The Shrewd Shopper

Tim Gruber for The New York Times

From left, Tara Niebeling, Sarah Schmidt, Bridget Jewell and Erin Vande Steeg are members of the social media team at the Mall of America in Bloomington, Minn.

Retailers are trying to lure shoppers away from the Internet, where they have increasingly been shopping to avoid Black Friday madness, and back to the stores. The bait is technological tools that will make shopping on the busiest day of the year a little more sane — and give shoppers an edge over their competition.

Those with smartphones in hand will get better planning tools, prices and parking spots. Walmart has a map that shows shoppers exactly where the top Black Friday specials can be found. A Mall of America Twitter feed gives advice on traffic and gifts, and the Macy’s app sends special deals for every five minutes a shopper stays in a store.

“The crazy mad rush to camp out and the crazy mad rush to hit the doorbusters have really made people think, ‘I’m just going to stay home on Black Friday,’ ” said Carey Rossi, editor in chief of ConsumerSearch.com, a review site. “This is going to invite some people back and say, ‘You know what? It doesn’t have to be that crazy.’ ”

Part of the retailers’ strategy is to slap back at online stores like Amazon.com, which last year used apps to pick off shoppers as they browsed in physical stores. But the stores are also recognizing that shopping on the Friday after Thanksgiving need not require an overnight wait in line, a helmet and elbow pads. A smartphone gives shoppers enough of an edge.

“This takes away that frantic Black Friday anxiety,” said Lawrence Fong, co-founder of BuyVia, an app that sends people price alerts and promotions. “While there’s a sport to it, life’s a little too short.”

Denise Fouts, 45, who works repairing fire and water damage in Chandler, Ariz., is already using apps to prepare for Black Friday, including Shopkick, Target’s app and one called Black Friday. “There still are going to be the crowds, but at least I already know ahead of time what I’m going specifically for,” Ms. Fouts said.

Last week, Macy’s released an update to its app with about 300 Black Friday specials and their location. In the Herald Square store, for instance, the $49.99 cashmere sweater specials will be in the Broadway side of the fifth-floor women’s department.

“With the speed that people are shopping with on Black Friday, they need to be really efficient about how they’re spending their time,” said Jennifer Kasper, group vice president for digital media at Macy’s.

When shoppers keep the app open, Macy’s will start sending special deals to the phone every five minutes. The deals are not advertised elsewhere.

Walmart has had an app for several years, but recently introduced an in-store mode, which shows things like the current circular or food tastings when a shopper is near a certain location. Twelve percent of Walmart’s mobile revenue now comes from when a person is inside a store.

For Black Friday, the app will have a map of each store, with the precise location of the top sale items — so planners can determine the best way to run. “The blitz items are not where you think they would be, because for traffic reasons, maybe the hot game console is in the lawn and garden center,” said Gibu Thomas, senior vice president for mobile and digital for Walmart Global eCommerce.

Target is also testing a way-finding feature on its app at stores that include some in Seattle, Chicago and Los Angeles. If a shopper types in an item, the app will give its location.

Other app makers are betting that shoppers want apps that pull in information from many stores.

RedLaser, an eBay app, lets shoppers use their phones to compare prices and recently started using location data to give shoppers personalized promotions when they walk into stores, including items not on store shelves at Best Buy, for instance. RetailMeNot, which offers e-commerce coupons, now has offline coupons that will pop up on users’ cellphones when they step near 500 malls on Black Friday.

“Consumers are not going to download 40 different apps for 40 different stores,” said Cyriac Roeding, co-founder of Shopkick, a location-based app that gives shoppers points, redeemable for perks, when they walk into stores or scan certain items.

For Black Friday, Shopkick is publishing what it calls a little black book with the top doorbusters. Shoppers will earn extra points and rewards for shopping on Black Friday.

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Cease-Fire Between Israel and Hamas Takes Effect

CAIRO — Israel and Hamas agreed to a cease-fire on Wednesday, the eighth day of lethal fighting over the Gaza Strip, in a deal completed under strong American and Egyptian diplomatic pressure that quieted an aerial battle of rockets and bombs and forestalled — for now — an escalation into an Israeli invasion.

The cease-fire, which took effect at 9 p.m. local time (2 p.m. Eastern), was formally announced by Secretary of State Hillary Rodham Clinton and Foreign Minister Mohamed Amr of Egypt after intensive negotiations in Cairo. It was welcomed by all sides, but whether the cease-fire could hold was uncertain.

Even in the minutes leading up to the effective start time, the antagonists were firing at each other, and the Israeli authorities reported at least five Palestinian rockets were lobbed into southern Israel shortly after the cease-fire had begun. But no damage or injuries were reported and the rocket fire seemed to end in the second hour. In Gaza, thousands of residents came outside to celebrate.

“This is a critical moment for the region,” Mrs. Clinton, who rushed to the Middle East late Tuesday in an intensified effort to halt the hostilities, told reporters in Cairo. She thanked Egypt’s president, Mohamed Morsi, who played a pivotal role in the negotiations, for “assuming the leadership that has long made this country a cornerstone of regional stability and peace.”

Mrs. Clinton also pledged to work “with our partners across the region to consolidate this progress, improve conditions for the people of Gaza, provide security for the people of Israel.”

Mr. Amr said Egypt’s role in reaching the agreement reflected its “historical commitment to the Palestinian cause” and Egypt’s efforts to “bring together the gap between the Palestinian factions.”

The top leader of Hamas, Khaled Meshal, also had strong words of praise for the Egyptian leader, a former official in the Muslim Brotherhood, in which Hamas has roots. At a news conference in Cairo, Mr. Meshal thanked Egypt for its role and said Israel had “failed in all its objectives.”

The negotiators reached an agreement after days of nearly nonstop Israeli aerial assaults on Gaza, the Mediterranean enclave run by Hamas, and the firing of hundreds of rockets into Israel from an arsenal Hamas had been amassing since the three-week Israeli invasion four years ago.

Under the terms distributed after the cease-fire was announced, Israel agreed to stop all land, sea and air hostilities in Gaza, including the “targeting of individuals” — a reference to militants of Hamas and its affiliates who have been killed. The cease-fire also called on the Palestinian factions in Gaza to stop all hostilities against Israel, including rocket attacks and attacks along the border.

But the terms also state that underlying grievances of Gazans, most notably the border restrictions Israel has imposed that impede the movement of people and goods through Gaza, will be addressed starting 24 hours after the cease-fire is in effect. Precisely how they will be addressed was left unclear.

Also left unclear was how the agreement would be enforced, but the terms stated that “each party shall commit itself not to perform any acts that would breach this understanding.”

The agreement came despite a bus bombing in Tel Aviv earlier in the day, applauded by Hamas and other Palestinian militant groups, which invited Israeli reprisals and threatened to derail the talks. Also complicating the path to the cease-fire were Israeli strikes overnight on Gaza.

Prime Minister Benjamin Netanyahu of Israel, who had been threatening to start another ground invasion if the Gaza rockets did not stop, said in a statement that he was satisfied, for the moment, with the outcome. But he left open the possibility of more military action.

The statement issued by his office said Mr. Netanyahu had spoken with President Obama and “responded positively to his recommendation to give a chance to the Egyptian proposal for a cease-fire and to allow an opportunity to stabilize the situation and to calm it down before there is a need to use much greater force.”

An agreement had been on the verge of completion on Tuesday, but was delayed over a number of issues, including Hamas’s demands for unfettered access to Gaza via the Rafah crossing into Egypt and other steps that would ease Israel’s economic and border control over other aspects of life for the more than one million Palestinian residents of Gaza, which Israel vacated in 2005 after 38 years of occupation.

David D. Kirkpatrick reported from Cairo, Ethan Bronner from Jerusalem and Rick Gladstone from New York. Reporting was contributed by Jodi Rudoren and Fares Akram from Gaza, Isabel Kershner from Jerusalem, Alan Cowell from London, Andrea Bruce from Rafah and Christine Hauser from New York.

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Tool Kit: Online Shopping Tips for the Holidays

Some people may be looking forward to leaving Thanksgiving dinner before the pie is served to join the Black Friday rush, which will begin during dinnertime Thursday, earlier than ever, at stores like Sears, Walmart and Lord & Taylor.

But for those who prefer to stay for the pie course, avoid the lines and freezing temperatures and shop from the comfort of their homes, there are just as many deals to be found online this year, especially for smart shoppers.

Last year, online shoppers spent $816 million on Black Friday, an increase of 26 percent from the year before, and another $2.3 billion over Thanksgiving weekend and Cyber Monday, according to comScore. It expects online spending to increase again this year.

Online, there is no commute, no parking and no crowds — and shopping can be done in bed or at the Thanksgiving dinner table. Still, you cannot try clothes on, you have to wait for your purchase to arrive in the mail and there is always the nagging feeling that a better price is just one more click away.

To find your way around those problems, here are some tips from online shopping pros, retailers and shopping bloggers.

BARGAINS START EARLY “Cyber Monday is passé,” said Fiona Dias, chief strategy officer for ShopRunner.com, a network of e-commerce sites. “With online sales beginning as early as the Wednesday night before Thanksgiving, consumers who hold out for the best deal may find that what they are looking for has already sold out.”

Amazon.com, for example, started its Black Friday deals on Monday, and they will be available through Saturday. SHOP ON TUESDAYS One of the secrets of online shopping is that prices change by the second. To maximize your chances of getting the best price year-round, shop on Tuesday, a variety of e-commerce experts say. For whatever reason, Tuesday is when most e-commerce sites, including Shopbop, Etsy and RetailMeNot, post discounts and new items.

No matter the day, online retailers often start sales in the wee hours, so shop early.

As for the time of year, women’s clothes, shoes and accessories are discounted most in January, February, August and September, according to Shop It To Me, an online shopping search site. For consumer electronics like laptops, shop in midsummer and late September, before and after the back-to-school rush, according to Decide.com, a price comparison site.

NEVER PAY FULL PRICE Online holiday shoppers should use 40 percent off as a benchmark for a good deal, said Marjorie Cader, a Shop It To Me spokeswoman, based on discount data the site has collected. Expect discounts that are about 5 percent better from online-only retailers than from those that also operate brick and mortar stores, she said.

Comparison shopping sites like TheFind or ShopStyle can locate the best prices; Google or coupon sites like RetailMeNot can also help find a discount.

Google, Amazon and even flash sale sites like Gilt.com do not always have the lowest prices. You might check small shopping blogs dedicated to your favorite brands, like Grechen’s Closet for contemporary women’s clothes or J. Crew Aficionada.

“Spend 20 minutes and ensure you are getting the best deal out there,” said John Faith, senior vice president of mobile at WhaleShark Media, which operates coupon sites, including RetailMeNot.

BE A HAGGLER This is the year haggling at the cash register could become acceptable, as offline retailers try to keep shoppers offline. If you find a better price online — by using an application like RedLaser or searching Amazon — ask whether the cashier will match it. Big retailers like Target have already said they will.

WAIT TILL THE LAST MINUTE Procrastinators might benefit during the holidays. Electronics sold online are least expensive in the week before Christmas, according to Decide, especially TVs, laptops and cameras.

And while Dec. 17 is the last day that most online retailers will offer free shipping in time for Christmas, Walmart, the luxury clothing seller Net-a-Porter and others will deliver the same day. In San Francisco and New York, eBay now offers same-day delivery from hundreds of stores, including Macy’s, Target and Toys “R” Us.

NEVER PAY FOR SHIPPING... Nine of ten retailers will offer free shipping on certain purchases this holiday season, and a third will offer free shipping on all purchases, according to the National Retail Federation.

Some, though, require that you enter a promotional code, so it’s wise to take a minute to look around the Web site or search a coupon site to find it.

Stores including Walmart, Toys “R” Us and Nordstrom allow you to shop online and pick up your order locally.

...OR FOR RETURNS Sites like Zappos.com and Piperlime send prepaid shipping labels, but beware.

“When it comes to returns, read the fine print,” said Brian Hoyt, a spokesman for WhaleShark Media. Some merchants include a prepaid return label but subtract the price from your refund, and others charge a restocking fee that can be as high as 30 percent for consumer electronics.

Many companies, including Gap and J. Crew, also let you return an online purchase to a local store. And until Dec. 31, PayPay will cover the return shipping cost if the merchant does not, as long as you pay with PayPal and make the return within 30 days.

SEARCH WISELY Try searching synonyms, like “coat” instead of “jacket.” On sites like eBay, try leaving out words — if you are looking for an Yves Saint Laurent handbag on eBay, search for “Saint Laurent” or “Laurent bag.”

“If you search for ‘Yves Saint Laurent,’ you’ll be fighting over pieces with a bigger group of people,” said Sophia Amoruso, founder and chief executive of the e-commerce retailer Nasty Gal, who suggested purposefully misspelling brand names as well. “Think of what an uninformed person might list a really great designer piece as, and you can get an amazing gem for an incredible price.”

EBay Fashion also lets shoppers search by taking a cellphone picture of a fabric to find similar designs.

GET INSPIRED Search for “black sequin dress,” and you’ll get 128 results on Zappos.com, 2,618 on Amazon.com and a truly overwhelming 18 million on Google.

One solution: Trust online curators to suggest items. Etsy creates lists of recommended items. On Pinterest, you can peruse items culled by others. Other sites to search for inspiration: Polvyore, Fancy, Svpply, Lookbook.nu and We Heart It.

TRY IT ON, VIRTUALLY You can visit sites that show real people wearing the clothes you’re interested in buying, like Go Try It On, Fashism and Rent the Runway and sites that show video, including Asos, MyHabit and Joyus. Or, as long as a site offers free shipping and returns, order two sizes and return one.

SHOP INTERNATIONALLY “Don’t let international shopping scare you off,” said Caroline Nolan, the writer of Pregnant Fashionista, a maternity shopping blog.

Many international e-commerce sites, like Asos, ship free to the United States. And because the seasons are different, winter clothes in Australia, for instance, go on sale just as Americans are starting to shop for winter, she said. FarFetch has items from small boutiques worldwide and 1stDibs is good at finding rare items like an antique from Paris. On eBay, you might have luck finding items made by a European designer by switching to eBay’s site for a particular country.

MAKE SITES WORK FOR YOU On Shop It To Me, you can enter your favorite designers and sizes and the site will send you personalized e-mails with promotions and sales. Many sites allow shoppers to place a symbol like a heart on best-liked items or save them to a wish list. On a site like Pinterest, shoppers can build their own lists.

“You always think you’ll remember where you saw something or what brand it was, but really you never do,” said Noria Morales, style director at SugarInc, a network of fashion and lifestyle blogs.

Even better, sites like Shopbop and Polyvore send alerts when items you have saved go on sale or are running low. EBay sends alerts when new items are listed for a search you have saved.

BE DILIGENT No one has time to read 50 e-mails a day from retailers. But for your favorite e-commerce sites or small boutiques, it is worth signing up for e-mails, as well as tracking them on Facebook and Twitter, where they often post exclusive deals. Many online shoppers have more luck hunting for items than trusting services to send them alerts, said Grechen Reiter, owner of Grechen Media, a network of shopping blogs.

“It is the thrill of the hunt that gets us going, after all,” she said.

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Well: Yawning Begins Early, Though No One Is Sure Why

Everyone yawns. And we start yawning even before we are born.

Now, using ultrasound video recordings, researchers have worked out a technique to distinguish prenatal yawns from the simple mouth openings that we also engage in well before birth.

For the study, published on Wednesday in PLoS One, scientists scanned 15 healthy fetuses, eight girls and seven boys, at 24, 28, 32 and 36 weeks’ gestation. They distinguished yawns from jaw openings by the timing of the action and shape of the fetuses’ mouths. In all, they counted 56 yawns and 27 non-yawn mouth openings. By 36 weeks, the yawning had completely disappeared.

Why fetuses yawn is unclear — for that matter, it is unclear why adults yawn. In any case, the study’s lead author, Nadja Reissland, a developmental psychologist at Durham University in England, said that yawning in a fetus is different from yawning in adults.

“When you see a fetus yawning, it’s not because it’s tired,” she said. “The yawning itself might have some kind of function in healthy development. Fetuses yawn, and then as they develop they stop yawning. There’s something special in yawning.”

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Well: Yawning Begins Early, Though No One Is Sure Why

Everyone yawns. And we start yawning even before we are born.

Now, using ultrasound video recordings, researchers have worked out a technique to distinguish prenatal yawns from the simple mouth openings that we also engage in well before birth.

For the study, published on Wednesday in PLoS One, scientists scanned 15 healthy fetuses, eight girls and seven boys, at 24, 28, 32 and 36 weeks’ gestation. They distinguished yawns from jaw openings by the timing of the action and shape of the fetuses’ mouths. In all, they counted 56 yawns and 27 non-yawn mouth openings. By 36 weeks, the yawning had completely disappeared.

Why fetuses yawn is unclear — for that matter, it is unclear why adults yawn. In any case, the study’s lead author, Nadja Reissland, a developmental psychologist at Durham University in England, said that yawning in a fetus is different from yawning in adults.

“When you see a fetus yawning, it’s not because it’s tired,” she said. “The yawning itself might have some kind of function in healthy development. Fetuses yawn, and then as they develop they stop yawning. There’s something special in yawning.”

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A Retailer, Eileen Fisher, Shakes Off Storm’s Impact to Reopen

Richard Perry/The New York Times

For Eileen Fisher, the storm was the biggest blow to her company's operations since she opened it in 1984.

IRVINGTON, N.Y. — Eileen Fisher had no time to spare. For her clothing stores to be up and running for Thanksgiving weekend, and her many retail clients stocked for the holiday rush, her company’s response to Hurricane Sandy would need to be close to flawless.

Eileen Fisher

The flooding from Hurricane Sandy decimated an Eileen Fisher store in Irvington, N.Y., and forced the company to close its headquarters there.

And it was.

All but one of the company’s 58 stores are open, and retailers like Nordstrom and Bloomingdale’s have Ms. Fisher’s latest designs on their racks. On a recent afternoon, aside from its cramped quarters, there was no sign of the storm on the second floor of the Eileen Fisher headquarters here, 20 miles north of Manhattan. Phones were ringing, online orders were being processed and Ms. Fisher was at her desk.

But step downstairs, where work crews were sawing off the bottom part of walls, removing mold-ridden desks and pulling up drenched carpet, and the magnitude of the last month’s miracle was hard to dismiss.

“It was a mess,” Ms. Fisher said. “I couldn’t believe it.”

Hurricane Sandy hurt retailers large and small. It closed airports, ports and roads, jamming merchandise at critical shipping times. More than a third of stores in the Northeast closed for at least a day, according to the research firm RetailNext. Macy’s has said that the storm delayed sales. Target said November started off choppily, and a Kohl’s store in Brooklyn will be closed at least through January.

For Eileen Fisher, started by Ms. Fisher in 1984, the storm was the biggest blow to operations ever. It decimated a store here and closed her headquarters, her Manhattan design center and her warehouse in Secaucus, N.J. For smaller retailers — Eileen Fisher expects about $350 million in revenue this year — a week or two of closed offices, stores and warehouses in early November could be ruinous.

Recovery was both an urgent and daunting task. A broad insurance policy helped a lot. So did some planning and a good amount of luck. As did an almost out-of-body detachment on executives’ parts to see past the emotion of sewage-soaked shirts and stained rolls of fabric to the prize of reopening a ravaged business.

Even the cash in the register at the Irvington store had to be taken home and blown dry. Almost $1.5 million, 12 Dumpsters and eight moving-truck-size mobile storage units of damaged goods later, Eileen Fisher was — for the most part — back.

“It was just stuff,” Ms. Fisher said.

Perils of a New Location

Ms. Fisher moved her headquarters to Irvington 20 years ago, choosing a brick building that was just a couple of yards from the Hudson River. It reminded her of the TriBeCa location where she had started the business, she said, and who doesn’t get inspiration from water?

Now that inspiration had become a liability. On a recent sunny day, the Hudson seemed calm and threatless, a cool gray-brown river about 10 feet below its banks. But on the night of the storm, the river rose over a barrier and stampeded north, churning through buildings “like a washing machine,” said Peter Joslin, the company’s facilities manager.

Mr. Joslin is from the Midwest, and he’s seen his fair share of river flooding, including last year, when a corner of the building took on water during Hurricane Irene. In the week before Sandy hit on Monday, Oct. 29, he was watching the weather forecasts, but, as he says, “we’re pretty laid back down here.”

Then, on the Friday before the storm, he received an e-mail from his predecessor in the job. It contained just four words: “Get out them sandbags.”

“That started to freak me out,” Mr. Joslin said.

He called the owner of a remediation company that had done work for Eileen Fisher in the past and obtained a promise that if anything went wrong, the company would be on site within two hours. He then called a moving company to see if it could remove some important files and other valuables, like $20,000 copiers. The moving company was already booked.

Employees worked through the weekend, piling sandbags three high along the building, encasing the second floor of headquarters in plastic in case the roof leaked and caulking windows. The storm struck Monday night.

Assessing the Damage

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Clinton Arrives in Middle East as Egypt Says Truce in Gaza Is Close

JERUSALEM — Diplomatic efforts accelerated on Tuesday to end the lethal confrontation between Israel and Palestinian militants in Gaza on one of the most violent days yet in the conflict, as the United States sent Secretary of State Hillary Rodham Clinton to the Middle East and Egypt’s president and his senior aides expressed confidence that a cease-fire was close.

But by late evening there was no announcement, and Mrs. Clinton said she would be working in coming days to complete an agreement. Appearing beside Prime Minister Benjamin Netanyahu of Israel to speak briefly to the press, Mrs. Clinton said she hoped to achieve an end to the hostilities with a deal that moves “toward a comprehensive peace for all people in the region.”

The diplomatic moves to end the nearly week-old crisis came as the antagonists on both sides intensified their attacks before any cease-fire takes effect.

Israeli aerial and naval forces assaulted several Gaza targets in multiple strikes, including a suspected rocket-launching site near Al Shifa hospital, which killed more than a dozen people. Those deaths brought the total number of fatalities in Gaza so far to more than 130 — roughly half of them civilians, the Gaza Health Ministry said.

A delegation visiting from the Arab League canceled a news conference at the hospital because of the Israeli aerial assaults as wailing ambulances brought victims in, some of them decapitated.

Militants in Gaza fired a barrage of at least 200 rockets into Israel, killing an Israeli soldier — the first military casualty on the Israeli side since the hostilities broke out last week. The Israel Defense Forces said the soldier, identified as Yosef Fartuk, 18, died from a rocket strike that hit an area near Gaza. Israeli officials said a civilian military contractor working near the Gaza border was also killed, bringing the total number of fatalities in Israel from the past week of rocket mayhem to five.

Other Palestinian rockets hit the southern Israeli cities of Beersheba and Ashdod, and longer-range rockets were fired at Tel Aviv and Jerusalem, but neither main city was struck and no casualties were reported. One Gaza rocket hit a building in the Israeli city of Rishon Lezion, just south of Tel Aviv, injuring one person and wrecking the top three floors.

Senior Egyptian officials in Cairo said Israel and Hamas, the militant Islamist group that governs Gaza, were “very close” to a cease-fire agreement that could be announced within hours. “We have not received final approval but I hope to receive it any moment,” said Essam el-Haddad, President Mohamed Morsi’s top foreign affairs adviser.

Foreign diplomats who were briefed on the outlines of a tentative agreement said it had been structured in stages — first, an announcement of a cease-fire, followed by its implementation for 48 hours. That would allow time for Mrs. Clinton to involve herself in the process on the ground here and create a window for negotiators to agree on conditions for a longer-term cessation of hostilities.

By late evening, however, there was no word on an announcement, and Israeli television was saying the talks needed more time. In Cairo, Egyptian news reports quoted Hamas officials as blaming Israel for delaying a deal and an announcement was unlikely before Wednesday.

The announcement of Mrs. Clinton’s active role in efforts to defuse the crisis added a strong new dimension to the multinational push to avert a new Middle East war. Israel has amassed thousands of soldiers on the border with Gaza and has threatened to invade the crowded Palestinian enclave for the second time in four years to stop the persistent rockets that have been lobbed at Israel.

Mrs. Clinton, who accompanied President Obama on his three-country Asia trip, left Cambodia on her own plane immediately for the Israel, and upon arrival in the late evening went into immediate talks with Israeli leaders.

She was scheduled to visit the West Bank later to meet with Palestinian leaders and then go to Cairo to consult with Egyptian officials.

Mr. Obama made a number of late-night phone calls from his Asian tour to the Middle East on Monday night that contributed to his conclusion that he had to become more engaged and that Mrs. Clinton might be able to accomplish something.

Isabel Kershner reported from Jerusalem; Peter Baker from Phnom Penh, Cambodia; and Rick Gladstone from New York. Reporting was contributed by Jodi Rudoren and Fares Akram from Gaza City, David D. Kirkpatrick from Cairo, Ethan Bronner from Jerusalem and David E. Sanger from Washington.

This article has been revised to reflect the following correction:

Correction: November 20, 2012

Because of an editing error, an earlier version of this article misspelled the family name of the Israeli soldier who was killed in a Palestinian rocket attack on Tuesday. He is Yosef Fartuk, not Yosef Faruk. 

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DealBook: Hewlett-Packard Takes $8.8 Billion Charge

Hewlett-Packard said on Tuesday that it had taken an $8.8 billion accounting charge, after discovering “serious accounting improprieties” and “outright misrepresentations” at Autonomy, a British software maker that it bought for $10 billion last year.

It is a major setback for H.P., which has been struggling to turn around its operations and remake its business.

The charge essentially wiped out its profit. In the latest quarter, H.P. reported a net loss of $6.9 billion, compared with a $200 million profit in the period a year earlier. The company said the improprieties and misrepresentations took place just before the acquisition, and accounted for the majority of the charges in the quarter, more than $5 billion.

Shares in H.P. plummeted nearly 11 percent in early afternoon trading on Tuesday, to less than $12.

Hewlett-Packard bought Autonomy in the summer of 2011 in an attempt to bolster its presence in the enterprise software market and catch up with rivals like I.B.M. The takeover was the brainchild of Léo Apotheker, H.P.’s chief executive at the time, and was criticized within Silicon Valley as a hugely expensive blunder.

Mr. Apotheker resigned a month later. The management shake-up came about one year after Mark Hurd was forced to step down as the head of H.P. after questions were raised about his relationship with a female contract employee.

“I’m both stunned and disappointed to learn of Autonomy’s alleged accounting improprieties,” Mr. Apotheker said in a statement. “The developments are a shock to the many who believed in the company, myself included. ”

Since then, H.P. has tried to revive the company and to move past the controversies. Last year, Meg Whitman, a former head of eBay, took over as chief executive and began rethinking the product lineup and global marketing strategy.

But the efforts have been slow to take hold.

In the previous fiscal quarter, the company announced that it would take an $8 billion charge related to its 2008 acquisition of Electronic Data Systems, as well as added costs related to layoffs. Then Ms. Whitman told Wall Street analysts in October that revenue and profit would be significantly lower, adding that it would take several years to complete a turnaround.

“We have much more work to do,” Ms. Whitman said at the time.

Hewlett-Packard continues to face weakness in its core businesses. Revenue for the full fiscal year dropped 5 percent, to $120.4 billion, with the personal computer, printing, enterprise and service businesses all losing ground. Earnings dropped 23 percent, to $8 billion, over the same period.

“As we discussed during our securities analyst meeting last month, fiscal 2012 was the first year in a multiyear journey to turn H.P. around,” Ms. Whitman said in a statement. “We’re starting to see progress in key areas, such as new product releases and customer wins.”

The strategic troubles have weighed on the stock. Shares of H.P. have dropped to less than $12 from nearly $30 at their high this year.

The latest developments could present another setback for Ms. Whitman’s efforts.

When the company assessed Autonomy before the acquisitions, the financial results appeared to pass muster. Ms. Whitman said H.P.’s board at the time – which remains the same now, except for the addition of the activist investor Ralph V. Whitworth – relied on Deloitte’s auditing of Autonomy’s financial statements. As part of the due diligence process for the deal, H.P. also hired KPMG to audit Deloitte’s work.

Neither Deloitte nor KPMG caught the accounting discrepancies. Deloitte said in a statement that it could not comment on the matter, citing client confidentiality. “We will cooperate with the relevant authorities with any investigations into these allegations,” the accounting firm said.

Hewlett-Packard said it first began looking into potential accounting problems in the spring, after a senior Autonomy executive came forward. H.P. then hired a third-party forensic accounting firm, PricewaterhouseCoopers, to conduct an investigation covering Autonomy sales between the third quarter 2009 and the second quarter 2011, just before the acquisition.

The company said it discovered several accounting irregularities, which disguised Autonomy’s actual costs and the nature of the its products. Autonomy makes software that finds patterns, data that is used by companies and governments.

H.P. said that Autonomy, in some instances, sold hardware like servers, which has higher associated costs. But the company booked these as software sales. It had the effect of underplaying the company’s expenses and inflating the margins.

“They used low-end hardware sales, but put out that it was a pure software company,” said John Schultz, the general counsel of H.P. Computer hardware typically has a much smaller profit margin than software. “They put this into their growth calculation.”

An H.P. official, who spoke on background because of ongoing inquiries by regulators, said the hardware was sold at a 10 percent loss. The loss was disguised as a marketing expense, and the amount registered as a marketing expense appeared to increase over time, the official said.

H.P. also contends that Autonomy relied on value-added resellers, middlemen who sold software on behalf of the company. Those middlemen reported sales to customers that didn’t actually exist, according to H.P.

H.P. also claims that that Autonomy was taking licensing revenue upfront, before receiving the money. That improper assignment of sales inflated the company’s gross profit margins.pfront, before receiving the money. It had the effect, the company said, of significantly bolstering Autonomy’s gross margin.

Hewlett Packard turned over its findings to Securities and Exchange Commission in the United States and the Serious Fraud Office in Britain with the last week. In a conference call with analysts, Ms. Whitman said the company might consider legal actions against several parties.

The former management team of Autonomy, which includes the company’s founder Mike Lynch, rejected H.P. claims about the accounting issues.

“H.P. has made a series of allegations against some unspecified former members of Autonomy Corporation PLC’s senior management team. The former management team of Autonomy was shocked to see this statement today, and flatly rejects these allegations, which are false,” the group said in a statement. “It took 10 years to build Autonomy’s industry-leading technology and it is sad to see how it has been mismanaged since its acquisition by H.P.”

While Mr. Schultz would not detail H.P.’s future legal strategy, he said “we intend to be aggressive in recovering value for our shareholders.” In addition to Mr. Lynch, the company indicated this could include other individuals, including perhaps former senior executives of H.P. who missed the bad accounting. “We’re not limiting it to Autonomy,” Mr. Shulz said.

H.P. also underscored the importance of Autonomy to the broader strategy, emphasized the quality of the products. “This is a very healthy company with good products that exist,” said Mr. Shultz. “At its core, these are very good products.”

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Global Update: Meningitis Vaccine Gets Longer Window Without Refrigeration

In what may prove to be a major advance for Africa’s “meningitis belt,” regulatory authorities have decided that a new meningitis vaccine could be stored without refrigeration for up to four days.

The announcement was made last week at a conference in Atlanta of the American Society of Tropical Medicine and Hygiene. While a few days may seem trivial, the hardest part of protecting poor countries is often keeping a vaccine cold while moving it from electrified cities to villages with no power. In antipolio drives, for example, the freezers, generators and fuel needed to make ice for the shoulder bags of vaccinators can cost more than the vaccine.

The new vaccine, MenAfriVac, made in India for 50 cents a dose, was introduced in 2010. In bad years, epidemics during the hot harmattan winds have killed as many as 25,000 Africans and disabled 50,000 more. In Chad this year, vaccination drove down cases to near zero in districts where it was used, while others nearby had serious outbreaks.

Experts decided that the vaccine is safe for four days as long as it stays below 104 degrees.

While temperatures get higher than that in Africa, said Dr. Godwin Enwere, medical director for the Meningitis Vaccine Project, teams normally get the vaccine out of coolers at dawn, drive to villages and finish before the day heats up. Other experts said it should be kept in the shade and monitored with colored paper “dots” that darken after hours in the heat.

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Global Update: Meningitis Vaccine Gets Longer Window Without Refrigeration

In what may prove to be a major advance for Africa’s “meningitis belt,” regulatory authorities have decided that a new meningitis vaccine could be stored without refrigeration for up to four days.

The announcement was made last week at a conference in Atlanta of the American Society of Tropical Medicine and Hygiene. While a few days may seem trivial, the hardest part of protecting poor countries is often keeping a vaccine cold while moving it from electrified cities to villages with no power. In antipolio drives, for example, the freezers, generators and fuel needed to make ice for the shoulder bags of vaccinators can cost more than the vaccine.

The new vaccine, MenAfriVac, made in India for 50 cents a dose, was introduced in 2010. In bad years, epidemics during the hot harmattan winds have killed as many as 25,000 Africans and disabled 50,000 more. In Chad this year, vaccination drove down cases to near zero in districts where it was used, while others nearby had serious outbreaks.

Experts decided that the vaccine is safe for four days as long as it stays below 104 degrees.

While temperatures get higher than that in Africa, said Dr. Godwin Enwere, medical director for the Meningitis Vaccine Project, teams normally get the vaccine out of coolers at dawn, drive to villages and finish before the day heats up. Other experts said it should be kept in the shade and monitored with colored paper “dots” that darken after hours in the heat.

Read More..