Stocks mixed on Wall Street; GM slumps

NEW YORK — The stock market continued its lackluster start to the New Year Friday.

Stocks opened higher, then fell back to trade flat around midday. The market's slump on Thursday was the first for an opening day of the year since 2008.

KEEPING SCORE: The Standard & Poor's 500 index fell two points, or 0.1 percent, to 1,830 as of 12:09 p.m. Eastern Time. The Dow Jones industrial average gained seven points, or 0.1 percent, to 16,449. The Nasdaq composite fell 16 points, or 0.4 percent, to 4,126.

SALES SLUMP: General Motors was among the biggest decliners in the S&P 500. The automaker fell $1.41, or 3.4 percent, to $39.53 after the company said its U.S. sales slumped more than 6 percent in December. GM sold about 230,000 cars last month, down from nearly 246,000 a year ago.

BIG STORM: Trading was muted Friday after a winter storm hit the Northeast. The governors of New York and New Jersey declared states of emergency and urged people to avoid travelling. Trading has been quiet this week, before and after the New Year's Day holiday on Wednesday.

DELTA DECEMBER: Delta jumped $1.20, or 4.3 percent, to $28.73 after the airline said that a measure of its revenue for December rose 10 percent. Delta benefited from strong demand and the late Thanksgiving holiday. Analysts at S&P Capital IQ raised their earnings estimates for the carrier and boosted their recommendation on the stock to "strong buy."

TREASURYS AND COMMODITIES: The yield on the 10-year Treasury note edged higher to 3 percent from 2.99 percent on Thursday. The price of oil dropped for a fourth straight trading day. Oil fell 95 cents, or 1 percent, to $94.50 a barrel.

THE BIGGER PICTURE: Despite the slow start to the year, the economic backdrop remains positive for stocks, said Bill Barker, a senior portfolio analyst at Motley Fool Funds, which manages about $600 million in stock mutual funds.

"As long as there is no inflation, and a good economy, with low interest rates....that's the kind of thing that stocks love," said Barker.

NO JOY: Joy Global, a manufacturer of mining equipment, fell 74 cents, or 1.3 percent, to $55.62, after analysts at Goldman Sachs recommended their clients sell the stock amid a weaker outlook for the mining industry.

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Writer, Doyle estate dispute copyright on Sherlock

CHICAGO — It's the kind of puzzle that might have amused Sherlock Holmes himself.

Now that copyright protections have expired on nearly all of Sir Arthur Conan Doyle's tales about the pipe-puffing detective in the deerstalker hat, are writers free to depict the character in new mysteries without seeking permission or paying license fees?

A federal judge in Chicago says yes, so long as they don't stray into territory covered in the 10 stories still protected by copyright. Not so fast, says the Doyle estate, which is considering an appeal this month. Descendants of the Scottish physician and author argue he continued to develop the characters of Holmes and Dr. Watson in the later works so they should remain off-limits until the remaining copyrights run out at the end of 2022.

"It's a bogus argument. It means you can reprint Conan Doyle's own stories freely but you can't make up a new story? It doesn't make logical sense," said author Leslie Klinger, who brought the case against the Conan Doyle Estate Ltd. to settle the matter.

With last week's ruling in hand, Klinger plans to finish work on "In the Company of Sherlock Holmes," a book of original short stories featuring characters and other elements from Conan Doyle's work. He is co-editing the book with plans to publish this fall.

If appeals judges hold it up, the ruling could lift the threat of legal action for the untold scores of writers out there churning out pastiches and fan fiction without permission. Most of them fly under the radar. In Klinger's case, the estate demanded $5,000, he said.

"Whatever decision they make will essentially determine the fate of many characters, not just Sherlock Holmes and Dr. Watson, but very intricate characters such as James Bond. ... What happens as copyrights expire on Ian Fleming's original stories?" said Doyle estate attorney William Zieske.

The ruling could also weaken the value of the Sherlock franchise to the point that major publishers and movie producers could also decide to move ahead with projects without licensing deals, said Paul Supnik, a Beverly Hills, Calif., attorney specializing in copyright and entertainment law who was not connected with the case.

"At the very least it's going to affect the bargaining power as to what the estate can do in trying to sell it to the studio," Supnik said.

At the heart of the dispute is whether a character can be copyright protected over an entire series of works. The Doyle estate argues that a basic element of copyright law allows for that if the character is highly delineated, as opposed to a two-dimensional cartoon-like character who doesn't change much over time.

In ruling against the estate, Judge Ruben Castillo called that a "novel legal argument" that was "counter to the goals of the Copyright Act." The lawsuit was filed in Chicago because a literary agent for the Doyle estate is based in Illinois.

There's no question that Holmes and Watson are highly complex characters. Conan Doyle produced a total of four Sherlock Holmes novels and 56 stories between 1887 and 1927.

Klinger argues that everything you really need to know about Holmes and Watson is in the novels and stories published before 1923 that are in the public domain in the U.S. That includes their family backgrounds, education and a slew of character traits: Holmes' Bohemian nature and cocaine use, erratic eating habits, his Baker Street lodgings, his methods of reasoning, his clever use of disguise, his skill in chemistry and even his weapon of choice, a loaded hunting crop.

"Everything that the lay person would think of as being a characteristic of Holmes or Watson is in those pre-1923 stories," said Klinger, who is also an attorney and lives in Malibu, Calif. "In fact, some would say you could pick up almost everything you need from the very first story."

The other 10 stories have new biographical footnotes, including a mention that Watson had a second wife and played rugby in his youth.

But the Doyle estate says there are other significant elements in those later stories, such as Holmes' "mellowing" personality and the shift in Holmes' and Watson's relationship from flatmates and collaborators to closest friends.

Thus, to depict Holmes and Watson based only on parts of the canon that pre-date 1923 would be something of an artistic crime and ignore the extent to which the characters continued to evolve, said Doyle attorney Zieske.

"That's the essence of literature, how people change through different experiences," Zieske said. "And to reduce true literary characters to a cardboard cutout, parts of which can be carved off, I think does literature a great disservice."

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Mass. rehab hospitals get Ala. owner

A Birmingham, Ala., health care real estate development company has acquired New England and Braintree rehabilitation hospitals for $90 million.

The Sanders Trust, in a joint venture with its capital partner, Harrison Street Real Estate Capital, LLC, of Chicago, bought the real estate associated with the hospitals from Senior Housing Properties Trust of Newton and affiliates and simultaneously entered into 15-year leases with Reliant Hospital Partners of Richardson, Texas, to run them.

"They're excellent hospitals with a very strong quality of care," said Steve Hewett, senior vice president of The Sanders Trust.

Reliant Hospital Partners, which operates nine other inpatient rehabilitation hospitals in Texas and Ohio, did not return calls yesterday about what changes it intends to make at the two Bay State hospitals, which represent nearly two-thirds market share for rehabilitation services in the Boston metro area.

Braintree Rehabilitation Hospital, which has 166 licensed beds, and New England Rehabilitation Hospital, which has 198 beds and is located in Woburn, are also affiliated with several other inpatient and out-patient locations in eastern Massachusetts and provide patients with short-term rehabilitation, averaging more than 5,000 successful discharges annually.

In a statement yesterday, Senior Housing Properties Trust, which acquired the hospitals in 2002, said it expects to recognize a gain on their sale of more than $30 million, while simultaneously reducing its exposure to possible future cuts in government funding for Medicare, which paid a large majority of the hospitals' revenues.

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Kathi-Anne Reinstein raising stein as beer lobbyist

State Rep. Kathi-Anne Reinstein's shift from State House power broker to Sam Adams beer lobbyist could pay dividends for the industry as a whole, observers say, even as the Revere lawmaker readies to leave behind key posts on Beacon Hill.

Reinstein's position as manager of government affairs for Sam Adams' brewer, Boston Beer Co., is a newly created position that will plug the 15-year House veteran into an increasingly politically active industry. Jessica Paar, a Boston Beer Co. spokeswoman, said the company didn't specifically target Reinstein for the job.

"Her career and experience will be an asset to Boston Beer, working with the communities where our breweries are based, and supporting our local small brewer trade associations," Paar said in a statement. "She applied based on the job posting, and it is a new position."

Paul Gatza, director of the Craft Brewers Association, said Reinstein's new role could benefit the industry in its efforts to change decades-old state law to give craft brewers more power in agreements with distributors.

"They've been friends to a lot of brewers," Gatza said of Boston Beer Co.

Reinstein's departure will leave a hole in the leadership team of House Speaker Robert DeLeo, who yesterday called her a "close friend." She also is resigning at a key time in the debate over state gaming, as her hometown prepares to vote on Suffolk Downs' new casino deal with Mohegan Sun.

In a statement, Reinstein, a key backer of Suffolk Downs in its quest for the lucrative eastern Massachusetts casino license, said she would be "unable to actively participate" in the Feb. 25 vote, but urged voters to pass it. She declined further comment.

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Snapchat says to make app more secure

NEW YORK — Snapchat says it plans to put out a more secure version of its application following a breach that allowed hackers to collect the usernames and phone numbers of some 4.6 million of its users.

The disappearing-message service popular with young people said in a blog post late Thursday that the updated version of its app would allow users to opt out of its "Find Friends" feature, which was apparently at the heart of the breach, and would stem future attempts to abuse its service.

The breach occurred after security experts warned the company at least twice about a vulnerability in its system.

Before announcing its plans to update the app, Snapchat had been quiet. Its seemingly detached response caused some security specialists to wonder whether the young company can handle the spotlight that it's been thrust into over the last year as its service has become enormously popular.

In response to a warning by Gibson Security on Dec. 25 —which followed an earlier alert in August — Snapchat said in a blog post last Friday that it had implemented "various safeguards" over the past year that would make it more difficult to steal large sets of phone numbers. Snapchat hasn't detailed the changes it made.

As Americans rang in the New Year, hackers reportedly published 4.6 million Snapchat usernames and phone numbers on a website called snapchatdb.info, which has since been suspended. The breach came less than a week after the most recent warning from security experts that an attack could take place.

The incident bruises the company's image and may threaten its rapid growth. Los Angeles-based Snapchat has no source of revenue, but its rapid rise to an estimated 20 million U.S. adult users prompted Facebook to extend a reported $3 billion buyout last year. Snapchat's 23-year-old CEO Evan Spiegel turned down the overture. The user number estimate is based on census data and data from the Pew Research Center.

What should users do? Gibson Security, the firm that warned Snapchat of the security vulnerability on Christmas Day, has created a site, — http://lookup.gibsonsec.org/ — that lets users type in their username to see if their phone number was among those leaked. Of two user accounts that The Associated Press checked, one was found to have been compromised.

Gibson Security did not publish the last two digits of the phone numbers.

Gibson says users can delete their Snapchat account if they wish, but "this won't remove your phone number from the already circulating leaked database." Users can also ask their phone company to give them a new phone number.

"Lastly, ensure that your security settings are up to scratch on your social media profiles. Be careful about what data you give away to sites when you sign up — if you don't think a service requires your phone number, don't give it to them," Gibson said.

This was Gibson's second warning to Snapchat, following one in August that the security firm said was ignored.

"Given that it's been around four months since our last Snapchat release, we figured we'd do a refresher on the latest version, and see which of the released exploits had been fixed (full disclosure: none of them)," Gibson wrote on the Gibson Security website.

The Snapchat breach comes just two weeks after Target was hit with a massive data security breach that affected as many as 40 million debit and credit card holders.

Gartner security analyst Avivah Litan said phone numbers are not considered "sensitive" personally identifiable information — such as credit card or social security numbers — so they are collected by all sorts of companies to verify a person's identity.

A phone number is "not as bad as password or magnetic strip information, but it's the piece of the puzzle that criminals need to impersonate identities," she said.

Christopher Soghoian, principal technologist with the American Civil Liberties Union, agreed.

"The main problem was that they ignored a responsible report by security researchers," he said, adding that his concern is not with the specific database of information that was released, but that Snapchat has "demonstrated a cavalier attitude about privacy and security."

Many people use Snapchat because it feels more private than other messaging apps and social networks. Users can send each other photos and videos that disappear within a few seconds after they are viewed. While the recipient can take a screenshot of the message, a big draw of Snapchat is its ephemeral nature.

"This probably won't be the last problem with Snapchat," Soghoian said. Companies like Microsoft and Google, he added, actively court security researchers and even pay bounties for people to expose flaws in their systems.

"Snapchat may be too small to pay bounties, but they certainly should be treating researchers with respect and addressing issues as soon as they are told about them," he said.

In its blog post Thursday, Snapchat listed an email address that security experts could use to contact the company "when they discover new ways to abuse our service so that we can respond quickly to address those concerns."

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Mass. family-owned pharmacy chain closes

BROCKTON, Mass. — A once flourishing independent chain of nine pharmacies south of Boston has closed its last three stores.

Arthur and Sandra Sedell closed their stores in Lakeville, Assonet and Carver last month and sold the stock to CVS.

The 71-year-old Sandra Sedell tells The Enterprise (http://bit.ly/19PeZQb ) it was time for the couple to retire.

They opened their first Sedell's Pharmacy in Raynham in 1974. They eventually opened two stores in Easton and others in Lakeville, Halifax, Plymouth, Carver, Sandwich and Assonet.

Sandra Sedell says they filled a vital role in the area before chain pharmacies became ubiquitous. They counted both their sons among their almost 170 employees at the peak of their business.

They are looking to lease the space of the vacant stores in Lakeville and Carver.

___

Information from: The (Brockton, Mass.) Enterprise, http://www.enterprisenews.com

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US stocks edge higher in early trading

NEW YORK — Stocks are higher in early trading in Wall Street a day after starting the New Year off with a thud.

The Dow Jones industrial average climbed 52 points, or 0.3 percent, to 16,494 points in the first few minutes of trading Friday. It fell 135 points the day before.

The Standard & Poor's 500 rose five points, or 0.3 percent, to 1,837. The Nasdaq composite rose five points, or 0.1 percent, to 4,148.

Boeing led the Dow stocks higher with a 1 percent gain.

Boeing machinists will decide Friday whether to accept a contract that would cut benefits in exchange for ensuring that the company's new plane is built in Washington state.

Bond prices fell. The yield on the 10-year Treasury note edged up to 3 percent from 2.99 percent.

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German car sales down but exports up in 2013

BERLIN — An industry group says car sales in Germany, Europe's biggest economy, picked up at the end of 2013 — though that wasn't enough to prevent a 4 percent decline over the full year.

The VDA group said Friday that 215,300 new cars were registered in Germany in December, 5 percent more than a year earlier. However full-year sales were down to 2.95 million. VDA president Matthias Wissmann said the group expects a slight increase to about 3 million in 2014.

Car exports from Germany, which is home to automakers such as Volkswagen, BMW and Daimler, increased 2 percent last year to 4.2 million vehicles. In December, exports were 3 percent higher at 286,100.

Some 5.45 million cars were produced in Germany last year, 1 percent more than in 2012.

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Dec. auto sales falter; 2013 still best in 6 years

DETROIT — December U.S. auto sales slowed a bit from the brisk pace earlier this year, but automakers still were on target to finish 2013 with the best numbers in six years.

Nissan posted an 11 percent gain for December and Chrysler managed a 6 percent increase. But General Motors, Toyota, Ford and Volkswagen each posted disappointing numbers. Still, most major automakers reported at least a 7 percent increase for 2013, and analysts expect full-year sales to be up around 8 percent to 15.6 million when all the numbers are in. That would be the highest sales figure since 16.1 million in 2007.

"The auto industry was a consistent bright spot in the economic recovery throughout 2013," Bill Fay, Toyota division group vice president, said Friday in a statement. "We expect the economy will continue to gain strength in 2014, with car sales rising to pre-recession levels."

But automakers may need to do more to lure shoppers into showrooms. Analysts say discounts rose in December, and there were signs that automakers were beginning to lower prices to match competitors. That could foreshadow better deals in the new year, especially on pickup trucks and midsize cars.

GM's December sales were off more than 6 percent as sales of its top-selling model, the Chevrolet Silverado pickup, fell 16 percent. Toyota sales were down 1.7 percent from a year ago, while Ford sales were up only 1.8 percent for the month. Volkswagen, which has struggled all year, saw sales fall 23 percent.

Ford and GM said bad weather cut into December sales, and discounts in late November pulled sales ahead from December.

John Felice, Ford's U.S. sales chief, said he wasn't concerned about softer sales in December. November sales were better than expected because of strong sales on Black Friday weekend, he said, so that took some steam out of sales in the beginning of December. About half of Ford's December sales came in the final week of the month, he said.

Poor weather throughout the month also may have kept many buyers home, he said. But December's sales pace was still tracking at an annualized pace of more than 16 million vehicles, a healthy rate for the industry, he said.

GM's pickup truck sales apparently fell victim to heavy discounts that Ford offered on its F-Series, which posted an 8 percent gain in December. Chrysler's Ram pickup also posted a large gain at 11 percent.

For the full year, though, Ford led all major automakers with an 11 percent gain to almost 2.5 million vehicles. Chrysler sales were up 9 percent to 1.8 million cars and trucks, and Nissan also posted a 9 percent gain to nearly 1.25 million vehicles. GM sales rose 7 percent to 2.8 million. Toyota sales also were up 7 percent to just over 2.2 million cars and trucks. But the VW brand struggled, with sales falling 7 percent to nearly 408,000.

Analysts expect automakers will need to work harder this year to maintain sales momentum. Auto sales have risen by more than a million vehicles per year since 2009, when just 10.4 million cars and trucks sold. But some analysts expect growth to slow to as little as 400,000 this year, with total sales around 16 million.

That should be good news for shoppers: automakers likely will offer deals to protect or increase market share.

"We think there's going to definitely be more competition," said Larry Dominique, president of Automotive Lease Guide, a company that tracks lease costs and car prices.

As a result, Dominique said, consumers should look for more bargains, especially on pickup trucks and midsize cars.

For December, analysts had predicted sales of around 1.4 million new cars and trucks, expecting consumers to take advantage of year-end closeouts, low interest rates and sweet lease deals. But Black Friday deals may have pulled some sales into November, and a series of big storms last month may have kept a few car buyers at home.

Dominique also thinks the pent-up demand that has driven sales is starting to ease. People have been replacing cars and trucks they kept through the recession and the slow recovery. The average age of a vehicle on U.S. roads today is a record 11.4 years, according to the Polk research firm.

In December automakers raised rebates and other incentives as they pushed to make year-end sales goals. Average incentives were up 4 percent compared with a year ago to $2,676 as Ford, Hyundai/Kia and Honda led the way with sweet deals, according to the TrueCar.com auto pricing site.

Ford raised incentives a whopping 22 percent last month as it sparred with Chevrolet and GMC over pickup truck sales and battled for small-car buyers, Dominique said. Hyundai/Kia incentives were up nearly 18 percent, while Honda raised its deals by almost 15 percent, according to TrueCar. Ford Focus buyers, for instance, could get as much as 25 percent off the sticker price, according to Dominique. Only Chrysler, which traditionally has had high incentives, cut them in December, by 9 percent.

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Gov't: Birth control mandate should not be blocked

WASHINGTON — The Obama administration on Friday called on a Supreme Court justice to stop blocking the new health care law's requirement that some religion-affiliated organizations provide health insurance that includes birth control.

The Justice Department called on Justice Sonia Sotomayor to dissolve her last-minute stay on the contraceptive coverage requirement of the Affordable Care Act, also known as Obamacare. Sotomayor issued the stay on New Year's Eve, only hours before the law's coverage went into effect.

Under the health care law, most health insurance plans have to cover all FDA-approved contraceptives as preventive care for women, free of cost to the patient. Churches and other houses of worship are exempt from the birth control requirement, but affiliated institutions that serve the general public are not. That includes charitable organizations, universities and hospitals.

In response to an outcry, the government came up with a compromise that requires insurers or health plan administrators to provide birth control coverage, but allows the religious group to distance itself from that action. The exemption is triggered when the religious group signs a form for the insurer saying that it objects to the coverage.

The insurer can then go forward with the coverage.

A group of Denver nuns who run nursing homes for the poor, called the Little Sisters of the Poor Home for the Aged, say signing that form makes them complicit in providing contraceptive coverage, and therefore violates their religious beliefs. "Unfortunately, the federal government has started the new year the same way that it ended the old one: trying to bully nuns into violating their religious beliefs," said their lawyer, Mark Rienzi, who is also senior counsel for the Becket Fund for Religious Liberty.

But Solicitor General Donald Verrilli said in court papers that nothing in the law will make those nuns pay for birth control for their employees. The nuns' insurance is provided through a church plan that is not required to provide contraceptive coverage and has said it will not, he said, making their complaint baseless.

"With the stroke of their own pen, applicants can secure for themselves the relief they seek from this Court — an exemption from the requirements of the contraceptive-coverage provision — and the employer-applicants' employees (and their family members) will not receive contraceptive coverage through the plan's third-party administrator either. The application should be denied," Verrilli argued.

It is not known when Sotomayor will make a decision.

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