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From Briefing.com: 4:31PM KLA-Tencor announces global reduction in force by ~15%; to lower expense rate by ~165-170 mln by FY09 (KLAC) 16.81 -0.56 : Co announced that, in response to current market conditions, the company plans to reduce its global workforce by approximately 15 percent by June 30, 2009. This reduction is one of many cost-reduction actions the company is taking in an effort to lower the company's quarterly operating expense run rate to approximately $165-170 million by the end of fiscal year 2009 in response to the current demand environment. KLA-Tencor currently estimates that, in connection with the workforce reduction, it will incur an initial charge in the range of approximately $15 million to $20 million, almost all of which is related to estimated severance costs associated with the workforce reduction.

4:25 pm : Stocks rose 1.0% in a volatile session as traders digested testimony from the head of the Federal Reserve, Treasury and FDIC, upside earnings guidance from Hewlett-Packard and speculation regarding the future of U.S. automakers.

The S&P 500 climbed to a gain 1.8% at midday, dropped to a loss of 2.8% in the final hour of trade before a surge in buying interest sent the S&P 500 back into positive territory. Seven of the ten economic sectors posted a gain. Small- and mid-cap stocks underperformed, with the Russell 2000 (-0.8%) and S&P 400 (-0.3%) both declining.

Fed Chairman Bernanke, Treasury Secretary Paulson and FDIC Chairman Bair were called to testify about the $700 billion financial relief package before the House Financial Services committee. Bernanke said there are some signs that credit markets are improving, although they remain strained. Treasury Secretary Paulson defended scrapping the original plan to buy troubled assets, saying that direct capital injections were more effective given the sharp deterioration in financial markets. Paulson believes the economy will not recover as fast as anyone would like, but will recover at a quicker pace because of the relief package.

On a related note, the Treasury bought $33.6 billion in preferred stock from 21 banks, including $6.6 billion in US Bancorp (USB 25.73, -0.07) and $3.6 billion in Capital One Financial (COF 29.25, -0.62). This brings the totaled preferred stock purchases in banks up to $158.6 billion. The financial sector fell 0.8%.

In corporate news, Hewlett-Packard (HPQ 33.58, +4.24) announced preliminary fourth quarter earnings that topped estimates and issued fiscal year 2009 earnings guidance that was above expectations.

Yahoo! (YHOO 11.48, +0.85) gained after announcing that cofounder Jerry Yang will step down as CEO as soon as a replacement is found, raising speculation that Microsoft (MSFT 19.62, +0.43) may show renewed interest.

The 14.5% gain in HPQ and 8.0% increase in YHOO helped the tech sector (+1.9%) outperform. More than half of tech stocks posted a loss, however, as investors were aware that the upside HPQ guidance was largely a company specific story, and not indication of overall strength.

In earnings news, Saks (SKS 3.27, -0.58) tumbled after missing third quarter earnings expectations, while Home Depot (HD 20.71, +0.71) rose after topping estimates. Both retailers were cautions about the near-term outlook. Retailers a whole fell 0.2%.

Shares of General Motors (GM 3.09, -0.09) and Ford (F 1.68, -0.04) fell to multi-decade lows. The automakers, along with Chrysler and the United Auto Workers, testified before the Senate Banking Committee regarding possible aid for the struggling U.S. auto industry.

In economic news, domestic producer prices in October dropped by a larger-than-expected amount due to the sharp decline in energy prices. Specifically, October PPI dropped 2.8% month over month, compared to the expected decline of 1.9%. Core PPI, which excludes food and energy, rose 0.4%, which was larger than the expected increase of 0.1%. DJ30 +151.17 NASDAQ +1.22 NQ100 +0.3% R2K -0.8% SP400 -0.3% SP500 +8.37 NASDAQ Adv/Vol/Dec 1088/2.41 bln/1719 NYSE Adv/Vol/Dec 1153/1.60 bln/1975

3:48PM General Electric: Additional detail on earlier headline regarding GE's new capital structure (GE) 15.88 -0.23 : The co announces a new GE Capital organization structure designed to execute on those objectives, and accelerate the evolution of the business into a more focused set of higher returning businesses. The new structure consists of operational poles in Europe, Asia and the Americas. Co also has created two new platforms to take advantage of new opportunities and leverage our expertise: one for consumer-focused international banks and JVs, and another focused on optimizing returns on non-strategic assets... Michael Neal, chairman of GE Capital, said, "Over the last two months, we have acted decisively to improve our funding position. We reduced our leverage, successfully raised capital, and accessed government programs that level the competitive playing field for us in financial services. Through these actions, we have strongly improved our 2009 funding outlook, and continue to reposition GE Capital for long-term performance and to play offense as conditions permit. This new organization aligns our operations with our strategic and funding plans."... With this more efficient organization, co is projecting approximately $2 billion in savings at GE Capital in 2009. These savings and the continued focus on optimizing the portfolio increase flexibility and vantage of opportunities created in the current market and drive value for our shareholders.

11:00AM Atmel comments on Microchip and ON announcement to withdraw their unsolicited, unfinanced proposal (ATML) 3.38 -0.65 : Co issues statement in response to the announcement that Microchip Technology (MCHP) and ON Semiconductor (ONNN) have withdrawn their joint proposal to acquire Atmel. "Atmel's Board and management remain focused on executing the transformation plan to ensure that Atmel's stockholders fully realize the value inherent in the Company. We are making significant progress, as evidenced by Atmel's outstanding third quarter results, which included market share gains and the highest gross margins in seven years. The decision by Microchip and ON to withdraw their unsolicited, unfinanced proposal underscores our Board's determination that the proposal was highly conditional and subject to significant execution risk. As previously announced, after a comprehensive review, and with advice from outside financial and legal advisors, Atmel's Board unanimously determined that the October 1, 2008, unsolicited proposal from Microchip and ON was inadequate in multiple respects, including value, conditionality and complexity, and was not in the best interests of Atmel's stockholders."

9:04AM Atmel: ON Semiconductor withdraws from proposal to acquire Atmel (ATML) 3.99 : ON Semiconductor (ONNN) announces that it is withdrawing from its joint proposal with Microchip Technology (MCHP) to acquire ATML. "We have decided to withdraw from the proposal due to the unforeseen deterioration in the semiconductor market since we announced our proposal as well as the unprecedented weakness in the financial markets." MCHP said that: "As a result of ON Semiconductor's withdrawal, Microchip must also withdraw its $5 per share offer for Atmel. However, Microchip intends to evaluate its potential alternatives for pursuing a transaction without ON Semiconductor."

8:30AM Corning withdraws fourth-quarter and 2009 guidance, expect Q4 sales to be below previous guidance and EPS to be at the low end or below guidance range (GLW) 9.01 : Co has withdrawn its previously disclosed financial guidance for the fourth quarter and 2009. "We now expect our fourth-quarter sales to be below our guidance range of $1.1-1.2 bln (vs $1.33 bln First Call consensus), and EPS to be at the low end or below our guidance range of $0.20-0.28*(vs $0.25 First Call consensus). The retail environment and the LCD supply chain are both extremely uncertain. As a result, since the display business is a significant contributor to our overall results, we are unable to offer revised guidance for the fourth quarter or for 2009 at this time." Co will make further LCD glass manufacturing capacity reductions in the fourth quarter, with a resulting impact on gross margins in the Display Technologies segment and the company overall. Co will have restructuring charges in both the fourth quarter of this year and in the first half of 2009 as the company adjusts its capacity and fixed cost structure to reflect the lower demand.

8:10AM Hewlett-Packard guides above consensus for Q4; issues in-line Q1 guidance, mixed FY09 guidance (HPQ) 29.34 : Co issues upside guidance for Q4 (Oct), sees EPS of $1.03, excluding non-recurring items, vs. $1.00 First Call consensus; sees Q4 (Oct) revs of $33.6 bln vs. $33.09 bln consensus. Co issues in-line guidance for Q1 (Jan), sees EPS of $0.93-0.95, excluding non-recurring items, vs. $0.93 consensus; sees Q1 (Jan) revs of $32-32.5 bln vs. $33.72 bln consensus. Co issues mixed guidance for FY09 (Oct), sees EPS of $3.88-4.03, ex items, vs. $3.85 consensus; sees FY09 (Oct) revs of $127.5-130 bln vs. $135.06 bln consensus. In providing its outlook for the first fiscal quarter and the full fiscal year 2009, the company has taken into consideration the current economic environment and the relative strength of the U.S. dollar. Based on current currency exchange rates, the company now expects an unfavorable year-over-year currency impact on revenue of approximately 5 percentage points in the first quarter and roughly 6 - 7 percentage points for the full year and this impact is reflected in its outlook.

8:01AM Broadcom says "Qualcomm again held in contempt of injunction on 3G cellular products previously found to infringe Broadcom patent" (BRCM) 14.72 : Co announced that a federal judge yesterday found Qualcomm Incorporated (QCOM) in contempt of an injunction entered last December that was designed to prevent Qualcomm from continued infringement of two Broadcom patents. As to Broadcom's U.S. Patent No. 5,657,317, the injunction prohibits Qualcomm from making, using, selling, offering for sale, importing, and developing certain EV-DO chips. The injunction also provides a sunset period during which Qualcomm can continue to sell legacy EV-DO chips to legacy customers until January 31, 2009, provided that it pays a royalty to Broadcom. U.S. District Court Judge James V. Selna found that Qualcomm violated both provisions of the injunction by selling and offering to sell enjoined EV-DO chips and by failing to pay royalties on legacy EV-DO chips.

7:30AM Am Superconductor partners with Shenyang Blower Works for development of 2 megawatt wind turbines (AMSC) 10.28 : Co and Shenyang Blower Works signed an agreement for co-development work that positions S.B.W. to become a leading supplier of wind turbines for the Chinese marketplace. Under the terms of the agreement, AMSC's wholly owned AMSC Windtec subsidiary will provide S.B.W. with designs for its 2 megawatt doubly fed induction wind turbine. AMSC will also help S.B.W. localize the supply of all core components for the wind turbines, establish its wind turbine manufacturing line and build and test S.B.W.'s first prototype wind turbines. After receiving certification, S.B.W. will manufacture the turbines and sell them primarily into the Chinese market. AMSC will provide the full electrical systems for all of SBW's wind turbines.

Mattson Technology (MTSN) announces that it has shipped an etch system to a major memory manufacturer, who has entered into a joint evaluation agreement with Mattson for development of next generation memory devices...

07:37 am Microsoft initiated with an Average at Caris- tgt $21: . Caris initiates MSFT with an Average and sets a $21 tgt, as efforts to penetrate faster growth markets have pressured margins and cash flow with no clear sense of time and/or magnitude of payback and see little upside to their below consensus FY09 revenue and EPS estimates which remain dependent on a weak and receding PC market.

08:37 am Hewlett-Packard (HPQ)

Shares of Hewlett-Packard (HPQ 29.34) are seeing some positive support ahead of the session's opening bell as investors react to upbeat guidance.

HP stated this morning that it expects fourth quarter revenue to come in around $33.6 billion, while earnings are expected to come in at $1.03 per share. Wall Street's current consensus calls for revenue of $33.1 billion and earnings of $1.00 per share.

For the first quarter of the coming fiscal year, Hewlett-Packard expects revenue to range from $32.0 billion to $33.5 billion. Earnings are expected to range from $0.93 to $0.95 per share. Meanwhile, the consensus calls for revenue of $33.7 billion and earnings of $0.93 per share.

As for 2009, the company currently estimates revenue will range from $127.5 billion to $130.0 billion with earnings ranging from $3.88 to $4.03 per share. Wall Street forecast a top line of $135.1 billion and earnings of $3.85 per share.

The outlook comes as a refreshing dose of good news as the trend of disappointing quarterly results and downwardly revised outlooks from various businesses have added to investors' gloom. HP's outlook, though, is likely supported by cost cutting and its share repurchase plan.

The company recently authorized an additional $8 billion for stock buybacks, which should prove accretive to earnings per share results by reducing the number of outstanding shares.