On Track for Strong Weekly Gains, Wall St. Trades Flat

Shares of Twitter Inc, the social media company that has nearly tripled in value since going public in early November, slid 13 percent to close at $63.75 after investors took profits. Twitter was among the most actively traded stocks on the New York Stock Exchange on Friday.

The tech-heavy Nasdaq fell 0.25 percent, with leaders like Apple off 0.7 percent at $560.09 and Facebook Inc. down about 4 percent at $55.44. The Nasdaq has surged 37.7 percent this year, making it the best performer among the three major U.S. stock indexes.

"Consolidating a little bit here is probably healthy rather than continuing a march higher without taking a breath," said Joseph Benanti, managing director of Rosenblatt Securities in New York. "It's a healthy pause with some profit-taking."

Volume overall was light, as it has been all week. About 4 billion shares traded on U.S. exchanges, well below the average of about 6.1 billion this month, according to data from BATS Global Markets.

Both the Dow and the S&P 500 wrapped up a second straight week of solid gains. The S&P 500 posted its best two-week period since July, while the Dow marked its best two weeks since June 2012. The S&P 500 has soared 29.1 percent this year, on track for its best year since 1997. The Dow has climbed 25.8 percent this year, on track for its best year since 1996.

Sprint Corp shares jumped 8.3 percent to $10.79, following speculation that a deal by Japan's SoftBank Corp to acquire U.S. wireless carrier T-Mobile US is closer to getting done. Sprint's stock also hit a 52-week high at $11.46 in Friday's regular session.

The Dow Jones industrial average fell 1.47 points or 0.01 percent, to end at 16,478.41. The S&P 500 dipped just 0.62 of a point, or 0.03 percent, to finish at 1,841.40. The Nasdaq Composite dropped 10.59 points or 0.25 percent, to close at 4,156.59.

Friday's slight decline also halted the S&P 500's run of four record closing highs in a row.

For the holiday-shortened week, the Dow gained 1.6 percent, the S&P 500 added about 1.3 percent and the Nasdaq advanced about 1.3 percent. The U.S. stock market was closed on Wednesday for Christmas and trading had ended early on Tuesday.

In company news, Textron Inc agreed to buy aircraft maker Beechcraft Corp for $1.4 billion in cash. Textron shares rose 1.1 percent to close at $36.61.

General Motors Co's China joint venture will recall close to 1.5 million vehicles because of potential safety issues in one of the biggest recalls in the world's biggest auto market. GM's stock fell 1.4 percent to end at $40.94.

Advancers outnumbered decliners on the NYSE by a ratio of about 8 to 7. On the Nasdaq, about 13 stocks fell for every 12 that rose.

(Refiles to add dropped word 'among' in second paragraph)

(Editing by Jan Paschal)

Wall Street Rebounds to End Three-Day Drop as Microsoft Gains

The three major U.S. stock indexes shook off early losses as Microsoft shares climbed. The stock closed up 2.6 percent at $32.89 in heavy volume. The S&P information technology sector index rose 0.4 percent.

Shares of Tesla Motors Inc jumped 14.3 percent to $153.48 a day after the electric car maker posted an unexpected quarterly profit. The stock has been a major momentum favorite this year, up almost 350 percent in 2013.

"There definitely seems to be some big runners. Microsoft was up quite a bit," said Peter Jankovskis, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois.

"It could be people decided there are some bargains out there. It's kind of odd that we had a fair amount of this tapering talk the past few days. So I'm surprised in that regard that people have decided to step back in."

Stocks had inched lower much of this week, pulling back from last week's record levels, on concerns that the Federal Reserve will start to reduce its stimulus efforts this year as the economy recovers. Gains in equities have been closely linked to the Fed's stimulative policy, and many investors are worried that economic growth may stall without the Fed's intervention.

In the latest comments from a Fed official, Richard Fisher, president of the Federal Reserve Bank of Dallas, reiterated that the central bank will probably begin cutting back on its massive bond-buying stimulus next month, as long as economic data continues to improve.

The Dow Jones industrial average rose 27.65 points or 0.18 percent, to end at 15,498.32. The S&P 500 gained 6.57 points or 0.39 percent, to 1,697.48. The Nasdaq Composite Index added 15.115 points or 0.41 percent, to 3,669.124.

Volume was once again light, with about 5.81 billion shares traded on the New York Stock Exchange, the NYSE MKT and the Nasdaq, below the daily average of 6.35 billion. Volume has yet to climb above 6 billion for any trading day this week.

Groupon Inc shares soared 21.6 percent to $10.60. Late Wednesday, the online coupon company reported revenue that exceeded expectations and named its co-founder as chief executive.

JPMorgan Chase & Co was among the Dow's worst performers. The stock fell 0.9 percent to $54.83. JPMorgan Chase, which is the biggest U.S. bank ranked by assets, faces a criminal probe by the U.S. Department of Justice over sales of mortgage-backed securities.

Data showed U.S. weekly jobless claims rose less than expected to 333,000 in the latest week, while the four-week average fell to 335,500, its lowest level since before the recession in 2007 through 2009.

Orbitz Worldwide Inc, an online travel agency, reported higher-than-expected quarterly earnings as it sold more hotel and vacation packages, and forecast full-year revenue above analysts' estimates. Orbitz shares surged 36.7 percent to $12.62.

After the closing bell, Priceline.com shares rose 5.1 percent to $981.46 after the online travel agency said quarterly profit rose on improved hotel and car-rental reservations. The stock had ended regular trading at $933.75, up 0.7 percent ahead of its earnings.

Of 442 companies in the S&P 500 that had reported earnings through Thursday morning, Thomson Reuters data showed that 67 percent topped analysts' expectations, matching the beat rate over the past four quarters. In terms of revenue, 53.6 percent exceeded estimates, more than the 48 percent rate over the past four quarters, but below the 61 percent average since 2002.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of 2 to 1, while on the Nasdaq, three stocks rose for every two that fell.

(Editing by Jan Paschal)

Tool Kit: Virtual Currency Gains Ground in Actual World

A type of digital cash, bitcoins were invented in 2009 and can be sent directly to anyone, anywhere in the world. You don’t have to go through a financial institution, which means no fees and no one tracking your spending habits. With a current market capitalization of $1 billion, bitcoins are beginning to be more widely accepted. You can use them to pay for a pizza or make speculative bets that could end up financing your child’s college education.

But bitcoins, and other digital currencies, have also come under scrutiny. Liberty Reserve, an online payment system, was shuttered in the spring by New York authorities, who said the company used its digital currency, known as LRs, to launder up to $6 billion. And law enforcement officials have voiced concerns that bitcoins could also abet illegal transactions. Bart Chilton, a commissioner on the Commodity Futures Trading Commission, suggested that bitcoins might be ripe for regulation.

Moreover, some critics say the bitcoin infrastructure is insecure, as hackable as any other computer-based system.

“The way the basic bitcoin system works is both incredibly solid and incredibly clever from a technical standpoint,” said Nicholas Weaver, senior staff researcher at the International Computer Science Institute in Berkeley, which studies and advances a range of emerging technologies. “The system’s security is fragile, however, and the economic model behind bitcoin is, well, crazy stupid.”

Nonetheless, paying with bitcoins can be a weirdly fun way to make transactions. Here is a primer on how to do it.

Like gold, bitcoins, which are both a currency and a commodity, are in limited supply (there is a cap of 21 million total) and have to be “mined” before they are put in circulation. Anyone can mine for bitcoins by downloading software, known as the bitcoin client, which algorithmically crunches a bunch of numbers to legitimize or authenticate a sequence or “block” of past bitcoin transactions. So bitcoins are basically minted as a reward for contributing to the smooth operation of the system. Validating a block yields 25 bitcoins, which are currently worth $2,675.

The fluctuating price of bitcoins, also like gold, is a function of supply and demand, as well as psychology. “Bitcoins have value because people say they have value,” said Andrew White, a former I.T. manager for the Wikipedia Foundation and now a digital currency entrepreneur in San Francisco.

Unlike fiat currencies like the United States dollar and virtual currencies like Facebook credits and the one invented by Liberty Reserve, bitcoins are not created or controlled by a central authority. But with the blistering rate of bitcoin transactions these days, you need a pricey and complex computer rig to effectively run the bitcoin client and procure some bitcoin bounty. An easier way to get bitcoins is to just find someone willing to sell them to you.

Julian Tosh, an I.T. systems administrator in Las Vegas, for example, lets friends and family buy items on his Amazon wish list and pays them back in bitcoins. “This works well as long as I need stuff,” said Mr. Tosh, who also presides over a Wednesday “Bitcoin Lunch Mob” in Las Vegas, which gathers to discuss and trade bitcoins.

But maybe you don’t personally know any bitcoin enthusiasts like Mr. Tosh or the Winklevoss twins, Cameron and Tyler, who own around $11 million worth and have filed papers with the Securities and Exchange Commission to form a bitcoin investment trust. If so, you might try localbitcoins.com, which lists people in your area who are willing to exchange bitcoins for cold hard cash. The market price Tuesday afternoon was $107 for a bitcoin. Be sure to check out sellers’ profiles and reviews to make sure they are reputable. And, of course, it’s always a good idea to meet in a public place to make the transaction.

Bitcoins can be easily transferred and stored using a digital wallet app on your Android mobile device. Popular wallet apps include BitcoinSpinner and Bitcoin Wallet. There are no iOS bitcoin wallet apps and Apple did not respond to e-mails seeking an explanation. But Blockchain has an online wallet service that you can access using any Internet-connected desktop, laptop, tablet or smartphone.

You can also get bitcoins through Mt.Gox, the largest bitcoin exchange and where the currency is traded as a commodity. But it’s a cumbersome and lengthy process, requiring wire transfers and scanning identity documents. The company, which is based in Japan, also charges a 0.6 percent fee for all transactions.

Keep in mind that the United States Department of Homeland Security in May seized Mt.Gox’s United States accounts, saying it misrepresented the full extent of its financial operations. The company did not respond to requests for comment but continues to function as before the seizure.

Another option is Coinbase, a bitcoin transaction platform, which recently announced a $5 million infusion of venture capital. While it’s still a nascent venture (not even a year old), the service hasn’t had any major hiccups yet and is relatively simple to use. You just enter your bank account and routing number, how many bitcoins you want and click “buy.” You can also send bitcoins to others through your Coinbase account. Just know you’ll be charged a 1 percent transaction fee.

Once you have your bitcoins, the fun part is spending them. Bitcoin. travel, BitcoinsInVegas.com, Spendbitcoins.com and Reddit have directories of businesses that accept bitcoins as payment. And Bitpremier.com lists high-priced luxury items (cars, jets, yachts, etc.) you can buy with bitcoins.

To make a purchase, all you have to do is type the receiver’s key code or scan their QR code into your bitcoin wallet and you’re done. Like cash transactions, you can’t cancel payment later, so be sure it’s what you want before you click “send.”

Brewster Kahle, a founder of the Internet Archive in San Francisco, said he routinely used bitcoins to pay for lunch at a local sushi restaurant. He’s interested in the technology and appreciates the libertarian aspect of it. “Bitcoin used to be just in the land of computer geeks, but not anymore,” he said.

More businesses are accepting bitcoins lately thanks to Bitpay, which supplies software for processing bitcoin payments. The merchant pays a 0.99 percent fee per transaction versus the 2 to 4 percent fees charged by credit card companies. Bitpay will also immediately convert bitcoins to dollars if the merchant desires.

“Bitcoin users are pretty enthusiastic, so you get instant loyal customers,” said Adam Penn, owner of Veggie Galaxy, a restaurant in Cambridge, Mass., which began accepting bitcoins through Bitpay in May. “So far, it’s been a no-risk revenue generator.”

Also last month, Bitpay announced a partnership with the mobile gift card app Gyft, which will allow people to use bitcoins to purchase gift cards from hundreds of retailers including Brookstone, Lowe’s, Gap, Sephora, GameStop, American Eagle, Nike, Marriott, Burger King and Fandango.

“It’s a huge development,” said Mr. Tosh in Las Vegas, who predicts Gyft’s embrace of bitcoins will lead to widespread use of the alternative currency. “Pandora’s box has been smashed.”

Or maybe not. The legal trouble at Mt.Gox sent a shiver through the market as did S.E.C. charges last week that the founder and operator of the lesser-known Bitcoin Savings and Trust in McKinney, Tex., was running a bitcoin Ponzi scheme.

Still, bitcoin advocates point out that, despite some bad actors, the actual system has not had a major security breach. Nevertheless, even the most ardent bitcoin boosters urge caution. Bitcoins have appreciated more than 700 percent since this time last year — an increase some have compared to a bubble bound to burst.

“It’s supervolatile, so I’d tell people to go slow,” said Peter Vessenes, chairman and executive director of the Bitcoin Foundation, a nonprofit organization that promotes the currency. “Never hold more bitcoins than you’re prepared to lose.”

Market Shows Small Gains in Short Session

The stock market ended slightly higher on Wednesday in a half-day session ahead of the Fourth of July holiday and Friday’s government report on the job market.

The three main stock indexes seesawed on thin trading volume, with some traders already away before the holiday. The stock market, which is closed on Thursday, will reopen on Friday for a full session.

Mixed economic data on Wednesday failed to give the market a solid direction. Private sector employers stepped up their hiring in June and weekly initial claims for unemployment benefits fell, but the growth rate in the services sector slowed in June and the United States trade deficit widened on a drop in exports.

“The only explanation that there is to the volatility is that the volume’s really light, so any sudden moves in sentiment, whether it’s buy or sell, reflects itself in the volatility because there’s not a lot of liquidity,” said Jason Weisberg, managing director at Seaport Securities.

About 3.37 billion shares exchanged hands on the New York Stock Exchange, the Nasdaq and NYSE MKT. The full trading-day average volume has been about 6.4 billion so far this year.

The Dow Jones industrial average rose 56.14 points or 0.38 percent, to close at 14,988.55. The Standard & Poor’s 500-stock index edged up 1.33 points, to 1,615.41. The Nasdaq composite index added 10.27 points, or 0.30 percent, to 3,443.67.

Large-capitalization technology stocks were among the strongest of the day, helping the Nasdaq. Cisco Systems rose 1.1 percent to $24.59 while Oracle gained 2 percent to $30.70.

Crude oil prices rose 1.64 percent to $101.24 a barrel after hitting a 14-month high above $102 a barrel on a sharp decline in crude stockpiles in the United States and political unrest in Egypt.

Health providers were in focus on Wall Street after the Obama administration said it would not require employers to provide health insurance for their workers until 2015, delaying a crucial provision of the health care law by a year.

Tenet Healthcare fell 4.3 percent to $43.64. Universal Health Services dropped 3.5 percent to $65.82.

In the bond market, interest rates moved higher. The 10-year Treasury note fell 8/32, to 93 15/32, while its yield rose to 2.50 percent, from 2.47 percent late Tuesday.

Traders Book Day’s Gains, Blunting a Rally Set Off by Encouraging Economic Data

Stocks climbed on Monday, the first day of the third quarter, supported by signs of strength in the manufacturing and construction sectors. Even so, the major stock indexes pulled back from their session highs late in the day as investors sold some shares to book profits.

The Standard & Poor’s 500-stock index closed up 0.54 percent after jumping as much as 1.27 percent earlier in the day. But the gains followed the S.& P.’s rally of 12.6 percent in the first six months of 2013, which is the strongest first half of a year since 1998 for the benchmark.

“We’ve had a couple days of pretty good moves, and on Friday and today, you’ve had some intraday profit-taking,” said Richard Meckler, president of the hedge fund LibertyView Capital Management, in Jersey City, N.J.

Wall Street showed signs of stabilization last week after a sell-off that began because of concerns that the Federal Reserve’s bond-buying policy would end sooner than expected. June was the S.& P. 500’s first negative month since October.

Among the S.& P. 500’s 10 industrial sectors, the telecommunication and utilities sectors were the decliners of the day. The S.& P.’s telecommunication sector index slipped 0.1 percent, and its utilities sector index lost 1.3 percent.

The day’s early rally was brought on by data from the Institute for Supply Management that showed that American manufacturing activity grew in June, rebounding from an unexpected contraction in May.

The Dow Jones industrial average rose 65.36 points, or 0.44 percent, to close at 14,974.96. The S.& P. 500 advanced 8.68 points, or 0.54 percent, to finish at 1,614.96. The Nasdaq composite index gained 31.24 points, or 0.92 percent, to end at 3,434.49.

While fears about the Fed’s early exit from its stimulus efforts have calmed for now, analysts said the transition to a no-stimulus environment could cause further volatility.

“I still believe the market is trying to figure out how to price in slightly higher interest rates, even if rate increases from the Federal Reserve are still at least a year away,” said Randy Frederick, managing director of active trading and derivatives at the Schwab Center for Financial Research in Austin, Tex.

In government bonds, the benchmark 10-year Treasury note increased 3/32 to 93 22/32, sending the yield down to 2.48 percent, from 2.49 percent late Friday.

Manufacturing Gains Strength, But Hiring in Sector Stays Weak

A separate report on Monday showed that construction spending neared a four-year high in May, a sign that it has regained some strength after having collapsed in the 2007-2009 recession. Even with consumer and housing data pointing to a steadily improving recovery, pockets of concern remain, particularly jobs.

The Institute for Supply Management said its index of national factory activity rose slightly more than expected in June, to 50.9 from 49, with a reading above 50 indicating expansion. The gauge for new orders rose to 51.9 from 48.8, while production jumped to 53.4 from 48.6, helping the overall index bounce back from a contraction in May — the first in six months.

“It’s nice to see manufacturing moving back into growth territory from contraction,” said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa.

But a measure of employment fell to 48.7, the lowest reading since September 2009. It was 50.1 in May. That could feed concern about the strength of the recovery, particularly since the Fed has said it could begin to wind down its stimulus this year.

“The employment issue is key,” Mr. Naroff said. “If those jobs are not there, you are not going to get consumer demand.”

A separate index from Markit, also showed modest growth in manufacturing, but recorded sharp slides in hiring and new orders from abroad.

“Firms are responding to the increasingly worrying order-book trend by pulling back on recruitment,” said Chris Williamson, Markit’s chief economist.

Construction spending neared a four-year high in May, though difficulties in the commercial real estate and factory sector subdued the pace of recovery.

Horse-Butchering Plan Gains as U.S. Agrees to Inspect

A plant in New Mexico that plans to slaughter horses to produce meat for human consumption moved a step closer to operation on Friday when the Agriculture Department said it would provide legally required inspection services.

Courtney Rowe, a spokeswoman for the department, said it was likely to grant inspection services to two more plants “in the coming days.” The department did not name them but has said it has applications from facilities in Iowa and Missouri.

Although the plant, owned by the Valley Meat Company in Roswell, N.M., still has hurdles to overcome in the state, it is on track to become the first operation in the nation permitted to process horses into meat since Congress effectively banned the practice seven years ago.

Ms. Rowe said the department had determined that the company met all of the requirements of the Federal Meat Inspection Act.

The Obama administration has asked Congress to reinstate a ban on horse slaughtering in the United States. The House and Senate appropriations committees have approved similar amendments that would deny government financing for horse slaughter.

But “until Congress acts, the department must continue to comply with current law,” Ms. Rowe added.

In a statement, Valley Meat said it was “encouraged that after well over a year of delay that the process has finally reached completion.”

It said it planned to hire as many as 100 employees to work in the plant.

Opponents of horse slaughter said the federal government had options that would have allowed it to withhold inspection. They said that it had agreed to provide inspection services in an effort to put an end to a lawsuit filed by Valley Meat.

“This looks like a strange obedience to a Hail Mary lawsuit filed by the company,” said Wayne Pacelle, chief executive of the Humane Society of the United States.

Valley Meat said, however, that it would continue to press the lawsuit. “Given the unjustifiable failures of U.S.D.A. to comply with the law for a period extending well over 14 months, Valley Meat intends to continue to pursue the case,” the company said.

Gov. Susana Martinez of New Mexico and Gary K. King, the state’s attorney general, have opposed horse slaughtering, in part because of animal welfare issues but also because of potential hazards to humans. Horses are routinely injected with veterinary drugs by owners who never expect them to be eaten.

The Humane Society maintains a list of more than 100 drugs administered to horses, some of which carry labels stating they are not to be used in horses intended for human consumption. Bruce A. Wagman, a lawyer for Front Range Equine Rescue, a group opposing horse slaughter, said those drugs also posed an environmental hazard that the Agriculture Department was ignoring.

“The offal and waste byproducts produced by horse slaughter is put into lagoons where those drugs and other contaminants can leach out into streams and ground water,” Mr. Wagman said.

Phil Sisneros, a spokesman for Mr. King, New Mexico’s attorney general, said Valley Meat still faced hurdles to resuming operations there. (The plant was shut in 2007, after Congress effectively banned horse slaughtering). In a recent opinion, Mr. King said drugs administered to horses could constitute illegal contamination under New Mexico law.

“As I understand it, their attorney has said they have a testing process ready to go, and that’s a good thing,” Mr. Sisneros said. “We’re not going to just take their word for it, so there will be some sort of independent testing that has to be done.”

He said the environmental crime unit in the attorney general’s office would monitor Valley Meat, along with the state’s environment department, which has dealt with the company in the past.

Gains for a 4th Week in a Row, and Milestones, Too

Stocks continued their climb into uncharted territory on Friday, racking up the fourth week in a row of gains as encouraging economic data prompted investors to buy shares of growth companies.

The Dow Jones industrial average and the Standard & Poor’s 500-stock index finished at highs, driven by gains in energy and industrial shares. The indexes have pushed to a series of high levels as part of the rally that has lifted equities more than 16 percent for the year so far.

The Dow Jones industrial average gained 121.18 points, or 0.80 percent, to close at a milestone 15,354.40. The S.& P. 500-stock index rose 17 points, or 1.03 percent, to end at a record 1,667.42.

The Nasdaq composite index climbed 33.73 points, or 0.97 percent, to finish at 3,498.97 — its highest close since October 2000.

In a sign of how far the market has come, the S.& P. 500 is about 1,000 points above the low it hit in March 2009 in the wake of the credit crisis and recession.

“It’s hard to hold this market down,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Conn.

Data released on Friday showed Americans felt better about their economic and financial prospects in early May, with consumer sentiment at its highest in nearly six years, while a gauge of future economic activity rose in April to a near five-year high.

“If you believe the economy is going to gradually get better and that global growth will improve, the parts of the market that have not benefited so far, like cyclicals, will probably be the next group to outperform,” Mr. Sheldon said. Cyclical industries are those that do well when times are good, like an airline that benefits from more people flying on vacation.

The S.& P. energy sector index gained 0.8 percent, with Exxon Mobil up 1.2 percent at $91.76.

Boeing shares led the S.& P. 500’s industrial sector index higher with a 2.4 percent advance to $98.92, its highest since October 2007. The S.& P. industrial index rose 1.4 percent.

The rate of growth in the economy has been expected to slow in the second quarter as tighter fiscal policy started to take effect. But recent improvements, including in the labor market and retail sales, suggest the recovery remains resilient.

“We are still recovering,” said Doreen Mogavero, chief of Mogavero, Lee & Company in New York, who also noted that the comeback was slow. She added that markets in the United States, for all their troubles, were “still the best place to be at this moment.”

Earlier in Friday’s session, the Dow touched a high at 15,357.40. For the week, the Dow advanced 1.7 percent, while the S.& P. 500 climbed 2.1 percent and the Nasdaq rose 1.9 percent.

J. P. Morgan raised its year-end target for the S.& P. 500 to 1,715 from 1,580, implying a gain of just under 3.5 percent for the index for the rest of the year.

“We realize investors are apprehensive about making fresh money purchases, but we see the risk/reward as particularly attractive in technology, health care and financials,” said the client note from Thomas Lee, J. P. Morgan’s United States equity strategist.

J. C. Penney shares lost 4.2 percent to $18.01 after the retailer reported another steep quarterly loss on weak sales and heavy clearance deals, and the chief executive, Myron Ullman, cautioned that he needed time to fix the company’s problems.

Tableau Software, a maker of data analysis software, surged in its first day of trading as investors bet the rising interest in Big Data would drive its growth. Tableau surged 64 percent to $50.75.

The price of the benchmark 10-year Treasury note fell 22/32 to 98 5/32, increasing the yield to 1.95, from 1.88 on Thursday.

Time Warner Revenue Is Flat, Despite Cable Gains

The parent company of HBO, CNN, TNT and TBS reported revenue of $6.9 billion in the quarter that ended March 31, down 1 percent from the same period last year. Net income grew 23.5 percent to $720 million, or 75 cents a share, compared with $583 million and 59 cents a share in 2012.

“We’re off to a strong start in 2013, making us even more confident in our full-year outlook,” Jeffrey L. Bewkes, chairman and chief executive of Time Warner, told analysts. He specifically pointed to the success of the company’s cable TV business, driven this quarter by an average nightly audience of 10.7 million for the N.C.A.A. basketball tournament broadcast on several Turner channels.

But Time Warner’s legacy businesses continued to lag. Later this year, the company is expected to complete the spinoff of its Time Inc. publishing unit into a separate, publicly traded company. Revenue at Time Inc., which publishes Time, People, Sports Illustrated and InStyle, fell 5 percent to $737 million, reflecting an 11 percent dip in subscription revenues.

Time Inc. eliminated roughly 6 percent of its total worldwide staff of 8,000 in the first quarter, resulting in $53 million in restructuring and severance charges. “We remain very focused on taking costs out of the business,” said John K. Martin, chief financial and administrative officer at Time Warner. Cost cutting, he added, is “an important step in preparing Time Inc. to function as a stand-alone public company.'’

Revenues at the Warner Brothers studio fell 4 percent to $2.7 billion, while operating income increased by 23 percent to $263 million. “Both ‘Gangster Squad’ and ‘Jack the Giant Slayer’ fell below our expectations,” Mr. Bewkes said.

He remained optimistic about the studio’s slate of upcoming films, including “The Great Gatsby” and “The Hangover Part III.” Warner Brothers had a strong television season with “Revolution,” an apocalyptic drama on NBC, and “Game of Thrones,” the HBO fantasy series that averages 13.4 million viewers per episode.

Mr. Bewkes defended CNN under the leadership of Jeff Zucker, the recently named president of CNN Worldwide. But, he said, the channel still needed to evolve from a trusted source of breaking news to a more regularly watched outlet. “CNN can’t just be politics and wars,” Mr. Bewkes said.

He rebuffed questions about whether the HBO Go on-demand app would be made available on an à la carte basis through a broadband connection, making the premium cable channel more like the streaming service Netflix. “We would do it if we thought it was in our economic best interest,” Mr. Bewkes said. “At this point, we don’t think it makes sense.”

Sirius XM Reports Gains in Income and Subscribers

Sirius XM said revenue rose 12 percent, $897 million, from the period a year earlier, but was lower than the $906 million analysts had predicted.

Net income increased 15 percent to $124 million, while earnings before interest, tax, depreciation and amortization — adjusted to eliminate some charges including the effect of the 2008 merger between Sirius and XM — were $262 million, up 26 percent from a year earlier.

Sirius XM earned 2 cents a share, one cent less than analysts had predicted.

The company’s subscriber growth continued to be a bright spot, even after a rare price increase last year. It was the first time Sirius had raised the subscription rate; XM had done it once before. Sirius XM gained 453,000 subscribers in the quarter, bringing its total to 24.4 million. In the last two years its subscriber ranks have grown 19 percent.

“Sirius XM’s first-quarter results show a continuation of our trend of strong, profitable growth,” Mr. Meyer said in a statement.

One concern for investors, however, is an increase in “churn” rate, a measurement of subscriber turnover. In recent years, that number had been gradually reduced to 1.9 percent, but in the most recent quarter it was 2 percent.

Mr. Meyer, who had been Sirius’s president for sales and operations since 2004, was named interim chief executive in December after the departure of Mel Karmazin. He was appointed to the post permanently in a separate announcement on Tuesday by Gregory B. Maffei, who became chairman on April 10.

Mr. Maffei is the president and chief executive of Liberty Media, which since 2009 had been Sirius XM’s largest investor and took over the company, which is based in New York, last year by acquiring a majority of its shares.

Sirius XM shares rose 18 cents, or 5.9 percent, to close at $3.25 on Tuesday.

A Year of Market Gains, Despite Political Turmoil

A year ago, some thought 2012 was destined to be the year that the euro zone — and maybe even the entire European Union — broke up. The banks that supported their governments, and that in turn depended on those same governments for bailouts if they went broke, were deemed to be particularly vulnerable to disaster.

It did not happen, and while the euro zone countries hardly solved their economic problems, the Continent’s stock markets turned out to be good investments in 2012, with bank shares among the best performers. The same could be said about the United States, where the broad stock market posted double-digit gains and Bank of America shares doubled in 2012, albeit from a very depressed level.

Over all, the Standard & Poor’s Euro 350-stock index was up 13 percent for the year, measured in euros, and more than 15 percent measured in dollars. The S.& P. 500 wound up the year with a gain of 13 percent.

It may have been typical of 2012 that it was politicians and central bankers — not economic news or corporate developments — that dominated investor attention. As the year ended, the difference was that it was Washington, not Europe, where the squabbles were taking place.

For much of the year, it appeared that the European squabbles were leading nowhere, and by midsummer, markets were pessimistic about the outcome. Finally, Mario Draghi, the president of the European Central Bank, took decisive action to assure that the banks — and the governments that depended on them — would have access to funds. That did not turn around recessionary conditions in much of the euro zone, but it was enough to turn around financial markets. Prices of government bonds in many of the most troubled countries began to rise. Those who bet that Europe would solve its problems did well in the financial markets.

The accompanying charts show the performance of stocks in 10 economic sectors in both Europe and the United States, both in 2012 and since Oct. 9, 2007, the day that world stock markets peaked before what would turn out to be a world recession and credit crisis.

What stands out is how well financial stocks and consumer discretionary stocks did during 2012. The latter stocks are things purchased by consumers that are likely to do better when the economy is improving. In the United States, the two best such stocks in the S.& P. 500 were PulteGroup, a homebuilder, and Whirlpool, an appliance maker.

But while Europe did better in 2012, it remains much farther from recovering all of the losses experienced since the 2007 peak. The American index is just 9 percent lower than that, while the European index is about a third below where it was then. The only sectors that have completely made up their losses on both sides of the Atlantic are health care and consumer staples. In the United States, the consumer discretionary and information technology sectors have also done so, although the latter sector’s performance is largely because of Apple, whose shares are more than three times as high as they were in 2007.