Thursday morning headlines

Stocks take off: Market opens sharply on the upside, with decent retail numbers and lower jobless claims providing lift. Dow is up about 180 points in early trading.

Yankee index: Scoff if you must, but in the previous 22 World Series since 1936 in which the Bronx Bombers prevailed, the S&P 500 returned an average of 10 percent in the next year. When the series ended in six games, the average return was 15 percent. (DealBook)

Water deal: The long-awaited legislation allows the state to control water delivery, impose stricter conservation rules, and support restoration of the Sacramento-San Joaquin River Delta ecosystem. It also relies on borrowing $11 billion that still needs voter approval. From the LAT:

The package's broad scope is in part a recognition that the good old days are gone, and that the state must embrace new approaches to meet its water needs. "This is California slowly and painfully coming to terms with a static water supply," said Phil Isenberg, a former legislator who has grappled with water issues for years. "There are big problems and [we] have to do a bunch of different things."

Decent retail results: October sales were helped by easy comparisons to last year's terrible numbers, but nonetheless consumers appear to be returning to the stores - and buying. From AP:

Cooler weather helped boost sales of plaid shirts, leggings and boots. And early holiday discounts also may have drawn shoppers last month to get a head start on Christmas buying. Those with money to spend, are now becoming a little more generous, soothed by improving signs in housing and the stock market. But retail sales figures are mainly starting to look better because they are being compared with the free fall in spending a year ago.

Toyota gets wrist-slapped: The National Highway Traffic Safety Administration says the automaker is issuing "inaccurate and misleading" statements about a defect that involves the design of the accelerator pedal and the driver's foot well. From the LAT:

In response to the NHTSA statement, Toyota said it was "never our intention to mislead or provide inaccurate information." The statement added that it was still developing "vehicle-based" remedies to prevent unintended acceleration events, in which motorists say their vehicles suddenly speed out of control.

More Toyota: The Japanese automaker returned to profitability in the latest quarter and now expects a smaller loss for the entire year. Government incentive programs, including cash for clunkers, have helped boost sales. (NYT)

Oprah rumor mill: Winfrey's co-executive producer is headed to L.A. as chief creative officer of OWN (Oprah Winfrey Network), and that's renewed chatter about the talk show queen giving up her syndication gig. Her contract ends at the end of next season. (The Wrap)

Is MySpace fixable?: More talk about overhauling the Bev Hills-based social networking site, but it's still losing traffic and money and parent News Corp. no longer expects to get all of the $900 million from a Google advertising deal (terms were tied to traffic minimums that aren't being met). From MediaMemo:

So what's the plan to fix all of this? "It's a work in progress," News Corp. officials say over and over during the call. Chase Carey, Murdoch's new number two, uses the phrase at least three times in one answer. Any other color on overhaul plans? Nothing you haven't heard before: The company is trying to become an entertainment portal instead of a social network. Carey: "We're not trying to beat Facebook. We're not trying to beat Twitter."

Mozilo must face music: An L.A. federal judge denied a request by the ex-CEO of the ex-Countrywide Financial that the SEC fraud case against him be dismissed. Mozilo's lawyer says his client is an innocent man. (Reuters)

Fortune cuts: About 40 editorial people is the count from the NY Post's Keith Kelly. The company is also folding Fortune Small Business.