HARI SREENIVASAN: Housing is heating up and it's taking Wall Street with it. The National Association of Realtors reported today that January contracts for home sales hit the highest level in more than two years. The stock market reacted with a sharp rally. The Dow Jones industrial average gained 175 points to close at 14,075. It's up nearly 300 points in two days. The Nasdaq rose 32 points today to close at 3,162.
The latest nuclear negotiations with Iran ended today with talk of concessions by the West and an upbeat appraisal from Tehran.
Margaret Warner has our report.
MARGARET WARNER: The two days of talks in Almaty, Kazakstan, ended with no breakthrough, only an agreement for more talks in March and April.
But there was something new. The U.S. and five negotiating partners reportedly offered to ease some economic sanctions. Iran's principal negotiator, Saeed Jalili, called it a turning point.
SAEED JALILI, Iranian Supreme National Security Council Secretary: Some of the issues in the latest proposal are more realistic compared to what they said in the past. And they tried to get closer to Iran's viewpoint, which we believe is a positive step, although we still have a long way to reach the optimum point.
MARGARET WARNER: Reports from Almaty said, in exchange, the six powers called for Iran to sharply restrict its enriching uranium to near-weapons-grade level. The powers also reportedly dropped a demand to shutter the enrichment facility at Fordow, proposing instead that work there be suspended.
Fordow is buried deep in a mountain, making it hard to destroy in a possible military strike. The lead negotiator for the six powers, the U.S., Britain, France, Russia, and China, plus Germany, was Catherine Ashton of the European Union.
CATHERINE ASHTON, European Union: I hope that the Iranian side are looking positively on the proposals that we have put forward. The proposals we have put forward are designed to build some confidence and enable us to move forward.
MARGARET WARNER: Far from Almaty, Secretary of State Kerry said in Paris that the talks had been useful, but he also reiterated the U.S. position.
SECRETARY OF STATE JOHN KERRY, United States: Iran knows what it needs to do. The president has made clear his determination to implement his policy that Iran will not have a nuclear weapon.
MARGARET WARNER: And, in Jerusalem, Israeli Prime Minister Benjamin Netanyahu called again for the threat of military measures.
PRIME MINISTER BENJAMIN NETANYAHU, Israel: I believe that this requires the international community to ratchet up its sanctions and make clear that if this continues, there will be also credible military sanctions. I think no other means will make Iran obey the wishes of the international community.
MARGARET WARNER: Iran insists its nuclear program is for peaceful energy production, not weapons. But just last week, the International Atomic Energy Agency reported Iran is installing advanced uranium- enriching centrifuges at its Natanz nuclear facility, a step the United States called provocative.
HARI SREENIVASAN: Chuck Hagel was sworn in today as the new secretary of defense, with federal budget cuts topping his agenda. The former Republican senator from Nebraska addressed Pentagon employees who will have to manage some $46 billion dollars in reductions starting Friday.
DEFENSE SECRETARY CHUCK HAGEL, United States: We need to figure this out. You are doing that. You have been doing that. We need to deal with this reality. We have got ahead of us a lot of challenges. They are going to define much of who we are, not this institution only, but our country.
HARI SREENIVASAN: Hagel won Senate confirmation yesterday, despite the opposition of most of his fellow Republicans. He succeeds Leon Panetta, who had served in the top Pentagon job since July of 2011.
White House officials conceded today it's unlikely the government will avoid those looming automatic budget cuts. A spokesman said President Obama will meet Friday with congressional leaders, but there was no indication that any deal is in the works. Tomorrow, Senate Democrats will try to bring up a stopgap bill to delay the cuts, but Republicans could block the measure.
At the Vatican, Pope Benedict XVI gave an emotional farewell in his last general audience a day before his retirement becomes official.
We have a report from James Mates of Independent Television News.
JAMES MATES: A final ride on the popemobile into the crowds on St. Peter's Square, a last baby to kiss. There is no protocol on how to leave the office of pope, because no living pope has done so for 600 years.
But Benedict XVI decided he wasn't going to go quietly. For 10 days, there have been rumors that he stood down not just because of ill health, but because of power struggles in the Vatican. In his farewell address in front of 50,000 in the square and millions more on TV, he confirmed all had not been well.
There were also moments that were not easy, he said. "I felt like St. Peter and the apostles in the boat on the Sea of Galilee. The lord gave as many days of light winds when the fish were abundant, but also times when the waters were stormy and the winds were against us and the lord seemed to be sleeping."
The tens of thousands of pilgrims and of the simply curious who heard today's speech cheered and waved their banners in appreciation. Most cannot have expected such frank admissions, but, even so, didn't seem surprised.
MAN: The difficulties of office? Well, with the absolute mayhem in the Catholic Church in the last number of years, I suppose, what else could he mean?
POPE BENEDICT XVI, Leader of Catholic Church: And I ask each of you to pray for me and for the new pope.
JAMES MATES: As he took his leave of St. Peter's and of the world stage, he has spelled out very clearly the challenge facing his successor.
HARI SREENIVASAN: One hundred and fifteen cardinals will choose Benedict's successor during a papal conclave. They will begin meeting Monday to set a date for the official gathering.
Those are some of the day's major stories -- now back to Gwen.