In a stunning move, Caroline Kennedy is dropping her bid for Hillary Clinton’s Senate seat. The New York Post reports Caroline told Gov. David Paterson she’s withdrawing her name from consideration, citing “personal reasons.” Kennedy’s decision leaves state Attorney General Andrew Cuomo as the front-runner for the seat. But the bigger question is, what’s behind her withdrawal? Though The New York Times cites concerns over the deteriorating health of her uncle, Sen. Ted Kennedy, the Post reports she made her move after learning she was about to be snubbed by Paterson.

Who else saw this coming? After Chief Justice John Roberts’ big flub Tuesday administering the oath of office, Obama had him over to the White House tonight to try it again. ABC’s Jake Tapper reports Roberts administered the oath at 7:35 p.m. in the Map Room. “Because there was one word out of sequence” yesterday—faithfully—the president took the oath again “out of an abundance of caution,” said White House press secretary Robert Gibbs. “We decided it was so much fun,” Obama joked. “Are you ready to take the oath?” Roberts asked. “I am, and we’re going to do it very slowly,” Obama answered. Present for the historic redo were Obama, Roberts, Gibbs, White House communications staffer Katie Lillie, White House photographer Pete Souza, and four lucky reporters.

Phew! The wait is over for Hillary Clinton. The Senate confirmed her nomination as Obama’s secretary of state this afternoon. Though today’s outcome was never really in doubt, some senators, particularly Texas Republican John Cornyn, had voiced concern about contributions to her husband’s presidential foundation. But John McCain today used his first Senate floor speech since losing the presidential campaign to urge his colleagues to confirm Hillary quickly, saying, “I think the message that the American people are sending us now is they want us to work together and get to work. I think we ought to let Senator Clinton, who is obviously qualified and obviously will serve, get to work immediately.”

Forget all the negative chatter about the Obama inauguration’s negative impact on Wall Street: After a drop of more than 300 points yesterday, US stocks finished strong this afternoon, with the Dow gaining 279.01 to close at 8,227.10. The S&P and Nasdaq also gained more than 4 percent, as investors buzzed over President Obama’s new plan to shore up banks. Bank of America jumped 31 percent, while IBM gained 12 percent. Treasury Secretary-designate Tim Geithner told Congress today that in the next few weeks Obama will propose a “comprehensive plan” for responded to the economic and financial crises.

The country’s 16 intelligence agencies are getting a new technology program that will link their sensitive data “by Google-like search systems,” The Wall Street Journal reports. The move is aimed at aiding interagency communication, letting intelligence analysts search through secret files the same way they search the Internet to help them prevent another 9/11. The agencies’ email systems will also be united into a single system with a full directory, and The Journal reports the new program “is designed to include Facebook-like social-networking programs and classified news feeds.” The price for all this interaction is expected to run into the billions, but the impact “will be staggering,” according to Director of National Intelligence Mike McConnell.

After much struggle and hard-fought debate, Obama has won a victory over the doubters. He’ll keep his BlackBerry in the White House, after all. A government agency—probably the National Security Agency, The Atlantic’s Marc Ambinder reports—has given the smartphone a super-encryption package to keep sensitive White House communiqués from hackers, foreign governments, and the prying eyes of Research In Motion employees in Waterloo, Ontario. Despite the lifting of the BlackBerry ban, Obama and his staffers are still forbidden from instant messaging. An Obama official says they will try to do more old-fashioned talking on the telephone.

It looks like the ladies of Sex and the City will be dusting off their Louboutins: Us Weekly is reporting that Sarah Jessica Parker, Cynthia Nixon, Kristin Davis, and Kim Cattrall have signed on for another film. “Not all the contracts are signed, but everyone is on board,” says an Us source. “It just happened.” The first Sex and the City movie premiered in May and grossed more than $150 million. Naturally, Carrie, Miranda, Charlotte, and Samantha are getting hefty pay raises this time around.

He may have a 73 percent approval rating now, but that doesn’t mean President Obama won’t face intense debate from his own party over his platform. Politico has a handy 10-point rundown of Democrats who could join the “White House Frenemies List.” Among the potential offenders: Sen. Dianne Feinstein (“not afraid to break with her party on thorny issues”; “may be positioning herself for a 2010 gubernatorial run”); Sen. Daniel Inouye (“old school when it comes to legislative earmarks”); Sen. Jim Webb (“Because none of his fellow Democrats ever know what he will do or say”); and even Vice President Joe Biden. “If Biden can’t button it — and encourage his wife to do the same — expect to see Obama’s pinched-face look a little more often,” Politico reports.

Tim Geithner, President Obama's nominee to head the Treasury Department, apologized to the Senate Finance Committee for skipping $34,000 in taxes from 2001 to 2004. "These were careless mistakes. They were avoidable mistakes. But they were unintentional," he said. "I should have been more careful." Geithner has since paid what he owed and still has bipartisan support. "To some, he is not only the best choice, he is the only choice," said Sen. Charles Grassley, the committee's senior Republican.

Days after announcing plans to split itself in two, Citigroup is shaking up its board. Richard Parsons, former CEO of Time Warner and until recently Citi’s lead director, will succeed Sir Win Bischoff as chairman. The troubled bank, until recently America’s largest, is still reeling despite swallowing $350 billion in federal bailouts in the last six months, and regulators had been pressing for a changing of the guard and a new partner for CEO Vikram Pandit. “I look forward to continuing to work with the board and management of Citi in my new capacity as we continue to strengthen the company’s core franchise and build value for our shareholders,” Parsons said in a statement. Bischoff’s departure follows that of former Treasury Secretary Robert Rubin, who announced his planned retirement from Citi’s board Jan. 9 amid criticism over the bank’s huge subprime losses.

We all remember his last foray into dancing. But a little publicity wasn’t going to stop Colin Powell from busting a move yet again at the inaugural festivities on Tuesday night. In the spirit of Obama, he shimmied to Shakira’s “Hips Don’t Lie” at the BET ball; he also got a personal serenade from Wyclef Jean—Bob Marley’s “No Woman, No Cry” and “Redemption Song,” which the general sang along to. New York magazine’s Daily Intelligencer got some video of the action.

President Obama wasted no time getting started on his first day in office. This morning, the new administration drafted an executive order to close the Guantanamo Bay detention facility within a year. Obama also announced plans to freeze salaries for about a hundred White House employees who make over $100,000 annually. "Families are tightening their belts, and so should Washington," he said in a statement. The president took time to call four Middle East leaders--President Hosni Mubarak of Egypt, Prime Minister Ehud Olmert of Israel, King Abdullah of Jordan, and President Mahmoud Abbas of the Palestinian Authority--to discuss progress in the region.

Parade-watchers yesterday may have noticed a fierce-looking Cadillac hulking behind the new president and first lady. Meet "The Beast," the new presidential limo. Not much is known about the car, but observers say it is likely that it includes "bullet proof glass, an armored body, a separate oxygen supply, and a completely sealed interior to protect against a chemical attack." The assistant director for the Office of Protective Operations called it "the most technologically advanced protection vehicle in the world." The White House has not returned our calls about co-branding.

There's no recession at McDonalds. The fast food giant that caters to cost-conscience consumers has seen 55 straight months of increased sales. Profits increased 11% in the third quarter of last year alone. With dollar-menu staples and millions of Americans trading down--" "If you can't afford to eat at Chili's, you'll snap up McDonald's," said one analyst--the company and Walmart were the only stocks on the Dow Jones index to go up during last year's abysmal decline.

Malia and Sasha Obama probably thought meeting the Jonas Brothers and Miley Cyrus on the eve of the inauguration was the highlight of their new public life. Well, having the Jonas Brothers surprise them during a White House scavenger hunt was probably even better. As their parents danced at inauguration balls, Sasha, 7, and Malia, 10, watched two Disney movies at their new home with a group of friends—and then came cross the tween-friendly trio. "The White House chef has reportedly already been briefed on the girls' favorite kind of pizza, and the house is filled with enough activities to ensure the first daughters will never be bored," ABC News reports.

How big of a fan of Barack Obama are you? A pin and a t-shirt are one thing. Following the new president to Hawaii is another. Conde Nast Traveler presents an exhaustive guide for anyone who wants to eat and play in the president's native state.

Attention Pride & Prejudice fans. A portrait of Mr Darcy, as played by Colin Firth, in the BBC adaption of Jane Austen’s novel, sold for $16,000 at auction. “The oil painting shows the actor in period costume and was hung in the character's fictional mansion home of Pemberley,” the Telegraph reported. The painting includes a letter from Firth. “The likeness was supernatural,” he wrote. “I disliked him intensely.”

After 77 years as the world's top automaker, General Motors officially
gave up the top rank to Toyota. With an 11% drop in sales, GM sold 8.35
million vehicles in 2008 versus 8.97 by Toyota, a drop of 4% from the
prior year. On the bright side, GM has had rising sales in some markets
outside of the U.S. The company insisted being No. 2 is fine with them.
"[Toyota] passed us in market cap, profitability and cash flow a long
time ago," GM's COO said.

Though he’s making it big at the box office with Notorious, the biopic of infamous rapper Biggie Smalls, it’s not all gravy for Jamal “Gravy” Woolard. The 300-pound actor, who plays the drug-dealing, gun-toting, and philandering rapper, was charged with the misdemeanor assault and harassment of his wife, Tina Younger. It is reported that Woolard slapped Younger following an early morning altercation in September. And this isn’t the first time he’s been in trouble: Woolard shot himself in the buttocks outside Hot 97’s studio in 2006, but went ahead with his scheduled on-air interview. He’s is expected to appear in court on January 29.

Though Michelle Obama is the fashionista the White House, it may be the president himself on a future cover of Vogue. Rumors are circulating that celebrity photographer Annie Leibowitz, who has followed the couple on the campaign trail, may have recently snapped Barack and Michelle for the cover of an upcoming issue. Leibowitz photographed then-Senator Obama for the June 2006 issue of Men's Vogue, and Michelle for a Vogue feature in September 2007, but it is unclear whether she is preparing for a future cover story on the couple. In the meantime, however, there's surely no shortage of American spirit at the magazine: White House social secretary Desiree Rogers is the subject of a large spread in the current issue.

What's our first taste of change? In one of his first actions as president, Obama ordered military prosecutors to seek a 120-day suspension of legal proceedings involving detainees at Guantanamo Bay. Judges and defense attorneys may not necessarily comply, but The Washington Post calls it "a first step toward closing a detention facility and system of military trials that became a worldwide symbol of the Bush administration's war on terrorism." The move is intended to buy Obama time in order to reevaluate the country's options for prosecuting terror detainees.

The Great Recession’s death toll is mounting: The latest victim is Irish financier Patrick Rocca, who shot himself this week as the prospect of losing his property empire loomed. Rocca, 41, was “a poster boy for Ireland’s Celtic tiger economy,” The Times of London reports, who “lent Bill Clinton his helicopter whenever he was in Ireland for a round of golf and rubbed shoulders with Tony Blair at gala dinners.” But neighbors saw the tycoon Monday wandering around the grounds of his luxury home in pyjamas; when his wife left to pick up the children from school later that day, he killed himself. Rocca, whose death has rocked Dublin society, had more than 20 million euros invested in Anglo Irish, which the Irish government is nationalizing.

Maybe one of the reasons so many celebrities showed up in Washington for inauguration is that there's not much work for them back in Hollywood. Variety reports that "studios are proceeding cautiously as they wait for the SAG dispute to play itself out. And they are using economic hard times to slash talent salaries to the point where, even when the business is back, it won't nearly be the same as it used to be." Disney has asked Nicholas Cage to cut his price for the next National Treasure sequel; Mickey Rourke may be resurgent, but Marvel has offered him only $250,000 to play the villain in the next Iron Man film; and Samuel L. Jackson refused to play Nick Fury when Marvel similarly lowballed him. "Business models and budgets are changing, and agencies have had to face the fact that studios are no longer doing the deals they once were willing to make with artists," one studio production chief told Variety.

Two Burmese fishermen have been rescued after spending 25 days adrift in shark-infested waters in an industrial-sized cooler after their ship sank. The Independent reports that the men, both in their twenties, survived on rain water that collected in the bottom of the vessel and chunks of fish stored in the cooler. The men managed to climb into the cooler as their 30-foot wooden fishing boat sank in heavy seas on December 23 and survived extreme heat, high winds, and torrential rain from Cyclone Charlotte. That same rain may have allowed them to survive. A helicopter patrolling Australia for illegal trawlers and boats carrying would-be asylum-seekers spotted the men in the red cooler waving their T-shirts. The other 18 members of the Thai-Burmese crew are presumed dead.

Barack Obama's first day in office was marred when Ted Kennedy suffered a seizure at a lunch honoring the new president, but the Massachusetts senator was conscious and speaking yesterday afternoon, according to The Hill. "After testing, we believe the incident was brought on by simple fatigue," Kennedy's office said in a statement. Obama said, "This is a joyous time, but it's also a sobering time." Kennedy was diagnosed with a brain tumor in May.

“Out with the old, in with the new.” Apparently one network didn’t get the memo. The Los Angeles Times notes that late Tuesday afternoon, when the entire world’s collective consciousness was seized by the inauguration, Fox News was the only national news channel to cover the live broadcast of former president Bush’s homecoming speech in Midland, Texas. In front of a smiling and supportive crowd, the former President said, “Sometimes what I did wasn't popular…But that's OK. I always did what I thought was right." MSNBC preferred to air Hardball with Chris Matthews, while CNN provided more exhaustive coverage of the inaugural parade.

On Wednesday, three days after Israel and Hamas declared separate cease fires, Israeli forces were completely removed from the Gaza Strip. A military spokesman said, “As of this morning, the last of the Israel Defense Forces soldiers have left the Gaza Strip and the forces have deployed outside of Gaza and are prepared for any occurrences.” Israel withdrew most forces before Barack Obama’s swearing in ceremony, presumably not to create ill will with the new administration. The 22-day offense resulted in the deaths of 1,300 Palestinians, including 700 civilians, say Gaza medical officials.

Barack isn't the only Obama bringing change: "the era of first lady-as-rectangle had ended," Robin Givhan declares in today's Washington Post. Michelle Obama's Isabel Toledo gown reached into the "loftiest corners of the fashion industry." "Recent first ladies seem to have tried—at least during the first term—to hold on to the idea of normalcy. At their husbands' first inaugurations, Hillary Clinton and Laura Bush wore uninspired clothes that didn't make them seem unique. Obama's mere presence on the Capitol steps yesterday was an anomaly—and her clothes celebrated that. Her coat and dress made her look exceptional—and vaguely regal."

President Obama's inauguration speech has earned a warm reception by several prominent Muslim leaders, Reuters reports. In the view of Former Egyptian Foreign Minister Ahmed Maher, the president's proposal of "a new way forward with the Muslim world" suggested a welcome contrast to the Bush administration. "This is a speech that reflected a new spirit of dialogue, reaching out and working together," he said. Essam el-Erian, head of the Muslim Brotherhood's political committee, a dissenting Muslim faction in Egypt, praised the speech's tone of tolerance towards the Muslim world: "We need mutual respect. If this attitude persists, I think it will transform relations between the United States and Arabs." Others are more skeptical about the connection between rhetoric and action. Abdelilah Benkirane, chief of the main Islamist opposition party in Morocco, noted that, "We are waiting for action, for deeds... He does not rule America alone."

Microsoft is expected to announce quarterly profits below expectations and could cut 6,000 to 8,000 employees as a result of the weak economy and a decreased demand for personal computers and software. Microsoft's earnings report comes after the company sold its entire stake in Comcast on Friday. "Microsoft's vision of a Windows-based gateway to the television still hasn't materialized," one analyst explained.

Welcome to the presidency, Mr. Obama. The New York Post reports that former-president Bush handed over the infamous "nuclear football" minutes after inauguration. Then, the president and first lady were off to prepare for the 10 official inaugural balls. The couple opened their evening at the Neighborhood Ball with a dance to a performance by Beyoncé, during which a flatfooted Barack stepped on the hem of Michelle's dress. The Obamas sped through the balls: They were scheduled to finish their last stop at 2:55 a.m., but wrapped it up before 12:45. On Obama's agenda for today? A meeting with Defense Secretary Robert Gates, Joint Chiefs of Staff Chairman Mike Mullen, General Petraeus, and the top commanders in U.S. and Afghanistan.

Apple's woes continue to mount: Bloomberg is reporting that the SEC is reviewing Apple's disclosures over Steve Jobs' health in order to make sure that investors weren't misled. Apple isn't yet accused of any wrongdoing, but the company's stock share has plummeted 8.4 percent since Jobs stepped down for health reasons until the end of June. In order to bring a case, the SEC would probably have to demonstrate "the company tried to benefit by withholding information about an unambiguous diagnosis." Last week, Bloomberg reported that Jobs is considering a liver transplant as a result of complications from his 2004 battle with cancer. One professor who talks with Bloomberg suggests that Apple may, in fact, be Bernard Madoff's latest victim: "It's not surprising for the SEC to come in and look afterward, given the pressure and publicity regarding their handling of a lot of cases."

Jeffrey Katzenberg's Motion Pictures & Television Fund has announced it will close its hospital and acute care nursing home—which is currently serving 150 patients—by the end the year. The Woodland Hills, Calif., facility is said to have lost $10 million a year for the fund, and jeopardizes its financial health. Katzenberg, chairman of the MPTF Foundation, said the fund had "no choice" in the matter because the bad economy and high-cost critical care patients were causing its endowment to take a hit.

Suspicious white powder was mailed in more than a dozen envelopes to the New York City headquarters of The Wall Street Journal, the company reported. Local hazmat teams were investigating the composition of the powder and evacuated the mailroom and another floor.