US blames Hamas for growing Mideast violence

WASHINGTON – The United States on Saturday blamed the more than week-old onslaught in the Gaza strip squarely on Hamas militants and avoided any criticism of Israel despite mounting world outrage over a death toll now topping 460 and growing.

Israel launched a ground invasion of Gaza on Saturday in its bid to stop the Hamas rocket attacks.

A State Department official said the U.S. is working toward a cease-fire but provided no details on how this can be accomplished because the U.S. does not talk to Hamas. Spokesman Sean McCormack said a cease-fire is needed that will not allow Hamas to continue firing rockets into Israel. The comments were made after Israel launched a ground invasion of Gaza.

McCormack said "it's obvious the cease-fire should take place as soon as possible," but it has to be sustainable and cannot allow Hamas to continue to launch rockets out of Gaza.

The U.N. Security Council scheduled emergency consultations Saturday night to address the escalation of violence in Gaza, and Secretary-General Ban Ki-moon urged an immediate halt to Israel's ground operation.

White House spokesman Gordon Johndroe said President Bush was briefed this afternoon on the situation in Gaza and said U.S. officials are in "regular contact with the Israelis as well as officials from countries in the region and Europe."

Asked if the U.S. was warned before the invasion, Johndroe did not answer that question, but said: "Their ground action is part of their overall operation. We continue to make clear to them our concerns for civilians, as well as the humanitarian situation."

A senior U.S. defense official in Washington said it appeared that the Israeli ground force that entered Gaza was perhaps several thousand strong. The official, who spoke on condition of anonymity because of the sensitivity of the situation, said it appeared the objective of the ground assault was not just to deal with the current problem of rocket attacks into southern Israel but to seek longer-term security.

With time running out on the Bush presidency, the crisis in Gaza is likely to carry over to President-elect Barack Obama.

The escalation of fighting in Gaza comes as the Bush administration approaches its final two weeks in office, with Obama scheduled to become president on Jan. 20.

Israeli warplanes have rained bombs on Gaza, targeting the Palestinian militant group Hamas, which has traumatized southern Israel with intensifying rocket attacks. More than 460 Palestinians and at least four Israelis have been killed. The U.N. estimated Friday that a quarter of the Palestinians killed were civilians.

President George W. Bush also spoke about the situation in Gaza during his weekly radio address.

Calling the Hamas attacks an "act of terror," Bush said the United States was "leading diplomatic efforts to achieve a meaningful cease-fire."

"Another one-way cease-fire that leads to rocket attacks on Israel is not acceptable," he said in the address, which was released Friday. "And promises from Hamas will not suffice — there must be monitoring mechanisms in place to help ensure that smuggling of weapons to terrorist groups in Gaza comes to an end."

Before Saturday's movement of Israeli ground troops. U.S. Secretary of State Condoleezza Rice had briefed Bush on developments in Gaza and conducted telephone diplomacy in hopes of arranging a truce. Yet, she said she had no plans to make an emergency visit to the region.

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Associated Press writers Bob Burns, Matthew Lee and Anne Gearan contributed to this report.

Stocks up after GMAC lifeline, retail sales dip

NEW YORK — Wall Street put together a moderate advance in light post-holiday trading Friday after the finance arm of General Motors got a government lifeline, but dreary holiday spending readings dimmed the chance of a big year-end rally. The major indexes finished the week with losses.

Not surprisingly, Americans spent much less on gifts this season than they did last year, according to SpendingPulse, a division of MasterCard Advisors. Retail sales dropped between 5.5 percent and 8 percent compared with last year, the data showed, or between 2 percent and 4 percent after stripping out auto and gas sales.

Personal consumption is a huge part of US economic activity — comprising more than two-thirds of gross domestic product — so Wall Street is nervous that a more frugal consumer could keep the economy weak in 2009.

Investors did get a some good news on Christmas Eve, when the Federal Reserve allowed GMAC Financial Services — the finance arm of struggling Detroit automaker General Motors Corp. — to become a bank holding company and thus qualify for the government's $700 billion rescue fund. Analysts had said that without financial help, GMAC might have had to file for bankruptcy protection or shut down.

There was little conviction behind the advance, which the market managed after stocks meandered for much of the session. With just three full trading days left in the year, no news has been upbeat enough to spark a big year-end rally, a consequence of the great uncertainty still in the market. December is usually a strong month for stocks, and a flurry of trading known as a "Santa Claus rally" is often seen in the final week.

"I think we could have a year-end rally, but it's got a formidable headwind in the form of tax-selling, in my view," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.

Tax-loss selling is when investors sell their poorly-performing stocks to realize a loss for the year, which can reduce their taxes in upcoming years.

The Dow Jones industrial average rose 47.07, or 0.56 percent, to 8,515.55 after Thursday's market holiday.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 4.65, or 0.54 percent, to 872.80, and the Nasdaq composite index rose 5.34, or 0.35 percent, to 1,530.24. The Russell 2000 index of smaller companies rose 6.28, or 1.33 percent, to 476.77.

For the week, the Dow ended down 0.74 percent, the S&P 500 fell 1.7 percent and the Nasdaq lost 2.1 percent.

As the year winds down, investors are flummoxed over what 2009 might bring. Some market analysts are predicting a stock market recovery, and others are predicting more volatility; but nearly all are doing so with the caveat that anything is possible.

"It's hard to imagine another year that is going to be as dismal or dark or bad as 2008," Johnson said. "It's even hard to imagine that we have another down year in 2009 — the odds are the stock market will be higher at the end of 2009. Common sense tells you that."

The Dow is down 35.8 percent for the year.

But, Johnson added, it's impossible to forecast the end of a bear market, and "confidence can turn on a dime."

On Friday, the dollar was down against other major currencies, while gold prices rose.

Demand for government bonds increased. The three-month Treasury bill's yield fell to 0.01 percent from 0.02 percent late Wednesday, and the 10-year Treasury note's yield fell to 2.14 percent from 2.19 percent.

Light, sweet crude rose $2.36 to $37.71 a barrel on the New York Mercantile Exchange. Crude prices had tumbled Wednesday for the ninth straight day — dipping as low as $35.13 — after gloomy economic reports and growing stockpiles of unused gasoline suggesting eroded demand.

GMAC notes shot higher on the news of the company's transformation into a bank. GMAC's 7.25 percent note due to mature in 2033 rose 88.5 percent to $9.67 from $5.13 on Wednesday. But analysts were wary of the big price move, noting that volume was thin, and saying there is still much to be resolved about the company's finances. - AP