PRESS DIGEST - Wall Street Journal - Sept 28

Sept 28 (Reuters) - The following were the top stories in The Wall Street Journal on Monday. Reuters has not verified these stories and does not vouch for their accuracy.

* A center-right alliance led by German Chancellor Angela Merkel was set for victory in Germany's national elections on Sunday, opening the door to modest tax cuts and labor-market changes that could help strengthen the fragile recovery in Germany's crisis-battered economy.

* The Obama administration is close to committing as much as $35 billion to help beleaguered state and local housing agencies continue to provide mortgages to low- and moderate-income families, according to administration officials.

* Abbott Laboratories (ABT.N) has struck a deal to acquire the pharmaceutical unit of Belgian conglomerate Solvay SA (SOLB.BR) for roughly 4.8 billion euros ($7 billion), in another sign of the consolidation of the drug industry

* The stock market's strong rally is facing its next test as companies gear up to announce third-quarter earnings that, while still weak, will very possibly be better than investors expect.

* Japan's new government has watched but not acted as the yen has risen steadily against the dollar, in a gamble that a strong yen could spur domestic demand and lower the country's reliance on exports.

* World Bank President Robert Zoellick said the Treasury, not the Federal Reserve, should be given more power to regulate big financial institutions.

* Already facing the loss of federal government funding, the community-organizing group Acorn also has run afoul of one of its big corporate partners, Bank of America Corp (BAC.N).

* HSN, the home shopping network, is looking to a new source of revenue: advertising.

* As the U.S. housing market shows tentative signs of healing, some of the nation's biggest home builders are starting to acquire land again in preparation for better times. But one builder is hobbled going into this land grab: Hovnanian Enterprises Inc (HOV.N).

* Indian and South African officials were working toward a compromise that would allow a $24 billion deal between two of their nation's cellphone giants to proceed, people familiar with the situation said.

* Donald Fisher, who set out to create a new kind of clothing store to fill "The Gap" he saw in retailing, died of cancer Sunday at age 81.

* The International Monetary Fund, in a broad self-evaluation, said it acted effectively in combating the global recession, especially in Eastern Europe, a finding that is bound to deepen the debate on the IMF's crisis-fighting abilities.

* China's Ministry of Commerce said Sunday it is formally starting to investigate some "unfair" imports of chicken products from the U.S., advancing a case it had first flagged two weeks ago.