Champion Djokovic charms Australian Open crowd

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MELBOURNE, Australia (AP) — Novak Djokovic had a big, adoring crowd at Rod Laver Arena, and he knew exactly how to work it.
Writing "Aussie, Aussie, Aussie" on a live TV camera lens with a felt-tip pen was the perfect way to sign off after his 15th consecutive win at the Australian Open.
Having the confidence to charm a crowd of thousands comes with experience — he has won the last two Australian titles and is aiming to be the first man in the Open era to win three in succession.
"Hello, everybody, it's great to be back," he said after his 6-2, 6-4, 7-5 win over Paul-Henri Mathieu of France, his first match at Melbourne Park since his epic five-set win over Rafael Nadal in last year's final. "I have great memories. ... Twelve months ago, played a six-hour final. Thanks for coming and supporting me."
David Ferrer, who took the No. 4 seeding when fellow Spaniard Rafael Nadal withdrew because of illness and injury, had only a couple of hundred people watching in cavernous Hisense Arena on Day One at Melbourne Park. He opened with a 6-3, 6-4, 6-2 victory over Olivier Rochus of Belgium.
Ferrer knows that without his compatriot in the draw, there's a semifinal spot up for grabs, but he's content to stay under the radar.
"Of course, Novak, Roger and Rafael and Murray — they've won Grand Slams. It's very difficult for (another) player to win the first Grand Slam of his career. For me, I am trying to do my best."
The four majors in 2012 were shared by Djokovic, Nadal, Roger Federer and Andy Murray, the Scotsman who finally ended the 76-year drought for British men at the Grand Slam events by winning the U.S. Open. With Nadal out, the so called 'Big 4' has become the 'Big 3,' with nobody else in the top 10 given a realistic chance of winning.
Djokovic doesn't have another Grand Slam winner in his half of the draw after his Serbian Davis Cup teammate Janko Tipsarevic ousted Australian veteran Lleyton Hewitt, a former U.S. Open and Wimbledon winner, in a night match.
"If you want my opinion, it's that the top four, they are better," Ferrer said. "The last years, they were in all the semifinals and finals."
Federer, who has four Australian titles among his 17 majors, and Murray, who broke his Grand Slam drought by winning the U.S. Open, have their first-round matches Tuesday in what shapes as a blockbuster day session at Rod Laver Arena.
Murray is against Robin Haase in the first match and Federer is against Benoit Paire of France in the third — women's champion Victoria Azarenka takes in Monica Niculescu of Romania in between.
Congestion on center court means Serena Williams, the big favorite to win the women's title, will play her first-round match at Hisense Arena against Romania's Edina Gallovits-Hall, who is ranked No. 110.
Williams had a good look at the setting Monday, sitting in the stands with her coach Patrick Mouratoglou to watch older sister Venus win her opening match.
Serena, who is ranked No. 3 and has won 35 of her last 36 matches including titles at Wimbledon, the Olympics and the U.S. Open, had left long before Ferrer was to play the third match at Hisense.
The 30-year-old Spaniard drew polite applause rather than raucous cheering from the small crowd in a match punctuated by long periods of silence.
The second of the main courts at Melbourne Park can be eerily quiet when empty. It didn't bother Ferrer that there was only a smattering of fans and red-and-yellow Spanish flags.
Ferrer is a four-time Grand Slam semifinalist. He's a practical technician who became a multimillionaire through tennis. But he's clearly no Nadal, who can rage like a bull on court.
"Rafael is more important because he is the best of the history of Spanish players," Ferrer said. "Rafael is very important for the tour and for everybody. Anyway, he's a ... very good friend for me. Of course, we miss him. Not just me, everybody."
Fifth-seeded Tomas Berdych reached the 2010 Wimbledon final and beat Federer in the quarterfinals at the U.S. Open before losing to Murray.
He beat American Michael Russell 6-3, 7-5, 6-3 in his opening match Monday, and was content to let the top three men have all the attention.
"I would say it's maybe even better for myself," he said. "I mean, let's leave all the pressure on them. You know, everybody's talking how many Grand Slams this guy can win, that one."
Four American men advanced Monday, led by No. 20 Sam Querrey, the highest-ranked U.S. man in the tournament after John Isner pulled out with an injury. Querry beat Daniel Munoz-de la Nava of Spain 6-7 (2), 6-4, 6-2, 6-4.
Brian Baker fended off Russia's Alex Bogomolov Jr. 7-6 (4), 6-3, 6-7 (0), 3-6, 6-2; Tim Smyczek beat Croatia's Ivo Karlovic 6-4, 7-6 (5), 7-5; and Ryan Harrison's reward for beating Santiago Giraldo of Colombia 2-6, 6-4, 7-5, 6-4 was a second-round match against Djokovic.
Among the other men's seeds advancing were No. 10 Nicolas Almagro, No. 15 Stanislas Wawrinka, No. 16 Kei Nishikori and No. 22 Fernando Verdasco, a semifinalist in Australia in 2009.
No. 11 Juan Monaco of Argentina lost to Andrey Kuznetsov of Russia 7-6 (3), 6-1, 6-1.
Tipsarevic thought he had to overcome the most difficult challenge of the day. Australia's Hewitt, a two-time major winner and former No. 1, was playing his 17th consecutive Australian Open.
"Lleyton Hewitt is as tough as it gets for a first round Australian Open, first Grand Slam of the year," he said. "With all the respect to all the other guys who are potential threats, I think this is as tough as it gets, knowing that he plays really good tennis here, knowing that he won Kooyong last week," he said. "I cannot tell you how happy that I am."
The first two women's matches were over quickly, with No. 2-ranked Maria Sharapova finishing off a 6-0, 6-0 win over Olga Puchkova in 55 minutes. She showed no signs of discomfort from a right collarbone injury that ruled her out of a tuneup tournament in Brisbane.
Sharapova has a potential third-round match against Venus Williams, who needed just an hour for her opening 6-1, 6-0 win over Galina Voskoboeva of Kazakhstan.
No. 4 Agnieszka Radwanska, No. 6 Li Na, No. 9 Samantha Stosur, No. 11 Marion Bartoli and No. 13 Ana Ivanovic all won in straight sets, and 17-year-old American Madison Keys joined them in the second round when she beat Casey Dellacqua of Australia 6-4, 7-6 (0).
Venus Williams missed the 2012 Australian Open. She is returning from a seven-month layoff because of Sjogren's syndrome, an illness that causes joint pain and fatigue.
"It's hard to play the first match in a major, first thing of the year, and that can be a lot of pressure," Williams said. "I did my best.
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Autopsy: Chiefs LB drunk at time of murder-suicide

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KANSAS CITY, Mo. (AP) — Kansas City Chiefs linebacker Jovan Belcher had a blood-alcohol level more than twice the legal limit when he shot his girlfriend nine times and then killed himself in front of his coach and general manager, an autopsy released Monday showed.
The Jackson County Medical Examiner report on Belcher, 25, raised new questions about whether police should have done more before the Dec. 1 murder-suicide. Officers found Belcher sleeping in his idling car about five hours earlier, but let him go inside a nearby apartment to sleep it off.
At the time of the autopsy, Belcher's BAC was 0.17, more than twice the limit of 0.08 percent for Missouri drivers, and it was likely higher when he shot girlfriend Kasandra Perkins, 22, at the couple's Kansas City home.
A police report released previously said Belcher had gone out the night before with a woman he was dating on the side while Perkins attended a concert with her friends.
Police who found Belcher sleeping in his Bentley outside the woman's apartment told him to turn off the ignition and he complied, the report said.
The report said Belcher "initially displayed possible signs of being under the influence (asleep and disoriented)." But the report added that after a few minutes of being awake his "demeanor and communication became more fluid and coherent." The report added that officers didn't smell alcohol on Belcher, and that there were no signs of him being "violent or emotionally unstable."
Under both city ordinance and state law, it is illegal to operate a motor vehicle while intoxicated, city prosecutor Lowell C. Gard said in an email. He said a vehicle doesn't need to be in motion for it to be determined that the person behind the wheel was operating it.
"Operation has been defined in Missouri courts to include a wide range of activity, including sitting behind the wheel of a parked car with the engine running, and sitting alone behind the wheel of a parked car with a warm, but shut off, engine," Gard wrote. "However, problems of proof arise when the arresting officer must provide evidence of that operation contemporaneous with intoxication."
Kansas City police Sgt. Marisa Barnes said in an email she wasn't aware of anyone being disciplined over the case. Even if they were, she said, she wouldn't be able to discuss it.
Belcher asked the officers who found him if he could stay inside the apartment for the night. Belcher tried to call his girlfriend, but she didn't discover the missed calls until the next morning. Two women who were up late invited Belcher to wait inside their nearby apartment after he explained his plight. They said Belcher "appeared to be intoxicated" but "seemed to be in good spirits," the police report said.
Belcher slept on their couch for a couple hours, leaving at 6:45 a.m. so he could make it to a team meeting planned for later that morning.
Upon arriving at the home he shared with Perkins, the couple began arguing. Belcher's mother, Cheryl Shepherd, who had moved in with them about two weeks earlier, heard multiple gunshots and ran to the bedroom, where she saw Belcher kneeling next to Perkins' body, saying he was sorry. The autopsy report says Perkins was shot in the neck, chest, abdomen, hip, back, leg and hand.
After kissing Perkins, his baby daughter and his mother, Belcher drove to Arrowhead Stadium. The autopsy said Belcher shot himself in the right temple as coach Romeo Crennel and general manager Scott Pioli looked on.
The infant, Zoe, is the subject of a custody fight between relatives of Belcher and Perkins.
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A's reward manager Melvin with two-year extension

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(Reuters) - The Oakland Athletics rewarded manager Bob Melvin with a two-year contract extension after he led the team to a division title and was voted American League Manager of the Year, the team said on Monday.
The extension will keep Melvin, who led Oakland to a 94-68 record in 2012 that was a 20-win improvement over the previous campaign, with the A's through the 2016 Major League Baseball season, the team said in a statement.
It was Melvin's first full year at the helm in Oakland. He was named interim manager in June 2011 before signing a three-year pact three months later.
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Bomb hits convoy of Iraq's Sunni finance minister

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BAGHDAD (AP) — Attackers detonated a bomb Sunday next to a convoy carrying the Iraqi finance minister, a central figure in more than two weeks of protests by minority Sunnis against the Shiite-dominated Baghdad government, police said.
The minister, Rafia al-Issawi, was not hurt in the bombing. The device exploded as the last car in his convoy was passing by.
Al-Issawi is one of the senior Sunni officials in the government. Arrest of his bodyguards set off a wave of protests in Anbar province, a huge, mostly Sunni area, once a haven for al-Qaida militants that targeted Shiites and U.S. forces during the American-led operation in Iraq that started in 2003. The last U.S. combat soldiers left Iraq a year ago.
The minister was heading to Fallujah to meet with tribal leaders. Fallujah is at the eastern edge of Anbar, closest to Baghdad.
The attack on al-Issawi could trigger another round of protests. Rare demonstrations by angry Sunnis on the main highway between Iraq and Syria caused disruptions over the past two weeks. Sunnis charge that the central government is discriminating against them.
In violence in Anbar on Sunday, police said a roadside bomb exploded next to a security patrol in Fallujah, killing a 7-year-old boy who was walking near the patrol. Three policemen were wounded.
Medics in nearby hospitals confirmed the casualty figures.
Police officials said another attack took place early Sunday, when gunmen opened fire on an army checkpoint near the city of Samarra, north of Baghdad, killing three soldiers and wounding two others.
All officials spoke on condition of anonymity because they are not authorized to talk to reporters.
Violence has ebbed in Iraq, but insurgent attacks are still frequent.
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Potential impact of Mubarak retrial

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CAIRO (AP) — Egypt's highest appeals court on Sunday overturned Hosni Mubarak's conviction and ordered a retrial of the former president for failing to prevent the killing of nearly 900 protesters during the 2011 uprising that toppled his 29-year regime. A look at the potential impact of the decision:
— A retrial can produce a not-guilty verdict, uphold Mubarak's life sentence or reduce it. It cannot stiffen his sentence, however, because defendants cannot draw a heavier sentence when they appeal a conviction. Still, new evidence could lead to the deposed leader being convicted of ordering the crackdown on the protesters, not just failing to prevent it, a scenario that would go a long way toward appeasing victims' families.
— Also facing retrial are Mubarak's security chief, Habib el-Adly, who was in charge of security forces at the time of the uprising, as well as six of el-Adly's top aides — five for their part in the use of deadly force against the protesters and one for "gross negligence." The six top police commanders have been free since their acquittal in June.
— Mubarak, his two sons and a family associate, Hussein Salem, will also face retrial on corruption charges they were earlier acquitted of. The sons— onetime heir apparent Gamal and wealthy businessman Alaa — are in jail while on trial for insider trading and using their influence to buy state land at a fraction of its market price.
— For Mubarak's successor, Islamist Mohammed Morsi, a retrial is likely to be an unwanted distraction as he tries to restore law and order, and grapple with a wrecked economy, as well as the aftermath of last month's deadly debacle over a new constitution drafted by his Islamist allies and hurriedly adopted in an all-night session in late November.
— A retrial could also deny much-needed closure as the still-volatile country prepares for parliamentary elections in about three months which Morsi and his Islamist allies are determined to win. It could also revive calls for a deeper purge of those viewed as holdovers from the old era.
— The issue of the revolution's martyrs is a sensitive one in Egypt, with the families of the victims demanding retribution and compensation. They would be pleased to see Mubarak, el-Adly and the six top police commanders in the defendants' cage again, but there are no guarantees that they will be convicted of ordering the deadly crackdown.
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Egypt's Mubarak to get new trial over killings

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CAIRO (AP) — An Egyptian appeals court on Sunday overturnedHosni Mubarak's life sentence and ordered a retrial of the ousted leader in the killing of hundreds of protesters, a ruling likely to further unsettle a nation still reeling from political turmoil and complicate the struggle of his Islamist successor to assert his authority.
The court's decision put the spotlight back on the highly divisive issue of justice for Mubarak and his top security officers, who were also ordered retried, two years after the revolution that toppled him.
The ruling poses a distraction for President Mohammed Morsi as he tries to restore law and order, grapple with a wrecked economy and deal with the aftermath of the worst political crisis since Mubarak's ouster.
A new trial is virtually certain to dominate national headlines, attracting attention away from a crucial election for a new house of deputies roughly three months from now. Morsi and his Islamist allies are determined to win a comfortable majority in the new chamber, allowing them to take the helm of the most populous Arab nation.
The ailing 84-year-old Mubarak is currently being held in a military hospital and will not walk free after Sunday's decision. He remains under investigation in an unrelated case.
A small crowd of Mubarak loyalists erupted into applause after the ruling was announced. Holding portraits of the former president aloft, they broke into chants of "Long live justice!" Another jubilant crowd later gathered outside the Nile-side Cairo hospital where Mubarak is being held, passing out candies to pedestrians and motorists.
Still, the crowds paled in comparison to the immediate reaction to Mubarak's conviction and sentencing in June, when thousands took to the streets, some in celebration and others in anger that he escaped the death penalty.
Sunday's muted reaction indicates the fate of Egypt's ruler of nearly three decades may have, at least for now, been reduced to a political footnote in a country sagging under the weight of a crippling economic crisis and anxious over its future direction under the rule of Islamists.
No date has been set for the retrial, but attention is sure to dramatically pick up when it begins and Egyptians again watch fascinated by the sight of their country's one-time strongman behind bars in the defendants' cage.
If convicted, Mubarak could face a life sentence or have it reduced. He could also be acquitted. Under Egyptian law, a defendant cannot face a harsher sentence in a retrial, meaning the former leader cannot face the death penalty.
The Court of Cassation did not immediately disclose its reasoning, but legal experts said the appeal was granted over a series of procedural problems in the conduct of the original trial.
The ruling had been widely expected. When Mubarak was convicted in June, the presiding judge criticized the prosecution's case, saying it lacked concrete evidence and failed to prove the protesters were killed by the police.
Gamal Eid, a prominent rights lawyer, said the new trial could include new defendants and the judge ordering additional investigations.
Mubarak's defense lawyers had argued the ex-president did not know of the killings or realize the extent of the street protests. But a fact-finding mission recently determined he watched the uprising against him unfold through a live TV feed at his palace.
The mission's report could hold both political opportunities and dangers for Morsi and his fundamentalist Muslim Brotherhood. A new trial would be popular, since many Egyptians were angered that Mubarak was convicted of failing to stop the killings, rather than ordering the crackdown in which nearly 900 people died.
The report also implicates the military and security officials in the protesters' deaths. Any move to prosecute them could spark a backlash from the powerful police and others who still hold positions under Morsi's Islamist government.
In Sunday's ruling, the judge also ordered a retrial of Mubarak's former security chief, Habib el-Adly, convicted and sentenced to life in prison on the same charges, as well as six of el-Adly's top aides. All six were acquitted in the earlier trial.
The appeals court also granted the prosecution's request to overturn not-guilty verdicts on Mubarak, his two sons and an associate of the former president, Hussein Salem, on corruption charges. Salem was tried in absentia and remains at large.
The prosecutors in the Mubarak trial complained that security agencies and the nation's top intelligence organization had not cooperated with their investigation, leaving them with little incriminating evidence against the defendants. During the trial, prosecutors focused their argument on the political responsibility of Mubarak and el-Adly.
Morsi, Egypt's first freely elected president, has his plate full with a rapidly worsening economy, stinging media criticism and the fallout from the worst political crisis since Mubarak's ouster, first over decrees that gave him almost unrestricted powers and then by a constitution hurriedly adopted by his Islamist allies and ratified in a nationwide referendum last month.
Since coming to office six months ago, Morsi has had to deal with a slide in the nation's currency against the U.S. dollar, shrinking foreign reserves and a tourism sector in a deep slump. Politically, Egypt is deeply divided by the bitter rivalry between his camp of Islamists and an opposition led by liberals and secularists.
Clashes between the two sides left at least 10 people dead and hundreds wounded last month.
Morsi was given a thinly veiled reprimand Sunday by the president of the European Union, Herman van Rompuy, who told a news conference in Cairo that only "consensus building, inclusiveness and dialogue among all parties" could ensure Egypt's successful transition to a "deep and sustainable democracy.
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UPDATE 1-Golf-U.S. PGA Tour Sony Open scores

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Jan 11 (Infostrada Sports) - Scores from the U.S. PGA Tour Sony Open at the par-70 course on Friday in Honolulu, Hawaii
62 Scott Langley (U.S.) 62
63 Russell Henley (U.S.) 63
64 Scott Piercy (U.S.) 64
Tim Clark (South Africa) 64
65 Stephen Ames (Canada) 65
Jeff Overton (U.S.) 65
66 Webb Simpson (U.S.) 66
Matt Jones (Australia) 66
Charles Howell III (U.S.) 66
Matt Kuchar (U.S.) 66
Tim Herron (U.S.) 66
Brian Stuard (U.S.) 66
Morgan Hoffmann (U.S.) 66
Billy Horschel (U.S.) 66
Tommy Gainey (U.S.) 66
Danny Lee (New Zealand) 66
67 Charlie Wi (South Korea) 67
Vijay Singh (Fiji) 67
David Hearn (Canada) 67
Ryan Palmer (U.S.) 67
Marc Leishman (Australia) 67
Brad Fritsch (Canada) 67
Robert Streb (U.S.) 67
Steven Bowditch (Australia) 67
Ben Kohles (U.S.) 67
Erik Compton (U.S.) 67
68 Bart Bryant (U.S.) 68
John Rollins (U.S.) 68
Chris Kirk (U.S.) 68
Ken Duke (U.S.) 68
Tag Ridings (U.S.) 68
Darron Stiles (U.S.) 68
Carl Pettersson (Sweden) 68
Keegan Bradley (U.S.) 68
Brian Davis (Britain) 68
Shawn Stefani (U.S.) 68
Justin Bolli (U.S.) 68
Russ Cochran (U.S.) 68
Pat Perez (U.S.) 68
Dicky Pride (U.S.) 68
Alistair Presnell (Australia) 68
Lee Dong-Hwan (South Korea) 68
Peter Tomasulo (U.S.) 68
Scott Gardiner (Australia) 68
69 Nicholas Thompson (U.S.) 69
Jason Kokrak (U.S.) 69
Graham DeLaet (Canada) 69
Jimmy Walker (U.S.) 69
Steve Marino (U.S.) 69
Shane Bertsch (U.S.) 69
Dean Wilson (U.S.) 69
Roberto Castro (U.S.) 69
John Senden (Australia) 69
Brendon De Jonge (Zimbabwe) 69
Harris English (U.S.) 69
Rory Sabbatini (South Africa) 69
Jerry Kelly (U.S.) 69
Daniel Summerhays (U.S.) 69
David Lingmerth (Sweden) 69
Yuta Ikeda (Japan) 69
Justin Hicks (U.S.) 69
Jonas Blixt (Sweden) 69
Chez Reavie (U.S.) 69
Casey Wittenberg (U.S.) 69
David Mathis (U.S.) 69
Fabian Gomez (Argentina) 69
Park Jin (South Korea) 69
Lee Williams (U.S.) 69
Colt Knost (U.S.) 69
Chad Campbell (U.S.) 69
70 Brian Gay (U.S.) 70
Michael Thompson (U.S.) 70
George McNeill (U.S.) 70
Ryan Moore (U.S.) 70
Ricky Barnes (U.S.) 70
John Mallinger (U.S.) 70
Yang Yong-Eun (South Korea) 70
Justin Leonard (U.S.) 70
Dustin Johnson (U.S.) 70
Fred Funk (U.S.) 70
Jeff Gove (U.S.) 70
Andrew Svoboda (U.S.) 70
Kevin Stadler (U.S.) 70
John Daly (U.S.) 70
Hideto Tanihara (Japan) 70
Henrik Norlander (Sweden) 70
James Hahn (U.S.) 70
Josh Teater (U.S.) 70
71 Matt Every (U.S.) 71
Ted Potter Jr. (U.S.) 71
Brian Harman (U.S.) 71
Kevin Streelman (U.S.) 71
Mike Weir (Canada) 71
Zach Johnson (U.S.) 71
Johnson Wagner (U.S.) 71
Kevin Na (U.S.) 71
Greg Owen (Britain) 71
Chris Stroud (U.S.) 71
Jason Bohn (U.S.) 71
Jeff Maggert (U.S.) 71
Cameron Percy (Australia) 71
Derek Ernst (U.S.) 71
Josh Persons (U.S.) 71
Paul Haley II (U.S.) 71
John Huh (U.S.) 71
Luke Guthrie (U.S.) 71
Russell Knox (Britain) 71
Doug LaBelle II (U.S.) 71
Richard Hattori (Japan) 71
72 Boo Weekley (U.S.) 72
Bae Sang-Moon (South Korea) 72
Michael Letzig (U.S.) 72
Robert Allenby (Australia) 72
Michael Bradley (U.S.) 72
K.J. Choi (South Korea) 72
Scott Stallings (U.S.) 72
J.J. Henry (U.S.) 72
Patrick Reed (U.S.) 72
Steven Alker (New Zealand) 72
Ryuji Imada (Japan) 72
Jim Herman (U.S.) 72
Donald Constable (U.S.) 72
Aaron Watkins (U.S.) 72
73 Cameron Tringale (U.S.) 73
Mark Anderson (U.S.) 73
Steve LeBrun (U.S.) 73
Kyle Stanley (U.S.) 73
Martin Flores (U.S.) 73
Richard Lee (U.S.) 73
74 Mark Wilson (U.S.) 74
Will Claxton (U.S.) 74
Luke List (U.S.) 74
Hideki Matsuyama (Japan) 74
Ben Curtis (U.S.) 74
Andres Gonzales (U.S.) 74
Stewart Cink (U.S.) 74
Wes Short Jr. (U.S.) 74
75 Davis Love III (U.S.) 75
Tom Gillis (U.S.) 75
Bobby Gates (U.S.) 75
Bud Cauley (U.S.) 75
76 Joe Ogilvie (U.S.) 76
Kevin Carll (U.S.) 76
77 Eric Meierdierks (U.S.) 77
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NFLPA: no formal investigation into RG3 injury

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WASHINGTON (AP) — The NFL players' union does not plan a formal investigation into how the Washington Redskins medical staff handled Robert Griffin III's knee injury.
The NFL Players Association said Friday that they were satisfied with a report received from the Redskins detailing the procedures used by team physician James Andrews and other staff on the sidelines.
Griffin had reconstructive ACL surgery Wednesday after reinjuring his right knee in Sunday's playoff loss to Seattle. He also strained a ligament in the knee last month against Baltimore.
The NFLPA's informal inquiry focused on the quality of medical care Griffin received. The union does not have authority to investigate coaching decisions — including whether Redskins coach Mike Shanahan should have left Griffin in either game after it was clear the quarterback was hurt.
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Alabama's Lacy, Milliner, Fluker enter NFL draft

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TUSCALOOSA, Ala. (AP) — Alabama tailback Eddie Lacy, cornerback Dee Milliner and right tackle D.J. Fluker are entering the NFL draft after helping lead the Crimson Tide to a second straight national title.
Lacy and Milliner announced their plans to skip their senior seasons Friday at a news conference. Fluker couldn't be there for the announcement because he was traveling.
It's another exodus of talented underclassmen for a team that has won three of the past four national championships. Most of the four first-round picks in each of the past two drafts that left Alabama were underclassmen.
"I appreciate what they've done for the University of Alabama but we also acknowledge the fact that from a business standpoint, these guys are making good decisions about their future and what they can do," coach Nick Saban said.
Unlike recent groups of departing juniors from Alabama, only Milliner is pegged as a sure first-round pick.
He was a Jim Thorpe Award finalist and unanimous All-American after recording two interceptions and 22 pass deflections. He and guard Chance Warmack, who was a senior, are projected as the Tide's top current prospects.
"I think while I was here, I met all the goals and team affirmations that I set for myself as a freshman by winning a championship, becoming an All-American, just being part of a team that always loved to win," Milliner said. "I think I fulfilled all my goals and am ready and prepared to go to the next level."
Lacy was MVP of the national championship game against Notre Dame after rushing for 140 yards and scoring two touchdowns. He said he wasn't 100 percent healthy all season until the title game Monday night, but Lacy still ran for 1,322 yards and 17 touchdowns while averaging 6.5 yards per carry.
"We don't have a lot of years to play this position, so you have to go while you can," Lacy said. "I would love to come back. This is a great place. We have the best fans, but I really didn't want to risk coming back and not having such a good year or maybe even risking injury. I've had my share of injuries this year. I feel like you've got to get out while you can."
Lacy thinks he "made a pretty solid statement" in the title game, when he made a spin move into the end zone on a TD catch and on another run pushed 248-pound linebacker Danny Spond away with one hand.
Lacy was recruited in the same class as Trent Richardson, last year's No. 3 pick by Cleveland, but redshirted and then spent two seasons as a backup. He's not widely projected to follow Richardson and 2009 Heisman Trophy winner Mark Ingram into the first round. Lacy said he was projected as a second- or third-round pick in feedback from the NFL, but was impressive in the finale. Ordinarily, Saban only recommends projected first-round picks leave early.
"I'm fully supportive of what Eddie's doing," Saban said. "It's a little bit of a different situation than we've had in the past, but it's a little bit unique as well. Every one of these situations is unique to that particular individual and what his situation is. "
The 6-foot-6, 335-pound Fluker started 35 games for the Tide and was a second-team Associated Press All-American.
He was one of the Tide's top-rated signees in 2009 but came in overweight at about 395 pounds and was redshirted.
"I certainly feel like this year has been his best year as a player, and I feel that he's made a good decision about what he wants to do," said Saban, adding that Fluker has improved as much as any player on the team.
The mammoth Fluker, who wears a size-22 shoe, said in a statement that leaving early "is never an easy decision when you are playing at a place like Alabama."
"''These four years in Tuscaloosa have been the best four years of my life and I appreciate everyone who helped me along the way," he said.
Quarterback AJ McCarron, All-America linebacker C.J. Moseley and guard Anthony Steen have already said they're returning for their senior seasons. Saban didn't rule out other juniors possibly declaring for the draft before Tuesday's deadline.
The Tide does have promising players who have logged plenty of playing time behind Lacy and Milliner, especially. Two freshmen — tailback T.J. Yeldon (1,108 yards, 12 touchdowns) — and cornerback Geno Smith saw significant action.
"You've got people that are going to go to the NFL each year and you've got people behind them that are going to do the same things when their time comes," Milliner said.
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Amazon offers free digital versions of purchased CDs

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SAN FRANCISCO (Reuters) - Amazon.com Inc, taking aim at Apple's dominant iTunes store, on Thursday unveiled a service that it hopes will boost digital music sales and encourage more people to use its Cloud music service.
Amazon launched Amazon AutoRip, which gives customers free digital versions of music CDs they purchase from the world's largest Internet retailer.
The digital music files are automatically stored in customer libraries in remote datacenters run by Amazon, where they are available to play or download immediately through the company's Cloud Player service, the company said.
Amazon customers who have bought AutoRip-eligible CDs at any time since the company started selling discs in 1998 will also get digital versions of that music stored in their Cloud Player libraries for free, the company added.
Amazon's MP3 digital music business has been around since 2007, but its market share is less than 15 percent, according to The NPD Group. Apple Inc's iTunes store is the clear leader, with over 50 percent of the market.
The move sparked speculation that Amazon may be able to do the same for books, making Kindle ebook copies of physical titles.
"It would even be profitable for Amazon.com to pay publishers a subsidy to transition all the books purchased on Amazon.com to Kindle books," said Scott Devitt, an analyst at Morgan Stanley. "Having a digital library that is accessible only on the Kindle platform essentially locks a customer into the Kindle ecosystem forever.
"If executed, it would possibly be the largest coup in company history," he added.
An Amazon spokeswoman did not respond to an e-mail seeking comment on Thursday afternoon about a book version of AutoRip.
More than 50,000 albums are available for AutoRip. Steve Boom, head of digital music at Amazon, said the company focused on music that has been the most popular among its customers during the past 15 years.
Albums include "21" by Adele; "Overexposed" by Maroon 5; "Dark Side of the Moon" by Pink Floyd and "Thriller" by Michael Jackson.
Boom declined to estimate how many CDs Amazon expects to digitize through the new service. However, he noted that the company has sold hundreds of millions of CDs to millions of customers.
"When we picked those 50,000 titles we focused on having a substantial majority of our physical CD sales covered," he added. "People will be exposed to Cloud Player and our digital music offering, which is a good thing," Boom said. "We want to take this global."
Amazon is making a bigger push against iTunes now that the company's Kindle Fire tablets are in more consumers' hands and its Cloud Player music application is available on a range of other mobile devices, including Apple's iPhone, iPad and iPod Touch.
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Academy Launches Oscar App on Android, Amazon

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LOS ANGELES (TheWrap.com) - The Academy launched its official Oscars app on Android and Amazon on Thursday, expanding its initiative to direct fans' attention from the television to the second screen.
The app, already available on the iPad and iPhone, was made available for free on the Google Play store and the Amazon app store, the Academy said. According to iTunes, the iPad app was updated earlier on Wednesday.
Developed by the Academy and Disney/ABC Television Group's digital media arm, the app allows users to see behind-the-scenes videos and stories with host Seth MacFarlane and search information about the nominees. It also features a "My Picks" ballot on which users can organize their dream-team of winners.
On Oscar night on February 24, the app will feature "Backstage Pass," a live telecast from more than a dozen cameras placed on the Red Carpet and throughout the Dolby Theatre - in the press room, the control room, backstage and elsewhere.
And a ticker on the app will notify when a users' favorite actor and actress arrives on stage.
"We're always looking for ways to bring fans closer to the show and this app provides a unique and fun way to do that," Josh Spector, the managing director of digital media and marketing for the Academy, said in a statement. "More fans than ever will be able to enjoy the full Oscar experience now that our app is available to Droid users."
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Three witnesses won't be charged in Ohio football rape case: documents

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(Reuters) - At least three members of a high school football team in Steubenville, Ohio, received word they would not be prosecuted just days before testifying against teammates accused of raping a 16-year-old girl, according to documents obtained by Reuters.
In letters from Ohio Attorney General Mike DeWine's office addressed to each student's lawyer, the state committed to not prosecuting Evan Westlake, Anthony Craig and Mark Cole, three witnesses for the prosecution.
But DeWine said on Thursday his office had made no deal with any of the witnesses involved in the case.
"We have offered nothing, made no promises to any witness in this case. ... No deals have been cut with anybody," DeWine told WTOV television in comments confirmed by his spokesman.
The case has unsettled Steubenville, a city of 19,000 near the Pennsylvania border where football has a powerful influence.
Community leaders have criticized authorities, voicing suspicion they have avoided charging more players who could have been involved in order to protect the school's beloved football program.
Days after the letters were sent, all three players testified at a pre-trial hearing against teammates Ma'lik Richmond and Trenton Mays, both 16, who were charged with raping a classmate at a party attended by many teammates last August. Richmond and Mays were set to be tried as juveniles in February.
Although evidence in the criminal case showed each player "may not have conducted himself in a responsible or appropriate manner, his behavior did not rise to the level of any criminal conduct," all three letters say. "Therefore, we will not prosecute your client for his actions on August 11-12, 2012."
Walter Madison, an attorney who represents one of the students charged with rape, verified the letters' authenticity, but declined to comment further.
The letters can protect the players from criminal charges, said John Burkoff, a criminal law professor at the University of Pittsburgh.
"If the government says that it won't prosecute you and then changes its mind, you can argue that it can't go back on that," he said. "It's constitutional estoppel (an impediment)."
The letter to Westlake, dated September 28, was signed by Ohio Associate Attorney General Marianne Hemmeter. The other two letters were signed by Ohio Associate Assistant Attorney General Jennifer Brumby and dated October 9, three days before the trio testified against their teammates. Brumby and Hemmeter conducted the questioning at that hearing.
Attorney General spokesman Dan Tierney said the state decided the students would go uncharged only for the crime of illegal use of a minor in nudity-oriented material.
"We would stand by the attorney general's previous comments," he told Reuters on Thursday.
The case shot to national prominence last week when the online activist group Anonymous made public a picture of the purported rape victim being carried by her wrists and ankles by two young men. Anonymous also released a video that showed several other young men joking about an assault.
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Wall Street gains as earnings flow in; Boeing up

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NEW YORK (AP) — Stocks rose on Wall Street Wednesday after U.S. corporate earnings reports got off to a good start.
The Dow Jones industrial average climbed 61.66 points to 13,390.51, its first gain of the week. The Standard & Poor's 500 index gained 3.87 points to 1,461.02, and the Nasdaq composite rose 14 to 3,105.81.
Having rallied after a last-minute resolution stopped the U.S. from going over the "fiscal cliff," stocks are facing their first big challenge of the year as companies start to report earnings for the fourth quarter of 2012. Throughout last year, analysts cut their outlook for earnings growth in the period and now expect them to rise by 3.21 percent, according to data from S&P Capital IQ.
"Maybe earnings expectations were a little too low," said Ryan Detrick, a strategist at Schaeffer's Investment Research. "You don't need to have great earnings, you just need to beat those expectations" for stocks to rally, Detrick said.
Early indications were decent. Aluminum maker Alcoa reported late Tuesday that it swung to a profit for the fourth quarter, with earnings that met Wall Street's expectations. The company brought in more revenue than analysts had expected, and the company also predicted rising demand for aluminum this year as the aerospace industry gains strength. Alcoa is usually the first Dow component to report earnings every quarter.
Despite the better revenue number, Alcoa's stock performance Wednesday was lackluster. It traded higher for part of the day then ended down 2 cents at $9.08.
Other companies fared better after reporting earnings. Helen of Troy, which sells personal care products under brands including Dr. Scholl's and Vidal Sassoon, rose 2.7 percent, up 90 cents to $34.43 after reporting a 15 percent increase in quarterly net income.
Boeing was the biggest gainer of the 30 stocks in the Dow. It jumped 3.5 percent, up $2.63 to $76.76, following two days of sharp declines triggered by new problems for its 787 Dreamliner. Boeing said it has "extreme confidence" in the plane even as federal investigators try to determine the cause of a fire Monday aboard an empty Japan Airlines plane in Boston and a fuel leak at another JAL 787 on Tuesday.
The yield on the 10-year Treasury note edged down to 1.86 percent from 1.87 percent.
Among other stocks making big moves:
— Wireless network operator Clearwire jumped 7.2 percent, or 21 cents, to $3.13, after Dish network made an unsolicited offer to buy the company, which has already agreed to sell itself to Sprint. Dish rose 88 cents to $36.85, and Sprint fell 9 cents to $5.88.
— Online education company Apollo Group plunged 7.8 percent after reporting a sharp decline in fall-term student sign-ups at the University of Phoenix. The stock fell $1.63 to $19.32.
— Seagate Technology, a maker of hard-disk drives, jumped 6.6 percent, up $2.09 to $33.48, after predicting revenue for its fiscal second quarter that topped Wall Street expectations late Tuesday.
— Bank of America fell 4.6 percent, down 55 cents to $11.43, after Credit Suisse analysts lowered their outlook on the bank to "neutral" for "outperform," saying the current stock price overestimates the improvement in cost reduction that the bank can achieve this year.
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Wall Street rises after Alcoa reports earnings

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NEW YORK (Reuters) - Stocks rose on Wednesday, rebounding from two days of losses, as investors turned their focus to the first prominent results of the earnings season.
Stocks had retreated at the start of the week from the S&P 500's highest point in five years, hit last Friday, on worries about possible earnings weakness.
Shares of Alcoa Inc were down 0.5 percent to $9.08 after early gains, following the company's earnings release after the bell on Tuesday. The largest U.S. aluminum producer said it expects global demand for aluminum to grow in 2013.
Herbalife Ltd stock rose 4.2 percent to $39.95 in its most active day of trading in the company's history after hedge fund manager Dan Loeb took a large stake in the nutritional supplements seller. Prominent short-seller Bill Ackman had previously accused the company of being a "pyramid scheme," which Herbalife has denied.
Traders have been cautious as the current quarter shaped up like the previous one, with companies recently lowering expectations, said James Dailey, portfolio manager of Team Asset Strategy Fund in Harrisburg, Pennsylvania. Lower expectations leave room for companies to surprise investors even if their results are not particularly strong.
"The big question and focus is on revenue, and Alcoa had better-than-expected revenue," which calmed the market a little, Dailey said.
Overall, corporate profits were expected to beat the previous quarter's meager 0.1 percent rise. Both earnings and revenues in the fourth quarter are expected to have grown by 1.9 percent, according to Thomson Reuters data.
The Dow Jones industrial average <.dji> gained 61.66 points, or 0.46 percent, to 13,390.51. The Standard & Poor's 500 Index <.spx> rose 3.87 points, or 0.27 percent, to 1,461.02. The Nasdaq Composite Index <.ixic> gained 14.00 points, or 0.45 percent, to 3,105.81.
Facebook Inc shares rose above $30 for the first time since July 2012, trading up 5.3 percent at $30.59. Facebook, which has been tight-lipped about its plans after its botched IPO in May, invited the media to its headquarters next week.
Clearwire Corp shares jumped 7.2 percent to $3.13 after Dish Network bid $2.28 billion for the company, beating out a previous Sprint offer and setting the stage for a takeover battle for the wireless service provider that owns crucial mobile spectrum.
Apollo Group Inc slid after heavier early losses, a day after it reported lower student sign-ups for the third straight quarter and cut its operating profit outlook for 2013. Apollo's shares were last off 7.8 percent at $19.32.
Volume was below the 2012 average of 6.42 billion shares traded per day, as 6.10 billion were traded on the New York Stock Exchange, NYSE MKT and Nasdaq.
Advancing stocks outnumbered declining ones on the NYSE by 2,014 to 963, while on the Nasdaq advancers beat decliners 1,603 to 859.
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As public fumes, AIG says will not sue U.S. over bailout

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(Reuters) - Facing anger from Congress and the American people, AIG Inc said on Wednesday it would not sue the U.S. government over terms of the company's multi-billion dollar bailout.
Insurer American International Group had been weighing whether to join a lawsuit filed by its former Chief Executive Hank Greenberg and his company Starr International, which owned 12 percent of AIG before its $182 billion rescue that started in 2008.
Greenberg claims the rescue was unfair to shareholders and that the Federal Reserve Bank of New York charged an excessive interest rate on its initial loan. He is seeking billions of dollars in damages.
AIG said its board had carried out its legal and fiduciary duty to consider joining Greenberg's lawsuit before making its decision. Greenberg has a case pending in the Court of Federal Claims in Washington, D.C., and is also appealing the dismissal of a lawsuit in the federal court in New York.
AIG's Chief Executive Bob Benmosche said in an interview with CNBC that ultimately the public had to trust the company.
"It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government," Benmosche said.
AIG said it would not pursue Starr's claims nor would it allow Starr to pursue them on AIG's behalf, setting the stage for a fresh legal fight between Greenberg and the company.
The idea that AIG might sue the government struck a raw nerve with the public, which took to the Internet to vent its anger at what it viewed as the company's audacity. The volume of AIG mentions on Twitter rose more than 50-fold on Tuesday, according to Topsy Analytics.
Starr's attorney, David Boies, said in a statement that AIG's effort to block Starr from pursuing claims was contrary to shareholders' interests.
"Whether or not the AIG Board will be successful in blocking Starr's efforts to recover damages for their shareholders will ultimately be decided the Court," Boies said.
EMOTIONS RUN HIGH
Former Obama administration adviser Austan Goolsbee said "GO SCREW YOURSELVES" in a multi-tweet tirade. Comedian Andy Borowitz drafted a mock letter from the company to taxpayers, asking for more bailout money to pay for the cost of the lawsuit. Dozens of obscene comments made descriptive references to the anatomy of Chief Executive Robert Benmosche.
And those were the gentler barbs. The New York Daily News ran an editorial cartoon in which a lifeguard saves a drowning man with "AIG" on his belly. When the lifeguard asks the man how he feels, the victim says, "Like suing you."
The vitriol was just like it had been in late 2008 and early 2009 when, with the United States deep in recession, AIG employees hid ID badges and their families were threatened amid an uproar over bonuses.
A group of congressmen led by Vermont Democrat Peter Welch sent AIG's chairman a letter late on Tuesday, advising, "Don't do it. Don't even think about it." Other members of Congress threatened hearings.
AIG took to Twitter to defend itself, saying it was legally obligated to at least consider action, but its defense mostly fell on deaf ears.
The U.S. government rescued the company from the brink of bankruptcy in September 2008 with a bailout that ultimately topped $182 billion. After a recapitalization deal closed in early 2011, the U.S. Treasury owned 92 percent of AIG.
The Treasury sold the last of that stake in mid-December 2012. The government has said it earned a return of $22.7 billion on the rescue.
AIG shares rose 0.3 percent to close at $35.76. The stock lost half its value in 2011 but then rose more than 50 percent in 2012, as it showed consistent profitability.
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U.S. launches review of Shell Arctic drilling program

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WASHINGTON (Reuters) - The Interior Department will review Royal Dutch Shell's 2012 Arctic oil drilling program to assess the challenges the oil company faced and to help guide future permitting in the region.
The announcement on Tuesday follows the grounding of one of Shell's rigs off the coast of Alaska last week, the latest mishap the company has encountered as it undertakes an ambitious Arctic exploration effort.
"Exploration allows us to better comprehend the true scope of our resources in the Arctic ... but we also recognize that the unique challenges posed by the Arctic environment demand an even higher level of scrutiny," Interior Secretary Ken Salazar said in a statement.
Any changes in permitting requirements or delays due to the review could threaten Shell's drilling plans for 2013. The company faces a limited window during the summer when weather conditions and regulators will allow drilling.
Interior said it hopes to complete its "high-level" assessment within 60 days.
Also on Tuesday, the U.S. Coast Guard in Alaska ordered a special investigation into the causes of last week's grounding of Shell's Kulluk drill ship, a probe that the Coast Guard said was expected to take several months.
Known as a formal marine casualty investigation, it is convened when a shipping accident has considerable regional significance or may indicate vessel class problems, or if such an investigation is the best way to assess technical issues that may have contributed to the problem, the Coast Guard said.
Shell has spent $4.5 billion since 2005 to develop the Arctic's vast oil reserves, but the company has faced intense opposition from environmentalists and native groups, as well as regulatory and technical hurdles.
The oil company made some strides last year, actually beginning preparatory drilling in the Chukchi and Beaufort seas. But the work was far short of completing up to three wells in the Chukchi and up to two in the Beaufort, as Shell planned.
Instead, its 2012 drilling season was beset by delays due to lingering ice in the water and problems with getting a mandatory oil spill containment vessel certified by the Coast Guard.
Shell welcomed the department's review, conceding that it had experienced some challenges.
"We have already been in dialogue with the DOI on lessons learned from this season, and a high level review will help strengthen our Alaska exploration program going forward," Shell spokeswoman Kelly op de Weegh said in a statement.
Interior said it would examine the issues with Shell's containment vessel, as well as issues with Shell's two Arctic drilling rigs, the Kulluk and Noble Corp's Discoverer, which Shell has under contract there.
It was the Kulluk that broke away from tow boats and ran aground on New Year's Eve in what were described as near hurricane conditions before being towed to safety on Monday.
U.S. Senator Mark Begich, an Alaska Democrat and strong supporter of offshore Arctic drilling, called on Tuesday for a hearing to examine the Kulluk situation.
"While this incident notably involves marine transportation and not oil exploration or drilling, we must quickly answer the many questions surrounding the Kulluk grounding and improve any regulatory or operational standards as needed to ensure this type of maritime accident does not occur again," Begich said in a letter to Coast Guard Commandant Admiral Robert Papp and to Shell.
Environmentalists see the Kulluk accident as new evidence that oil companies are not ready for Arctic drilling, calling on the government to put permitting there on hold.
One group calling for a pause in permitting, conservation group Oceana, said Interior's review was a step in the right direction, but it must be "more than a paper exercise."
"The Department of the Interior, after all, is complicit in Shell's failures because it granted the approvals that allowed Shell to operate," said Michael LeVine, Pacific senior counsel at the ocean conservation group.
As for the Kulluk itself, the unified command for the accident response said it remained anchored in its bay of refuge and still showed no signs of leaks or spills. Later on Tuesday, remote operated vehicles are expected to examine the hull and divers will be called in if necessary, the statement said.
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Defense rests in trial of boy who killed neo-Nazi father

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RIVERSIDE, California (Reuters) - Attorneys representing a 12-year-old California boy charged with murdering his neo-Nazi father rested their case Tuesday without calling him to testify in a case that drew attention due to the rarity of a parent being slain by a child so young.
Lawyers for Joseph Hall concede that the boy, then just 10 years old, shot his father in May 2011 at point blank range, but argue that he should not be held criminally responsible. The gun belonged to his father, Jeffrey Hall, 32.
The boy's lawyers had suggested on Monday that he might testify in his own defense before the closely watched juvenile trial in Riverside County Superior Court concludes.
But defense attorney Matthew Hardy, in resting his case, said Hall would not be taking the witness stand, clearing the way for closing arguments to begin on Wednesday. Hardy did not elaborate on the decision.
Superior Court Judge Jean Leonard said she would likely render her verdict in the case, which is being conducted without a jury, on Monday morning.
"At this point, I'm really not sure what I'm going to do. I haven't made any decisions," Leonard told the attorneys.
The case has made headlines because of the father's neo-Nazi associations and the rarity of a parent being killed by a child so young.
Kathleen Heide, a criminologist who specializes in juvenile offenders, has said that 8,000 murder victims over the past 32 years were slain by their offspring, but only 16 of those were committed by defendants aged 10 or younger.
Hardy formally withdrew a plea of not guilty by reason of insanity on Monday and said that he would ask during closing arguments that the charges against Hall be dismissed on the grounds that prosecutors had not proven the boy was culpable.
Since Hall is a minor, the purpose of the trial is not to determine guilt or innocence but whether certain allegations about his motives are true. If he is found responsible for the crime, he could be sent to a juvenile facility until he is 23.
The outcome hinges on the boy's understanding of right and wrong at the time. Defense lawyers have said the boy was conditioned by his father's violent, racist behavior and that he killed him to put an end to the physical abuse inflicted on him.
Prosecutors say Hall, who lived with four siblings, killed his father because he thought he was planning to divorce his stepmother, Krista McCary. Prosecutors said the boy was close to McCary and considered her his true mother.
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U.S. does not rule out removing all troops from Afghanistan

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WASHINGTON (Reuters) - The Obama administration does not rule out a complete withdrawal of U.S. troops from Afghanistan after 2014, the White House said on Tuesday, just days before President Barack Obama is due to meet Afghan President Hamid Karzai.
The comments by U.S. Deputy National Security Adviser Ben Rhodes were the clearest signal yet that, despite initial recommendations by the top military commander in Afghanistan to keep as many as 15,000 troops in the country, Obama could opt to remove everyone, as happened in Iraq in 2011.
Asked about consideration of a so-called zero-option once the NATO combat mission ends at the end of 2014, Rhodes said: "That would be an option that we would consider."
Rhodes made clear that a decision on post-2014 troop levels is not expected for months and will be made based on two U.S. security objectives in Afghanistan - denying a safe haven to al Qaeda and ensuring Afghan forces are trained and equipped so that they, and not foreign forces, can secure the nation.
"There are, of course, many different ways of accomplishing those objectives, some of which might involve U.S. troops, some of which might not," Rhodes said, briefing reporters to preview Karzai's visit.
In Iraq, Obama decided to pull out all U.S. forces after failing in negotiations with the Iraqi government to secure immunity for any U.S. troops who would remain behind.
The Obama administration is also insisting on immunity for any U.S. troops that remain in Afghanistan, and that unsettled question will figure in this week's talks between Obama and Karzai and their aides.
"As we know from our Iraq experience, if there are no authorities granted by the sovereign state, then there's no room for a follow-on U.S. military mission," said Douglas Lute, special assistant to Obama for Afghanistan and Pakistan.
Jeffrey Dressler, an Afghanistan expert at the Washington-based Institute for the Study of War who favors keeping a larger presence in Afghanistan, questioned whether the White House comments might be part of a U.S. bargaining strategy with Kabul.
"I can't tell that they're doing that as a negotiating position ... or if it is a no-kidding option," Dressler said. "If you ask me, I don't see how zero troops is in the national security interest of the United States."
SHOULDN'T JUST "LEAVE THEM"
U.S. officials have said privately that the White House had asked for options to be developed for keeping between 3,000 and 9,000 troops in the country, a lower range than was put forward initially by General John Allen, the top U.S. and NATO commander in Afghanistan.
Allen suggested keeping between 6,000 and 15,000 troops in Afghanistan.
Retired General Stanley McChrystal, a former U.S. commander of the Afghan mission who resigned in 2010, said in an interview with Reuters on Monday there was a value to having an overt U.S. military presence in Afghanistan after 2014 - even if it wasn't large.
"The art, I would say, would be having the smallest number so that you give the impression that you are always there to help, but you're never there either as an unwelcome presence or an occupier - or any of the negatives that people might draw," he said, without commenting on any specific numbers.
The United States now has about 66,000 troops in Afghanistan and Rhodes confirmed there would be steady reductions in troop levels through 2014.
Also on the agenda for the Obama-Karzai talks are tentative reconciliation efforts involving Taliban insurgents. Those efforts have shown flickers of life after nearly 10 months of limbo.
Still, hopes for Afghan peace talks have been raised before, only to be dashed. Last March, the Taliban suspended months of quiet discussions with Washington aimed at getting the insurgents and the Karzai government to the peace table.
Washington has also had a strained relationship with Karzai, who in October accused the United States of playing a double game in his country by fighting the war in Afghan villages instead of going after those in Pakistan who support insurgents.
Karzai will give a joint press conference with Obama on Friday and will visit the Pentagon on Thursday, meeting with Defense Secretary Leon Panetta and the U.S. top military officer, General Martin Dempsey.
Still, it is unclear what, if any, concrete agreements might emerge from Karzai's visit to Washington.
Michael O'Hanlon, a defense analyst at Brookings, cautioned against expecting too much from the visit, which he said is best seen as an opportunity for Washington and Kabul to "shore up this partnership that has had such a troubled status and a weak foundation."
"There are a lot of scars in this relationship. There are a lot of hurt feelings," O'Hanlon said. "It's sort of like a bad marriage and it's very easy for just the wrong word to immediately set people off in an emotional way."
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US banks try to clean up remaining mortgage mess

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WASHINGTON (AP) — U.S. banks have taken another step to clear away the wreckage of the 2008 financial crisis by agreeing to pay $8.5 billion to settle charges that they wrongfully foreclosed on millions of homeowners.
The deal announced Monday could compensate hundreds of thousands of Americans whose homes were seized because of abuses such as "robo-signing," when banks automatically signed off on foreclosures without properly reviewing documents. The agreement will also help eliminate huge potential liabilities for the banks.
But consumer advocates complained that regulators settled for too low a price by letting banks avoid full responsibility for foreclosures that victimized families and fueled an exodus from neighborhoods across the country.
The settlement ends an independent review of loan files required under a 2011 action by regulators. Bruce Marks, CEO of the advocacy group Neighborhood Assistance Corp. of America, noted that ending the review will cut short investigations into the banks' practices.
"The question of who's to blame — the homeowners or the lenders — if you stop this investigation now, that will always be an open-ended question," Marks said.
The banks, which include JPMorgan Chase, Bank of America and Wells Fargo, will pay about $3.3 billion to homeowners to end the review of foreclosures.
The rest of the money — $5.2 billion — will be used to reduce mortgage bills and forgive outstanding principal on home sales that generated less than borrowers owed on their mortgages.
A total of 3.8 million people are eligible for payments under the deal announced by the Office of Comptroller of the Currency and the Federal Reserve. Those payments could range from a few hundred dollars to up to $125,000.
Homeowners who were wrongly denied a loan modification will be entitled to relatively small payments. By contrast, people whose homes were unfairly seized and sold would be eligible for the biggest payments.
Banks and consumer advocates had complained that the loan-by-loan reviews required under the 2011 order were time-consuming and costly and didn't reach many homeowners. Banks were paying large sums to consultants to review the files. Some questioned the independence of those consultants, who often ruled against homeowners.
The deal "represents a significant change in direction" that ensures "consumers are the ones who will benefit, and that they will benefit more quickly and in a more direct manner," Thomas Curry, the comptroller of the currency, said in a statement.
But Charles Wanless, a homeowner in the Florida Panhandle, is among those who question that promise. Wanless, who is fighting foreclosure proceedings with Bank of America, says he doubts the money will benefit many who lost homes.
"Let's say they already foreclosed on me and I lost my home," said Wanless, who runs a pool cleaning business in Crestview, Fla. "What's $1,000 going to do to help me? If they took my house away wrongfully, is that going to get me my house back? I might be able to find one if I'm one of the lucky ones who gets $125,000."
Diane Thompson, a lawyer with the National Consumer Law Center, complained that the deal won't actually compensate homeowners for the actual harm they suffered.
The deal "caps (banks') liability at a total number that's less than they thought they were going to pay going in," she said.
Thompson supports the decision to make direct payments to victimized homeowners. But she said the deal will work only if it includes strong oversight and transparency provisions.
The companies involved in the settlement announced Monday also include Citigroup, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Aurora. The 2011 action also included GMAC Mortgage, HSBC Finance Corp. and EMC Mortgage Corp.
Regulators announced the deal on the same day that Bank of America agreed to pay $11.6 billion to government-backed mortgage financier Fannie Mae to settle claims related to mortgages that soured during the housing crash.
The agreements come as U.S. banks are showing renewed signs of financial health, extending their recovery from the 2008 crisis that nearly toppled many of them. They are lending more and earning greater profits than at any time since the Great Recession began in December 2007.
Monday's foreclosure settlement doesn't close the book on the housing crisis, which caused more than 4 million foreclosures. It covers only consumers who were in foreclosure in 2009 and 2010. Some banks didn't agree to the settlement. And resolving millions of claims involving multiple banks and mortgage companies is complicated and time-consuming.
"It's going to take a few more years to get it sorted out," said Bert Ely, an independent banking consultant.
Michael Allen of Petersburg, Va., hopes to benefit from the settlement. He lost his home last month after 2½ years of trying to modify his mortgage. He had fallen behind on his payments after the plant he was working closed.
"I was working with the banks to re-modify (my loan), and I'd get to the final stages and I'd have to start over again. They didn't give me any reason. I'd call them, they'd transfer me from one person to the next. ... They just kept giving me the runaround."
Citigroup said in a statement that it was "pleased to have the matter resolved" and thinks the agreement "will provide benefits for homeowners." Citi expects to record a charge of $305 million in the fourth quarter of 2012 to cover its cash payment under the settlement. The bank expects that existing reserves will cover its $500 million share of the non-cash foreclosure aid.
Bank of America CEO Brian Moynihan said the agreements were "a significant step" in resolving the bank's remaining legacy mortgage issues while streamlining the company and reducing future expenses.
Amy Bonitatibus, spokeswoman for JPMorgan Chase, said the bank had "worked very hard" on the foreclosure review and was "pleased to have it now behind us."
U.S. Bancorp, which owns U.S. Bank, said its part of the settlement includes an $80 million payment to homeowners. That payment will reduce its fourth-quarter earnings by 3 cents per share. It has also committed $128 million in mortgage aid.
Leaders of a House oversight panel have asked regulators for a briefing on the proposed settlement. Regulators had refused to brief Congress before announcing the deal publicly.
Rep. Elijah Cummings of Maryland, the top Democrat on the House Committee on Oversight and Government Reform, said the settlement "may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered."
He complained that regulators failed to answer key questions about how the settlement was reached, who will get the money and what will happen to others who were harmed by these banks but were not included in the settlement.
The settlement is separate from a $25 billion settlement among 49 state attorneys general, federal regulators and five banks: Ally, formerly known as GMAC; Bank of America; Citigroup; JPMorgan Chase and Wells Fargo.
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Exclusive: Disney looks for cost savings, ponders layoffs - sources

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LOS ANGELES (Reuters) - Walt Disney Co started an internal cost-cutting review several weeks ago that may include layoffs at its studio and other units, three people with knowledge of the effort told Reuters, in an early sign that big companies may not be finished tightening their belts.
Disney, whose empire spans TV, film, merchandise and theme parks, is exploring cutbacks in jobs it no longer needs because of improvements in technology, one of the people said.
It is also looking at redundant operations that could be eliminated following a string of major acquisitions over the past few years, said the person.
The people did not want to be identified because Disney has not disclosed the internal review.
After years of repeated and sometimes severe cost cutting in the wake of the financial crisis, by last summer it looked as though Corporate America had trimmed all the fat and was back on the path of profits through operating growth. But news Disney is weighing cuts - on the heels of Eli Lilly and Co's warning last week that cost controls would drive earnings this year - could herald yet another wave of retrenchment.
Disney executives warned in November that the rising cost of sports rights and moribund home video sales would dampen growth.
"We are constantly looking at eliminating redundancies and creating greater efficiencies, especially with the rapid rise in new technology," said Disney spokeswoman Zenia Mucha.
In terms of profit margin, Disney's studio is the least profitable of the entertainment conglomerate's four major product divisions. The studio had a profit margin of 12.3 percent in 2012.
Its fifth division, the interactive unit that creates online games, lost $758 million over the last three years, according to the company's financial filings. The unit lost $216 million last year.
Disney could trim jobs at both the studio and interactive divisions as well as its music arm, said Tony Wible, an analyst with Janney Montgomery Scott, who has a neutral rating on the company's stock.
The media company is in what CEO Bob Iger calls a "transition year" after spending on projects such as the "Cars Land" expansion at the Disneyland Resort in California and a new cruise ship that launched last year.
"We invested a lot of money in our theme parks and resorts business," Disney Chief Financial Officer Jay Rasulo told a media conference in December. "We want to execute against delivering the returns that we've been promising all of you for the years that we've been making those investments. We really want to hunker down on it."
CUTS NOT CERTAIN
Staff cuts are not a certainty at this point, the source added, although the company has a history of streamlining operations through layoffs.
In 2011, the interactive group laid off about 200 people at its video games unit after what Disney executives said at the time was a shift away from console games to focus on online and mobile entertainment. In September, 50 employees at Disney Interactive were laid off in a restructuring of the money-losing unit, according to one of the sources.
The company also made cuts at its publishing unit last year, and cut workers at its studio in 2011.
"This is not necessarily a negative thing," said Michael Morris, an analyst with Davenport and Co who has a buy recommendation on the stock but was not aware of the review.
"It speaks to a fiscally responsible management."
CORPORATE AMERICA CUTS BACK
If Disney does make some cuts, it would be the latest company to warn that costs still need to come under control.
Lilly said last week that sales this year would be flat to slightly higher, but said profit growth would exceed Wall Street estimates on the back of cost controls. In late December, book publisher Scholastic Corp said it too would look for cost savings in the current fiscal year.
Disney and Lilly are far from alone, though. Tech companies in particular are expected to have been hurt by the fourth-quarter uncertainty over the impending "fiscal cliff" of automatic tax increases and spending cuts which led corporate clients to slow or stop spending.
Congress agreed to a deal on January 1 that averted the cliff.
Fear of the cliff may have affected sales across a range of industries, further clouding the growth picture. Retailers are also expected to contend with the fallout of a lackluster holiday season, which could lead to cutbacks.
Thomson Reuters corporate earnings research analyst Greg Harrison said many of the themes that held true in 2012 -- like cost cuts that helped earnings, even as sales stalled -- were likely to carry over into this year.
"In the absence of any fresh catalysts for profits emerging, it may be reasonable to expect that current estimates for earnings growth in the low- to mid-single digits throughout 2013 may shrink, even though analysts believe that the slowest part of the earnings growth is now behind us," Harrison wrote in a preview of the fourth-quarter earnings season.
If a trend is emerging, it should begin to be clear as soon as the next two weeks, as companies start reporting 2012 results and offering up their 2013 outlooks.
STUDIO COULD BE TARGET
The present review, headed by CFO Rasulo, has already identified areas to change in the company's travel policy, said one of the sources. It is also looking at a hiring freeze rather than layoffs, said a second source.
Cuts are most likely at the studio, said two of the three sources, where the strategy has changed to focus on fewer films and rely more on outside producers such as Steven Spielberg's DreamWorks studio, which finances its own films and pays Disney a fee to market and distribute them.
The film strategy shift began when Iger took over as CEO in late 2005. Under Iger, the company purchased "Toy Story" creator Pixar Animation and Marvel, which brought it characters such as "Thor" and "Iron Man" that featured in this summer's blockbuster hit "The Avengers."
Disney completed a $4.06 billion acquisition of "Star Wars" creator George Lucas' Lucasfilm in December, and has said that it will begin producing new installments of the lucrative franchise in 2015, and make a film every two to three years.
Shares in the company fell 2.3 percent on Monday to close at $50.97, sharply underperforming broader markets.
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Exclusive: SEC probes Ernst & Young over audit client lobbying

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WASHINGTON/NEW YORK (Reuters) - The Securities and Exchange Commission is investigating whether auditing company Ernst & Young violated auditor rules by letting its lobbying unit perform work for several major audit clients, people familiar with the matter told Reuters.
The SEC inquiry began shortly after Reuters reported in March 2012 that Washington Council Ernst & Young, the E&Y unit, was registered as a lobbyist for several corporate audit clients including Amgen Inc, CVS Caremark Corp and Verizon Communications Inc [ID:nL2E8DL649], according to one of the sources.
The SEC's enforcement division and its Office of the Chief Accountant are looking in to the issue, according to the two sources, who spoke in recent days and who could not be named because the investigation is not public.
It is unclear how far along the probe is, or whether it could result in the SEC filing civil charges against Ernst & Young, one of the world's largest audit and accounting firms.
An SEC spokesman declined to comment.
Ernst & Young spokeswoman Amy Call Well declined to comment on whether the company was being investigated. "All of our services for audit clients undergo considerable scrutiny to confirm they are consistent with applicable rules," she said.
U.S. independence rules bar auditors from serving in an "advocacy role" for audit clients. The goal is to allow auditors to maintain some degree of objectivity regarding the companies they audit, based on the idea that auditors are watchdogs for investors and should not be promoting management's interests.
The SEC's rule does not definitively say whether lobbying could compromise an auditor's independence. It is more focused on barring legal advocacy, such as expert witness testimony.
In interviews last year, former SEC Chief Accountant Jim Kroeker told Reuters that certain lobbying activities could potentially be covered under the general prohibition on advocacy. Kroeker is now an executive at Deloitte, a rival of Ernst & Young.
'ABUNDANTLY CLEAR' LINE
Harvard Business School Professor Max Bazerman said on Monday that it was "abundantly clear" that a firm that is lobbying for a company is no longer capable of independently auditing that company.
Ernst & Young has previously said it complied with independence rules. It also said that it did not act in an advocacy role and that the work performed by its lobbying unit was limited to tax issues.
Tax consulting is a permissible activity under auditor independence rules if it does not involve public advocacy.
About two months after publication of the Reuters story, federal records showed Washington Council Ernst & Young was no longer registered as a lobbyist for Amgen, CVS Caremark or Verizon Communications.
A spokesman for Amgen did not immediately respond to calls seeking comment. Verizon and CVS spokesmen declined to comment.
Ernst & Young also terminated a lobbying relationship with a fourth company, Nomura Holdings Inc, which also used an E&Y affiliate for auditing services.
Obtaining an independent view on the books is the main reason companies are required to hire outside auditors, said Richard Kaplan, law professor at the University of Illinois.
Ernst & Young was suspended in 2004 from accepting new public company audit clients for six months because of alleged violations of independence rules. The suspension stemmed from a joint venture that Ernst had in the 1990s with business software provider PeopleSoft, now part of Oracle Corp, when Ernst was also auditing PeopleSoft's books.
An SEC administrative law judge ordered Ernst & Young to give back $1.7 million in audit fees and issued a cease-and- desist order against future independence violations.
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US drone strike in Pakistan kills influential Taliban commander

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Key Pakistani Taliban commander Maulvi Nazir – considered a "good" Taliban by some among the Pakistani military – died in a US drone strike that left at least six dead on Thursday, according to local reports.
According to Pakistan's Dawn newspaper, Taliban and local government officials confirm that Mr. Nazir and at least two of his deputies were killed when a US drone hit their vehicle in South Waziristan, a Pakistani tribal region along the Afghan border. The commander's truck had reportedly broken down at the time.
The Guardian notes that neither the Pakistani government nor the Taliban has made an official statement on the reports, and that details remain murky.
Because journalists are usually prevented by militants from visiting places hit by drones, the exact details of what happened and who was killed in such attacks are often extremely hard to verify.
Residents and an intelligence official in South Waziristan who spoke to a local journalist said the total number of people killed in the first attack was either six or 10. The intelligence source said all the men killed were "top leaders" of the Mullah Nazir group, the leading militant group in South Waziristan.
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Maulvi Nazir was the primary militant commander in South Waziristan and a key figure in Pakistan's Taliban, having maintained a complex set of relationships among the region's players.
Unlike some of Pakistan's domestic militants, Nazir chose to focus his efforts fully on Afghanistan and the NATO and US forces stationed there, and according to the US “had a clear collaboration” with Afghanistan's powerful Haqqani network, a primary foe of US and NATO troops in Afghanistan. The Washington Post notes that he was accused of regularly sending troops into Afghanistan to fight alongside the country's own Taliban against the US-led forces there.
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His Afghan focus on targeting foreign troops earned him a reputation with parts of the Pakistani military as a "good" Taliban, and he negotiated a deal with the Islamabad to stay out of its battle with domestic militants in the region. His militants have also aided Pakistani troops in attacking members of Tehrik-e-Taliban Pakistan (TTP), an anti-Islamabad faction of the Taliban.
But that also earned him the hostility of some of his domestic Taliban peers. Nazir was wounded in November during a suicide attack on his convoy. Rival Taliban commanders were believed to have been behind the attack, which was said to have caused some fracturing of the Pakistani Taliban in the region.
Security analyst Imtiaz Gul told the Guardian that Nazir's death will likely be welcomed by both the US and Pakistan – despite the latter's peace deal with the late militant.
"Both the US and Pakistan will be happy because they now have one less enemy," he said. "Although he was in an undeclared peace deal with the government, he was also subverting the stated goals of that agreement by providing support and shelter to al-Qaida people whose leaders have pleaded with the rank and file of the Pakistani army to rebel against the state.
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Russia plans biggest war games since Soviet era

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The Russian navy has announced that it will hold its biggest war games since Soviet times in the Mediterranean and Black seas later this month.
The ambitious exercises, which will involve ships from all four major Russian fleets, are a sign of growing confidence on the part of Russia's military as it begins to enjoy the benefits of President Vladimir Putin's huge budget allocations for renewing and re-equipping all branches of the armed forces.
The purpose of the war games will be to strengthen integration between different types of forces and gain practice with major military deployments outside Russia's immediate neighborhood, the Defense Ministry said in a statement Tuesday.
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As part of the maneuvers, naval ships will arrive at an "unprepared" coast in the Russian northern Caucasus region to take amphibious troops onto transport vessels.
"The primary goal of the exercise is to train issues regarding formation of a battle group consisting of troops of different branches outside of the Russian Federation, planning its deployment and managing a coordinated action of a joint Navy group in accordance with a common plan," the ministry's statement said.
The participating ships, it said, will be drawn from all of Russia's four major naval formations: the Northern, Baltic, Pacific, and Black Sea fleets.
Some experts suggest the war games may be cover for an increasingly nervous Moscow's preparations to evacuate Russian citizens and their dependents from war-torn Syria.
About 9,000 Russians are registered with the Russian embassy in Damascus, but some experts say the full number may be 30,000 or more. Over the nearly half a century that Moscow has enjoyed good relations with Syria, thousands of Russian women have married Syrian men and moved to the country. Many of them may urgently demand to return with their children to Russia if the situation turns critical.
This week the Russian navy refreshed a fleet, including several huge amphibious assault ships capable of carrying thousands of people, which it had deployed to the eastern Mediterranean last summer.
Experts say the replacement fleet dispatched this week is of similar makeup, with at least five huge troop-transport ships at its core.
As part of Russia's 8-year, $659-billion rearmament program, the navy is slated to receive 50 new warships by 2016, including new Borey-class nuclear-powered ballistic-missile submarines – the third of which entered service last weekend – 18 major surface warships, and dozens of special purpose and support vessels.
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Taiwan undersea oil plans raise neighbors' eyebrows

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Taiwan, a normally quiet claimant to portions of the disputed South China Sea, plans to explore for undersea oil there, a move likely to test fragile relations with China and upset major Southeast Asian nations.
Ringed by China, Vietnam, the Philippines, Indonesia and others, the waters are believed to hold as many as 213 billion barrels of oil but competing claims from the six bordering nations have fueled tensions, prompting US officials to step in last year to urge calm.
Taiwan’s Bureau of Mines and its top energy company plan to explore this year for some of that oil near an islet that the government holds in the Spratly archipelago, a spokesman for the company said.
Taiwan’s search for oil would remind five competing nations that it still has clout, despite old foe China. The more powerful Beijing forbids its allies around Asia from talking to Taipei and has its own ambitions in the disputed 3.5 million-square-kilometer (1.4 million-square-mile) sea.
“Taiwan seems to be seeking ways to remind other nations of its sovereignty claims,” says Bonnie Glaser, senior Asia adviser with the Washington-based think tank Center for Strategic and International Studies. “Taiwan doesn’t want to be ignored or forgotten.”
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China has considered self-ruled Taiwan part of its territory since the Chinese civil war of the 1940s, chilling ties until 2008 when the two sides put aside political differences to discuss trade and economic links.
But new incidents have challenged the fragile détente, and Taiwan is already angry about last year’s Chinese passports that claim two Taiwanese landmarks. Oil could be next, as Taiwan says it has no plans to share its search with China.
Vietnam and the Philippines also staked claims in the sea. Vessels from China and the Philippines were locked in a standoff last year, and 70 Vietnamese sailors died in a clash in 1988.
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But even as both countries periodically make what's thought of as aggressive moves in the region, both would stop short of forcing Taiwan out from the waters near Spratly where it already has an airstrip, analysts say. Too much bluster might push Taiwan closer to China, which wants more economic ties with Taiwan and which Southeast Asian claimants see as a bigger threat to their maritime interests.
“Lacking much naval power, Manila would have a hard time actually physically preventing any oil exploration by Taiwan,” says Scott Harold, associate political scientist at the RAND Corp., a policy research nonprofit in the United States.
“Hanoi would have a better prospect of reacting militarily, but any stand-off would potentially put them on the wrong side of both Washington and Beijing,” he says.
But much of the oil is already spoken for. China’s state-owned CNOOC Ltd. began drilling undersea last year, and its peer in Hanoi, PetroVietnam, has started surveying. The Philippines is also contracting out other exploration tracts.
Fellow claimant Malaysia currently produces about half the South China Sea’s oil, which is estimated at 1.3 million barrels per day. Brunei also claims parts of the ocean.
Taiwan’s Bureau of Mines will draw up a budget this year and hire CPC Corp. Taiwan to look for oil, CPC spokesman Chen Ming-hui says. Officials told parliament that exploration would cost at least $562,000.
Taiwan needs the oil as 99 percent of energy sources are now imported, Mr. Chen says. “The South China Sea is a place where Vietnam and others have sighted oil, so we think the opportunities there are good,” he says.
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Target ad campaign puts food in the spotlight

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NEW YORK (AP) — Is Target's grocery aisle ready for its close up?
Target is pushing its food, laundry detergent and other groceries in a national ad campaign that pokes fun at high-fashion advertising by featuring models interacting with everyday products.
In one ad, a model in a white dress and high heels struts by blueberry muffin and cake mix boxes that explode in different colors. Then she crushes an egg with her hand.
"Dominate that PTA bake sale," a voiceover whispers. "The Everyday Collection. By Target."
The campaign is part of a larger move by Target, better known for its cheap-chic clothing and home goods, to focus more on its grocery-store aisle. Wal-Mart Stores Inc. and other Target competitors also have been expanding their selection of groceries to lure more customers into stores.
For its part, Target has been expanding its grocery selection, particularly with investments in its "P-Fresh" fresh-food section. Out of its 1,782 stores, about 1100 have an expanded fresh food layout and more than 250 have a full grocery store.
With that push complete, Target decided the time was right to put the focus on its groceries, but in a way that still plays on Target's fashion know how, said chief marketing officer Jeff Jones.
Target, with ad agency Mono in Minneapolis, created the tongue-in-cheek campaign that treats groceries and home products like fashion accessories in a photo shoot. Spending is undisclosed on the ad campaign, but it will include eight TV ads that will run throughout 2013. In addition to TV spots and newspaper inserts, it will include eight TV spots, three radio ads, and digital short films that will run as banner ads online.
One TV ad shows an $11.99 bottle of Tide laundry detergent and a model in a white dress dancing fancifully.
"We all yearn for something," says a voiceover as bubbles float by the model. "And that something is the other sock."
The campaign "creates a foil for what people are used to seeing for grocery advertising," said Jones. "It combines the design ethos and fashion creditability that Target has with the idea that it also has great grocery items at a great price."
Target's ad campaign comes as the retailer faces some challenges.
On Thursday, Target reported that revenue at stores open at least one year was flat in December — a key holiday sales period. The company, based in Minneapolis, blamed the decline in part on weakness in sales of merchandise such as furniture and electronics.
Target, which has been successful in the past by pairing up with upscale designers who create lines of products that it can sell for a limited time, also recently was dinged by bad publicity for its collaboration with posh retailer Neiman Marcus. The line debuted Dec. 1 and included 50 products from 24 designers, including a $70 Marc Jacobs scarf and a $500 Alice + Olivia bike.
But the merchandise was criticized for being too expensive, among other things, and all remaining items in that collection were marked down 70 percent off on Jan. 1. That's quite a reversal from its Missoni collection a year ago, which was so popular demand caused Target's Web site to crash.
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Stocks gain, pushing the S&P 500 to 5-year high

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The Standard & Poor's 500 closed at its highest level in five years Friday after a report showed that hiring held up in December, giving stocks an early lift.
The S&P 500 finished up 7.10 points at 1,466.47, its highest close since December 2007.
The index began its descent from a record close of 1,565.15 in October 2007, as the early signs of the financial crisis began to emerge. The index bottomed out in March 2009 at 676.53 before staging a recovery that has seen it more than double in value and move to within 99 points of its all-time peak.
The remarkable recovery has come despite a halting recovery in the U.S. economy as the Federal Reserve provided huge support to the financial system, buying hundreds of billions of dollars' worth of bonds and holding benchmark interest rates near zero. Last month the Fed said it would keep rates low until the unemployment rate improved significantly.
"Without the Federal Reserve doing what they did for the last few years, there would be no way you'd be near any of these levels in the index," said Joe Saluzzi, co-head of equity trading at Themis Trading. "I would call this the Fed-levitating market."
The Dow Jones industrial average finished 43.85 points higher at 13,435.21. It gained 3.8 percent for the week, its biggest weekly advance since June. The Nasdaq closed up 1.09 point at 3,101.66.
Stocks have surged this week after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the "fiscal cliff." The law passed late Tuesday night averted that outcome, which could have pushed the economy back into recession.
The Labor Department said U.S. employers added 155,000 jobs in December, showing that hiring held up during the tense fiscal negotiations in Washington. It also said hiring was stronger in November than first thought. The unemployment rate held steady at 7.8 percent.
The jobs report failed to give stocks more of a boost because the number of jobs was exactly in line with analysts' forecasts, said JJ Kinahan, chief derivatives trader for TD Ameritrade.
"The jobs report couldn't have been more in line," Kinahan said. "The market had more to lose than to gain from it."
Among stocks making big moves, Eli Lilly and Co. jumped $1.84, or 3.7 percent, to $51.56 after saying that its earnings will grow more than Wall Street expects, even though the drugmaker will lose U.S. patent protection for two more product types this year.
Walgreen Co., the nation's largest drugstore chain, fell 61 cents, or 1.6 percent, to $37.18 after the company said that a measure of revenue fell more than analysts had expected in December, even as prescription counts continued to recover.
Stocks may also be benefiting as investors adjust their portfolios to favor stocks over bonds, said TD Ameritrade's Kinahan. A multi-year rally in bonds has pushed up prices for the securities and reduced the yield that they offer, in many cases to levels below company dividends.
Goldman Sachs reaffirmed its view that stocks "can be an attractive source of income," and warned that there is a risk that bonds may fall. In a note to clients, the investment bank said that an index of AAA rated corporate bonds offers a yield of just 1.6 percent, less than the S&P 500's dividend yield of 2.2 percent.
The 10-year Treasury note fell, pushing its yield higher. The yield on the 10-year note fell 2 basis points to 1.91 percent. The note's yield has now climbed 52 basis points since falling to its lowest in at least 20 years in July.
Other notable stock moves;
— Accuray Inc. plunged $1.37, or 20 percent, to $5.41 after the radiation oncology equipment company reported weak sales and said it would cut 13 percent of its staff.
— Lululemon, a yoga apparel maker, dropped $3.14, or 4.2 percent, to $71.95 after Credit Suisse predicted slowing momentum and downgraded its stock.
— Finish Line Inc., an athletic footwear and clothing company, fell $1.58, or 8.3 percent, to $17.18 after it reported a small loss after sneaker trends changed and customers didn't take to its new web site launched in November. Analysts had forecast a profit.
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US job market shrugs off fears of 'fiscal cliff'

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WASHINGTON (AP) — The U.S. job market proved resilient in December despite fears that a budget impasse in Washington would send the economy over the fiscal cliff and trigger growth-killing tax hikes and spending cuts.
Employers added 155,000 jobs last month, roughly matching the solid but unspectacular monthly pace of the past two years.
The gains announced Friday weren't enough to reduce unemployment, which remained a still-high 7.8 percent. The November rate was revised up a notch from the 7.7 percent the government had originally reported.
The stable pace of December hiring suggested that many employers tuned out the fracas in the nation's capital. The threat wasn't averted until a deal won final passage on New Year's Day.
Rather than hold back until the fiscal cliff was resolved, many employers kept hiring, most likely in anticipation of higher customer demand.
"What would hiring have been if we had not been facing the fiscal cliff in December?" said Robert Kavcic, senior economist at BMO Capital Markets. "We might have seen quite a bit stronger job growth" — something closer to 200,000 a month.
That's an encouraging sign for the job market, because an even bigger budget showdown is looming: Congress must vote to raise the government's $16.4 trillion borrowing limit by late February. If not, the government risks defaulting on its debt. Republicans will likely demand deep spending cuts as the price of raising the debt limit.
Robust hiring in construction and manufacturing drove last month's job increases. Construction firms added 30,000 jobs, the most in 15 months. In part, that increase likely reflected hiring needed to rebuild from Superstorm Sandy. And the housing market's gradual recovery has energized homebuilding. Manufacturers added 25,000 jobs, the most in nine months.
Economists found other hopeful news in the report. Americans were given more work hours in December — an average 34.5 hours a week in December, up from 34.4 in November. And their pay outgrew inflation. Hourly wages rose 7 cents to $23.73 last month, a 2.1 percent increase compared with a year earlier. Over the same period, inflation rose 1.8 percent.
"Perhaps (the) underlying economic performance is accelerating, and even Washington can't screw it up," said Dan Greenhaus, chief global strategist at BTIG.
One company that hired last year and would like to add more jobs in 2013 is Arteriocyte, a Cleveland-based stem-cell therapy and medical device company. But CEO Don Brown is concerned about potential cuts in government spending, which he says could erode Arteriocyte's revenue.
One such cut is a 2 percent reduction in the reimbursements Medicare gives doctors and hospitals. That reduction was delayed by the budget deal reached this week. If the reimbursement cut is imposed later this year, it would lower revenue for the hospitals and surgeons that buy Arteriocyte's advanced products.
"Our entire customer base is unsure about what their reimbursement landscape is going to be," Brown said.
The Obama administration's health care reform law also imposed a 2.2 percent sales tax on medical devices. Brown estimates that will cost his company $400,000. He had hoped the tax would be eliminated as part of a fiscal cliff agreement.
Arteriocyte hired 10 workers last year and now employs 76. The new hires included research scientists, two marketing specialists and a sales representative. Brown hopes to make five to 10 additional hires this year, but he might be unable to do so if the Medicare cut takes effect.
Despite last month's hiring gains, Friday's report pointed to some weakness in the job market. For example, the number of unemployed actually rose 164,000 to 12.2 million. About 192,000 people entered the work force last month, but most did not find jobs.
The unemployment numbers come from a government survey of households. The number of jobs added comes from a separate survey of businesses.
A broader category that includes not only the unemployed but also part-time workers who want full-time jobs and people who have given up looking for work was unchanged in December at 22.7 million.
The government revised up its estimates of job growth for October and November by 14,000 jobs. October's job increases were revised down from 138,000 to 137,000 but November's were revised up from 146,000 to 161,000.
Economists said the pace of hiring almost certainly isn't strong enough to lead the Federal Reserve to cut short its bond-buying program. The Fed is spending $85 billion a month on bond purchases to try to drive down long-term borrowing costs and stimulate economic growth.
The job market is being held back by government cutbacks. Governments at all levels cut 13,000 jobs in December. Since the Great Recession ended in mid-2009, governments have eliminated 645,000 jobs — an average of nearly 15,400 a month.
By contrast, during the recoveries from the recessions of 1990-1991 and 2001, governments added an average of more than 15,000 jobs a month. If governments were hiring at that pace instead of slashing payrolls, the U.S economy would be generating more than 180,000 jobs a month.
Instead, for two full years, monthly job growth has remained stuck at a tepid pace: It averaged 153,000 in both 2011 and 2012. That isn't enough to lower unemployment to what economists regard as a "normal" rate of 6 percent or less. The Federal Reserve doesn't expect unemployment to drop that low until after 2015.
The economy has replaced just 4.8 million, or 54 percent, of the 8.8 million jobs lost between January 2008, when the job market peaked, and February 2010, when it bottomed during the recession. It has been, by far, the weakest jobs recovery since the Great Depression of the 1930s.
"A status quo report in today's labor market represents an ongoing jobs crisis," says Heidi Shierholz, an economist at the liberal Economic Policy Institute.
Still, the economy has been showing broad improvement. Layoffs are down. Banks are lending a bit more freely. Companies have built up a near-record $1.7 trillion in cash. Consumers have cut their debts to pre-recession levels. Europe has avoided a financial catastrophe.
The once-depressed housing market is rebounding. A gauge of U.S. service firms' business activity expanded in December by the most in nearly a year. Manufacturing is benefiting from the best auto sales in five years. And Americans spent more at the end of the crucial holiday shopping season.
"There is little doubt that the seeds of faster growth are being planted," James Marple, an economist at TD Bank, said in a note to clients.
That said, most economists expect slight improvement at best in hiring this year. A 2 percentage point cut in the Social Security tax expired Jan. 1. That means a household with income of about $50,000 will have about $1,000 less to spend. A household with two high-paid workers will have up to $4,500 less.
And the government may impose spending cuts this year.
Higher taxes and less government spending, along with uncertainty about future budget fights, could restrain growth and hiring.
That "likely means acceleration in the labor market will remain elusive for the time being," said Ellen Zentner, an economist at Nomura Securities.
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