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Welcome back risk-on. Asian and European stock markets posted sharp gains Tuesday and commodities soared following Monday's U.S. rally, underscoring growing - if transient - confidence that authorities are actually making progress in tackling the eurozone debt dilemma. Transfixed with the debt crisis, markets seem willing for now to ignore an impending euro-area recession.

Rumors fly on EU debt crisis action. According to media reports, "top European officials" are preparing a detailed plan that would lever up existing EFSF money eight-to-one to buy up European sovereign debt and then issue bonds. German officials tried to downplay expectations of quick and dramatic action, while U.S. officials pushed their European counterparts to move faster to address the region's debt crisis. The ECB continues to be reluctant about large-scale intervention, and last week scaled back its purchases of government bonds to €4B, down from nearly €10B the week before.

Japan might aid Greek bailout. Japanese finmin Jun Azumi said today that Japan is open to aiding a Greek bailout effort: "If there is a scheme that's based on a firm process, involves a reasonable amount of money and could provide the world and markets with a sense of security regarding a Greek bailout, I would not rule out the possibility of Japan sharing some of the burden."

More shrinkage for Goldman. After promising $1.2B in cost cuts over the summer, sources say Goldman Sachs (NYSE:GS) is preparing to expand its cost-cutting initiative by "hundreds of millions of dollars" - a move that would likely lead to more job losses. Year-end bonuses and perks are in focus as GS braces for what may be one of its worst quarters as a public company.

Buffett sees bargain in Berkshire. Berkshire Hathaway (NYSE:BRK.A) announced a share repurchase program yesterday morning, planning to reduce its cash holdings to no less than $20B. The company also said it would pay no price higher than a 10% premium over the then-current book value of the shares. Since the repurchase news sent Berkshire's A shares up 8.1% to a close of $108,449, just shy of 110% of book value, the company may have talked itself out of the buyback.

Tech patent wars. The first scheduled court hearing of Samsung's (OTC:SSNLF) intellectual-property suits against Apple (NASDAQ:AAPL) was held yesterday in the Netherlands, with Samsung arguing that Apple is "consciously, structurally infringing the 3G patents." The court moves are part of a larger legal showdown between tech giants trying to get an edge in the smartphone market.

Senate approves budget stop-gap. The Senate approved, in a 79-12 vote, stop-gap measures to fund the government for an additional six weeks and avert a shutdown. It also approved, on a voice vote, a one-week extension to give the House time to consider the funding bill; House approval is expected.

Kodak plunges on cash call. Shares of Eastman Kodak (EK) fell 27% yesterday to $1.74, a 38-year low, after the firm disclosed it had borrowed $160M against its credit line for "general corporate purposes." The news intensified concerns about the company's ability to generate cash and keep up with its rivals.

InterDigital gets hit on low sale bids. InterDigital (NASDAQ:IDCC) fell more than 20% yesterday, before recovering somewhat to close -14% at $49.54, after a media report claimed buyout offers for the 3G/4G patent holder, which put itself on sale in July, have been in the $1B-2B range. InterDigital's market cap was north of $2.5B heading into yesterday's trading, as hopes ran high of a sale price comparable to that for Nortel's patent portfolio.

Tough times for accounting's Big Four. The European Commission is zeroing in on the business model of the Big Four accounting firms (Deloitte, PwC, Ernst & Young, and KPMG), with plans to transform the accounting sector in order to restore trust in financial reporting. Draft regulation from the EC would require the firms to abandon their consultancy businesses and share audit work with smaller rivals. Separately, Deloitte was accused yesterday of failing to detect fraud during its audit of now-bankrupt mortgage giant Taylor, Bean & Whitaker, and is being sued for $7.6B in losses.

B&N cleared to buy Borders IP. Barnes & Noble (NYSE:BKS) won court approval yesterday to buy intellectual property, including a customer database, from bankrupt Borders Group. Shares of B&N climbed 4.4% in yesterday's trading.

Motorola Solutions faces bribery probe. Motorola Solutions (NYSE:MSI), the part of the old Motorola (NYSE:MMI) not being acquired by Google (NASDAQ:GOOG), is reportedly under investigation by the Justice Department and SEC over whether it paid bribes to win business in Europe in violation of the Foreign Corrupt Practices Act. The investigation began in 2009, after the company opened an internal probe and alerted federal authorities to possible violations of anti-bribery laws.

Today's Markets
Asia: Japan +2.8%. Hong Kong +4.2%. China +0.9%. India +3.0%.
Europe at midday: London +2.3%. Paris +3.6%. Frankfurt +3.4%.
Futures at 7:00: S&P +1.31%. 10-yr -0.3%. Euro -0.01% vs. dollar. Crude +2.67% to $82.39. Gold +4.94% to $1671.45.

Tuesday's Economic Calendar
7:45 ICSC Retail Store Sales
8:30 Chicago Fed Midwest Manufacturing Index
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
12:30 PM Fed's Lockhart: US Economy

Notable earnings before Tuesday's open: WAG

Notable earnings after Tuesday's close: ACN, JBL, PAYX

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Source: Wall Street Breakfast: Must-Know News