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Sept 9 (Reuters) - The following were the top stories in The Wall Street Journal on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy.
* Investors cheered the U.S. government's seizure of Fannie Mae FNM.N and Freddie Mac FRE.N, with stock markets rallying in the U.S. and abroad and mortgage rates falling. But obstacles remain if the takeover is to succeed.
* The U.S. Justice Department hired top litigator Sanford Litvack for a possible antitrust challenge to Google Inc's (GOOG.O) growing power in advertising.
* The legal showdown between Apollo Management and U.S. chemicals maker Huntsman Corp (HUN.N) opens a window into the messy aftermath of the private-equity buyout boom.
* Washington Mutual Inc's (WM.N) new CEO pledged to return the bank to profitability, but investor doubts remain about its prospects. WaMu also entered into a memorandum of understanding with the Office of Thrift Supervision concerning aspects of its operations.
* Hedge funds are offering to cut fees if investors agree to stay put, in another sign of the changing power dynamics between funds and investors.
* Momentum is building in the U.S. Congress to increase funding for public transportation as transit agencies struggle to accommodate increased demand from Americans seeking to escape high gas prices.
* Airplane makers and technology companies are working to develop systems that will help prevent on-the-ground collisions.
* U.S. President George W. Bush plans to shift troops from Iraq to Afghanistan. The gradual redeployment is aimed at addressing Afghanistan's ongoing deterioration as conditions in Iraq continue to improve.
* Governor Sarah Palin has become the new phenomenon on the campaign trail, at times overshadowing her workmanlike running mate. The McCain campaign continues to assert that Palin opposed the "Bridge to Nowhere," despite significant evidence to the contrary.
* Raffaello Follieri, the Italian entrepreneur who had business dealings with billionaire Ron Burkle, is near an agreement to plead guilty to fraud and money-laundering charges.
* Russian President Dmitry Medvedev pledged to pull his troops out of Georgia proper within a month, averting a conflict with the European Union. But the agreement lets Russia keep troops in two Georgian regions that have declared independence.