Today's Headlines

Bloomberg:

- U.S. stocks erased declines after former Federal Reserve Chairman Alan Greenspan said the nation is seeing a “very significant” increase in the availability of money and he expects continued market improvement.

- Prudential Financial Inc.(PRU), the second-largest U.S. life insurer, plans to seek “opportunistic acquisitions,” Chief Executive Officer John Strangfeld said.

- A clip on Google Inc.’s YouTube of a congressman scolding the Federal Reserve’s inspector general on her oversight of taxpayer funds has garnered more than 166,000 viewings in six days since a hearing on Capitol Hill. Representative Alan Grayson, a Florida Democrat, chastised Inspector General Elizabeth Coleman for what he deemed a lack of oversight of the central bank’s off-balance-sheet transactions. The video titled “Is Anyone Minding the Store at the Federal Reserve?” was posted a day after Coleman’s May 5 testimony to a House Financial Services subcommittee. “Do you know who received that $1 trillion-plus that the Fed extended and put on its balance sheet since last September?” Grayson asked. Coleman responded by saying she didn’t know. “We have not looked at that specific area,” she said in the nearly five-and- a-half minute clip.

- India’s industrial production fell the most in 16 years in March as the worst global recession since World War II damped demand for the nation’s exports. Output at factories, utilities and mines declined 2.3 percent from a year earlier after a revised 0.7 percent drop in February, the statistics agency said in New Delhi today. That was more than three times analysts’ estimates and the worst performance since January 1993, according to Bloomberg data.

- India’s opposition Bharatiya Janata Party will cut spending and increase tax collection if it returns to power this month to plug a revenue shortfall that imperils growth, former finance minister Yashwant Sinha said. “You will have to cut back on whatever expenditure you can without cutting back on essentials,” Sinha, 71, said in an interview in New Delhi yesterday, without specifying how much he would seek to curb expenditure.

- The rally in US stocks may continue as the largest money managers shift their record levels of cash into equities, according to Bank of America Corp. Professional investors had $2.51 trillion in money-market funds on April 27, suggesting they are still shunning risk, Bank of America’s Mary Ann Bartels wrote. “This cash is a future source of demand for US equities and a contrarian bullish signal,” said Bartels, who ranked second among analysts who study price charts in Institutional Investor magazine’s most recent survey.

- India’s steelmakers, facing increased competition from producers in China and Russia, have asked the government to raise tariffs on imports they say are being sold at prices that don’t reflect costs. “These countries are willing to sell at any price,” said Seshagiri Rao, joint managing director at JSW Steel Ltd., India’s third-biggest producer. “Chinese steelmakers enjoy subsidies.” China, Russia and Ukraine accounted for 57% of global output in March, from 46% in November. The joint stake of Japan, India, the US, South Korea and Germany fell to 22% from 29%, according to the World Steel Assoc.

- The U.S. reported the first budget deficit for April in 26 years, recording a shortfall in the month that usually sees a jump in tax payments before the Internal Revenue Service’s mid-month deadline. The excess of spending over revenue climbed to $20.9 billion, compared with a surplus of $159.3 billion in the same month a year earlier, the Treasury said today in Washington. For the fiscal year to date, the shortfall totaled $802.3 billion, more than four times the year-to-date gap of $153.5 billion in April 2008. For the fiscal year that ends Sept. 30, the deficit is projected to reach a record $1.75 trillion, according to a Congressional Budget Office forecast, as the recession crimps revenue and President Barack Obama’s administration spends and cuts taxes in a bid to spur growth. That would be almost four times the previous fiscal year’s $454.8 billion shortfall. “When the government can’t post a surplus in April, you know things are dire,” said Richard Yamarone, director of economic research at Argus Research Corp. in New York.

- DigitalGlobe Inc.(DGI), the provider of satellite images to Google Earth and U.S. intelligence agencies, plans to sell $264.6 million in stock, becoming just the third U.S. technology initial public offering this year. The deal, scheduled to price tomorrow, will raise $16.6 million for the Longmont, Colorado-based company, with the rest going to hedge funds and institutional investors, according to a regulatory filing.

Wall Street Journal:

- Senate leaders are considering new federal taxes on soda and other sugary drinks to help pay for an overhaul of the nation's health-care system. The taxes would pay for only a fraction of the cost to expand health-insurance coverage to all Americans and would face strong opposition from the beverage industry. They also could spark a backlash from consumers who would have to pay several cents more for a soft drink. On Tuesday, the Senate Finance Committee is set to hear proposals from about a dozen experts about how to pay for the comprehensive health-care overhaul that President Barack Obama wants to enact this year. Early estimates put the cost of the plan at around $1.2 trillion. The administration has so far only earmarked funds for about half of that amount.

- Inflation-linked U.S. government debt has rallied since the start of this year, but now the market is setting up for a short-term correction with the inflation outlook remaining subdued in coming months. For Mihir Worah, manager of the $12.1 billion Real Return Fund at bond-fund giant Pacific Investment Management Co., that means trimming the fund's short-term position in Treasury inflation-protected securities, or TIPS, "close to neutral" from the bullish view held two months ago.

- Pakistani army commandos on Tuesday landed in the high mountains of the Swat Valley where top militant commanders were believed to be hiding, a significant new move in a conflict the army says has created 800,000 new refugees.

- U.S. oil field service company Weatherford International Ltd. (WFT) has won a deal worth $224.4 million to drill 20 wells in the Buzurgan oil field in southern Iraq, an Iraq cabinet spokesman said Tuesday.

- Microsoft Corp.(MSFT) is developing a new videocamera for its Xbox 360 videogame console that will allow players to control games with the movement of their bodies, according to people familiar with the matter.

CNBC:

- Several large US banks undertook big capital-raising efforts on Tuesday, hoping to satisfy regulators who want to see bigger cushions against a deep recession, or proof they have enough of a buffer already.

- The Standard & Poor's 500 could hit 1,050 within the next year even as the economy struggles to recover, noted Goldman Sachs analyst Abby Joseph Cohen told CNBC.

- Former New York Governor Eliot Spitzer hasn’t learned a thing from his recent ordeals and has destroyed as much value as anybody else in America, Kenneth Langone, former director of the New York Stock Exchange, told CNBC Tuesday.

- This is not a bear market rally but a cyclical bull market, said Barton Biggs, managing partner at Traxis Partners. “I don’t think it’s too late [to get into the market],” Biggs told CNBC. “We’re about half or 60 percent of the way through the upside.” “So we’ve still got significant room on the upside,” he said.

Barron’s:
- While Bank of America (BAC) and others dilute common shareholders with new stock, Bank of New York Mellon (BK), or BONY, looks like a much better bet to us. As a non-traditional bank, BONY owes the government less and could well rise further with a rebound in overall market activity.

MarketWatch:
- Shares of Foundation Coal(FCL) rallied more than 20% Tuesday after it agreed to be bought by Alpha Natural Resources(ANR) in a deal valued at around $2 billion.

NY Post:

- Billionaire corporate raider and activist investor Carl Icahn plans to continue his assaults on companies he feels need change, but he's doing it more through bonds rather than stocks, according to an investor letter obtained by The Post. The 73-year-old agitator said he sees a "once in a generation" opportunity to buy distressed debt, according to the letter from hedge fund Icahn Partners, which is dated May 1 and is signed by Icahn.

Washington Times:

- President Obama's nominee for the Treasury Department's top legal job still can receive almost $3 million in pay over the next three years from one of the nation's largest financial-services companies under a compensation plan approved by government ethics lawyers. If confirmed as the department's next general counsel, George W. Madison would earn a government salary of $153,200 and get an additional $955,000 next year from his previous employer, TIAA-CREF, as a participant in the New York-based company's "long-term compensation plan," according to a government ethics filing. Retirement-planning company TIAA-CREF manages more than $300 billion in retirement and other assets for 3.6 million members, mostly working in the medical, research and academic fields. The company has a big presence in Washington, spending more than $1 million to lobby Congress, the White House, the Treasury Department and other agencies over the past year. Ethics specialists say Mr. Madison's continuing financial relationship with TIAA-CREF, which has lobbied government officials on numerous issues, including the Troubled Asset Relief Program (TARP), deserves close scrutiny, given the company's broad interests on issues in which the Treasury Department holds sway.

Business Insider:

- Lenny Dykstra's creditors are becoming an angry mob, says Keith Kelly at the Post. Especially now that he's lost a self-described $3 million stock-advice deal with TheStreet.com. LENNY "Nails" Dykstra, the former big-league outfielder turned financial-stock picker and glossy-magazine publisher, is drowning in a sea of bad debts and lawsuits that have pushed his total indebtedness to around $50 million, according to one source.

USAToday:

- In a bid to win over Internet-savvy travelers, AirTran Airways (AAI) this summer will become the first large U.S. airline to offer wireless Internet access on every flight nationwide. AirTran plans to have all 136 of its Boeing 737 and 717 jets equipped with in-flight wireless service by late July, CEO Bob Fornaro said Monday. For a fee, the Orlando-based, low-fare carrier will offer Wi-Fi for passengers' wireless-enabled laptops, smartphones and personal digital assistants.

VentureBeat:

- Developers may be making tens of millions of dollars through games and virtual goods on Facebook’s platform, but the social network itself hasn’t had a way to get a share of that money. This may be about to change, as it plans to begin testing a payments system with developers in several weeks, according to industry sources.

Reuters:
- General Motors Corp(GM) stock plunged more than 22 percent to a 76-year low on Tuesday, a day after GM's top executives dumped their shares as the automaker heads toward a bankruptcy or a restructuring that would all but wipe out existing shareholders.

- The risk of Dendreon Corp's (DNDN) Provenge prostate cancer vaccine failing to win U.S. approval in its second attempt is "low," the biotechnology company's CEO said on Tuesday.

Globe and Mail:

- Great-West Lifeco Inc. GWO-T is looking for acquisition opportunities in the U.S., where the life insurance industry will be transformed by a wave of deals, its chief executive officer says. "We are looking there, and we are interested in doing acquisitions," Allen Loney, the head of the Winnipeg-based company, said of the U.S. as well as Britain.

CTV:

- Best Buy Co. Inc. (BBY) is looking to lessons it learned in Canada to help double its annual sales to $100-billion (U.S.) within a decade, as it aggressively pursues the kind of growth that has made it one of the best-performing American stocks over the past two decades.

GulfNews.com:
- A total of 27 real estate projects are up for possible cancellation in Dubai as the Land department review the status of them. Bin Galita had said earlier that he expected around 25 per cent of projects in Dubai would be cancelled, a figure he said is now "almost the same".