Today's Headlines

Bloomberg:

• Payrolls Decline More Than Forecast. The U.S. lost more jobs than forecast in September as local governments fired teachers and other workers in response to declining tax revenue. Payrolls fell by 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed today. Wages and the workweek stagnated. The unemployment rate held at 9.6 percent in September, the Labor Department said. The rate was forecast to rise to 9.7 percent, according to the median forecast in a Bloomberg News survey of 83 economists. Today’s jobs report is the last before the Nov. 2 congressional elections that threaten to deprive the Democrats of their majorities in the House and Senate, partly as a result of voter disenchantment with President Barack Obama’s handling of the economy. Obama’s job approval over a three-day period that ended Oct. 5 was 43 percent, compared with 53 percent at the same time last year, according to a poll from Princeton, New Jersey-based Gallup Inc. The jobless rate has equaled or exceeded 9.5 percent for 14 consecutive months, surpassing the 13-month period from mid 1982 to mid 1983 as the longest span of elevated joblessness since monthly records began in 1948. “If we’re only creating jobs at this pace, the unemployment rate is going to go higher,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, who forecast a 65,000 gain in private payrolls. “We aren’t creating enough jobs to keep it steady.” The buying power of consumers whose purchases make up nearly 70 percent of the economy isn’t improving, today’s report showed. Average hourly earnings were little changed at $19.10, and the average work week for all workers held at 34.2 hours. 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 17.1 percent from 16.7 percent.
• Credit Risk Index Falls as Jobs Report Bolsters Bets Fed Will Buy Assets. A gauge of corporate credit risk in the U.S. fell to a five-month low as a bigger-than-estimated decline in the nation’s payrolls last month bolstered bets the Federal Reserve will increase asset purchases to support the economy. The Markit CDX North America Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses on corporate debt or to speculate on creditworthiness, fell 1.1 basis point to a mid-price of 97.3 basis points as of 8:54 a.m. in New York, according to Markit Group Ltd.
• U.S. Two- and Five-Year Yields Fall to Record Lows on Jobs, Fed Outlook. Treasuries rose, pushing two- and five-year yields to record lows as data showing U.S. employers cut more jobs than forecast last month spurred speculation the Federal Reserve will buy more bonds to stimulate the economy. Ten-year note yields fell to the lowest level since January 2009 as investors bet the floundering labor market signals weaker-than-expected growth in the broader economy this year. Yields have slid this week as investors speculated the Fed will purchase more assets, a strategy called quantitative easing. Barclays Plc said it expects “an incremental large-scale” purchase program to start next month.
• Corn, Soybeans, Wheat Surge by Exchange Limits as U.S. Cuts Supply Outlook. Grain and oilseed prices rose the most allowed by the Chicago Board of Trade after the U.S. government said domestic and world supplies of corn, soybeans and wheat will be smaller than forecast last month. The U.S. Department of Agriculture cut its domestic corn- crop estimate for the second time in as many months, predicting a 3.4 percent drop from last year. While farmers will collect the most soybeans ever, the total will be 2.2 percent less than forecast in September, the USDA said. Global wheat inventories will be 1.8 percent less than projected last month. “Although the trade had increasingly braced for a downward revision in corn yields, the USDA provided a far larger-than- expected shock,” Lewis Hagedorn, a commodity analyst for JPMorgan Chase & Co., said in a report. “Meaningfully higher prices are now required in order to ration demand,” specifically for corn used to make ethanol, Hagedorn said.
• Bullard Sees No 'Obvious' Case for More Stimulus as Risks Ease. The chance of a renewed U.S. recession has receded and there may not be a strong enough case for additional stimulus, Federal Reserve Bank of St. Louis President James Bullard said. “The risk of double-dip recession has probably receded some in the last six to eight weeks,” Bullard said today in an interview with CNBC. “The economy has slowed, but it hasn’t slowed so much that it’s an obvious case to do something. A very reasonable decision would be to say, ‘maybe we should push it off a meeting or two and see how the data comes in.’”
• CF(CF) Leads Fertilizer Makers Higher on Corn-Forecast Cut, Buyout Speculation. CF Industries Holdings Inc. led fertilizer makers higher in New York trading after the U.S. government cut a corn-crop forecast and Reuters reported that Rio Tinto Group is interested in buying potash makers. CF jumped as much as 10 percent, the biggest intraday gain in 19 months. The Deerfield, Illinois-based company rose $8.83, or 8.8 percent, to $107.35 as of 10:50 a.m. in New York Stock Exchange composite trading. Canada’s Agrium Inc. climbed 6.2 percent to $80.04 and Plymouth, Minnesota-based Mosaic Co. advanced 7.4 percent to $66.08. “The bulk of today’s move is coming from” the U.S. Department of Agriculture’s crop forecast report, Edlain Rodriguez, a New York-based analyst at Gleacher & Co., said in a telephone interview. “Rio’s interest in fertilizer assets is adding to the fire. Farm-equipment makers Deere & Co., CNH Global NV and Agco Corp. also gained. Meat processors Tyson Foods Inc., Sanderson Farms Inc. and Smithfield Foods Inc., which use corn as animal feed, dropped. Deere rose 5.6 percent to $75.92, CNH rose 6.3 percent to $40.07 and Agco gained 8.1 percent to $42.39. Tyson dropped 6.6 percent to $15.20, Sanderson declined 5.8 percent to $39.05 and Smithfield fell 5.4 percent to $15.19.
• HP(HPQ), Oracle(ORCL) Lead $50 Billion Acquisition Spree Tearing Down Tech Barriers. Hewlett-Packard Co., Oracle Corp. and International Business Machines Corp. are leading an acquisition spree that has propelled the value of U.S. technology deals 24 percent to more than $50 billion this year and broken down decades-old barriers between industries. The companies are using purchases to become one-stop providers of products from computers to software to networking gear, rather than focusing on a niche.
• Leuthold Boosts Allocation to Stocks on View S&P 500 Will Set a 2010 High. Steve Leuthold, whose Leuthold Core Investment Fund has beaten 85 percent of its competitors in the past five years, said he boosted his stock holdings and may invest as much as 70 percent in equities because the market is poised to reach a new 2010 high. The investor, who bet on stocks before the Standard & Poor’s 500 Index started the biggest rally since the Great Depression in March 2009, said he lifted the net equity position of the $1.32 billion Leuthold Core Investment Fund and the $1.25 billion Leuthold Asset Allocation Fund to 60 percent from 46 percent in July. The Leuthold Global Fund, which has $294.5 million in assets, has between 62 percent and 63 percent in equities, he said.
• French Senate Votes to Raise Retirement Age to 62 as Unions Ready to Strike. France’s Senate voted today in favor of raising the legal retirement age to 62 from 60, part of President Nicolas Sarkozy’s pensions system overhaul. Lawmakers in the upper chamber of Parliament voted 186 to 153 for the increase, the Senate press office said. The senators are now debating increasing the eligible age for a full pension to 67 from 65.
• Ford(F), Dealers Say Credit Access Helping Recovery in Auto Sales. New-vehicle buyers are having an easier time getting credit, signaling U.S. auto sales may continue to accelerate after last month reaching the fastest pace since the government’s “cash for clunkers” program. Federal Reserve data shows banks began easing consumer- lending standards in July, and the Fed’s loan facility program rejuvenated the market for securitized auto debt, said Ellen Hughes-Cromwick, Ford’s chief economist. Data from CNW Research shows improved sales for buyers with weaker credit scores.

Wall Street Journal:

• September J0bs Data Raises Odds of Fed Asset Buying. September’s grim jobs environment is increasing already strong chances the Federal Reserve will act again to stimulate economic growth.
  
• Analyst: Apple(AAPL) Will Retain At Least Half the Growing Tablet Market. “The iPad’s sales momentum out of the gate has been unprecedented for a new product, and there appears to be no boundaries to the use case for the device, meaning the adoption curve could remain steep beyond the near term,” he theorizes. “We think that the iPad’s form factor, technology, and content ecosystem could help the company retain 50 percent of the tablet market next year, and anything above that number could represent a significant source of upside to our estimates.” One last point worth noting here. As slick as some of these rival tablets might prove to be, they’re still likely to have a hard time stealing market share from the iPad because of Apple’s broad app and content ecosystem. Says Moskowitz, “With tablets, we think that offering a trove of applications, as is industry practice in smartphones, will not be enough. The ability of the user to access content, such as movies and TV shows, is more important for tablet users, and this is where Apple has fought hard to secure access to the content. We think it will take time for other vendors to establish similar access to the content.”

Bloomberg Businessweek:

• MGM Resorts(MGM), Wynn(WYNN) Jump as Las Vegas Strip Gaming Sales Rise. Shares of MGM Resorts International, Las Vegas Sands Corp.(LVS) and Wynn Resorts Ltd. rose after Las Vegas Strip gambling revenue jumped 21 percent in August, showing the biggest U.S. casino city is emerging from a record slump. Revenue rose to $544.4 million from $449.6 million in the same month a year earlier, Nevada’s Gaming Control Board said today in an e-mail. Strip casino proceeds increased 4.5 percent in the first eight months of this year.

CNBC:

• Bank of America's(BAC) Big Freeze Chills Housing Recovery. It was bound to happen, and it did. Bank of America extended its foreclosure freeze to all 50 states as it continues internal "assessments" of its foreclosure practices. "Our ongoing assessment shows the basis for our past foreclosure decisions is accurate," reads their statement.
• Cost of EU Rises, Even as Countries Make Cuts.
  

Business Insider:

• CHART OF THE DAY: The Scariest Jobs Chart Ever.

Zero Hedge:

• September's Hedge Fund Winners and Losers.
• Refuting the SEC's Lies at the Core of the "Flash Crash" Analysis.
  

MarketWatch.com:

• China Telecom May Be Next iPhone Partner: Report. China Telecom Corp. will likely become the second Chinese operator after China Unicom (Hong Kong) Ltd. to offer Apple Inc.'s iPhone in mainland China, the South China Morning Post reported Friday, citing analysts at Deutsche Bank AG. The analysts said in a report China Unicom's exclusivity deal with Apple on the mainland will likely come to an end early next year, according to the newspaper. The U.S. firm plans to mass-produce an iPhone that can run on the CDMA 2000 mobile technology standard that China Telecom operates its third-generation network on, and is in talks with the Chinese company, according to the report.

Forbes:

• Oppenheimer Raises Apple(AAPL) Target to $345. Apple 'not too big to blow it out'.
• Hedge Fund Manager Ackman Moves In On JCPenney(JCP). After a bitter proxy battle with Target's board of directors in 2009, hedge fund manager Bill Ackman is setting his sights on another retailer, J.C. Penney.

Politico:

• Tom Donilon to Replace James Jones as National Security Council Chief. President Barack Obama's national security adviser, Gen. Jim Jones, will step down in two weeks and will be replaced by his deputy, Tom Donilon, senior administration officials said Friday morning.
• Sharron Angle Surge Unnerving Nevada Democrats. New polling out of Nevada is unnerving Democrats who fear Republican Sharron Angle’s campaign is surging despite enduring millions of dollars’ worth of TV ad attacks from Senate Majority Leader Harry Reid. The three most recently released public polls show Angle with a nominal edge, though all have been within the margin of error.

Reuters:

• US Sends $727 Million to Community Health Centers. The Obama administration on Friday announced $727 million will go to help fix up community health centers across the country, the first of $11 billion for the centers promised by the U.S. healthcare reform law. The money will go to 143 community health centers -- which provide services regardless of patients' ability to pay -- in about 40 states, Washington D.C., and Puerto Rico, the Health and Human Services department said.
• US Weekly Leading Economic Growth Gauge Rises to 19-Week High.
  

Financial Times:

• A Distorted US 10-Year Swap Spread? BNP Paribas observes on Friday that the US 10-year swap spread — the difference between the swap rate on a contract and the yield on a government bond — has moved sharply out recently, while the VIX — a measure of volatility, also known as the fear index — has remained subdued. This they say could be down to distortions caused by prospects for yet more quantitative easing, with markets assuming the Fed will concentrate on putting public debt on the US balance sheet, rather than private risk.

Diario:

• Fitch Ratings considers the Portuguese government will meet its budget deficit target for this year, citing Fitch Associate Director Douglas Renwick.