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The Securities and Exchange Commission is due to vote on a final rule on Wednesday on the threshold that would trigger extensive reporting requirements for advisers to large hedge funds and other private funds.

The rule is required by last year's Dodd-Frank financial oversight law and would give the SEC for the first time a direct window into massive funds' investment concentrations and trading strategies.

The information is designed to help the new Financial Stability Oversight Council determine whether a fund's trading may pose any risks to the broader marketplace.

In addition to possibly raising the dollar threshold so that fewer advisers will be captured by the expansive reporting rules, the SEC is also planning to grant some relief for advisers to large private equity funds by only requiring them to file reports with the SEC annually, instead of quarterly as previously proposed.

The sources spoke anonymously because the final rule is not yet public and negotiations were continuing Tuesday on the details.

While advisers to large hedge funds will still be required to submit more extensive information to regulators about things such as their funds' exposures to various asset classes, the SEC's final rule will clarify that hedge fund advisers will not be forced to hand over detailed position-level data, one of the sources said.

Private funds have been nervous about handing over sensitive financial information to regulators over concerns their positions or trading strategies could be exposed. Private funds, lawmakers and some former SEC commissioners have also raised concerns about the cost of the reporting requirements.

In its original January plan, the SEC had proposed a tiered regulatory approach whereby advisers to hedge funds, liquidity funds and private equity funds with more than $1 billion in regulatory assets under management would face heightened and more detailed reporting requirements every quarter.

Under the final rule expected to emerge on Wednesday, advisers to smaller funds will still only be required to file a report with the SEC once a year with basic data such as fund strategy, leverage and credit risk.

Advisers to smaller funds will be captured by the rule as long as they are registered with the SEC and advise private funds with at least $150 million in regulatory assets under management, sources said.

Critics of the hedge fund measure had accused the SEC of failing to adequately weigh the costs and benefits of the rule, a flaw that recently caused the overturning of an SEC rule on how shareholders can nominate candidates to company boards.

"I suspect that this rule, like the one the District of Columbia Circuit recently struck down, likely results from a flawed cost-benefit analysis process," Congressman Darrell Issa wrote in a September 20 letter to the SEC. "The benefits of Form PF are too narrow and create a potential for fraud and abuse. Meanwhile the cost in terms of jobs and capital are ignored."

(Reporting by Sarah N. Lynch; Editing by Tim Dobbyn)

The stock plummeted 14 percent to $194.31 after hours, after closing at $227.15 on Nasdaq.

The world's largest Internet retailer said on Tuesday its third-quarter net income was $63 million, or 14 cents a share, versus $231 million, or 51 cents a share, a year earlier. Revenue was $10.88 billion, up 44 percent from the third quarter of 2010, it added.

Analysts had expected Amazon to report third-quarter earnings per share of 24 cents on revenue of $10.95 billion, according to Thomson Reuters I/B/E/S.

"Lower profit margins would be acceptable, but for the lower-than-expected revenue growth numbers," said Fred Moran, an analyst at The Benchmark Co.

Moran had expected third-quarter revenue growth of as much as 50 percent.

(Reporting by Alistair Barr; Editing by Richard Chang)

* Chemical maker and Dow component DuPont (DD.N) reported a 23 percent jump in third-quarter profit on Tuesday, helped by price hikes and strong demand for a key paint pigment. The stock rose 2.8 percent to $47.40 in premarket trade.

* Bankrupt chemicals maker W.R. Grace & Co (GRA.N) also said on Tuesday its quarterly profit jumped 48 percent as it raised prices across the board.

* Xerox Corp's (XRX.N) profit and revenue rose in the third quarter as the company signed more outsourcing services deals.

* Amazon.com Inc (AMZN.O), 3M (MMM.N) and United Parcel Service (UPS.N) are among companies reporting results.

* S&P 500 futures rose 0.4 point and were in line with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 12 points, while Nasdaq 100 futures added 4.25 points.

* On Monday, Texas Instruments (TXN.N) said a drop in demand for its chips due to economic weakness would see revenue come under further pressure this quarter.

* Netflix Inc (NFLX.O) shares fell 35 percent to $77.32 in premarket after the top video rental company said it lost more customers than anticipated.

* Economic news will include the U.S. Case-Shiller home price index due at 9:00 a.m. EDT and U.S. Conference Board consumer confidence and U.S. Richmond Fed manufacturing figures at 10:00 a.m. EDT.

* Morgan Stanley (MS.N) has sold its mortgage-servicing business SCI Services Inc to Ocwen Financial Corp (OCN.N).

* Intel Corp (INTC.O) is working with suppliers and manufacturers to lower the cost of its new ultrabook slim PCs and expects them to account for 40 percent of the consumer PC market by the end of next year.

* Nearly 35 percent of News Corp (NWSA.O) shareholders voted against the re-election to the board of James Murdoch, casting doubt over whether he has the credibility and support to succeed father Rupert as head of the media empire.

* U.S. stocks ended higher on Monday as a flurry of merger activity and strong earnings from Caterpillar (CAT.N) boosted investor sentiment and kept the three-week rally intact.

* Equities have risen on hopes a resolution to Europe's sovereign debt crisis is on the horizon and a reduced likelihood of a U.S. recession after stronger-than-expected corporate results and economic data.

(Reporting by Angela Moon, Editing by Chizu Nomiyama)

Just 24 hours before European Union leaders are due to adopt a plan to reduce Greece's debt burden, fortify European banks to withstand bond losses, and scale up the euro zone rescue fund to prevent market contagion, all eyes were on Rome.

Prime Minister Silvio Berlusconi's faction-ridden cabinet failed to agree at an emergency session late Monday on raising the retirement age, one of the key economic reforms demanded by Italy's EU partners as a condition for supporting its bonds.

Berlusconi responded defiantly to public pressure from French President Nicolas Sarkozy and German Chancellor Angela Merkel at an EU meeting on Sunday, saying in a statement that no one could teach Italy lessons.

With his populist Northern League coalition partners opposed to raising the retirement age to 67 from 65, there was growing talk that a government crisis could lead to an early general election. Northern League leader Umberto Bossi told reporters the center-right cabinet was at risk over the EU reform demands and the alternative was new elections.

"The situation is difficult, very dangerous. This is a dramatic moment," Bossi said.

As the coalition parties held separate meetings, President Giorgio Napolitano said in a statement Italy must do everything to reduce the risk to government bonds by making its commitment to cut public debt more credible and boosting growth.

The euro zone's number three economy is at the center of the storm, despite European Central Bank intervention to buy its bonds, because it needs to issue some 600 billion euros in bonds in the next three years to refinance maturing debt.

Italy was not the only unresolved item on the summit agenda and Bank of England governor Mervyn King voiced skepticism from outside the euro zone as to whether the currency area's leaders would be able to find solutions.

"Even on July 21 there was a package which they held out as being the solution to it. The underlying problems hadn't changed at all and they won't change," King told the House of Commons treasury committee.

"The aim of the measures to be introduced over the next few days is to create a year or possibly two years' breathing space. The underlying problems still have to be resolved."

GAME OF CHICKEN

Tough negotiations were continuing between euro zone governments and Greece's private bondholders over the scale of a write-down they will have to accept on Greek debt holdings.

Governments are demanding that banks and insurers accept a 60 percent "haircut" as part of a second rescue package to make Athens' debt mountain, set to reach 160 percent of economic output this year, more sustainable.

Bank negotiators have offered a 40 percent write-down and warned that forcing them into deeper losses would amount to a forced default with devastating consequences for the European financial system.

EU diplomats said the outcome of the game of chicken between governments and banks was uncertain, but some forecast a last-minute deal on a 50 percent write-down.

Greek Prime Minister George Papandreou said: "I hope that tomorrow we will come to decisions, this is our partners' will.

"Tomorrow we want to put an end, turn a page, in order for the country to move forward."

UNCERTAINTIES

Many uncertainties remain also over complex options to increase the firepower of the 440-billion-euro ($600 billion) European Financial Stability Facility so it can prevent contagion spreading from Greece to Italy and Spain.

A working paper circulated to German lawmakers on Monday set out two options that might be used separately or in tandem to provide partial insurance on new Italian and Spanish bonds and to attract foreign sovereign and private investors via a special purpose investment vehicle (SPIV).

The German parliament has insisted on holding a vote on Wednesday to give Merkel a mandate just before she leaves for the euro zone summit.

Her Free Democratic junior coalition partners, who have dabbled in Euroskepticism, said the plan, which could leverage the EFSF up to more than 1 trillion euros, was acceptable. Finance Minister Wolfgang Schaeuble was to present the plan to parliament's budget committee on Tuesday.

Financial markets held their breath with trading volatile pending the outcome of Wednesday night's summit, due to start with a short meeting of the full 27-nation European Union at 1600 GMT (12 p.m. EDT), followed by a lengthier session of the 17 euro zone members.

The euro and European shares were steady, but in a sign of bond market nerves, Spain's short-term borrowing costs jumped to their highest since 2008 at an auction of three- and six-month bills on Tuesday.

Even if the leaders agree on the leverage plan for the EFSF, the arrangements could take several weeks to put in place and euro zone leaders are counting heavily on the European Central Bank to go on buying Italian and Spanish bonds.

Outgoing ECB President Jean-Claude Trichet, who retires next week, had signaled that the central bank was looking to exit from the deeply controversial bond-buying policy once the EFSF gained its new powers to intervene on bond markets.

However, EU officials say they are counting on his successor, Mario Draghi of Italy, to continue the purchases as long as is necessary to stabilize the bond markets.

Diplomats said France and the European Commission wanted a line in Wednesday's euro zone summit statement welcoming the ECB's willingness to continue supporting states in difficulty -- a formula that would respect the bank's cherished independence.

Net profit fell 39 percent to 1.018 billion francs, compared with average analyst forecasts for 276 million francs and steady from the 1.0 billion francs it posted in the second quarter, already hit by falling trading volumes.

It said a 1.765 billion franc gain on the value of its own debt helped make up for the trading loss and 387 million francs of restructuring costs it booked after announcing 3,500 job cuts in August.

This accounting gain -- which occurs because the bank could profit from buying back its own bonds at lower levels -- also gave a big boost this quarter to profits at most U.S. banks.

However, UBS results also mirrored their U.S. peers in showing declining bond and stock revenues as sovereign debt worries spiraled in the three months to September.

The investment bank posted a pre-tax loss of 650 million francs as revenues fell across all business areas due to the difficult market conditions and the strong Swiss franc.

"Market conditions and trading activity are unlikely to improve materially, potentially creating headwinds for growth in revenues and net new money," UBS said.

Interim Chief Executive Sergio Ermotti, appointed after Oswald Gruebel quit over the trading loss, said he was finalizing plans to restructure the investment bank ahead of an investor day on November 17.

"As we look to the future, our strategy centers on our leading global wealth management businesses in combination with a competitive and successful investment bank," Ermotti and Chairman Kaspar Villiger said in a letter to shareholders.

"We are committed to the implementation of the Investment Bank's client-centric strategy, concentrating on advisory, capital markets and client flow and solutions businesses."

The bank, which already said the trading scandal had not resulted in many clients withdrawing their money in the quarter, reported wealth management net inflows of 7.8 billion francs, down from 8.2 billion in the previous three months.

That included 4 billion francs of net inflows in its Americas wealth management business, up from 2.6 billion the previous quarter.

UBS announced in August it would cut 3,500 jobs from its around 66,000 staff to shave 2 billion Swiss francs off annual costs and the bank said on Tuesday that program was on track.

UBS said that its internal investigation into the unauthorized trading activities had determined that certain controls had not been effective.

The bank said it had identified two control deficiencies related to counterparties of trades and the inter-desk reconciliation process, and that it was taking measures to address them.

The bank said investigations were ongoing and it may broaden the scope of findings to take additional measures. It also confirmed the reliability of its financial statements in its 2010 annual report.

(Additional reporting by Caroline Copley; Editing by David Cowell)