Friday morning headlines

Stocks still down: The slump continues as investors keep looking for a bottom. So far, no luck. Dow is down 40 points.

Averting the fiscal cliff?: White House officials are considering a package of small spending cuts to replace the sweeping budget reductions that threaten the overall economy, the WSJ is reporting.

By postponing the sequester cuts, Washington would essentially push off a number of large deficit-reduction decisions into mid-2013. This would include a long-term plan to replace the remaining sequester cuts, a plan to overhaul the tax code, and separate decisions about how to restructure Medicare and Medicaid. The plan that has been discussed by White House officials is similar in many ways to what lawmakers have discussed.

Hostess moves to liquidate: The iconic maker of Twinkies is going out of business after striking workers and company officials could not reach a labor agreement. The closing would mean the loss of about 18,500 jobs, including a few hundred locally. From AP:

Hostess said the company is unprofitable under its current cost structure, in large part because of union wages and pension costs. [CEO Gregory] Rayburn said in a statement on the company website that all employees will eventually lose their jobs, "some sooner than others." "Unfortunately, because we are in bankruptcy, there are severe limits on the assistance the (company) can offer you at this time," Rayburn wrote.

Cheap gas for the holiday: Motorists will enjoy a noticeable savings when they travel next week. An average gallon of regular in the L.A. area is $3.856, according to the Auto Club, down about 85 cents from the record high in early October.

How to spend L.A.'s extra tax revenue: If voters sign off on a sales tax increase in March, Council President Herb Wesson says the money should go towards police, fire, the City Attorney's Office, and Recreation and Parks. "Everything else, we'd just have to try to stabilize, we'd have to stay focused and disciplined," he said. (Daily News)

Charles Munger eases off on ballot measures: After contributing more than $35 million towards failed ballot initiatives, the Republican donor says he'll be focusing on redistricting reform and patching up the California Republican Party. (Fox and Hounds)

OC Register owners wants LAT: With Tribune Co. about to emerge from bankruptcy protection, Aaron Kushner is one of the few potential bidders to make his intentions known. From the OC Register:

Kushner has hired Morgan Stanley as a financial adviser to help with his acquisition plans. The publisher, however, declined to say where funding would come from for a Tribune purchase. One potential hurdle for the Freedom bid is possible anti-trust concerns by federal regulators, who review whether a company may unfairly dominate a market, particularly in advertising. Newspaper industry supporters, however, have contended that with the advent of the Internet and other media, anti-trust issues are less of a concern in the current landscape, but the matter has not been settled.