U.S., rebels urge gloomy Moscow to help oust Assad

BEIRUT (Reuters) - Syria's rebel leadership and the United States seized on Russian pessimism over President Bashar al-Assad's future to urge Moscow to help push its ally into ceding power and end the battles closing in around his capital.

"We want to commend the Russian government for finally waking up to the reality and acknowledging that the regime's days are numbered," the U.S. State Department spokeswoman said after a senior Kremlin envoy conceded publicly on Thursday that Assad's opponents could win the 20-month-old civil war.

"The question now is, will the Russian government join those of us in the international community who are working with the opposition to try to have a smooth democratic transition?" U.S. spokeswoman Victoria Nuland added in Washington.

In Marrakech, where his new coalition won recognition from other international powers as the legitimate leadership of Syria, rebel political leader Mouaz al-Khatib said he believed Russia, ally and arms supplier to the Assad dynasty since Soviet times, was looking for ways out of its support for a lost cause.

"I believe that the Russians have woken up and are sensing that they have implicated themselves with this regime, but they don't know how to get out," al-Khatib told Reuters. He held them "particularly responsible" for helping Assad with arms but said Moscow need not "lose everything" in Syria if it changed tack.

Under President Vladimir Putin, wary since last year's Libyan war of what Russia sees as a Western drive to use the United Nations to overthrow national leaders it dislikes, Russia has blocked U.N. efforts to squeeze Assad, who has also had strong support from his long-time sponsor Iran.

But Mikhail Bogdanov, a deputy foreign minister and the Kremlin's special envoy for Middle East affairs, was quoted as saying in Moscow: "One must look the facts in the face."

"Unfortunately, the victory of the Syrian opposition cannot be ruled out." The Syrian government, he said, was "losing control of more and more territory" and Moscow was preparing to evacuate Russian citizens if necessary.

Nuland said Bogdanov's comments demonstrated that Moscow now "sees the writing on the wall" on Syria and said Russia should now rally behind U.N. efforts to prevent a wider bloodbath.

"They can withdraw any residual support for the Assad regime, whether it is material support (or) financial support," she said. "They can also help us to identify people who might be willing, inside of Syria, to work on a transitional structure."

DIPLOMACY

International envoy Lakhdar Brahimi, who has met Russian and U.S. officials twice in the past week, is seeking a solution based on an agreement reached in Geneva in June that called for the creation of a transitional government in Syria.

But Russia has repeated warnings that recognition of al-Khatib's coalition, notably by the United States, is undermining diplomacy, and rejected U.S. contentions that the Geneva agreement sent a clear message that Assad should step down.

Nuland said the Brahimi meetings could lay the framework for a political structure to follow Assad:

"We've said all along to the Russians that we are concerned that the longer that this goes on, and the longer it takes us to get to an alternative political path for Syria, the only path is going to be the military one and that is just going to bring more violence.

"We all ought to be working together."

Bogdanov, whose government has suggested that Assad himself should be allowed to see through a transition he has promised, suggested the rebels and their allies were set on a military solution and he gave little hint of detente with Washington.

"The fighting will become even more intense and (Syria) will lose tens of thousands and, perhaps, hundreds of thousands of civilians," Bogdanov was quoted as saying. "If such a price for the removal of the president seems acceptable to you, what can we do? We, of course, consider it absolutely unacceptable."

The head of NATO, Anders Fogh Rasmussen, said elsewhere: "I think the regime in Damascus is approaching collapse."

A U.S. official said: "Assad probably still believes that Syria is his and illusions can die hard. But Assad and those closest to him have got to be feeling the psychological strain of fighting a long war that is not going their way."

DAMASCUS BATTLES

But Al-Khatib, who played down Western concerns of sectarian Sunni Islamists in rebel ranks, warned that the fighting was far from over, even as it has begun to rattle the heart of Assad's power in Damascus. On Wednesday, a car bomb killed at least 16 people in a nearby town which is home to many military families.

"The noose is tightening around the regime," al-Khatib said.

"(But) the regime still has power. People think that the regime is finished, but it still has power left, but it is demoralized and however long it lasted its end is clear."

Day and night, Damascenes can hear the thunderous sound of bombardment aimed at rebel-held and contested neighborhoods.

The city's streets have now turned into a labyrinth of checkpoints and road blocks, with several major roads permanently closed off to traffic by concrete barriers.

"We escape from one place and trouble follows," said one grandmother, Um Hassan, as she described to Reuters her family's flight from one neighborhood to another as fighting seeps into the capital. "I don't know where we can keep running to."

Nonetheless, al-Khatib played down demands for their allies to provide heavier weaponry - a request long resisted by governments wary of anti-aircraft missiles and other hardware reaching Islamist rebels who might turn them against the West.

"The Syrian people ... no longer need international forces to protect them," he said, not specifying whether he meant a no-fly zone, arms supplies or other military support.

The opposition chief said he was willing to listen to proposals for Assad to escape with his life - "The best thing is that he steps down and stops drinking the blood of the Syrian people" - and outlined three scenarios for a change of power:

Al-Khatib ruled out the Russian proposal suggesting Assad hand over power to a transitional government while remaining president, saying it was "disgraceful for a slaughtered nation to accept to have a killer and criminal at its head".

The British-based Syrian Observatory said war planes bombed rebel-held eastern suburbs of Damascus on Thursday and artillery was hitting Daraya and Moadamiyeh, southwestern areas near the centre where rebels have been fighting for a foothold.

Syria has relied on war planes and helicopters to bombard rebel districts but Damascus denied accusations by U.S. and NATO officials that it had fired Scud missiles in recent days. The foreign ministry said the long-range missiles were not used against "terrorist groups," a term it uses for the rebels.

At least 40,000 people have been killed in Syria's uprising, which started in March 2011 with street protests which were met with gunfire by Assad's security forces, and which spiraled into the most enduring and destructive of the Arab revolts.

(Additional reporting by Steve Gutterman in Moscow and Andrew Quinn in Washington; Writing by Alastair Macdonald; Editing by Michael Roddy) For an interactive look at the uprising in Syria, please click on http://link.reuters.com/rut37s

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‘The Hobbit’: Like One Bad Video Game

Perhaps the most exciting thing about Peter Jackson‘s landmark, blockbuster Lord of the Rings films was that they made fans, through a combination of stunning landscapes and intricate special effects and soaring music and dramatic spectacle, feel as though we were seeing an almost impossible elevation of the potential size and scope of movies. Here was a rich, dense, sprawling series of films that thundered like myths, that were breathtaking in their realization of some pretty huge ambitions. Sure, they were massive corporate projects that earned lots of people millions of dollars, but to the regular moviegoer they were feats that proved the majesty of the movies, the potential to tell enthralling stories that also played like art. And so it’s hugely disappointing, if not all that surprising, that Jackson’s first foray back into the land of Middle Earth, The Hobbit: An Unexpected Journey, is such a sullenly, basely commercial and junky affair, a movie that feels not crafted with Jackson’s seemingly divine inspiration but by the hands of studio executives. Perhaps the reason that Warner Bros. is forgoing the usual console video-game tie-ins for simple mobile games is because the damn movie already looks like a video game, and not a very fun one at that.

RELATED: ‘The Hobbit’ Trailer Needs to Get Out of the Shire

The Lord of the Rings series succeeded aesthetically because it was such an elegant, painting-like wonder to behold. The textures and palettes all had the look of a particularly vibrant illustrated story book, the kind of immersive vision that exists somewhere between imagination and the real world. For The Hobbit, though, Jackson chose to film at a high frame rate and with Real 3D technology in mind — because 3D movies are doing well these days and, hell, doesn’t hurt that the tickets cost more — but the results are frequently hideous. Those among us who have bought shiny new flatscreen TVs over the past few years are likely familiar with the dreaded “Soap Opera Effect,” which turns what should be stunning, glossy images into cheap-looking messes, all strange movement and lighting, like any network soap or cheap British show. (Think Children of Men looking like Torchwood.) It’s the problem of technology over-thinking or over-performing, and it is on startling, gruesome display in The Hobbit. When you’re wearing the 3D glasses (and admittedly sitting a little off to the side), this hugely expensive movie looks like it was shot on a nice handheld digital camera on the cheap. Actors stand in strange contrast to the digital backgrounds behind them, motion looks too slick or unnatural. Gone are the somber vistas and rugged terrain, replaced by eye-aching shine and plastic-y smoothness. The most special effects-heavy sequences look very much like the non-playable parts of modern video games — the exposition bits that can amp up the graphics a bit because they don’t have to worry about the randomness of play, the stuff you see in the commercials, right before the “rated T for teen” part. I don’t know if I just had a bad projector or what, but I spent the bulk of this long movie distracted by how dreadful everything looked. With a few small exceptions — The Shire glows with lovely green, a mountain cave fight/chase sequence is bracingly rich — this is a dismally unattractive movie, featuring too many shots that I’m sure were lovely at some point but are too often ruined and chintzified by the terrible technology monster.

RELATED: Jon Hamm Has a Roger Clemens Story; Here Come the 007 Novelty Themes

So on its aesthetic merits, The Hobbit comes up more than short. The trouble is, it’s not rescued by many narrative successes. Jackson has taken largely from the first third of J.R.R. Tolkien‘s novel — about an expedition to reclaim a lost dwarf kingdom from a dragon — but he’s also added in some elements found in appendices detailing an expanded universe that Tolkien included in an edition of The Lord of the Rings. This is partly to flesh out the story as Jackson believes Tolkien meant it to be, but it’s also meant to satisfy the needs of a supersize film trilogy based on one mere book. And so we get several pointless and uninteresting diversions, mostly about dwarves and their bitter enemies the orcs, that read exactly like the filler they are. Jackson is trying to flesh out dwarf mythology, because we spend so much of our time with these little guys, but it feels tediously synthetic, as if there are two movies competing for attention with neither one getting its due. We go to the goblin caves of The Hobbit and then, upon deliverance from that dark place, are thrust right into some kind of honor-and-revenge-based conflict with a snarling, giant, one-armed orc. It’s all very crowded and strangely hurried for a movie that, all told, takes its sweet time.

RELATED: No One Likes Peter Jackson’s New ‘Hobbit’ Footage

I suspect that another of Jackson’s reasons for including all this extra dramatic battling is that, on its own, The Hobbit is something of a children’s book. We’ve got wacky, food-crazed dwarves, a mean old dragon, and a funny little guy to take us along on the journey. Jackson doesn’t deny his movie the kiddie flourishes — there’s snot humor and butt jokes and lots of other goofy stuff involving some trolls, plus two little musical numbers involving all the dwarves — but he then tries to complement them with the big, booming faith and honor stuff and it never properly congeals. One moment we’re on a sprightly children’s adventure, the next we’re talking in big fashion about all that warlike serious business. It’s a discordant mix, and I’d imagine it will leave both kids and adults out in the cold.

RELATED: All the Comic-Con News That Matters

The film is not without its bright spots, rare as they may be. Ian McKellen is a feisty, spirited, mysterious Gandalf as ever before, and Martin Freeman nicely and genially projects everyday hobbit-ness, even if he’s a tad underused in the film. (Yeah, in the movie called The Hobbit, there’s barely any time to focus on the darn Hobbit.) Cate Blanchett turns up once more as the ethereal elf Galadriel, lending the movie a cool classiness and a welcome dose of feminine energy. And, of course, we’re back, for one mesmerizing scene, with our beloved Gollum, so winningly and creepily played by Andy Serkis, and here yet another marvel of computer innovation. In some ways Gollum’s innate cartoonishness works better now than it did in the original trilogy, which is probably the only time that can be said of this movie. There are one or two moments in Gollum’s pivotal scene where he’s given a bit too much modern humor to play, but all told he’s the most welcome sight in the film. Maybe that’s just the newfound purist in me, yearning for the old days, but I suspect it has more to do with Gollum being the only genuinely realized character we’ve so far encountered in this new trio of films. Everyone else is a snoozy lesser version of someone else, especially the ridiculous bloodthirsty orc leader, who snarls and growls like something out of the Underworld movies. Sometimes, in the jumble of the The Hobbit‘s many cluttered and dull action scenes, the frantic blur looks like any sequence from one of those schlocky ’00s B-movies; all roughly hewn CGI clashing around nonsensically, with this orc fellow leading the charge.

RELATED: ‘The Hobbit’ Might Be Three Movies Now?

Despite all the technical advancements, if we can call them that, most moments in The Hobbit feel like Peter Jackson is sadly trying to make all those familiar LOTR elements work for him once more, without ever really being able to reignite the old flame. The supposedly awe-inducing visit to the elf city of Rivendell is a ho-hum experience in this new frame-rate-ruined world. A silly battle sequence involving a wizard, a silly Radagast the Brown, riding around pell-mell on a rabbit-drawn sled looks like an interstitial from late-era Super Mario. Even Elijah Wood, appearing briefly as Frodo, looks strange — a pale ghost of himself, as if stitched in from another movie by some forlorn and desperate hand. The film is inevitably resonant with memories of the original trilogy, and little about it can hold up to the comparison. There’s too much effort in the wrong places — action instead of story, technical tricks instead of actual design — and the constant rhythm of arbitrary event after arbitrary event becomes tiresome well before the film’s two hours and forty minutes have lurched to a halt. I’m sure there are kids who will like this wan, distracted effort — they might not yet have anything else to compare it to, depending on their age — but as a human who remembers what came before, I’m afraid The Hobbit left me nothing but frustrated, sad, and tired. Frustrated that these big-budget visionaries seem to consistently feel they have to taint their earlier masterpieces with techno-junk followups, sad that once magical lands now flicker cheap and garish in my head, and tired at the prospect of two more of these things. I exited the theater trying to remind myself that Attack of the Clones was way better than Phantom Menace and that Revenge of the Sith was better still. I then realized how depressing it was that I was making that comparison. Oh, Middle Earth. What has become of you?

Gaming News Headlines – Yahoo! News

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Eric Clapton, Bruce Springsteen, Kanye West & More Perform for Sandy Relief

By Andrea Billups

12/12/2012 at 06:30 PM EST

Kanye, Bon Jovi, Alicia Keys and Bruce Springsteen

Kevin Mazur/WireImage; Jamie McCarthy/Getty; WireImage; Tim Mosenfelder/Getty

It's time for a concert for a great cause.

On Wednesday at 7:30 p.m., musicians including Bruce Springsteen, Paul McCartney, Alicia Keys and Kanye West will take the stage at Madison Square Garden for the 12-12-12 Concert for Sandy Relief.

The concert will raise money to benefit those affected by the superstorm in New York, New Jersey and Connecticut.

The show will be broadcast for free at movie theaters in the tri-state area, offering those impacted by Sandy the opportunity to enjoy a night of music, but you can watch a live stream here on PEOPLE.com.

Other performers include Bon Jovi, Dave Grohl, Billy Joel, Coldplay's Chris Martin, Eddie Vedder, Roger Waters and The Who.

Join us tonight for this historic event.

For more information, visit www.121212concert.org, and check back on PEOPLE.com Thursday morning for highlights from star-studded concert!

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Wall Street ends almost flat as Bernanke warns on "cliff"

NEW YORK (Reuters) - Stocks ended nearly flat on Wednesday, giving up most of the day's gains after Fed Chairman Ben Bernanke reiterated that monetary policy won't be enough to offset damage from the "fiscal cliff."

His comments followed the Federal Reserve's announcement of a new stimulus plan, which briefly pushed the S&P 500 to a seven-week high.

The plan, the latest attempt to boost the country's struggling economy, will replace a more modest program set to expire with a fresh round of Treasury purchases that will increase its balance sheet. The program is known as "quantitative easing" or QE.

In comments after the announcement, Bernanke said he hopes that markets won't have to tank to get a fiscal cliff deal.

"Initially the addition of QE was certainly favorable. I think, though, in the press conference, what came out is that there still seems to be a level of uncertainty with regard to the exit strategy (and) the efficacy of the current policy," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

Bernanke "reiterated the fact that monetary policy has its hands tied as far as addressing the seriousness of going over the fiscal cliff," Hellwig added.

The S&P financial sector index <.gspf>, which had been up more than 1 percent after the Fed's announcement, ended up just 0.5 percent.

Wal-Mart Stores Inc's stock was the biggest drag on the Dow, falling 2.8 percent to $68.94 following the Indian government's announcement of an inquiry into the company's lobbying practices.

The Dow Jones industrial average <.dji> slipped 2.99 points, or 0.02 percent, to 13,245.45 at the close. The Standard & Poor's 500 Index <.spx> inched up just 0.64 of a point, or 0.04 percent, to 1,428.48. But the Nasdaq Composite Index <.ixic> shed 8.49 points, or 0.28 percent, to end at 3,013.81.

Though the S&P 500 ended up just slightly, it was the sixth day of gains for the index - its longest winning streak since August.

The central bank committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September. It also said it will keep its near-zero interest-rate program in place until the U.S. unemployment rate falls to 6.5 percent from its current 7.7 percent.

"The actions by the Fed were more aggressive than investors anticipated," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

"The asset-purchasing program is probably larger and more comprehensive than some might have thought."

Negotiations over plans to avoid the fiscal cliff intensified in Washington, but U.S. House of Representatives Speaker John Boehner said on Wednesday that "serious differences" remain with President Barack Obama in their talks. If no agreement is reached, steep tax hikes and budget cuts will fall into place early next year.

Shares of Aetna , the third-largest U.S. health insurer, gained 3.2 percent to $45.91, a day after the company gave a higher forecast for profit and revenue growth in 2013.

Volume was roughly 6.58 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.52 billion.

Decliners slightly outnumbered advancers on the NYSE by about 16 to 15, and on the Nasdaq, by about 3 to 2.

(Reporting by Caroline Valetkevitch; Additional reporting by Leah Schnurr Editing by Jan Paschal)

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North Korea rocket launch raises nuclear stakes

SEOUL/TOKYO (Reuters) - North Korea successfully launched a rocket on Wednesday, boosting the credentials of its new leader and stepping up the threat the isolated and impoverished state poses to opponents.

The rocket, which North Korea says put a weather satellite into orbit, has been labeled by the United States, South Korea and Japan as a test of technology that could one day deliver a nuclear warhead capable of hitting targets as far away as the continental United States.

"The satellite has entered the planned orbit," a North Korean television news reader clad in traditional Korean garb announced, after which the station played patriotic songs with the lyrics "Chosun (Korea) does what it says".

The rocket was launched just before 10 a.m. (0100 GMT), according to defense officials in South Korea and Japan, and was more successful than a rocket launched in April that flew for less than two minutes.

The North American Aerospace Defense Command (NORAD), a joint U.S.-Canadian military organization, said that the missile had "deployed an object that appeared to achieve orbit".

North Korea followed what it said was a similar successful launch in 2009 with a nuclear test that prompted the U.N. Security Council to stiffen sanctions that it originally imposed in 2006 after the North's first nuclear test.

North Korea is banned from developing nuclear and missile-related technology under U.N. resolutions, although Kim Jong-un, the youthful head of state who took power a year ago, is believed to have continued the state's "military first" programs put in place by his late father, Kim Jong-il.

North Korea hailed the launch as celebrating the prowess of all three members of the Kim family to rule since it was founded in 1948.

"At a time when great yearnings and reverence for Kim Jong-il pervade the whole country, its scientists and technicians brilliantly carried out his behests to launch a scientific and technological satellite in 2012, the year marking the 100th birth anniversary of President Kim Il Sung," its KCNA news agency said. Kim Il Sung, the current leader's grandfather, was North Korea's first leader.

The United States condemned the launch as "provocative" and a breach of U.N. rules, while Japan's U.N. envoy called for a Security Council meeting. However, diplomats say further tough sanctions are unlikely from the Security Council as China, the North's only major ally, will oppose them.

"The international community must work in a concerted fashion to send North Korea a clear message that its violations of United Nations Security Council resolutions have consequences," the White House said in a statement.

U.S. intelligence has linked North Korea with missile shipments to Iran. Newspapers in Japan and South Korea have reported that Iranian observers were in the North for the launch, something Iran has denied.

Japan's likely next prime minister, Shinzo Abe, who is leading in opinion polls ahead of an election on Sunday and who is known as a hawk on North Korea, called on the United Nations to adopt a resolution "strongly criticizing" Pyongyang.

A North Korean Foreign Ministry spokesman reiterated that the rocket was a "peaceful project".

"The attempt to see our satellite launch as a long-range missile launch for military purposes comes from hostile perception that tries to designate us a cause for security tension," KCNA cited the spokesman as saying.

"STUMBLING BLOCK"

China had expressed "deep concern" prior to the launch which was announced a day after a top politburo member, representing new Chinese leader Xi Jinping, met Kim Jong-un in Pyongyang.

On Wednesday, its tone was measured, regretting the launch but calling for restraint on any counter-measures, in line with a policy of effectively vetoing tougher sanctions.

"China believes the Security Council's response should be cautious and moderate, protect the overall peaceful and stable situation on the Korean peninsula, and avoid an escalation," Chinese Foreign Ministry spokesman Hong Lei told journalists.

Bruce Klingner, a Korea expert at the Heritage Foundation, said: "China has been the stumbling block to firmer U.N. action and we'll have to see if the new leadership is any different than its predecessors."

A senior adviser to South Korea's president said last week it was unlikely there would be action from the United Nations and Seoul would expect its allies to tighten sanctions unilaterally.

Kim Jong-un, believed to be 29 years old, took power when his father died on December 17 last year and experts believe the launch was intended to commemorate the first anniversary of his death. The April launch was timed for the centennial of the birth of Kim Il Sung.

Wednesday's success puts the North ahead of the South which has not managed to get a rocket off the ground.

"This is a considerable boost in establishing the rule of Kim Jong-un," said Cho Min, an expert at the Korea Institute of National Unification.

There have been few indications the secretive and impoverished state, where the United Nations estimates a third of people are malnourished, has made any advances in opening up economically over the past year.

North Korea remains reliant on minerals exports to China and remittances from tens of thousands of its workers overseas.

Many of its 22 million people need handouts from defectors, who have escaped to South Korea, for basic medicines.

Given the puny size of its economy - per capita income is less than $2,000 a year - one of the few ways the North can attract world attention is by emphasizing its military threat.

It wants the United States to resume aid and to recognize it diplomatically, although the April launch scuppered a planned food deal.

The North is believed to be some years away from developing a functioning nuclear warhead although it may have enough plutonium for about half a dozen nuclear bombs, according to nuclear experts.

It has also been enriching uranium, which would give it a second path to nuclear weapons as it sits on big natural uranium reserves.

"A successful launch puts North Korea closer to the capability to deploy a weaponized missile," said Denny Roy, a senior fellow at the East-West Center in Hawaii.

"But this would still require fitting a weapon to the missile and ensuring a reasonable degree of accuracy. The North Koreans probably do not yet have a nuclear weapon small enough for a missile to carry."

The North says its work is part of a civil nuclear program although it has also boasted of it being a "nuclear weapons power".

(This story has been refiled to clarify reference to NORAD in paragraph five)

(Additional reporting by Jumin Park and Yoo Choonsik in SEOUL; David Alexander, Matt Spetalnick and Paul Eckert in WASHINGTON; Linda Sieg in TOKYO, Sui-Lee Wee and michael Martina in BEIJING,; Rosmarie Francisco in MANILA; Writing by David Chance; Editing by Raju Gopalakrishnan and Robert Birsel)

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Microsoft ups Surface production, to sell in more stores

SEATTLE (Reuters) – Microsoft Corp has stepped up manufacturing of the Surface tablet, its new device designed to counter Apple Inc‘s iPad, and will introduce it to third-party retailers this week.

The moves suggest Microsoft is seeing some demand for its first own-brand computer in the crucial holiday shopping season, although it has yet to divulge any sales figures.

“The public reaction to Surface has been exciting to see,” said Panos Panay, general manager of Microsoft’s Surface project, which forms part of the company’s Windows unit.

“We’ve increased production and are expanding the ways in which customers can interact with, experience and purchase Surface,” said Panay, but gave no details of how many extra units were being produced.

Panay did not mention names of retailers that will sell the Surface, but separately office equipment retailer Staples Inc said it would stock the tablet from Wednesday.

He said the Surface would also be on sale at retailers in Australia from mid-December, with more countries to follow in the next few months.

Since launch in late October, the Surface has only been sold by Microsoft itself, in its own brick and mortar stores in the United States and Canada and online in Australia, China, France, the UK and Germany.

The only Surface model available now – officially called Surface with Windows RT – runs a version of Windows created to work on the low-power chips designed by ARM Holdings, which dominate smartphones and tablets but are incompatible with old Windows applications.

It starts at $ 499 for the 32 gigabyte version plus $ 120 for a thin cover that doubles as a keyboard.

A larger, heavier tablet – called Surface with Windows 8 Pro – will be introduced in January, running on an Intel Corp chip that works with all Microsoft’s Windows and Office applications. Microsoft plans to price the new Surface from $ 899 for a 64 gigabyte version.

The world’s largest software company also said it would keep its chain of ‘pop-up’ holiday stores open into the new year and will convert them into permanent retail outlets or what it called “specialty store locations”.

Microsoft’s recent push into physical retail – following Apple’s great success – has resulted in 31 permanent stores plus 34 holiday ‘pop-up’ stores in the U.S. and Canada.

If Microsoft converted each of the temporary stores into permanent outlets it would have 65 stores, still well below Apple with almost 400 worldwide.

(Reporting by Bill Rigby in Seattle, Sruthi Ramakrishnan in Bangalore)

Tech News Headlines – Yahoo! News

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Hugh Hefner's Engagement Ring to Crystal Harris Revealed

By Mike Fleeman

12/11/2012 at 07:00 PM EST

The wedding's back on – though it may be a good idea to save that gift receipt.

Hugh Hefner, 86, officially confirms that he is once again engaged to Crystal Harris, 26, telling his Twitter followers, "I've given Crystal Harris a ring. I love the girl."

And to prove it, Harris posted photos of the big diamond sparkler, calling it "my beautiful ring."

Neither announced a wedding date, though sources tell PEOPLE they're planning to tie the knot at the Playboy Mansion in Los Angeles on New Year's Eve.

Whether that still happens remains to be seen.

This is the plan they had in 2011 – a wedding at the mansion – except that Harris called it off just days before the nuptials were scheduled to happen in front of 300 invited guests.

Hugh Hefner and Crystal Harris

David Livingston / Getty

The onetime Playmate of the Month then ripped Hef's bedroom skills, calling him a two-second man, to which Hefner replied, "I missed a bullet" by not marrying her.

A year later, Hefner's "runaway bunny" bounded back to him.

• Reporting by JENNIFER GARCIA

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DA investigating Texas' troubled $3B cancer agency

AUSTIN, Texas (AP) — Turmoil surrounding an unprecedented $3 billion cancer-fighting effort in Texas worsened Tuesday when its executive director offered his resignation and the state's chief public corruption prosecutor announced an investigation into the beleaguered agency.

No specific criminal allegations are driving the latest probe into the Cancer Prevention and Research Institute of Texas, said Gregg Cox, director of the Travis County district attorney's public integrity unit. But his influential office opened a case only weeks after the embattled agency disclosed that an $11 million grant to a private company bypassed review.

That award is the latest trouble in a tumultuous year for CPRIT, which controls the nation's second-largest pot of cancer research dollars. Amid the mounting problems, the agency announced Tuesday that Executive Director Bill Gimson had submitted his letter of resignation.

"Unfortunately, I have also been placed in a situation where I feel I can no longer be effective," Gimson wrote in a letter dated Monday.

Gimson said the troubles have resulted in "wasted efforts expended in low value activities" at the agency, instead of a focused fight against cancer. Gimson offered to stay on until January, and the agency's board must still approve his request to step down.

His departure would complete a remarkable house-cleaning at CPRIT in a span of just eight months. It began in May, when Dr. Alfred Gilman resigned as chief science officer in protest over a different grant that the Nobel laureate wanted approved by a panel of scientists. He warned it would be "the bomb that destroys CPRIT."

Gilman was followed by Chief Commercialization Officer Jerry Cobbs, whose resignation in November came after an internal audit showed Cobbs included an $11 million proposal in a funding slate without a required outside review of the project's merits. The lucrative grant was given to Dallas-based Peloton Therapeutics, a biomedical startup.

Gimson chalked up Peloton's award to an honest mistake and has said that, to his knowledge, no one associated with CPRIT stood to benefit financially from the company receiving the taxpayer funds. That hasn't satisfied some members of the agency's governing board, who called last week for more assurances that no one personally profited.

Cox said he has been following the agency's problems and his office received a number of concerned phone calls. His department in Austin is charged with prosecuting crimes related to government officials; his most famous cases include winning a conviction against former U.S. House Majority Leader Tom DeLay in 2010 on money laundering charges.

"We have to gather the facts and figure what, if any, crime occurred so that (the investigation) can be focused more," Cox said.

Gimson's resignation letter was dated the same day the Texas attorney general's office also announced its investigation of the agency. Cox said his department would work cooperatively with state investigators, but he made clear the probes would be separate.

Peloton's award marks the second time this year that a lucrative taxpayer-funded grant authorized by CPRIT instigated backlash and raised questions about oversight. The first involved the $20 million grant to M.D. Anderson Cancer Center in Houston that Gilman described as a thin proposal that should have first been scrutinized by an outside panel of scientific peer-reviewers, even though none was required under the agency's rules.

Dozens of the nation's top scientists agreed. They resigned en masse from the agency's peer-review panels along with Gilman. Some accused the agency of "hucksterism" and charting a politically-driven path that was putting commercial product-development above science.

The latest shake-up at CPRIT caught Gilman's successor off-guard. Dr. Margaret Kripke, who was introduced to reporters Tuesday, acknowledged that she wasn't even sure who she would be answering to now that Gimson was stepping down. She said that although she wasn't with the agency when her predecessor announced his resignation, she was aware of the concerns and allegations.

"I don't think people would resign frivolously, so there must be some substance to those concerns," Kripke said.

Kripke also acknowledged the challenge of restocking the peer-review panels after the agency's credibility was so publicly smeared by some of the country's top scientists. She said she took the job because she felt the agency's mission and potential was too important to lose.

Only the National Institutes of Health doles out more cancer research dollars than CPRIT, which has awarded more than $700 million so far.

Gov. Rick Perry told reporters in Houston on Tuesday that he wasn't previously aware of the resignation but said Gimson's decision to step down was his own.

Joining the mounting criticism of CPRIT is the woman credited with brainstorming the idea for the agency in the first place. Cathy Bonner, who served under former Texas Gov. Ann Richards, teamed with cancer survivor Lance Armstrong in selling Texas voters in 2007 on a constitutional amendment to create an unprecedented state-run effort to finance a war on disease.

Now Bonner says politics have sullied an agency that she said was built to fund research, not subsidize private companies.

"There appears to be a cover-up going on," Bonner said.

Peloton has declined comment about its award and has referred questions to CPRIT. The agency has said the company wasn't aware that its application was never scrutinized by an outside panel, as required under agency rules.

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Follow Paul J. Weber on Twitter: www.twitter.com/pauljweber

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Big tech boosts S&P 500 to best close since election

NEW YORK (Reuters) - Stocks rose on Tuesday, led by gains in technology companies, helping the S&P 500 end at its highest level since Election Day.

A 2.2 percent gain to $541.39 in Apple's stock lifted the Nasdaq, as the largest U.S. company by market value rebounded from a week in which investors took profits before a possible tax rise next year. Prior to Tuesday's trading, Apple shares had lost 25 percent from an all-time intraday high hit in September.

Stocks pared some gains by late afternoon as more news on the "fiscal cliff" negotiations emerged. U.S. Senate Majority Leader Harry Reid said it will be difficult to reach agreement resolving the cliff tax hikes and spending cuts before Christmas.

"There's been a real explosion in anxiety over this thing. Because markets have become the way they are, you've got people just stepping back," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"There's a tremendous absence of liquidity in the market," he said.

The S&P 500 had lost 5.3 percent in the seven sessions following Election Day as investors refocused on the threat posed to the economy by the fiscal cliff, a series of automatic spending cuts and tax increases. Markets have mostly recovered those losses, but volume has been thin, suggesting investors are not betting aggressively due to the uncertainty.

The Dow Jones industrial average <.dji> was up 78.56 points, or 0.60 percent, at 13,248.44. The Standard & Poor's 500 Index <.spx> was up 9.29 points, or 0.65 percent, at 1,427.84. The Nasdaq Composite Index <.ixic> was up 35.34 points, or 1.18 percent, at 3,022.30.

Volume was roughly 6.43 billion shares traded on the NYSE, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of roughly 6.5 billion.

Other major tech stocks also rose. Texas Instruments gained 4 percent to $31.01 after bumping up its profit target late Monday. That helped other chipmakers rally, with the PHLX Semiconductor index <.sox> up 1.9 percent. Microsoft rose 1.4 percent to $27.32.

The lack of demonstrable progress in the fiscal cliff negotiations has kept investors from making aggressive bets in recent weeks.

Republican House Speaker John Boehner called on President Barack Obama to propose a counter-offer on Tuesday.

Retailers like luggage maker Tumi Holding Inc and Michael Kors Holding gained on Tuesday after a positive report from Goldman Sachs Equity Research. Tumi was up 4.7 percent to $21.92 and Michael Kors gained 2.4 percent, reaching $50.92.

By contrast, discount retailers Dollar General and Family Dollar declined. Dollar General, whose shares fell 7.8 percent to $42.94, said it sees margins under pressure in 2013. [ID:nL1E8NB0QB] Family Dollar shares dropped 8.4 percent to $64.68.

SPX Corp shares fell 9.1 percent to $62.07 and the stock was the biggest percentage decliner on the New York Stock Exchange after sources said the company is in exclusive talks to buy rival Gardner Denver , in a merger that could create an industrial machinery conglomerate with a market value over $7 billion.

The U.S. Treasury is selling its remaining stake in insurer American International Group Inc . AIG's shares were up 5.7 percent at $35.26.

The Fed began a two-day policy-setting meeting on Tuesday. The central bank is expected to announce a new round of Treasury bond purchases when the meeting ends on Wednesday to replace its "Operation Twist" stimulus, which expires at the end of the year.

Advancers outnumbered decliners on the NYSE by about 2 to 1, and on the Nasdaq by nearly 9 to 4.

(Additional reporting by Gabriel Debenedetti; Editing by Kenneth Barry and Nick Zieminski)

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Egyptian army to host unity talks as crisis deepens

CAIRO (Reuters) - Egypt's army chief will host national unity talks on Wednesday, seeking to end a growing political and economic crisis in the Arab world's most populous nation.

The meeting scheduled for 1430 GMT was called in response to a wave of protests since President Mohamed Mursi awarded himself sweeping powers on November 22 to push through a new constitution shaped by his Islamist allies, which is due to go to a referendum on Saturday.

"We will not speak about politics nor about the referendum. Tomorrow we will sit together as Egyptians," armed forces chief and Defense Minister Abdel Fattah al-Sisi said at a gathering of army and police officials on Tuesday.

Mursi and the Muslim Brotherhood, which propelled him to power in a June election, were expected to attend, while the main opposition coalition said it would decide on Wednesday morning whether to participate. The opposition stayed away from an earlier reconciliation meeting called by Mursi last weekend.

The judiciary committee overseeing the vote decided late on Tuesday that the referendum would be conducted on two days instead of one, as previously planned.

"The committee had officially asked the President to issue a law approving that the referendum takes place on two stages on Saturday December 15 and Saturday December 22," Judge Mahmoud Abu Shousha, a member of the referendum judiciary committee, said. Voting for Egyptians living abroad starts on Wednesday.

"The reason for the splitting of the vote into two stages is due to a shortage of judges needed to supervise the ballot stations," another member of the committee, who asked not to be named, said.

Many judges had decided in a joint meeting on Tuesday to not supervise the vote on a constitution they say had divided the country into two groups.

Outside the presidential palace - where anti-Mursi protesters are demanding the Islamist postpone the vote on a constitution they say does not represent all Egyptians - there was skepticism tinged with some hope.

"Talks without the cancellation of the referendum - and a change to the constitution to make it a constitution for all Egyptians and not the Brotherhood - will lead to nothing and will be no more than a media show," said Ahmed Hamdy, a 35-year-old office worker.

But the fact that the army was calling such talks "is an indication to all parties that the crisis is coming to a head and that they need to end it quickly", he said.

Earlier, Finance Minister Mumtaz al-Said disclosed that a $4.8 billion International Monetary Fund loan, a cornerstone of Egypt's economic recovery hopes, would be delayed until next month because of the crisis.

The delay was intended to allow time to explain a widely criticized package of economic austerity measures to the Egyptian people, Said told Reuters.

REBUILD CONSENSUS

Prime Minister Hisham Kandil said the measures would not hurt the poor. Bread, sugar and rice would not be touched, but prices of cigarettes and cooking oil would go up and fines would be imposed for public littering. In a bid to rebuild consensus, he said there would be a public consultation about the program next week.

In Washington, the IMF said Egypt had asked for the loan to be postponed "in light of the unfolding developments on the ground". The Fund stood ready to consult with Egypt on resuming discussions on the stand-by loan, a spokeswoman said.

On the streets of Cairo, thousands of opposition supporters gathered outside the presidential palace to demand that Mursi postpone Saturday's referendum.

A bigger crowd of flag-waving Islamist Mursi backers, who want the vote to go ahead as planned on Saturday, assembled at two mosques and remained on the streets as night fell over the Egyptian capital. There were also protests in Alexandria and other cities.

The extended upheaval following the fall of Hosni Mubarak last year is causing concern in the United States, which has given Cairo billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

State Department spokeswoman Victoria Nuland emphasized "deep concerns" over the situation in Egypt and repeated calls on protesters to demonstrate peacefully and on security forces to act with restraint. She declined to be drawn on whether Washington believed the referendum should be postponed.

The latest unrest has so far claimed seven lives in clashes between the Islamist Muslim Brotherhood and the opposition. But the Republican Guard has yet to use force to keep protesters away from the presidential palace, now ringed with tanks, barbed wire and concrete barricades.

(Additional reporting by Tamim Elyan and Edmund Blair in Cairo, and Andrew Quinn in Washington; Writing by Giles Elgood; Editing by Michael Roddy)

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