Today's Headlines

Bloomberg:

- Fewer Americans filed claims for jobless benefits last week, another sign the economy is pulling out of the worst recession since the 1930s. The total number of people collecting unemployment insurance fell to the lowest level since April. The jobless claims report showed the four-week moving average of initial applications, a less volatile measure, dropped to 566,250 last week from 571,000. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 4.6 percent in the week ended Aug. 15, from 4.7 percent the prior week.

- Oil fell below $70 a barrel and gasoline declined on signs U.S. demand will be slow to rebound after a report yesterday showed crude supplies unexpectedly rose in the world’s largest energy-consuming country. “We’re not seeing anything to suggest demand is recovering, so there’s nothing on the fundamental side that would suggest prices would be this high,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. Oil’s inability to break through technical resistance at $75 a barrel is also pressuring the market, he said. U.S. total daily fuel use averaged 19.2 million barrels in the past four weeks, down 0.9 percent from a year earlier, the Energy Department said. U.S. travel during the Labor Day weekend will decline 13 percent from last year because the holiday falls later than usual, AAA said yesterday.

- TomTom NV and Garmin Ltd., the largest makers of car-navigation devices, expect a rebound next year after the industry’s first-ever contraction in 2009. “In the summer period, we’ve seen quite a good development in demand,” TomTom Chief Executive Officer Harold Goddijn said in an interview at his Amsterdam office. “We’re becoming more optimistic.”

- Boeing Co.(BA) jumped the most since December in New York trading after saying it still expects the 787 Dreamliner program to be profitable following a $2.5 billion third-quarter charge for the delayed plane. Boeing rose $4.28, or 9 percent, to $52.10 at 12:46 p.m. in New York Stock Exchange composite trading. The shares earlier rose as much as 9.5 percent, the biggest intraday percentage gain since Dec. 8.

- The following table ranks companies listed in the S&P 500 Index that have more than 10 percent of their shares available for trading sold short by investors as of the Aug. 14 settlement date.

- Spending on items that US consumers can do without or put off buying has slumped so badly that it’s bound to bounce back, according to Tobias Levovich, Citigroup’s(C) chief US equity strategist. Discretionary goods and services accounted for a smaller percentage of consumer outlays last quarter than at any other time since 1959. The proportion dropped about .3 percentage point, the sixth decline in seven quarters, to 15.6%. Consumer behavior is likely to revert to “the ‘Old’ Normal” – spending more closely tied to income, rather than borrowing – that prevailed during the 1950s through the 1970s, Levkovich wrote. “Some reasonable bounce is to be expected” in discretionary spending as that occurs, the report said.

Wall Street Journal:

- The debate over how to curb carbon-dioxide emissions and other gases linked to global climate change is splitting some prominent political families in both parties. Interior Secretary Ken Salazar is one of the Obama administration's leading advocates of strong action on climate change. His older brother John, a Democratic congressman from Colorado, voted with many House Republicans against a bill to cap U.S. greenhouse-gas emissions. John Salazar said the House climate bill would be "unfair" to Colorado and lead to "dramatically" higher electricity bills for his constituents.

- The War on Terror is Over.

- A U.S. service member died Thursday in a militant attack involving a roadside bomb and gunfire, a death that pushed August into a tie with July as the deadliest months of the eight-year war. The death brings to 44 the number of U.S. troops who have died in Afghanistan this month. But with four days left in the month, August could set a new record.

- Obama Targets Medicare Advantage. Seniors would lose with health 'reform,' and seniors vote.

CNBC:

- JP Morgan Chase(JPM) is lending a hand to the nation's worst credit risk. California State Treasurer Bill Lockyer announced that the banking giant is lending the state $1.5 billion to help it pay off IOUs. The terms are very favorable to California, as the loan carries a 3 percent annual interest rate, lower than the 3.75 percent rate the state is paying on the IOUs.

- Despite a seemingly endless flow of US government debt into the markets, foreign investors continue to gobble up Treasurys and keep yields relatively low.

NY Times:

- In an alliance that signals potential new directions in consumer electronics marketing, Sony and Best Buy(BBY) have unveiled a range of audio products — including iPod speaker docks and a Blu-ray theater system — that are the result of two years’ collaboration. With the new line, called Altus, “we’re breaking new ground in the consumer electronics industry,” said Mike Fasulo, Sony’s chief marketing officer, in a statement. The gear will be sold through Sony’s online store, at Best Buy locations and elsewhere..

MarketWatch:
- Microsoft Corp.(MSFT) has cut the price of its top-end Xbox 360 gaming console by $100, matching a similar move by arch-rival Sony Corp. just last week.

- Banks in the 16-nation euro zone did little to boost lending in July, despite the provision of massive amounts of liquidity by the European Central Bank, according to data released Thursday. The Frankfurt-based ECB said M3 money supply grew at an annual rate of just 3%, down from 3.6% in June and marking the 15th straight month of slowing growth. Annual private-sector lending growth slowed to a record low of 0.6% from 1.5% in June, the ECB said.

NY Post:

- Hedge-fund hotshot John Paulson has been quietly snapping up shares of beleaguered Citigroup(C) in recent weeks, sources tell The Post. Paulson was said to have acquired a roughly 2 percent stake in Citi -- below the 5 percent threshold that would require him to disclose his investment stake in a securities filing, according to one source. Although it's unclear what the hedge-fund master's rationale is for buying shares of the nation's most troubled bank, of which Uncle Sam holds a 34 percent stake, sources think that Paulson believes Citi's assets are undervalued.

- Blackstone(BX) boss Steve Schwarzman has quietly moved to the head of the class when it comes to the lucrative business of compiling and managing hedge-fund portfolios for investors. As rivals like HSBC and Man Investments suffered double-digit drops in their respective units through the end of June, Blackstone's grew 25 percent to $25 billion, according to London-based research group Hedge Fund Journal. That pushes the New York firm -- known primarily for its private-equity investments -- to the unexpected position of top dog when it comes to the profitable dealings in hedge fund portfolios, also known as funds of hedge funds. In the process, Blackstone has rolled over former kingpins. HSBC's assets dropped nearly 52 percent to $22.2 billion, while Man's assets fell more than 46 percent to $23 billion. Switzerland's Union Bancaire Privée's dough declined almost 28 percent to $23.8 billion. In all, an eye-popping $200 billion has been pulled from the top 50 players since last September, the report said. The only firm ahead of Blackstone is UBS, with $31.4 billion, according to the report.

LA Times:

- While Californians are still feeling the sting of income and sales tax hikes signed into law earlier this year, now comes news that state tax authorities plan to take a little more from their pockets. For only the second time in 30 years, the tax board is lowering the point where each tax bracket begins, bumping many people into a higher category. At the same time, officials are cutting back some deductions. Everyone will pay more, even people whose bracket or income doesn't change. The extra sums will total as much as $140 per family, on top of the increases previously enacted.

- Scammers from Eastern Europe typically install malware and pull money out in increments, a financial industry group says. One Texas firm lost $1.2 million, and a school district had $700,000 stolen. Organized cyber-gangs in Eastern Europe are increasingly preying on small and mid-size companies in the United States, setting off a multimillion-dollar online crime wave that has begun to worry the nation's largest financial institutions. A task force representing the financial industry sent out an alert last week outlining the problem and urging its members to implement many of the precautions now used to detect consumer bank and credit card fraud.

paidContent.org:

- Trying to find a way to bring more ad dollars to its AdSense members amid slowing revenue growth, Google (GOOG) is opening up its system to ad networks for the first time. In a letter sent around to members tonight, Google told members they’ll soon be able to allow multiple ad nets access to their pages. The access won’t be open-ended, however, as Google will select the networks that can participate.

Rassmussen:

- Forty-nine percent (49%) of U.S. voters disagree with the Justice Department’s decision to investigate the treatment and possible torture of terrorists during the Bush administration, according to a new Rasmussen Reports national telephone survey. Thirty-six percent (36%) agree with Attorney General Eric Holder’s naming of a veteran prosecutor to probe the CIA’s handling of terrorists under the previous administration. Fifteen percent (15%) are undecided.

Politico:

- Sen. John McCain (R-Ariz.) said Wednesday night that the raucous town hall crowds opposing the Democratic push for a health care overhaul are proof that the beginnings of a “revolution” are bubbling up. McCain told Fox News’s Sean Hannity during an interview that he has “never” seen anything like the “peaceful revolution taking place” in opposition to President Barack Obama’s push for health care reform. “There is a grass-roots uprising the likes of which I have never seen,” he said. “There’s anger; there’s concern about the future. There’s concern about the generational theft that we’ve committed by running up unconscionable and unsustainable deficits.”

The Business Insider:

- We've called General Electric(GE) "a great bet on big government," as it has monster lobbying clout, and it's both blue collar and high tech at the same time. If there was any doubt that GE is a great bet on government, it should be washed away with today's story in the D.C. Examiner by Tim Carney, who gives us more evidence to support the theory. Carney highlights a leaked email from GE’s vice chairman bragging about how the company shapes government policy to its benefit:

Miami Herald:

- A Goldman Sachs(GS) analyst on Thursday upgraded his sector rating for midsized brokerages, saying an expected resurgence of corporate mergers and acquisitions as well as initial public offerings should lift the firms.

USA Today:

- The federal government sent about 3,900 economic stimulus payments of $250 each this spring to people who were in no position to use the money to help stimulate the economy: prison inmates.

- More than two dozen firms that have surfaced in a broad corruption investigation of public pension funds gave at least $1.97 million in campaign contributions to officials with potential influence over the funds' investments, a USA TODAY analysis shows. The givers included private-equity giants such as the Blackstone Group, the Carlyle Group and the Quadrangle Group, the firm founded by Steven Rattner, who in July resigned as the White House point man for the auto industry rescue. The contributions are legal, and the firms haven't been accused of wrongdoing related to the giving.

Reuters:
- The U.S. economy appears to have stabilized and may not need all the stimulus the central bank had planned to offer, Richmond Federal Reserve Bank President Jeffrey Lacker said on Thursday. "The economy appears to have leveled out and I believe we can look forward to better times ahead," Lacker told a business group.

- Bank of China, the country's biggest foreign-exchange lender, expects to scale back lending in the coming months as Beijing moves to stem a break-neck increase in liquidity fuelled by a massive economic stimulus program. Bank of China President Li Lihui said the pace of lending was likely to be slowed in the second half of the year "by a relatively big amount," after a surge in loans helped second-quarter earnings beat analysts' forecasts.

- AIG to Hank: All is forgiven, we need your help! That is the message from Robert Benmosche, the new CEO of American International Group Inc (AIG), to Maurice "Hank" Greenberg -- the man who built the company into what was the largest insurer in the world but was then ousted, and has since been embroiled with the company in a bitter legal struggle.

- Ford Motor Co(F) said on Thursday it is adding shifts at its truck plants in Michigan and Missouri in response to increased demand for its F-150 pickup trucks and Escape SUVs. Ford's Dearborn, Michigan, truck plant will return to a three-shift operation in September from two shifts, a move that will boost production of F-150 pickup trucks by about 10,000 this year, the company said. Ford is also adding a third shift at its Kansas City assembly plant in Missouri in October, which will increase production of Ford Escape and Mercury Mariner SUVs by 2,400 by the end of October.

- Second-largest U.S. cable operator Time Warner Cable Inc and Verizon Communications Inc said on Thursday they have joined a trial with major media companies to offer television shows on the Web to paying subscribers. Networks participating in Time Warner Cable's 'TV Everywhere' trial include General Electric Co's NBC Universal-owned Syfy channel, Time Warner Inc's TNT, HBO and TBS; Cablevision Systems Corp's AMC, IFC and Sundance Channel and BBC America. Other companies involved in the trial are CBS Corp and Discovery Communications Inc.

- Vital signs for healthcare stocks are improving at the expense of what is shaping up to be a watered down government health reform initiative. But the sector, which is heavily weighted to U.S. healthcare companies, is still struggling to regain its footing with more investor cash leaving the group than is coming in while the reform debate rages across the United States. Data show investors have pulled nearly $2 billion, or roughly 10 percent, out of funds investing only in healthcare stocks year-to-date, even as the benchmark S&P500 index has recovered 50 percent from 12 year lows seen in March this year. "When you look at year-to-date performance healthcare has really been passed over by the rest of the market... This certainly catches your attention especially in such a bullish market," said Jeff Tjornehoj, U.S. and Canada research manager at Lipper Inc.

Ottawa Citizen:

- Canadian doctors probing the worst cases of swine flu in Canada have made a striking finding: 40-year-olds, many previously healthy, appear most at risk of developing severe H1N1 disease. The finding is based on global reports of illness and case reports from critically ill patients in intensive care units across the country. The investigation confirms the virus behind the first flu pandemic of the 21st century does not fit the typical patterns of influenza. Significant, doctors say, is its ability to cause serious disease in previously healthy people.

Calgary Sun:

- Alberta health-care workers will be offered voluntary early retirement as part of a plan to attack a $1.3-billion budget deficit, Alberta Health Services (AHS) president Stephen Duckett announced yesterday. That's a key part of a two-phase plan that will see $965 million trimmed from the $10.9-billion AHS budget while still improving health care, Duckett told a news conference. "We've got a huge task ahead of us," said Duckett. "About 70% of our spending is on salaries. We've actually got to trend that down. "Our current spending is not sustainable," he said. "In order to meet our access and quality improvement targets over the next three years, including the reduction of wait times in emergency departments and for some high-demand surgeries, we must control our costs and reduce spending elsewhere in the health system." The health boss said $650 million in cuts are now underway or will be implemented in two months, while $315 million in savings will come from Phase 2 of the exercise. Liberal Opposition health-care critic MLA Kevin Taft said he was "deeply sceptical" the cuts could be achieved while still improving service. "If it walks like a duck and talks like a duck, it's a duck," said Taft. "It's likely to become more difficult to get the care you need." Friends of Medicare executive director David Eggen didn't buy it either. "Reducing health-care workers is reducing health care," said Eggen." The double talk is astounding that you'd reduce your work force and wind up with better care."