Thursday morning headlines

Dow hits 9800: The upward climb continues, even though today's news is mostly mixed (drop in jobless claims and a lower earnings report for FedEx). Index is up about 30 points.

Worried about another plunge: Investors are, of course, pleased with the stock rally, but they're also anxious about where the market is headed. From the LAT:

Market optimists say stocks are responding as they always do to increasing evidence that the economy is coming out of recession, which should fuel a revival in corporate earnings. On Tuesday, Federal Reserve Chairman Ben S. Bernanke reinforced that sentiment by declaring that the recession was "very likely over." What has stunned many Wall Street veterans, however, is how relentless the rally has been since March, particularly given that most economists believe that any recovery will be weak at best and therefore tenuous.

Pressuring banks: L.A. Councilman Richard Alarcon thinks local governments should threaten to pull out of financial institutions that are slow to modify home loans. (LAT)

Council signs off on cuts: Members voted in favor of a plan that would eliminate almost 1,000 city jobs and impose 26 days of layoffs, but the council hasn't given up on the union's early retirement proposal. Unions are already preparing a legal challenge. (LAT)

Variety going for pay wall: Nikki Finke reports that after the first of the year the Hollywood trade paper will be charging for Web content. She's also hearing that that The Hollywood Reporter is about to drop its daily print version. (Deadline.com)

Too much overbooking: Passengers are getting bumped from flights at the highest rate in at least 14 years, though it's still a fairly rare occurrence (fewer than two passengers out of every 10,000). From the WSJ:

As carriers have slashed capacity, grounding airplanes and cutting flights from schedules, they have packed more people into their remaining flights -- sometimes too many people. "It's pretty simple: It's just because planes are more full than last year," says Tom Trenga, vice president of revenue management at US Airways Group Inc., which had the highest bumping rate among major airlines, at 1.88 passengers per 10,000 in the second quarter.

Tanker battle renewed: Northrop (and the European maker of Airbus planes) and Boeing are back competing for that $35 billion contract for refueling tankers. Air Force officials, who had been accused of botching the earlier award process, plan to release a draft proposal within the next two weeks. (NYT)

Ad slump over?: New report from TNS Media suggest suggests that while things haven't gotten any better, they haven't gotten any worse, either. From the NY Post:

After a year of steep declines, the ad business is also starting to look rosier because of easier comparisons, according to Jon Swallen, TNS' head of research. Heading into the third quarter, the year-over-year declines will narrow for some segments of media and advertising. "In general, the ad market began to unravel in November and December and that continued into the first six to seven months of this year," he said.