Wednesday morning headlines

Doubtful market: This isn't looking like the day the Dow will push over the 14,000 mark. Stocks have been down all morning because of more inflation concerns from Federal Reserve Chairman Ben Bernanke and new jitters in the subprime arena.

New supermarket contract: Normally when a labor deal is reached, both sides claim victory - no matter how one-sided the contract might be. This time, though, it appears as if the United Food and Commercial Workers really made some gains after the disastrous contract talks in 2003-04. The four-year deal, which must be ratified by union members for Albertsons, Ralphs and Vons stores, would give workers their first scheduled raises since 2002. The contract would also cut the amount of time newer workers would have to wait to get health insurance to six months from as long as 18 months (all this from the LAT, citing sources). More broadly, this contract starts to disassemble the controversial two-tier pay system in which newer employees get a much lower pay package than long-timers.

The deal marks "significant progress" for the UFCW, said Dave Smith, associate professor of economics at Pepperdine University's Graziadio School of Business and Management. "I think the grocers found that this notion of a two-tier system has not worked out as well as they thought," Smith said. "You get a lot of workplace dissatisfaction with such different wage and benefit scales for employees who are working side by side." Providing newer workers with a way to reach the top wage scale and a better benefit package "should improve workplace harmony," he said.

Kohlberg Kravis eyeing Macy's: Women's Wear Daily reports that KKR is preparing a $24 billion offer for the department store giant (that may or may not include debt). An agreement in principle could be within days of being completed, according to the paper, with the goal of making an announcement before Monday, the scheduled date for a series of investor meetings. Macy's would be an attractive catch because it generates cash, owns 54 percent of its real estate, and is one of the most famous retail brands in the world. There have been Street rumors for weeks about a possible Macy's takeover.

Slow but steady growth: Tourism and trade should offset the sluggish housing market, according to the mid-year forecast by the Economic Development Corp. of L.A. County. Job growth in the county is expected to grow at a decent 1.2 percent clip this year and 1.5 percent in 2008. Unemployment will remain low - 4.8 percent this year and 5 percent in 2008. One wild card: a possible labor dispute in Hollywood. (LAT)

Dow Jones board approves sale: Now that the preliminaries are over, it's time for the main event: Rupert Murdoch vs. the Bancroft family. The Bancrofts control a voting stakes in Dow Jones, so their approval is what really matters - and the family is not acting in lock-step, so there's no telling how this thing might end (several family members are still looking at alternatives). Anyway, they'll be meeting on Monday and given several days to decide. (NYT)

Stefani sues Forever 21: The pop sensation claims that the L.A.-based fast-fashion retailer has knocked off designs from her Harajuku Lovers clothing line. The design features a checkerboard pattern of alternating hearts and squares, including Japanese lettering and the words "Harajuku" and "Lovers." Lovely. In March, Diane Von Furstenberg alleged in a suit that Forever 21's $32 "Sabrina" smock dress looked uncannily similar to her own $325 "Cerisier" design. The company isn't talking. (NY Post)

Billionaire's lair: The court battle between former Broadcom CEO Henry T. Nicholas III and his assistant Kenji Kato is turning up some nasty allegations about Nicholas' alleged cavorting. A draft complaint in Orange County Superior Court describes plans for a "secret and convenient lair" with hidden entries for Nicholas to indulge his "manic obsession with prostitutes" and "addiction to cocaine and Ecstasy." Nicholas' attorney says the allegations are fabricated - and indeed, it's not clear how much of this story will be part of the court case with Kato. From the LAT:

The alleged plans for the covert underground hideaway, to be connected to Nicholas' Laguna Hills home, were detailed by Roman James of Newport Beach, the lead contractor on the project, and six other contractors, engineers and construction workers who worked on it and filed a lawsuit against Nicholas in 2002. The construction team accused Nicholas of failing to pay millions of dollars for work performed between April 1998 and April 2002. Nicholas was said to have used "manipulation, lies, intimidation and even death threats" to pressure "nearly every contractor and vendor" on the project to perform extra work without pay "at warp speed." The allegations were contained in a draft complaint that was prepared but not filed as part of the contractors' lawsuit, which was resolved in a confidential settlement in 2002.

Monster shopping complex: The Westfield Group is planning what's effectively a third mall connecting the Topanga and Promenade malls in the West Valley that will include a 300-room, four-star hotel, 150 condominiums and apartments, offices, and 550,000 square feet of shops and restaurants. At 3.8 million square feet, the complex will be larger than OC's South Coast Plaza. Construction is expected to start in two years. One question to be determined: how Westfield will connect the three malls. (Daily News)