Wednesday morning headlines

Market slumping: Looks like yesterday's rally is fizzling out in early trading. Dow is down about 20 points.

Sluggish sales at Target: But the retail giant also reported a 14.3 percent jump in second-quarter net income, helped by reducing operating costs. (AP)

About those retail profits: With shoppers reluctant to spend, stores are cutting costs in order to make money. That means reducing employee work hours and keeping inventories tight. From the WSJ:

Abercrombie & Fitch Co. plans to close 60 of its 1,098 stores this year and 50 next year. The teen retailer reported a 5% jump in quarterly same-store sales, but noted that average prices fell 15% as stores wage price wars to wrest a bigger share of back-to-school budgets. "We're prepared and plan for an aggressive promotional environment," said Chief Executive Mike Jeffries, who expects price competition to continue through the holidays.

Another jaw-dropper in Bell: Turns out that the city loaned almost $1 million to several officials, including City Administrator Robert Rizzo (two loans for $80,000 each). Rizzo, whose crazy-high salary really sparked the scandal, described the loans as a "pay advance." From the LAT:

Public finance experts said it's highly unusual for municipalities to have a loan program for employees. Although some cities have given loans to entice city manager candidates to buy homes in the community, Bell appears to have given loans to people who already worked at City Hall.

Pension reform loses support: Legislation to prevent state workers from spiking their end-of-career pay in order to get higher retirement benefits is being watered down to the point where some supporters are giving up. From the LAT:

Reform advocates say that union-backed amendments to the bill have neutered its beneficial effects. "It allows unions to negotiate what items of pay will be included in final compensation," said Marcia Fritz of the California Foundation for Fiscal Responsibility. "We should be taking away the candy, not adding more."

State runs out of movie/TV tax credits: Less than three months into the fiscal year, 30 projects have exhausted the $100-million giveaway fund. New subsidy money won't be available until next July. (Bloomberg)

Sam Nazarian betting on recovery: The L.A. entrepreneur, still best known for operating Hollywood nightclubs, wants to expand his SLS Hotel brand to NY, London, and other major cities. He says the market is coming back. (Bloomberg)

Council votes on parking bids: City officials said the anticipated revenue from leasing out 10 parking garages would help prop up the budget. Without the money there might be more layoffs. (LA Weekly)

Stock woes for Mannkind: Shares of the Valencia-based inhaled insulin drug developer keep falling this morning after the company said it would offer $100 million in convertible debt to fill a hole in its balance sheet. Mannkind, founded by L.A. billionaire Alfred Mann, is awaiting FDA approval of its Afrezza drug. (Barron's)