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Alcoa Miss Fails to Hurt the Market

Alcoa miss does not hurt the market. More evidence that Europe is what matters: euro strong, European bourses up 1 to 3 percent.

Keep voting, until there's a yes. The vote in Slovakia to approve expansion of the European Financial Stability Facility (EFSF) failed, the government fell, but no matter: There will be another vote in a day or so with a new coalition, and the EFSF expansion will become a reality.

Up next: The European Union Summit on Oct. 23, where the markets are expecting the EU leadership to start speaking with one voice on recapitalization and the Greek debt crisis, but also expect broader pronouncements about tighter integration in the euro zone.

It's time for all in, or out.

European Commission President Jose Manuel Barosso is scheduled to present a plan on bank recapitalization later today. Germany's position seems to be ascendant: Banks should raise capital first, go to national governments second, and rely on the newly expanded EFSF last.

Elsewhere:

1. What happened to the recession? UBS today said the U.S. economy is "somewhat stronger than we assumed" and raised its third-quarter estimates for the S&P 500 to $24.50 from $23.50, and also raised its fourth-quarter forecast to $24.50 from $23.84, citing strength in the manufacturing, auto sales, and payroll report.

2. The Shanghai Composite up 3 percent (!)

3.

Harrisburg, Pa., files for bankruptcy protection

, and it seems to have had little effect on the markets. "The market has built in an understanding that we will see numerous local municipal bankruptcies across the U.S.," one trader wrote to me.?

4. Pepsibeat estimates by a penny on stronger-than-expected sales, resulting from favorable pricing and volume gains across its divisions. Emerging markets were a particular area of strength, with organic snack volumes there growing 8 percent and organic beverage volumes rising 3 percent. The beverage and snack maker also reaffirmed full-year guidance of high single-digit earnings per share growth, even as it expects an uncertain economic environment and higher commodity costs.

5. Getting rid of the weak links: In a strategic move, apparel maker and retailer Liz Claiborne soars 28 percent after announcing plans to sell its namesake and Monet brands to J.C. Penney for $268 million. The company will change its name and focus on its more successful luxury brands, including Lucky Brand, kate spade, and Juicy Couture. This comes after it sold a majority stake in its international Mexx business last month to private equity firm Gores Group.

6. In its interim quarterly report, Chevron sees third-quarter earnings flat compared to the prior quarter. That would be ahead of Street expectations as the oil giant earned $7.7 billion in the second quarter, while analysts were expecting a $6.5 billion profit in the current quarter. However, oil production both in the U.S. and overseas were down midway through the quarter.

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