Today's Headlines

Bloomberg:

• Recession Concerns Ease on August Jobs Data. Companies in the U.S. added more jobs than forecast in August, easing concern the world’s largest economy is sliding back into a recession. Private payrolls climbed 67,000 after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The unemployment rate rose to 9.6 percent as more people looked for work. A separate report showed service industries expanded more slowly than estimated. “The double-dip talk was probably misplaced,” said Maury Harris, chief economist at UBS Securities LLC in New York. “From a historical perspective, things are still soft. The economy ought to be doing better.” President Barack Obama said there is “no quick fix” for the economy and promised to lay out new ideas next week to boost growth and hiring. The White House is considering payroll tax relief to encourage new hiring, a permanent extension of the research and development tax credit and other business tax breaks as well as more infrastructure spending, according to people familiar with the discussions. Obama’s approval ratings have slipped and support for the Republican Party has grown during the summer months amid signs the economy was cooling. A USA Today/Gallup Poll completed Aug. 30 found Americans believe Republicans in Congress would do a better job on the economy than Democrats, by 49 percent versus 38 percent plurality. Unemployment, which reached a 26-year high of 10.1 percent in October, will average more than 9 percent through 2011, according to a Bloomberg survey. “The painfully slow recovery in the labor market has restrained growth in labor income, raised uncertainty about job security and prospects, and damped confidence,” Bernanke said in a speech in Jackson Hole, Wyoming, on Aug. 27. The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- increased to 16.7 percent from 16.5 percent. The report also showed long-term unemployment dropped. The number of people unemployed for 27 weeks or more fell as a percentage of all jobless to 42 percent from 44.9 percent.
• Debt Risk Heads for Biggest Drop in 11 Weeks in Europe After Jobs Report. The cost of insuring against losses on European corporate bonds headed for the biggest weekly decline in almost three months after a report showed U.S. companies added more jobs than forecast. The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly high-yield credit ratings dropped 47 basis points this week to 478, the lowest level since Aug. 9, according to JPMorgan Chase & Co. The contracts were 13 basis points lower at 2 p.m. in London. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings dropped 2.75 basis points today and 11.75 basis points this week to 105.75, JPMorgan prices show. The cost of protecting bank bonds from default is headed for the first decline in five weeks, with the Markit iTraxx Financial Index of 25 banks and insurers falling 20 basis points to 126.5. The index is 6.5 basis points lower today.
• MGIC(MTG) Leads Mortgage Insurers' Rally on Jobs Reports. MGIC Investment Corp. led a rally by U.S. mortgage insurers in New York trading after a report showed companies added more jobs than forecast in August. MGIC, the biggest mortgage guarantor, rose 7.1 percent to $8.55 at 10:54 a.m. in New York Stock Exchange composite trading, after jumping as much as 12 percent. Radian Group Inc. of Philadelphia, the second-largest mortgage insurer, advanced as much as 7 percent to $7.62. No. 3 PMI Group Inc. gained 5.3 percent to $3.48, after climbing as much as 12 percent.
• Coinstar(CSTR) Builds Apple(AAPL) Relationship as It Seeks Online Partner for Movies. Coinstar Inc., owner of the Redbox DVD rental kiosks, is expanding ties with Apple Inc. as it searches for a partner to build an online viewing service. The company added 1.8 million Internet users in the second quarter, including social-media sites and an iPhone application that lets customers reserve DVDs at kiosks, Chief Executive Officer Paul Davis said today in an interview. Coinstar also offers an iTunes coupon through its coin-counting machines. The company says it needs a partner to deliver movies to homes and portable devices to compete with Netflix Inc.’s online service.
• Corn Extends Rally to 14-Month High as Hot, Dry Spell Parches U.S. Crop. Corn rose, extending a rally to a 14-month high, after hot, dry weather last month in the Midwest increased the chances of lower yields in the U.S., the world’s biggest producer and exporter. Harvest results and hundreds of test plots planted by seed companies “all seem to be pointing at yields significantly below a year ago,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “I’ve seen nothing that would make me believe that corn yields aren’t headed lower.”
• Crude Oil Falls After U.S. Service-Industries Report Dims Economic Outlook. Crude oil fell after service industries grew in August at the weakest pace in seven months, bolstering concern that the U.S. economic rebound will slow. “Prices are still pretty lofty, given supply and the economic backdrop,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “The economic outlook is at best mixed.” Crude oil for October delivery declined $1.32, or 1.8 percent, to $73.70 a barrel at 1:33 p.m. on the New York Mercantile Exchange. Futures are down 2 percent this week. An Energy Department report on Sept. 1 showed that U.S. petroleum stockpiles, a combination of oil and fuel supplies, climbed 4.04 million barrels, or 0.4 percent, to 1.14 billion, the highest level since at least 1990. Refineries operated at 87 percent of capacity, down 0.7 percentage point from the prior week and the lowest level since April, according to the report. “There’s plenty of crude around and plenty of refining capacity,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “These are fundamental reasons to not be too bullish.
• Goldman Sachs(GS) Said to Be Disbanding Principal Strategies Unit. Goldman Sachs Group Inc. is shutting its principal-strategies business, a group that makes bets with the firm’s own capital, to comply with new U.S. rules aimed at curbing risk, two people with knowledge of the decision said.

Wall Street Journal:

• Billboards That Can See You. Inside the bustling Shinagawa train station here, a futuristic-looking vending machine has replaced rows of drink bottles and cans with a 47-inch touch-screen monitor. When a person stands in front of the screen, a camera captures his image and a sensor determines the person's gender and approximate age. Based on that reading, the machine "recommends" drinks that fit the customer's profile.
• U.S. Official Warns of Backlash Against China. China risks a backlash from the U.S. Congress unless it becomes more responsive to international concerns about its currency value and trade practices, a top U.S. State Department official warned. Difficult economic conditions, inflated unemployment levels, and election-year politics create a politically combustible environment, said Robert Hormats, under secretary of State for economic, energy and agricultural affairs, told The Wall Street Journal. A lack of action by the Chinese to address U.S. concerns about currency issues and intellectual-property protections could encourage a more protectionist agenda on Capitol Hill. "We're likely to see some legislation offered that would be adverse to Chinese interests" if more steps aren't taken, Mr. Hormats warned.
• Attack Kills Over 40 at Shiite Rally in Pakistan.
  

CNBC:

• Apple(AAPL) Declares War on Nintendo, Sony Over Video Games.
• There's a 'Bull Market in Pessimism': Credit Suisse Exec.
  

Business Insider:

• The 11 Hedge Fund Managers Most Likely to Retire Next.

Zero Hedge:

• Goldman(GS) Exposes The "Lend to Play" Conflict Scheme Involved in IPO Underwriter Allocation.

NASDAQ:

• Brokers See Continued Blockade By Big Banks. Senior brokerage firm executives warned Friday that new rules for over-the-counter derivatives trading only maintain the status quo for major banks and don't resolve issues that played into the 2008 financial crisis. Officials with Knight Capital Group Inc. (KCG) and Newedge said clearinghouses set up to handle trades in credit-derivatives and interest-rate swaps, and thereby reduce risk to the market, also are being used by derivatives dealer banks as barriers to new competition. "If the dealer banks are allowed to control clearing, they could set arbitrary thresholds for joining clearing organizations," said Marcus Katz, senior vice president with Newedge, speaking at an event hosted by the Chicago Federal Reserve.

gurufocus.com:

• Hedge Fund Tiger Management Top Holdings: (WMT), (AAPL), (GOOG), (BBY), (MA), (EBAY).

Charlotte Observer:

• Wachovia, Bank of America Add Fees That 'certainly won't be popular'. No more waived fees for using another bank's ATM. Higher monthly account charges. Fees for paper statements with images of canceled checks. These are some of the changes coming to customers of Bank of America and Wachovia, Charlotte's dominant banks. Bank of America will start telling customers next week that it's adjusting fees as part of an effort to standardize its practices nationwide. Wachovia has been making its own changes, the latest wrinkle from the Wells Fargo merger. The new pricing comes as banks nationwide are revamping their accounts and fee lineups as they adjust to new regulations and look to recoup lost revenue.

AppleInsider:

• Apple(AAPL) Now Building 2 Million iPads Per Month to Meet Demand. Apple has doubled its monthly output capacity of the iPad and is now manufacturing 2 million per month to meet strong consumer demand, but the company reportedly would like to go even further and produce 3 million every month very soon.

FINalternatives:

• Hedge Funds Burned By July Outflows. Hedge funds continued to hemorrhage assets despite strong performance in July, according to a new report. Investors yanked $2.9 billion from hedge funds in July, TrimTabs Investment Research and BarclayHedge said. The outflow—the industry’s second-straight monthly setback—of 0.2% of total hedge fund assets left industry assets at their lowest level since November at $1.53 trillion. “Hedge funds posted a positive return in July, but they did not regain the ground they lost in May and June,” BarclayHedge’s Sol Waksman said. Things look even grimmer for funds of hedge funds, despite a proportionally smaller outflow, according to TrimTabs’ Vincent Deluard. “Funds of funds are in a bad way,” he said. “They posted only five inflows in the past 25 months.” One of those months was not July, when investors pulled $670 million from funds of funds, or 0.1% of total assets.

Politics Daily:

• Campaign 2010: Hill Dems Getting Steamed at Obama?

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 27% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-three percent (43%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -16 (see trends).

Reuters:

• China Orders State Groups to Explore Potash(POT) Bid: Source. One option being discussed is the possibility of Sinochem linking up with China's $300 billion sovereign wealth fund, CIC, according to a second banking source familiar with the matter. Chinese officials have ordered state-owned companies to meet with investment bankers to explore potential options to block BHP Billiton's $39 billion bid for Potash Corp, according to a source with direct knowledge of the matter. In response to the directive, Sinochem is holding meetings with multiple banks, the source said, including Citigroup, HSBC and Morgan Stanley. The order from Beijing underscores the seriousness in which China is taking the potential BHP-Potash tie up and its implications to its fertilizer pricing and supply, despite the obstacles of launching a successful counter-bid.
• FACTBOX - US Tax and Spending Policies Floating in Washington.
• Fewer U.S. Sellers Cut Home Prices in August - Zillow.
  

Herald Sun:

• Israel 'can be removed from the world', says Mahmoud Ahmadinejad. THE people of the Middle East are "capable of removing the Zionist regime from the world scene", Iranian President Mahmoud Ahmadinejad said in an annual Palestinian solidarity day address in Tehran. "If the leaders of the region do not have the guts, then the people of the region are capable of removing the Zionist regime from the world scene," he said as the crowd chanted "Death to America! Death to Israel!" Mr Ahmadinejad said that direct peace talks, which Western-backed Palestinian president Mahmud Abbas relaunched with Israel in Washington on Thursday after a 20-month hiatus, were "doomed" to fail. "What do they want to negotiate about? Who are they representing? What are they going to talk about?" the Iranian President asked of the Palestinian leadership. "Who gave them the right to sell piece of Palestinian land? The people of Palestine and the people of the region will not allow them to sell even an inch of Palestinian soil to the enemy. The negotiations are stillborn and doomed."

Xinhua:

• North Korea will continue attempts to strengthen its friendship with China, citing comments made by North Korean Foreign Minister Pak Ui Chun in a speech at the Chinese Embassy in Pyongyang at a reception held to mark the end of World War II 65 years ago.