Wednesday morning headlines

Market takes off: The strong Intel earnings could be providing a lift. Dow is up over 100 points in early trading.

Intel's upbeat numbers: The mega-chipmaker posted second-quarter sales substantially stronger than Wall Street expected, and its outlook for the rest of the year looks pretty good as well. Customers have burned through massive amounts of inventory to save money, and now need to restock. (AP)

Budget deal near?: Legislative leaders say they're close to resolving the state's $26.3-billion deficit. (Even the Republicans are sounding encouraged.) More talks are scheduled for today. From the LAT:

Staffers involved in the talks said the legislative leaders and the governor have agreed on how to solve all but $400 million of the deficit. The governor is pushing to close that last portion of the deficit with more cuts in social service and healthcare programs, while Democrats are angling to blunt the effect on those programs by achieving the savings through accounting shifts and expense deferrals.

Calpers sues over losses: California's massive pension fund alleges in state court that it took huge hits because of "wildly inaccurate" credit ratings from the three leading ratings agencies. From the NYT:

The lawsuit, filed late last week in California Superior Court in San Francisco, is focused on a form of debt called structured investment vehicles, highly complex packages of securities made up of a variety of assets, including subprime mortgages. Calpers bought $1.3 billion of them in 2006; they collapsed in 2007 and 2008. Calpers maintains that in giving these packages of securities the agencies' highest credit rating, the three top ratings agencies -- Moody's Investors Service, Standard & Poor's and Fitch -- "made negligent misrepresentation" to the pension fund, which provides retirement benefits to 1.6 million public employees in California.

Prime time for steak: USDA prime beef is showing up more and more in supermarkets because of a severe slump at steak houses, where the top-of-the-line meat usually ends up. From the WSJ:

Indeed, across the spectrum of beef varieties and grades, prices for "steak-house cuts" such as tenderloin, porterhouse and rib eyes are down by 3% to 12%, depending on the cut, from last year, according to the National Cattlemen's Beef Association. Wal-Mart, under the Genuine Steakhouse label it rolled out to all stores last April, is selling USDA choice-grade meat. Prior to Genuine Steakhouse, Wal-Mart sold mostly select-grade meat, a less marbled variety.

Kohl's takes Mervyns spots: The department store chain will open in Northridge and Sun Valley, taking over the locations that had been shuttered when Mervyns went out of business. The new locations are among a dozen in the Los Angeles area and 30 statewide that will open in October. (Daily News)

Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the increase in local bankruptcies and the latest outlook for commercial real estate. Also on kpcc.org and on podcast.