.

(Additional reporting by Ayai Tomisawa, Lisa Twaronite and Osamu Tsukimori in Tokyo; Editing by Edwina Gibbs and Eric Meijer)

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IHT Rendezvous: IHT Quick Read: Feb. 11

NEWS For months, Damascus has hunched in a defensive crouch as fighting raged in suburbs, but a rebel advance has created a new level of alarm and disorder. An employee of the New York Times reports from Damascus and Anne Barnard reports from Beirut.

President Obama will use his State of the Union speech on Tuesday to reinvigorate one of his signature national security objectives — drastically reducing nuclear arsenals around the world — after securing agreement in recent months with the United States military that the American nuclear force can be cut in size by roughly a third. David E. Sanger reports from Washington.

Scotland would have to renegotiate membership in the European Union and other international organizations if it votes for independence in a referendum next year, according to legal advice expected to be published Monday by the British government. Stephen Castle reports from London.

A Hong Kong television series has tapped into the tensions between the city’s residents and mainland Chinese visitors, striking a nerve on both sides of the border and drawing the attention of Chinese censors. Gerry Mullany reports from Hong Kong.

Several journalists who cover Myanmar said Sunday that they had received warnings from Google that their email accounts might have been hacked by “state-sponsored attackers.” Thomas Fuller reports from Bangkok.

The Financial Times is celebrating its 125th birthday Wednesday. While the print editions are fading, The F.T. has figured out how to make money from new outlets. Eric Pfanner reports.

EDUCATION The use of part-time faculty who have little possibility of tenure or permanent employment is increasingly common at U.S. colleges and universities. But European law gives workers more rights, and French workers are among the most protected in Europe — unless, it seems, they work for an American university. D. D. Gutenplan reports from Paris.

ARTS An exhibition at the Museo del Novecento in Milan celebrates Olivetti’s contribution to the design culture of the modern industrial era. Alice Rawsthorn reviews from Milan.

FASHION The blizzard kept Suzy Menkes from getting to the early New York fashion shows, so she pulled out her iPad to watch them online. Suzy Menkes writes from the virtual front row.

SPORTS England was the big winner of a second weekend of the 2013 European Six Nations rugby championship that ended with the perennial power France at the bottom of the table. Huw Richards reports from Paris.

As Gareth Bale of Tottenham and Cristiano Ronaldo of Madrid led their teams to victories this weekend, some wonder if they will be playing together next season. Rob Hughes reports from London.

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How'd They Make Carrie Underwood's Glowing Gown?

Stylewatch
Style News Now

02/11/2013 at 12:25 AM ET

Kevork Djansezian/Getty; John Shearer/Invision/AP (2)

We can’t say we were surprised to see that Carrie Underwood had ditched her form-fitting Roberto Cavalli number for a princess-y silver gown to perform her song “Blown Away” at the Grammys Sunday night. When glowing paisley details began to unscroll across her full skirt, however? We definitely didn’t see that coming.

“We wanted it to be artful and dramatic,” Underwood told reporters backstage. “I just like to stand still and sing sometimes, so this seemed like the best way I could do that and still create something visually attention-capturing.” On the technology behind it, she was a little more tight-lipped, saying “I guess I probably shouldn’t tell my secret, should I?” — but luckily, we’ve already got the inside info.

To perform the song that won her best solo country performance, the superstar donned a custom Theia gown designed specifically for the vivid light show. The line’s creative director Don O’Neill sourced fabric for the 4 feet 5 inches-wide skirt that had to be approved by both Underwood’s stylist, Trish Townsend, as well as the video team creating the special effects.

With only three days to create the gown, O’Neill’s team worked around the clock, stitching together 10 yards of Duchesse satin, 100 yards of tulle and crinoline and thousands of Swarovski crystals onto the bodice. Meanwhile, the production team created the effects that were projected onto her gown, including sparkling stars, rose petals and butterflies.

And was all that work worth it? Judging by your overwhelmingly positive reactions on Twitter, absolutely. And O’Neill was thrilled with the result too, especially because he took the line’s name from the Greek goddess of light. “There couldn’t be a more perfect opportunity to fuse light in a literal sense with one of my gowns,” he says in a statement, “and have it showcased on a national stage by Carrie Underwood, the first celebrity to wear a Theia dress four years ago when we launched.”

Tell us: What did you think of Underwood’s high-tech couture?

–Alex Apatoff

PHOTOS: SEE MORE GRAMMY RISK-TAKERS!

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Equities, oil steady; euro dips in holiday-thinned trade

SINGAPORE (Reuters) - Oil and equities dawdled on Monday near multi-month highs scaled after robust Chinese trade data last week, while the euro slipped to a two-week low as uncertainty surrounded a political scandal in Spain and a looming election in Italy.

With the Lunar New Year holiday shutting most Asian financial centers, including those in Japan, China, Hong Kong, Singapore and South Korea, trading was light and volatile on many of those exchanges that remained open.

European markets were expected to likewise lack momentum in the absence of major economic drivers and ahead of a meeting of the Eurogroup, where the discussion around the risk of a global round of competitive currency devaluation could re-emerge.

Financial bookmakers called major European indexes <.ftse><.gdaxi><.fchi>to open flat.

Australian shares <.axjo> were flat after closing at a 34-month high on Friday following positive data from China, the most important consumer of Australia's commodity exports.

S&P 500 index futures inched up 0.1 percent after the Wall Street benchmark reached a five-year high on Friday.

Brent crude oil, which touched its highest in nine months on Friday, was unchanged just below $119 a barrel.

Foreign exchange trading was choppy in thin volumes, with what traders interpreted as slightly dovish comments from the European Central Bank last week also weighing on the euro, which has shed around 2.5 percent since reaching a 15-month high above $1.37 on February 1.

The euro briefly fell to $1.3325 on Monday, after stop-loss selling was triggered below $1.3340, traders said, before recovering to stand little changed around $1.3370.

There are growing worries about Spain as a scandal on secret cash payments engulfs the prime minister, while confidence in Italy has been shaken in the run-up to a February 24-25 election. "The euro's upside is likely to be limited and short-lived," said Aroop Chatterjee, an analyst at Barclays Capital.

"Better financial conditions are likely to be offset by rising political risks, market positioning and a weaker economy. We expect the euro to be on a declining trend beginning in Q2."

The yen pared a little of its recent heavy losses after Japanese Finance Minister Taro Aso said it had weakened more than intended.

The currency, which has been an easy one-way bet for weeks as Prime Minister Shinzo Abe put intense pressure on the central bank to take bold action to revive Japan's fragile economy, also recovered from its recent 4-week trough against the Aussie, the latter changing hands at 95.25 yen AUDJPY=R, compared with a peak of 97.42 set on Tuesday.

(Additional reporting by Ian Chua in Sydney and Vidya Ranganathan in Singapore; Editing by Shri Navaratnam)

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IHT Rendezvous: Sharper Tongues in China's Year of the Snake?

BEIJING — The Snake is determined and smart, according to traditional Chinese beliefs. Today is New Year’s Day in China, the first day in the Year of the Snake, and a good day to ask: Will Xi Jinping, a “snake” set to become president in March (Mr. Xi was born in a Year of the Snake, in 1953) bring change to China?

Whether or not one believes in feng shui – the thought system based on geomancy, astronomy and folk wisdom of which the 12-yearly animal cycle is part – many here swear by it, and that makes the confluence of the man and the year important.

As the rational economist He Fan said last year, at the beginning of the Year of the Dragon: Feng shui may not be rational, but it is “symbolic,” “and that’s important, because that’s how China’s political culture works.”

So as ordinary people across the nation settle into their hard-earned, weeklong holiday amid the thunder of festival firecrackers, some are wondering whether recent calls by Mr. Xi to attack corruption and “criticize sharply” the ruling Communist Party will bring unwelcome shocks to members of the privileged classes in China, including the party, the government and state-run companies, widely seen as too powerful and too corrupt.

Skepticism about real change is rife, for sure, but signs say maybe, at least to some degree. And if that sounds woolly, it is because making predictions in China is notoriously difficult. Yet it is also important as the nation grows in international stature: As Bloomberg News notes, 2012 may have marked the year when China became the world’s largest trading nation. China was last the world’s biggest economy during the Qing dynasty, Bloomberg noted (though back then it didn’t focus on trade, Bloomberg wrote).

Some say the change has already begun, amid a deepening campaign against corruption announced by Mr. Xi after he was appointed general secretary of the party in November. The state’s anti-corruption warnings are being taken more seriously now than at any time in the past decade because they come from Mr. Xi, who is regarded as potentially a strong leader fast establishing his dominance, already the most eminent member of the seven-man Standing Committee of the Politburo, China’s inner circle of power.

One sign: Traditionally lavish end-of-the-year parties thrown by powerful state-owned companies, and thus paid for from the public purse, have been canceled in large numbers, causing great satisfaction among ordinary people as high-end restaurants in Beijing are suddenly available for traditional New Year family dinners. In previous years, getting a booking was impossible. This year, it’s not.

Another sign: a recent call by Mr. Xi for “sharp criticism” of the Communist Party.

“Chinese leader Xi Jinping has urged the Communist Party of China (CPC) to be more tolerant of criticism and receptive to the views of non-communists,” Xinhua, the state-run news agency, reported last week.

“The CPC should be able to put up with sharp criticism, correct mistakes if it has committed them and avoid them if it has not,” Xinhua quoted Mr. Xi as saying, adding that nonparty members should “have the courage to tell the truth, speak words jarring on the ear, and truthfully reflect public aspirations.”

The call has been – what else? – sharply criticized, in fast and furious microblog postings showing just how deep is the well of resentment against the state’s heavy hand in some quarters.

Shortly after 9 a.m. on New Year’s Day, Ai Weiwei, the artist, snapped on his Twitter account: “First sentence of the New Year, release all political prisoners.”

The South China Morning Post, a Hong Kong newspaper, gathered more acerbic responses:

The venture capitalist Kai-Fu Lee: “Will you stop silencing and shutting down microblog accounts?”

Xu Xiaonian, an economics professor: “Will you stop censoring books and media reports?”

Chen Tongkui, an academic: “Will you stop press censorship?”

Wang Xiaoyu, another academic: “Can you not delete the comments on this microblog post?”

The real estate magnante Ren Zhiqiang: “Will you stop criminalizing people’s speech and sentencing them to re-education through labor?”

Cui Weiping, an academic: “Will you put an end to police harassment” of activists and netizens?

And yet, for many ordinary Chinese, there is hope. Incomes are rising, and there is a whiff of, yes, change in the air. In a recent, colorfully presented survey by TNS, part of Kantar, an information and consulting group, 88 percent of people surveyed in China were positive about the Year of the Snake, the company said.

As Mr. He said of last year, which saw the dramatic downfall of the political scion Bo Xilai, seen by some as a contender for Mr. Xi’s position, amid a murder and corruption scandal: “Something happens in every Dragon Year, even if it’s just a turning point.” Often, the real action begins a year or two later.

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Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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India Ink: Newswallah: Bharat Edition

Himachal Pradesh: Heavy snowfall for three straight days in the hill state has shut down several arterial roads in the interior areas on Thursday, affecting vehicular traffic, according to an IANS report on the NDTV Web site. In Shimla, a popular holiday destination, at least 10 people, most of them tourists, were injured while walking on the slippery roads, the report said.

Sikkim: The ecologically rich state, located in the lower ranges of the Himalayas, will host the International Flower Show from Feb. 23 to 27, according to an IANS report cited in the Hindustan Times. The state is home to almost 5,000 varieties of flowers, and Sikkim’s state government is keen to promote floriculture and related activities as an important source of livelihood in the coming years, the report said.

Assam: A review committee decided to sign off on the government’s decision to block 306 Twitter accounts after last year’s ethnic clashes in the Kokrajhar district of Assam, the Press Trust of India reported. The committee observed that the accounts could inflame religious tensions in the country.

Gujarat: On Wednesday, a candidate for a local village election in Gujarat’s Sabarkantha district was arrested, along with his manager, for allegedly forcing 100 people to put their hands in boiling oil to prove their loyalty to him, The Hindu reported. The candidate, Dinesh Parmar, who lost the election, had allegedly told the people that their hands would not be burned if they had indeed voted for him.

Rajasthan: A village council in Rajasthan’s Bikaner district decided to impose a fine on those who consumed alcohol or hunted animals, the Press Trust of India reported. At a meeting of the village council, it was decided that the penalty amount would range between 1,000 rupees and 11,000 rupees (about $19 to $206).

Karnataka: About 26 members of Bangalore-based women’s rights groups were taken into custody Tuesday but were later released, The Hindu said. These activists held demonstrations in front of the Raj Bhavan, or the governor’s mansion, to protest the central government’s new laws to deter violence against women, which the activists said ignored important recommendations by a government-appointed committee.

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Minka Kelly: 'I'm Not Worthy' of Acting with Oprah

By Jennifer Cress

02/08/2013 at 07:40 PM EST

Minka Kelly as Jacqueline Kennedy Onassis

Pacific Coast News

It's intimidating enough to play Jackie O, but Minka Kelly felt even more pressure to perform when she found out who was joining the cast of her latest film, The Butler.

"I'm not worthy. I feel so lucky and grateful. I was like, 'What am I doing here?!' " Kelly tells PEOPLE of starring alongside Robin Williams, Forest Whitaker, John Cusack, Vanessa Redgrave, Jane Fonda and more in the upcoming film, which tells the story of a butler who served eight presidents.

The movie also features another major star: the one and only Oprah Winfrey. "I didn't get to meet Oprah because our shooting schedules were different, but she's a pretty loved lady," Kelly says. "I have yet to hear a bad thing about her!"

Kelly found that the most difficult part of playing Jackie Kennedy was nailing the former first lady's distinct accent. "I think she spoke in a way she thought she should speak, so getting that down was hard. There's a musicality and rhythm to the way she speaks," Kelly explains. "I went to sleep listening to her."

Another tough task? Slipping into the retro costumes. "My body is so different from her because I have curves, so fitting into those vintage clothes was actually really hard," she shares. "Also it was hot – and there was a lot of wool!"

Jennifer Graylock / Getty

But Kelly had no issue slipping into the stunning Oscar de la Renta gown (left) she strutted down the runway in at the Red Dress Collection fashion show in N.Y.C. on Wednesday night. The actress walked for the second year in a row in honor of The Heart Truth campaign, which encourages women to monitor their heart health.

For the month of February, Diet Coke will donate $1 for every person who uploads a heart-inspired photo to Twitter or Instagram using the hashtag #showyourheart. Visit to dietcoke.com/showyourheart for more information.

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Stocks end higher for sixth straight week, tech leads

NEW YORK (Reuters) - The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The S&P 500 also posted a sixth straight week of gains for the first time since August.

The technology sector led the day's gains, with the S&P 500 technology index <.splrct> up 1.0 percent. Gains in professional network platform LinkedIn Corp and AOL Inc after they reported quarterly results helped the sector.

Shares of LinkedIn jumped 21.3 percent to $150.48 after the social networking site announced strong quarterly profits and gave a bullish forecast for the year.

AOL Inc shares rose 7.4 percent to $33.72 after the online company reported higher quarterly profit, boosted by a 13 percent rise in advertising sales.

Data showed Chinese exports grew more than expected, a positive sign for the global economy. The U.S. trade deficit narrowed in December, suggesting the U.S. economy likely grew in the fourth quarter instead of contracting slightly as originally reported by the U.S. government.

"That may have sent a ray of optimism," said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.

Trading volume on Friday was below average for the week as a blizzard swept into the northeastern United States.

The U.S. stock market has posted strong gains since the start of the year, with the S&P 500 up 6.4 percent since December 31. The advance has slowed in recent days, with fourth-quarter earnings winding down and few incentives to continue the rally on the horizon.

"I think we're in the middle of a trading range and I'd put plus or minus 5.0 percent around it. Fundamental factors are best described as neutral," Dickson said.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

For the week, the Dow was down 0.1 percent, the S&P 500 was up 0.3 percent and the Nasdaq up 0.5 percent.

Shares of Dell closed at $13.63, up 0.7 percent, after briefly trading above a buyout offering price of $13.65 during the session.

Dell's largest independent shareholder, Southeastern Asset Management, said it plans to oppose the buyout of the personal computer maker, setting up a battle for founder Michael Dell.

Signs of economic strength overseas buoyed sentiment on Wall Street. Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 surplus that was the nation's second highest in more than 60 years, an indication of the underlying strength of Europe's biggest economy.

Separately, U.S. economic data showed the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did much better in the fourth quarter than initially estimated.

Earnings have mostly come in stronger than expected since the start of the reporting period. Fourth-quarter earnings for S&P 500 companies now are estimated up 5.2 percent versus a year ago, according to Thomson Reuters data. That contrasts with a 1.9 percent growth forecast at the start of the earnings season.

Molina Healthcare Inc surged 10.4 percent to $31.88 as the biggest boost to the index after posting fourth-quarter earnings.

The CBOE Volatility index <.vix>, Wall Street's so-called fear gauge, was down 3.6 percent at 13.02. The gauge, a key measure of market expectations of short-term volatility, generally moves inversely to the S&P 500.

"I'm watching the 14 level closely" on the CBOE Volatility index, said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research. "The break below it at the beginning of the year signaled the sharp rally in January, and a rally back above it could be a sign to exercise some caution."

Volume was roughly 5.6 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.

Advancers outpaced decliners on the NYSE by nearly 2 to 1 and on the Nasdaq by almost 5 to 3.

(Additional reporting by Angela Moon; Editing by Bernadette Baum, Nick Zieminski, Kenneth Barry and Andrew Hay)

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India Ink: Five Questions for: Author and Filmmaker Laleh Khadivi

Laleh Khadivi is an author and filmmaker who was born in Esfahan, Iran, and grew up in California. Her first novel, “The Age of Orphans,” received the Whiting Award for Fiction, the Barnes and Noble Discover New Writers Award and an Emory Fiction Fellowship, and it was translated into eight languages. Her latest novel, “The Walking,” will be published in March. Her debut documentary film, “900 Women,” premiered at the Human Rights Watch Film Festival in 2001. India Ink interviewed Ms. Khadivi at the Jaipur Literature Festival.

What are the occupational hazards of being a writer?

Depression? I’m kidding. I think that when you write, and that is the only thing you do and you don’t have another job you end up spending a lot of time alone in worlds of your creation and so that can make living in the world of reality a little bit difficult. I feel like, for myself and a few other writers I know intimately, going between those two worlds is often very difficult. You don’t have the ease with which to converse randomly at a dinner party when you’ve been writing a torture scene all day. You kind of have to step in and out of the things that you know are fiction and the things that you know to be real. Otherwise, writing is a pretty sweet job. You can’t really complain about it, you know.

What is your everyday writing ritual?

When I’m in the middle of writing a book, doing the day-to-day writing of it, I develop a ritual for that book, but it changes for each book. So I ideally would like to write every morning between 7 a.m. and noon if I can get those many hours –though I just had a son so this is not going to ever happen again. And then from noon until 7, do other things. And then I find the night very useful for writing so I write again from dark until when I go to sleep. At the end of the day, I’m a writer, and in the middle, a regular person.

Why should we read your latest book?

My latest book is about the effects of movies on the imagination. It’s about a lot of other things as well — political things and social things — but mostly it’s about a boy’s love of the cinema and what the cinema does to your desires. How if you only know one world – one particular village or one town – and you watch movies that happen halfway across the globe, how you are changed and how you suddenly think to yourself, “Oh wait, the Earth is bigger than what I know. How do I get to this other place?”

India has such a rich history of cinema, and Bollywood is all about spinning imaginary tales. They might not involve other places on the planet, but they involve other classes, other gender dynamics and other fashion.

It’s a book about that distance between where you are and what you see, and where you can be in cinema and how it changes what you want. It takes place partially in the Kurdish region of Iran and partially in Los Angeles.

How do you deal with your critics?

Ha! I’ve been trying to figure that out.

I think ideally the best way to deal with it is to just not read the reviews. Because with my first book I got these reviews, and some of them were great, and some of them were not. I realized that the ones that were great did not make me feel good — I didn’t celebrate it. And a bad review made me feel terrible. So there was nothing to win, nothing to gain from reading the reviews. Granted, your ego is very tempted to go and see what they are saying about your book, but you know if it’s good and where it’s not good and what the weak parts are.

If someone gives it a bad review and doesn’t like it, there is a good chance they just didn’t get it or it’s not their thing. If I was asked to review a book by John Updike, I would say terrible things, but someone else would give him the Pulitzer Prize. It’s a personal preference. Reviews are very bizarre – they are assigned to one reader and that reader might hate the Middle East. I see the intellectual background of where the reviewer is from – if they do not like Faulkner’s writing, chances are they are not going to like mine.

Why does the Jaipur Literature Festival matter to you?

One billion people – not all of them reading, but still a country of a billion people — you just can’t ignore that. There’s a billion universes going on in those people’s lives and communities, and I feel like because there is an English-speaking presence here and my books can be read without translation, I should go and help people get excited about them.

I have been blown away by the attentiveness and the eagerness of the audiences in Jaipur. I also think that beyond just engaging with readers, I think it’s important to engage with writers about writing and have public discourse about the life of the mind. Our world is increasingly not giving writers and thinkers and artists a place to do that, and so Jaipur is like this small little window to have discussions that are not about money, but about art or politics or inspiration. That’s important to me, and I think that’s important to the increasing readership of Indians.

(The interview has been lightly edited and condensed.)

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