College Programmers Beat Tech Elite in Hacking Contest

It was 3 a.m. on the first day of final exams. While most slept, a small cohort of students, overcome with excitement, locked arms to sing the Auburn University alma mater. The Alabama school, which has recently produced NFL stars named "Cam" and "Cadillac," had just pulled off an earth-shaking upset in an unlikely "sport" — coding. Auburn University is often thought of as a college football powerhouse, but rarely a programmers paradise. The school showed its diversity, however, when two computer science students placed in the top five of a 500-person coding challenge. Junior Kevin Davis, 20, and sophomore David Shuckerow, 19, placed first and fourth, respectively, in the competition, the participants of which represented more than 80 universities in eight different countries. Davis took home $1,500 for winning the contest. [More from Mashable: This Is My Brain on YouTube] "I was very happy obviously, and there was a bit of extra satisfaction winning the contest while being from a school that most people probably wouldn’t expect to do well in a contest like this," Davis tells Mashable. There was no shortage of representatives from schools most would expect to do well in such a contest. The ultra elite Massachusetts Institute of Technology sent 33 students to the competition, but its top three performers finished in places eight through ten. [More from Mashable: Sulia: The Hottest Social Network You’ve Never Heard Of] SEE ALSO: Tour College Campuses Virtually With This Site The two-week challenge, sponsored by ReadyForce, culminated in the wee hours of Monday morning. ReadyForce is an online recruiting service self-described as a sort of dating site for students and potential employers. The company's reps spent September, October and parts of November on what they called "HackerTour," a bus trip that traveled to top tech schools to sign up students for ReadyForce's website. For the coding challenge, students programmed bots, which continually competed against each other in a contest loosely based on the movie Tron. Created and hosted by Hacker Rank, standings for the competition were derived from a complex set of mathematical equations. To the right is an image from one match, wherein Davis' and Shuckerow's bots faced off against one another. Davis' bot won this bout. Competitors could rewrite code throughout the two weeks to patch holes in their bots' AI. The two Auburn Tigers took slightly different paths to success. Davis wrote his bot in C++, while Shuckerow used Python. To finish in fourth, Shuckerow says he dedicated nearly all his concentration to the challenge. "When you work on a project like this, you can’t really measure it in terms of hours," Shuckerow tells Mashable. "You make it so much a part of yourself that you’re not working on it at any given time — it’s 24 hours a day that you’re working on it. You eat it, you sleep it, you breathe it. Most of the work you do isn’t in front of a keyboard; it’s up in your head." On Sunday evening, the final night of the competition, Shuckerow set up his computer in his dorm's lobby, so as not to disturb his roommate who had a final exam early the next morning. Throughout the night, other students began to take an interest in what he was doing. Despite needing to prepare for finals of their own, many students sat with Shuckerow and helped him discover and fix flaws in his bot. It wasn't just computer science students. More than 10 other students from a variety of fields of study spent time helping Shuckerow. He attributes his success during the final night of the challenge to the diversity of ideas and perspectives he was able to incorporate into his code. There is a great deal of school pride at Auburn. When the Tigers win a big football game, 90,000 fans in Jordan-Hare stadium put their arms around one another and sing the school's song while swaying back and forth. It sounds something like this: When the dust settled on the coding challenge at around 3 a.m., Shuckerow and company saw he had finished fourth. They also saw that Davis, a fellow Tiger, had won the entire competition. Filled with glee, Shuckerow and his comrades mimicked the football tradition to celebrate their own success in the hacking competition. "Everyone was excited that we had done something this big," he says. "I definitely did everything I set out to do in the competition — I wrote code that played well, and I helped show that both I and Auburn are able to tangle with the very best on the international stage and come out on top." Image courtesy of Flickr, REL Waldman BONUS: 10 College Courses That Didn't Exist 20 Years Ago 1. Level Design & Development for Video Games — University of Southern California The University of Southern California's School of Cinematic Arts instructs students in theory, art and practice behind film, television and new media. Its video game design and management minor requires seven courses (24 units) for completion, and instructs students in level design, game-play control, user interface, multiplayer, game mechanics and storytelling. Its sister curriculum, the video game programming minor, teaches students to write code and program game engines.

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Sulia: The Hottest Social Network You've Never Heard Of

1. Sulia Sulia is "a subject-based social network that connects you to the top social sources on subjects you care about." You can sign up to the service by connecting either your Twitter or Facebook accounts. Click here to view this gallery. [More from Mashable: This Is My Brain on YouTube] Social services that promise to aggregate online content neatly into easily digestible digital piles are nothing original, so where does new site Sulia fit into the mix? Sulia, evolved from Twitter list firm TLists, offers a subject-based social service that lets you follow topics you are passionate about, from your local football team to television shows to topical political issues. [More from Mashable: College Programmers Beat Tech Elite in Hacking Contest] Ten million unique users have signed up in less than a year, and several big-name investors have contributed some pretty hefty funding. It seems Sulia's mix of crowdsourcing, machine learning and human supervision is making its 1,000+ channels of content a success.

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Icebergs Scoured Florida During Ice Age

SAN FRANCISCO — During the last ice age, icebergs carved trenches in the ocean floor as far south as Miami, according to research presented here yesterday (Dec. 6) at the annual meeting of the American Geophysical Union. Based on the sea level at the time, some 20,000 years ago, the chunks of floating ice must have reached at least 320 to 650 feet (100 to 200 meters) tall to reach the seafloor, said Jenna Hill, a professor at Coastal Carolina University in South Carolina. "You had to have had big, huge chunks of ice," Hill told OurAmazingPlanet.. The channels, seen in sonar surveys, run between 30 to 165 feet (10 to 50 m) wide and 6 to 16 feet (2 to 5 m) deep. They are smaller and fewer in number than the hundreds of iceberg scours Hill discovered off the South Carolina coastline in 2006. Hill's latest study found up to 100 marks off northern Florida, and four at the state's southern tip. The deep grooves are evidence of a cold current running southward along the Florida coastline during the last ice age, sometime since 20,000 years ago, Hill said. Gigantic floods from glacial lakes in the Arctic provide one likely source for the frigid flow. During the last ice age, vast pulses of freshwater — more than all the water in the Great Lakes combined — periodically poured into the Atlantic Ocean through the northeastern United States and Canada. The iceberg scours suggest that these floodwaters flowed south, rather than pooling in the North Atlantic Ocean. The cold current likely deflected the warm Gulf Stream, altering the climate in North America and Europe, Hill said. Hill initially discovered the scours while conducting high-resolution sonar surveys for geologic studies of submarine gas blowouts along the East Coast. The long furrows and pits perplexed researchers at first, but the similarity to seafloor features in the modern Arctic and Antarctic soon became apparent. Hill said additional surveys may reveal more scours in Florida and help pin down their age. "The more mapping we do, the more we can learn about the seafloor," she said. "We didn't initially set out to find iceberg scours [in 2006]," Hill said. "This opens the door to a lot of new information about past climate patterns and past ocean circulation patterns."

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Supreme Court To Take Up Same-Sex Marriage

The U.S. Supreme Court announced Friday (Dec. 7) that it will take up the issue of same-sex marriage this term, with rulings expected in June. The announcement comes after a period of uncertainty during which the judges met about their upcoming docket but declined to make any announcements about their plans to consider the gay marriage issue. There were 10 pending cases regarding same-sex marriage before the Court, eight of which focused on the federal Defense of Marriage Act (DOMA), which prevents the recognition of same-sex marriage on a federal level. The Court will consider a portion of DOMA that denies federal benefits to same-sex couples married in states that allow the unions, according to the Los Angeles Times. These provisions have been struck down by judges in California, New York and New England, the Times reported, leaving the Supreme Court to pass a final decision. The Court will also consider Proposition 8, a voter initiative that banned same-sex marriage in California in 2008. Months prior, the California Supreme Court had granted gay couples the right to marry in the state. A federal judge in the U.S. 9th Circuit Court of Appeals struck down the law, arguing that it was unconstitutional because it took away a right already granted by the state court. [5 Myths About Gay People Debunked] According to news reports, the Court is likely to hear oral arguments in the same-sex marriage cases in March, with a judgment to come in June. The Court's consideration comes at a time when 53 percent of Americans favor legalized same-sex marriage, according to a Gallup poll released Dec. 5. Of those who oppose the legalization, 47 percent cite religious beliefs as their reason. Another 20 percent responded that "marriage should be between a man and a woman," with the rest citing traditional beliefs, the existence of civil unions and the "laws of nature." Supporters of legalization most often cited equal rights (32 percent) and personal choice (32 percent), while another 14 percent said it wasn't the government's business to decide who could marry. Younger people were more likely than older Americans to support same-sex marriage, with 73 percent of 18- to 19-year-olds in favor compared with only 39 percent of 65-year-olds. About half of 50- to 64-year-olds support legalization. The total 53 percent number in support of same-sex marriage ties with a previous high set in May 2011. In 1996, when Gallup first began asking the question, only 27 percent of Americans thought same-sex marriages should be legally valid.

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Baby Leopard Brothers Come to San Diego Zoo

Meet Riki-san and Haui-san, a cute and clumsy pair of clouded leopard cubs that made their debut this week at the San Diego Zoo. The 14-week-old brothers came to Southern California by way of the Nashville Zoo at Grassmere, which has a breeding program aimed at boosting the numbers of this species, listed as vulnerable by the International Union for Conservation of Nature (IUCN). Named for their cloud-like spots, males of the cat species can weigh up to 50 lbs (22.6 kg), and can be found in forest pockets from the foothills of the Himalayas to eastern China and Southeast Asia. Known for their acrobatic lifestyle, the clouded leopard and the margay from South America in fact are the only cat species that can scurry down a tree head first. Riki-san and Haui-san will remain for 30 days in a quarantine unit at the zoo, where they can be seen climbing on (and tumbling off) scratching posts and wrestling with each other. At 13 pounds (5.9 kilogram), Riki-san is the larger of the two but is also the more timid one, while 11.5-lbs (5.2-kg) Haui-san is feistier and eggs on his brother to play, according to the zoo. There are believed to be fewer than 10,000 clouded leopards left in the wild and they face threats of deforestation and hunting. (Poachers seek their gray-and-black coats and some of the cats' body parts are used in traditional medicine).

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SEC charges China affiliates of top accounting firms

WASHINGTON/NEW YORK (Reuters) - U.S. regulators on Monday charged the Chinese arms of five top accounting firms with securities violations over their refusal to produce certain audit papers for U.S.-listed Chinese companies. The Securities and Exchange Commission began proceedings against the Chinese affiliates of Deloitte, KPMG, PricewaterhouseCoopers, BDO and Ernst & Young. The agency on Monday also moved to pursue a case they had put on hold against Deloitte. It was the SEC's widest enforcement effort yet to procure documents in connection with probes of possible accounting fraud of U.S.-listed Chinese companies, and raised questions about whether talks have stalled between the U.S. and Chinese governments to resolve the issue. The SEC said it has been seeking documents related to investigations of possible wrongdoing at nine China-based companies. Chinese secrecy laws have stymied efforts to obtain audit documents that investigators need to determine whether there were accounting irregularities. An administrative law judge will schedule a hearing to determine potential sanctions against the Chinese arms of the accounting firms, the SEC said. It was unclear whether the SEC's new posture will result in financial penalties and discourage the firms from working with certain Chinese companies, or if the move was designed to force a breakthrough in the larger negotiations. In July, the SEC disclosed it was in discussions with Chinese regulators on cross-border cooperation, including access to documents. The Monday action suggests those talks have not progressed to the SEC's satisfaction. "Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions," SEC enforcement director Robert Khuzami said in a statement announcing the action. The accounting firms pinned the blame on lack of progress in the negotiations. "(The action) is the result of conflicting laws between the U.S. and China," PwC China said in a statement. "This action involves an issue that needs to be resolved between the US and China." Deloitte said: "While it is unfortunate that the two countries have not yet been able to find common ground on these issues, we remain hopeful that a diplomatic agreement can be reached, and we stand ready to assist that effort in any way we can." Ernst & Young's China affiliate, Ernst & Young Hua Ming, said in a statement it hoped U.S. and Chinese regulators can reach agreement. KPMG Huazhen's statement also stressed hope for an agreement. "We remain hopeful that these on-going discussions will result in a positive diplomatic resolution," it said. BDO did not immediately respond to a request for comment. Separately on Monday, Canada's top securities regulator said it believes Ernst & Young breached the Ontario Securities Act in its audits of Sino-Forest Corp, a China-focused forestry company that collapsed under the weight of fraud allegations. Ernst & Young Canada said in a statement that it is confident its work "met all professional standards. AUDITOR WATCHDOG ALSO NEGOTIATING Top accounting firms operate as global networks of legally separate member firms in each country, so all member firms are not liable for the actions in any one country. The SEC action accuses the affiliates of violating U.S. securities laws that require foreign public accounting firms to provide the SEC with audit work papers involving any company trading on U.S. markets. Many of the Chinese companies under investigation traded on U.S. exchanges through so-called reverse mergers, and have since been deregistered by the SEC. Last year, the agency took Deloitte to federal court to try to force that firm to turn over documents in connection with an investigation into Longtop Financial Technologies Ltd. In July, it sought a six-month delay in that legal battle, citing negotiations with Chinese regulators. But on Monday, the SEC said those negotiations ended unsuccessfully and filed a motion to proceed with the case. It also renewed efforts to get the documents related to Deloitte's auditing of Longtop's financial statements. Reuters reported last month that the U.S. auditor watchdog, the Public Company Accounting Oversight Board (PCAOB), had completed observations of Chinese inspections of auditors and expressed optimism about talks over access to audit documents. PCAOB spokeswoman Colleen Brennan said on Monday the agency met with China regulators in Washington in the last week of November. In a statement, PCAOB Chairman James Doty said his agency's negotiations are proceeding on a separate track from the SEC. If the agency's efforts do not lead to an agreement, "then we will need to consider other alternatives," Doty said. (Additional reporting by Rachel Armstrong in Singapore; Editing by Jeffrey Benkoe, Nick Zieminski, David Gregorio and Edmund Klamann)

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Morgan Stanley trader was probed at Goldman: sources

(Reuters) - Morgan Stanley hired former Goldman Sachs trader Edward Glenn Hadden to run its Treasury bond desk last year, even though his former employer had placed the trader on paid leave for about a year following an internal inquiry, said three people familiar with the situation. The inquiry by Goldman involved a matter separate from an ongoing investigation by exchange operator CME Group into a December 2008 trade that involved U.S. Treasury futures. Neither Hadden nor Goldman has been accused of wrongdoing in the 2008 trading incident. But the decision by Morgan Stanley to hire Hadden even though some of his activities had raised questions within Goldman could put the firm in an uncomfortable position in light of the revelations of the CME Group investigation. Hadden was a partner at Goldman Sachs when the 2008 trade drawing scrutiny occurred. The incident that led to the Goldman internal inquiry took place the end of 2009 and involved profits Hadden is said to have made ahead of the launch of a new Treasury futures contract introduced by the CME Group in early 2010. Morgan Stanley and Goldman Sachs both recently learned of the CME investigation into the 2008 incident. But sources said Morgan Stanley was aware Goldman had put Hadden on paid leave when it hired him in March 2011. Hadden's lawyer said his client did nothing wrong with the 2008 trade and expects the CME to reach a similar conclusion when it completes its investigation. "There is no legal or factual basis for any suggestion of market manipulation," said James Benjamin, who defended his client in response to a recent regulatory disclosure by the firm that Hadden is being investigated by CME over a 4-year-old trade. Benjamin had no comment about the incident that led to Goldman putting Hadden on paid leave that effectively barred him from trading at the firm for about a year. Hadden, who goes by his middle name "Glenn," officially left Goldman in late 2010. A few months later, Hadden, who had been a partner at Goldman, joined Morgan Stanley with much fanfare to run the Wall Street firm's Treasury bond and interest rate derivatives trading desk. Hadden is one of the most successful traders in the market for Treasury bonds and interest rate derivatives, whose value stands at $531.6 trillion, according to the Securities Industry and Financial Markets Association. He had worked for Goldman Sachs for about 11 years before voluntarily leaving the firm at the end of 2010. Trading in Treasuries and interest rate derivatives is an important part of Morgan Stanley's bond trading business, as it focuses on high-volume trading that can be easily automated and cleared under new regulations, rather than riskier and more complex over-the-counter trades. Benjamin, a defense attorney with Akin Gump, said the CME investigation involves a "technical risk management activity" that occurred "in a one-minute period four years ago." While Benjamin declined to discuss the specifics of the allegation against Hadden in his statement, the lawyer said his client had "acted properly and followed established market practice." CME Group declined to comment. Morgan Stanley spokesman Mark Lake said Hadden is still employed by the firm, and in good standing. News of the investigation broke on Sunday evening when The New York Times posted a story on its website about Hadden with the headline "Morgan Stanley Trader Faces Inquiry on Possible Manipulation." The paper, citing a regulatory filing and sources familiar with the matter, said the CME was investigating Hadden over whether his Treasury futures trading had manipulated prices. Hadden's file with the Financial Industry Regulatory Authority cites a pending CME investigation of his Treasury futures orders placed on the expiration date in December 2008. The trades being probed by the CME pertained to programs set up by the Federal Reserve during the height of the financial crisis to help support Wall Street and the banking system, a person familiar with the matter said. The New York Times reported that some at the Fed had suspected that Goldman was trying to improperly profit from one of the government's bond-buying programs, and complained to Goldman about Hadden. The 2009 incident that led to the Goldman internal inquiry also involved Treasury futures but had nothing to do with the U.S. government's efforts to prop up the financial system. Instead, the 2009 matter involved a new Treasury futures trading product the CME was developing and one which Hadden had advised on, said those people, who were not authorized to speak publicly on the matter. Hadden had found a way to structure a Treasury trade ahead of the CME's official announcement in September 2009 that it was going to launch in early 2010. That incident moved his superiors at Goldman to put him on leave, keeping him on the payroll but preventing him from actively trading for about a year. Indeed, even as the CME investigates Hadden over the 2008 incident, its product development team has continued to turn to him for help in devising new Treasury futures products. CME Group quoted Hadden in a September 18 press release highlighting a new interest rate swap futures product. (Reporting by Lauren Tara LaCapra and Emily Flitter; Additional reporting by Ann Saphir; Editing by Matthew Goldstein, Steve Orlofsky, Leslie Gevirtz and Richard Chang)

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Court withdraws win for BNY Mellon in Sentinel case

(Reuters) - A federal appeals court in the United States has withdrawn a ruling that put Bank of New York Mellon Corp ahead of former customers of Sentinel Management Group seeking to recoup money lost in the futures broker's 2007 collapse. In a two-line ruling that gave no further explanation, the U.S. Court of Appeals for the Seventh Circuit withdrew an August 9 opinion. "This appeal remains under consideration by the panel," the three-judge panel wrote in a ruling dated November 30. The decision overturns an August opinion from the same court affirming an earlier district court ruling that Bank of New York Mellon had a "secured position" on a $312 million loan it gave to Sentinel. Frederick Grede, the trustee in Sentinel's bankruptcy, alleged that the broker pledged hundreds of millions of dollars in customer assets to secure an overnight loan at the bank, leaving the bank in a secured position but Sentinel's customers with losses of millions. Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business. At Sentinel, customer funds were allegedly moved from the protected accounts to other accounts so they could be used as collateral for loans to Sentinel's own trading operations. The appeals court said in August that "perhaps the bank should have known that Sentinel violated segregation requirements" but agreed with the district court's earlier ruling that "such a lack of care does not rise to the level of the egregious misconduct" needed to reprioritize a claim. That decision was a blow for Grede, who had sought to strip Bank of New York Mellon of its secured position. Sentinel largely managed money for other futures brokers, delivering outsized returns that Grede says were boosted by improperly using customer money to secure loans that funded risky trades. The scheme unraveled when the credit crisis hit began the summer of 2007. A spokesman for BNY Mellon declined to comment. A lawyer for Grede could not be immediately reached for comment late on Monday. The case is Frederick Grede v. Bank of New York Mellon Corp., in the U.S. Court of Appeals for the Seventh Circuit, no. 10-3787.

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Fed officials laud stimulus, quibble over future plans

Boston Federal Reserve Bank President Eric Rosengren, one of the most vocal proponents of Fed asset purchases, said there was a "strong case" for the Fed to stay the course on accommodative policies next year and continue buying a total of $85 billion in bonds each month. In September, the Fed announced an open-ended bond buying scheme that began with $40 billion per month in mortgage-backed securities. That new effort to boost the economy comes on top of a separate program in which the Fed was buying $45 billion of longer-term Treasury securities per month with proceeds from sales of a like amount of shorter-term debt. The latter plan, known as Operation Twist, is set to expire at the end of this month, and most analysts expect the central bank to substitute an equal amount of long-term Treasury buying. However, James Bullard, president of the St. Louis Fed, argued the central bank should not replace its expiring 'Operation Twist' program on a dollar-for-dollar basis. He said purchases that expand the Fed's $2.8 trillion balance sheet would have a bigger effect than Twist, which does not add to the balance sheet. "If the goal is to keep policy on its present course, the replacement rate should be less than one-for-one," Bullard told the Little Rock Chamber of Commerce, suggesting $25 billion as an adequate monthly amount. THRESHOLDS Whether to expand the Fed's balance sheet further will be a key topic of debate at Fed policymakers' next meeting on December 11-12. Also under consideration: tweaking Fed communications by adopting numerical thresholds for inflation and joblessness to signal when rates might rise. Bullard on Monday said he supported the adoption of such thresholds as long as the Fed can address his concerns, especially his worry that the Fed is seen as trying to target unemployment. That approach was badly discredited in the 1970s, he said, when rates were kept low to boost jobs and inflation skyrocketed. Bullard had previously sounded more skeptical on thresholds, saying they could rob the central bank of flexibility. But the idea has recently gained traction, with Fed Vice Chair Janet Yellen voicing strong support for the idea, first advocated by Chicago Fed President Charles Evans a year ago. Evans wants the Fed to keep rates low until unemployment drops to at least 6.5 percent, as long as inflation does not threaten to rise above 2.5 percent. Minneapolis Fed President Narayana Kocherlakota and Boston Fed's Rosengren have also pitched specific proposals. GROWTH The U.S. economy grew at a 2.7 percent annual rate in the third quarter but is expected to have slowed in the final months of the year. Unemployment remains elevated at 7.9 percent. Bullard said he expects the expansion to pick up steam in 2013, allowing gross domestic product to rise about 3.5 percent. But he added that estimate was predicated on a successful resolution of a year-end budget crunch, still a big "if". William Dudley, head of the New York Fed, argued the Fed's mortgage-backed securities purchases have provided much-needed support to the economy, even if their benefits in easing financial conditions have not been fully passed through from financial institutions down to customers. "Our policy has been and continues to be effective - though it is certainly not all-powerful in current circumstances," he said at a conference on mortgage finance at the New York Fed, at which his Boston Fed counterpart Rosengren was the keynote speaker. The conference was aimed at exploring some of the blockages in the transmission of Fed policy to American consumers, Dudley said. "We are focusing on ... the significant widening of the spread between yields on mortgage-backed securities and primary mortgage rates," he said. In response to the financial crisis and deep recession of 2007-2009, the Fed had already slashed official rates to zero and bought some $2.3 trillion in government and mortgage-backed bonds prior to the launch of its latest stimulus.

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Asian shares fall from nine-month high on weak U.S. data

SINGAPORE (Reuters) - Asian shares slipped on Tuesday after a plunge in U.S. manufacturing activity hit American stocks and the dollar, while the euro hovered near a six-week high on optimism over Greece's plan to buy back debt. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> fell 0.3 percent to 450.79, backing away from a nine-month high reached on Monday. Australian shares <.AXJO> eased 0.5 percent, while Japan's benchmark Nikkei share average fell 0.2 percent, declining further from a seven-month intraday high of 9,525.82 struck on Monday. The losses in Asian stock markets were suggestive of some caution after gains in the past few weeks, with some of the negative bias seeping over from weakness in the American economy and continued gridlock in the U.S. Congress over proposals to avert a fiscal cliff - $600 billion worth of tax increases and spending cuts that will be automatically triggered in early 2013. "Investors are cautious about the market's sharp rise in the past few weeks, and as soon as the Nikkei hit the 9,500-mark, trading has slowed down. Investors started taking a wait-and-see mode," said Hiroichi Nishi, general manager at SMBC Nikko Securities in Tokyo. Global share indexes had risen on Monday after manufacturing surveys showed signs of a recovery, albeit an uneven one, in China's economy and a slower contraction in Europe. But sentiment toward equities soured after data revealed U.S. manufacturing unexpectedly contracted in November to its lowest level in more than three years. The Institute for Supply Management (ISM) said on Monday that its index of national factory activity fell to 49.5 in November, the weakest since July 2009, as companies worried about whether lawmakers in Washington could reach a budget deal in time to avert a fiscal crisis that may lead to a recession. Heading into next week, even a hint of progress in the fiscal cliff negotiations could spawn a modest rally, said Vishnu Varathan, regional economist in Singapore for Mizuho Corporate Bank. "Overall the euro zone noises are coming out positive and I don't see any turning around there. The only real deal-breaker, whatever will send the dollar spiking up and risk really off the table, will be if there is a complete breakdown in the Congress negotiations," he said. "Right now there is some disappointment here and there, but overall still the consensus is that negotiations will result in some kind of acceptable compromise," Varathan said. RBA CUTS The Australian dollar recovered from initial weakness on Tuesday after a widely expected interest rate cut by the Reserve Bank of Australia (RBA). The rate was trimmed by 25 basis points to 3.0 percent, matching an earlier record low. The RBA said the full impact of rate cuts in the past had yet to be felt, and that recent data confirmed the peak in resource investment was approaching. The Aussie rose 0.3 percent on the day and last traded at $1.0445, not far from a two-month peak of $1.0491 touched last week. The euro was flat at $1.3060, hovering near the previous day's high of $1.3076, the single currency's strongest level in about six weeks. The euro gained as Greek bonds rallied on Monday after Athens announced better-than-expected terms for its planned debt buy-back, boosting chances it will succeed and lead to the release of fresh aid funds. European stocks and peripheral bonds were also buoyed by news eurozone finance ministers have approved aid to Spanish banks, alleviating the tail risks of a banking crisis in Spain. The U.S. fiscal cliff issue remained in the minds of many investors. The White House dismissed a proposal from congressional Republicans on Monday that included tax reforms and spending cuts, saying it did not meet President Barack Obama's pledge to raise taxes on the wealthiest Americans. The Republicans proposed overhauling the U.S. tax code to raise $800 billion in new revenue over 10 years. Obama's opening bid, outlined last Friday, seeks $1.6 trillion in new revenue by allowing the expiry of tax cuts enacted under President George W. Bush for the top two tax brackets.

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