Bounce houses a party hit but kids' injuries soar

CHICAGO (AP) — They may be a big hit at kids' birthday parties, but inflatable bounce houses can be dangerous, with the number of injuries soaring in recent years, a nationwide study found.

Kids often crowd into bounce houses, and jumping up and down can send other children flying into the air, too.

The numbers suggest 30 U.S. children a day are treated in emergency rooms for broken bones, sprains, cuts and concussions from bounce house accidents. Most involve children falling inside or out of the inflated playthings, and many children get hurt when they collide with other bouncing kids.

The number of children aged 17 and younger who got emergency-room treatment for bounce house injuries has climbed along with the popularity of bounce houses — from fewer than 1,000 in 1995 to nearly 11,000 in 2010. That's a 15-fold increase, and a doubling just since 2008.

"I was surprised by the number, especially by the rapid increase in the number of injuries," said lead author Dr. Gary Smith, director of the Center for Injury Research and Policy at Nationwide Children's Hospital in Columbus, Ohio.

Amusement parks and fairs have bounce houses, and the playthings can also be rented or purchased for home use.

Smith and colleagues analyzed national surveillance data on ER treatment for nonfatal injuries linked with bounce houses, maintained by the U.S. Consumer Product Safety Commission. Their study was published online Monday in the journal Pediatrics.

Only about 3 percent of children were hospitalized, mostly for broken bones.

More than one-third of the injuries were in children aged 5 and younger. The safety commission recommends against letting children younger than 6 use full-size trampolines, and Smith said barring kids that young from even smaller, home-use bounce houses would make sense.

"There is no evidence that the size or location of an inflatable bouncer affects the injury risk," he said.

Other recommendations, often listed in manufacturers' instruction pamphlets, include not overloading bounce houses with too many kids and not allowing young children to bounce with much older, heavier kids or adults, said Laura Woodburn, a spokeswoman for the National Association of Amusement Ride Safety Officials.

The study didn't include deaths, but some accidents are fatal. Separate data from the product safety commission show four bounce house deaths from 2003 to 2007, all involving children striking their heads on a hard surface.

Several nonfatal accidents occurred last year when bounce houses collapsed or were lifted by high winds.

A group that issues voluntary industry standards says bounce houses should be supervised by trained operators and recommends that bouncers be prohibited from doing flips and purposefully colliding with others, the study authors noted.

Bounce house injuries are similar to those linked with trampolines, and the American Academy of Pediatrics has recommended against using trampolines at home. Policymakers should consider whether bounce houses warrant similar precautions, the authors said.

___

Online:

Pediatrics: http://www.pediatrics.org

Trade group: http://www.naarso.com

___

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

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Asian shares, euro rise on Greek debt deal

TOKYO (Reuters) - The euro hit a one-month high, commodities rose and Asian shares climbed for a seventh consecutive day on Tuesday as global lenders reached a deal on new debt targets for Greece and a political agreement on disbursing the next installment of aid.

European shares will likely track Asian peers higher, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> to open as much as 0.7 percent higher. <.l><.eu><.n/>

U.S. stock futures were up 0.3 percent, hinting at a firm Wall Street open.

After 12 hours of talks at their third meeting in as many weeks, Greece's international lenders agreed on a package of measures to cut Greek debt to 124 percent of gross domestic product by 2020, and pledged to take further steps to lower the debt below 110 percent of GDP in 2022.

Eurogroup Chairman Jean-Claude Juncker said ministers would formally approve the release of crucial aid for debt-stricken Greece, removing uncertainty over whether Athens could avoid a near-term bankruptcy.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> gained 0.7 percent to a near three-week high, led by a 1 percent advance in Korean shares <.ks11> and a 0.7 percent rise in Australian shares <.axjo>. Indian shares <.bsesn> also jumped 1.2 percent.

Shanghai shares <.ssec> bucked the trend to fell 1 percent to their lowest since 2009, dragged by weakness in growth-sensitive companies.

"Overhanging the market for a little while has been these macro concerns, so progress towards sorting the situation out gives room for the market to move higher," said Phillip Weinberg, director at BestEx.

Investors' focus is likely to shift now to another major concern hanging over markets, a looming U.S. fiscal crisis.

Republicans in the U.S. Congress on Monday called on President Barack Obama to detail long-term spending cuts to help solve the country's fiscal crisis, while holding firm against the income tax rate increases for the wealthy that Democrats seek.

"Now people will start focusing on the U.S. fiscal cliff and there could be some nervousness there, particularly if it drags on," said Burrell & Co dealer Jamie Elgar of Australian shares.

The euro gained as much as about 0.3 percent to $1.3010, its highest level since October 31, in reaction to the Greek news, before paring gains to be up 0.1 percent at $1.2982.

"The euro gained but the rise is small, and it's unlikely that it will climb further, with big funds winding down their positions ahead of the year-end. Any rise will be countered by selling to cap the euro's upside," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo.

He cautioned that the euro still faced downside risks as the latest agreement does not offer a fundamental resolution to the euro zone's debt crisis.

"While the Eurogroup has set December 13 for formal approval of the disbursement, and Germany's planned parliamentary vote later this week will be watched with interest, for markets the deal should put Greece largely on the backburner for a couple of months before it starts missing its fiscal targets again," Sean Callow, senior currency strategist at Westpac bank in Sydney, said in a note.

He doubted if the euro's short-covering will produce sustained trade beyond $1.3050/$1.3100.

Japan's Nikkei stock average <.n225> rose 0.5 percent, just below Monday's seven-month closing high. The benchmark has climbed more than 8 percent in two weeks as the yen has weakened on expectations of easier monetary policy with the likely election of a new government. <.t/>

WEAK USD, CHINA HELP COMMODITIES

The dollar inched up 0.2 percent against the yen to 82.22 yen. The euro rose 0.3 percent against the yen to 106.72.

Traders said some investors unwound long positions in the dollar built up in recent weeks on expectations the Bank of Japan would come under pressure for more aggressive easing.

The dollar eased 0.1 percent against a basket of key currencies <.dxy>, helping to underpin dollar-based commodities.

U.S. crude futures rose 0.3 percent to $88.03 a barrel and Brent was up 0.2 percent to $111.09.

Spot gold was up 0.1 percent to $1,749.65 an ounce, just below a six-week high of $1,754.10 hit on Friday.

London copper hit a near one-month high of $7,821.50 a metric ton (1.1023 tons) as the Greek debt deal added to confidence over copper demand after recent positive data from its top consumer China.

Sentiment may be further underpinned by a report saying China has approved construction of two city subway projects worth 49 billion yuan ($7.87 billion), adding to the list of recent railway project approvals aimed at boosting growth in the world's second-biggest economy.

In another possible sign that the economy is regaining traction, China's industrial profits in October were up 20.5 percent from a year earlier, accelerating from 7.8 percent growth in September.

Asian credit markets firmed slightly, narrowing the spreads on the iTraxx Asia ex-Japan investment-grade index by 1 basis point.

(Additional reporting by Victoria Thieberger in Melbourne; Editing by Edwina Gibbs & Kim Coghill)

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Egypt's Mursi to meet judges over power grab

CAIRO (Reuters) - Egyptian President Mohamed Mursi will meet senior judges on Monday to try to ease a crisis over his seizure of new powers which has set off violent protests reminiscent of last year's revolution which brought him to power.

Egypt's stock market plunged on Sunday in its first day open since Mursi issued a decree late on Thursday temporarily widening his powers and shielding his decisions from judicial review, drawing accusations he was behaving like a new dictator.

More than 500 people have been injured in clashes between police and protesters worried Mursi's Muslim Brotherhood aims to dominate the post-Hosni Mubarak era after winning Egypt's first democratic parliamentary and presidential elections this year.

One Muslim Brotherhood member was killed and 60 people were hurt on Sunday in an attack on the main office of the Brotherhood in the Egyptian Nile Delta town of Damanhour, the website of the Brotherhood's Freedom and Justice Party said.

Egypt's highest judicial authority hinted at compromise to avert a further escalation, though Mursi's opponents want nothing less than the complete cancellation of a decree they see as a danger to democracy.

The Supreme Judicial Council said Mursi's decree should apply only to "sovereign matters", suggesting it did not reject the declaration outright, and called on judges and prosecutors, some of whom began a strike on Sunday, to return to work.

Mursi would meet the council on Monday, state media said.

Mursi's office repeated assurances that the measures would be temporary, and said he wanted dialogue with political groups to find "common ground" over what should go in Egypt's constitution, one of the issues at the heart of the crisis.

Hassan Nafaa, a professor of political science at Cairo University, saw an effort by the presidency and judiciary to resolve the crisis, but added their statements were "vague". "The situation is heading towards more trouble," he said.

Sunday's stock market fall of nearly 10 percent - halted only by automatic curbs - was the worst since the uprising that toppled Mubarak in February, 2011.

Images of protesters clashing with riot police and tear gas wafting through Cairo's Tahrir Square were an unsettling reminder of that uprising. Activists were camped in the square for a third day, blocking traffic with makeshift barricades. Nearby, riot police and protesters clashed intermittently.

"BACK TO SQUARE ONE"

Mursi's supporters and opponents plan big demonstrations on Tuesday that could be a trigger for more street violence.

"We are back to square one, politically, socially," said Mohamed Radwan of Pharos Securities, an Egyptian brokerage firm.

Mursi's decree marks an effort to consolidate his influence after he successfully sidelined Mubarak-era generals in August. It reflects his suspicions of a judiciary little reformed since the Mubarak era.

Issued just a day after Mursi received glowing tributes from Washington for his work brokering a deal to end eight days of violence between Israel and Hamas, the decree drew warnings from the West to uphold democracy. Washington has leverage because of billions of dollars it sends in annual military aid.

"The United States should be saying this is unacceptable," former presidential nominee John McCain, leading Republican on the Senate Armed Services Committee, said on Fox News.

"We thank Mr. Mursi for his efforts in brokering the ceasefire with Hamas ... But this is not what the United States of America's taxpayers expect. Our dollars will be directly related to progress toward democracy."

The Mursi administration has defended his decree as an effort to speed up reforms that will complete Egypt's democratic transformation. Yet leftists, liberals, socialists and others say it has exposed the autocratic impulses of a man once jailed by Mubarak.

"There is no room for dialogue when a dictator imposes the most oppressive, abhorrent measures and then says 'let us split the difference'," prominent opposition leader Mohamed ElBaradei said on Saturday.

WARNINGS FROM WEST

Investors had grown more confident in recent months that a legitimately elected government would help Egypt put its economic and political problems behind it. The stock market's main index had risen 35 percent since Mursi's victory. It closed on Sunday at its lowest level since July 31.

Political turmoil also raised the cost of government borrowing at a treasury bill auction on Sunday.

"Investors know that Mursi's decisions will not be accepted and that there will be clashes on the street," said Osama Mourad of Arab Financial Brokerage.

Just last week, investor confidence was helped by a preliminary agreement with the International Monetary Fund over a $4.8 billion loan needed to shore up state finances.

Mursi's decree removes judicial review of decisions he takes until a new parliament is elected, expected early next year.

It also shields the Islamist-dominated assembly writing Egypt's new constitution from a raft of legal challenges that have threatened it with dissolution, and offers the same protection to the Islamist-controlled upper house of parliament.

"I am really afraid that the two camps are paving the way for violence," said Nafaa. "Mursi has misjudged this, very much so. But forcing him again to relinquish what he has done will appear a defeat."

Many of Mursi's political opponents share the view that Egypt's judiciary needs reform, though they disagree with his methods. Mursi's new powers allowed him to sack the prosecutor general who took his job during the Mubarak era and is unpopular among reformists of all stripes.

(Additional reporting by Yasmine Saleh and Marwa Awad in Cairo and Philip Barbara in Washington; Editing by Peter Graff and Philippa Fletcher)

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Tom Cruise Films Helicopter Scene in Empty Trafalgar Square

11/25/2012 at 05:15 PM EST

Tom Cruise in Trafalgar Square

FameFlynet

Back to work!

After spending Thanksgiving with daughter Suri, 6, Tom Cruise filmed scenes for the sci-fi action film All You Need Is Kill in London on Sunday.

The actor, who plays alien fighter Lt. Col. Bill Cage, landed in a helicopter in the middle of the usually bustling Trafalgar Square, which was shut down for the scene, in the heart of London.

Based on Hiroshi Sakurazaka's novel, the movie follows Cage as he battles the Mimics, a violent race of alien invaders, while stuck in a time loop.

Emily Blunt also stars in the film as Special Forces fighter Rita Vrataski, who according to Deadline.com, has destroyed more Mimics than anyone else on earth.

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AP PHOTOS: Simple surgery heals blind Indonesians

PADANG SIDEMPUAN, Indonesia (AP) — They came from the remotest parts of Indonesia, taking crowded overnight ferries and riding for hours in cars or buses — all in the hope that a simple, and free, surgical procedure would restore their eyesight.

Many patients were elderly and needed help to reach two hospitals in Sumatra where mass eye camps were held earlier this month by Nepalese surgeon Dr. Sanduk Ruit. During eight days, more than 1,400 cataracts were removed.

The patients camped out, sleeping side-by-side on military cots, eating donated food while fire trucks supplied water for showers and toilets. Many who had given up hope of seeing again left smiling after their bandages were removed.

"I've been blind for three years, and it's really bad," said Arlita Tobing, 65, whose sight was restored after the surgery. "I worked on someone's farm, but I couldn't work anymore."

Indonesia has one of the highest rates of blindness in the world, making it a target country for Ruit who travels throughout the developing world holding free mass eye camps while training doctors to perform the simple, stitch-free procedure he pioneered. He often visits hard-to-reach remote areas where health care is scarce and patients are poor. He believes that by teaching doctors how to perform his method of cataract removal, the rate of blindness can be reduced worldwide.

Cataracts are the leading cause of blindness globally, affecting about 20 million people who mostly live in poor countries, according to the World Health Organization.

"We get only one life, and that life is very short. I am blessed by God to have this opportunity," said Ruit, who runs the Tilganga Eye Center in Katmandu, Nepal. "The most important of that is training, taking the idea to other people."

During the recent camps, Ruit trained six doctors from Indonesia, Thailand and Singapore.

Here, in images, are scenes from the mobile eye camps:

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Asian shares edge higher on hopes for Greek deal

TOKYO (Reuters) - Asian shares inched up on Monday on hopes that Greece can avoid a near-term bankruptcy, with the market focusing on a euro zone finance ministers meeting later in the day, but a regional Spanish vote favoring separatist parties capped gains.

U.S. stock futures were down 0.3 percent, suggesting a soft Wall Street open, and European shares were seen falling, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> to open down as much as 0.3 percent. <.l><.eu><.n/>

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.2 percent to a two-week high.

It marked the sixth consecutive day of advances and comes after the euro and global shares climbed on Friday on expectations that an agreement will be reached soon to disburse aid for Greece, and after a rise in Germany's Ifo business climate index.

"There is optimism around in regards to the euro area's ability to achieve a deal on Greece," said Emma Lawson, senior currency strategist at the National Australia Bank.

But worries about the Spanish vote and the implications for Madrid's push for fiscal austerity helped the euro slip 0.1 percent to $1.2960, pulling back from a three-week high of $1.2991 reached on Friday.

Against the yen, however, the single currency hit a seven-month peak of 107.13.

The yen was near a 7-1/2-month low of 82.84 yen to the dollar hit last week. It has been weakening on expectations of further monetary policy easing with the likely advent of a new Japanese government next month.

The dollar <.dxy> inched up 0.1 percent, after falling to a three-week low of 80.128 against a basket of major currencies on Friday as risk appetite gained.

Australian shares <.axjo> rose 0.2 percent on gains in energy and mining stocks, but Hong Kong <.hsi> and Shanghai <.ssec> shares eased slightly.

Japan's Nikkei stock average <.n225> gained 0.8 percent after rising to a seven-month high earlier on Monday on views that a weaker yen will boost earnings for exporters. <.t/>

"Although some investors are cautious about the fast-paced gains in the Japanese market, they will likely stay buyers on the back of the improving trading environment in the global market," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

EUROPE HOLDS KEY

On Sunday, separatists in the Spanish region of Catalonia won an election but failed to get the resounding mandate they need to push convincingly for a referendum on independence.

The win heightens concerns about a potential negative impact on the Spanish economy and the country's finances, as Catalonia accounts for 20 percent of the economy and provides the most tax revenue to the central government.

"While the result helps tone down the risk of the government being forced to give more autonomy to Catalonia in its fiscal policy, the underlying discomfort the province may be feeling about its big fiscal burden may persist," said Masafumi Yamamoto, chief FX strategist at Barclays in Tokyo.

He added that the result may weigh on the euro more when trading starts in Europe, where the euro's liquidity is far larger.

On Friday, European shares posted their best weekly gain so far this year on hopes for Greece and Germany's solid Ifo data, which followed firmer manufacturing reports from China and the United States released earlier last week.

London copper edged down 0.1 percent to $7,769.75 a metric ton (1.1023 tons) after rising for two weeks in a row. While signs of economic recovery in top consumer China helped support prices, China's official purchasing manufacturers' index due later in the week will be awaited for more confirmation of the trend.

"A positive PMI number should help a little bit, but we have not seen any significant improvement in the real economy yet," said Beijing-based metals analyst Wan Ling of commodities research house CRU Group.

The Thomson Reuters-Jefferies CRB index <.trjcrb>, a global commodities benchmark, rose to its highest close since October 23 on Friday -- its best weekly performance since mid-September with a 1.9 percent gain.

Spot gold eased 0.1 percent to $1,750.35 an ounce on Monday after rising above $1,750 for the first time in five weeks on Friday.

U.S. crude fell 0.5 percent to $87.88 a barrel and Brent eased 0.2 percent to $111.12.

Asian credit markets steadied, with the spreads on the iTraxx Asia ex-Japan investment-grade index barely moved from Friday levels.

(Additional reporting by Ayai Tomisawa in Tokyo, Ian Chua in Sydney and Melanie Burton in Singapore; Editing by Edwina Gibbs & Kim Coghill)

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Egypt's Mursi faces judicial revolt over decree

CAIRO (Reuters) - Egyptian President Mohamed Mursi faced a rebellion from judges who accused him on Saturday of expanding his powers at their expense, deepening a crisis that has triggered violence in the street and exposed the country's deep divisions.

The Judges' Club, a body representing judges across Egypt, called for a strike during a meeting interrupted with chants demanding the "downfall of the regime" - the rallying cry in the uprising that toppled Hosni Mubarak last year.

Mursi's political opponents and supporters, representing the divide between newly empowered Islamists and their critics, called for rival demonstrations on Tuesday over a decree that has triggered concern in the West.

Issued late on Thursday, it marks an effort by Mursi to consolidate his influence after he successfully sidelined Mubarak-era generals in August. The decree defends from judicial review decisions taken by Mursi until a new parliament is elected in a vote expected early next year.

It also shields the Islamist-dominated assembly writing Egypt's new constitution from a raft of legal challenges that have threatened the body with dissolution, and offers the same protection to the Islamist-controlled upper house of parliament.

Egypt's highest judicial authority, the Supreme Judicial Council, said the decree was an "unprecedented attack" on the independence of the judiciary. The Judges' Club, meeting in Cairo, called on Mursi to rescind it.

That demand was echoed by prominent opposition leader Mohamed ElBaradei. "There is no room for dialogue when a dictator imposes the most oppressive, abhorrent measures and then says 'let us split the difference'," he said.

"I am waiting to see, I hope soon, a very strong statement of condemnation by the U.S., by Europe and by everybody who really cares about human dignity," he said in an interview with Reuters and the Associated Press.

More than 300 people were injured on Friday as protests against the decree turned violent. There were attacks on at least three offices belonging to the Muslim Brotherhood, the movement that propelled Mursi to power.

POLARISATION

Liberal, leftist and socialist parties called a big protest for Tuesday to force Mursi to row back on a move they say has exposed the autocratic impulses of a man once jailed by Mubarak.

In a sign of the polarization in the country, the Muslim Brotherhood called its own protests that day to support the president's decree.

Mursi also assigned himself new authority to sack the prosecutor general, who was appointed during the Mubarak era, and appoint a new one. The dismissed prosecutor general, Abdel Maguid Mahmoud, was given a hero's welcome at the Judges' Club.

In open defiance of Mursi, Ahmed al-Zind, head of the club, introduced Mahmoud by his old title.

The Mursi administration has defended the decree on the grounds that it aims to speed up a protracted transition from Mubarak's rule to a new system of democratic government.

Analysts say it reflects the Brotherhood's suspicion towards sections of a judiciary unreformed from Mubarak's days.

"It aims to sideline Mursi's enemies in the judiciary and ultimately to impose and head off any legal challenges to the constitution," said Elijah Zarwan, a fellow with The European Council on Foreign Relations.

"We are in a situation now where both sides are escalating and its getting harder and harder to see how either side can gracefully climb down."

ADVISOR TO MURSI QUITS

Following a day of violence in Cairo, Alexandria, Port Said and Suez, the smell of tear gas hung over the capital's Tahrir Square, the epicentre of the uprising that toppled Mubarak in 2011 and the stage for more protests on Friday.

Youths clashed sporadically with police near the square, where activists camped out for a second day on Saturday, setting up makeshift barricades to keep out traffic.

Al-Masry Al-Youm, one of Egypt's most widely read dailies, hailed Friday's protest as "The November 23 Intifada", invoking the Arabic word for uprising.

But the ultra-orthodox Salafi Islamist groups that have been pushing for tighter application of Islamic law in the new constitution have rallied behind Mursi's decree.

The Nour Party, one such group, stated its support for the Mursi decree. Al-Gama'a al-Islamiya, which carried arms against the state in the 1990s, said it would save the revolution from what it described as remnants of the Mubarak regime.

Samir Morkos, a Christian assistant to Mursi, had told the president he wanted to resign, said Yasser Ali, Mursi's spokesman. Speaking to the London-based Asharq Al-Awsat newspaper, Morkos said: "I refuse to continue in the shadow of republican decisions that obstruct the democratic transition".

Mursi's decree has been criticized by Western states that earlier this week were full of praise for his role in mediating an end to the eight-day war between Israel and Palestinians.

"The decisions and declarations announced on November 22 raise concerns for many Egyptians and for the international community," State Department spokeswoman Victoria Nuland said.

The European Union urged Mursi to respect the democratic process.

(Additional reporting by Omar Fahmy, Marwa Awad, Edmund Blair and Shaimaa Fayed and Reuters TV; Editing by Jon Hemming)

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10 Adorable Animals Feeding Other Animals [VIDEOS]

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AP PHOTOS: Simple surgery heals blind Indonesians

PADANG SIDEMPUAN, Indonesia (AP) — They came from the remotest parts of Indonesia, taking crowded overnight ferries and riding for hours in cars or buses — all in the hope that a simple, and free, surgical procedure would restore their eyesight.

Many patients were elderly and needed help to reach two hospitals in Sumatra where mass eye camps were held earlier this month by Nepalese surgeon Dr. Sanduk Ruit. During eight days, more than 1,400 cataracts were removed.

The patients camped out, sleeping side-by-side on military cots, eating donated food while fire trucks supplied water for showers and toilets. Many who had given up hope of seeing again left smiling after their bandages were removed.

"I've been blind for three years, and it's really bad," said Arlita Tobing, 65, whose sight was restored after the surgery. "I worked on someone's farm, but I couldn't work anymore."

Indonesia has one of the highest rates of blindness in the world, making it a target country for Ruit who travels throughout the developing world holding free mass eye camps while training doctors to perform the simple, stitch-free procedure he pioneered. He often visits hard-to-reach remote areas where health care is scarce and patients are poor. He believes that by teaching doctors how to perform his method of cataract removal, the rate of blindness can be reduced worldwide.

Cataracts are the leading cause of blindness globally, affecting about 20 million people who mostly live in poor countries, according to the World Health Organization.

"We get only one life, and that life is very short. I am blessed by God to have this opportunity," said Ruit, who runs the Tilganga Eye Center in Katmandu, Nepal. "The most important of that is training, taking the idea to other people."

During the recent camps, Ruit trained six doctors from Indonesia, Thailand and Singapore.

Here, in images, are scenes from the mobile eye camps:

Read More..

Wall Street Week Ahead: Political wrangling to pinch market's nerves

NEW YORK (Reuters) - Volatility is the name of this game.

With the S&P 500 above 1,400 following five days of gains, traders will be hard pressed not to cash in on the advance at the first sign of trouble during negotiations over tax hikes and spending cuts that resume next week in Washington.

President Barack Obama and U.S. congressional leaders are expected to discuss ways to reduce the budget deficit and avoid the "fiscal cliff" of automatic tax increases and spending cuts in 2013 that could tip the economy into recession.

As politicians make their case, markets could react with wild swings.

The CBOE Volatility Index <.vix>, known as the VIX, Wall Street's favorite barometer of market anxiety that usually moves in an inverse relationship with the S&P 500, is in a long-term decline with its 200-day moving average at its lowest in five years. The VIX could spike if dealings in Washington begin to stall.

"If the fiscal cliff happens, a lot of major assets will be down on a short-term basis because of the fear factor and the chaos factor," said Yu-Dee Chang, chief trader and sole principal of ACE Investments in Virginia.

"So whatever you are in, you're going to lose some money unless you go long the VIX and short the market. The 'upside risk' there is some kind of grand bargain, and then the market goes crazy."

He set the chances of the economy going over the cliff at only about 5 percent.

Many in the market agree there will be some sort of agreement that will fuel a rally, but the road there will be full of political landmines as Democrats and Republicans dig in on positions defended during the recent election.

Liberals want tax increases on the wealthiest Americans while protecting progressive advances in healthcare, while conservatives make a case for deep cuts in programs for the poor and a widening of the tax base to raise revenues without lifting tax rates.

"Both parties will raise the stakes and the pressure on the opposing side, so the market is going to feel much more concerned," said Tim Leach, chief investment officer of U.S. Bank Wealth Management in San Francisco.

"The administration feels really confident at this point, or a little more than the Republican side of Congress may feel," he said. "But it's still a balanced-power Congress so neither side can feel that they can act with impunity."

THE MIDDLE EAST AND EUROPE

Tension in the Middle East and unresolved talks in Europe over aid for Greece could add to the uncertainty and volatility on Wall Street could surge, analysts say.

An Egypt-brokered ceasefire between Israel and Hamas came into force late on Wednesday after a week of conflict, but it was broken with the shooting of a Palestinian man by Israeli soldiers, according to Palestine's foreign minister.

Buoyed by accolades from around the world for mediating the truce, Egyptian President Mohamed Mursi assumed sweeping powers, angering his opponents and prompting violent clashes in central Cairo and other cities on Friday.

"Those kinds of potential large-scale conflicts can certainly overwhelm some of the fundamental data here at home," said U.S. Bank's Leach.

"We are trying to keep in mind the idea that there are a lot of factors that are probably going to contribute to higher volatility."

On a brighter note for markets, Greece's finance minister said the International Monetary Fund has relaxed its debt-cutting target for Greece and a gap of only $13 billion remains to be filled for a vital aid installment to be paid.

Still, a deal has not been struck, and Greece is increasingly frustrated at its lenders, still squabbling over a deal to unlock fresh aid even though Athens has pushed through unpopular austerity cuts.

HOUSING DATA COULD CONFIRM RECOVERY

Next week is heavy on economic data, especially on the housing front. Some of the numbers have been affected by Superstorm Sandy, which hit the U.S. East Coast more than three weeks ago, killing more than 100 people in the United States alone and leaving billions of dollars in damages.

The housing data, though, could continue to confirm a rebound in the sector that is seen as a necessary step to unlock spending and lower the stubbornly high unemployment rate.

Tuesday's S&P/Case-Shiller home price index for September is expected to show the eighth straight month of increases, extending the longest continuous string of gains since prices were boosted by a homebuyer tax credit in 2009 and 2010.

New home sales for October, due on Wednesday, and October pending home sales data, due on Thursday, are also expected to show a stronger housing market.

Other data highlights next week include durable goods orders for October and consumer confidence for November on Tuesday and the Chicago Purchasing Managers Index on Friday.

At Friday's close, the S&P 500 wrapped up its second-best week of the year with a 3.6 percent gain. Encouraging economic data next week could confirm that regardless of the ups and downs that the fiscal cliff could bring, the market's fundamentals are solid.

Jeff Morris, head of U.S. equities at Standard Life Investments in Boston, said that "it's kind of noise here" in terms of whether the market has spent "a few days up or down. It has made some solid gains over the course of the year as the housing recovery has come into view, and that's what's underpinning the market at these levels.

"I would caution against reading too much into the next few days."

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

(Reporting by Rodrigo Campos; Editing by Tim Dobbyn and Jan Paschal)

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