Chavez suffers new post-surgery complications

CARACAS (Reuters) - Venezuelan President Hugo Chavez is suffering further complications linked to a respiratory infection that hit him after his fourth cancer operation in Cuba, his vice president said in a somber broadcast on Sunday.

Vice President Nicolas Maduro flew to Cuba to visit Chavez in the hospital as supporters' fears grow for the ailing 58-year-old socialist leader, who has not been seen in public nor heard from in three weeks.

Chavez had already suffered unexpected bleeding caused by the six-hour operation on December 11 for an undisclosed form of cancer in his pelvic area, and officials say doctors then had to fight a respiratory infection.

"Just a few minutes ago we were with President Chavez. He greeted us and he himself talked about these complications," Maduro said in the broadcast, adding that the third set of complications arose because of the respiratory infection.

"Thanks to his physical and spiritual strength, Comandante Chavez is confronting this difficult situation."

Maduro, flanked by his wife Attorney-General Cilia Flores, Chavez's daughter Rosa Virginia and her husband, Science Minister Jorge Arreaza, said he would remain in Havana while Chavez's condition evolved.

Chavez's resignation for health reasons, or his death, would upend politics in the OPEC nation where his personalized brand of oil-financed socialism has made him a hero to the poor but a pariah to critics who call him a dictator.

The president's allies have been openly discussing the possibility that he may not be able to return to swear in for his third six-year term on the constitutionally mandated date of January 10.

Opposition leaders say a postponement would be another signal Chavez is not in a fit state to govern and that new elections should be called to choose his replacement.

They believe they have a better shot against Maduro, who was named earlier this month by Chavez as his heir apparent, than against the charismatic president who for 14 years has been nearly invincible at the ballot box.

Any constitutional dispute over succession could lead to a messy transition toward a post-Chavez era in the country with the biggest oil reserves in the world.

Maduro has become the face of the government in Chavez's absence, imitating the president's bombastic style and sharp criticism of the United States and its "imperialist" policies.

(Additional reporting by Deisy Buitrago and Mario Naranjo; Ediitng by Kieran Murray and Todd Eastham)

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Wall Street ends sour week with 5th straight decline

NEW YORK (Reuters) - Stocks fell for a fifth straight day on Friday, dropping 1 percent and marking the S&P 500's longest losing streak in three months as the federal government edged closer to the "fiscal cliff" with no solution in sight.

President Barack Obama and top congressional leaders met at the White House to work on a solution for the draconian debt-reduction measures set to take effect beginning next week. Stocks, which have been influenced by little else than the flood of fiscal cliff headlines from Washington in recent days, extended losses going into the close with the Dow Jones industrial average and the S&P 500 each losing 1 percent, after reports that Obama would not offer a new plan to Republicans. The Dow closed below 13,000 for the first time since December 4.

"I was stunned Obama didn't have another plan, and that's absolutely why we sold off," said Mike Shea, managing partner at Direct Access Partners LLC in New York. "He's going to force the House to come to him with something different. I think that's a surprise. The entire market is disappointed in a lack of leadership in Washington."

In a sign of investor anxiety, the CBOE Volatility Index <.vix>, known as the VIX, jumped 16.69 percent to 22.72, closing at its highest level since June. Wall Street's favorite fear barometer has risen for five straight weeks, surging more than 40 percent over that time.

The Dow Jones industrial average <.dji> dropped 158.20 points, or 1.21 percent, to 12,938.11 at the close. The Standard & Poor's 500 Index <.spx> lost 15.67 points, or 1.11 percent, to 1,402.43. The Nasdaq Composite Index <.ixic> fell 25.59 points, or 0.86 percent, to end at 2,960.31.

For the week, the Dow fell 1.9 percent. The S&P 500 also lost 1.9 percent for the week, marking its worst weekly performance since mid-November. The Nasdaq finished the week down 2 percent. In contrast, the VIX jumped 22 percent for the week.

Pessimism continued after the market closed, with stock futures indicating even steeper losses. S&P 500 futures dropped 26.7 points, or 1.9 percent, eclipsing the decline seen in the regular session.

All 10 S&P 500 sectors fell during Friday's regular trading, with most posting declines of 1 percent, but energy and material shares were among the weakest of the day, with both groups closely tied to the pace of growth.

An S&P energy sector index <.gspe> slid 1.8 percent, with Exxon Mobil down 2 percent at $85.10, and Chevron Corp off 1.9 percent at $106.45. The S&P material sector index <.gspm> fell 1.3 percent, with U.S. Steel Corp down 2.6 percent at $23.03.

Decliners outnumbered advancers by a ratio of slightly more than 2 to 1 on the New York Stock Exchange, while on the Nasdaq, two stocks fell for every one that rose.

"We've been whipsawing around on low volume and rumors that come out on the cliff," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia, who helps oversee $7 billion in assets.

With time running short, lawmakers may opt to allow the higher taxes and across-the-board federal spending cuts to go into effect and attempt to pass a retroactive fix soon after the new year. Standard & Poor's said an impasse on the cliff wouldn't affect the sovereign credit rating of the United States.

"We're not as concerned with January 1 as the market seems to be," said Richard Weiss, senior money manager at American Century Investments, in Mountain View, California. "Things will be resolved, just maybe not on a good timetable, and any deal can easily be retroactive."

Trading volume was light throughout the holiday-shortened week, with just 4.46 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Friday, below the daily average so far this year of about 6.48 billion shares. On Monday, the U.S. stock market closed early for Christmas Eve, and the market was shut on Tuesday for Christmas. Many senior traders were absent this week for the holidays.

Highlighting Wall Street's sensitivity to developments in Washington, stocks tumbled more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned that a deal was unlikely before the deadline. But late in the day, stocks nearly bounced back when the House said it would hold an unusual Sunday session to work on a fiscal solution.

Positive economic data failed to alter the market's mood.

The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest expanded in December.

"Economic reports have been very favorable, and once Congress comes to a resolution, the market should resume an upward trend, based on the data," said Weiss, who helps oversee about $125 billion in assets. "All else being equal, we see any further decline as a buying opportunity."

Barnes & Noble Inc rose 4.3 percent to $14.97 after the top U.S. bookstore chain said British publisher Pearson Plc had agreed to make a strategic investment in its Nook Media subsidiary. But Barnes & Noble also said its Nook business will not meet its previous projection for fiscal year 2013.

Shares of magicJack VocalTec Ltd jumped 10.3 percent to $17.95 after the company gave a strong fourth-quarter outlook and named Gerald Vento president and chief executive, effective January 1.

The U.S.-listed shares of Canadian drugmaker Aeterna Zentaris Inc surged 13.8 percent to $2.47 after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for a Phase 3 registration trial in endometrial cancer with AEZS-108 treatment.

(Reporting by Ryan Vlastelica; Editing by Jan Paschal)

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NHL makes new offer; lockout enters critical stage

NEW YORK (AP) — The NHL made a new offer to the players' association, hoping to spark talks toward ending the long lockout and saving the hockey season.

Deputy commissioner Bill Daly said Friday the league presented its proposal Thursday and was waiting for a response. The sides haven't met in person since a second round of talks with a federal mediator broke down Dec. 13.

The lockout has reached its 104th day, and the NHL said it doesn't want a season of less than 48 games. That means a deal would need to be reached mid-January.

"We delivered to the union a new, comprehensive proposal for a successor CBA," Daly said in a statement Friday. "We are not prepared to discuss the details of our proposal at this time. We are hopeful that once the union's staff and negotiating committee have had an opportunity to thoroughly review and consider our new proposal, they will share it with the players. We want to be back on the ice as soon as possible."

A person familiar with key points of the offer told The Associated Press that the league proposed raising the limit of individual free-agent contracts to six years from five — seven years if a team re-signs its own player; raising the salary variance from one year to another to 10 percent, up from 5 percent; and one compliance buyout for the 2013-14 season that wouldn't count toward a team's salary cap but would be included in the overall players' share of income.

The person spoke on condition of anonymity because details of the new offer were not being discussed publicly.

The NHL maintained the deferred payment amount of $300 million it offered in its previous proposal, an increase from an earlier offer of $211 million. The initial $300 million offer was pulled off the table after negotiations broke off earlier this month.

The latest proposal is for 10 years, running through the 2021-22 season, with both sides having the right to opt out after eight years.

A conference call with the players' association's negotiating committee and its executive board was scheduled for Friday afternoon and was expected to last several hours.

The lockout has reached a critical stage, threatening to shut down a season for the second time in eight years. All games through Jan. 14, plus the Winter Classic and the All-Star game already have been called off. The next round of cuts could claim the entire schedule.

The NHL is the only North American professional sports league to cancel a season because of a labor dispute, losing the 2004-05 campaign to a lockout. A 48-game season was played in 1995 after a lockout stretched into January.

It is still possible this dispute could eventually be settled in the courts if the sides can't reach a deal on their own.

The NHL filed a class-action suit this month in U.S. District Court in New York in an effort to show its lockout is legal. In a separate move, the league filed an unfair labor practice charge with the National Labor Relations Board, contending bad-faith bargaining by the union.

Those moves were made because the players' association took steps toward potentially filing a "disclaimer of interest," which would dissolve the union and make it a trade association. That would allow players to file antitrust lawsuits against the NHL.

Union members voted overwhelmingly to give their board the power to file the disclaimer by Jan. 2. If that deadline passes, another authorization vote could be held to approve a later filing.

Negotiations between the NHL and the union have been at a standstill since talks ended Dec. 6. One week later, the sides convened again with federal mediators in New Jersey, but still couldn't make progress.

The sides have been unable to reach agreement on the length of the new deal, the length of individual player contracts, and the variance in salary from year to year. The NHL is looking for an even split of revenues with players.

The NHL pulled all previous offers off the table after the union didn't agree to terms on its last proposal without negotiation.

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2013: A year for big issues in the courts

By Jeffrey Toobin, CNN Senior Legal Analyst

December 27, 2012 -- Updated 1445 GMT (2245 HKT)

Chief Justice John Roberts re-administers the oath of office to Barack Obama at the White House on January 21, 2009.

STORY HIGHLIGHTS

• Jeffrey Toobin: 2013 will see pivotal decisions in several key areas of law


• He says Supreme Court could decide fate of same-sex marriage


• Affirmative action for public college admissions is also on Court's agenda


• Toobin: Newtown massacre put gun control debate back in the forefront

Editor's note: Jeffrey Toobin is a senior legal analyst for CNN and a staff writer at The New Yorker magazine, where he covers legal affairs. He is the author of "The Oath: The Obama White House and the Supreme Court."

(CNN) -- What will we see in 2013?

One thing for sure: The year will begin with Chief Justice John Roberts and President Obama getting two chances to recite the oath correctly.

Jeffrey Toobin

After that, here are my guesses.

1. Same-sex marriage and the Supreme Court. There are two cases, and there are a Rubik's Cube-worth of possibilities for their outcomes. On one extreme, the court could say that the federal government (in the Defense of Marriage Act) and the states can ban or allow same-sex marriage as they prefer. On the other end, the Court could rule that gay people have a constitutional right to marry in any state in the union. (Or somewhere in between.)

CNN Opinion contributors weigh in on what to expect in 2013. What do you think the year holds in store? Let us know @CNNOpinion on Twitter and Facebook/CNNOpinion

2. The future of affirmative action. In a case pending before the Supreme Court, the Court could outlaw all affirmative action in admissions at public universities, with major implications for all racial preferences in all school or non-school settings.

3. Gun control returns to the agenda. The Congress (and probably some states) will wrestle with the question of gun control, an issue that had largely fallen off the national agenda before the massacre in Newtown. Expect many invocations (some accurate, some not) of the Second Amendment.

4. The continued decline of the death penalty. Death sentences and executions continue to decline, and this trend will continue. Fear of mistaken executions (largely caused by DNA exonerations) and the huge cost of the death penalty process will both accelerate the shift.

5. Celebrity sex scandal. There will be one. There will be outrage, shock and amusement. (Celebrity to be identified later.)

Follow @CNNOpinion on Twitter

Join us at Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Jeffrey Toobin.

Part of complete coverage on

December 28, 2012 -- Updated 1356 GMT (2156 HKT)

Aaron Carroll says most of the changes in 2013 will be in preparation for 2014 when the Affordable Care Act really kicks into effect.

December 28, 2012 -- Updated 1351 GMT (2151 HKT)

Don't look for dramatic change in the troubled politics of the Middle East, says Aaron Miller.

December 28, 2012 -- Updated 1337 GMT (2137 HKT)

Sheril Kirshenbaum says natural gas fracking, climate change and renewables are likely to drive discussions of energy in the new year.

December 28, 2012 -- Updated 1354 GMT (2154 HKT)

Former CIA director Michael Hayden says the controversy over the film is one of two Washington debates in which politics obscures the real role of intelligence agencies.

December 28, 2012 -- Updated 1344 GMT (2144 HKT)

Even for someone who has written more than 2,000 columns over the last 20 years, sometimes the words come out wrong, says Ruben Navarrette.

Get the latest opinion and analysis from CNN's columnists and contributors.

December 28, 2012 -- Updated 0307 GMT (1107 HKT)

Kerry Cahill and Keely Vanacker, whose father was shot dead at Fort Hood, say the nation must address problems that lead to massacres.

December 27, 2012 -- Updated 1734 GMT (0134 HKT)

Gayle Tzemach Lemmon says it's vital that the withdrawal of NATO forces by 2014 doesn't endanger the progress Afghan women have made.

December 27, 2012 -- Updated 1445 GMT (2245 HKT)

Jeffrey Toobin says key rulings will likely be made regarding same-sex marriage and affirmative action for public college admissions.

December 28, 2012 -- Updated 0041 GMT (0841 HKT)

Frida Ghitis says that after years in which conservative views dominated the nation, there's now majority support for many progressive stances.

December 28, 2012 -- Updated 0316 GMT (1116 HKT)

John MacIntosh says gun manufacturer Freedom Group should be acquired by public-spirited billionaires and turned into a company with ethical goals.

December 26, 2012 -- Updated 1540 GMT (2340 HKT)

Dean Obeidallah says "Zero Dark Thirty" and "Promised Land" present hot button issues that fire up people from the left and right.

December 22, 2012 -- Updated 1706 GMT (0106 HKT)

David Gergen says the hope for cooperation is gone in the capital as people spar over fiscal cliff, gun control, and nominations

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Senate leaders to make last-ditch 'fiscal cliff' effort

WASHINGTON (Reuters) - President Barack Obama and U.S. congressional leaders agreed on Friday to make a final effort to prevent the United States from going over the "fiscal cliff," setting off intense bargaining over Americans' tax rates as a New Year's Eve deadline looms.

With only days left to avoid steep tax hikes and spending cuts that could cause a recession, two Senate veterans will try to forge a deal that has eluded the White House and Congress for months.

Obama said he was "modestly optimistic" an agreement could be found. But neither side appeared to give much ground at a White House meeting of congressional leaders on Friday.

What they did agree on was to task Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber's Republican minority, with reaching a budget agreement by Sunday at the latest.

"The hour for immediate action is here. It is now. We're now at the point where in just four days, every American's tax rates are scheduled to go up by law. Every American's paycheck will get considerably smaller. And that would be the wrong thing to do," Obama told reporters.

A total of $600 billion in tax hikes and automatic cuts to government spending will start kicking in on Tuesday - New Year's Day - if politicians cannot reach a deal. Economists fear the measures will push the U.S. economy into a recession.

Pessimism about the fiscal cliff helped push U.S. stocks down on Friday for a fifth straight day. The Dow Jones industrial average dropped 158.20 points, or 1.21 percent. Retailers are blaming worries about the "fiscal cliff" for lackluster Christmas season shopping.

Under the plan hashed out on Friday, any agreement between McConnell and Reid would be backed by the Senate and then approved in the Republican-controlled House of Representatives before the end of the year.

But the House could well be the graveyard of any accord.

A core of fiscal conservatives there strongly opposes Obama's efforts to raise taxes for the wealthiest as part of a plan to close America's budget deficit. House Republicans also want to see Obama commit to major spending cuts.

Talks between Obama and Republican House Speaker John Boehner collapsed last week when several dozen Republicans defied their leader and rejected a plan to raise rates for those earning $1 million and above.

A Democratic aide said Boehner stuck mainly to "talking points" in Friday's White House meeting, with the message that the House had acted on the budget and it was now time for the Senate to move.

TALKS ON 'BIG NUMBERS'

The two Senate leaders and their aides will plunge into talks on Saturday that will focus mainly on the threshold for raising income taxes on households with upper-level earnings, a Democratic aide said. Analysts say both sides could agree on raising taxes for households earning more than $400,000 or $500,000 a year.

The pair will also discuss whether the estate tax should be kept at current low levels or allowed to rise, the aide said.

Democrat Reid warned of tough talks.

"It's not easy, we're dealing with big numbers, and some of that stuff we do is somewhat complicated," he said.

McConnell described Friday's White House summit, also attended by Democratic House Minority Leader Nancy Pelosi, as "a good meeting."

"So we'll be working hard to try to see if we can get there in the next 24 hours. So I'm hopeful and optimistic," he said.

If things cannot be worked out between the Senate leaders, Obama said he wanted both chambers in Congress to vote on a backup plan that would increase taxes only for households with more than $250,000 of annual income.

The plan would also extend unemployment insurance for about 2 million Americans and set up a framework for a larger deficit reduction deal next year.

There are signs in the options market that investor fear is taking hold. The CBOE Volatility Index, or the VIX, the market's favored anxiety indicator, has remained at relatively low levels throughout this process, but it moved on Friday above 22, the highest level since June.

But some in the market were resigned to Washington going beyond the New Year's Day deadline, as long as a serious agreement on deficit reduction comes out of the talks in early January.

"Regardless of whether the government resolves the issues now, any deal can easily be retroactive. We're not as concerned with January 1 as the market seems to be," said Richard Weiss, a senior money manager at American Century Investments.

Another component of the "fiscal cliff" - $109 billion in automatic spending cuts to military and domestic programs - is set to kick in on Wednesday.

S&P rating agency said on Friday the fiscal cliff impasse did not affect the U.S. sovereign rating.

That lifted the immediate threat of a downgrade from the agency, which cut the United States' triple-A rating in August, 2011 in an unprecedented move after a similar partisan budget fight.

(Additional reporting by David Lawder, Thomas Ferraro, Rachelle Younglai and Mark Felsenthal; Writing by Alistair Bell; Editing by Peter Cooney)

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India gang rape victim dies in Singapore hospital

SINGAPORE (Reuters) - The Indian gang rape victim whose assault in New Delhi triggered nationwide protests died of her injuries on Saturday in a Singapore hospital, potentially threatening fresh protests in India where her case is a rallying point for women's rights.

The 23-year-old medical student, severely beaten, raped and thrown out of a moving bus in New Delhi two weeks ago, had been flown to Singapore in a critical condition by the Indian government on Thursday for specialist treatment.

"We are very sad to report that the patient passed away peacefully at 4:45 a.m. on Dec 29, 2012 (3:45 p.m. ET Friday). Her family and officials from the High Commission (embassy) of India were by her side," Mount Elizabeth Hospital Chief Executive Officer Kelvin Loh said in a statement.

Most rapes and other sex crimes in India go unreported and offenders are rarely punished, women's rights activists say. But the brutality of the December 16 assault sparked public outrage and calls for better policing and harsher punishment for rapists.

The case has received blanket coverage on cable television news channels. The woman has not been identified but some Indian media have called her "Amanat", an Urdu word meaning "treasure".

"We are saddened to learn that she has succumbed to her injuries, and would like to extend our deepest condolences to her family during this time of bereavement," Singapore's Ministry of Foreign Affairs said in a statement.

Earlier on Friday, the hospital had reported that the woman's condition had taken a turn for the worse. It said that her family had been informed and were by her side.

T.C.A. Raghavan, the Indian High Commissioner to Singapore, said after her death that the family had expressed a desire for her body to be flown back to India. Moments later, the woman's body was loaded into a van and driven away.

Talking to reporters earlier on Saturday, Raghavan declined to comment on reports in India accusing the government of sending her to Singapore to minimize the possible backlash in the event of her death.

Some Indian medical experts had questioned the decision to airlift the woman to Singapore, calling it a risky maneuver given the seriousness of her injuries. They had said she was already receiving the best possible care in India.

Prime Minister Manmohan Singh's government has been battling criticism that it was tone-deaf to the outcry and heavy handed in its response to the protests in the Indian capital.

"It is deeply saddening and just beyond words. The police and government definitely have to do something more," said Sharanya Ramachandran, an Indian national working as an engineer in Singapore.

"They should bring in very severe punishment for such cases. They should start recognizing that it is a big crime."

"SIGNIFICANT BRAIN INJURY"

The Singapore hospital said earlier that the woman had suffered "significant brain injury" and was surviving against the odds. She had already undergone three abdominal operations before being flown to Singapore.

Protests over the lack of safety for women erupted across India after the attack, culminating last weekend in pitched battles between police and protesters in the heart of New Delhi.

New Delhi has been on edge since the weekend clashes. Hundreds of policemen have been deployed on the streets of the capital and streets leading to the main protest site, the India Gate war memorial, have been shut for long periods, severely disrupting traffic in the city of 16 million.

Commentators and sociologists say the rape has tapped into a deep well of frustration that many Indians feel over what they see as weak governance and poor leadership on social and economic issues.

Many protesters have complained that Singh's government has done little to curb the abuse of women in the country of 1.2 billion. A global poll by the Thomson Reuters Foundation in June found that India was the worst place to be a woman because of high rates of infanticide, child marriage and slavery.

New Delhi has the highest number of sex crimes among India's major cities, with a rape reported on average every 18 hours, according to police figures. Government data show the number of reported rape cases in the country rose by nearly 17 percent between 2007 and 2011.

(Additional reporting by Ross Colvin in New Delhi and Saeed Azhar and Edgar Su in Singapore; Editing by Michael Roddy and Mark Bendeich)

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Wall Street rebounds on House session, but off for 4th day

NEW YORK (Reuters) - Stocks fell for a fourth day on Thursday, but recovered most of their losses after the House of Representatives, in the barest sign of progress, said it would come back to work on avoiding the "fiscal cliff" this weekend.

It was a jittery session for stocks, with shares falling more than 1 percent after Senate Majority Harry Reid warned a deal was unlikely before the deadline, only to rebound merely on the news that the House would reconvene Sunday, a day before the December 31 "cliff" deadline.

"There's no conviction in the move or the overall market, based on the across-the-board reduction we've seen in volume ... but there will be continued weakness until there's sustained positive direction coming from our leaders," said Joseph Cangemi, managing director at ConvergEx Group, in New York.

The market has been prone to quick reactions to headlines and those moves have sometimes seemed more dramatic because of reduced trading volume. About 5.18 billion shares changed hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT, well below the daily average so far this year of about 6.48 billion shares.

Investors are looking for any hint that lawmakers will avert the $600 billion in tax hikes and spending cuts that will start to take effect next week and could push the U.S. economy into recession.

"Markets turned around in a heartbeat, as the House session is the first announcement of anything getting done," said Randy Bateman, chief investment officer of Huntington Asset Management, in Columbus, Ohio, which oversees $14.5 billion in assets. "I'm not convinced it will result in a deal, but you could get enough concessions by both parties to at least avoid the immediacy of going over the cliff."

In a sign of the anxiety, the CBOE Volatility Index <.vix>, or VIX, rose above 20 for the first time since July, suggesting rising worries, but ended up finishing the day down 0.4 percent as the stock market rebounded.

Stocks in the materials and the financial sectors, which are more vulnerable to the economy's performance, bore the brunt of the selling before recovering. Shares of Bank of America fell 0.6 percent to $11.47 while Freeport-McMoRan Copper & Gold fell 0.7 percent to $33.68.

Some of 2012's biggest gainers bucked the broader trend and rallied, a sign of year-end "window dressing." Expedia Inc was the S&P 500's top percentage gainer, climbing 4.1 percent to $60.30. The price of the online travel agency's stock has doubled this year.

The Dow Jones industrial average <.dji> slipped 18.28 points, or 0.14 percent, to 13,096.31 at the close. The Standard & Poor's 500 Index <.spx> declined 1.73 points, or 0.12 percent, to end at 1,418.10. The Nasdaq Composite Index <.ixic> dropped 4.25 points, or 0.14 percent, to close at 2,985.91.

Marvell Technology Group fell 3.5 percent to $7.14 after it said it would seek to overturn a jury's finding of patent infringement. The stock had fallen more than 10 percent in the previous session after a jury found the company infringed on patents held by Carnegie Mellon University and ordered the chipmaker to pay $1.17 billion in damages.

The four-day decline marked the S&P 500's longest losing streak in three months. The index has lost 1.8 percent over the period as investors grapple with the possibility that a deal may not be reached until next year.

President Barack Obama arrived back in Washington from Hawaii to restart stalled negotiations with Congress. House Speaker John Boehner and other Republican leaders were to hold a conference call with Republican lawmakers. The expectation was that lawmakers would be told to get back to Washington quickly if the Senate passed a bill.

Treasury Secretary Timothy Geithner announced the first of a series of measures that should push back the date when the U.S. government will hit its legal borrowing authority - a limit known as the debt ceiling - by about two months.

Economic data seemed to confirm worries about the impact of the fiscal cliff on the economy.

The Conference Board, an industry group, said its index of consumer confidence in December fell to 65.1 as the budget crisis dented growing optimism about the economy. The gauge fell more than expected from 71.5 in November.

However, the job market continues to mend. Initial claims for unemployment benefits dropped 12,000 to a seasonally adjusted 350,000 last week and the four-week moving average fell to the lowest since March 2008.

Decliners outnumbered advancers on the New York Stock Exchange by a ratio of about 8 to 7, while on the Nasdaq, about 14 stocks fell for every 11 that rose.

(Editing by Jan Paschal)

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