Today's Headlines

Bloomberg:
- U.S. stocks rallied, following gains in Asian and European markets, as the cheapest valuations in more than two decades lured investors back into equities. ``Anyone who has a long-term view and looks at earnings multiples and inflation will say it's a cheap moment to buy stocks,'' said Linda Duessel, equity market strategist at Pittsburgh-based Federated Investors Inc., which manages more than $333 billion. The S&P 500 was valued at 10.7 times estimated profit when trading opened today, the cheapest compared with the multiple using trailing profit since 1985. ``We're in the camp that believes a bottoming process is in place,'' said Leo Grohowski, chief investment officer for the wealth management unit of Bank of New York Mellon Corp., which manages $162 billion. The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars fell 4 basis points to 3.47 percent today, according to the British Bankers' Association. It was the 12th straight drop for the rate.

- The Baltic Dry Index, the benchmark for commodity shipping costs, fell below 1,000 for the first time in six years as the lack of credit curbed global trade and shipowners threatened to shun orders.

- The cost of protecting European corporate bonds from default fell, according to traders of credit-default swaps. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-risk, high-yield credit ratings dropped 28 basis points to 852, according to JPMorgan Chase & Co. prices at 7:23 a.m. in London. The Markit iTraxx Europe index of 125 companies with investment-grade ratings declined 6 basis points to 164, JPMorgan prices show.

- World Is ‘Drowning in Oil’(Again) After Drought.

- Germany's financial-markets regulator is looking into trading of Volkswagen AG shares after Porsche SE's plan to raise its stake in the automaker triggered a fourfold increase in two days. BaFin is monitoring Volkswagen and hasn't started a formal probe, said spokeswoman Anja Engelland. The gains follow Porsche's Oct. 26 announcement that it plans to increase the stake in Volkswagen to 75 percent. The move forced short-sellers to cover their bets on a decline in the stock.

- Morgan Stanley(MS) fell as much as 26 percent in New York trading while larger rival Goldman Sachs Group Inc.(GS) dropped as much as 11 percent amid speculation a surge in Volkswagen AG shares may have saddled some banks with losses.

Wall Street Journal:

- Obama’s ‘Redistribution’ Constitution. The courts are poised for a takeover by the judicial left. One of the great unappreciated stories of the past eight years is how thoroughly Senate Democrats thwarted efforts by President Bush to appoint judges to the lower federal courts.

CNBC.com:
- Roughly half the investors in T. Boone Pickens' BP Capital hedge fund have asked to withdraw their money after losses of about 60 percent this year, a source familiar with the situation said on Tuesday. The Texas oil tycoon and his investment fund, which had invested primarily in the energy sector, have lost about $2 billion since peaking in late June, the source said.

NY Post:

- Hedge funds are once again on track to post their worst monthly return in at least a decade - and the bloodshed this time may exceed the record set 10 years ago. As of last week, the average hedge fund was down 8.4 percent for Oct., according to research firm Hedge Fund Research. The mounting losses are hurting even the biggest names in the business - testing the long-held theory that the large, institutional guys are better insulated than everyone else. For the year, hedge funds are down more than 19 percent, according to data obtained by The Post.

Houston Chronicle:
- After five years of robust economic growth in Latin America, the global financial crisis appears set to bring its boom to a swift and painful halt. Economic growth in Latin America, the World Bank says, will slow from annual rates of about 5 percent to between 2.5 percent and 3.5 percent in 2009. And some analysts believe the situation will worsen before it improves.

USA Today:

- Competitive Costs Give Hydropower New Spark.

Les Echos:

- Ian Stannard, a currency strategist at BNP Paribas SA, said the euro may fall to $1.17 at the end of the year, $1.07 in the first quarter of 2009 and to $1 “soon,” citing an interview. The euro will drop because it’s harder to make economic and political decisions in the face of the crisis in Europe, Stannard said. The credit crisis will also hurt eastern European countries, which were helping Europe’s growth. China’s economic slowdown is also pointing to a gain in the US dollar, as foreign investments will slow, Stannard said. The dollar is a haven in the global economic turmoil.

The National:

- Barack Obama is the overwhelming better choice among Middle East residents to become the next US president. Mr Obama was favored by 51.1 per cent, while only 8.8 per cent of the respondents chose John McCain, his Republican opponent, in an online survey conducted for The National by Real Opinions, an online research company, this month.