Thursday morning headlines

Stocks are stabilizing - kinda: The Dow has been in the negative 420 to 480 range for the last hour or so, which is at least better than the outright plunge earlier this morning. Stay tuned for more talk about another recession.

Economy fell how much?: Bet you've never heard of the Philadelphia manufacturing index, but this morning it's one of the explanations for why the markets are falling. See, the index came in at -30.7, and the consensus forecast had been +3.7. Wall Street is freaking out. (Business Insider)

Jobless claims tick up: Weekly filings rose 9,000, to 408,000, even though the more reliable four-week average fell to its lowest level since mid-April. (AP)

Inflation takes dip: The L.A. area saw a 0.4 percent drop in prices last month, in part due to the lower cost of gasoline. Over 12 months, the consumer price index was up a modest 2.4 percent, well lower than the 3.6 percent figure nationwide. (BLS)

France maintains AAA rating: What can you say? The ratings agency says it remains confident in the nation's financial outlook. (BBC)

U.S. investigating S&P practices: The question is whether mortgage securities were improperly rated in the years leading up to the financial crisis, reports the NYT. The inquiry was begun well before the S&P downgrade of U.S. debt.

In the mortgage inquiry, the Justice Department has been asking about instances in which the company's analysts wanted to award lower ratings on mortgage bonds but may have been overruled by other S.& P. business managers, according to the people with knowledge of the interviews. If the government finds enough evidence to support such a case, which is likely to be a civil case, it could undercut S.& P.'s longstanding claim that its analysts act independently from business concerns.

SEC files were destroyed: Records from at least 9,000 preliminary inquiries may be gone, including files on the likes of Bernie Madoff and Lehman Brothers, according to Congressional investigators. From the NYT:

In addition to whether the document disposal violated federal laws about government records, officials are concerned that the S.E.C. policy might have hindered later investigations into the same people or companies or covered up wrongdoing. "These records may contain critical information that could be extremely useful in piecing together complex cases, even if not immediately pursued," Senator Charles E. Grassley, an Iowa Republican who is the ranking member on the Senate Judiciary Committee, wrote in a letter to the S.E.C. on Wednesday.

Caruso gets Vegas gig: The L.A. developer will oversee a $550 million open-air retail and entertainment district across Las Vegas Boulevard from Caesars Palace. Think the Grove, except a lot bigger. From the LAT:

Construction on the Linq is set to begin late this year and to be completed by 2013. The project has been approved by Clark County, Nev., officials and has financing, according to Caesars. The project would be a quarter-mile long and hold more than 200,000 square feet of shops, eateries and bars. Caruso said he would select retailers who did not already have outposts in Las Vegas, but he declined to name potential tenants.

Jeffrey Gundlach denies poaching TCW: The L.A. bond manager said he had not encouraged clients from the money management firm to bring their accounts to his new firm, DoubleLine Capital, after he was fired in December 2009. TCW has accused Gundlach of plotting to set up a competing company using proprietary data and client information. TCW is seeking more than $375 million in damages. (DealBook)

Supermarkets taking applications: With the grocers union taking a strike authorization vote on Friday, Albertsons and Vons are starting to look for replacement workers willing to cross a picket line. Ralphs is holding back for the moment. (LAT)

AEG wants to skip lawsuit stage: The idea is to avoid any lengthy legal challenge to a proposed downtown stadium by having environmental disputes heard before an arbitrator. AEG wants to start building by next June. (Daily News)

Conan losing viewers: His late-night show on TBS is down 60 percent from last fall's debut, though some of that is due to the cable channel's scant offerings. TBS has committed to a second season. From the WSJ:

Television executives say that Mr. O'Brien's ratings problem lies in part with his niche appeal. His act relies more on extended sketches that venture into absurd territory rather than punch lines ripped from the news or pure political and cultural satire. His biting, self-deprecating style, which often involves bizarre gestures or movements such as his famous "string dance," tends to resonate more with younger viewers. When he was at NBC, the company's executives at times urged him to broaden his act, according to a person familiar with the matter.