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Net earnings were $322 million, or 28 cents per share, compared with $136 million, or 13 cents per share in the same quarter of 2010.

Revenue rose 27 percent to $6.6 billion, topping the $6.32 billion expected by analysts.

Following are initial reactions of analysts and investors:

STEPHEN MASSOCCA, MANAGING DIRECTOR, WEDBUSH MORGAN, SAN FRANCISCO

"The initial reaction is that revenues are better than expected, but people are still going through the numbers. It's too early to draw any conclusions about the earnings.

"The revenue beat is the news here, but it's one data point so it's not conclusive. The other thing is Alcoa's CEO is talking about a strong second half and an improving outlook. They've seen growth in various markets, aerospace, automotives.

"The market is going to be more focused on macro concerns overnight. In a vacuum, this Alcoa news would be market moving, as the start to earnings season, but there are so many other issues that may drown it out tomorrow, based on what happens in Europe and negotiations in Washington."

BRIDGET FREAS, ANALYST AT MORNINGSTAR, CHICAGO

"The big story here is the beat on the revenue line. $6.6 billion -- that was certainly ahead of our expectations. Even though they've had a little more cost than expected during the quarter, volumes have improved significantly."

Obama told a White House news conference he would meet every single day with top U.S. lawmakers until an agreement is sealed to avoid defaulting on the national debt with the clock ticking to an August 2 deadline.

He planned talks at 2 p.m. EDT on Monday with them to try again to break a stalemate over reducing the country's $1.4 trillion deficit and clear the way for a vote to increase the $14.3 trillion debt ceiling.

The Treasury Department has warned that it will run out of money to cover the country's bills if Congress does not raise the debt limit by August 2. Failure to do so could push the United States back into recession, send shock waves through global markets and threaten the dollar's reserve status.

Obama is locked in a politically charged debate with House of Representatives Speaker John Boehner, the top U.S. Republican, over a large deal that Obama wants, a $4 trillion, 10-year deficit reduction proposal.

The deal would increase taxes -- to the chagrin of Republicans -- and reform sacred-cow entitlement programs like Medicare and Medicaid and cut government spending, which concerns Democrats.

Obama said his message to both sides in the close-door talks is: "If not now, when?"

"We might as well do it now -- pull off the band-aid, eat our peas," he said.

It was unclear whether Obama would be able to persuade Republicans to agree to a larger deal after Boehner balked over the weekend, meaning the two sides may have to negotiate a smaller, $2 trillion deal.

"I do not see a path to a deal if they don't budge, period," he said.

Negotiators will have to confront a divide over taxes that has prevented them from reaching a deal so far. Democrats say new tax revenues need to be part of the equation, while Republicans say they won't back any increase in taxes.

Obama said under the proposal taxes would not go up immediately, but in later years.

(Additional reporting by Matt Spetalnick, Patricia Zengerle, Kim Dixon in Washington and Ryan Vlastelica in New York)

* European Council President Herman Van Rompuy calls an emergency meeting of top officials to discuss the debt crisis, amid fears it could engulf Italy, the region's third-biggest economy.

* The Eurogroup meeting of European finance ministers meets to discuss the debt crisis, including a second bailout package for Greece.

* Italian market regulator Consob on Sunday approved new short-selling disclosure rules to limit stock volatility after a selloff hit domestic bank shares and government bonds on Friday.

* Democrats and Republicans fail to reach agreement over a budget and debt deal at a meeting on Sunday. Discussions are set to resume at the White House on Monday afternoon.

* Chinese annual inflation rose to a three-year high in June, data released on Saturday showed, increasing chances for yet more monetary policy tightening there.

* Peabody Energy (BTU.N) and ArcelorMittal (ISPA.AS) launch a $5 billion bid for Australian firm Macarthur Coal (MCC.AX), the world's biggest producer of pulverized coal.

* Alcoa Inc (AA.N) is set to kick off the second-quarter earnings season with analysts expecting a profit of 34 cents a share compared with 13 cents last year, with revenues seen up 20 percent to $6.3 billion.

* News Corp's (NWSA.O) $14 billion bid to buyout UK broadcaster BSkyB (BSY.L) face opposition from the British government, lawyers for whom are drawing up plans to block the deal, the Independent newspaper said.

* American International Group (AIG.N) plans to replace one or more Wall Street banks in its next sale of shares from the U.S. government, The Wall Street Journal reported on Sunday.

* Texas pipeline company Southern Union Co (SUG.N), which is the subject of a takeover bidding war, held talks with at least nine potential suitors beginning in 2008, The Wall Street Journal reported on Sunday.

* Indonesian villagers who accused Exxon Mobil Corp's (XOM.N) security forces of murder, torture and other atrocities have regained their right to sue the giant oil company in the United States.

* Dana Holding Corp (DAN.N) eyes massive growth in China.

* Nestle (NESN.VX) bids around $1.7 billion for a 60 percent stake in Chinese candy maker Hsu Fu Chi International (HSFU.SI).

* Hong Kong's richest man bids for UK water company Northumbrian Water (NWG.L) in a deal valuing the company at around 2.4 billion pounds ($3.9 billion).

* Australia introduces a carbon tax scheme, hitting shares in miners, steel firms and airlines.

* The FTSEurofirst 300 .FTEU3 index of leading European shares fell 0.5 percent on Monday, extending a 0.8 percent fall in the previous session, weighed by euro zone sovereign debt concerns.

* Japan's Nikkei .N225 fell 0.7 percent overnight on profit taking after three weeks of gains, hurt by weak U.S. and Chinese data.

* The Dow Jones industrial average .DJI fell 62.29 points, or 0.49 percent, to 12,657.20 points on Friday, weighed by a much worse than expected non-farm payrolls reading for June.

* The Standard & Poor's 500 index .SXP, meanwhile, shed 9.42 points, or 0.70 percent, to 1,343.80, while the Nasdaq Composite Index .IXIC dropped 12.85 points, or 0.45 percent, to 2,859.81.

* The U.S. employment trend index for June is due for release at 1400 GMT.

(Editing by Jon Loades-Carter)

The development underlined the political pressure on Prime Minister David Cameron over the revelations, which have caused public outrage over the behavior of some journalists, police and politicians.

The new request to media regulator Ofcom, which is already assessing whether News Corps is a 'fit and proper' holder of a broadcast license, follows a report in the Independent newspaper that lawyers were drawing up plans to block Murdoch's bid to buy out the profitable pay-TV operator BSkyB.

Shares in BSkyB dropped more than seven percent on Monday morning after a similar fall on Friday. News Corp shares fell more than 5 percent in New York last week.

"We believe the deal is all but dead," Panmure Gordon analyst Alex DeGroot said.

Murdoch himself has shown no sign of backing away from the deal.

Opposition Labour party leader Ed Miliband said on Sunday he would force parliament to vote this week if Cameron did not take steps to halt News Corp's $14-billion bid for the 61 percent of BSkyB that it does not already own.

A vote in parliament could split the coalition between Cameron's Conservatives and the Liberal Democrats who, traditionally less favored by Murdoch's media, have signaled they could vote with Labour on the issue.

It would also give Labour a chance to cast itself as the champion of a public angered by allegations that News of the World reporters and editors were complicit in illegally hacking the voicemails of a murdered girl, London bombing victims and Britain's war dead in search of stories.

"We are working on a plan to suspend the deal while the police investigation is taking place," the Independent quoted a senior government source as saying. A spokesman for the prime minister declined to comment.

Secretary of State for Media Jeremy Hunt wrote to regulator OFCOM asking for a fresh assessment of the BSkyB buyout, which until last week's hacking revelations appeared assured.

"Given the well-publicized matters involving the News of the World in the past week...I would be grateful if you could let me know whether you consider that any new information that has come to light causes you to reconsider any part of your previous advice to me including your confidence in the credibility, sustainability of practicalities of the undertakings offered by News Corporation," the letter said.

Murdoch's own Sunday Times reported that a 2007 internal investigation at the News of the World had found evidence that phone hacking was more widespread than the company had admitted and that staff had illegally paid police for information.

Murdoch, 80, flew into London on Sunday to take charge of attempts to save the BSkyB deal and limit the damage to News Corp, the world's largest news conglomerate.

As he was driven into his London headquarters, he held up the final edition of the News of the World, the 168-year-old newspaper he bought in 1969 then closed last week in a bid to stem the crisis.

Christina Camargo-Lima, walking on her way to work past Murdoch's London flat on Monday morning, welcomed the criticism of Murdoch. "I think it's time the mogul came down. They just can't control democracy like that."

LURID HEADLINES

The paper is best known for its lurid headlines exposing misadventures of the rich, royal and famous. Its last headline said simply "Thank You & Goodbye" over a montage of some of its most celebrated splashes of the past 168 years.

On Monday, the Daily Mirror newspaper reported, citing an unidentified source, that News of the World journalists had offered to pay a New York police officer to retrieve the private phone records of victims of the September 11, 2001, attacks. [nLDE76A006]

Murdoch dined on Sunday in an upmarket hotel with his British newspaper arm's chief executive Rebekah Brooks, a friend of Cameron's and editor of the News of the World at the time of the alleged phone-hacking, and his son and heir apparent, James. Cameron has since called for her resignation.

The affair has thrown a harsh spotlight on the long-standing ties between British politicians and Murdoch. In particular, it has called into question the judgment of Cameron, who hired former News of the World editor Andy Coulson as his head of communications.

Coulson later resigned, and was arrested on Friday and released on bail after being questioned by police about voicemail hacking and payments to police. Coulson denies any knowledge that hacking was carried out.

Cameron has insisted that the government has no legal power to block the BSkyB deal if it is satisfied that enough media plurality -- competition -- will be maintained. It had already indicated it would accept News Corp's assurances on this count.

"FIT AND PROPER"

The Independent said the government had latterly hoped the broadcasting regulator Ofcom would stop the deal going through on grounds that News Corp directors were not "fit and proper" to run BSkyB, but this was unlikely to happen until a possibly lengthy police investigation had been completed.

Instead, it said lawyers in the department of Culture and media were now looking at using competition criteria to block the deal.

That would still be embarrassing for the prime minister, who has ordered a public inquiry and also admitted media barons had too much influence over politicians, but arguably less damaging than a split with his coalition partners.

Blocking the BSkyB deal on grounds of media plurality would also be better for Murdoch than if he and his team were found to be not "fit and proper" to run the broadcaster, as that could see him lose his existing 39 percent of the company.

(Writing by Jon Hemming; Editing by Jon Boyle)