Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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At Least 8 Die in Egyptian Riots after Soccer Verdict

CAIRO — An Egyptian court sentenced 21 people to death on Saturday on charges related to one of the world’s deadliest incidents of soccer violence, touching off an attempted jailbreak and a riot that killed another eight in the Mediterranean port city that is home to most of the defendants.

The verdict follows deadly clashes between police and demonstrators on Friday, the second anniversary of the uprising that overthrew Egypt’s longtime leader Hosni Mubarak. Such cycles of violence, often lasting for weeks and costing dozens of lives, have occurred regularly in the last two years.

Avid soccer fans from both teams, known as Ultras, hold the police at least partly responsible for the Port Said deaths and have criticized President Mohamed Morsi for doing little to overhaul the force.

Immediately after the verdict, two police officers were shot dead outside Port Said’s main prison when angry relatives tried to storm the facility to free the defendants. Police fired tear gas and rubber bullets, as well as live rounds, at the crowd outside the prison, killing six, security officials said.

Security officials said the military was being deployed to Port Said — the second such deployment in less than 24 hours. The army is often used to keep order by top generals who took over after Mr. Mubarak was ousted, but the military has kept a much lower profile since Mr. Morsi was elected as president in June. The military was also deployed overnight in the city of Suez after eight people died in clashes between security forces and protesters opposed to President Morsi.

Judge Sobhi Abdel-Maguid read out the death sentences related to the Feb. 1 riot in Port Said that killed 74 fans of the Cairo-based Al-Ahly team. Defendants’ lawyers said all those sentenced were fans of the Port Said team, Al-Masry. Executions in Egypt are usually carried out by hanging.

The judge said in his statement, read live on state TV, that he would announce the verdict for the remaining 52 defendants on March 9.

Among those on trial are nine security officials, but none were handed sentences Saturday, lawyers and security officials say.

Fans of al-Ahly, whose stands were attacked by the rival club Al-Masry in the Feb. 1 incident in Port Said, had promised more violence if the accused did not receive death sentences. In the days leading up to the verdict, Al-Ahly fans warned of bloodshed and retribution. Hundreds of Al-Ahly fans gathered outside the Cairo sports club in anticipation of the verdict, chanting against the police and the government.

Before the judge could read out the names of the 21, families erupted in screams of "Allahu akbar!" Arabic for God is great, with their hands in the air and waving pictures of the deceased. One man fainted while others hugged one another. The judge smacked the bench several times to try and contain reaction in the courtroom.

The verdict is not expected to calm tensions between the two rival teams. The judge is expected to make public his reasons for the death sentences March 9, when the remaining 52 defendants receive their sentences.

A Port Said resident and lawyer of one defendant given a death sentence said the verdict was nothing more than "a political decision to calm the public."

"There is nothing to say these people did anything and we don’t understand what this verdict is based on," the lawyer, Mohammed al-Daw, said.

The violence began after the Port Said’s home team won the match, 3-1. Al-Masry fans stormed the pitch after the game ended, attacking Cairo’s Al-Ahly fans.

Authorities shut off the stadium lights, plunging it into darkness. In the exit corridor, the fleeing crowd pressed against a chained gate until it broke open. Many were crushed under the crowd of people trying to flee.

Survivors described a nightmarish scene in the stadium. Police stood by doing nothing, they said, as fans of Al-Masry attacked supporters of the top Cairo club stabbing them and throwing them off bleachers.

Al-Ahly survivors said supporters of Al-Masry carved the words "Port Said" into their bodies and undressed them while beating them with iron bars.

While there has long been bad blood between the two rival teams, many blamed police for failing to perform the usual searches for weapons at the stadium.

Both Al-Ahly Ultras and Al-Masry Ultras widely believe that former members of the ousted government of Mr. Mubarak helped instigate the attack, and that the police at the very least were responsible for gross negligence. It is not clear what kind of evidence, if any, was presented to the court to back up claims that the attack had been orchestrated by governmentofficials.

As is customary in Egypt, the death sentences will be sent to the nation’s top religious authority, the Grand Mufti, for approval, though the court has final say on the matter.

All of the defendants — who were not present in the courtroom Saturday for security reasons — have the right to appeal the verdict.

The incident was the world’s deadliest soccer violence in 15 years.

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Notre Dame’s Te’o says had no part in forming hoax

Jan 24 (Reuters) – Notre Dame football player Manti Te‘o said he was the victim of an elaborate online hoax and denied in an interview broadcast on Thursday having had any part in the construction of the dramatic story of his dying girlfriend.

“No, I did not,” Te’o said in the interview with Katie Couric broadcast on the daytime talk show “Katie.” “I think what people don’t realize is that the same day that everybody else found out about this situation, I found out.”

The reported deaths of Te’o's grandmother and purported girlfriend, both on Sept. 12, and his response to the tragedies, were often repeated stories during Notre Dame‘s bid for a national championship last season. His grandmother did die that day.

Te’o, who was a finalist for college football’s highest individual honor for helping drive Notre Dame to an undefeated regular season, admitted he maintained the public deception after he learned the truth that she had never existed, but he did not do so for personal gain.

Couric asked Te’o to respond to several theories people have raised since the hoax was revealed, including that he might be gay and created the relationship to hide his sexual orientation.

“No, far from it,” Te’o said when asked by Couric if he were gay. “Far from that.”

Te’o sat with his hands often clasped and responded in a soft tone to Couric‘s questions, telling her he did not know if the Lennay Kekua story had supported his Heisman trophy candidacy.

It was his first on-camera interview since sports blog Deadspin.com broke the story on Jan. 16 that Kekua did not exist. Couric also interviewed his parents, Brian and Ottilia Te‘o, who defended their son.

Notre Dame, one of the most powerful institutions in U.S. collegiate athletics, held a news conference within hours of the Deadspin.com story to say that Te’o had been duped.

Te’o had told sports network ESPN in an off-camera interview on Friday that an acquaintance, Ronaiah Tuiasosopo, had told him he was behind the hoax.

CONFESSED HOAX

Te’o said in the interview with Couric that Tuiasosopo, who he had spoken to twice before and had believed was Kekua‘s cousin, confessed the hoax to him on Jan. 16.

Te’o said he received a telephone call from the person claiming to be Kekua on Dec. 6 – two days before the Heisman presentation – and he wasn’t really certain she never existed until Tuiasosopo‘s confession to him.

“My whole reality was she was dead, and now all of the sudden she’s alive. At that time I didn’t know that it was just somebody’s prank.”

He went along with the Kekua story the day of the Heisman presentation, though he knew at a minimum that she was alive, and did not tell his parents until Christmas, he said.

“Part of me was saying that if you say she is alive what would everybody think? What are you going to tell everybody who follows you, who you inspire? What are you going to say? At that time, on Dec. 8, two days after I just found out she was alive, as a 21-year-old, I wasn’t ready for that.”

Te’o said he “wasn’t forthcoming” about the extent of his relationship with Kekua, that they had never met in person, but reporters did not ask him directly if they had met in person.

He said he was most sorry for having told his father he had seen Kekua in person when he was in Hawaii, a story that his father repeated to media when asked.

When asked why he wouldn’t simply want a girlfriend he could spend time with on campus, Te’o said he was drawn to Kekua because her background appeared similar to his own.

“What I went through was real,” Te’o said. “The feelings, the pain, the sorrow, that was all real. That is something I can’t fake.”

Te’o said he did not know how the hoax would affect his position in the National Football League draft.

“As far as my draft status, I hope and pray that good happens obviously, but as long as my family is OK, I can live with whatever happens,” he said. (Reporting by David Bailey; Editing by Cynthia Johnston and Tim Dobbyn)

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Waiter Michael Garcia Refuses to Serve Man Who Insulted Boy with Down Syndrome

By Dahvi Shira

01/26/2013 at 09:00 AM EST

Waiter Michael Garcia made his regular customer Kim Castillo feel like family last week at the Houston restaurant Laurenzo's Prime Rib.

Castillo was eating there with her husband and their 5-year-old son Milo when several waiters came by their table to chat. Milo, who has Down syndrome, has slightly delayed speech. He showed off some new words, while talking about his recent birthday.

The chatter apparently displeased a nearby customer, who, according to NBC affiliate KPRC-TV, said, "Special needs children need to be special somewhere else."

Once Garcia heard the man's comment, "My personal feelings took over, and I told him, 'I'm not going to be able to serve you, Sir,' " he told the news channel. "[I said], 'How could you say that? How could you say that about a beautiful 5-year-old angel?' "

Castillo, "impressed" with Garcia's actions, says the waiter "put [his] job on the line … to stand up for somebody else."

Calling the man who insulted her son, "ignorant," Castillo adds, "I know Michael [stood up for Milo] from his heart, and from reacting to the situation. I don't think he stopped and thought about what he was doing."

Following the incident, Castillo wrote a blog post defending her son.

"Was he loud? Maybe a little in the moment, but honestly, the adults at our table were three times louder than he was," she said. "If he had been obnoxious, which like any other 5-year-old he can be, I wouldn't have thought twice about the family asking to move."

Meanwhile the restaurant's Facebook page has lit up with praise for Garcia and the supportive staff there.

"I am a Father of a special needs child and I applaud you and your employee, Michael Garcia, for standing up to intolerance and helping to educate people who fear the most precious of all children, those with special needs and disabilities," read one post.

He added, "Although I am a resident of California, I work for a [company] headquartered in Texas and am there on occasion for business. I will be sure to drop by and say hello and thank you when in town!"

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CDC: Flu seems to level off except in the West

New government figures show that flu cases seem to be leveling off nationwide. Flu activity is declining in most regions although still rising in the West.

The Centers for Disease Control and Prevention says hospitalizations and deaths spiked again last week, especially among the elderly. The CDC says quick treatment with antiviral medicines is important, in particular for the very young or old. The season's first flu case resistant to treatment with Tamiflu was reported Friday.

Eight more children have died from the flu, bringing this season's total pediatric deaths to 37. About 100 children die in an average flu season.

There is still vaccine available although it may be hard to find. The CDC has a website that can help.

___

CDC: http://www.cdc.gov/flu/

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Wall Street Week Ahead: Bears hibernate as stocks near record highs

NEW YORK (Reuters) - Stocks have been on a tear in January, moving major indexes within striking distance of all-time highs. The bearish case is a difficult one to make right now.

Earnings have exceeded expectations, the housing and labor markets have strengthened, lawmakers in Washington no longer seem to be the roadblock that they were for most of 2012, and money has returned to stock funds again.

The Standard & Poor's 500 Index <.spx> has gained 5.4 percent this year and closed above 1,500 - climbing to the spot where Wall Street strategists expected it to be by mid-year. The Dow Jones industrial average <.dji> is 2.2 percent away from all-time highs reached in October 2007. The Dow ended Friday's session at 13,895.98, its highest close since October 31, 2007.

The S&P has risen for four straight weeks and eight consecutive sessions, the longest streak of days since 2004. On Friday, the benchmark S&P 500 ended at 1,502.96 - its first close above 1,500 in more than five years.

"Once we break above a resistance level at 1,510, we dramatically increase the probability that we break the highs of 2007," said Walter Zimmermann, technical analyst at United-ICAP, in Jersey City, New Jersey. "That may be the start of a rise that could take equities near 1,800 within the next few years."

The most recent Reuters poll of Wall Street strategists estimated the benchmark index would rise to 1,550 by year-end, a target that is 3.1 percent away from current levels. That would put the S&P 500 a stone's throw from the index's all-time intraday high of 1,576.09 reached on October 11, 2007.

The new year has brought a sharp increase in flows into U.S. equity mutual funds, and that has helped stocks rack up four straight weeks of gains, with strength in big- and small-caps alike.

That's not to say there aren't concerns. Economic growth has been steady, but not as strong as many had hoped. The household unemployment rate remains high at 7.8 percent. And more than 75 percent of the stocks in the S&P 500 are above their 26-week highs, suggesting the buying has come too far, too fast.

MUTUAL FUND INVESTORS COME BACK

All 10 S&P 500 industry sectors are higher in 2013, in part because of new money flowing into equity funds. Investors in U.S.-based funds committed $3.66 billion to stock mutual funds in the latest week, the third straight week of big gains for the funds, data from Thomson Reuters' Lipper service showed on Thursday.

Energy shares <.5sp10> lead the way with a gain of 6.6 percent, followed by industrials <.5sp20>, up 6.3 percent. Telecom <.5sp50>, a defensive play that underperforms in periods of growth, is the weakest sector - up 0.1 percent for the year.

More than 350 stocks hit new highs on Friday alone on the New York Stock Exchange. The Dow Jones Transportation Average <.djt> recently climbed to an all-time high, with stocks in this sector and other economic bellwethers posting strong gains almost daily.

"If you peel back the onion a little bit, you start to look at companies like Precision Castparts , Honeywell , 3M Co and Illinois Tool Works - these are big, broad-based industrial companies in the U.S. and they are all hitting new highs, and doing very well. That is the real story," said Mike Binger, portfolio manager at Gradient Investments, in Shoreview, Minnesota.

The gains have run across asset sizes as well. The S&P small-cap index <.spcy> has jumped 6.7 percent and the S&P mid-cap index <.mid> has shot up 7.5 percent so far this year.

Exchange-traded funds have seen year-to-date inflows of $15.6 billion, with fairly even flows across the small-, mid- and large-cap categories, according to Nicholas Colas, chief market strategist at the ConvergEx Group, in New York.

"Investors aren't really differentiating among asset sizes. They just want broad equity exposure," Colas said.

The market has shown resilience to weak news. On Thursday, the S&P 500 held steady despite a 12 percent slide in shares of Apple after the iPhone and iPad maker's results. The tech giant is heavily weighted in both the S&P 500 and Nasdaq 100 <.ndx> and in the past, its drop has suffocated stocks' broader gains.

JOBS DATA MAY TEST THE RALLY

In the last few days, the ratio of stocks hitting new highs versus those hitting new lows on a daily basis has started to diminish - a potential sign that the rally is narrowing to fewer names - and could be running out of gas.

Investors have also cited sentiment surveys that indicate high levels of bullishness among newsletter writers, a contrarian indicator, and momentum indicators are starting to also suggest the rally has perhaps come too far.

The market's resilience could be tested next week with Friday's release of the January non-farm payrolls report. About 155,000 jobs are seen being added in the month and the unemployment rate is expected to hold steady at 7.8 percent.

"Staying over 1,500 sends up a flag of profit taking," said Jerry Harris, president of asset management at Sterne Agee, in Birmingham, Alabama. "Since recent jobless claims have made us optimistic on payrolls, if that doesn't come through, it will be a real risk to the rally."

A number of marquee names will report earnings next week, including bellwether companies such as Caterpillar Inc , Amazon.com Inc , Ford Motor Co and Pfizer Inc .

On a historic basis, valuations remain relatively low - the S&P 500's current price-to-earnings ratio sits at 15.66, which is just a tad above the historic level of 15.

Worries about the U.S. stock market's recent strength do not mean the market is in a bubble. Investors clearly don't feel that way at the moment.

"We're seeing more interest in equities overall, and a lot of flows from bonds into stocks," said Paul Zemsky, who helps oversee $445 billion as the New York-based head of asset allocation at ING Investment Management. "We've been increasing our exposure to risky assets."

For the week, the Dow climbed 1.8 percent, the S&P 500 rose 1.1 percent and the Nasdaq advanced 0.5 percent.

(Reporting by Ryan Vlastelica; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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India Ink: Five Questions For: Prajwal Parajuly

Prajwal Parajuly is an Indian writer whose first book “The Gurkha’s Daughter,” a collection of short stories on Nepalese-speaking people, was recently released in India. He spoke to India Ink from the Jaipur Literature Festival.

What are the occupational hazards of being a writer?

When there is a lot of adulation coming in a short time — one doesn’t feel grounded. Second, I would say, a lot of people assume you don’t have a nine-to-five job. My health has taken a back seat. I write late at night.

What is your writing ritual?

I write only when I think. I do a major chunk of writing in my hometown of Gangtok [in Sikkim state]. I did my first draft with a multitude of ellipses.

Why does the Jaipur Literature Festival matter to you?

When I was invited, I was told by people that you are a debut author and you can’t miss the Jaipur Literature Festival. I feel I am the most insignificant author here. But I am enjoying the festival.

How do you deal with critics?

I have learned that a lot of praise is unmerited and so is a lot of criticism. I try not to take it seriously. You can’t be 28 and writing considerably!

Why should we read your book?

Buy it because the cover is beautiful and would look great on your mantelpiece.

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Somalia militants’ Twitter account down after hostage threat

NAIROBI (Reuters) – A Twitter account run by Somali militant group al Shabaab was unavailable on Friday, days after the al Qaeda-aligned rebels used the social media site to boast about killing a French agent and threatened to kill several Kenyan hostages.

Al Shabaab often used its Twitter account to claim responsibility for attacks on African Union and Somali government troops, as well as senior officials in the Horn of Africa nation and other bombings in the region.

But the militant group’s official Twitter account, which had thousands of followers, was offline on Friday with a message saying “Sorry, that user is suspended”.

It was not immediately clear why the account, which was created in 2011 under the HSM PRESS Twitter handle, was suspended. The account was still unavailable as of 0930 GMT.

Twitter said it does not comment on individual accounts and the Kenyan government denied it had filed any request for the account to be taken down.

“It’s an emphatic no. We would not try to negotiate or have anything to do with the Al Shabaab. We didn’t even know the account was suspended,” said government spokesman Muthui Kariuki.

Al Shabaab posted on the account on Wednesday a link to a video of two Kenyan civil servants held hostage in Somalia, telling the Kenyan government their lives were in danger unless it released all Muslims held on “so-called terrorism charges” in the country.

“Kenyan government has three weeks, starting midnight 24/01/2013 to respond to the demands of HSM if the prisoners are to remain alive,” the group said.

Last week the rebel group said on its Twitter account that it had executed French agent Dennis Allex, who was held hostage since 2009, after a French commando mission to rescue him failed.

Al Shabaab wants to impose their strict version of sharia, or Islamic law, across Somalia. However, it has lost significant territory in the southern and central parts of the country in the face of an offensive by African Union troops.

(Reporting by Drazen Jorgic and George Obulutsa; Editing by Jon Boyle)

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Vanessa Lachey: How I Told Nick I Was Pregnant

Courtesy of the Lacheys

After their destination wedding on the beaches of Necker Island in 2011, newlyweds Nick and Vanessa Lachey were ready to begin making good on the promise of a brood of babies.

But six months into trying to get pregnant, Vanessa was ready to call it quits — at least temporarily — to allow nature to take its course.

“Honestly, by mid-December, I resigned myself to the notion that it was not going to be easy for us,” she writes on her new website. “So, I decided that I had to just ‘let go.’”

Spending time settling into their new Los Angeles home while the couple wrapped up projects — Vanessa was busy filming Wipeout — the pair first planned a family trip to the Bahamas for a chance to unwind.

“Before we could relax and soak in the sun, I had to film [an] appearance and would meet everyone in the Bahamas the next day,” Vanessa explains.

After work, the actress headed out to celebrate a friend’s birthday — where telltale signs of pending parenthood suddenly began to pop up.

“I wanted absolutely everything on the menu! I also remember NOT wanting my martini,” she recalls. “After dinner something in my gut said, ‘Let’s go back to the hotel … and pick up a pregnancy test on the way!’”

Proving a mother knows best, it was positive — only to be confirmed by a big batch of follow-up tests. “I was in absolute shock! I had taken a pregnancy test multiple times every month over the past six months, but this one (and the nine others I took that night) was positive,” Vanessa writes. “It was such a beautiful moment. The only thing missing was my husband, of course.”

But with Nick waiting for his wife in the Bahamas, the mom-to-be managed to contain her excitement, keeping mum until she could spill the beans in person.

“I wanted to look into his eyes when I said, ‘I’m pregnant,’” she shares. “I wanted to feel his hug when he grabbed me with excitement. I wanted to take in the surroundings so that I would always remember the exact moment I told him he was going to be a father.”

Following “the longest night I can remember,” Vanessa began the trek to the Bahamas — a journey that “seemed like an absolute eternity!” — to join Nick. Once she arrived, the expectant star quickly settled in and headed with her husband for a seaside stroll.

“All I kept thinking about was this little life inside of me that WE made. He was growing and we were going to become a family,” she says. “At that moment everything in me felt so right. I was bursting with emotion and wanting to tell Nick the good news.”

Vanessa was finally ready to break the news to the unknowing dad-to-be – a moment she will remember forever. “I took a deep breath, grabbed his hands, looked him in the eyes and told him, ‘I’M PREGNANT!” she writes.

“He looked at me and asked if I was serious. I said yes, we hugged and then he said, ‘I think I have to sit down!’ That was Jan. 6, 2012.”

Now the proud parents of son Camden John, 4 months, the tight knit trio revisited the same spot where Nick and Vanessa shared the sweet moment exactly one year later, a special anniversary caught on tape.

“We will always have that memory together and now Cam will have one, too,” the new mom shares. ”I took this video that I will embarrass him with in the future, and I’m happy to share a piece of it with you.”

– Anya Leon

For more exclusive content from Vanessa Lachey, visit her newly-launched website.

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Penalty could keep smokers out of health overhaul

WASHINGTON (AP) — Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.

The Affordable Care Act — "Obamacare" to its detractors — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.

For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.

Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration. But older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.

Workers covered on the job would be able to avoid tobacco penalties by joining smoking cessation programs, because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.

Nearly one of every five U.S. adults smokes. That share is higher among lower-income people, who also are more likely to work in jobs that don't come with health insurance and would therefore depend on the new federal health care law. Smoking increases the risk of developing heart disease, lung problems and cancer, contributing to nearly 450,000 deaths a year.

Insurers won't be allowed to charge more under the overhaul for people who are overweight, or have a health condition like a bad back or a heart that skips beats — but they can charge more if a person smokes.

Starting next Jan. 1, the federal health care law will make it possible for people who can't get coverage now to buy private policies, providing tax credits to keep the premiums affordable. Although the law prohibits insurance companies from turning away the sick, the penalties for smokers could have the same effect in many cases, keeping out potentially costly patients.

"We don't want to create barriers for people to get health care coverage," said California state Assemblyman Richard Pan, who is working on a law in his state that would limit insurers' ability to charge smokers more. The federal law allows states to limit or change the smoking penalty.

"We want people who are smoking to get smoking cessation treatment," added Pan, a pediatrician who represents the Sacramento area.

Obama administration officials declined to be interviewed for this article, but a former consumer protection regulator for the government is raising questions.

"If you are an insurer and there is a group of smokers you don't want in your pool, the ones you really don't want are the ones who have been smoking for 20 or 30 years," said Karen Pollitz, an expert on individual health insurance markets with the nonpartisan Kaiser Family Foundation. "You would have the flexibility to discourage them."

Several provisions in the federal health care law work together to leave older smokers with a bleak set of financial options, said Pollitz, formerly deputy director of the Office of Consumer Support in the federal Health and Human Services Department.

First, the law allows insurers to charge older adults up to three times as much as their youngest customers.

Second, the law allows insurers to levy the full 50 percent penalty on older smokers while charging less to younger ones.

And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.

Here's how the math would work:

Take a hypothetical 60-year-old smoker making $35,000 a year. Estimated premiums for coverage in the new private health insurance markets under Obama's law would total $10,172. That person would be eligible for a tax credit that brings the cost down to $3,325.

But the smoking penalty could add $5,086 to the cost. And since federal tax credits can't be used to offset the penalty, the smoker's total cost for health insurance would be $8,411, or 24 percent of income. That's considered unaffordable under the federal law. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator.

"The effect of the smoking (penalty) allowed under the law would be that lower-income smokers could not afford health insurance," said Richard Curtis, president of the Institute for Health Policy Solutions, a nonpartisan research group that called attention to the issue with a study about the potential impact in California.

In today's world, insurers can simply turn down a smoker. Under Obama's overhaul, would they actually charge the full 50 percent? After all, workplace anti-smoking programs that use penalties usually charge far less, maybe $75 or $100 a month.

Robert Laszewski, a consultant who previously worked in the insurance industry, says there's a good reason to charge the maximum.

"If you don't charge the 50 percent, your competitor is going to do it, and you are going to get a disproportionate share of the less-healthy older smokers," said Laszewski. "They are going to have to play defense."

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Online:

Kaiser Health Reform Subsidy Calculator — http://healthreform.kff.org/subsidycalculator.aspx

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