PRESS DIGEST - Wall Street Journal - Jan 8

Jan 8 (Reuters) - The following were the top stories in The Wall Street Journal on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

* President Barack Obama ordered his top intelligence chiefs Thursday to patch gaps in the way terrorism intelligence is distributed, analyzed and checked against watch lists used to identify potential attackers bound for the U.S.

* Even as Britain recovers from recession, it faces one of the largest budget deficits in the world. And paring it down may make recovery more painful than in many other places.

* Bank of America Corp (BAC.N) investment bankers are likely to get bonuses that are close to 2007 levels as the giant bank tries to stem more defections following its takeover of Merrill Lynch & Co, according to people familiar with the situation.

* The office market in Washington, D.C., is poised to topple New York as the nation's most expensive, reflecting the declining fortunes of the nation's financial center and the government expansion under way in the U.S. capital.

* Facing a chorus of doubters and a brewing revolt by local television stations, NBC is re-evaluating the future of "The Jay Leno Show" and could return Mr. Leno to his old 11:30 p.m. perch, according to people familiar with the matter.

* TCW filed suit against its ousted chief investment officer and others, alleging they stole TCW property and client data in launching a new money-management firm.

* The Federal Reserve Bank of New York told American International Group Inc (AIG.N) not to disclose key details of their agreements to make big payouts to banks in the insurer's regulatory filings in late 2008, according to a set of email exchanges released Thursday.

* A former senior partner at consulting firm McKinsey & Co pleaded guilty to criminal charges Thursday, saying he was paid more than $1 million to provide tips on McKinsey clients to Raj Rajaratnam, the founder of hedge fund firm Galleon Group.

* Electronic-book reading gadgets are getting bigger and more interactive-but not much cheaper. More than a half-dozen new players have entered the burgeoning e-reader market at this week's Consumer Electronics Show in Las Vegas.

* India's Reliance Industries Ltd (RELI.BO) recently sweetened its offer to take a controlling stake in LyondellBasell Industries [ACCEIN.UL] when the chemical maker exits bankruptcy, people familiar with the matter said Thursday.

* A number of retailers raised earnings forecasts Thursday after reporting healthy December sales gains, the fourth month in a row of year-over-year sales increases.