Investors face another Washington deadline

NEW YORK (Reuters) - Investors face another Washington-imposed deadline on government spending cuts next week, but it's not generating the same level of fear as two months ago when the "fiscal cliff" loomed large.

Investors in sectors most likely to be affected by the cuts, like defense, seem untroubled that the budget talks could send stocks tumbling.

Talks on the U.S. budget crisis began again this week leading up to the March 1 deadline for the so-called sequestration when $85 billion in automatic federal spending cuts are scheduled to take effect.

"It's at this point a political hot button in Washington but a very low level investor concern," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. The fight pits President Barack Obama and fellow Democrats against congressional Republicans.

Stocks rallied in early January after a compromise temporarily avoided the fiscal cliff, and the Standard & Poor's 500 index <.spx> has risen 6.3 percent since the start of the year.

But the benchmark index lost steam this week, posting its first week of losses since the start of the year. Minutes on Wednesday from the last Federal Reserve meeting, which suggested the central bank may slow or stop its stimulus policy sooner than expected, provided the catalyst.

National elections in Italy on Sunday and Monday could also add to investor concern. Most investors expect a government headed by Pier Luigi Bersani to win and continue with reforms to tackle Italy's debt problems. However, a resurgence by former leader Silvio Berlusconi has raised doubts.

"Europe has been in the last six months less of a topic for the stock market, but the problems haven't gone away. This may bring back investor attention to that," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

OPTIONS BULLS TARGET GAINS

The spending cuts, if they go ahead, could hit the defense industry particularly hard.

Yet in the options market, bulls were targeting gains in Lockheed Martin Corp , the Pentagon's biggest supplier.

Calls on the stock far outpaced puts, suggesting that many investors anticipate the stock to move higher. Overall options volume on the stock was 2.8 times the daily average with 17,000 calls and 3,360 puts traded, according to options analytics firm Trade Alert.

"The upside call buying in Lockheed solidifies the idea that option investors are not pricing in a lot of downside risk in most defense stocks from the likely impact of sequestration," said Jared Woodard, a founder of research and advisory firm condoroptions.com in Forest, Virginia.

The stock ended up 0.6 percent at $88.12 on Friday.

If lawmakers fail to reach an agreement on reducing the U.S. budget deficit in the next few days, a sequester would include significant cuts in defense spending. Companies such as General Dynamics Corp and Smith & Wesson Holding Corp could be affected.

General Dynamics Corp shares rose 1.2 percent to $67.32 and Smith & Wesson added 4.6 percent to $9.18 on Friday.

EYES ON GDP DATA, APPLE

The latest data on fourth-quarter U.S. gross domestic product is expected on Thursday, and some analysts predict an upward revision following trade data that showed America's deficit shrank in December to its narrowest in nearly three years.

U.S. GDP unexpectedly contracted in the fourth quarter, according to an earlier government estimate, but analysts said there was no reason for panic, given that consumer spending and business investment picked up.

Investors will be looking for any hints of changes in the Fed's policy of monetary easing when Fed Chairman Ben Bernake speaks before congressional committees on Tuesday and Wednesday.

Shares of Apple will be watched closely next week when the company's annual stockholders' meeting is held.

On Friday, a U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with the iPhone maker, blocking the company from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.

(Additional reporting by Doris Frankel; Editing by Kenneth Barry)

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Italy's Innerhofer wins World Cup downhill

GARMISCH-PARTENKIRCHEN, Germany (AP) — Christof Innerhofer of Italy won his third World Cup downhill of the season Saturday, on a course where he has a history of good results.

Innerhofer bested three Austrians to earn his sixth career victory, covering the 2.58-kilometer (1.6-mile) Kandahar course in 1 minute, 37.83 seconds to beat Georg Streitberger by 0.12 seconds. Streitberger was the 30th runner out of the gate and Innerhofer wiped his brow symbolically when the Austrian crossed the line. Klaus Kroell was 0.16 seconds back in third.

Hannes Reichelt was fourth and world champion Aksel Lund Svindal of Norway finished fifth.

The Kandahar course was shortened after heavy snow over the past few days made the preparation of the entire run impossible.

Innerhofer won three medals in Garmisch-Partenkirchen when the world championships were held here in 2011.

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Analysis: Italian election explained

Austerity-hit Italy chooses new leader

Austerity-hit Italy chooses new leader

Austerity-hit Italy chooses new leader

Austerity-hit Italy chooses new leader

STORY HIGHLIGHTS

• Silvio Berlusconi is campaigning to win his old job back for the fourth time


• The eurozone's third largest economy is hurting, with unemployment surpassing 11%


• Pier Luigi Bersani of the center-left Democratic Party is expected to narrowly win


• Italy's political system encourages the forming of alliances

(CNN) -- Little more than a year after he resigned in disgrace as prime minister, Silvio Berlusconi is campaigning to win his old job back -- for the fourth time.

Berlusconi, the septuagenarian playboy billionaire nicknamed "Il Cavaliere," has been trailing in polls behind his center-left rival, Per Luigi Bersani.

But the controversial media tycoon's rise in the polls in recent weeks, combined with widespread public disillusionment and the quirks of Italy's complex electoral system, means that nothing about the race is a foregone conclusion.

Why have the elections been called now?

Italian parliamentarians are elected for five-year terms, with the current one due to end in April. However in December, Berlusconi's People of Freedom Party (PdL) withdrew its support from the reformist government led by Mario Monti, saying it was pursuing policies that "were too German-centric." Monti subsequently resigned and the parliament was dissolved.

Berlusconi -- the country's longest serving post-war leader -- had resigned the prime ministerial office himself amidst a parliamentary revolt in November 2011. He left at a time of personal and national crisis, as Italy grappled with sovereign debt problems and Berlusconi faced criminal charges of tax fraud, for which he was subsequently convicted. He remains free pending an appeal. He was also embroiled in a scandal involving a young nightclub dancer - which led him to be charged with paying for sex with an underage prostitute.

MORE: From Venice to bunga bunga: Italy in coma

He was replaced by Monti, a respected economist and former European Commissioner, who was invited by Italy's President Giorgio Napolitano to lead a cabinet of unelected technocrats. Monti's government implemented a program of tax rises and austerity measures in an attempt to resolve Italy's economic crisis.

Who are the candidates?

The election is a four-horse race between political coalitions led by Bersani, Berlusconi, Monti, and the anti-establishment movement led by ex-comedian Beppe Grillo. Polls are banned within two weeks of election day, but the most recent ones had Bersani holding onto a slender lead over Berlusconi, followed by Grillo in distant third.

READ MORE: Will Monte Paschi banking scandal throw open Italy's election race?

The center-left alliance is dominated by the Democratic Party, led by Bersani. He is a former Minister of Economic Development in Romano Prodi's government from 2006-8 -- and has held a comfortable lead in polls, but that appears to be gradually being eroded by Berlusconi.

Italy's political system encourages the forming of alliances, and the Democratic Party has teamed with the more left-wing Left Ecology Freedom party.

The 61-year-old Bersani comes across as "bluff and homespun, and that's part of his appeal -- or not, depending on your point of view," said political analyst James Walston, department chair of international relations at the American University of Rome.

He described Bersani, a former communist, as a "revised apparatchik," saying the reform-minded socialist was paradoxically "far more of a free marketeer than even people on the right."

Bersani has vowed to continue with Monti's austerity measures and reforms, albeit with some adjustments, if he wins.

At second place in the polls is the center-right alliance led by Berlusconi's PdL, in coalition with the right-wing, anti-immigration Northern League.

Berlusconi has given conflicting signals as to whether he is running for the premiership, indicating that he would seek the job if his coalition won, but contradicting that on other occasions.

In a recent speech, he proposed himself as Economy and Industry Minister, and the PdL Secretary Angelino Alfano as prime minister.

Roberto Maroni, leader of the Northern League, has said the possibility of Berlusconi becoming prime minister is explicitly ruled out by the electoral pact between the parties, but the former premier has repeatedly said he plays to win, and observers believe he is unlikely to pass up the chance to lead the country again if the opportunity presents itself.

Berlusconi has been campaigning as a Milan court weighs his appeal against a tax fraud conviction, for which he was sentenced to four years in jail last year. The verdict will be delivered after the elections; however, under the Italian legal system, he is entitled to a further appeal in a higher court. Because the case dates to July 2006, the statute of limitations will expire this year, meaning there is a good chance none of the defendants will serve any prison time.

He is also facing charges in the prostitution case (and that he tried to pull strings to get her out of jail when she was accused of theft) -- and in a third case stands accused of revealing confidential court information relating to an investigation into a bank scandal in 2005.

Despite all this, he retains strong political support from his base.

"Italy is a very forgiving society, it's partly to do with Roman Catholicism," said Walston. "There's sort of a 'live and let live' idea."

Monti, the country's 69-year-old technocrat prime minister, who had never been a politician before he was appointed to lead the government, has entered the fray to lead a centrist coalition committed to continuing his reforms. The alliance includes Monti's Civic Choice for Monti, the Christian Democrats and a smaller centre-right party, Future and Freedom for Italy.

As a "senator for life," Monti is guaranteed a seat in the senate and does not need to run for election himself, but he is hitting the hustings on behalf of his party.

In a climate of widespread public disillusionment with politics, comedian and blogger Beppe Grillo is also making gains by capturing the protest vote with his Five Star Movement. Grillo has railed against big business and the corruption of Italy's political establishment, and holds broadly euro-skeptical and pro-environmental positions.

How will the election be conducted?

Italy has a bicameral legislature and a voting system which even many Italians say they find confusing.

Voters will be electing 315 members of the Senate, and 630 members of the Chamber of Deputies. Both houses hold the same powers, although the Senate is referred to as the upper house.

Under the country's closed-list proportional representation system, each party submits ranked lists of its candidates, and is awarded seats according to the proportion of votes won -- provided it passes a minimum threshold of support.

Seats in the Chamber of Deputies are on a national basis, while seats in the senate are allocated on a regional one.

The party with the most votes are awarded a premium of bonus seats to give them a working majority.

The prime minister needs the support of both houses to govern.

Who is likely to be the next prime minister?

On current polling, Bersani's bloc looks the likely victor in the Chamber of Deputies. But even if he maintains his lead in polls, he could fall short of winning the Senate, because of the rules distributing seats in that house on a regional basis.

Crucial to victory in the Senate is winning the region of Lombardy, the industrial powerhouse of the north of Italy which generates a fifth of the country's wealth and is a traditional support base for Berlusconi. Often compared to the U.S. state of Ohio for the "kingmaker" role it plays in elections, Lombardy has more Senate seats than any other region.

If no bloc succeeds in controlling both houses, the horse-trading begins in search of a broader coalition.

Walston said that a coalition government between the blocs led by Bersani and Monti seemed "almost inevitable," barring something "peculiar" happening in the final stages of the election campaign.

Berlusconi, he predicted, would "get enough votes to cause trouble."

What are the main issues?

There's only really one issue on the agenda at this election.

The eurozone's third largest economy is hurting, with unemployment surpassing 11% -- and hitting 37% for young people.

Voters are weighing the question of whether to continue taking Monti's bitter medicine of higher taxation and austerity measures, while a contentious property tax is also proving a subject of vexed debate.

Walston said the dilemma facing Italians was deciding between "who's going to look after the country better, or who's going to look after my pocket better."

He said it appeared voters held far greater confidence in the ability of Monti and Bersani to fix the economy, while those swayed by appeals to their own finances may be more likely to support Berlusconi.

But he said it appeared that few undecided voters had any faith in Berlusconi's ability to follow through on his pledges, including a recent promise to reverse the property tax.

What are the ramifications of the election for Europe and the wider world?

Improving the fortunes of the world's eighth largest economy is in the interests of Europe, and in turn the global economy.

Italy's woes have alarmed foreign investors. However, financial commentator Nicholas Spiro, managing director of consultancy Spiro Sovereign Strategy, says the European Central Bank's bond-buying program has gone a long way to mitigating investors' concerns about the instability of Italian politics.

Why is political instability so endemic to Italy?

Italy has had more than 60 governments since World War II -- in large part as a by-product of a system designed to prevent the rise of another dictator.

Parties can be formed and make their way on to the political main stage with relative ease -- as witnessed by the rise of Grillo's Five Star Movement, the protest party which was formed in 2009 but in local and regional elections has even outshone Berlusoni's party at times.

Others point to enduringly strong regional identities as part of the recipe for the country's political fluidity.

READ MORE: Italian Elections 2013: Fame di sapere (hunger for knowledge)

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Drew Peterson: 'I don't do well in incarceration'

With a 38-year sentence at age 59, Drew Peterson most likely will spend the rest of his life in prison.

The former Bolingbrook police officer acknowledged as much in a tearful, rage-filled monologue before his sentencing Thursday. Barring a successful appeal, Peterson will not be eligible for release until he's 93. But he estimated he would not make it that long because he has developed high cholesterol and has been twice diagnosed with skin cancer since his incarceration at the Will County Jail.

"I'm not looking for any sympathy, but anything you sentence me to, you're sentencing me to the Department of Corrections to die," Peterson told the court in a raised voice choked with emotion.

Peterson's new life will stand in stark contrast to the one he knew as a police sergeant, when he busied himself by riding motorcycles, flying airplanes and chasing younger women. But it won't be that different from the nearly four years he has spent in jail after being charged with killing his third wife, Kathleen Savio.

Peterson was transferred to the Stateville Correctional Center on Friday morning, less than 24 hours after receiving his sentence. He stayed there only a few hours before being sent to his new home at the Pontiac prison. He is in the maximum-security facility, which has a protective custody unit. The assignment was based on factors such as his conviction, length of sentence, program needs, and medical and mental health requirements, per Illinois Department of Correction protocol.

Officials have not said whether he has a cellmate or if he will be in solitary confinement as he had been during his jail stay.

As part of his daily routine there, he will remain in his cell for most of the day, though he will be allowed out for meals and showers. Most inmates also get about five hours of recreation time outside per week, Illinois Department of Corrections spokeswoman Stacey Solano said.

Peterson already seemed to be envisioning a dreary existence.

"I don't do well in incarceration," he said during his 40-minute courtroom soliloquy. "Due to the bad food and lack of exercise (in jail), I have high blood pressure, high cholesterol, borderline diabetes, a variety of skin issues, and I've had two bouts with skin cancer."

Prisoners can earn work privileges and be assigned menial jobs in the kitchen, laundry room or other areas of the detention center. The shifts, which are not daily, are at least four hours long, Solano said.

Though the Will County Jail has a similar jobs program, Peterson did not participate in it because he was kept separate from the rest of the jail population. The sheriff's department, which oversees the facility, kept him segregated there amid concerns that his high-profile case and law-enforcement background could make him a target of inmates looking to build tough-guy reputations.

As such, Peterson had been kept in the jail's medical unit since his May 2009 arrest. He spent most of his time in his cell, which was 8 feet wide by 5 feet deep. He was given an hour or two in an adjacent day room each day, but that's about it.

His attorney Joseph Lopez, however, said he does not believe such measures need to be taken in state prison. Though high-profile inmates often attract unwanted attention — Jeffrey Dahmer, for example, was slain in 1994 while serving multiple life terms — Lopez thinks Peterson can protect himself.

"He's got a black belt in karate. He knows how to defend himself," Lopez said. "He's a gregarious type of guy. I'm sure the inmates will love him once they get to know him."

Peterson did not seem as convinced on Thursday.

"Originally, I had some cute and funny things to end with," he said, "but in closing now it's time to sentence an innocent man to a life of hardship and abuse (in) prison, and I don't deserve this."

Illinois Department of Corrections officials would not say what safety precautions would be taken in their facilities, but Solano said such issues are considered during an inmate's initial evaluation.

"IDOC will continue to ensure proper placement of all offenders as the health, safety and security of inmates and staff remain the department's top priority," she said.

Peterson will be allowed visits in prison, with some facilities allowing up to five per month. He had similar privileges in jail, but few people had actually come to see him. A visitor's list released shortly before his murder trial included his brother, sister and a small number of friends. Only two of his six children — his sons Thomas and Kris with Savio — went to see him in jail.

His older son, Stephen, who is raising his father's two youngest children, had not visited in the three years leading up to the trial. However, the two communicate frequently via collect phone calls from the jail. Illinois prisoners also have regular telephone contact — as long as it's collect — with people on their approved contacts list, Solano said.

Peterson's attorneys informed him after court Thursday that he could be transferred to Stateville as early as Friday. Despite his rage-filled monologue in court, he seemed to take the prison transfer in stride.

"He's ready for it," Lopez said. "He says he wants a change of scenery."

And that's just fine with Savio's family.

"I think he should have gotten 60 (years) myself," her brother Henry Savio Jr. said. "But he is going to spend the rest of his life in jail so I'm OK with it. He deserves to die there."

sstclair@tribune.com

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NFL exec: HGH testing resolution needed

INDIANAPOLIS (AP) — NFL senior vice president Adolpho Birch says the league and players association need to reach agreement soon on HGH testing.

The NFL and the union agreed in principle to HGH testing when a new 10-year labor agreement was reached in August 2011. But protocols must be approved by both sides and the players have questioned the science in the testing procedures, stalling implementation.

Speaking at the scouting combine Thursday, Birch says the NFL has full confidence in the test and "should have been a year into this by now." He calls the delays "a disservice to all of us."

On Tuesday, the union said in a conference call it favors HGH testing, but only with a strong appeal process. Otherwise, NFLPA spokesman George Atallah said, "it's just a nonstarter."

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How troubled Italy fell into a coma

Austerity-hit Italy chooses new leader

Austerity-hit Italy chooses new leader

Austerity-hit Italy chooses new leader

Austerity-hit Italy chooses new leader

STORY HIGHLIGHTS

• Bill Emmott: "Good Italy and Bad Italy" represent spit personalities of troubled country


• In 1950s, Italy was Europe's "emerging economy" and a pioneering center for design


• Old demons, including corruption and bloated public pensions, nearly bankrupted Italy


• Today Italy's biggest problem is the country's refusal to take responsibility and change

Editor's note: Bill Emmott is a British journalist and was the editor of The Economist from 1993 to 2006. His book "Good Italy, Bad Italy" was published in English in 2012, and he is the narrator of "Girlfriend in a Coma," a documentary about Italy's current crisis.

(CNN) -- On my first visit to Italy, at the age of 18, I fell in love with the country and its amazing history almost at first sight, as I and my friends sailed across the lagoon on the ferry to Venice. When we returned and found our camper van had been emptied out by thieves, I felt a little less enamored, to say the least.

This was my first glimpse of the split personality of a country that is expressed nearly 40 years later in the title of my 2012 book, "Good Italy, Bad Italy," and is the theme of the new film I have just narrated for the Italian director Annalisa Piras, "Girlfriend in a Coma".

Yet what I didn't realize then, as a (fairly) innocent teenager, was quite how significant Italy's history is for the whole of the West.

Bill Emmott

The greatest case study, or cautionary tale, comes from Venice itself. In medieval times La Serenissima, as Venice is known, became the richest and most powerful city-state in the Mediterranean. It was run by a quasi-democratic "grand council", made up of the merchants who were making the city rich, an elite that was open to newcomers if they had new ideas and new energies.

But in the 14th century the elite decided to close its doors to newcomers, allowing in only those related by family to the old guard, and nationalizing trading rights. The decline of Venice began with that decision.

Italy today is like a huge re-run of that sad Venetian story. During the 1950s and 1960s, the country was Europe's own "emerging economy" of the period, enjoying the third fastest average annual GDP growth rate in the world during those decades, beaten only by Japan and South Korea. It was helped by the global move towards freer trade and by the early European Union, but also by its own then very dynamic society and economy.

New, entrepreneurial companies were formed, new ideas blossomed; Italy became a pioneering center for design, for cinema, and for fashion, and the migration of millions of workers from the poor south to the industrializing north provided the factories with labor at a competitive price.

But then old demons came back to haunt Italy. The sharp polarization, combined with fear, between left and right that was a legacy of the fascist period of Mussolini from 1917 to 1943, returned first in the form of a huge wave of strikes in the late 1960s and early 1970s, and then in a deadly form of political violence. Nearly 500 people died in shootings, bombings and other tragedies during the decade and a half from 1970 as extremists on both left and right fought a running battle.

As well, sadly, as taking part in the violence, governments responded by trying to buy social peace -- first by implementing a very restrictive labor law which had the effect of making the law courts the principal arbitrator in industrial disputes; and second by an explosion of public spending (and thus borrowing) chiefly on pensions and a national health system.

Public pensions became the main form of unemployment insurance, as unwanted workers were permitted to retire early and draw pensions. But public debt became the main albatross around Italy's neck as governments ran budget deficits that in 1975-95 averaged (yes, averaged) almost 10% of GDP each and every year. The result: a pioneering crisis of sovereign debt and a foretaste of the crises now roiling the eurozone, as Italy's debt load reached 120% of GDP in the early 1990s and sent the country into near bankruptcy.

That financial crisis, in the course of which the Italian lira was ejected from Europe's pre-euro exchange-rate system (along with Britain's pound sterling) coincided with a huge political crisis, as corruption investigations brought crashing down the parties that had dominated Italian politics for the past 40 years.

The crisis brought talk of a new start, a "second republic" (to succeed the first, formed with the postwar constitution in 1945-48) and even a renaissance. In the interim, governments led by so-called technocrats (a professor, a governor of the Bank of Italy, an ex-diplomat) were brought in to make reforms and give the country a much needed "reset" before normal politics would be resumed.

It didn't happen. Hence, 20 years later, Italy finds itself in yet another crisis, one that looks eerily similar. The country's sovereign debt is -- you guessed it -- 120% of GDP. A mix of financial crisis and scandals brought down the long-running government of the media billionaire Silvio Berlusconi, while also discrediting establishment politicians of all parties.

In November 2011 a technocrat, the economics professor and former European Commissioner Mario Monti, was brought in to stabilize the country's finances, make reforms and give the country a "reset" before normal politics commence again after the upcoming elections.

It is too soon to say that the "reset" -- or, to use a broader metaphor, the upgrading of Italy's cultural, political and economic software -- will fail again. But it can be said that progress has been slow and disappointing.

Prime Minister Monti succeeded in stabilizing the public finances, but at the cost of a deeper recession than in all other eurozone economies except Greece and Spain. Beyond that, however, no major reforms have been implemented -- so the justice system remains painfully slow, the labor laws still discourage hiring while leaving millions of young people on poorly paid temporary contracts, competition remains overly restricted, too many markets are over-regulated, meritocracy remains stunted, corruption remains rife, and the huge cost of politics and political privileges has been left unchanged.

These tasks all remain for whichever coalition succeeds in forming a government after the elections. They should, however, have been done during the previous 20 years. Some progress in liberalizing markets was made, but not enough to stop Italy's GDP growth rate during 2001-10 from being the 180th worst in the world, just ahead of Haiti's.

Why not? Resistance from entrenched interest groups has been strong. Berlusconi's entry into politics in 1994 was essentially designed to obstruct change, to preserve his quasi-monopolistic businesses, and to ensure the old political ways could continue. On the left, suspicion of capitalism has remained rife, trade union powers have been maintained more successfully than in Germany or even France, and the use of political patronage to build power networks and reward supporters has helped destroy meritocracy.

The big question, however, is why Italians have allowed this to happen. The answer in our film, "Girlfriend in a Coma", is taken from Italy's, and arguably Europe's, greatest ever poet: Dante Alighieri. In his "Divine Comedy" of the 14th century, the sin he condemned most vigorously was "ignavia," by which he meant sloth -- the failure to take responsibility, the failure to show moral courage and to change things.

That is the coma that filmmaker Annalisa Piras and I diagnose as the Italian condition: economic stagnation, yes, but also a failure of consciousness and responsibility, which is in effect a moral failure.

Umberto Eco, the philosopher and novelist, adds a further explanation in the film. Italians, he says, "do not have a sense of the state." They had and respected a very powerful state in Roman times but that collapsed. The only states that have successfully replaced it since then have been the city states of Venice, Florence and elsewhere, which produced great riches and even the Renaissance of art, science, humanism and culture of the 15th century, but never achieved a set of stable, respected, still-less national institutions.

To get Italy out of its coma, its second crisis of 20 years, new governments will have to work hard to fix that problem. To make sure they do so, Italians will need to shed their ignavia and to become more active and demanding -- not in their sectional or local interests, but in the national interest.

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Overnight snow hampering Chicago-area commute

About three inches of snow fell across the Chicago region, though the snow is expected to turn to freezing drizzle this morning, coating the area with ice.

The 2.7 inches at O'Hare International Airport tied the highest total for this year, according to the National Weather Service. Some flurries are still fallign so the total could tick upward by a tenth of an inch or two, said Ben Deubelbeiss, a NWS meteorologist.

Some of the snow in southern suburbs has already started turning to rain and might create a "light glaze" on the roadways, he said.

Dozens of schools closed or are delaying start times because of the storm.

The accumulation was more or less consistent across the area, from Rockford in north central Illinois east to Portage, Ind.

The weather caused between 20 and 30 spinouts on highways across the city and suburbs, according to state police, who described the conditions as "horrible." 

State Police are in a "snow plan" and aren't responding to accidents without injuries - those are supposed to be reported later.

"It will be tapering off from the south in the next couple hours, possibly some freezing drizzle across whole area," said Mark Ratzer, meteorologist for the National Weather Service. "We may end up coming in a little less."

The city of Chicago has sent 284 plows to work clearing main thoroughfares, according to the streets and sanitation department.

Temperatures today should peak around 34 degrees with winds gusting out of the east around 20 or 25 miles an hour.

"The wind should be diminishing today to around 10 miles an hour," Deubelbeiss said.

Flurries could linger into the weekend with a chance for light snow on Saturday. Deubelbeiss said he didn't expect any significant weather Sunday. High temperatures both days should be around 30, with lows in the low 20s and high teens both mornings.

Check back for more information.

Midwest storm hits Kansas hardest

A major winter storm blanketed states from Minnesota to Ohio with a mix of blinding snow, sleet and freezing rain Thursday and into Friday morning.

The same storm dumped more than a foot of snow in Kansas, stranded motorists on highways and forced airports to cancel hundreds of flights.

The storm is expected to eventually reach the East Coast this weekend, delivering heavy snow to parts of New England for a third straight weekend, from northern Connecticut to southern Maine.

Kansas bore the brunt of the storm, with up to 15 inches of snow in some parts of the state, according to the National Weather Service. A 200-mile stretch of Interstate 70 in central Kansas was closed and strewn with cars stuck in snow.

National Guard troops riding in Humvees were dispatched to look for stranded motorists along the interstate and other highways, said Sharon Watson, a spokeswoman for Kansas emergency management services.

The fierce storm triggered severe thunderstorms from eastern Texas to Georgia.

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Wal-Mart holiday profit rises despite lackluster sales

(Reuters) - Wal-Mart Stores Inc posted a larger-than-expected rise in quarterly profit on Thursday, as a lower-than-anticipated tax rate helped to overcome some weakness in sales at its major Walmart U.S. unit that persisted into the beginning of February.

The world's largest retailer also raised its dividend payout. Its shares fell 1 percent in premarket trading.

Wal-Mart earned $1.67 per share from continuing operations in the fiscal fourth quarter, up from $1.51 per share a year earlier. Wal-Mart had forecast a profit of $1.53 to $1.58 per share from continuing operations, and analysts expected it to earn $1.57 per share, according to Thomson Reuters I/B/E/S.

Walmart U.S. has had a slow start to February, which Walmart U.S. Chief Executive Bill Simon attributed largely to a delay in income tax refunds. The company expects sales at Walmart U.S. stores open at least a year, or same-store sales, to be about flat during the current first quarter. A year earlier, such sales rose 2.6 percent.

Efforts such as extending its layaway program and matching competitors' prices attracted shoppers during the competitive holiday season, but Walmart U.S. same-store sales rose just 1 percent in the fourth quarter. The company had forecast an increase of 1 percent to 3 percent, and analysts, on average, had looked for a 1.5 percent gain.

A year earlier, Walmart U.S. same-store sales rose 1.5 percent.

Still, Wal-Mart said that its biggest unit gained market share in major categories of food, consumables, health and wellness and over-the-counter medications, as well as in entertainment and toys, which are big sellers during the holiday period, citing data from Nielsen and the NPD Group.

(Reporting by Jessica Wohl in Boca Raton, Florida; Editing by Maureen Bavdek)

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Prosecutors: Detective should be dropped from case

PRETORIA, South Africa (AP) — South Africa's National Prosecuting Authority acknowledged Thursday that the timing of attempted murder charges against a policeman leading the investigation into Oscar Pistorius was "totally weird" and that the policeman should be dropped from the case against the world-famous athlete.

Bulewa Makeke, spokeswoman for the NPA, said it was a decision for police and not prosecutors whether to take detective Hilton Botha off the case that has riveted the world's attention and is bringing scrutiny on South Africa's justice system. Botha testified on Wednesday in the case, acknowledging that nothing in Pistorius' account of the fatal Valentine's Day shooting of his girlfriend contradicted what police had discovered. That testimony in the double amputee's bail hearing marked a setback for the prosecution.

Botha was summoned by the magistrate on Thursday after police said charges have been reinstated against him in connection with a 2011 shooting incident in which he and two other officers allegedly fired at a minibus.

"Is he going to be dropped from the case? I don't know. I think the right thing would be for him to be dropped," Makeke said outside Pretoria Magistrate's Court shortly before Pistorius' bail hearing went into a third day. "Obviously there will be consultations between the two (police and prosecutors) to determine what is the best course of action."

Magistrate Desmond Nair questioned Botha over delays in processing records from phones found in Pistorius' house following the killing of 29--year-old Reeva Steenkamp. Prosecutors have charged Pistorius, a Paralympian who also competed in the London games last year, with premeditated murder. Pistorius says he mistook Steenkamp for an intruder.

Botha also testified Thursday that he had investigated a 2009 complaint against Pistorius by a woman who claimed the athlete had assaulted her. He said that Pistorius had not hurt her and that the woman had actually injured herself when she kicked a door at Pistorius' home.

The chief prosecutor, Gerrie Nel, said in court Thursday that they were not aware that the charges against Botha had been recently reinstated when he testified against Pistorius. Police say that Botha and two other police officers fired at a minibus they were trying to stop and will appear in court in May to face seven counts of attempted murder.

Pistorius is charged with premeditated murder in the Valentine's Day shooting of his girlfriend.

Pistorius' defense team on Thursday began to pick apart the state's case against him.

"The poor quality of the evidence offered by investigative officer Botha exposed the disastrous shortcomings of the state's case," Roux said Thursday as Pistorius sat calmly in the dock looking down at his hands.

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AP Sports Writer Gerald Imray in Johannesburg contributed to this report.

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Would the pope vote be hackable?

The Conclave of Cardinals that will elect a new pope will meet in the Sistine Chapel in Vatican City.

STORY HIGHLIGHTS

• Bruce Schneier: Rules for picking a new pope are very detailed


• He says elaborate precautions are taken to prevent election fraud


• Every step of the election process is observed by people who know each other


• Schneier: Vatican's procedures, centuries in the making, are very secure

Editor's note: Bruce Schneier is a security technologist and author of "Liars and Outliers: Enabling the Trust Society Needs to Survive." In 2005, before the conclave that elected Pope Benedict XVI, Schneier wrote a piece on his blog about the process. This essay is an updated version, reflecting new information and analysis.

(CNN) -- As the College of Cardinals prepares to elect a new pope, security people like me wonder about the process. How does it work, and just how hard would it be to hack the vote?

The rules for papal elections are steeped in tradition. John Paul II last codified them in 1996, and Benedict XVI left the rules largely untouched. The "Universi Dominici Gregis on the Vacancy of the Apostolic See and the Election of the Roman Pontiff" is surprisingly detailed.

Every cardinal younger than 80 is eligible to vote. We expect 117 to be voting. The election takes place in the Sistine Chapel, directed by the church chamberlain. The ballot is entirely paper-based, and all ballot counting is done by hand. Votes are secret, but everything else is open.

Bruce Schneier

First, there's the "pre-scrutiny" phase.

"At least two or three" paper ballots are given to each cardinal, presumably so that a cardinal has extras in case he makes a mistake. Then nine election officials are randomly selected from the cardinals: three "scrutineers," who count the votes; three "revisers," who verify the results of the scrutineers; and three "infirmarii," who collect the votes from those too sick to be in the chapel. Different sets of officials are chosen randomly for each ballot.

Each cardinal, including the nine officials, writes his selection for pope on a rectangular ballot paper "as far as possible in handwriting that cannot be identified as his." He then folds the paper lengthwise and holds it aloft for everyone to see.

When everyone has written his vote, the "scrutiny" phase of the election begins. The cardinals proceed to the altar one by one. On the altar is a large chalice with a paten -- the shallow metal plate used to hold communion wafers during Mass -- resting on top of it. Each cardinal places his folded ballot on the paten. Then he picks up the paten and slides his ballot into the chalice.

Pope may change rules to allow earlier election

If a cardinal cannot walk to the altar, one of the scrutineers -- in full view of everyone -- does this for him.

If any cardinals are too sick to be in the chapel, the scrutineers give the infirmarii a locked empty box with a slot, and the three infirmarii together collect those votes. If a cardinal is too sick to write, he asks one of the infirmarii to do it for him. The box is opened, and the ballots are placed onto the paten and into the chalice, one at a time.

When all the ballots are in the chalice, the first scrutineer shakes it several times to mix them. Then the third scrutineer transfers the ballots, one by one, from one chalice to another, counting them in the process. If the total number of ballots is not correct, the ballots are burned and everyone votes again.

To count the votes, each ballot is opened, and the vote is read by each scrutineer in turn, the third one aloud. Each scrutineer writes the vote on a tally sheet. This is all done in full view of the cardinals.

The total number of votes cast for each person is written on a separate sheet of paper. Ballots with more than one name (overvotes) are void, and I assume the same is true for ballots with no name written on them (undervotes). Illegible or ambiguous ballots are much more likely, and I presume they are discarded as well.

Then there's the "post-scrutiny" phase. The scrutineers tally the votes and determine whether there's a winner. We're not done yet, though.

The revisers verify the entire process: ballots, tallies, everything. And then the ballots are burned. That's where the smoke comes from: white if a pope has been elected, black if not -- the black smoke is created by adding water or a special chemical to the ballots.

Being elected pope requires a two-thirds plus one vote majority. This is where Pope Benedict made a change. Traditionally a two-thirds majority had been required for election. Pope John Paul II changed the rules so that after roughly 12 days of fruitless votes, a simple majority was enough to elect a pope. Benedict reversed this rule.

How hard would this be to hack?

First, the system is entirely manual, making it immune to the sorts of technological attacks that make modern voting systems so risky.

Second, the small group of voters -- all of whom know each other -- makes it impossible for an outsider to affect the voting in any way. The chapel is cleared and locked before voting. No one is going to dress up as a cardinal and sneak into the Sistine Chapel. In short, the voter verification process is about as good as you're ever going to find.

A cardinal can't stuff ballots when he votes. The complicated paten-and-chalice ritual ensures that each cardinal votes once -- his ballot is visible -- and also keeps his hand out of the chalice holding the other votes. Not that they haven't thought about this: The cardinals are in "choir dress" during the voting, which has translucent lace sleeves under a short red cape, making sleight-of-hand tricks much harder. Additionally, the total would be wrong.

The rules anticipate this in another way: "If during the opening of the ballots the scrutineers should discover two ballots folded in such a way that they appear to have been completed by one elector, if these ballots bear the same name, they are counted as one vote; if however they bear two different names, neither vote will be valid; however, in neither of the two cases is the voting session annulled." This surprises me, as if it seems more likely to happen by accident and result in two cardinals' votes not being counted.

Ballots from previous votes are burned, which makes it harder to use one to stuff the ballot box. But there's one wrinkle: "If however a second vote is to take place immediately, the ballots from the first vote will be burned only at the end, together with those from the second vote." I assume that's done so there's only one plume of smoke for the two elections, but it would be more secure to burn each set of ballots before the next round of voting.

The scrutineers are in the best position to modify votes, but it's difficult. The counting is conducted in public, and there are multiple people checking every step. It'd be possible for the first scrutineer, if he were good at sleight of hand, to swap one ballot paper for another before recording it. Or for the third scrutineer to swap ballots during the counting process. Making the ballots large would make these attacks harder. So would controlling the blank ballots better, and only distributing one to each cardinal per vote. Presumably cardinals change their mind more often during the voting process, so distributing extra blank ballots makes sense.

There's so much checking and rechecking that it's just not possible for a scrutineer to misrecord the votes. And since they're chosen randomly for each ballot, the probability of a cabal being selected is extremely low. More interesting would be to try to attack the system of selecting scrutineers, which isn't well-defined in the document. Influencing the selection of scrutineers and revisers seems a necessary first step toward influencing the election.

If there's a weak step, it's the counting of the ballots.

There's no real reason to do a precount, and it gives the scrutineer doing the transfer a chance to swap legitimate ballots with others he previously stuffed up his sleeve. Shaking the chalice to randomize the ballots is smart, but putting the ballots in a wire cage and spinning it around would be more secure -- albeit less reverent.

I would also add some kind of white-glove treatment to prevent a scrutineer from hiding a pencil lead or pen tip under his fingernails. Although the requirement to write out the candidate's name in full provides some resistance against this sort of attack.

Probably the biggest risk is complacency. What might seem beautiful in its tradition and ritual during the first ballot could easily become cumbersome and annoying after the twentieth ballot, and there will be a temptation to cut corners to save time. If the Cardinals do that, the election process becomes more vulnerable.

A 1996 change in the process lets the cardinals go back and forth from the chapel to their dorm rooms, instead of being locked in the chapel the whole time, as was done previously. This makes the process slightly less secure but a lot more comfortable.

Of course, one of the infirmarii could do what he wanted when transcribing the vote of an infirm cardinal. There's no way to prevent that. If the infirm cardinal were concerned about that but not privacy, he could ask all three infirmarii to witness the ballot.

There are also enormous social -- religious, actually -- disincentives to hacking the vote. The election takes place in a chapel and at an altar. The cardinals swear an oath as they are casting their ballot -- further discouragement. The chalice and paten are the implements used to celebrate the Eucharist, the holiest act of the Catholic Church. And the scrutineers are explicitly exhorted not to form any sort of cabal or make any plans to sway the election, under pain of excommunication.

The other major security risk in the process is eavesdropping from the outside world. The election is supposed to be a completely closed process, with nothing communicated to the world except a winner. In today's high-tech world, this is very difficult. The rules explicitly state that the chapel is to be checked for recording and transmission devices "with the help of trustworthy individuals of proven technical ability." That was a lot easier in 2005 than it will be in 2013.

What are the lessons here?

First, open systems conducted within a known group make voting fraud much harder. Every step of the election process is observed by everyone, and everyone knows everyone, which makes it harder for someone to get away with anything.

Second, small and simple elections are easier to secure. This kind of process works to elect a pope or a club president, but quickly becomes unwieldy for a large-scale election. The only way manual systems could work for a larger group would be through a pyramid-like mechanism, with small groups reporting their manually obtained results up the chain to more central tabulating authorities.

And third: When an election process is left to develop over the course of a couple of thousand years, you end up with something surprisingly good.

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The opinions expressed in this commentary are solely those of Bruce Schneier.

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