Reports of recent events, from the plural of new, new things: what is new, pluralized in French and Latin fashion, imported into English by the fifteenth century.
Documented
The newes record
Documented: English newes appears by the 1400s, translating French nouvelles and Latin nova, both literally new things. The compass-acronym story has no period attestation, and the word predates any possible acronym source by centuries. Acronym word formation itself is largely a twentieth-century habit, which alone dates the myth.
Assessment: Documented: the OED's citations run from the fifteenth century. The acronym appears in no dictionary, ever.
Stories
The compass myth
The folk version: news gathers from North, East, West, South, therefore NEWS. It is a backronym, a word reverse-engineered into initials, and it survives because it flatters the concept, the word becomes a diagram of its own job.
Assessment: Stories: backronyms are the modern folk etymology, acronym-aged. This one is the genre's flagship.
Interesting claims
The plural that forgot
The structural curiosity: news is a plural that became singular, like molasses and billiards, what is the news, never what are the news. The word fossilizes the moment English stopped counting reports and started treating information as a substance, a mass noun for the flow itself.
Assessment: Interesting: the grammar vote is recorded in the word. English decided the news was a thing, not a list.
Sources and further reading
Oxford English Dictionary, news: plural of new, as newes from the fifteenth century, translating French nouvelles and Latin nova
Middle English Dictionary, newes citations (the fifteenth-century record)
The North-East-West-South backronym: unattested in any period source or dictionary (the myth's documented absence)
Worth asking
If the acronym is fake, why does it feel truer than the plural of new?