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The world's largest software company is hoping that the new phones, from handset makers such as Samsung, LG and HTC, will propel it back into the mobile market, which many see as the key to the future of computing.

The new phones, initially available on AT&T Inc's network, have already been shown off in prototype form, and are much closer in look and feel to Apple's iPhone, with colorful touch-screens and 'tiles' for easy access to e-mail, the web, music and other applications.

Some analysts say they represent Microsoft's last chance to catch up with rivals, which overtook them in the past few years. Handsets are not expected to appear in stores for a month, so their success may not be judged until the new year.

Microsoft has just a 5 percent share of the global smartphone market, according to research firm Gartner, compared with 9 percent a year ago. Google's Android system has a 17 percent market share, jumping from only 2 percent a year ago.

The market for multi-feature phones that allow users to e-mail, surf the web and play games, as well as have access to music and video is set to expand massively.

Gartner expects almost 270 million smartphones to be sold around the world this year, up 56 percent from last year.

In comparison, Gartner expects only a 19 percent increase in worldwide PC sales to 368 million units this year.

Microsoft, whose stock is trading at the same level it was eight years ago, has been struggling to find a footing in phones and mobile computing.

Its share price has fallen almost 20 percent so far this year.

Earlier this year, Microsoft yanked its Kin phone aimed at teenagers off the market less than three months after launch. There are still no signs of an imminent Windows-powered tablet device to counter Apple's hot-selling iPad.

TOUGH ENVIRONMENT

Microsoft's new phones will have a tough job elbowing aside a revamped set of rivals. In August, Research in Motion Ltd launched its new $200 BlackBerry Torch, with a touchscreen and slide-out keyboard.

In June, Apple launched its new $200 to $300 iPhone 4, which is selling well despite some antenna problems.

A slew of similarly priced Android phones, such as Motorola Inc's Droid X and Samsung's Galaxy series are also grabbing customers.

Minutes due on Tuesday from the Fed's most recent policy-setting meeting may reflect some divisions among officials over whether to launch another round of asset purchases, known as quantitative easing.

Investors, however, assume the Fed will pull the trigger, likely at its next policy-setting meeting in November.

A Reuters poll of 16 primary dealers -- investment firms that deal directly with the Fed -- showed all expected the central bank to return to buying bonds. All but one predicted the announcement would come at the November 2-3 meeting.

The Fed cannot sit idly by with unemployment stuck near 10 percent and inflation below the central bank's perceived target, economists say. Statements from some of the Fed's top officials in recent days have made it increasingly clear that action is likely, even though others remain vocally opposed.

The next batch of U.S. inflation data comes Thursday and Friday, and is likely to show price pressures remain low, particularly for consumers. The Fed said in its latest statement that inflation was lower than it would like.

Low inflation raises concerns about the risk of deflation, a vicious circle of a downward spiral in prices and the economy.

While action seems assured, don't bank on the Fed performing economic miracles.

"One should not expect too much from further quantitative or credit easing," said Olivier Blanchard, the chief economist of the International Monetary Fund. "It should be done but the implications for the economy will be limited."

Christina Romer, who recently stepped down as a White House economic adviser, said the Fed is in uncharted waters and it is unclear how much further easing will accomplish.

"There's a lot of questions about quantitative easing and how it works and how communications policies work, but they need to be tried because this is still a crisis," she said.

MEASURING SUCCESS

The Fed, which has held interest rates near zero since December 2008, launched its asset-buying spree nearly two years ago, swelling its balance sheet to nearly $2.3 trillion from a pre-crisis level of around $800 billion.

The program succeeded in driving down borrowing costs, yet it did not spur as much lending as the Fed would have liked. Banks hoarded cash, fearful of racking up more loan losses so soon after the crippling financial crisis. Many companies balked at borrowing because of concerns about sluggish sales.

Paul Kasriel, director of economic research at Northern Trust in Chicago, said commercial bank credit will be the measure by which he judges the Fed's success this time. The central bank releases weekly statistics on commercial and industrial loans on Fridays.

Sales at U.S. Wal-Mart stores open at least a year have fallen in five straight quarters, hurt by competition from lower-priced dollar stores and an economy that has allowed some shoppers to move up to rivals such as Target Corp (TGT.N).

Bill Simon became CEO of the U.S. unit in June and is expected to outline how he and his revamped management team can spur sales.

"It is really important for them to show that they can get traffic in the stores, because that's going to be the key to that stock," said Sarah Henry, equity analyst at MFC Global Investment Management.

Wal-Mart arguably shot itself in the foot as the U.S. economy pulls out of recession, first through a poorly executed attempt to whittle down the products in its stores, followed by a failed attempt to increase traffic with thousands of temporary price "rollbacks."

While sales have done better outside the United States and the company plans to grow even more internationally, the U.S. performance has weighed down Wal-Mart stock.

Wal-Mart shares are up about 1.9 percent this year, well below the 13 percent increase for the Standard & Poor's Retail Index .RLX and a 12.2 percent jump for Target.

SHAKE-UP COULD CONTINUE

Soon after Simon's appointment, the company announced the departure of U.S. merchandising chief John Fleming. His post has not been replaced and four product heads will instead report directly to Simon, the retailer said in September.

"Given how soft sales have been, we were not surprised by the shake-up and think we could see more down the road if trends don't improve soon," J.P. Morgan analyst Charles Grom said in a note to clients.

Wal-Mart's one-time apparel chief has also left. Last month, the company said long-time Chief Financial Officer Tom Schoewe would retire at the end of November.

"We have a whole new management team over there, so it will be important for them to articulate a strategy going forward," Henry said.

Wal-Mart has said it will focus on basics in apparel -- items such as T-shirts and underwear -- to revive what has been a lagging business.

The retailer is also bringing back many of the products that were cut from U.S. stores and shifting from high-profile price "rollbacks" that failed to draw traffic back to what it calls "everyday low prices."

Simon has said the changes being made should improve sales by the fourth quarter.

Unless excesses built up during the bubble period are resolved, Shirakawa said, it will take a fairly long time for advanced economies to return to a full-fledged recovery despite unprecedented policy efforts.

Sustaining very easy monetary policies for too long could create another bubble and sow the seeds of a crisis, he said, warning of the risks of relying solely on quick-fix stimulative measures.

"Although easy monetary policy is needed, it alone cannot solve the problem," Shirakawa said in a speech to the Institute of International Finance.

And if strong growth in emerging countries turns into an asset bubble, it could end up having consequences on both emerging and advanced economies, he said.

"A crisis comes to the surface with a different face every time," Shirakawa said.

The BOJ surprised markets on Tuesday by pushing down interest rates to zero and pledging asset purchases to pump more money into Japan's struggling economy.

The Federal Reserve, the European Central Bank and the Bank of England also have extremely accommodative monetary policies in place.

Expectations the Fed will step back into the markets next month to buy more bonds to support the anemic U.S. recovery pushed the dollar down to a 15-year low against the yen on Friday.

With investors looking for better returns, emerging market currencies have soared. The flood of monetary into developing economies has sparked fears of growing asset bubbles.

(Reporting by Leika Kihara; Editing by Leslie Adler)

Statoil said the deal, its second major shale gas acquisition in North America, would give it recoverable reserves of about 550 million barrels of oil equivalent.

In 2008 Statoil acquired a 32.5 percent stake in the Marcellus Shale project from Chesapeake.

"The magnitude of the shale resources in North America and the significant role these resources are expected to play in the future energy mix make this an attractive opportunity," said, John Knight, Statoil's senior vice-president for business development and global unconventional gas, in a statement.

Statoil said it and Talisman were jointly buying 97,000 acres of land in southwest Texas from Denver-based Enduring Resources for $1.325 billion and have formed a 50/50 joint venture to develop these assets.

"The purchase price equates to about US$10,900 per acre," it said in a statement.

The Norwegian firm will also buy half of Talisman's existing assets in the Eagle Ford play for $180 million.

"As a result, Statoil and Talisman will together hold 134,000 net Eagle Ford acres and associated assets and production in the joint venture," it said.

The two transactions amount to a total consideration for Statoil of $843 million, Statoil said.

(Editing by Greg Mahlich)