(Reuters) - Banking regulators expect to release proposals for replacing the work of credit rating agencies in their regulations later this year when comprehensive proposals on tougher capital standards are unveiled, the Federal Reserve said on Monday. Credit rating agencies, such as Moody's Corp (MCO.N) and McGraw-Hill Cos' (MHP.N) Standard & Poor's, have been criticized for fueling the 2007-2009 financial crisis by assigning gold-plated ratings to securities that proved to be far more risky than advertised.

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(Reuters) - Stocks rose on Thursday as encouraging results from Morgan Stanley lifted optimism over the battered financial sector, while investors were cheered by the initial details over a rescue plan for Greece. Europe is willing to let Greece default on its sovereign debt under a crisis response involving a bond buyback, a debt swap but no new taxes on banks, sources said, as an emergency summit began. The euro zone crisis has been a big headwind for U.S. equities in recent weeks.

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(Reuters) - The number of Americans filing new claims for unemployment benefits rose more than expected last week, pointing to a labor market that is struggling to regain momentum. Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 418,000, the Labor Department said on Thursday. Economists polled by Reuters had forecast claims rising to 410,000 from a previously reported 405,000.

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(Reuters) - Morgan Stanley stunned investors with better-than-expected second-quarter results, outperforming Goldman Sachs and other rivals as it gained market share in tough trading conditions. The bottom line was helped by strong equity and sales trading, surprisingly resilient fixed income, currency and commodities (FICC) trading, and a lead underwriting position on several big technology IPOs. Morgan Stanley shares rose as much as 7 percent in premarket trading to $23.17.

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(Reuters) - Standard & Poor's reiterated on Thursday it sees a real risk that future U.S. government deficits may meaningfully miss discussed targets and that there is a 50-50 chance the U.S. AAA credit rating could be cut within three months, perhaps as soon as August. The deficit reduction debate is coming up against an August 2 deadline when the $14.3 trillion limit on America's borrowing capacity is exhausted, putting in jeopardy payments on U.S. Treasury debt as well as paychecks for federal employees and soldiers.

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(Reuters) - AT&T Inc's (T.N) second-quarter profit and revenue beat Wall Street estimates and it added more subscribers than expected despite the loss of exclusive U.S. rights to sell Apple Inc's (AAPL.O) iPhone. The No. 2 U.S. mobile provider, which is seeking approval to buy T-Mobile USA for $39 billion, added 331,000 net subscribers in the quarter, compared with the average expectation for 91,000 from seven analysts contacted by Reuters.

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(Reuters) - A key gauge of future economic activity rose less than expected in June as headwinds from the debt ceiling debate and recent floods and tornado damage in some regions of the country kept growth moderate, the independent Conference Board said on Thursday. The board said its Leading Economic Index increased 0.3 percent to 115.3 after a 0.8 percent increase in May to a record 114.7, which was revised upward to 114.9. Economists polled by Reuters had expected the index to rise 0.2 percent.

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(Reuters) - Europe is willing to let Greece default under a crisis response that would involve a bond buyback, a debt swap but no new tax on banks, EU sources said as euro zone leaders began a crucial emergency summit Thursday. A draft summit statement obtained by Reuters showed leaders were also considering a sweeping expansion of the role of their EFSF rescue fund to help states sooner, recapitalize banks and intervene in the bond market in a drive to halt contagion.

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(Reuters) - Wal-Mart Stores Inc (WMT.N) has agreed to give its U.S. store data to Nielsen Holdings NV (NLSN.N), bolstering an industry benchmark that has long lacked insights into sales at the world's largest chain. Nielsen gathers and analyzes sales information from a variety of U.S. chain stores, giving manufacturers, Wall Street analysts and others a glimpse at how products such as food and detergent are selling -- everywhere from grocery stores such as Kroger Co (KR.N) to mass merchants such as Target Corp (TGT.N).

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(Reuters) - Stocks were flat on Wednesday, with even a blowout quarter at Apple failing to entice investors to carry on buying the day after Wall Street's best day since March. The bellwether's results follow similarly strong numbers from IBM and Coca-Cola that helped underscore the growing sense companies were faring well despite the economic soft patch. However, sovereign debt problems in the United States and Europe continue to worry the market.

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