Nokia Joins Forces With Microsoft to Challenge Apple, Google; Shares Slump

Nokia Oyj, the world’s largest maker of mobile phones, said it’s forming a software corporation with Microsoft Corp, betting that together the two companies can challenge Google Inc. and Apple Inc.

Nokia fell as much as 12 percent, the biggest fall in a almost 10 months, after its plan to make Microsoft’s Windows its primary software was seen as a sign of the extent of its troubles taking on Apple’s iOS and Google’s Android platforms.

“It’s a clear admission that Nokia’s own platform strategy has faltered,” told Ben Wood, a London-based analyst with CCS Insight. “Microsoft is the big winner in this deal, but there are no silver bullets for either company given strength of iPhone and Android.”

Coke Sales Rise Globally

Coca-Cola Co. posted solid fourth-quarter worldwide sales growth and continued to take share from rival PepsiCo Inc. in the key North American market.

Coke's growth was fastest in emerging markets like India and Brazil, but the company is seeing stabilization in its biggest markets. In North America, sales volume in juices, sodas and all other beverages rose 3%, excluding the impact of acquisitions and foreign-currency translations. That was the third straight quarter the figure was up. Parts of Europe saw budding signs of recovery.

Significantly, Coke also saw its North American soda sales volume tick up for the third straight quarter, in defiance of a years-long slide across the industry as customers switched to water and other drinks for health and economic reasons.

Dollar falls against euro as China raises rates

The U.S. dollar fell to the euro in late trading Tuesday after China announced that it would increase rates. Investors have also become less worried about the unrest in Egypt, moving away from the dollar and looking to invest in riskier currencies.

China's central bank said Tuesday that it would increase deposit and lending interest rates by a quarter percentage point, the second time China has raised rates in over a month.

"It was expected, but the time was unknown," said Camilla Sutton, chief currency strategist at Scotia Capital. "Investors are anticipating more interest rate hikes out of China."

GLOBAL MARKETS: European Stocks Rise; Bullish Tone Exists

European stock markets push top Tuesday, with shares in London leading the way, as market participants are seemingly hopeful about the global economic outlook in the year ahead.

Equity markets are expected to trade powerfully through 2011 on a combination of multiple expansion and earnings growth, told Royal Bank of Scotland. It added that increasing optimism around the U.S. economy may contribute to pro-equity asset allocation flows, while in Europe, earnings-per-share growth could be just over 20%, as the global economy helps the top line, while domestic labor market slack ensures favorable unit labor cost trends persist.

"Our Stoxx Europe 600 year-end target of 320 implies circa 15% upside from present levels, and would see the market multiple rise to 12x 2011 earnings [currently around 11x]," added RBS.

Sony to Spend $1.2 Billion for Image Sensor Capacity

Sony Corp. will invest 100 billion yen ($1.2 billion) over the next fiscal year to twice its production capacity for image sensors, as the company aims to expand output of the devices used in smartphones.

The maker of Cyber-shot cameras will buy back from Toshiba Corp. a factory making chips used in PlayStation 3 game consoles and convert the plant into an image-sensor production facility, Tokyo-based Sony said today in a statement. The company also plans to include equipment to an existing plant in Nagasaki, western Japan, to make high-quality image sensors, it said.

The investment follows a plan by Sony, disclosed in September, to spend 40 billion yen to boost output of so-called CMOS chips at a factory in Kumamoto prefecture. Japan’s largest exporter of consumer electronics aims to win a 30 percent share of shipments in the market for image sensors used in cell phones, compared with about 10 percent for the year ending March 2011, Yoko Yasukochi, a Sony spokeswoman, said by phone today.

Oracle wants $211 million in interest from SAP

Turning up the heat in a bitter legal dispute, software maker Oracle is asking a federal judge to order German rival SAP to give $211 million in interest on a record $1.3 billion jury award for software pirating.

Oracle filed the request Friday, saying the interest is necessary to "fully compensate" Oracle for the worth of software licenses that SAP should have purchased in 2005 and 2006.

SAP has already made a separate payment to Oracle of $120 million for its legal expenses, after acknowledging that an SAP subsidiary copied Oracle software without authorization. A federal jury decided previous month that SAP should pay what would have been the market value for licenses to use the software at the time, which the jury pegged at $1.3 billion.

Heinz profit beats estimates; sees more cash

Ketchup maker H.J. Heinz Co (HNZ.N) posted higher-than-expected quarterly earnings, helped by price increases and growth in emerging markets.

The company, which also makes Ore-Ida frozen potatoes and Smart Ones frozen entrees, affirmed its earnings outlook for the complete fiscal year but raised the target for how much free cash it expects to generate.

Profit in the second quarter, ended Oct. 27, was $251.4 million, or 78 cents a share, compared with $231.4 million, or 73 cents a share, a year previous.

Analysts on average were expecting 76 cents per share, according to Thomson Reuters I/B/E/S.

Sales fell 1.2 percent to $2.61 billion, hurt by the impact of foreign exchange rates and falling short of analysts' expectations for $2.67 billion.

Sales volume increased 0.3 percent, driven by 2.6 percent growth in emerging markets. Cost increases lifted sales by 0.6 percent.

Heinz said it is still on track to deliver fiscal 2011 growth of 3 percent to 4 percent in sales and 7 percent to 10 percent in earnings per share. It raised its free cash flow target by 15 percent to $1.15 billion.

Top Democrat seeks small business tax form repeal

Senator Max Baucus, chairman of that chamber's tax-writing committee, said he would introduce legislation to repeal that part of the law, which requires filing so-called 1099 forms, after small business groups complained it would become a paperwork nightmare.

Republicans, who won control of the U.S. House of Representatives election and gained seats in the Senate in the recent elections, have vowed to try to repeal the entire healthcare law. They have also sought repeal of the 1099 provision separately.

Baucus noted that the change was originally proposed under former Republican President George W. Bush.

Baucus said he was convinced by business groups' complaints that it was an administrative burden.

"I have heard small businesses loud and clear and I am responding to their concerns," Baucus said in a statement.

Obama last week said that he would fight any attempt to repeal the legislation, but would be willing to consider some Republican ideas. He suggested the two sides work together to change the new business transaction reporting requirement.

Intel plans 1,000 high-tech jobs in 2 states

Intel announced Tuesday that is investing up to $8 billion in microchip manufacturing plants that could create up to 1,000 permanent high-tech jobs in Arizona and Oregon.

Intel said it will spend between $6 billion and $8 billion to fund a new development fabrication plants in Oregon and to upgrade four existing plants in Oregon and Arizona. The plants will manufacture "next-generation" 22-nanometer microprocessors, or chips, the company said.

The company said this will support the creation of 800 to 1,000 permanent high-tech jobs as well as 6,000 to 8,000 construction jobs.

Intel also said the investment will allow it "to maintain its current manufacturing employment at these U.S. sites."

Intel spokeswoman Lisa Malloy said the new plant will be built in Hillsboro, Ore., near Portland, where the company already has a significant presence. Of the four plants slated for upgrade, two are in Hillsboro and two are in the greater Phoenix area.

Intel, based in Santa Clara, Calif., said it generates three quarters of its revenue from overseas markets, but employs three quarters of its chip-making employees in the United States.

"It does cost a bit more to build one of these factories from scratch in the U.S.," Intel chief executive Paul Otellini told CNN's Ali Velshi in a live interview.

But he said labor costs are not the main problem -- grants from foreign countries are the biggest incentives for U.S. companies to build factories overseas. He said the U.S. government should offer more incentives to build plants in America.

Google nears $600

Shares of Google opened up 10% Friday morning, and came within striking distance of $600 for the first time in more than nine months, after the company posted solid quarterly earnings that impressed investors.

Google's (GOOG, Fortune 500) stock rose as much as $58.42 to $599.35 a share in early morning trading, before sliding back a bit. It was the stock's highest level since January.

Late Thursday, Google reported a third-quarter profit that rose 32% on the back of stronger search ad fees from advertisers. But the company's results were also buoyed by its non-core businesses, like YouTube, display advertising and mobile.

Google defied skeptical investors and analysts who feared that the search giant would never find a a significant new revenue stream besides search advertisements. In the past, the company has been tight-lipped about the financial details of its non-search businesses, leading some analysts to speculate that those product lines were insignificant to the company's overall revenue.

For instance, Google has made tremendous headway in mobile. Its Android operating system will command 17.7% of the global mobile device market by year's end, according to a Gartner forecast, making it the second best-selling smartphone operating system, behind Nokia's (NOK) Symbian OS and ahead of Apple's (AAPL, Fortune 500) iOS. That's stunning, considering it entered the market just two years ago.

Google said its mobile advertising business was doing sales of $1 billion on an annualized basis. Display advertising, which includes images rather than textual ads, is on pace to be a $2.5 billion business annually. The company said its display business is likely the third largest in the world, behind AOL (AOL) and Yahoo (YHOO, Fortune 500).

Investors had slammed Google's stock this year, sending it down by as much as 30%. Shares started to rebound in September, but were still down 13% before Friday's market open. But Google's impressive quarterly numbers sent shares soaring, and the stock is now down just 4% for the year.

President Obama hails New York teens' life-saving business ideas

President Obama honored two New York teens on Tuesday who are using their business skills to save lives.

Steven Gordon, 18, of Brooklyn, and Nia Froome, 17, of Valley Stream, L.I., are among the winners of the 2010 Oppenheimer Funds/Network for Teaching Entrepreneurship National Youth Entrepreneurship Challenge, which encourages kids from poorer communities to pursue careers in business.

Gordon founded TattooID when he learned that 1.3 million children are reported missing each year.

After taking a two-week business seminar at Columbia University, Gordon came up with the idea for the "TattooID," a temporary tattoo stamped on the hand or arm of children with their initials and contact information.

"I got the idea for the tattoos one day thinking about my little brother and wondering what would we do if we ever lost him," Gordon said.

"It's an unbelievable honor to meet the President - not something I ever expected. I mean, I'm from Brooklyn, ya know," chirped the Hunter College freshman, who has made about $200 so far from the idea.

Froome, who attends Poly Prep Country Day School in Brooklyn, learned how to cook vegan dishes about 10 years ago when her mother was diagnosed with breast cancer.

She was told a vegan diet could slow the growth of cancer cells. Froome took a decade of her experience in the kitchen and turned it into Mamma Nia's Vegan Bakery.

Wal-Mart to start selling Apple's iPad

Wal-Mart said the iPad will be available in hundreds of its stores in the United States to start, expanding to more than 2,300 outlets by mid-November.

Wal-Mart rivals Best Buy and Target are already selling the iPad, which Apple launched in April.

Demand for the 10-inch touchscreen tablet has so far been robust, and Apple initially had a difficult time producing enough.

The company sold more than 3 million iPads in the June quarter, and Wall Street expects the company to surpass that mark with ease in the September quarter.

Apple is set to report quarterly results next Monday.

Wal-Mart will sell the iPad for the same price as other retailers, starting at $499 for the more inexpensive model. The world's largest retailer already sells Apple's iPod and iPhone.

Shares of Cupertino, California-based Apple were up $1.75 at $297.11 in midday trading on the Nasdaq.

Renault's Improving Grip on Road

Renault is one of the cheapest but riskiest bets on the global auto sector. The stock has gotten a lot less risky now that the French auto maker has drastically reduced its debt by selling part of its stake in truck-maker Volvo AB. No wonder investors are excited. Renault's stock was up 7% Thursday. The cost of insuring Renault's debt against default also fell sharply. But investors still need to keep their enthusiasm in check.

Renault has done well to raise €3 billion ($4.18 billion) by selling all its 303 million B shares in Volvo for 93 Swedish kronor ($13.88) each, a slight discount to Wednesday's closing price but 60% above the stock's 2010 low. Better-than-expected U.S. September truck orders ensured strong institutional investor demand for Volvo stock. The French auto maker is retaining its A shares in Volvo, which gives it a 6.8% equity stake and 17.5% of the votes.

The move dramatically reduces leverage in Renault's automotive business. It had net debt of €4.7 billion as of June 30, equivalent to 1.3 times forecast 2010 earnings before interest, taxes, depreciation and amortization. Renault's extra financial security isn't to be sniffed at considering it was bailed out by the French government last year.

But Renault still faces considerable challenges. It is heavily reliant on selling low-margin small cars in Europe, a market likely to contract as subsidies end next year. The yen's strength against the dollar is a headache for Nissan Motor Co., which is responsible for most of Renault's earnings. Investments in Russia, a small-car partnership with Daimler, and a €4 billion electric-car program are years from contributing to earnings.

Investors currently attribute negative value to Renault itself. Using market valuations for its 44% stake in Nissan and other strategic investments, Renault is worth minus €14 a share, based on Tuesday's closing stock price, according to Credit Suisse. That suggests some potential upside for the shares. But while a deleveraged Renault is less likely to lose its grip of the road, the way ahead still looks bumpy.

Verdantix Forecasts US Sustainable Business Spending Will Double To $60 Billion By 2014

The US sustainable business market will double to $60bn in 2014 from $28bn in 2010, according to a new report from independent analyst firm Verdantix. Based on an analysis of 1,833 firms with US revenues of at least $1bn, sustainability spend will increase by 11% in 2010 compared to 2009. This positive trend will continue with a year-on-year increase of 16% in 2011 accelerating to growth of 24% in 2012. Over the 2009 to 2014 period the compound annual growth rate will be 19% across all 20 industries covered by the market forecast.

“Executive awareness of the business benefits of sustainability is on the rise” commented Verdantix Director, David Metcalfe. “The elevation of sustainable business decisions to the C-Suite drives increased expenditure across all sustainability issues. But the US sustainable business market is still 2 years away from rapid growth due to the sluggish global economy, delayed federal regulations and a lack of mature programs in firms with revenues of less than $10bn.”

Nvidia enters the graphics card business

Enthusiast site HardOCP reported last night about its purchase of two Nvidia-branded graphics cards from a local Best Buy. This is news.

Previously, Nvidia has been a maker only of graphics chips, leaving its partners like EVGA, ASUS, PNY, and others to handle the business of building the chips into graphics cards, and packaging and selling them at retail. It seems Nvidia has decided to change that relationship.

Nvidia's technical marketing director, Nick Stam, confirmed for us this morning that what HardOCP found is indeed part of a new strategy. In an exclusive partnership with Best Buy, Nvidia is now selling boxed graphics cards "built and supported by Nvidia" at retail. The card selection is limited for now to the midrange GeForce GTX 460 and the GeForce GTS 450, although those cards represent the most profitable $125 to $250 sweet spot of the retail graphics card business.

Nestle to invest $500M in medicinal foods business

Nestle will plow some $500 million into expanding its medical nutrition business over the next decade, in a bid to capture a slice of the growing market for foods to treat chronic conditions such as diabetes and obesity, the Swiss consumer company said Monday.

Nestle SA said it wants to "pioneer a new industry between food and pharma" by creating a medical nutrition institute in Switzerland and a stand-alone subsidiary called Nestle Health Science SA.

The Vevey-based company is already one of the world's biggest producers of processed foods including Nesquik cereal, Haagen-Dazs ice cream and Nespresso coffee, with sales of some $100 billion last year.

The decision to expand its medical nutrition segment is a direct challenge to North Chicago, Illinois-based Abbott Laboratories, which has steadily increased its presence outside the traditional pharmaceutical market.

Peter Brabeck-Letmathe, Nestle's chairman and former chief executive, said health care systems worlwide are struggling to cope with the growing number of people suffering from diabetes, obesity, cardiovascular disease and Alzheimer's.

"Finding efficient and cost-effective ways to prevent and treat acute and chronic diseases" will be the goal of Nestle's research combining food and medical science, he said.

TREASURIES-Losses on strong business spending, stock rally

* Strong Aug business spending boosts stocks, hurts bonds

* Stronger economy sign dents confidence Fed will buy debt

* Stock gains lure investors from safe-haven bonds

* Aug new home sales flat, but inventory at 42-year low (Adds comment, updates prices after home sales data)

By Ellen Freilich

NEW YORK, Sept 24 (Reuters) - U.S. Treasuries fell on Friday as news businesses spent heavily in August dented bond investors' confidence the Federal Reserve would need to buy debt to help the economy.

News of revived business spending spurred stock gains, drawing investors away from safe-haven U.S. government debt after a week-long bond rally. Traders cited talk of a very large asset allocation trade from bonds to equities.

The government said total orders for long-lasting goods fell in August. But what grabbed attention was what the report said about business spending: orders excluding non-defense capital goods and aircraft rose sharply.

"Business spending has a lot of momentum," said Cary Leahey, economist at Decision Economics in New York, pointing to the data as the reason for the drop in Treasury prices.

Because the market has rallied so much over the last week - fueled by the conviction the Federal Reserve would support the economy with additional debt purchases - it was vulnerable to second thoughts, analysts said.

"The signs of strength caught (the market) off-guard," Leahey said. "The market had leaned too far. It got slapped by the report, and now it's overreacting."

Dell CEO: Overall Business Likely To Grow 20% In Current Quarter

SAN FRANCISCO (Dow Jones)--Dell Inc. (DELL) unveiled its second tablet computer Wednesday, a move that expands its portfolio of mobile devices and ramps up the competition for Apple Inc.'s (AAPL) iPad device.

The 7-inch tablet will run Google Inc.'s (GOOG) Android smartphone operating system, Dell Chief Executive Michael Dell told an audience at Oracle Corp.'s (ORCL) annual conference in San Francisco. He did not provide other technical details or its expected release date.

Representatives of the Round Rock, Texas-based company did not immediately respond to requests for more details.

The move comes roughly five months after Apple began selling its iPad, igniting consumer interest in the emerging tablet computer category. Apple sold more than 3.3 million iPads in its first quarter of sales, while a host of other computer makers are rushing similar devices to the market.

Dell released its first tablet device, dubbed the Streak, earlier this year in Europe before releasing it in the U.S. That device is 5-inches--half the size of the iPad--can make and receive calls, and runs Android.

The Streak's impact on Dell's financial performance is expected to be muted. Shortly after its debut, Dell said initial sales were "interesting, exciting, but immaterial to Dell's $60 billion in revenue."

Dell said the Streak would be available at Best Buy Co. (BBY) stores soon.

Dell has indicated that it is willing to take chances in the tablet computer market. In June, Chief Financial Officer Brian Gladden said in an interview, "We'll have a series of these devices," adding that low development costs allow the company to test different form factors on the market.

IBM to buy Netezza for $1.7bn in cash

IBM on Monday announced an agreement to buy Massachusetts-based Netezza Corporation for $1.7bn in cash, in a deal which adds to recent deal-making momentum in business software and services.

An acquisition by the US technology group of the data warehousing and business analytics company would follow Hewlett-Packard’s victory over Dell this month in the battle to acquire storage technology company 3Par for $2.4bn.

There was no immediate sign of a rival to IBM’s bid, but analysts would not rule one out as Netezza’s share price climbed 13 per cent to $27.80 in midday trading on Monday, above IBM’s offer of $27 a share.

“Someone could swoop in at the eleventh hour and try to outbid IBM,” said Shawn Rogers, analyst at Enterprise Management Associates.

“There were whispers on the street that Netezza was on the block and many of us thought that HP would be the one to buy them, so [a counterbid] would be no surprise.”

Netezza would have to pay IBM $56m if it terminates the deal. 3Par paid Dell a $72m break fee in order to accept HP’s final offer of $33 a share, which was more than three times the $9.65 3Par was trading at before Dell’s initial $18 bid.

IBM’s offer represented only a 10 per cent premium to Netezza’s closing price on Friday, although analysts at Stifel Nicolaus pointed out that Netezza was trading at only about $14 prior to Dell’s 3Par bid in August.

“We expect [the IBM deal] to continue to support ongoing M&A-driven valuations across the technology landscape,” they said, citing likely future investor interest in technology companies such as CommVault, Compellent, Isilon and NetApp.

IBM said the Netezza deal would help it expand its business information and analytics offerings. Net-ezza’s 500-strong workforce would supplement 6,000 IBM consultants in this area. IBM’s analytics business grew 14 per cent year-on-year in the second quarter and it has spent $12bn in 23 analytics-related acquisitions over the past four years. Sam Palmisano, IBM chief executive, said in May he was planning $20bn in acquisitions over the next five years.

UPDATE 1-US Democrats reject R&D tax credit bill

U.S. Senate Democrats rejected a bill on Thursday to make a business research tax credit permanent after Republicans tried to attach it to a long-stalled small-business bill.

Democrats rejected the research and development tax credit on the grounds that it would delay passage of a larger small-business bill, which President Barack Obama is pushing for as part of his efforts to jump-start the economy.

Democrats later on Thursday passed their small-business bill, which Republicans had delayed since late July, to show voters they are working to improve the economy ahead of the Nov. 2 elections.

Democrats argued that attaching the R&D measure would cause further delays by forcing it back to the committee level.

"These motions are the way that folks score points, these motions are the way that folks try to embarrass," Democrat Senate Finance Chairman Max Baucus said.

Making permanent the research and development tax credit is one of Obama's signature proposals to jump-start the economy, and enjoys bipartisan support. The federal tax credit is now expired but is typically renewed annually.

"If Senate Democrats really want to do something for private sector jobs in this country, they should support Senator's Hatch's bipartisan R & D tax credit," Republican Senate Leader Mitch McConnell said.

Most Republicans oppose the small business measure, calling it a bailout because it includes a $30 billion lending fund.

Republicans have blocked most of the Democrats' job creation bills this year and Democrats are eager to pass the measure before facing voters in November