DealBook: Ex-Trader Charged in $276 Million Insider Scheme

Over the last half-decade, as federal authorities secured dozens of insider trading convictions against hedge fund traders, they have tried doggedly to build a case against one of Wall Street’s most influential players: the billionaire stock picker Steven A. Cohen.

On Tuesday, the government appeared to inch closer to that goal. Prosecutors brought charges against a former portfolio manager at the hedge fund SAC Capital Advisors in a case that for the first time directly involves Mr. Cohen, the fund’s founder.

Mathew Martoma, a former portfolio manager at CR Intrinsic, a unit of SAC, was charged with making more than $276 million in a combination of illegal profits and avoided losses by obtaining secret information from a doctor about clinical trials for an Alzheimer’s drug being developed by the companies Elan and Wyeth.

The case is “the most lucrative insider trading scheme ever charged,” said Preet Bharara, the United States attorney in Manhattan, who brought the charges in Federal District Court in Manhattan.

It also draws in Mr. Cohen, whose fund has been in the cross hairs of government investigators since the crackdown on insider trading began. Though not charged or mentioned by name, Mr. Cohen is referred to repeatedly in the government’s court filings as either “Portfolio Manager A” or the “owner” of the funds involved. People briefed on the case confirmed that the reference was to Mr. Cohen.

Mr. Martoma worked closely with Mr. Cohen in buying and selling large blocks of Elan and Wyeth shares, according to a lawsuit also filed on Tuesday by the Securities and Exchange Commission.

The government does not say that Mr. Cohen — who has not been charged in the case — knew that Mr. Martoma had confidential information about the companies’ Alzheimer drug when he bought and sold the stocks.

“Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government’s inquiry,” said Jonathan Gasthalter, a SAC spokesman.

From the middle of an expansive trading floor in SAC’s Stamford, Conn., headquarters, Mr. Cohen, 56, oversees a fund that manages about $13 billion and, including borrowing from banks, possesses about $39 billion in total buying power. The fund, which has about 900 employees, has generated some of the best investment returns on Wall Street, averaging about 30 percent over the last two decades.

Though the case against Mr. Martoma is the first time the government has pointed to Mr. Cohen’s participation in a trade that may have been improper, it is the latest in a spate of insider trading prosecutions of former SAC employees. At least seven former SAC employees have been tied to the government’s multiyear investigation; three of them have pleaded to insider trading while working for Mr. Cohen.

Previous cases involving SAC have highlighted the firm’s unusual structure: traders are allocated money and invest on their own with little direct input from Mr. Cohen. But in this case, Mr. Cohen is said to have had numerous contacts with Mr. Martoma and appeared to collaborate closely with him.

“The law of averages would tell you that all of these instances at one firm are not coincidences,” said Mark Zauderer, a securities lawyer in New York. “People take their cues from the top, and these cases must reflect a culture there.”

F.B.I. agents arrested Mr. Martoma, 38, early Tuesday morning at his home in Boca Raton, Fla. He was released on bail after making an appearance in Federal District Court in West Palm Beach. Mr. Martoma, who has been unemployed since leaving SAC in 2010, is expected to appear in federal court in Manhattan on Monday and enter a plea.

“Mathew Martoma was an exceptional portfolio manager who succeeded through hard work and the dogged pursuit of information in the public domain,” said his lawyer, Charles A. Stillman. “What happened today is only the beginning of a process that we are confident will lead to Mr. Martoma’s full exoneration.”

Also accused in the scheme by the Securities Exchange Commission on Tuesday was Sidney Gilman, a neurology professor at the University of Michigan. The S.E.C. said Dr. Gilman, 80, an Alzheimer’s expert who helped oversee the clinical trials for the drug, gave Mr. Martoma the confidential information.

Dr. Gilman is cooperating with the government and has entered into a nonprosecution with the United States attorney’s office in Manhattan, meaning that criminal charges will not be brought against him. Marc Mukasey, a lawyer for Dr. Gilman, said that he expected the S.E.C.’s case to be resolved shortly.

Mr. Martoma met Dr. Gilman through the Gerson Lehrman Group, a so-called expert network firm based in New York. Once an obscure pocket of Wall Street, expert network firms became popular among the hedge fund set in the last decade as a way to gain an investment edge. The services linked traders to specialists and consultants in various industries.

But these firms came under scrutiny after the government brought more than a dozen insider trading cases involving these expert networks. In some cases, hedge fund managers paid outside consultants handsome fees for providing confidential information about publicly traded companies. In others, the government charged executives at the expert network firms with knowingly facilitating the exchange of illegal stock tips.

A spokesman for Gerson Lehrman declined to comment. The government’s complaint details how Dr. Gilman hid his communications about the trial from the expert network firm.

Dr. Gilman’s consulting work for Mr. Martoma earned him about $108,000, according to court filings. Based in part on Dr. Gilman’s leaks about positive developments related to the clinical trials of a new Alzheimer’s drug, SAC accumulated a roughly $700 million position in the stocks of Wyeth and Elan, according to the government.

The S.E.C. said that the fund’s owner, Mr. Cohen, took a large position in Wyeth and Elan in his personal portfolio based on Mr. Martoma’s recommendation. Mr. Cohen maintained his holdings even though there was significant debate about the wisdom of such a large position in the companies, the government said.

But in July 2008, as the trials neared completion, Dr. Gilman told Mr. Martoma that patients were experiencing serious side effects, prosecutors say. Afterward, Mr. Martoma e-mailed Mr. Cohen, telling him “it’s important” that they speak. They spoke on the phone for nearly 20 minutes, the government says, and Mr. Martoma told his boss that he was no longer “comfortable” with the investments.

The following day, SAC reversed course. Mr. Cohen’s head trader sold the firm’s entire inventory of roughly 10.5 million shares of Elan and about seven million shares of Wyeth, the government said. Once it had dumped the shares, SAC built a short position in the two stocks, betting their value would drop.

According to the S.E.C., the trader, Mr. Cohen and Mr. Martoma kept the sales confidential. The trade, wrote the head trader in an e-mail to Mr. Cohen, “was executed quietly and efficiently over a four-day period through algos and darkpools” — referring to trades using algorithms and to trading platforms that do not have the same reporting requirements as the stock exchanges — “and booked into two firm accounts that have very limited viewing access.”

After the companies announced the results of the trials, Elan’s stock fell about 42 percent and Wyeth’s about 12 percent.

The trading allowed SAC to avoid about $194 million in losses and earn about $83 million in profits on Elan and Wyeth, according to prosecutors.

At the end of 2008, Mr. Martoma received a bonus of about $9.3 million, the S.E.C. said. Mr. Martoma’s stock picks were less successful in 2009 and 2010, and he received no bonuses then.

According to the government, in 2010 an SAC executive suggested in an e-mail that the firm let Mr. Martoma go, describing him as a “one-trick pony.”

SAC CAPITAL UNDER A MICROSCOPE The firm has been under a cloud since a former employee, Richard Choo-Beng Lee, pleaded guilty in 2009 to insider trading and began helping the government in its investigation. The crimes he confessed to were committed after he left SAC, but he agreed to provide information about his five years at the firm, which ended in 2004.

NAMES	THE CASES
Jonathan Hollander	The former analyst paid more than $220,000 to settle civil charges brought by the Securities and Exchange Commission accusing him of trading in his personal account on confidential information about the 2006 takeover of the Albertsons grocery store chain.
Jon Horvath and Michael Steinberg	Mr. Horvath, right, a former technology industry analyst, pleaded guilty in September to participating in a conspiracy that illegally traded in the shares of Dell computer. His boss, the former portfolio manager Mr. Steinberg, has been named as an unindicted co-conspirator but has not been charged in the case. Federal prosecutors contend they were part of a seven-person conspiracy — a “circle of friends” — that earned about $62 million in illegal gains trading on secret tips from executives at publicly traded technology companies.
Donald Longueuil and Noah Freeman	The two former portfolio managers admitted in 2011 to trading on illegal tips about publicly traded technology companies. Mr. Longueuil, right, was swept up in a crackdown on so-called expert networks. He is one of roughly a dozen implicated in the case. Mr. Longueuil is serving a two-and-a-half-year jail term at a federal prison in Otisville, N.Y.; Mr. Freeman, who is cooperating with prosecutors, has yet to be sentenced.
Mathew Martoma	The former trader at CR Intrinsic, a unit of the hedge fund, was charged with making about $276 million in combined profits and avoided losses by obtaining confidential information about a drug trial for an Alzheimer’s drug developed by the pharmaceutical companies Elan and Wyeth.

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Hamas Strengthens as Palestinian Authority Weakens

RAMALLAH, West Bank — In the daily demonstrations here of solidarity with Gaza, a mix of sympathy and anguish, there is something else: growing identification with the Islamist fighters of Hamas and derision for the Palestinian Authority, which Washington considers the only viable partner for peace with Israel.

“Strike a blow on Tel Aviv!” proclaim the lyrics of a new hit song blasting from shops and speakers at Monday’s demonstration, in a reference to Hamas rockets that made it nearly to Israel’s economic and cultural capital. “Don’t let the Zionists sleep! We don’t want a truce or a solution! Oh Palestinians, you can be proud!”

Pop songs everywhere are filled with bravado and aggression. But this one reflects a widespread sentiment that does not augur well for President Mahmoud Abbas and his Palestinian Authority, which is rapidly losing credibility, even relevance. The Gaza truce talks in Cairo, involving Egypt, Turkey and Qatar, offer a telling tableau. The Palestinian leader seen there is not Mr. Abbas, but Khaled Meshal, the leader of the militant group Hamas, who seeks to speak for all Palestinians as his ideological brothers in the Muslim Brotherhood rise to power around the region.

Israel is also threatening Mr. Abbas, even hinting that it may give up on him, as he prepares to go to the United Nations General Assembly on Nov. 29 to try to upgrade the Palestinian status to that of a nonmember state. The Israelis consider this step an act of aggression, and even some Palestinians say it is somewhat beside the point at this stage.

“His people are being killed in Gaza, and he is sitting on his comfortable chair in Ramallah,” lamented Firas Katash, 20, a student who took part in the Ramallah demonstration.

For the United States, as for other countries hoping to promote a two-state solution to this century-old conflict, a more radicalized West Bank with a discredited Palestinian Authority would mean greater insecurity for Israel and increased opportunity for anti-Western forces to take root in a region where Islamism is on the rise.

Since Hamas, which won parliamentary elections in 2006, threw the Fatah-controlled authority out of Gaza a year later, Mr. Abbas has not set foot there. Yet he will be asking the world to recognize the two increasingly distinct entities as a unified state.

Manar Wadi, who works in an office in Ramallah, put the issue this way: “What is happening in Gaza makes the Palestinian Authority left behind and isolated. Now we see the other face of Hamas, and its popularity is rising. It makes us feel that the Palestinian Authority doesn’t offer a path to the future.”

In Cairo on Monday, Mr. Meshal seemed defiant and confident in his new role, daring the Israelis to invade Gaza as a sixth day of Israeli aerial assaults brought the death toll there to more than 100 people, many of them militants of Hamas and its affiliates. Rockets launched from Gaza hit southern Israel, causing some damage and panic, but no casualties, leaving the death toll there at three.

“Whoever started the war must end it,” Mr. Meshal said at a news conference. “If Israel wants a cease-fire brokered through Egypt, then that is possible. Escalation is also possible.”

Officials in the authority have been holding leadership meetings, staying in close touch with the talks in Cairo and issuing statements of solidarity. They have also sent a small medical delegation to Gaza and argue that there is a new opportunity to forge unity between the two feuding movements. But they are acutely aware of their problem.

“The most dangerous thing is the fact that what we could not do in negotiations, Hamas did with one rocket,” one official said, speaking on the condition of anonymity. “The people had such excitement seeing the occupiers run in panic. It’s a very dangerous message.”

Mr. Abbas, whose popularity has been on the decline as the Palestinian Authority faces economic difficulty and growing Israeli settlements, also ran into trouble not long before the Gaza fighting began when he seemed to give up on the Palestinian demand of a right of return to what is now Israel.

Many Palestinians believe that Israel launched its latest operation in Gaza to block the Palestinian Authority’s United Nations plans by embarrassing it. Israeli officials say that is ridiculous: the operation’s purpose is to stop the growing number of rockets being fired at their communities, and Israelis interrupted their deliberations over the United Nations bid to wage the military campaign.

But Israel says anything that does not involve direct negotiations is a waste of time. The government of Prime Minister Benjamin Netanyahu has repeatedly threatened to take severe retaliatory steps against the Palestinian Authority, including cutting off badly needed tax receipts to Palestinian coffers, should Mr. Abbas go ahead at the United Nations.

In a speech here on Sunday night at a Palestinian leadership meeting, Mr. Abbas repeated his determination to go to New York and ask for a change in status to that of nonmember state. He has chosen the symbolically significant date of Nov. 29, when the General Assembly voted in 1947 to divide this land into two states, one Jewish and the other Palestinian Arab.

The United States has asked Mr. Abbas not to do so, but instead to resume direct negotiations with Israel, which have essentially been frozen since 2008.

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Marlins salary dump to Toronto finalized

MIAMI (AP) — The Miami Marlins' latest payroll purge received final approval Monday from the commissioner's office, and as the team's top baseball executive began to discuss the deal during a conference call, a bad connection generated waves of reverberating noise that filled the phone line.

Nearly a week after the Marlins swung their widely ridiculed trade with Toronto, negative feedback keeps coming.

Commissioner Bud Selig approved the blockbuster deal, however, even though it made Marlins fans irate and made the team a nationwide punch line. The trade sends All-Star shortstop Jose Reyes to the Blue Jays along with pitchers Mark Buehrle and Josh Johnson, catcher John Buck and outfielder Emilio Bonifacio for seven players, none of whom has a big-money contract.

Miami received infielders Yunel Escobar and Adeiny Hechavarria, pitchers Henderson Alvarez, Anthony DeSclafani and Justin Nicolino, catcher Jeff Mathis and outfielder Jake Marisnick.

By swinging the deal only months after the Marlins moved into a new stadium built with taxpayer money, they pared from their books $146.5 million in payroll. That's their net savings after agreeing to send $8.5 million to the Blue Jays as part of the trade.

Marlins president of baseball operations Larry Beinfest said he understood why fans were mad, and confirmed the trade was necessary because owner Jeffrey Loria wanted to pare payroll. Beinfest also conceded the deal will make it harder for the team to recruit free agents in the future.

But Selig decided not to block it.

"This transaction, involving established major leaguers and highly regarded young players and prospects, represents the exercise of plausible baseball judgment on the part of both clubs (and) does not violate any express rule of Major League Baseball and does not otherwise warrant the exercise of any of my powers to prevent its completion," Selig said in a statement. "It is, of course, up to the clubs involved to make the case to their respective fans that this transaction makes sense and enhances the competitive position of each, now or in the future."

The players traded by the Marlins have combined guaranteed salaries of $163.75 million through 2018, including $96 million due Reyes.

"I understand the pause the fans have with the instability in our roster at a time when we were hoping to be very stable in the new stadium," Beinfest said. "It's not a lot of fun."

By contrast, the trade stamps the Blue Jays as contenders in the AL East. They haven't reached the playoffs since winning their second consecutive World Series in 1993.

Miami also finalized a deal with outfielder Juan Pierre, who agreed to a $1.6 million, one-year contract. That leaves the Marlins with an estimated opening-day payroll of $36 million for active players, which would be their lowest since 2008. In the latest figures, Oakland had the lowest payroll in the majors this year at $59.5 million.

While Beinfest said the Marlins acquired championship-caliber talent, fans believe Loria's goal was to increase his profits in the new ballpark rather than put increased revenue into the roster.

"We did receive a payroll range from ownership that we needed to achieve," Beinfest said. "With this transaction, we have achieved that payroll range."

The Marlins flopped as big spenders. They began the year with a franchise-record payroll of $112 million, then went 69-93, their worst record since 1999.

After sinking to last place by midseason, the Marlins traded former NL batting champion Hanley Ramirez, second baseman Omar Infante, right-hander Anibal Sanchez and closer Heath Bell.

"We've finished in last place the past two years, and that is unacceptable," Loria said in a statement. "It's incumbent on us to make the changes necessary to make us a winner again. It may not happen overnight. But with the players we acquired in the second half of last season, coupled with the infusion of players we are acquiring now, we will be returning to Marlins baseball: high energy and hungry."

Reyes, Buehrle and Bell signed multiyear deals as newcomers a year ago during an unprecedented Marlins spending spree, and Beinfest acknowledged other free agents might be now reluctant to sign with Miami.

"It'll be a factor," he said. "I don't think we're happy about this at all. I understand there may be some disdain in the marketplace. We won't know until we get into those negotiations with free agents. It's definitely not great for the club, and we're going to have to deal with it."

Miami's biggest remaining star, slugger Giancarlo Stanton, has been among those expressing anger about the trade. Beinfest said he hadn't talked with Stanton about the deal.

"I know this is an emotional time," Beinfest said. "I'm sure it has been tough for him. Our feeling was to maybe let the dust settle a little bit and then talk to Giancarlo. I hear the frustration. It's not unexpected. This has been a tough go, but we think it's best for us moving forward."

Players' union head Michael Weiner withheld comment, saying he was awaiting more input from Major League Baseball.

In January 2009, the union reached an agreement with MLB and the Marlins covering 2010-12 which Weiner said was a "response to our concerns that revenue sharing proceeds have not been used as required. As part of the deal, Weiner said the team planned to "use such proceeds to increase player payroll annually as they move toward the opening of their new ballpark."

Selig said he was sensitive to how Marlins fans reacted to the trade.

"Baseball is a social institution with important social responsibilities, and I fully understand that the Miami community has done its part to put the Marlins into a position to succeed with beautiful new Marlins Park," Selig said. "Going forward, I will continue to monitor this situation with the expectation that the Marlins will take into account the sentiments of their fans, who deserve the best efforts and considered judgment of their club. I have received assurances from the ownership of the Marlins that they share these beliefs and are fully committed to build a long-term winning team that their fans can be proud of."

NOTES: Pierre would earn a $25,000 bonus if he's an All-Star, $25,000 each for winning a Gold Glove or Silver Slugger, $50,000 if he's an LCS MVP, $100,000 if he's the World Series MVP and $100,000 if he's the league MVP.

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AP Sports Writer Ronald Blum in New York contributed to this report.

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Really?: The Claim: Eye Problems Can Cause Headaches in Children

Really?

Anahad O’Connor tackles health myths.

THE FACTS When a child complains of frequent headaches, many pediatricians order an eye exam. “In some pediatric ophthalmology practices, it’s a daily occurrence,” said Dr. Zachary Roth, a resident in ophthalmology at Albany Medical Center in New York.

Often, a child may experience headaches while reading or doing schoolwork, leading parents to think the child needs glasses. But are eye problems really a cause of childhood headaches?

In a recent study, Dr. Roth and his colleagues examined 158 children under age 18 who were referred to ophthalmologists for frequent headaches. Then, they evaluated the children’s medical records and looked at the results of earlier vision exams.

Ultimately, the researchers could not find any significant link between headaches and diagnoses of vision problems. In three-quarters of the subjects, the headaches went away over time, both in those who received new glasses and those who did not.

The study, which was presented at a recent American Academy of Ophthalmology conference, was not designed to look for causes of the headaches. But there were “quite a few” children with family histories of migraine, Dr. Roth said. Sinus problems and stress headaches also appeared to be common issues, he added.

“I think the take-away message is that it’s very unlikely for headaches to be caused by an eye problem,” he said. “The experience of all the ophthalmologists we talked to is that it almost never seems to be related to the eyes, so it’s probably more fruitful to investigate other causes.”

THE BOTTOM LINE Vision problems are often blamed for childhood headaches, but in reality, the two are rarely related.

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Election, Storm and Shaky Economy Affect Holiday Shopping

Many retailers have more than the usual riding on sales beginning this Thanksgiving weekend.

The presidential election pushed holiday shopping later than usual because some toy and game makers held off on their big introductions for maximum attention. The aftereffects of Hurricane Sandy have included logistics problems and merchandise delivery delays. And some retailers, trying to keep inventory lean during uncertain economic times, have given themselves little room for error: shipments of holiday toys, for instance, are down 13 percent this year, to the lowest level since 2007, according to the global trade research firm Panjiva.

All of that makes for a particularly strange holiday season, retailers and analysts say.

“The election sucks all of the oxygen out of the room in terms of attention,” said Eric Hirshberg, the chief executive of Activision Publishing, the video game company. “A lot of the best media inventory goes to the candidates. It gets more expensive because there’s this premium demand from the candidates.”

Hasbro is adding more shades of its Furby toy through the end of the year, and Mattel last week introduced a new Monster High video game. Last year, Activision introduced its big Call of Duty release in early November. This year, though, it did not release Call of Duty: Black Ops II until Nov. 13.

“We were also worried that if we released Call of Duty before the election, no one would show up to vote,” Mr. Hirshberg said. (He was speaking facetiously, but given that the game’s retail sales were more than $500 million in the first 24 hours after it made its debut, he may have a point.)

And while retailers were expecting the election to delay some shopping, they were not expecting a storm. RetailNext, which tracks shopper traffic, said that store visits and sales in the Northeast were down about 25 percent during the storm and afterward.

Major retailers have said the election and Hurricane Sandy affected sales. Saks and Target said the beginning of November was choppy, and Macy’s said that the storm seemed to have pushed sales later into the season.

“Some of it is lost, most is postponed,” Karen M. Hoguet, Macy’s chief financial officer, said of demand. “It’s a question of timing.” And Kohl’s chief executive, Kevin Mansell, said the company typically experienced sales slowdowns pre-election and postelection, “and then the business kind of accelerates.”

The late introductions and delayed shopping put toy companies, in particular, in a difficult position: they were under pressure to make hit toys, largely via preorders and layaway, months before people would actually be buying them. Retailers and toy companies started trying to gauge demand early, looking for preliminary data on which items were unpopular and which ones were stars.

Walmart started layaway a month earlier this year versus last year, and Toys “R” Us also started holiday layaway earlier, giving the stores a jump on things. Amazon and other e-commerce sites are promoting tools like preorders, wish lists and gift registries — anything that can give them a sense of what people will buy as the Christmas season churns on.

Preorders are “an important tool to gauge customer demand, and get some feedback from our customers earlier in the process,” said John Alteio, director of toys and games for Amazon. Product introductions later in the year “can be challenging in the toy industry, so we have to draw some comparisons when we can and make the best estimate.”

Paul Solomon, co-chief executive of Moose Toys, which makes Micro Chargers and The Trash Pack, said preorders and layaway were becoming increasingly important. “It’s giving us a good read, early, as to how things are performing, and it’s even more crucial now to make a lot of noise about the brand earlier than in previous years,” he said.

“Preorders are kind of a cottage industry for games like Call of Duty,” Mr. Hirshberg, the Activision chief, said. The company began promoting the game in March, when it ran spots during the NBA playoffs.

In May, it released an ad featuring Oliver North, the national security aide at the heart of the Iran-contra affair and a consultant on the game, talking about the future of warfare. It accepted preorders starting in May. Through the summer, Activision revealed different facets of the game at various conferences, and this month it began running international television, outdoor, digital and mobile ads.

“There’s not a clean math equation that says this many preorders equals this many sales, but it’s confidence-building for us in terms of orders, in terms of production,” Mr. Hirshberg said.

John Barbour, the chief executive of LeapFrog, learned the value of early promotion after last year, when the children’s tablet LeapPad1 became a surprise hit. “It was very hard for me to gauge how successful it would be. Everyone took their best shots,” he said. By November and December, the LeapPad was selling out, and Mr. Barbour had to pay a premium to source tablet screens, and paid for airplanes to fly in extra inventory.

This year, he focused on early promotions that would translate into preorders and layaway, so toy retailers could accurately adjust their orders in time for the holidays. A good response early on means not just bigger orders from retailers, he said, but also more promotional support and more shelf space: it becomes a self-fulfilling prophecy.

“For retailers, it’s phenomenal. It brings demand forward, and they get a better read on what they’re going to need,” he said. When the LeapPad2 became available for preorders in August, it sold as much in two days of preorders as it did in its first week on sale last year, Mr. Barbour said.

He is being careful not to get too jubilant, though. “The penalties for having too much inventory are greater than the penalties for being a little bit short,” he said.

Still, some brands were ignoring the strange events of this holiday season and proceeding as usual. Stephen Bebis, the chief executive of Brookstone, said some products were becoming available in the final months of the year, but that was because of production delays, not strategy.

“People are still going to have to buy gifts for Christmas no matter who’s the president,” he said.

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Gaza Violence Is Unabating as Other Nations Push for Truce

GAZA CITY — Israeli forces killed at least 11 people, including several children, in a single airstrike that destroyed a home here on Sunday, as Israel pressed its bombardment of the Gaza Strip for a fifth day, deploying warplanes and naval vessels to pummel the coastal enclave.

The airstrike, which the Israeli military said was meant to kill a Palestinian militant involved in the recent rocket attacks, was the deadliest operation to date and would no doubt weigh on negotiations for a possible cease-fire. Among the dead were five women and four small children, The Associated Press reported, citing a Palestinian health official.

Two media offices were also hit on Sunday, and Prime Minister Benjamin Netanyahu of Israel warned of a “significant” expansion in the onslaught, which has already killed over 50 people, many of them civilians.

Speaking on Sunday from Bangkok, President Obama condemned missile attacks by Palestinian fighters in Gaza and defended Israel’s right to protect itself.

“There’s no country on earth that would tolerate missiles raining down on its citizens from outside its borders,” Mr. Obama said in his first public comments since the violence broke out. “We are fully supportive of Israel’s right to defend itself.”

The president also said that efforts were under way to address Israel’s security concerns and end the violence. “We’re going to have to see what kind of progress we can make in the next 24, 36, 48 hours,” Mr. Obama said.

Even as the diplomacy intensified on Sunday, the attacks continued in Gaza and Israel.

Mr. Netanyahu made his warning as militants in Gaza aimed at least one rocket at Tel Aviv, a day after Israeli forces broadened the attack beyond military targets, bombing centers of government infrastructure in Gaza, including the four-story headquarters of the Hamas prime minister.

“We are exacting a heavy price from Hamas and the terrorist organizations, and the Israel Defense Forces are prepared for a significant expansion of the operation,” Mr. Netanyahu told his cabinet at its routine Sunday meeting, referring directly to the of thousands of reservists who have been called up and the massing of armor on the Gaza border that many analysts have interpreted as preparations for a possible invasion.

“I appreciate the rapid and impressive mobilization of the reservists who have come from all over the country and turned out for the mission at hand,” Mr. Netanyahu said. “Reservist and conscript soldiers are ready for any order they might receive.”

His remarks were reported shortly after a battery of Israel’s Iron Dome defense shield, hastily deployed near Tel Aviv on Saturday in response to the threat of longer-range rockets, intercepted at least one aimed at the city on Sunday, Israeli officials said. It was the latest of several salvos that have illustrated Hamas’s ability to extend the reach of its rocket attacks.

Since Wednesday, when the escalation of the conflict began, Iron Dome has knocked 245 rockets out of the sky, the military said Saturday, while 500 have struck Israel.

The American-financed system is designed to intercept only rockets streaking toward towns and cities and to ignore those likely to strike open ground. But on Sunday a rocket fired from Gaza plowed through the roof of an apartment building in the southern Israeli city of Ashkelon. There were no immediate reports of casualties there.

In Gaza City, the crash of explosions pierced the quiet several times throughout the early morning.

Before the latest deadly strike involving civilians on Sunday, Hamas health officials had said the Palestinian death toll had risen to 53. One of the latest victims was a 52-year-old woman whose house in the eastern part of Gaza City was bombed around lunchtime.

A few hours earlier, a Hamas militant was killed and seven people were wounded in an attack on the Beach Refugee Camp, where Ismail Haniya, the Hamas prime minister, has a home. Those killed on Sunday included three children ages 1 through 5, the health officials said.

In Israel, 3 civilians have died and 63 have been injured. Four soldiers were wounded on Saturday.

The onslaught continued despite talks in Cairo that President Mohamed Morsi of Egypt said Saturday night could soon result in a cease-fire. Mr. Netanyahu said he would consider a comprehensive cease-fire if the launchings from Gaza stopped.

The attack on Mr. Haniya’s office, one of several on government installations, came a day after he hosted his Egyptian counterpart in the same building, a sign of Hamas’s new legitimacy in a radically redrawn Arab world.

Jodi Rudoren and Fares Akram reported from Gaza City. Reporting was contributed by Isabel Kershner, Carol Sutherland and Iritz Pazner Garshowitz from Jerusalem; Tyler Hicks from Gaza, Peter Baker from Bangkok, Alan Cowell from London, Michael Schwirtz from New York and David D. Kirkpatrick and Mayy El Sheikh from Cairo.

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Android de Google resta cada vez más mercado a Apple

Los teléfonos inteligentes y tabletas informáticas con el sistema operativo Android de Google están acaparando el mercado de dispositivos móviles y robando espacio a Apple al saciar el apetito por la innovación y los bajos precios, estiman analistas.

El sistema operativo Android funciona en casi tres de cada cuatro teléfonos inteligentes vendidos en el mundo en el trimestre que acaba de finalizar en momentos en que la plataforma móvil domina el mercado, de acuerdo con los analistas de la industria de la firma IDC.

“Android ha sido uno de los principales motores de crecimiento del mercado de teléfonos inteligentes desde su lanzamiento en 2008″, dice el gerente de investigación de teléfonos móviles de IDC, Ramon Llamas.

“Cada año desde entonces, Android ha desbordado el mercado y robado participación en el mercado de la competencia”, agrega.

En las tabletas, la cuota de mercado de Apple cayó a poco más del 50%, desde el 65% que registró en el segundo trimestre, mientras Android ha ganado terreno, de acuerdo con cifras de IDC.

“Tener una gran cantidad de personas que construyen un montón de cosas que cubren una gran cantidad de rangos de precio con múltiples marcas en varios lugares hace una gran diferencia”, dice el analista de NPD Group Stephen Baker.

“La variedad es la fuerza cuando se trata de artefactos móviles”, estima.

Los pedidos de teléfonos inteligentes Android aumentaron a 136 millones de dólares, superando los del mismo trimestre del año pasado por un poco más del 90%, de acuerdo con informes de IDC.

Galaxy S3 de Samsung superó al iPhone 4S de Apple en el tercer trimestre para dar a la empresa de Corea del Sur el modelo de teléfono inteligente más vendido del mundo por primera vez, según la firma de investigación Strategy Analytics.

“El ritmo de la innovación en Android es más rápido que el de Apple”, dice el vicepresidente de computación móvil de Gartner, Ken Dulaney. “Ellos están tratando de hacerlo más fuerte, Apple está muy por detrás en esa área”.

Android se está beneficiando de ser una plataforma “open-source” que los fabricantes de aplicaciones usan gratuitamente y mejoran a medida que lo estiman conveniente, proporcionando a Google conocimientos en el camino.

Apple, por su parte, supervisa muy de cerca sus productos desde el software al hardware, e inclusive la tienda online de música, libros, juegos u otro contenido.

“Lo que se obtiene con Android es este increíble circuito de retroalimentación con los desarrolladores, fabricantes de equipos, clientes y diseñadores”, dice Dulaney.

“En Apple, si bien tienen una gran visión interna que está bien, no tienen la retroalimentación que Android tiene”, añade.

Tener miles de diferentes dispositivos Android disputándose el dinero de los consumidores es un fuerte estímulo cuando se trata de participación de mercado pero pone a los fabricantes de hardware en un escenario altamente competitivo, según Baker.

“Aparte de Samsung, no sé si otros chicos (vinculados a) Android están haciendo dinero”, estima el analista.

Google ofrece Android de forma gratuita, pero la plataforma está diseñada para hacer que sea más fácil para la gente usar servicios de Google, como el de búsqueda o de mapas, entre otros, y hallar contenido en sus tiendas en línea Google Play.

El analista de Forrester Charles Golvin estimó que parte importante del éxito coyuntural de Android tiene que ver con cambios demográficos de los compradores de teléfonos inteligentes.

Los primeros usuarios de teléfonos multifunciones apreciaban más las nuevas tecnologías que el precio, pero los dispositivos se han vuelto imprescindibles y con un costo cada vez más importante para los compradores, según Golvin.

“La gente está más inclinada hacia la plataforma Android, porque hay más posibilidades de elección y la mayoría de las opciones que da es de bajo precio”, dice.

La naturaleza abierta de Android y la variedad de modelos ofrecidos por los fabricantes de dispositivos funcionan como un “arma de doble filo”, señala no obstante el analista.

Apple lanza anualmente actualizaciones del sistema operativo móvil iOS a sus dispositivos, mientras que las nuevas versiones de Android, aunque lo hacen más a menudo, deben obtenerse a través de los fabricantes de hardware y servicios de telecomunicaciones para llegar hasta los teléfonos.

“Tú tienes esta lenta cadena de intermediarios que están retrasando la instalación del nuevo software y sus innovaciones en los dispositivos existentes en el mercado”, advierte Golvin.

Los teléfonos inteligentes y tabletas informáticas con el sistema operativo Android de Google están acaparando el mercado de dispositivos móviles y robando espacio a Apple al saciar el apetito por la innovación y los bajos precios, estiman analistas.

Linux/Open Source News Headlines – Yahoo! News

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Keselowski wins Sprint Cup title

HOMESTEAD, Fla. (AP) — Here's a tweet for Brad Keselowski: NASCAR champion.

Roger Penske must like the sound of that, too.

The kid who stole the show at the season-opening Daytona 500 ended the year under the biggest spotlight of them all Sunday, beating five-time champion Jimmie Johnson to deliver the first Sprint Cup championship to Penske Racing.

His first act as champion? Sending a tweet, of course, from inside his car: "We did it!" with a picture of the celebration waiting for him.

"Always, throughout my whole life I've been told I'm not big enough, not fast enough, not strong enough and I don't have what it takes," Keselowski said from the championship stage. "I've used that as a chip on my shoulder to carry me through my whole career. It took until this year for me to realize that that was right, man, they were right.

"I'm not big enough, fast enough, strong enough. No person is. Only a team can do that."

So, with the Penske organization behind him, he delivered a trophy that had eluded "The Captain" since his 1972 NASCAR debut. Although his motorsports organization is considered the gold standard of open-wheel racing — 15 Indianapolis 500 wins — and his empire has made Penske one of the most successful businessmen in America, his NASCAR team has always been just average.

Then came Keselowski, the blue collar, Twitter-loving, Michigan native who visited Penske in 2008 convinced the NASCAR team could win, too.

Three years later, they hoisted the Sprint Cup trophy together at Homestead-Miami Speedway following Keselowski's 15th-place finish Sunday night.

"It's all about the people in our organization and obviously Brad coming on our board three years ago, and we set a plan and we stuck to it," the 75-year-old Penske said. "To win this championship is amazing."

Keselowski needed 125 starts to win his first championship, the fewest starts since four-time champion Jeff Gordon won his first title in 93 starts in 1995. Keselowski also won a second-tier Nationwide title in 2010, his first season with Penske and the owner's first official NASCAR championship.

Gordon, who avoided suspension this week but was fined $100,000 by NASCAR for intentionally wrecking Clint Bowyer last week at Phoenix, overcame the controversy to win the race in a 20th anniversary celebration for sponsor Dupont and Hendrick Motorsports.

It was Gordon's first victory at Homestead, which leaves Kentucky as the only active NASCAR track where he's yet to win.

Who did Gordon beat? Bowyer, of course.

And Bowyer's second-place finish moved him to a career-best second in the final standings. Third-place went to Ryan Newman, who got his break in NASCAR with Penske and spent seven seasons driving for the owner.

"He deserves this probably as much as anybody else, if not more because of what he's done for motor racing in general, NASCAR, his dedication to all forms of race cars is probably more than anybody else in the history of auto racing," Newman said. "I know this is probably one of the sweetest moments in his racing career."

Keselowski started the race up 20 points on Johnson, who blew a tire and crashed last week at Phoenix to give Keselowski a nice cushion and needing only to finish 15th or higher in the finale to wrap up his first championship. But the Penske team took nothing for granted — not after Will Power crashed in the IndyCar finale to blow a 17-point lead and lose the championship.

And this one got tight, too, especially when Keselowski ran out of gas on pit road during green flag pit stops. It put him a lap down with Johnson leading, and Keselowski and crew chief Paul Wolfe frantically tried to figure out how dire the situation had become.

Wolfe crunched the numbers, figuring the No. 2 Dodge would cycle out in the mid-20s, a lap down from the leaders.

"I know the scenario, and it's not good," Keselowski said.

But minutes later, Johnson went to pit road for his own stop and pulled away with a missing lug nut. NASCAR flagged the Hendrick Motorsports team and Johnson was forced back to pit road for another stop.

The Penske team was unsure if Keselowski wanted to know what was going on with Johnson.

"I've got a big picture story if you want to hear it," a team member radioed, then informed Keselowski that Johnson had to pit again.

"Ten-four. Thank you for telling me. We're back in the game. I got it," he said.

It got worse for Johnson from there. He broke a rear end gear in his Chevrolet and went to the garage with 40 laps to go, essentially clinching the championship for Keselowski.

"It all unraveled pretty quick," Johnson conceded.

No longer needing to save fuel, and no longer needing to play it conservatively, he waived off Wolfe's playbook.

"If he's in the garage, let's race," Keselowski said.

That's been Keselowski's attitude since he burst onto the NASCAR scene. He first caught attention as a brash driver for Dale Earnhardt Jr.'s Nationwide Series team, and he was unapologetic for his aggressive driving and his refusal to back down in long-running feuds with established stars Denny Hamlin and Carl Edwards.

But he's been calmer and focused since teaming with Penske in 2009, and his mission has been to give Penske a title. Still, his fame has been for the tweeting, which drew him worldwide attention when he took to Twitter from the cockpit of his car during the red flag in the season-opening Daytona 500.

NASCAR loved the attention it received, but quietly admonished him later for having a phone in his car, which is banned because it can manipulate electronic fuel injection systems. So when he tweeted again last week under red at Phoenix, NASCAR fined him $25,000 — which angered fans who felt a mixed message had been sent.

But Keselowski, who was tweeting into the early morning hours Sunday, handed his phone over with no resistance right before he climbed into the car at Homestead.

The win is the first for Dodge since Richard Petty's Cup title in 1975, and comes as the manufacturer is leaving NASCAR. Penske announced days after the Daytona 500 it will move to Ford next year, and it led to Dodge's decision to pull out of NASCAR.

"Not one failure all year long in that Dodge engine, so I want to thank Dodge for what they've done for us," Penske said after Keselowski secured the title.

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Daniel Stern, Who Studied Babies’ World, Dies at 78

Dr. Daniel Stern, a psychiatrist who increased the understanding of early human development by scrutinizing the most minute interactions between mothers and babies, died on Nov. 12 in Geneva. He was 78.

The cause was heart failure, said his wife, Dr. Nadia Bruschweiler Stern.

Dr. Stern was noted for his often poetic language in describing how children respond to their world — how they feel, think and see. He wrote one of his half-dozen books in the form of a diary by a baby. In another book, he told how mothers differ psychologically from women who do not have children. He coined the term “motherese” to describe a form of communication in which mothers are able to read even the slightest of babies’ emotional signals.

Dr. Stern, who did much of his research at what is now Weill Cornell Medical College and at the University of Geneva, drew inspiration from Jay S. Rosenblatt’s work with kittens at the American Museum of Natural History in the 1950s. Dr. Rosenblatt discovered that when he removed kittens from their cage, they made their way to a specific nipple of their mother’s even when they were as young as one day old. That finding demonstrated that learning occurs naturally at an exceptionally early age in a way staged experiments had not.

Dr. Stern videotaped babies from birth through their early years, and then studied the tapes second by second to analyze interactions between mother and child. He challenged the Freudian idea that babies go through defined critical phases, like oral and anal. Rather, he said, their development is continuous, with each phase layered on top of the previous one. The interactions are punctuated by intervals, sometimes only a few seconds long, of rest, solitude and reflection. As this process goes on, they develop a sense that other people can and will share in their feelings, and in that way develop a sense of self.

These interactions can underpin emotional episodes that occur years in the future. Citing one example in a 1990 interview with The Boston Globe, Dr. Stern told of a 13-month-old who grabbed for an electric plug. His alarmed mother, who moments before had been silent and loving, suddenly turned angry and sour. Two years later, the child heard a fairy tale about a wicked witch.

“He’s been prepared for that witch for years,” Dr. Stern said. “He’s already seen someone he loves turn into something evil. It’s perfectly believable for him. He maps right into it.”

Dr. Stern described such phenomena in 1985 in “The Interpersonal World of the Infant,” which the noted psychologist Stanley Spiegel, in an interview in The New York Times, called “the book of the decade in its influence on psychoanalytic theory.”

In recent years, Dr. Stern ventured beyond childhood development to examine the psychology of how people thought about time. In one experiment, he interviewed people in depth about a single brief moment at breakfast and found that it took them a full hour to describe all that went through their minds in 30 seconds. This resulted in the 2004 book “The Present Moment: In Psychotherapy and Everyday Life,” which called for people to appreciate every moment of experience and discussed the nature of memory.

In 2010, he published “Forms of Vitality: Exploring Dynamic Experience in Psychology, the Arts, Psychotherapy and Development,” which used new understandings of neuroscience to explain human empathy.

Dr. Stern, who wrote hundreds of scientific articles, also painted, wrote poetry and had friendships with important artists. He gave Jerome Robbins, the choreographer, the title for his “Dances at a Gathering.” His friend Robert Wilson, the avant-garde director and playwright, said Dr. Stern’s slow-motion baby films helped inspire his seven-hour “silent opera,” “Deafman Glance.”

“So many things are going on, and the baby is picking them up,” Mr. Wilson said.

Daniel Norman Stern was born in Manhattan on Aug. 16, 1934. He graduated from Harvard and completed his medical degree at the Albert Einstein College of Medicine. After conducting psychopharmacology research at the National Institutes of Health in Bethesda, Md., he did his residency in psychiatry at the Columbia University College of Physicians and Surgeons. He later trained as a psychoanalyst at the Center for Psychoanalytic Training and Research at Columbia.

Dr. Stern is survived by his wife, a physician who collaborated on much of his research; two sons, Michael and Adrien; three daughters, Maria, Kaia and Alice Stern; a sister, Ronnie Chalif; and 12 grandchildren.

Dr. Stern pointed out how the evolution of the human body bolstered mother-child interaction. He noted that the distance between the eyes of a baby at the breast and the mother’s eyes is about 10 inches, exactly the distance for the sharpest focus and clearest vision for a young infant.

“Her smile exerts its natural evocative powers in him and breathes a vitality into him,” he wrote. “It makes him resonate with the animation she feels and shows. His joy rises. Her smile pulls it out of him.”

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Investors Rush to Beat Threat of Higher Taxes

Business owners and investors are rapidly maneuvering to shield themselves from the prospect of higher taxes next year, a strategy that is sending ripples across Wall Street and broad areas of the economy.

Take Steve Wynn, the casino magnate, who has been a vocal critic of higher tax rates. He and his fellow shareholders in Wynn Resorts, the company announced, will collect a special dividend of $750 million on Tuesday, a payout timed to take advantage of current rates. Experts estimated that taking the payout this year instead of next could save Mr. Wynn, who owns a sizable stake in the company, more than $20 million.

For the wealthy like Mr. Wynn, the overriding goal is to record as much of their future income this year as they can. This includes moves as diverse as sales of businesses, one-time dividends and the sale of stocks that have been big winners.

“In my 30 years in practice, I’ve never seen such a flood of desire and action to transfer a business and cash out,” said Kenneth K. Bezozo, a partner in New York with the law firm Haynes and Boone. “We’re seeing a watershed event.”

Whether small business owners or individuals saving for retirement, investors are being urged by their advisers to reconsider their holdings. Along the way, many are shedding the very investments that have been the most popular over the last year, contributing to recent sell-offs in formerly high-flying shares like Apple and Amazon.

Investors typically take profits in their own portfolio at year-end, but the selling appears to be more targeted this year. Stocks with large dividends, for instance, are seen as less attractive because of the perceived likelihood of a sharp increase in the tax rate on dividends.

All this is weighing on the broader financial markets, as worries mount about the economic drag from the combination of higher tax rates and reduced government spending set for January if President Obama and Senate Republicans cannot reach a budget compromise before then.

Fears about the fiscal impasse in Washington, along with anxiety about fading corporate profits and weakening economies abroad, have pushed the benchmark Standard & Poor’s 500-stock index down about 5 percent since the election. On Friday, major stock indexes had their best showing of the week after President Obama and Republican leaders signaled that a compromise was possible.

Even if many of the tax breaks scheduled to expire survive a new budget deal, some business owners and investors are bracing for substantial increases in specific areas of the tax code.

The top rate on dividends, for example, could climb to 39.6 percent from 15 percent if no action is taken. Capital gains taxes, which now top out at 15 percent, could rise above 20 percent, many financial advisers say. Most investment income will also be subject to a 3.8 percent charge to help pay for President Obama’s health care law.

Stocks that pay big dividends have been popular in recent years among investors eager for an alternative to the meager returns on bank savings accounts and Treasury securities. Since October, though, the two sectors that provide the most generous dividend payments — utilities and telecommunication stocks — have been among the worst performers, hurt also in part by the devastation of Hurricane Sandy on the East Coast. Utility companies in the S.& P. 500 have fallen 9.4 percent from their highs in October. Telecommunication stocks in the index have dropped 11.3 percent from theirs, compared with the broader index’s 6.8 percent decline from its recent high.

John Moorin, the founder of a medical equipment company near Indianapolis, said he sold about $650,000 in dividend-paying stocks like McDonald’s and Coca-Cola a few days after the election, worried about the potential increase in taxes.

“I love these companies, but I’m so scared that now all of the sudden I’m going to get taxed at such a rate with them that they won’t be worth anything,” Mr. Moorin said.

Although Mr. Wynn has declared special dividends at the end of the year before — most recently in 2011 — in a call with analysts last month, he hinted that higher taxes would cause him and other chief executives to rethink big payouts in future years.

In the meantime, he added, it was “very difficult to do long-range planning with a government that moves as much as this does on so many issues.”

Leggett & Platt, a diversified manufacturer based in Carthage, Mo., decided to move up payment of its fourth-quarter dividend to December from January so shareholders could take advantage of the lower rate.

“If we can help our shareholders avoid taxes and keep more of their dividends, we’ll do it,” said David M. DeSonier, senior vice president for corporate strategy and investor relations.

David Kocieniewski contributed reporting.

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