Cliff fight may knock out December rally

NEW YORK (Reuters) - In normal times, next week's slew of U.S. economic data could be a springboard for a December rally in the stock market.

December is historically a strong month for markets. The S&P 500 has risen 16 times in the past 20 years during the month.

But the market hasn't been operating under normal circumstances since November 7 when a day after the U.S. election, investors' focus shifted squarely to the looming "fiscal cliff."

Investors are increasingly nervous about the ability of lawmakers to undo the $600 billion in tax increases and spending cuts that are set to begin in January; those changes, if they go into effect, could send the U.S. economy into a recession.

A string of economic indicators next week, which includes a key reading of the manufacturing sector on Monday, culminates with the November jobs report on Friday.

But the impact of those economic reports could be muted. Distortions in the data caused by Superstorm Sandy are discounted.

The spotlight will be more firmly on signs from Washington that politicians can settle their differences on how to avoid the fiscal cliff.

"We have a week with a lot of economic data, and obviously most of the economic data is going to reflect the effects of Sandy, and that might be a little bit negative for the market next week, but most of that is already expected - the main focus remains the fiscal cliff," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Concerns about the cliff sent the S&P 500 <.spx> into a two-week decline after the elections, dropping as much as 5.3 percent, only to rally back nearly 4 percent as the initial tone of talks offered hope that a compromise could be reached and investors snapped up stocks that were viewed as undervalued.

On Wednesday, the S&P 500 gained more than 20 points from its intraday low after House Speaker John Boehner said he was optimistic that a budget deal to avoid big spending cuts and tax hikes could be worked out. The next day, more pessimistic comments from Boehner, an Ohio Republican, briefly wiped out the day's gains in stocks.

On Friday, the sharp divide between the Democrats and the Republicans on taxes and spending was evident in comments from President Barack Obama, who favors raising taxes on the wealthy, and Boehner, the top Republican in Congress, who said Obama's plan was the wrong approach and declared that the talks had reached a stalemate.

"It's unusual to end up with one variable in this industry, it's unusual to have a single bullet that is the causal factor effect, and you are sitting here for the next maybe two weeks or more, on that kind of condition," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago.

"And that is what is grabbing the markets."

BE CONTRARY AND MAKE MERRY

But investor attitudes and seasonality could also help spur a rally for the final month of the year.

The most recent survey by the American Association of Individual Investors reflected investor caution about the cliff. Although bullish sentiment rose above 40 percent for the first time since August 23, bearish sentiment remained above its historical average of 30.5 percent for the 14th straight week.

December is a critical month for retailers such as Target Corp and Macy's Inc . They saw monthly retail sales results dented by Sandy, although the start of the holiday shopping season fared better.

With consumer spending making up roughly 70 percent of the U.S. economy, a solid showing for retailers during the holiday season could help fuel any gains.

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, believes the recent drop after the election could be a market bottom, with sentiment leaving stocks poised for a December rally.

"The concerns on the fiscal cliff - as valid as they might be - could be overblown. When you look at a lot of the overriding sentiment, that has gotten extremely negative," said Detrick.

"From that contrarian point of view with the historically bullish time frame of December, we once again could be setting ourselves up for a pretty nice end-of-year rally, based on lowered expectations."

SOME FEEL THE BIG CHILL

Others view the fiscal cliff as such an unusual event that any historical comparisons should be thrown out the window, with a rally unlikely because of a lack of confidence in Washington to reach an agreement and the economic hit caused by Sandy.

"History doesn't matter. You're dealing with an extraordinary set of circumstances that could very well end up in the U.S. economy going into a recession," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

"And the likelihood of that is exclusively in the hands of our elected officials in Washington. They could absolutely drag us into a completely voluntary recession."

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com )

(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Sony’s radical PlayStation 4 controller concept: A motion-control device you can split in half

While Nintendo (NTDOY) has been busy innovating with unique controllers on the Wii and Wii U, Sony’s (SNE) DualShock controller for its PlayStation, PlayStation 2 and PlayStation 3 has remained virtually the same since 1997. A newly discovered patent reveals Sony might be planning on a radical overhaul of the DualShock for the PlayStation 4 that’s rumored to arrive next year. U.S. patent 20120302347A1 details a “hybrid separable motion controller” that resembles a DualShock controller with two PlayStation Move sensor balls attached to it. Much like how the Wii Remote and Nunchuk controller combo separated the left and right hand input, the Sony controller patent goes one step further by allowing the two halves to be split and combined at any time – all without reducing the amount of buttons available.

The patent also highlights the inclusion of a “connection sensor for determining whether the controller is in a connected configuration or a disconnected configuration.”

One of the PlayStation Move’s biggest disadvantages is that it’s a separate controller and not the default one. As a result, most developers either saw it as merely a Wii Remote clone or as a niche controller with a limited install base not worth programming special controls for. If Sony were to include proper 1:1 motion controls within the default PS4 controller without turning its back on the “core” controller, it could greatly appeal to casual and core gamers.

Such a controller can be considered a natural evolution of the current DualShock 3 controller that sports limited motion controls using its three-axis accelerometer and gyroscope.

Of course, the controller is only a patent that may never make it to market, so don’t get your hopes up if it doesn’t happen.

Get more from BGR.com: Follow us on Twitter, Facebook

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What's the Latest Fashion Trend the Duchess Is Starting?

Stylewatch
Style News Now

11/29/2012 at 06:15 PM ET

Getty; Startraks (2)

After a quiet Thanksgiving holiday, Hollywood stars were out en force this week, dazzling (and sometimes disappointing) in a whole host of haute looks. And just in time for holiday party dress season, we saw some emerging trends you may want to try. Read on for more …

Up: Sleeves with personality: Katy Perry and Naomi Watts proved that dresses with sleeves don’t have to be snoozey — in fact, they can make a real statement on an otherwise plain dress. Perry added a floor-length cape to her midnight-blue Naeem Khan design, while Watts went for a winged look in a black below-the-knee number.

Up: Ladies in collars: So long are the days of navel-baring necklines — at least for the cooler months — since stars like the Duchess of Cambridge, Rihanna, Rose Byrne and Lucy Hale are taking a cue from the guys and donning shirts and dresses with buttoned-up collars. And because the trend is having such a major moment, we have a feeling it will last well into awards season, even at the most formal of events like the Oscars.

Down: White dresses with cutouts: Winter white gowns and cutouts are both huge trends this season, but when combined the look feels rather summery. Need proof? Just check out Emily Blunt in her Calvin Klein Collection dress. Even though she looks pretty, the whole ensemble feels better suited for August — not November.

Tell us: Which trend are you most excited to try? Vote below!

Want more Trend Report? Click to hear what we think about peplum, turtlenecks and yellow dresses.

–Jennifer Cress

GET ALL THE LATEST RED CARPET NEWS AND PHOTOS HERE!

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Kenya village pairs AIDS orphans with grandparents

NYUMBANI, Kenya (AP) — There are no middle-aged people in Nyumbani. They all died years ago, before this village of hope in Kenya began. Only the young and old live here.

Nyumbani was born of the AIDS crisis. The 938 children here all saw their parents die. The 97 grandparents — eight grandfathers among them — saw their middle-aged children die. But put together, the bookend generations take care of one another.

Saturday is World AIDS Day, but the executive director of the aid group Nyumbani, which oversees the village of the same name, hates the name which is given to the day because for her the word AIDS is so freighted with doom and death. These days, it doesn't necessarily mean a death sentence. Millions live with the virus with the help of anti-retroviral drugs, or ARVs. And the village she runs is an example of that.

"AIDS is not a word that we should be using. At the beginning when we came up against HIV, it was a terminal disease and people were presenting at the last phase, which we call AIDS," said Sister Mary Owens. "There is no known limit to the lifespan now so that word AIDS should not be used. So I hate World AIDS Day, follow? Because we have moved beyond talking about AIDS, the terminal stage. None of our children are in the terminal stage."

In the village, each grandparent is charged with caring for about a dozen "grandchildren," one or two of whom will be biological family. That responsibility has been a life-changer for Janet Kitheka, who lost one daughter to AIDS in 2003. Another daughter died from cancer in 2004. A son died in a tree-cutting accident in 2006 and the 63-year-old lost two grandchildren in 2007, including one from AIDS.

"When I came here I was released from the grief because I am always busy instead of thinking about the dead," said Kitheka. "Now I am thinking about building a new house with 12 children. They are orphans. I said to myself, 'Think about the living ones now.' I'm very happy because of the children."

As she walks around Nyumbani, which is three hours' drive east of Nairobi, 73-year-old Sister Mary is greeted like a rock star by little girls in matching colorful school uniforms. Children run and play, and sleep in bunk beds inside mud-brick homes. High schoolers study carpentry or tailoring. But before 2006, this village did not exist, not until a Catholic charity petitioned the Kenyan government for land on which to house orphans.

Everyone here has been touched by HIV or AIDS. But only 80 children have HIV and thanks to anti-retroviral drugs, none of them has AIDS.

"They can dream their dreams and live a long life," Owens said.

Nyumbani relies heavily on U.S. funds but it is aiming to be self-sustaining.

The kids' bunk beds are made in the technical school's shop. A small aquaponics project is trying to grow edible fish. The mud bricks are made on site. Each grandparent has a plot of land for farming.

The biggest chunk of aid comes from the United States President's Emergency Plan for AIDS Relief (PEPFAR), which has given the village $2.5 million since 2006. A British couple gives $50,000 a year. A tree-growing project in the village begun by an American, John Noel, now stands six years from its first harvest. Some 120,000 trees have already been planted and thousands more were being planted last week.

"My wife and I got married as teenagers and started out being very poor. Lived in a trailer. And we found out what it was like to be in a situation where you can't support yourself," he said. "As an entrepreneur I looked to my enterprise skills to see what we could do to sustain the village forever, because we are in our 60s and we wanted to make sure that the thousand babies and children, all the little ones, were taken care of."

He hopes that after a decade the timber profits from the trees will make the village totally self-sustaining.

But while the future is looking brighter, the losses the orphans' suffered can resurface, particularly when class lessons are about family or medicine, said Winnie Joseph, the deputy headmaster at the village's elementary school. Kitheka says she tries to teach the kids how to love one another and how to cook and clean. But older kids sometimes will threaten to hit her after accusing her of favoring her biological grandchildren, she said.

For the most part, though, the children in Nyumbani appear to know how lucky they are, having landed in a village where they are cared for. An estimated 23.5 million people in sub-Saharan Africa have HIV as of 2011, representing 69 percent of the global HIV population, according to UNAIDS. Eastern and southern Africa are the hardest-hit regions. Millions of people — many of them parents — have died.

Kitheka noted that children just outside the village frequently go to bed hungry. And ARVs are harder to come by outside the village. The World Health Organization says about 61 percent of Kenyans with HIV are covered by ARVs across the country.

Paul Lgina, 14, contrasted the difference between life in Nyumbani, which in Swahili means simply "home," and his earlier life.

"In the village I get support. At my mother's home I did not have enough food, and I had to go to the river to fetch water," said Lina, who, like all the children in the village, has neither a mother or a father.

When Sister Mary first began caring for AIDS orphans in the early 1990s, she said her group was often told not to bother.

"At the beginning nobody knew what to do with them. In 1992 we were told these children are going to die anyway," she said. "But that wasn't our spirit. Today, kids we were told would die have graduated from high school."

___

On the Internet:

http://www.trees4children.org/

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Wall Street edges lower as "fiscal cliff" debate drags

NEW YORK (Reuters) - Stocks dipped on Friday as President Barack Obama and top Republicans remained at odds about how to avert a series of tax hikes and spending cuts next year that could push the economy into recession.

Trading has been choppy as investors react to a barrage of mixed statements from policymakers on the state of discussions about how to avoid going over the "fiscal cliff."

Obama accused a "handful of Republicans" in the U.S. House of Representatives of holding up legislation to extend tax cuts for middle-class Americans in order to try to preserve them for the wealthy.

Speaking shortly after the president, House Speaker John Boehner, the top Republican in Congress, said: "There is a stalemate; let's not kid ourselves."

The market, however, has remained resilient, with the benchmark S&P 500 set to finish the month almost flat as many investors are betting that a deal will be struck - if only at the zero hour.

"There is no sign of it from the rhetoric, but there are expectations it will happen," said Steve Goldman, principal at Goldman Management in Short Hills, New Jersey. "The rhetoric will get worse before it gets better."

Corporations still anticipate a harsher tax regime next year. Whole Foods Market Inc was the latest to announce a special cash dividend of $2.00 per share to skirt higher dividend tax rates in 2013. The stock was up 0.5 percent at $93.51.

The Dow Jones industrial average <.dji> dropped 14.56 points, or 0.11 percent, to 13,007.26. The Standard & Poor's 500 Index <.spx> fell 2.17 points, or 0.15 percent, to 1,413.78. The Nasdaq Composite Index <.ixic> lost 6.66 points, or 0.22 percent, to 3,005.37.

The S&P 500 was on track to end the month up about 0.1 pct, or nearly flat, after declining almost 2 percent in October. The index has recovered 4.5 percent since shedding 8 percent following the U.S. presidential election earlier in November.

"The correction from the S&P 500's September peak has allowed overbought momentum and optimistic sentiment conditions to recede, and we believe the index is closer to an intermediate-term buy signal than a sell signal," said Ari Wald, an analyst at PrinceRidge Group.

Yum Brands Inc shares slid 9.2 percent to $67.59. The company said late Thursday it expects a drop in fourth-quarter sales at established restaurants in China, where a cooling economy is making it difficult to exceed the 21 percent gain it enjoyed there a year earlier.

After a close relationship for several years, Facebook Inc and Zynga Inc revised terms of a partnership agreement, according to regulatory filings on Thursday. Under the new pact, Zynga, creator of the "Farmville" game, will have limited ability to promote its site on Facebook.

Zynga's stock dropped 6.5 percent to $2.45. Facebook's stock slipped 0.2 percent to $27.26.

The markets' reaction to data on Friday was muted.

Data from the Institute for Supply Management-Chicago showed that business activity in the U.S. Midwest expanded for the first time since August, buoyed by an improvement in the labor market.

But Commerce Department data showed U.S. consumer spending fell in October for the first time in five months as income growth stalled, suggesting slower economic growth in the fourth quarter.

Apple Inc's latest iPhone has received final clearance from Chinese regulators, paving the way for a December debut in a highly competitive market where the lack of a new model had severely eroded its share of product sales. Apple's stock fell 0.8 percent to $584.57.

Verisign Inc said the U.S. Department of Commerce had approved its agreement with ICANN to run the .com internet registry, but the company wouldn't be able to raise prices as before. The stock dropped 14 percent to $33.84.

(Editing by Bernadette Baum and Jan Paschal)

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Study: DVRs now in half of US pay-TV homes

NEW YORK (AP) — A new survey finds that digital video recorders are now in more than half of all U.S. homes that subscribe to cable or satellite TV services.

Leichtman Research Group‘s survey of 1,300 households found that 52 percent of the ones that have pay-TV service also have a DVR. That translates to about 45 percent of all households and is up from 13.5 percent of all households surveyed five years ago by another firm, Nielsen.

The first DVRs came out in 1999, from TiVo Inc. and ReplayTV. Later, they were built into cable set-top boxes. The latest trend is “whole-home” DVRs that can distribute recorded shows to several sets.

Even with the spread of DVRs, live TV rules. Nielsen found last year that DVRs accounted for 8 percent of TV watching.

Gadgets News Headlines – Yahoo! News

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All the Details on Katie Holmes's Broadway Premiere Look

Stylewatch
Style News Now

11/30/2012 at 11:00 AM ET

Andrew H. Walker/Getty

Her performance received good reviews, but we’re not so sure people will be raving about the outfit Katie Holmes selected for the Dead Accounts premiere party.

For the Broadway play’s debut in N.Y.C. on Thursday evening, the star chose a busy feminine floral-print dress with black-and-white embellishment at the neckline, a black crochet panel at the waist and flared sleeves, plus a lemon clutch and Gio Diev strappy pumps.

We can’t say we strongly dislike any one part of the outfit (love the print, love the sexy touch at the waist, love the clutch, we could go on…), but all together, there’s just a lot going on with this ensemble … much like the plot of the play.

One aspect of her look we can’t critique: her Duchess of Cambridge-esque mane, a surprising — and welcome — departure from the way Holmes normally styles her hair (that would be stick-straight).

But we want to know what you think: Do you like Holmes’s outfit? What about her hair?

–Jennifer Cress

PHOTOS: SEE MORE RED CARPET STYLE IN ‘LAST NIGHT’S LOOK’

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Clinton releases road map for AIDS-free generation

WASHINGTON (AP) — In an ambitious road map for slashing the global spread of AIDS, the Obama administration says treating people sooner and more rapid expansion of other proven tools could help even the hardest-hit countries begin turning the tide of the epidemic over the next three to five years.

"An AIDS-free generation is not just a rallying cry — it is a goal that is within our reach," Secretary of State Hillary Rodham Clinton, who ordered the blueprint, said in the report.

"Make no mistake about it, HIV may well be with us into the future but the disease that it causes need not be," she said at the State Department Thursday.

President Barack Obama echoed that promise.

"We stand at a tipping point in the fight against HIV/AIDS, and working together, we can realize our historic opportunity to bring that fight to an end," Obama said in a proclamation to mark World AIDS Day on Saturday.

Some 34 million people worldwide are living with HIV, and despite a decline in new infections over the last decade, 2.5 million people were infected last year.

Given those staggering figures, what does an AIDS-free generation mean? That virtually no babies are born infected, young people have a much lower risk than today of becoming infected, and that people who already have HIV would receive life-saving treatment.

That last step is key: Treating people early in their infection, before they get sick, not only helps them survive but also dramatically cuts the chances that they'll infect others. Yet only about 8 million HIV patients in developing countries are getting treatment. The United Nations aims to have 15 million treated by 2015.

Other important steps include: Treating more pregnant women, and keeping them on treatment after their babies are born; increasing male circumcision to lower men's risk of heterosexual infection; increasing access to both male and female condoms; and more HIV testing.

The world spent $16.8 billion fighting AIDS in poor countries last year. The U.S. government is the leading donor, spending about $5.6 billion.

Thursday's report from PEPFAR, the President's Emergency Plan for AIDS Relief, outlines how progress could continue at current spending levels — something far from certain as Congress and Obama struggle to avert looming budget cuts at year's end — or how faster progress is possible with stepped-up commitments from hard-hit countries themselves.

Clinton warned Thursday that the U.S. must continue doing its share: "In the fight against HIV/AIDS, failure to live up to our commitments isn't just disappointing, it's deadly."

The report highlighted Zambia, which already is seeing some declines in new cases of HIV. It will have to treat only about 145,000 more patients over the next four years to meet its share of the U.N. goal, a move that could prevent more than 126,000 new infections in that same time period. But if Zambia could go further and treat nearly 198,000 more people, the benefit would be even greater — 179,000 new infections prevented, the report estimates.

In contrast, if Zambia had to stick with 2011 levels of HIV prevention, new infections could level off or even rise again over the next four years, the report found.

Advocacy groups said the blueprint offers a much-needed set of practical steps to achieve an AIDS-free generation — and makes clear that maintaining momentum is crucial despite economic difficulties here and abroad.

"The blueprint lays out the stark choices we have: To stick with the baseline and see an epidemic flatline or grow, or ramp up" to continue progress, said Chris Collins of amFAR, the Foundation for AIDS Research.

His group has estimated that more than 276,000 people would miss out on HIV treatment if U.S. dollars for the global AIDS fight are part of across-the-board spending cuts set to begin in January.

Thursday's report also urges targeting the populations at highest risk, including gay men, injecting drug users and sex workers, especially in countries where stigma and discrimination has denied them access to HIV prevention services.

"We have to go where the virus is," Clinton said.

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Wall Street trims gains, volatile after Boehner remarks

NEW YORK (Reuters) - Stocks climbed on Thursday, but shed some earlier gains, after John Boehner, the top Republican in Congress, poured cold water on hopes that lawmakers were getting closer to cutting a budget deal that would avert a possible recession next year.

Boehner's comment - that no "substantive" progress had been made in fiscal talks with the White House - was the latest in a string of contrary pronouncements by policymakers that have wobbled the markets as investors attempt to speculate over whether Washington will finally cut a deal.

There have been some signs that leaders are moving closer to a fiscal agreement. The S&P 500 has gained nearly 5 percent after dropping almost 8 percent following the U.S. election in November. But investors remain wary that ad hoc statements from politicians can spark quick reversals in the market.

"When the sentiment is that nothing is going to get done, it does create a lot of anxiety and selling pressure. If there's any sense of progress, then the market seems to rally," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago. "I think we're hostage to this for the rest of the year."

Discussions are ongoing in Congress over avoiding big spending cuts and tax hikes, known as the "fiscal cliff," that will begin to take effect from January.

The Dow Jones industrial average <.dji> gained 6.95 points, or 0.05 percent, to 12,992.06. The Standard & Poor's 500 Index <.spx> gained 3.40 points, or 0.24 percent, to 1,413.33. The Nasdaq Composite Index <.ixic> gained 11.82 points, or 0.40 percent, to 3,003.60.

U.S.-listed shares of BlackBerry maker Research In Motion surged 5.9 percent to $11.75 after Goldman Sachs upgraded the stock to "buy" from "neutral" on optimistic ahead of the launch of the BlackBerry 10 smartphone.

Shares of top retailers retreated in the wake of data showing a weak start to November sales after superstorm Sandy. Target fell 1.6 percent to $61.80 percent and Kohl's Corp dropped 8.2 percent to $46.94.

The U.S. economy grew faster than initially thought in the third quarter as businesses restocked, but consumer and business spending were revised lower in a sobering reminder of the economic recovery's underlying weakness.

Gross domestic product expanded at a 2.7 percent annual rate in the quarter, the Commerce Department said, as export growth helped offset the weakest consumer spending and first drop in business investment in more than a year.

Contracts to buy previously owned U.S. homes rose more than expected in October, a sign the housing market recovery advanced into the fourth quarter despite a mammoth storm and concerns over looming tax hikes.

Shares of companies that build homes rose. The PHLX housing index <.hgx> rose 0.4 percent, shedding some earlier gains in line with the pullback in the broader market.

Tiffany shares slumped 6.7 percent to $59.48 after the upscale jeweler reported quarterly results and cut its full-year sales and profit forecasts.

Although domestic events largely dominated investors' attention, the euro zone is still on the radar. The yield on Italy's 10-year bonds fell to the lowest in two years at an auction, amid relief that international lenders reached agreement this week to reduce Greece's debt by more than 40 billion euros.

"The fact that the bond sales in Europe went well suggest confidence is beginning to reenter some of the peripheral nations and that is a good sign," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

(Additional reporting by Caroline Valetkevitch; Editing by Bernadette Baum)

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Hacking Report Criticizes Murdoch Newspaper and British Press Standards

LONDON — The leader of a major inquiry into the standards of British newspapers triggered by the phone hacking scandal offered an excoriating critique of the press as a whole on Thursday, saying it displayed “significant and reckless disregard for accuracy,” and urged the press to form an independent regulator to be underpinned by law.

Dan Kitwood/Getty Images

Lord Justice Sir Brian Leveson on Thursday with his inquiry on press standards.

The report singled out Rupert Murdoch’s defunct tabloid The News of the World for sharp criticism.

“Too many stories in too many newspapers were the subject of complaints from too many people with too little in the way of titles taking responsibility, or considering the consequences for the individuals involved,” the head of the inquiry, Lord Justice Sir Brian Leveson, said in a 46-page summary of the findings in his long-awaited, 1,987-page report published in four volumes.

“The ball moves back into the politicians’ court,” Sir Brian said, referring to what form new and tighter regulations should take. “They must now decide who guards the guardians.”

The report was published after some 337 witnesses testified in person in 9 months of hearings that sought to unravel the close ties between politicians, the press and the police, reaching into what were depicted as an opaque web of links and cross-links within the British elite as well as a catalog of murky and sometimes unlawful practices within the newspaper industry.

“This inquiry has been the most concentrated look at the press this country has ever seen,” Sir Brian said after the report was made public.

But in a first reaction, Prime Minister David Cameron resisted the report’s recommendation that a new form of press regulation should be underpinned by laws, telling lawmakers that they “should be wary” of “crossing the Rubicon” by enacting legislation with the potential to limit free speech and free expression.

Mr. Cameron’s remarks drew immediate criticism from the leader of the Labour opposition, Ed Miliband, who said Sir Brian’s proposals should be accepted in their entirety.

Mr. Cameron ordered the Leveson Inquiry in July, 2011, as the phone hacking scandal at The News of the World blossomed into broad public revulsion with reports that the newspaper had ordered the interception of voice mail messages left on the cellphone of Milly Dowler, a British teenager who was abducted in 2002 and later found murdered. Sir Brian said there had been a “failure of management and compliance” at the 168-year-old News of the World, which Mr. Murdoch closed in July, 2011, accusing it of a “general lack of respect for individual privacy and dignity.”

“It was said that The News of the World had lost its way in relation to phone hacking,” the summary said. “Its casual attitude to privacy and the lip service it paid to consent demonstrated a far more general loss of direction.”

Speaking after the report was published, Sir Brian said that while the British press held a “privileged and powerful place in our society,” its “responsibilities have simply been ignored.”

“A free press in a democracy holds power to account. But, with a few honorable exceptions, the U.K. press has not performed that vital role in the case of its own power.”

“The press needs to establish a new regulatory body which is truly independent of industry leaders and of government and politicians,” he said. “Guaranteed independence, long-term stability and genuine benefits for the industry cannot be realized without legislation,” he said, adding: “This is not and cannot reasonably or fairly be characterized as statutory regulation of the press.”

In the body of the exhaustive report, reprising at length the testimony of many of the witnesses who spoke at the hearings, the document discusses press culture and ethics; explores the press’s attitude toward the subjects of its stories; and discusses the cozy relationship between the press and the police, and the press and politicians.

John F. Burns, Sandy Lark Turner and Sandy Macaskill contributed reporting.

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