Wall Street flat on lack of "fiscal cliff" progress

NEW YORK (Reuters) - Stocks fluctuated between small gains and losses on Tuesday after remarks by President Barack Obama on budget talks dented optimism a solution could be found to prevent the economy from falling into recession.

Obama rejected a Republican proposal to resolve a looming fiscal crisis as "still out of balance" and said any deal must include a rise in income tax rates on the wealthiest Americans.

Obama spoke in an interview with Bloomberg Television.

Republicans in Congress proposed steep spending cuts to bring down the budget deficit on Monday but gave no ground on Obama's call to raise tax rates on the rich. The proposal was quickly dismissed by the White House.

"We have more of the same and what that really means is that you see very public negotiations that seem to be going nowhere," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"If there was any conviction that this was going to be a done deal, that we are going to see some really positive resolution on this fiscal cliff, you would see some real activity in the market."

The market has been sensitive to rhetoric from Washington, and many investors still expect the two sides eventually will reach a deal before the year's end, which could trigger a rally in equities.

Obama meets with U.S. governors at the White House on Tuesday to talk about the fiscal cliff, a $600 billion package of tax hikes and federal spending cuts that would begin January 1.

Volume was light, with about 3.34 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq.

Differences within the Republican Party over how to engage with the Democrats came to the fore on Tuesday as one senator opposed to raising taxes lashed out at House Speaker and fellow Republican John Boehner for proposing to increase revenue by closing some tax loopholes.

Despite the sudden moves in the market, a measure of investor anxiety has held surprisingly flat.

The CBOE volatility index <.vix>, a gauge of market anxiety, was at 17.36 but has not traded above 20 since July following its 2012 high near 28 hit in June. The VIX's 10-day Average True Range, an internal volatility measure, is at its lowest since early 2007.

Coach became the latest company to advance the date of its next dividend payment. Expectations of higher taxes on dividends kicking in in 2013 have pushed many companies to pay special dividends this year or advance their next pay-back to investors. Shares of the upscale leather-goods maker declined 2 percent to $57.06.

The Dow Jones industrial average <.dji> added 16.60 points, or 0.13 percent, to 12,982.20. The Standard & Poor's 500 Index <.spx> dropped 0.27 point, or 0.02 percent, to 1,409.19. The Nasdaq Composite Index <.ixic> dipped 3.81 points, or 0.13 percent, to 2,998.39.

Darden Restaurants Inc plunged 10.3 percent to $47.04 as the worst performer on the S&P 500 after warning its latest quarter would miss expectations after unsuccessful promotions led to a decline in sales at its Olive Garden, Red Lobster and LongHorn Steakhouse chains.

In contrast, Big Lots Inc surged 13.8 percent to $31.95 after the close-out retailer posted a smaller-than-expected loss and boosted its full-year adjusted earnings forecast.

Toll Brothers shares gained 1.1 percent to $32.80 after the largest U.S. luxury homebuilder reported a higher quarterly profit and said new orders rose sharply.

MetroPCS Communications shares tumbled 7.2 percent to $10.00 after Sprint Nextel appeared unlikely to make a counter-offer for the wireless service provider.

Shares of Pep Boys-Manny Moe and Jack slid 13.5 percent at $9.24 a day after the release of the auto parts retailer's results.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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U.S. Navy Denies Iranian Claim to Have Captured Drone

TEHRAN — Iran’s Revolutionary Guards Corps naval forces have captured an American drone that it said entered Iranian airspace over the Persian Gulf, state television reported on Tuesday. The claim was quickly denied by the United States Navy.

Iranian state media said the aircraft was a ScanEagle built by Boeing, which, according to the company’s Web site, can be launched and operated from ships.

A spokesman for the United States Navy in Bahrain denied the Iranian claim, saying that no American drones were missing.

“The U.S. Navy has fully accounted for all unmanned air vehicles operating in the Middle East region,” a spokesman for the United States Naval Forces Central Command in Bahrain told Reuters. “Our operations in the gulf are confined to internationally recognized water and airspace. We have no record that we have lost any ScanEagles recently.”

However, the drone could have been one used by the Central Intelligence Agency, or even the National Security Agency, which both have eyes on Iran. Several kingdoms of the Persian Gulf also have ScanEagle drones.

If the seizure is confirmed, it would indicate a spike in tension between the United States and Iran in the skies over the gulf. On Nov. 8, Pentagon officials said Iranian warplanes had fired at a Predator drone flying over the gulf the previous week. It was believed to be the first incident in which Iranian warplanes had fired on an American drone, they said.

State television showed images of what seemed to be an intact ScanEagle being inspected by Rear Adm. Ali Fadavi, the commander of the Revolutionary Guards’ naval forces. The drone was displayed in front of a large map of the Persian Gulf with a text in English and Persian saying, “We shall trample on the U.S..”

Without mentioning the drone claim, President Mahmoud Ahmadinejad on Tuesday warned Iran’s adversaries against aggression. “Our enemies should open their eyes,” he said in a speech. “They may be able to take a few steps forward, but in the end we will make them retreat behind their own border.”

Iran’s foreign minister, Ali Akbar Salehi, told state television on Tuesday that the country planned to use the capture of the drone as evidence against the United States in international organizations.

“We had announced to the Americans that according to international conventions, we would not allow them to invade our territories, but unfortunately they did not comply,” Mr. Salehi said. “We had objected to the Americans before, but they claimed they were not present in our territories. We will use this drone as evidence to pursue a legal case against American invasion in international forums.” Admiral Fadavi said his forces had “hunted down” the ScanEagle over the gulf after it violated Iranian airspace and had forced it to land electronically, the semiofficial Fars news agency reported. A state television commentator said the drone was on a spy mission.

A September report by the Government Accountability Office on unmanned aircraft systems warned that some drones were sensitive to jamming and spoofing. In a spoofing operation, an unencrypted GPS signal can be taken over by enemy forces, the report warns, effectively hijacking the drone.

A former member of Iran’s Foreign Policy and National Security Commission said the seizure of the drone illustrated Iran’s growing military powers and showed that the United States was not really interested in mending relations with Tehran.

“How can we trust President Obama for talks if he sends his drones into our airspace?” the former commission member, Heshmatollah Falahatpisheh, said in an interview. “This move is counterproductive for any détente.”

Iran’s Parliament, which always cheers on any success by the Revolutionary Guards, invited top commanders to present details of the capture to lawmakers.

“The hunting and capturing of this American drone once again showed off the defensive and repelling strengths of the Islamic republic to the world,” Ebrahim Aghamohammadi, a member of Parliament, told Fars. “We are moving forward with dominance.”

In the Nov. 1 attack on the Predator, American officials maintained that the drone had been over international waters, while Iranian commanders insisted that it had violated Iranian airspace. Sea and air borders in the region are strongly contested. Iranian naval forces in small speedboats and United States warships monitor the sea lanes, through which nearly 30 percent of the world’s oil is transported.

Last month, Iran complained to the United Nations over at least eight violations of its airspace by American planes.

Iran’s latest claim came 12 months after Iran said it had brought down an RQ-170 Sentinel operated by the C.I.A. At the time, Iranian state television showed images of the bat-winged drone — apparently fully intact — that Iran had nicknamed “the beast of Kandahar,” a reference to a drone base in Afghanistan.

Iran has maintained that it hacked into the RQ-170’s controls and forced it to land. But American officials said it had crashed in Iranian territory.

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China goes crazy for iPhone 5: Preorders hit 100,000 units in under 24 hours

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Anderson Cooper Is Temporarily Blinded

TV Watch

By Julia Haskins

12/04/2012 at 02:30 PM EST

Anderson Cooper can see once again after a temporary – and painful – bout of blindness.

Cooper posted a picture of himself on Instagram Tuesday sporting a white gauze patch over his right eye. "Temporarily blinded last week while on assignment," he said. "UV light bouncing off water. Much better now. Details today on #andersonlive."

On Anderson Cooper Live, he explained how he went blind over the weekend while filming a story for 60 Minutes on the coast of Portugal.

"I wake up in the middle of the night and it feels like my eyes are on fire," he said. "It turns out I have sunburned my eyeballs and I go blind. I went blind for 36 hours. I took this picture of me after I went to the hospital."

He then showed his audience his photo and joked, "That's my new Match.com profile picture, by the way."

But the potential damage he faced is no laughing matter, and Cooper had NBC's chief medical editor, Dr. Nancy Snyderman, on to warn viewers about eye protection.

Snyderman said that the light reflected off the water burned his retinas, but that the hospital visit could have easily been avoided.

"It's a reminder that frankly everyone needs sunglasses," she advised. And to Cooper, she added, "Fortunately for you you're going to be fine, but it's a real reminder."

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Fossil fuel subsidies in focus at climate talks

DOHA, Qatar (AP) — Hassan al-Kubaisi considers it a gift from above that drivers in oil- and gas-rich Qatar only have to pay $1 per gallon at the pump.

"Thank God that our country is an oil producer and the price of gasoline is one of the lowest," al-Kubaisi said, filling up his Toyota Land Cruiser at a gas station in Doha. "God has given us a blessing."

To those looking for a global response to climate change, it's more like a curse.

Qatar — the host of U.N. climate talks that entered their final week Monday — is among dozens of countries that keep gas prices artificially low through subsidies that exceeded $500 billion globally last year. Renewable energy worldwide received six times less support — an imbalance that is just starting to earn attention in the divisive negotiations on curbing the carbon emissions blamed for heating the planet.

"We need to stop funding the problem, and start funding the solution," said Steve Kretzmann, of Oil Change International, an advocacy group for clean energy.

His group presented research Monday showing that in addition to the fuel subsidies in developing countries, rich nations in 2011 gave more than $58 billion in tax breaks and other production subsidies to the fossil fuel industry. The U.S. figure was $13 billion.

The Paris-based Organization for Economic Cooperation and Development has calculated that removing fossil fuel subsidies could reduce carbon emissions by more than 10 percent by 2050.

Yet the argument is just recently gaining traction in climate negotiations, which in two decades have failed to halt the rising temperatures that are melting Arctic ice, raising sea levels and shifting weather patterns with impacts on droughts and floods.

In Doha, the talks have been slowed by wrangling over financial aid to help poor countries cope with global warming and how to divide carbon emissions rights until 2020 when a new planned climate treaty is supposed to enter force. Calls are now intensifying to include fossil fuel subsidies as a key part of the discussion.

"I think it is manifestly clear ... that this is a massive missing piece of the climate change jigsaw puzzle," said Tim Groser, New Zealand's minister for climate change.

He is spearheading an initiative backed by Scandinavian countries and some developing countries to put fuel subsidies on the agenda in various forums, citing the U.N. talks as a "natural home" for the debate.

The G-20 called for their elimination in 2009, and the issue also came up at the U.N. earth summit in Rio de Janeiro earlier this year. Frustrated that not much has happened since, European Union climate commissioner Connie Hedegaard said Monday she planned to raise the issue with environment ministers on the sidelines of the talks in Doha.

Many developing countries are positive toward phasing out fossil fuel subsidies, not just to protect the climate but to balance budgets. Subsidies introduced as a form of welfare benefit decades ago have become an increasing burden to many countries as oil prices soar.

"We are reviewing the subsidy periodically in the context of the total economy for Qatar," the tiny Persian gulf country's energy minister, Mohammed bin Saleh al-Sada, told reporters Monday.

Qatar's National Development Strategy 2011-2016 states it more bluntly, saying fuel subsides are "at odds with the aspirations" and sustainability objectives of the wealthy emirate.

The problem is that getting rid of them comes with a heavy political price.

When Jordan raised fuel prices last month, angry crowds poured into the streets, torching police cars, government offices and private banks in the most sustained protests to hit the country since the start of the Arab unrest. One person was killed and 75 others were injured in the violence.

Nigeria, Indonesia, India and Sudan have also seen violent protests this year as governments tried to bring fuel prices closer to market rates.

Iran has used a phased approach to lift fuel subsidies over the past several years, but its pump prices remain among the cheapest in the world.

"People perceive it as something that the government is taking away from them," said Kretzmann. "The trick is we need to do it in a way that doesn't harm the poor."

The International Energy Agency found in 2010 that fuel subsidies are not an effective measure against poverty because only 8 percent of such subsidies reached the bottom 20 percent of income earners.

The IEA, which only looked at consumption subsidies, this year said they "remain most prevalent in the Middle East and North Africa, where momentum toward their reform appears to have been lost."

In the U.S., environmental groups say fossil fuel subsidies include tax breaks, the foreign tax credit and the credit for production of nonconventional fuels.

Industry groups, like the Independent Petroleum Association of America, are against removing such support, saying that would harm smaller companies, rather than the big oil giants.

In Doha, Mohammed Adow, a climate activist with Christian Aid, called all fuel subsidies "reckless and dangerous," but described removing subsidies on the production side as "low-hanging fruit" for governments if they are serious about dealing with climate change.

"It's going to oil and coal companies that don't need it in the first place," he said.

___

Associated Press writers Abdullah Rebhy in Doha, Qatar, and Brian Murphy in Dubai, United Arab Emirates, contributed to this report

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Karl Ritter can be reached at www.twitter.com/karl_ritter

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Wall Street slips after weak factory data

NEW YORK (Reuters) - Stocks fell on Monday, with the S&P 500 and Nasdaq erasing early gains as disappointing U.S. factory numbers curbed optimism spurred by positive data on China's economy.

Manufacturing in the United States surprisingly contracted in November, according to the Institute for Supply Management, dropping to its lowest level in more than three years. Economic data has been mixed in recent months, sparking new worries about the pace of economic growth at a time when investors are already concerned about the "fiscal cliff" issue in Washington.

Markets had opened higher as output by China's factories grew in November for the first time in more than a year, data showed. Investors look to strength from China, the world's second-largest economy, to offset weak growth in the United States and Europe.

Still, the fiscal cliff remains investors' primary focus, with political haggling continuing over how to deal with large automatic spending cuts and tax hikes scheduled to kick in next year that could tip the U.S. economy back into recession.

"Markets have lately been more optimistic than what the reality of the negotiations seems to be, and the reality of that may be starting to set in," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "Until the cliff gets resolved, market upside may be capped while the downside isn't constrained."

The Dow Jones industrial average <.dji> was down 39.57 points, or 0.30 percent, at 12,986.01. The Standard & Poor's 500 Index <.spx> was down 3.97 points, or 0.28 percent, at 1,412.21. The Nasdaq Composite Index <.ixic> was down 3.22 points, or 0.11 percent, at 3,007.02.

The S&P 500 briefly moved above its 50-day moving average at about 1,420, a level that the index has been below since October 22, and now serving as a key resistance point for equities.

U.S. Treasury Secretary Timothy Geithner pushed Republicans on Sunday to offer specific ideas to cut the deficit. He predicted that they would agree to raise tax rates on the rich to obtain a year-end deal to avoid the fiscal cliff.

Among other factors serving to offset the ISM report were two developments in the euro zone: Spain formally requested the disbursement of more than $50 billion of European funds to recapitalize its crippled banking sector, while Greece said it would spend 10 billion euros ($13 billion) to buy back bonds in a bid to reduce its ballooning debt.

The PHLX Europe sector index <.xex> rose 0.3 percent.

"The general feeling underneath here is things are improving - Europe appears to be improving, at least politically getting their act together," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

Dell shares gained 4.4 percent to $10.06. The stock was one of the biggest percentage gainers in both the S&P 500 and Nasdaq 100 <.ndx> after Goldman Sachs upgraded its view on the stock to "buy" from "sell.

Advanced Micro Devices was the S&P's top gainer, rising 8.2 percent to $2.38. Option traders appeared to be betting on further gains ahead. Early options order flow was focused on upside April calls, including a sweep of 3,594 April $3.50 strike calls for 16 cents per contract when the market was 14 cents to 16 cents, said WhatsTrading.com options strategist Frederic Ruffy.

Retail stocks were among the weakest of the day, with J.C. Penney Co off 3.4 percent to $17.33, and Big Lots Inc down 2.5 percent at $27.47. Staples Inc lost 1.6 percent to $11.51. Consumer discretionary names tend to underperform during periods of economic uncertainty as consumers focus on core purchases.

Singapore Airlines said it was in talks with interested parties to sell its 49 percent stake in British carrier Virgin Atlantic, with sources saying that Delta Air Lines was among the potential suitors. Delta shares fell 2.1 percent to $9.79.

(Additional reporting by Chuck Mikolajczak and Doris Frankel; Editing by Jan Paschal)

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Clinton Warns Syria Against Using Chemical Weapons

WASHINGTON — The Obama administration said Monday that it is worried that Syria’s embattled government may be preparing to use chemical weapons against the opposition and warned that doing so “would cross a red line for the United States” and prompt American action.

The White House said that some recent actions by the government of President Bashar al-Assad were indicators that such weapons could be deployed soon, following earlier reports that intelligence agencies had noticed signs of activity at chemical weapons sites.

“We have an increased concern about the possibility of the regime taking the desperate act of using its chemical weapons,” said Jay Carney, the White House press secretary. He said such a move “would cross a red line for the United States. The Assad regime must know that the world is watching and that they will be held accountable by the United States and the international community if they use chemical weapons or fail to secure them.”

Mr. Carney hinted at possible military action in response, although he declined to specify what options President Obama would consider. “We think it is important to prepare for all scenarios,” Mr. Carney said. “Contingency planning is the responsible thing to do.”

The White House statements on Syria echoed and amplified similar warnings issued by Secretary of State Hillary Rodham Clinton earlier in the day in Prague, the Czech capital, where she was stopping on her way to meetings in Brussels.

“This is a red line for the United States,” Mrs. Clinton said, using the same language that the White House later would use. “I am not going to telegraph in any specifics what we would do in the event of credible evidence that the Assad regime has resorted to using chemical weapons against their own people. But suffice it to say we are certainly planning to take action if that eventuality were to occur.”

There have been signs in recent days of heightened activity at some of Syria’s chemical weapons sites, according to American and Israeli officials familiar with intelligence reports. Mrs. Clinton did not confirm the intelligence reports or say what sort of activity was occurring.

The Syrian Foreign Ministry, in a swift response, said the government “would not use chemical weapons, if it had them, against its own people under any circumstances.” The statement was reported on Syrian state television and on the Lebanese channel LBC.

The warning from the White House came as the spokesman for Syria’s foreign ministry, Jihad Makdissi, was reported by the Hezbollah-run television station, Al Manar, as having been fired, although Lebanese news Web sites reported the departure as a defection. Mr. Makdissi, who was thought to be in Europe on Monday, was one of the highest ranking Christians to defect, and his polished persona and fluent English had long made him one of the most cosmopolitan faces of the government.

In recent months he had not taken phone calls and had not made public statements, leading some to speculate that he had either fallen out of favor or had doubts about the regime.

Mr. Maqdissi had been one of the most accessible Syrian officials for foreign journalists. Al Manar reported that he was fired for making statements that did not reflect the government’s point of view, though it was unclear what those statements might have been.

The crisis has been worsening in Syria, where about 40,000 people have been killed in 20 months of conflict. On Monday, the United Nations regional humanitarian coordinator for Syria, Radhouane Nouicer, said that they were pulling nonessential international staff out of the country because of the security situation, The Associated Press reported.

Mrs. Clinton, who made her comments after meeting with Karel Schwarzenberg, the foreign minister of the Czech Republic, indicated that they had discussed the situation in Syria, including the potential chemical weapons threat.

Mr. Schwarzenberg described the situation in Syria as “rather chaotic” and “highly dangerous.” He said that Czech troops who specialize in the detection of chemical weapons and decontamination were in Jordan training with forces there.

An American task force has been deployed to Jordan and has been helping the Jordanians deal with an escalating humanitarian crisis centered on Syria, including an exodus of more than 200,000 refugees from Syria to Jordan. The force is also planning how to respond, if necessary, to a chemical weapons threat.

Mrs. Clinton stopped in Prague on her way to Brussels for a meeting of NATO foreign ministers. A major topic of the NATO meeting is a Turkish request that the alliance deploy Patriot antimissile batteries in Turkey. The Turkish government is concerned about Syria’s ballistic missiles, which could carry chemical weapons, and it wants NATO to guard as many as 10 sites inside Turkey.

Peter Baker reported from Washington, D.C. and Michael R. Gordon reported from Prague. Anne Barnard contributed reporting from Beirut, Lebanon.

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Obama Is Taking Himself and #My2K to Twitter This Afternoon

What a day for Twitter! First the Pope, then the Royal Baby, and now President Obama will come online to answer questions about the fiscal cliff. A @WhiteHouse tweet with the distincitive “-bo” signature, announced not long ago that the big guy himself will be taking questions online, starting at 2:00 p.m. ET.

Good to see lots of folks on twitter speaking out on extending middle class tax cuts. I’ll answer some Qs on that at 2ET. Ask w/ #My2k –bo

— The White House (@whitehouse) December 3, 2012

Unfortunately, he’s sticking with the troublesome #My2K hashtag that conservatives have already seized upon in a back-and-forth battle for messaging. Trying to mobilize your supporters through social media is all well and good, but the problem with any genuinely open town hall, is that anyone can invite themselves—even those who disagree with you and might be louder than your friends. (Plus, any reasonably popular hashtag moves much to fast for anyone to follow it or have an actual conversation on Twitter anyway.)

RELATED: Don’t Expect Too Much From Social Media Town Halls

But ask away! Maybe you’ll get luck and get RT’d by the President himself. And then find yourself becoming the next conservative meme as soon as the hashtag-averse pundits start making fun of your question. Should be a fun afternoon.

Social Media News Headlines – Yahoo! News

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Congressman Joseph Kennedy III Marries Lauren Birchfield

12/03/2012 at 02:15 PM EST

Joseph Kennedy III and Lauren Anne Birchfield

Victor Sizemore Photography

Happy news for the Kennedy family: Congressman-elect Joe Kennedy III is a married man.

The newly-elected politician wed fiancée Lauren Birchfield on Saturday at the Community Church in Corona del Mar, Calif., his office tells NBC News. The ceremony was officiated by her father, the Rev. Jim Birchfield.

Kennedy, 32, and Birchfield, 28, met at Harvard Law School, and they were married in front of family and friends.

"The bride and groom are extremely grateful for all the well wishes and for the outpouring of support and friendship they have received this year," the newlyweds say in a statement to NBC News.

Kennedy III, the son of former Rep. Joseph Kennedy II, and Robert F. Kennedy's grandson, represents Massachusetts's 4th Congressional District.

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Asperger's dropped from revised diagnosis manual

CHICAGO (AP) — The now familiar term "Asperger's disorder" is being dropped. And abnormally bad and frequent temper tantrums will be given a scientific-sounding diagnosis called DMDD. But "dyslexia" and other learning disorders remain.

The revisions come in the first major rewrite in nearly 20 years of the diagnostic guide used by the nation's psychiatrists. Changes were approved Saturday.

Full details of all the revisions will come next May when the American Psychiatric Association's new diagnostic manual is published, but the impact will be huge, affecting millions of children and adults worldwide. The manual also is important for the insurance industry in deciding what treatment to pay for, and it helps schools decide how to allot special education.

This diagnostic guide "defines what constellations of symptoms" doctors recognize as mental disorders, said Dr. Mark Olfson, a Columbia University psychiatry professor. More important, he said, it "shapes who will receive what treatment. Even seemingly subtle changes to the criteria can have substantial effects on patterns of care."

Olfson was not involved in the revision process. The changes were approved Saturday in suburban Washington, D.C., by the psychiatric association's board of trustees.

The aim is not to expand the number of people diagnosed with mental illness, but to ensure that affected children and adults are more accurately diagnosed so they can get the most appropriate treatment, said Dr. David Kupfer. He chaired the task force in charge of revising the manual and is a psychiatry professor at the University of Pittsburgh.

One of the most hotly argued changes was how to define the various ranges of autism. Some advocates opposed the idea of dropping the specific diagnosis for Asperger's disorder. People with that disorder often have high intelligence and vast knowledge on narrow subjects but lack social skills. Some who have the condition embrace their quirkiness and vow to continue to use the label.

And some Asperger's families opposed any change, fearing their kids would lose a diagnosis and no longer be eligible for special services.

But the revision will not affect their education services, experts say.

The new manual adds the term "autism spectrum disorder," which already is used by many experts in the field. Asperger's disorder will be dropped and incorporated under that umbrella diagnosis. The new category will include kids with severe autism, who often don't talk or interact, as well as those with milder forms.

Kelli Gibson of Battle Creek, Mich., who has four sons with various forms of autism, said Saturday she welcomes the change. Her boys all had different labels in the old diagnostic manual, including a 14-year-old with Asperger's.

"To give it separate names never made sense to me," Gibson said. "To me, my children all had autism."

Three of her boys receive special education services in public school; the fourth is enrolled in a school for disabled children. The new autism diagnosis won't affect those services, Gibson said. She also has a 3-year-old daughter without autism.

People with dyslexia also were closely watching for the new updated doctors' guide. Many with the reading disorder did not want their diagnosis to be dropped. And it won't be. Instead, the new manual will have a broader learning disorder category to cover several conditions including dyslexia, which causes difficulty understanding letters and recognizing written words.

The trustees on Saturday made the final decision on what proposals made the cut; recommendations came from experts in several work groups assigned to evaluate different mental illnesses.

The revised guidebook "represents a significant step forward for the field. It will improve our ability to accurately diagnose psychiatric disorders," Dr. David Fassler, the group's treasurer and a University of Vermont psychiatry professor, said after the vote.

The shorthand name for the new edition, the organization's fifth revision of the Diagnostic and Statistical Manual, is DSM-5. Group leaders said specifics won't be disclosed until the manual is published but they confirmed some changes. A 2000 edition of the manual made minor changes but the last major edition was published in 1994.

Olfson said the manual "seeks to capture the current state of knowledge of psychiatric disorders. Since 2000 ... there have been important advances in our understanding of the nature of psychiatric disorders."

Catherine Lord, an autism expert at Weill Cornell Medical College in New York who was on the psychiatric group's autism task force, said anyone who met criteria for Asperger's in the old manual would be included in the new diagnosis.

One reason for the change is that some states and school systems don't provide services for children and adults with Asperger's, or provide fewer services than those given an autism diagnosis, she said.

Autism researcher Geraldine Dawson, chief science officer for the advocacy group Autism Speaks, said small studies have suggested the new criteria will be effective. But she said it will be crucial to monitor so that children don't lose services.

Other changes include:

—A new diagnosis for severe recurrent temper tantrums — disruptive mood dysregulation disorder. Critics say it will medicalize kids' who have normal tantrums. Supporters say it will address concerns about too many kids being misdiagnosed with bipolar disorder and treated with powerful psychiatric drugs. Bipolar disorder involves sharp mood swings and affected children are sometimes very irritable or have explosive tantrums.

—Eliminating the term "gender identity disorder." It has been used for children or adults who strongly believe that they were born the wrong gender. But many activists believe the condition isn't a disorder and say calling it one is stigmatizing. The term would be replaced with "gender dysphoria," which means emotional distress over one's gender. Supporters equated the change with removing homosexuality as a mental illness in the diagnostic manual, which happened decades ago.

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner .

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