Wednesday morning headlines

Flat market: A pretty low-key first hour on Wall Street (for a change), with the Dow up just a shade. By the way, a WSJ/NBC News poll finds that 46 percent of those surveyed expect the market to move higher over the next year, while 16 percent expect a decline (respondents had to have at least $5,000 in the market). Among all Americans, however, the survey shows increased pessimism about the direction of the economy. WSJ

Backdating on 9/11: This one is likely to take your breath away. The WSJ is reporting that dozens of companies used the huge stock drops after 2001's terrorist attacks as an opportunity to backdate their stock options. With stock options, the lower the exercise price the greater potential for profit at the other end - and as you might know, the market rebounded sharply in the fourth quarter of 2001. Harvey Pitt, who was SEC chairman at the time of the attacks, called the practice "offensive," which is putting it mildly. Among the companies cited in the Journal story are Irvine-based Broadcom Corp., which is in the midst of a federal inquiry into backdating activities. From the WSJ:

In the wake of the attacks, the nation's stock markets were closed from Sept. 11 to Sept. 14. When they reopened the following week, the Dow Jones Industrial Average skidded more than 14%, in the worst full week for the blue-chip average since Germany invaded France in May 1940. Scores of companies rushed to grant options during the market's trough; a Wall Street Journal analysis published in July found that among a set of 1,800 leading companies the frequency of option grants more than doubled in late September 2001, compared with other years. (See that July article.) When previously asked about their reasons for granting options in the wake of the terrorist attacks, some companies said it was pure happenstance, while others said it was intended to help motivate executives through the difficult period. But until recently none had admitted the award dates reflected improper backdating.

Tribune eyes Zell: The LAT reports that real estate mogul Sam Zell has become a strong contender for Tribune Co. Zell is proposing to take the company private with the help of an employee stock ownership plan. That structure would do several things: limit his tax bill, allow those pesky Chandlers to be bought out, and remove the company from Wall Street scrutiny. While Zell made his big money in real estate, he has dabbled in other industries. At last check, Tribune was supposed to make a decision by the end of the quarter, which is just a few weeks off.

Movie watching: Remember all the Hollywood hub-bub about cutting production costs? Well, it ain't happening, not so far anyway. The average film cost $65.8 million to make in 2006, up from $63.6 million a year, according to the Motion Picture Association of America's annual report. The cost of marketing a movie fell 4.4 percent, to an average of $34.5 million. Variety theorizes that the rise in production costs could be the result of all that private equity money flowing into Hollywood over the past year or two. Meanwhile, box office was up 5.5 percent in 2006, and admissions were up for first time in four years. Also, there were more movies released in 2006 than ever before - 607.

Early port talks?: That's what the shipping companies are proposing. The current contract with West Coast dockworkers doesn't expire until next year, but Jim McKenna, president of the Pacific Maritime Association, would like a new agreement in hand by the end of this year. If he seems a little fidgety about labor peace, remember that the 2002 dockworkers strike shut down West Coast operations for 11 days and cost the U.S. economy about $15 billion. No immediate response from the 15,000-member International Longshore & Warehouse Union. LAT

Rocawear deal: The very hot (or very cool depending on your age) clothing line co-founded by rapper Jay-Z is being bought by Iconix Brand Group for $205 million. Iconix already owns the Joe Boxer, Mossimo and Ocean Pacific brands. Rocawear sales should hit $750 million this year. From the LAT:

The apparel lines meld with the music world as the rappers who pitch them wear the clothes in videos, at awards shows and in concert. One Jay-Z song, for example, starts with the New York rapper ticking off his personal inventory: "My gear is right, check/My bucket is low, check/My Rocawear is fittin' incredible." It's a smart deal for Iconix, analysts say, given Jay-Z's uncommon combination of street cred and business savvy. Shawn Carter, Jay-Z's real name, is chief executive of Def Jam Records and Roc-A-Fella Records. And his relationship with Beyonce Knowles, who also has her own clothing line, hasn't hurt, Portnoy said.