Cliff fight may knock out December rally

NEW YORK (Reuters) - In normal times, next week's slew of U.S. economic data could be a springboard for a December rally in the stock market.

December is historically a strong month for markets. The S&P 500 has risen 16 times in the past 20 years during the month.

But the market hasn't been operating under normal circumstances since November 7 when a day after the U.S. election, investors' focus shifted squarely to the looming "fiscal cliff."

Investors are increasingly nervous about the ability of lawmakers to undo the $600 billion in tax increases and spending cuts that are set to begin in January; those changes, if they go into effect, could send the U.S. economy into a recession.

A string of economic indicators next week, which includes a key reading of the manufacturing sector on Monday, culminates with the November jobs report on Friday.

But the impact of those economic reports could be muted. Distortions in the data caused by Superstorm Sandy are discounted.

The spotlight will be more firmly on signs from Washington that politicians can settle their differences on how to avoid the fiscal cliff.

"We have a week with a lot of economic data, and obviously most of the economic data is going to reflect the effects of Sandy, and that might be a little bit negative for the market next week, but most of that is already expected - the main focus remains the fiscal cliff," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Concerns about the cliff sent the S&P 500 <.spx> into a two-week decline after the elections, dropping as much as 5.3 percent, only to rally back nearly 4 percent as the initial tone of talks offered hope that a compromise could be reached and investors snapped up stocks that were viewed as undervalued.

On Wednesday, the S&P 500 gained more than 20 points from its intraday low after House Speaker John Boehner said he was optimistic that a budget deal to avoid big spending cuts and tax hikes could be worked out. The next day, more pessimistic comments from Boehner, an Ohio Republican, briefly wiped out the day's gains in stocks.

On Friday, the sharp divide between the Democrats and the Republicans on taxes and spending was evident in comments from President Barack Obama, who favors raising taxes on the wealthy, and Boehner, the top Republican in Congress, who said Obama's plan was the wrong approach and declared that the talks had reached a stalemate.

"It's unusual to end up with one variable in this industry, it's unusual to have a single bullet that is the causal factor effect, and you are sitting here for the next maybe two weeks or more, on that kind of condition," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago.

"And that is what is grabbing the markets."

BE CONTRARY AND MAKE MERRY

But investor attitudes and seasonality could also help spur a rally for the final month of the year.

The most recent survey by the American Association of Individual Investors reflected investor caution about the cliff. Although bullish sentiment rose above 40 percent for the first time since August 23, bearish sentiment remained above its historical average of 30.5 percent for the 14th straight week.

December is a critical month for retailers such as Target Corp and Macy's Inc . They saw monthly retail sales results dented by Sandy, although the start of the holiday shopping season fared better.

With consumer spending making up roughly 70 percent of the U.S. economy, a solid showing for retailers during the holiday season could help fuel any gains.

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, believes the recent drop after the election could be a market bottom, with sentiment leaving stocks poised for a December rally.

"The concerns on the fiscal cliff - as valid as they might be - could be overblown. When you look at a lot of the overriding sentiment, that has gotten extremely negative," said Detrick.

"From that contrarian point of view with the historically bullish time frame of December, we once again could be setting ourselves up for a pretty nice end-of-year rally, based on lowered expectations."

SOME FEEL THE BIG CHILL

Others view the fiscal cliff as such an unusual event that any historical comparisons should be thrown out the window, with a rally unlikely because of a lack of confidence in Washington to reach an agreement and the economic hit caused by Sandy.

"History doesn't matter. You're dealing with an extraordinary set of circumstances that could very well end up in the U.S. economy going into a recession," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

"And the likelihood of that is exclusively in the hands of our elected officials in Washington. They could absolutely drag us into a completely voluntary recession."

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com )

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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IHT Rendezvous: Christmas Tree Controversy Fires Multicultural Belgium

LONDON — It’s that time of year again. As November turned to December, a work gang just arrived outside the front window to set up the neighbourhood Christmas tree and mark the approach of the annual season of peace and good will.

Meanwhile, across the Channel in Brussels, there is a distinct lack of good will this year as locals in the Belgium capital tangle over a controversial decision by the city fathers to replace the traditional pine tree with an abstract structure of illuminated cubes.

The 25-meter, or 82-foot, tree of light installed this year on the Grand Place, the main square in Brussels, has sparked a protest movement and an online petition, demanding respect for “values and traditions”, which has so far attracted 25,000 signatures.

Some are claiming, however, that the campaign amounts to a thinly veiled attack on multiculturalism in the capital of the European Union, with undertones of Islamophobia.

The controversy was sparked by remarks by Bianca Debaets, a city councilor from the Christian Democrat and Flemish Party, who claimed the Socialist-run municipality was pandering to the sensitivities of non-Christians by scrapping the traditional tree.

“What next?” she asked. “Will Easter eggs be banned from the city because they make us think of Easter?”

The municipality has defended its choice, saying it wanted to blend the modern and the traditional to show off the city’s annual winter fair. More traditional Christmas symbols would also be on display in the Grand Place, including a Nativity scene, officials said.

Ms. Debaets has since distanced herself from openly racist comments that have attached themselves to an otherwise innocent online protest movement, some of which claimed the city was bowing to pressure from its estimated one-in-five Muslim minority.

In online comments, Muslims ridiculed the claims and Semsettin Ugurlu, chairman of the Belgian Muslim Executive that represents the Muslim community, said his organization did not object to any kind of Christmas tree.

“We know we are living in a country with a Christian culture, we take no offense over a traditional Christmas tree,” the BBC quoted him as saying.

The organizer of the online protest petition, identified as Olivier, told Belgian television he was not a racist and merely wanted his children to enjoy the pleasure of seeing the traditional tree.

The wording of the petition, and some of the comments attached by signatories, nevertheless revealed a wider agenda. It said the scrapping of the traditional tree at the Grand Place followed a ban on Christmas trees at law courts, the suppression of religious symbols at school and a ban on pork at school canteens.

The Christmas tree controversy comes after two members of an Islamic list, who said they might one day seek a referendum on establishing Sharia law in Belgium, were elected last month as councilors in Flemish-speaking districts of the Brussels region.

That prompted its own online petition, sponsored by a far-right party, to have their grouping banned.

Their election embarrassed moderate Muslim organisations, one of which started its own petition rejecting Sharia law. The Belgian Muslim Executive also said it was inconceivable to most Muslims that Belgium would ever become a Muslim state.

Olivier Mangain, a center-right Francophone politician, meanwhile called for secularism to be written into the Belgian Constitution in order to prevent any religious or other group from undermining fundamental rights such as gender equality.

La Vie, a Christian weekly in neighboring France, commented: “In a country hit by economic crisis, in the grip of regional tensions, and now starting an annual battle over how to mark Christmas, this affair has once more sparked a debate over the identity of Belgium.”

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Microsoft’s next-gen Xbox again said to launch ahead of 2013 holidays

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Ashley Hebert and J.P. Rosenbaum Are Married

People Exclusive

By Monica Rizzo

12/01/2012 at 06:15 PM EST

J.P. Rosenbaum and Ashley Hebert

Victor Chavez/Getty

It’s official: Bachelorette star Ashley Hebert and her fiancé J.P. Rosenbaum tied the knot Saturday afternoon in Pasadena, Calif.

Surrounded by family, friends and fellow Bachelor and Bachelorette alumni like Ali Fedotowsky, Emily Maynard, and Jason and Molly Mesnick, the couple said "I do" in an outdoor ceremony officiated by franchise host Chris Harrison.

"Today is all about our friends and family," Hebert, whose nuptials will air Dec. 16 on a two-hour special on ABC, tells PEOPLE. "It's about standing with J.P., looking around at all the people we love in the same room there to celebrate our love."

The 28-year-old dentist from Madawaska, Maine, met New York construction manager Rosenbaum, 35, on season 7 of The Bachelorette. The couple became engaged on the season finale.

Hebert and Rosenbaum are the second couple in the franchise's 24 seasons to make it from their show finale to the altar, following in the footsteps of Bachelorette Trista Rehn, who married Vail, Colo., firefighter Ryan Sutter in 2003.

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Asperger's dropped from revised diagnosis manual

CHICAGO (AP) — The now familiar term "Asperger's disorder" is being dropped. And abnormally bad and frequent temper tantrums will be given a scientific-sounding diagnosis called DMDD. But "dyslexia" and other learning disorders remain.

The revisions come in the first major rewrite in nearly 20 years of the diagnostic guide used by the nation's psychiatrists. Changes were approved Saturday.

Full details of all the revisions will come next May when the American Psychiatric Association's new diagnostic manual is published, but the impact will be huge, affecting millions of children and adults worldwide. The manual also is important for the insurance industry in deciding what treatment to pay for, and it helps schools decide how to allot special education.

This diagnostic guide "defines what constellations of symptoms" doctors recognize as mental disorders, said Dr. Mark Olfson, a Columbia University psychiatry professor. More important, he said, it "shapes who will receive what treatment. Even seemingly subtle changes to the criteria can have substantial effects on patterns of care."

Olfson was not involved in the revision process. The changes were approved Saturday in suburban Washington, D.C., by the psychiatric association's board of trustees.

The aim is not to expand the number of people diagnosed with mental illness, but to ensure that affected children and adults are more accurately diagnosed so they can get the most appropriate treatment, said Dr. David Kupfer. He chaired the task force in charge of revising the manual and is a psychiatry professor at the University of Pittsburgh.

One of the most hotly argued changes was how to define the various ranges of autism. Some advocates opposed the idea of dropping the specific diagnosis for Asperger's disorder. People with that disorder often have high intelligence and vast knowledge on narrow subjects but lack social skills. Some who have the condition embrace their quirkiness and vow to continue to use the label.

And some Asperger's families opposed any change, fearing their kids would lose a diagnosis and no longer be eligible for special services.

But the revision will not affect their education services, experts say.

The new manual adds the term "autism spectrum disorder," which already is used by many experts in the field. Asperger's disorder will be dropped and incorporated under that umbrella diagnosis. The new category will include kids with severe autism, who often don't talk or interact, as well as those with milder forms.

Kelli Gibson of Battle Creek, Mich., who has four sons with various forms of autism, said Saturday she welcomes the change. Her boys all had different labels in the old diagnostic manual, including a 14-year-old with Asperger's.

"To give it separate names never made sense to me," Gibson said. "To me, my children all had autism."

Three of her boys receive special education services in public school; the fourth is enrolled in a school for disabled children. The new autism diagnosis won't affect those services, Gibson said. She also has a 3-year-old daughter without autism.

People with dyslexia also were closely watching for the new updated doctors' guide. Many with the reading disorder did not want their diagnosis to be dropped. And it won't be. Instead, the new manual will have a broader learning disorder category to cover several conditions including dyslexia, which causes difficulty understanding letters and recognizing written words.

The trustees on Saturday made the final decision on what proposals made the cut; recommendations came from experts in several work groups assigned to evaluate different mental illnesses.

The revised guidebook "represents a significant step forward for the field. It will improve our ability to accurately diagnose psychiatric disorders," Dr. David Fassler, the group's treasurer and a University of Vermont psychiatry professor, said after the vote.

The shorthand name for the new edition, the organization's fifth revision of the Diagnostic and Statistical Manual, is DSM-5. Group leaders said specifics won't be disclosed until the manual is published but they confirmed some changes. A 2000 edition of the manual made minor changes but the last major edition was published in 1994.

Olfson said the manual "seeks to capture the current state of knowledge of psychiatric disorders. Since 2000 ... there have been important advances in our understanding of the nature of psychiatric disorders."

Catherine Lord, an autism expert at Weill Cornell Medical College in New York who was on the psychiatric group's autism task force, said anyone who met criteria for Asperger's in the old manual would be included in the new diagnosis.

One reason for the change is that some states and school systems don't provide services for children and adults with Asperger's, or provide fewer services than those given an autism diagnosis, she said.

Autism researcher Geraldine Dawson, chief science officer for the advocacy group Autism Speaks, said small studies have suggested the new criteria will be effective. But she said it will be crucial to monitor so that children don't lose services.

Other changes include:

—A new diagnosis for severe recurrent temper tantrums — disruptive mood dysregulation disorder. Critics say it will medicalize kids' who have normal tantrums. Supporters say it will address concerns about too many kids being misdiagnosed with bipolar disorder and treated with powerful psychiatric drugs. Bipolar disorder involves sharp mood swings and affected children are sometimes very irritable or have explosive tantrums.

—Eliminating the term "gender identity disorder." It has been used for children or adults who strongly believe that they were born the wrong gender. But many activists believe the condition isn't a disorder and say calling it one is stigmatizing. The term would be replaced with "gender dysphoria," which means emotional distress over one's gender. Supporters equated the change with removing homosexuality as a mental illness in the diagnostic manual, which happened decades ago.

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner .

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Cliff fight may knock out December rally

NEW YORK (Reuters) - In normal times, next week's slew of U.S. economic data could be a springboard for a December rally in the stock market.

December is historically a strong month for markets. The S&P 500 has risen 16 times in the past 20 years during the month.

But the market hasn't been operating under normal circumstances since November 7 when a day after the U.S. election, investors' focus shifted squarely to the looming "fiscal cliff."

Investors are increasingly nervous about the ability of lawmakers to undo the $600 billion in tax increases and spending cuts that are set to begin in January; those changes, if they go into effect, could send the U.S. economy into a recession.

A string of economic indicators next week, which includes a key reading of the manufacturing sector on Monday, culminates with the November jobs report on Friday.

But the impact of those economic reports could be muted. Distortions in the data caused by Superstorm Sandy are discounted.

The spotlight will be more firmly on signs from Washington that politicians can settle their differences on how to avoid the fiscal cliff.

"We have a week with a lot of economic data, and obviously most of the economic data is going to reflect the effects of Sandy, and that might be a little bit negative for the market next week, but most of that is already expected - the main focus remains the fiscal cliff," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Concerns about the cliff sent the S&P 500 <.spx> into a two-week decline after the elections, dropping as much as 5.3 percent, only to rally back nearly 4 percent as the initial tone of talks offered hope that a compromise could be reached and investors snapped up stocks that were viewed as undervalued.

On Wednesday, the S&P 500 gained more than 20 points from its intraday low after House Speaker John Boehner said he was optimistic that a budget deal to avoid big spending cuts and tax hikes could be worked out. The next day, more pessimistic comments from Boehner, an Ohio Republican, briefly wiped out the day's gains in stocks.

On Friday, the sharp divide between the Democrats and the Republicans on taxes and spending was evident in comments from President Barack Obama, who favors raising taxes on the wealthy, and Boehner, the top Republican in Congress, who said Obama's plan was the wrong approach and declared that the talks had reached a stalemate.

"It's unusual to end up with one variable in this industry, it's unusual to have a single bullet that is the causal factor effect, and you are sitting here for the next maybe two weeks or more, on that kind of condition," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago.

"And that is what is grabbing the markets."

BE CONTRARY AND MAKE MERRY

But investor attitudes and seasonality could also help spur a rally for the final month of the year.

The most recent survey by the American Association of Individual Investors reflected investor caution about the cliff. Although bullish sentiment rose above 40 percent for the first time since August 23, bearish sentiment remained above its historical average of 30.5 percent for the 14th straight week.

December is a critical month for retailers such as Target Corp and Macy's Inc . They saw monthly retail sales results dented by Sandy, although the start of the holiday shopping season fared better.

With consumer spending making up roughly 70 percent of the U.S. economy, a solid showing for retailers during the holiday season could help fuel any gains.

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, believes the recent drop after the election could be a market bottom, with sentiment leaving stocks poised for a December rally.

"The concerns on the fiscal cliff - as valid as they might be - could be overblown. When you look at a lot of the overriding sentiment, that has gotten extremely negative," said Detrick.

"From that contrarian point of view with the historically bullish time frame of December, we once again could be setting ourselves up for a pretty nice end-of-year rally, based on lowered expectations."

SOME FEEL THE BIG CHILL

Others view the fiscal cliff as such an unusual event that any historical comparisons should be thrown out the window, with a rally unlikely because of a lack of confidence in Washington to reach an agreement and the economic hit caused by Sandy.

"History doesn't matter. You're dealing with an extraordinary set of circumstances that could very well end up in the U.S. economy going into a recession," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

"And the likelihood of that is exclusively in the hands of our elected officials in Washington. They could absolutely drag us into a completely voluntary recession."

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com )

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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EBay’s double tax base prompts calls for investigation

LONDON (Reuters) – Britain and Germany may have missed out on a combined $ 1 billion in sales tax since online marketplace eBay picked a tiny Luxembourg office as its base for EU sales, a shift that lawmakers say should now be investigated.

EBay’s nomination of Luxembourg unit eBay Europe Sarl – with a staff of nine – as its provider of services to EU clients allows it to charge customers in Europe a low rate of sales tax, often known as Value Added Tax, helping it to compete against rivals.

However, the unit doesn’t actually receive the money from sales. Instead, eBay said it continues to channel revenues through a Berne-based unit, allowing the company also to benefit from what Swiss tax lawyers say is the most competitive corporate income tax regime in Europe.

EU rules allow companies to establish subsidiaries in Luxembourg and levy VAT at Luxembourg’s low VAT rate on sales to customers across the bloc.

However, the rules also allow individual EU taxmen to challenge any claim to Luxembourg residence, and the right to charge Luxembourg VAT, in their domestic courts, if the taxman feels a Luxembourg-based subsidiary does not have sufficient staff or assets to support its claim to be the true supplier of goods or services.

Tax experts say eBay’s arrangement, which appears to give eBay the best of both income and sales tax worlds, could be open to challenge, and lawmakers in the UK and Germany want their taxmen to investigate.

“I hope that HMRC (UK tax authority Her Majesty’s Revenue and Customs) takes note … and takes prompt action,” said Margaret Hodge, member of parliament and chairman of the Public Accounts Committee (PAC), which monitors government finances.

“I will be seeking assurance that they are, next time we take evidence from HMRC,” she added. Officials from HMRC are due to testify to the PAC in early December as part of the committee’s investigation into tax matters.

Sven Giegold, member of the European Parliament for Germany’s Green Party, said he wanted the German tax authorities to “have a very critical look at this”.

It is common for companies to seek to reduce their tax bills, and a number of multinationals have established bases in Luxembourg so they can charge customers lower levels of VAT.

EBay said HMRC was aware of all its tax arrangements and that it was confident it met all its tax liabilities in the UK and elsewhere.

“In all countries and at all times, eBay is fully compliant with national, EU and international tax rules (including the OECD) including the remittance of VAT to the appropriate authorities,” an eBay spokesman said in an emailed statement.

The UK, German, French and Luxembourg tax authorities declined to comment on eBay, citing rules on taxpayer confidentiality.

LOWER THRESHOLD

Big companies’ tax practices have risen to the top of the political agenda in Europe in the past year, with lawmakers growing increasingly frustrated with the way in which companies such as search engine company Google pay almost no income tax in countries where they have billions of dollars in sales.

The companies escape liability for income taxes in countries like the UK by arguing the value created by their business, and therefore the location where the profit should be realized, is not the place where the customer resides, but rather in the location where the intellectual property underpinning the product or service is based.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said this was a valid economic argument and that if, for example, HMRC wants to claim more income tax from Google, it has to prove the company is generating more value in the UK than it is declaring.

This would require a thorough deconstruction of its business model and supply chain.

However, it is easier to establish liability to VAT, since this tax hinges simply on the location of the buyer and seller.

“The threshold is lower,” said Simon Newark, head of VAT at accountants UHY Hacker.

“There are a lot more aspects for HMRC to challenge in VAT than in direct (income) tax.”

For tax purposes, the EU deems eBay’s online platform an “electronically supplied service”, a category that also covers e-Books and music downloads.

Under EU rules, suppliers of such services based within the bloc are supposed to charge EU customers VAT at the rate prevailing in the country where the supplier is based.

A number of suppliers of electronic services, including Amazon.Com Inc and Apple Inc’s iTunes have established European headquarters in Luxembourg to enable them to charge customers lower VAT rates than prevail in their customers’ countries.

Luxembourg has traditionally charged the lowest standard VAT rates in the European Union. Its 15 percent rate compares with rates of 19-25 percent in most other EU members.

By charging customers VAT at Luxembourg’s rate eBay is better able to compete with rivals based elsewhere in the EU, such as Britain’s eBid, which must charge customers VAT at the standard UK rate of 20 percent.

However, to be entitled to charge Luxembourg rates, a company has to be able to prove in British, German or EU courts that it is genuinely based in the Grand Duchy.

Companies selling to EU customers from outside the EU – as eBay was until the 2007 nomination of eBay Europe Sarl as supplier to EU clients – must charge European customers VAT at the rate prevailing in the country where the customer resides, and to pay that VAT to the taxman in the customer’s country.

There is no definitive checklist that determines the true base of a company and any decision by a national court can be challenged in the European Court of Justice. In the UK, HMRC said it approached the matter on a case-by-case basis, and disputes are often resolved in court.

“HMRC will challenge any arrangements where it is claimed that supplies are made from a particular country but the business does not have the necessary resources to make those supplies,” a spokesman said.

EUROPE EXPANSION

EBay, which is headquartered in San Jose, California, moved into Europe in 1999 when it established eBay International in Berne. Switzerland’s low income tax regime for foreign companies was highly beneficial for the auction site. “We do have a very favorable international tax structure,” then-Chief Financial Officer Rajiv Dutta told analysts in 2002 when asked how the company managed to pay such low taxes on its non-U.S. income.

The Swiss base also meant, initially, that the company didn’t have to charge EU customers VAT. But in 2003, Brussels changed the rules, which forced eBay to charge EU sellers on its platform VAT based on their residence. The VAT gathered was remitted to the tax authority in the customer’s country.

Not all customers are charged VAT. Most medium-sized and big businesses are legitimately exempted from paying VAT on some purchases, such as eBay seller fees.

EBay’s Swiss-based European public relations head declined to say what portion of its EU customers were liable to be charged VAT. James Cordwell, equities analyst at Atlantic Equities, estimated that such customers accounted for 40-50 percent of sales in Europe.

Since the 2007 creation of its Luxembourg operation, eBay has had German fee revenues of $ 6.1 billion and UK revenues of $ 5 billion, its annual accounts show.

If the services were supplied from Switzerland or another non-EU country, and assuming only half of customers should have been charged VAT, EU rules would have obliged eBay to collect $ 580 million in VAT for the German taxman and $ 500 million in VAT for HMRC since 2007.

EBay’s entitlement to charge Luxembourg VAT on sales and to pay this to the Luxembourg taxman rests on being able to prove in court that eBay Europe Sarl is the provider of services to EU clients.

But despite German and UK fee income of $ 3.1 billion last year, eBay Europe Sarl recorded turnover of only 5 million euros in 2011.

John Hemming, an MP with the Liberal Democrats, the junior partner in the British coalition government, said the fact eBay’s sales revenues did not go through the Luxembourg unit undermined the claim that it was the true provider of services to EU clients.

“If it’s a real transaction, you would expect the money to pass with it, and not pass someplace else,” he said.

Rather than going to Luxembourg, the money generated from customers continues to go to Berne-based eBay International AG, a spokeswoman said.

When Reuters visited in mid November, staff at the Luxembourg office, just opposite the central post office, declined to discuss what operations the unit conducted for eBay.

A spokesman later said the office conducted activities including billing, data privacy, contracting, regulatory, management and some customer services operations.

By contrast, Amazon and iTunes do report their sales of ebooks and music downloads to EU customers through their Luxembourg units.

Prem Sikka, professor of accounting at Essex University, along with Newark and Roy-Chowdhury said a cash trail through a unit was one of the key factors used as evidence that the unit was the true supplier of a service.

UK and German tax authorities could argue that the shift in eBay’s supply base to Luxembourg from Berne was therefore not genuine. If successful, they could claim back the VAT lost.

EBay declined to say why it channeled sales through Switzerland. Tax advisors say the country can still offer some companies lower tax rates than other European low-tax jurisdictions such as Ireland and Luxembourg.

Indeed, EBay’s closest rival Amazon, which channels about half its non-U.S. earnings through Luxembourg, reported average income tax on overseas earnings of 6 percent in the past four years. EBay paid just 3 percent over the same period.

(Additional reporting by Brenda Goh; Editing by Will Waterman)

Tech News Headlines – Yahoo! News

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Dennis Quaid Files for Divorce, Seeks Joint Custody

By Mike Fleeman

11/30/2012 at 09:20 PM EST

Kimberly Buffington-Quaid and Dennis Quaid

Casey Rodgers/NBC/AP

Dennis Quaid is ready to end his marriage for good.

After his wife of eight years, Kimberly Buffington-Quaid, sought legal separation in October, the Vegas star filed Friday for divorce in Los Angeles Superior Court.

The actor requests joint physical and legal custody of their 4-year-old twins, Thomas and Zoe, and offers to pay spousal support, according to the petition.

This will be the third divorce for Quaid, 58, who was previously married to Meg Ryan and P.J. Soles.

Kimberly, a former real estate agent, initially filed for divorce in March. She
put the divorce on hold a month later, pulling the papers so they could work on their marriage, before then filing for separation.

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South Africa makes progress in HIV/AIDS fight

JOHANNESBURG (AP) — In the early 90s when South Africa's Themba Lethu clinic could only treat HIV/AIDS patients for opportunistic diseases, many would come in on wheelchairs and keep coming to the health center until they died.

Two decades later the clinic is the biggest ARV (anti-retroviral) treatment center in the country and sees between 600 to 800 patients a day from all over southern Africa. Those who are brought in on wheelchairs, sometimes on the brink of death, get the crucial drugs and often become healthy and are walking within weeks.

"The ARVs are called the 'Lazarus drug' because people rise up and walk," said Sue Roberts who has been a nurse at the clinic , run by Right to Care in Johannesburg's Helen Joseph Hospital, since it opened its doors in 1992. She said they recently treated a woman who was pushed in a wheelchair for 3 kilometers (1.8 miles) to avoid a taxi fare and who was so sick it was touch and go. Two weeks later, the woman walked to the clinic, Roberts said.

Such stories of hope and progress are readily available on World AIDS Day 2012 in sub-Saharan Africa where deaths from AIDS-related causes have declined by 32 percent from 1.8 million in 2005 to 1.2 million in 2011, according to the latest UNAIDS report.

As people around the world celebrate a reduction in the rate of HIV infections, the growth of the clinic, which was one of only a few to open its doors 20 years ago, reflects how changes in treatment and attitude toward HIV/AIDS have moved South Africa forward. The nation, which has the most people living with HIV in the world at 5.6 million, still faces stigma and high rates of infection.

"You have no idea what a beautiful time we're living in right now," said Dr. Kay Mahomed, a doctor at the clinic who said treatment has improved drastically over the past several years.

President Jacob Zuma's government decided to give the best care, including TB screening and care at the clinic, and not to look at the cost, she said. South Africa has increased the numbers treated for HIV by 75 percent in the last two years, UNAIDS said, and new HIV infections have fallen by more than 50,000 in those two years. South Africa has also increased its domestic expenditure on AIDS to $1.6 billion, the highest by any low-and middle-income country, the group said.

Themba Lethu clinic, with funding from the government, USAID and PEPFAR, is now among some 2,500 ARV facilities in the country that treat approximately 1.9 million people.

"Now, you can't not get better. It's just one of these win-win situations. You test, you treat and you get better, end of story," Mahomed said.

But it hasn't always been that way.

In the 1990s South Africa's problem was compounded by years of misinformation by President Thabo Mbeki, who questioned the link between HIV and AIDS, and his health minister, Manto Tshabalala-Msimang, who promoted a "treatment" of beets and garlic.

Christinah Motsoahae first found out she was HIV positive in 1996, and said she felt nothing could be done about it.

"I didn't understand it at that time because I was only 24, and I said, 'What the hell is that?'" she said.

Sixteen years after her first diagnosis, she is now on ARV drugs and her life has turned around. She says the clinic has been instrumental.

"My status has changed my life, I have learned to accept people the way they are. I have learned not to be judgmental. And I have learned that it is God's purpose that I have this," the 40-year-old said.

She works with a support group of "positive ladies" in her hometown near Krugersdorp. She travels to the clinic as often as needed and her optimism shines through her gold eye shadow and wide smile. "I love the way I'm living now."

Motsoahae credits Nelson Mandela's family for inspiring her to face up to her status. The anti-apartheid icon galvanized the AIDS community in 2005 when he publicly acknowledged his son died of AIDS.

None of Motsoahae's children was born with HIV. The number of children newly infected with HIV has declined significantly. In six countries in sub-Saharan Africa — South Africa, Burundi, Kenya, Namibia, Togo and Zambia —the number of children with HIV declined by 40 to 59 percent between 2009 and 2011, the UNAIDS report said.

But the situation remains dire for those over the age of 15, who make up the 5.3 million infected in South Africa. Fear and denial lend to the high prevalence of HIV for that age group in South Africa, said the clinic's Kay Mahomed.

About 3.5 million South Africans still are not getting therapy, and many wait too long to come in to clinics or don't stay on the drugs, said Dr. Dave Spencer, who works at the clinic .

"People are still afraid of a stigma related to HIV," he said, adding that education and communication are key to controlling the disease.

Themba Lethu clinic reaches out to the younger generation with a teen program.

Tshepo Hoato, 21, who helps run the program found out he was HIV positive after his mother died in 2000. He said he has been helped by the program in which teens meet one day a month.

"What I've seen is a lot people around our ages, some commit suicide as soon as they find out they are HIV. That's a very hard stage for them so we came up with this program to help one another," he said. "We tell them our stories so they can understand and progress and see that no, man, it's not the end of the world."

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Stock futures flat on "fiscal cliff" caution; data on tap

NEW YORK (Reuters) - Stock futures were little changed on Friday, the final trading day of the month, amid a cautious mood as investors kept their focus firmly on U.S. budget talks.

Trading has been choppy lately, as investors buy on sporadic dips in the market and react to mixed headlines out of Washington regarding progress in talks on averting the "fiscal cliff," spending cuts and tax hikes that will come into effect in the new year.

U.S. President Barack Obama plans to travel to a factory in Pennsylvania to press his case on raising taxes on the wealthy to narrow the deficit.

"Washington brinkmanship and a delay in reaching an agreement on the fiscal cliff are likely to rattle markets. These risks and uncertainties are likely to keep markets volatile," said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC.

"However, we expect an agreement in Washington preventing the U.S. economy plunging over the cliff, and further stabilization in euro zone," Praveen said. "This, combined with the liquidity and interest rate tailwinds, should fuel a relief rally into 2012 year-end."

After a close relationship for several years, Facebook Inc and Zynga Inc revised terms of a partnership agreement between the companies; under the new pact, Zynga will have limited ability to promote its site on Facebook. Zynga shares were down 6.9 percent at $2.43 in premarket trading. Facebook shares were up 0.8 percent at $27.55.

Whole Foods Market Inc announced a special cash dividend of $2.00 per share. In expectation of higher dividend tax rates in 2013, companies have been shifting dividends or announcing special payouts to shareholders.

The U.S. Commerce Dept releases October personal income and consumption data at 8:30 a.m. ET (1330 GMT). Economists in a Reuters survey expect a 0.2 percent rise in income, and an unchanged reading for spending. In September, income grew 0.4 percent and spending was up 0.8 percent.

The Institute for Supply Management in Chicago releases November index of manufacturing activity at 9:45 a.m. (1445 GMT). A reading of 50.5 is expected, compared with 49.9 in October.

S&P 500 futures were flat and in line with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 6 points, and Nasdaq 100 futures added 4.75 points.

Apple Inc's latest iPhone has received final clearance from Chinese regulators, paving the way for a December debut in a highly competitive market where the lack of a new model had severely eroded its share of product sales.

Japan's Nikkei average hit a seven-month closing high on Friday as a weaker yen, driven by expectations the Bank of Japan will act more boldly under a likely new government following December 16 elections, lifted the shares of exporters.

European shares were steady at 15-month highs as investors squared the books on the final trading day of the month, with all eyes on U.S. budget talks.

U.S. stocks finished higher on Thursday as investors bought on sporadic dips in a market roiled by conflicting comments from Washington on negotiations to avert the "fiscal cliff," automatic spending cuts and tax rises set to begin in 2013.

(Editing by Bernadette Baum)

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