• Patent peace. Qualcomm and Nokia put an end to their patent battles - a move that could benefit both companies. Financial terms weren't disclosed, but the companies described it as a 15-year agreement that includes Nokia making an up-front payment, and paying ongoing royalties - which implies NOK may now become a QCOM customer. "This is a landmark deal," Lehman's Timothy Luke said. "This removes a ton of uncertainty from the industry." He estimates NOK should owe QCOM about $600M for 2008 alone. In early pre-market trading, QCOM is up 20.5%; NOK is up 1%.
• Amazon profit surges; margins shrink. Online retail giant Amazon.com (AMZN) said its 2Q profit doubled as revenue jumped 41% (see below). It also raised its sales forecast for the year. Analysts say aggressive discounting and free-shipping helped lure cash-strapped shoppers. CFO Tom Szkutak said gross margins were constrained by lower prices and by its product mix; it sees full-year operating margin of 5.7%, down from a previous forecast of 5.8%. Sales of books, music and movies rose 31% to $2.41B; electronics and other general merchandise revenue rose 58% to $1.53B. (Earnings call transcript)
• State budgets slashed. States, facing a $40B shortfall, are slashing spending and cutting jobs. The gap is more than triple last year's; the State Budget Update report (.pdf) says it stems from broad U.S. economic weakness, and that its repercussions may be felt straight through to 2010.
• Microsoft online chief goes, Ballmer talks tough. Kevin Johnson, head of Microsoft's (MSFT) online unit and in charge of MSFT's Yahoo (YHOO) bid, resigned. He will take over as CEO of Juniper Networks (JNPR), sources say. The move reflects CEO Steve Ballmer's "deep dissatisfaction" with MSFT's online presence. In an internal memo yesterday, he vowed to "out-innovate" Google (GOOG) in search by upping the ante in R&D and through acquisitions. "This is a long-term battle for our company."
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• GE Health buys Vital Signs. GE (GE) is acquiring Vital Signs (VITL) for $74.50/share ($860M). Vital Signs is a global provider of medical products for areas such as anesthesia, respiratory, sleep therapy and emergency medicine. "This acquisition is consistent with GE's strategy to invest in high-technology, innovative businesses that deliver top-line growth, earnings expansion and expanded margins," GE Healthcare CEO John Dineen said.
• Goldman raises $10B for LBO debt fund. Goldman Sachs (GS) has created a $10B fund to invest in senior leveraged buyout [LBO] debt. GS already has a $20B fund that invests in 'mezzanine' debt - which is second in line to collect behind senior. The two funds enable Goldman to finance sizeable deals without needing to recruit outsiders.
• Intel introduces SoCs. Intel (INTC) unveiled its first attempt at multifunction chips. The so-called SoCs (systems on a chip) can be used in various devices including cars, Tvs, robots, as well as security and communications hardware. Competitors in the space include ARM Holdings (ARMH), MIPS Technologies (MIPS), IBM (IBM) and Freescale Semiconductor (FSL).
• The Fed's Beige Book was downbeat, but held few surprises. Consumer spending was reported as mixed, weak, or slowing. Rebate checks boosted sales for some items - especially electronics. Manufacturing activity slowed, although export demand remained high. Both residential and commercial real estate markets were sluggish.

Earnings: Thursday Before Open

• 3M Company (MMM): Q2 EPS of $1.39 beats by $0.04. Revenue of $6.74B (+9.7%) in-line. [PR]
• AmerisourceBergen (ABC): FQ3 EPS of $0.73 beats by $0.07. Revenue of $17.51B (+14.5%) in-line. [PR]
• AutoNation (AN): Q2 EPS of $0.29 misses by $0.01. Revenue of $3.91B (-12.7%) vs. $4.09B. Shares +0.1%. "In the second quarter, the industry encountered $4.00 per gln gasoline on top of the continued housing depression and credit crisis, resulting in a significant challenge as consumers are either postponing the purchase of vehicles or they are purchasing smaller vehicles that are more economical both at the time of purchase and at the pump." [PR]
• Ashland (ASH): FQ3 EPS of $1.03 beats by $0.17. Revenue of $2.2B (+11%) vs. $2.13B. Shares [PR]
• AU Optronics (AUO): Q2 EPS of $0.84 beats by $0.27. Revenue of $4.06B (+25.7%) in-line. [PR]
• Belden (BDC): Q2 EPS of $0.97 beats by $0.07. Revenue of $556B (+1.2%) vs. $573B. [PR]
• Bristol-Myers (BMY): Q2 EPS of $0.43 beats by $0.03. Revenue of $5.2B vs. $5.09B. Shares +0.5%. [PR]
• Bunge (BG): Q2 EPS of $5.45 beats by $2.18. Revenue of $14.37B (+73.1%) vs. $13.25B. Sees full-year EPS of $11.60-11.90 vs. $9.16. "Looking to the second half of the year, fertilizer fundamentals should remain strong." [PR]
• Canon (CAJ): Q2 profit fell 13% to $1B. Sales fell 1.9% to $10.26B. Weak results were mainly due to the strong yen vs. the weak dollar. [AP]
• Celgene (CELG): Q2 EPS of $0.37 beats by $0.02. Revenue of $571.5M (+64.3%) vs. $539M. Shares +2.1%. [PR]
• Cooper Industries (CBE): Q2 EPS of $0.97 beats by $0.06. Revenue of $1.72B (+17.8%) in-line. [PR]
• Credit Suisse (CS): Net profit fell to 1.22B francs from 3.19B - roughly doubling analyst expectations. It attracted 17.4B francs in new assets. CS says the outlook remains difficult. Shares were up 5.5% in Zurich. [WSJ]
• Daimler (DAI): Q2 EPS of €1.40 beats by €0.07. Revenue of €25.38B (+9%) vs. €24.12B. Shares [PR]
• Diamond Offshore Drilling (DO): Q2 EPS of $2.99 beats by $0.22. Revenue of $954M (+47.1%) vs. $926M. [PR]
• Dow Chemical (DOW): Q2 EPS of $0.81 misses by $0.04. Revenue of $16.38B (+23.5%) vs. $14.89B. [PR]
• Elan (ELN): Q2 EPS of -$0.15 misses by $0.02. Revenue of $246M (+30.3%) vs. $250M. [PR]
• Eli Lilly (LLY): Q2 EPS of $0.99 misses by $0.01. Revenue of $5.15B (+11.2%) vs. $5.03B. Shares +0.3%. [PR]
• EnCana (ECA): Q2 EPS of $1.96 beats by $0.12. Revenue of $7.32B (+30.4%) vs. $5.95B. [PR]
• Ford (F): Q2 EPS of -$0.62 misses by $0.35. Revenue of $38.6B (-12.7%). [PR]
• Goodrich (GR): Q2 EPS of $1.44 beats by $0.36. Revenue of $1.85B (+17.3%) in-line. Sees full-year EPS of $4.80-4.95 vs. $4.51. [PR]
• Invitrogen (IVGN): Q2 EPS of $0.73 beats by $0.16. Revenue of $368M (+14.3%) vs. $353M. Shares +3.1%. [PR]
• Kimberly-Clark (KMB): Q2 EPS of $1.03 in-line. Revenue of $5.01B (+11.2%) in-line. [PR]
• Kinetic Concepts (KCI): Q2 EPS of $0.98 beats by $0.05. Revenue of $462M (+16.5%) vs. $447M. [PR]
• L-3 Communications (LLL): Q2 EPS of $1.67 beats by $0.04. Revenue of $3.72B (+9.2%) vs. $3.66B. Shares +0.2%. [PR]
• Laboratory Corp. (LH): Q2 EPS of $1.24 in-line. Revenue of $1.15B (+10%) in-line. [PR]
• Lee Enterprises (LEE): FQ3 EPS of $0.28 misses by $0.02. Revenue of $256M (-8.3%) vs. $264M. [PR]
• Level 3 Communications (LVLT): Q2 EPS of -$0.08 beats by $0.02. Revenue of $1.09B (+3.6%) in-line. Shares +5.3%. [PR]
• Medco Health Solutions (MHS): Q2 EPS of $0.56 beats by $0.02. [PR]
• National City (NCC): Q2 EPS of -$2.45 (-$1.8B) vs. consensus of -$0.26. Provisions for loan losses rose to $1.59B from $145M a year ago and $1.39B in Q1. [PR]
• Occidental Petroleum (OXY): Q2 EPS of $2.79 beats by $0.08. Revenue of $7.1B vs. $6.77B. Shares +5.8%. [PR]
• Petro-Canada (PCZ): Q2 EPS of C$2.38 misses by $0.15. [PR]
• Potash (POT): Q2 EPS of $2.82 beats by $0.21. Revenue of $2.62B (+93.7%) vs. $2.55B. [PR]
• Qualcomm (QCOM): Sees Q4 EPS of $0.49-0.51 vs. $0.54 and revenue of $2.5-2.7B vs. $2.71. [PR]
• RadioShack (RSH): Q2 EPS of $0.35 beats by $0.09. Revenue of $995M (+6.4%) vs. $908.5M. Announces $200M buyback. [PR]
• Raytheon (RTN): Q2 EPS of $1.00 beats by $0.07. Revenue of $5.87B (+11.2%) vs. $5.63B. Sees full-year EPS of $3.80-3.95 vs. $3.92. [PR]
• Snap-On (SNA): Q2 EPS of $1.15 beats by $0.09. Revenue of $766B (+7.6%) vs. $757B. [PR]
• Southwest Airlines (LUV): Q2 EPS of $0.16 beats by $0.04. Revenue of $2.87B (+11.1%) in-line. [PR]
• Suncor Energy (SU): Q2 EPS of $0.88 beats by $0.17. [PR]
• Smith International (SII): Q2 EPS of $0.91 beats by $0.02. Revenue of $2.49B (+18%) vs. $2.38B. [PR]
• Starwood Hotels (HOT): Q2 EPS of $0.56 beats by $0.04. Revenue of $1.57B (+0.1%) vs. $1.49B. Sees Q3 EPS of $0.52-0.57 vs. $0.66 and full-year EPS of $2.17-2.32 vs. $2.44. [PR]
• TASER International (TASR): Q2 EPS of -$0.02 misses by $0.03. Revenue of $21.1M (-18.4%) vs. $27.2M. Shares -12.1%. [PR]
• Union Pacific (UNP): Q2 EPS of $1.02 beats by $0.10. Revenue of $4.57B (+12.9%) in-line. Shares +1.8%. [PR]
• Xerox (XRX): Q2 EPS of $0.24 in-line. Revenue of $4.53B (+7.77%) in-line. [PR]

Earnings: Wednesday After Close

• AFLAC (AFL): EPS of $1.01 in-line. Revenue of $4.34B (+15.2%) in-line. -4%. [PR]
• Allstate (ALL): Q2 EPS of $1.24 misses by $0.05. Revenue of $7.42B (-21.5%) vs. $8.8B. Shares [PR]
• Amazon.com (AMZN): EPS of $0.37 beats by $0.11 (some analysts say it missed by $0.02 - see comments). Revenue of $4.06B (+40.8%) vs. $3.96B. +7%. [PR]
• Amdocs (DOX): EPS of $0.71 beats by $0.06. Revenue of $194M (-9.1%) vs. $185M. +2.5%. [PR]
• Ameriprise Financial (AMP): EPS of $1.01 beats by $0.14. Revenue of $2.02B (-8.9%) vs. $2.09B. [PR]
• Baidu.com (BIDU): Q2 EPS of $1.11 beats by $0.13. Revenue of $117M (+124.2%) vs. $112.5M. Shares +13%. [PR]
• Cabot (CBT): FQ3 EPS of $0.52 beats by $0.14. Revenue of $840M (+29.4%) vs. $801M. [PR]
• Chipotle Mexican Grill (CMG): EPS of $0.74 misses by $0.01. Revenue of $341M (+24.3%) vs. $344M. -4.7%. [PR]
• Citrix Systems (CTXS): EPS of $0.38 beats by $0.02. Revenue of $392M (+17.2%) vs. $387M. -0.6%. [PR]
• F5 Networks (FFIV): EPS of $0.23 beats by $0.01. Revenue of $166M (+25.1%) vs. $161M. -3.2%. [PR]
• Fidelity National Financial (FNF): EPS of $0.03 misses by $0.10. Revenue of $1.18B (-21.1%) vs. $1.09B. [PR]
• Intersil (ISIL): EPS of $0.39 beats by $0.01. Revenue of $216 (+21.3%) in-line. [PR]
• LSI Logic (LSI): EPS of $0.13 beats by $0.04. Revenue of $692M (+3.3%) vs. $665M. +11%. [PR]
• McKesson (MCK): EPS of $0.83 beats by $0.03. Revenue of $26.7B (+8.9%) vs. $26.03B. Sees 2009 EPS of $4.00-4.15 vs. $3.83. +2.5%. [PR]
• MEMC Electronic Materials (WFR): EPS of $0.92 misses by $0.08. Revenue of $531M (+6%) vs. $558M. Sees full-year EPS of $4.00-4.30 vs. $4.30. -13%. [PR]
• Netgear (NTGR): EPS of $0.41 beats by $0.06. Revenue of $204M (+24.5%) vs. $196M. [PR]
• Newfield Exploration (NFX): Q2 EPS of $1.06 beats by $0.08. Revenue of $691M (+31.4%) vs. $538M. [PR]
• Noble (NE): Q2 EPS of $1.40 beats by $0.09. Revenue of $813M (+12%) vs. $835M. [PR]
• NutriSystem (NTRI): EPS of $0.71 beats by $0.06. Revenue of $194M vs. $185M. +9%. [PR]
• Pulte Homes (PHM): Q2 EPS of $-0.63 beats by $0.06. Revenue of $1.63B (-19.6%) vs. $1.56B. Shares +7%. [PR]
• Qualcomm (QCOM): FQ3 EPS of $0.55 in-line. Revenue of $2.76B (+18.6%) in-line. [PR]
• Robert Half International (RHI): EPS of $0.48 beats by $0.06. Revenue of $1.22B (+6.6%) in-line. [PR]
• SLM (SLM): Q2 EPS of $0.27. Student loans +12% to $2.7B. "Our funding costs have been extraordinarily high throughout 2008. Recent spread narrowing is encouraging because our earnings potential in 2008 and beyond is largely dependent on future funding costs." [PR]
• Skechers (SKX): EPS of $0.31 misses by $0.03. Revenue of $355M (+0.7%) vs. $360M. -4.5%. [PR]
• Sybase (SY): EPS of $0.49 beats by $0.06. Revenue of $283M (+15.4%) vs. $262M. -0.5%. [PR]
• Teradyne (TER): Q2 EPS of $0.16 misses by $0.01. Revenue of $318M (+6.9%) in-line. [PR]
• Terex (TEX): EPS of $2.32 beats by $0.32. Revenue of $2.94B (+25.3%) vs. $2.76B. +10%. [PR]
• Tupperware (TUP): Q2 EPS of $0.75 beats by $0.08. Revenue of $584M (+18.4%) vs. $573M. [PR]

Today's Markets

• Asia Thursday was a mixed bag. Nikkei +2.2% to 13,603. Hang Seng -0.2% to 23,088. Shanghai +2.55% to 2,910. BSE -1.1% to 14,777.
• In Europe, markets are lower at midday. London -0.4%. Paris -0.8%. Frankfurt -0.7%.
• Futures have inched down overnight. Dow -0.44%. S&P -0.43%. Nasdaq +0.05%. Crude +0.14% to $124.65. Gold +0.22% to $925.

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