PRESS DIGEST - Wall Street Journal - Aug 11

Mon Aug 11, 2014 1:16am EDT

Aug 11 (Reuters) - The following are the top stories in the Wall Street Journal. Reuters has not verified these stories and does not vouch for their accuracy.

* Islamist extremists who have overrun swaths of Iraq made a rare retreat in an area hit by U.S. air strikes and gave up some territory they had won from Kurdish forces, in an early sign of impact from the three-day-old American campaign. (on.wsj.com/1kvlfam)

* Israel's early failure to detect the vast Hamas tunnel network that its forces destroyed in Gaza is triggering a wave of recriminations within the country's security and political establishment. (on.wsj.com/XV52Bh)

* Alaska, the state which staked most of its economy on energy in the 1970s after oil was found on the North Slope, is now competing with, and often losing out to, places with hotter oil fields-especially North Dakota. More people left Alaska than settled in the state between 2012 and 2013, while North Dakota added residents, according to state and federal census data. (on.wsj.com/1vw7n4B)

* Kinder Morgan Inc is consolidating its vast oil-and-gas pipeline empire into a single company amid investor worries about the enterprises' growth prospects. (on.wsj.com/1uEAX3J)

* Blackstone Group LP is nearing a deal to buy Royal Dutch Shell PLC's half-interest in the Haynesville Shale, a huge Louisiana gas field, in a deal that could value the stake at more than $1 billion. (on.wsj.com/1A6y3rf)

* Widespread use of commercial drones is likely to take significantly longer than many proponents of the budding industry anticipate, according to U.S. and Canadian aviation regulators. (on.wsj.com/1oVnkfs)

* U.S. factories that were idled during the recession are now humming with activity. Office and apartment buildings have less empty space. Unemployment is falling, while wages and benefits are growing slowly. However, conditions aren't quite back to what was normal before the 2008 financial crisis. (on.wsj.com/1oVntPP)

* A summer of geopolitical unrest is rattling markets, but despite a recent downturn, investors' optimistic view of U.S. stocks has been largely unscathed. A wave of risk aversion has punished stocks and fueled the largest-ever retreat from junk bonds. Investors are contending with violence in Ukraine, Iraq and the Gaza Strip, along with news that Italy faces its third recession since 2008 and Germany's industrial production is slowing. Yet many fund managers say that unless the unrest increases and threatens the global growth outlook, the case for buying U.S. stocks appears stronger than that for bonds and many other assets. (on.wsj.com/1vw8v8d)

* The largest U.S. public pension plan is considering a dramatic retreat from some riskier investments, as it tries to simplify its $295 billion in holdings and better protect against losses during the next market downturn, according to people familiar with the matter. California Public Employees' Retirement System is weighing whether to exit or substantially reduce bets on commodities, actively managed company stocks and hedge funds, the people said. (on.wsj.com/1plYNRg)

* Citigroup Inc and Swiss-based trader Mercuria Energy Group are battling in a London court over payments relating to metals-backed financing arrangements in China valued at over $270 million. The case between Mercuria and Citigroup is one of several brought by companies scrambling to limit their exposure to potential losses after the Chinese government launched an investigation into allegations of loan fraud at the ports. (on.wsj.com/1A6zkyD)

* Hachette Book Group said Amazon.com Inc is motivated by profits and market share at the expense of authors and bookstores, as the companies' contentious contract talks over e-book pricing continues. (on.wsj.com/1kvmSoq)

* At least 2.2 million people have already watched "The Expendables 3." The problem for the movie's distributor, Lions Gate Entertainment Corp, is that its big-budget action movie doesn't open until Friday. (on.wsj.com/1A6m7G2) (Compiled by Rama Venkat Raman in Bangalore)