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Speaking on Sunday at the start of Oracle's annual technology and user conference in San Francisco, Ellison touted the benefits of parallel computing and showed off the latest version of the company's SPARC Solaris computer.

He also unveiled Oracle's new Exalytics data analysis machine, "hardware and software engineered to deliver data analysis at the speed of thought," Ellison said at the OpenWorld conference, which is expected to attract more than 40,000 people.

With its multi-billion purchase of Sun Microsystems last year, Oracle is aggressively stepping into the hardware business and competing against vendors including former partner Hewlett-Packard.

Ellison spent much of his speech pitching the idea of parallel computing, where computers are built with multiple processors and other components that work simultaneously, improving overall performance.

"How do we make this thing to go 10 times faster? Parallel everything," Ellison said. "Lots and lots of parallel network connections moving enormous amounts of data in parallel. That's how you make this thing go faster."

Last year, the company launched Exalogic, combining hardware technology acquired in Oracle's multi-billion dollar purchase of Sun Microsystems with its own software.

Oracle so far has installed 1,000 of its Exadata database machines with customers and sales are going well, he said.

Oracle has long compete with European software giant SAP AG and IBM in the business software and database products markets.

(Reporting by Noel Randewich; Editing by Matt Driskill)

Some firms are accusing rivals of casually interpreting a Securities and Exchange Commission rule that bans giving clients "naked" access to the marketplace, according to interviews with more than a dozen Wall Street officials and regulators.

At issue is the SEC's market access rule, which takes full effect in late November. It is aimed at ending a practice in which brokers give high-frequency trading firms (HFTs), hedge funds and some of their other most active customers a direct pipeline to exchanges without any pre-trade supervision.

Such access has been blamed for "fat finger" and "algo" problems in which errant keystrokes or a cascade of trades can destabilize markets within seconds.

Broker-dealers ranging in size from Morgan Stanley to clearing firm Penson Worldwide have scrambled to build, buy or outsource the needed surveillance systems with hopes of retaining existing clients or attracting new ones.

They are caught between clients that loathe any delays in sending their bids and offers and regulators demanding "reasonable" and "defensible" pre-trade oversight. The question is how far brokers will push the limits of the rule.

"We may end up having regulation by enforcement, and I think that's dangerous," said George Hessler, CEO of broker-dealer Stock USA, which hired an outside firm for its surveillance. "We made our own interpretations and went ahead with the implementation."

The issue often arises when principle-based regulation is offered instead of specific rule guidance. "The differences between the interpretations are broad, not tight," said an electronic trading executive at one large bank, speaking on condition of anonymity.

Another sniped that some of his competitors are "selectively choosing not to adhere" to the intention of the rule.

The SEC adopted the market access rule in November in one of Chairman Mary Schapiro's first attempts to rein in the risks of high-frequency trading following the May 2010 "flash crash.

The rule hits directly at brokers, themselves among the most sophisticated HFTs, who have sole responsibility for screening all orders before they are sent to exchanges. Traders who make their profits by deluging marketplaces with a flood of orders to take advantage of minuscule pricing differences, loathe any delays, even a few more microseconds.

The new rule is taking effect in phases. Since July 14, brokers have had to check for erroneous or manipulative orders on stocks, bonds and options, something that had usually occurred after a trade was executed. The tricky next phase begins on November 30 and requires brokers to check that orders do not exceed credit or capital limits they have set up for clients.

The limit check is especially problematic with large clients that trade in many asset classes and through several brokers. The limit check and a requirement that brokers have "direct and exclusive control" over whether to block the orders have caused the most friction, according to industry executives and regulators.

The Financial Industry Regulatory Authority (FINRA), which enforces the market access rule, has identified 20 to 25 brokers it plans to examine for compliance, said Tom Gira, executive vice president of FINRA's market regulation unit.

FINRA wants "to make sure that firms have made a good-faith attempt to comply with the rule", he said at an industry conference on September 21. "I'm sure there will be firms that we might be troubled by what we see," he said.

FINRA has already begun its blitz of firms, according to two brokerage officials. One said the regulator wants to ensure that large brokers are building internal surveillance systems and not simply outsourcing it to one of the many technology providers vying for new business.

A regulator from another agency, who asked not to be named, told Reuters he would not be surprised if some brokerages "pushed the envelope" and allowed clients to have some access to the controls.

At the conference, Gira said the standards to be enforced will likely evolve over time.

SEA CHANGE

Though several brokers said the number of erroneous trades has fallen since the rule began rolling out in July, there are still incidents. One such trade, which halted trading in Exxon Mobil, was canceled on August 11.

The stakes are high for an industry that must bulk up what was a patchwork of screening for bad orders. Brokers will spend some $220 million this year to abide by the rule, up 18 percent from last year, and costs should rise through 2014, estimated Miranda Mizen, a principal at consultancy TABB Group.

Meanwhile, there are already signs that the rule has hit some of the biggest providers of what is known as "sponsored access."

Wedbush Securities was for years the Nasdaq Stock Market's top liquidity provider, thanks to clients that funneled orders through its pipes to get low trading fees and fast access to exchanges. But in August it had dropped to third in Nasdaq-listed stocks and to sixth in NYSE-listed stocks, suggesting some broker-dealer clients cut out the middle man.

While many Wall Street firms adapted or built internal systems, Wedbush responded to the SEC's rule by acquiring Lime Brokerage, a specialist in pre-trade surveillance. Jeff Bell, Wedbush's head of clearing and technology, said it is also offering clients alternative software-based products.

Penson, another big sponsored access provider, decided not to build or buy. Instead, it is using several outside surveillance providers for customers, said Bill Yancey, CEO of the firm's Penson Financial Services unit.

"Some customers ... might want to become broker-dealers themselves, and some execution-only customers might want to procure both execution and clearing services from the same place," Yancey said. "It's going to be a sea change. We're moving from a post-trade world to a pre-trade world."

Large brokers hoping to take advantage of the new world are complaining that some rivals are cutting corners in an effort to attract or retain HFT clients. Much of their focus involves the credit limits for individual clients.

The SEC, aiming to protect brokers and clients from a financial blow-up, did not specify whether the limits should be based on buying power, net capital or some other measure. It did not publish FAQs as it sometimes does for new rules.

It did, however, publish eight suggestions last week on how brokers can screen so-called sub-accounts for money laundering, insider trading and market manipulation by their clients.

Yet many questions remain, and regulators are not expected to give specifics for at least another year.

"Different market actors will necessarily interpret the rule differently based on their role in the marketplace," said Joanna Fields, head of equity market structure for the Americas at Deutsche Bank. She said the bank has developed its own risk-check technology.

Technology vendors, such as Nasdaq OMX Group's FTEN, have been pitching software- and hardware-based surveillance systems that they say take no more than 10 microseconds -- one-millionth of a second -- to do the job.

Louis Liu, founder of New York-based vendor Matrix Trading Technologies, said the pressure is intense to provide robust order screening in as little time as possible.

"You're being pushed by the regulators on one side, and by the customer on the other side," he said. "Eventually you just push into the wall of physics."

(Reporting by Jonathan Spicer; Editing by Gary Hill)

The euro zone's debt crisis and weakness in China have fueled investor concern that the global economy could tip back into recession, possibly dampening U.S. earnings growth at a time when the U.S. economy is still struggling to gain ground.

Overseas sales have helped U.S. companies beat earnings expectations in the last couple of years, with foreign sales totaling 30 percent on average for Standard & Poor's 500 companies.

"If the euro region is crumbling, that's going to have a tremendous negative impact" on companies like McDonald's, said Todd Schoenberger, managing director at LandColt Trading in Wilmington, Delaware.

"I'm not expecting a big earnings quarter," he said. "We've been getting the clues already."

The most recent company to trouble investors about the earnings outlook is Ingersoll Rand Plc, whose shares tumbled 12.1 percent to $28.09 on Friday after the industrial conglomerate cut its third-quarter and full-year earnings forecast to below market estimates.

Investor pessimism is already high.

The S&P 500 finished the quarter with its worst performance since 2008, and many strategists have slashed their forecasts for year-end.

The S&P 500 dropped 14.3 percent in the third quarter, losing about $1.7 trillion in market capitalization.

A disappointing third-quarter earnings period, which begins the second week of October, could only trigger more losses, analysts said. Stronger-than-expected earnings helped stocks claw back fro 12-year lows in 2009.

Next week, investors also will be bracing for data on the U.S. job market, among the weakest parts of the economy. The government's September employment report is due Friday, while U.S. manufacturing data from the Institute for Supply Management is due Monday. The ISM services-sector index is set for release on Wednesday.

CURRENCY CUSHION MAY BE THINNER

Companies reporting earnings have benefited for the last decade from weakness in the dollar, which helped overseas revenue figures.

With the euro down 7.4 percent this quarter, the biggest quarterly loss by percentage since mid-2010, companies could lose some of that currency cushion.

"I think you'll see a lot of companies blaming problems on Europe," said Justin Walters, co-founder of Bespoke Investment Group in Harrison, New York.

Walters said excluding companies that report no international sales, the average percentage of overseas revenue for the S&P 500 is 41 percent.

The euro-zone debt crisis has investors worried about a repeat of the 2008 financial crisis.

In China, which has been a major engine of growth for the global economy, data has shown some weakness. On Friday, figures showed the country's manufacturing shrank for the third month in a row and had the longest contractional streak since 2009.

Analysts have slowly been reducing earnings forecasts for the quarter.

Third-quarter earnings are expected to have risen 13.3 percent from a year ago, according to Thomson Reuters data. The forecast was for 17 percent growth on July 1.

"If there's a very drastic downturn in the European economic zone, that portion of U.S. earnings will be impacted," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.

But she and other strategists are optimistic that the earnings period will not disappoint, and could even present a buying opportunity.

"U.S. multinationals don't necessarily derive all of their additional earnings (from Europe), and in China, data seems to be showing a slowdown but not in hard-landing territory," Trunow said.

Other strategists said the dramatic cost-cutting that U.S. companies started in the 2008 financial crisis will help to keep bottom-line earnings numbers relatively healthy.

"In our view, corporate America has learned to make money in this environment," said Hank Smith, chief investment officer at Haverford Trust Co. in Philadelphia.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)

The euro and most commodity prices also fell as investors' search for safety drove up U.S. government bonds and the dollar.

Adding to a string of global data that has crushed growth-related assets in the past three months, China's manufacturing sector contracted for a third straight month in September while German retail sales slid at their sharpest pace in more than four years.

An unexpected rise in euro-zone inflation for September also moderated talk that the European Central Bank would cut interest rates. Still, the euro fell sharply to close its worst quarter against the U.S. dollar since mid 2010.

"The combination of sovereign debt crisis, a slowing economy and really what appears to be ineffective leadership in Europe has led to this decline, and we expect that to continue to play out in the fourth quarter," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.

U.S. stocks fell, closing their worst quarter since the collapse of Lehman Brothers in late 2008 with sharp declines.

The MSCI All Country World Index slumped 18 percent for the quarter, with a drop of 2.3 percent on Friday. It lost roughly $5.29 trillion in market capitalization in the quarter, according to Thomson Reuters Datastream.

On Friday, the Dow Jones industrial average dropped 240.60 points, or 2.16 percent, to 10,913.38. The S&P 500 fell 28.98 points, or 2.50 percent, to 1,131.42. The Nasdaq Composite slid 65.36 points, or 2.63 percent, to 2,415.40.

U.S. crude oil prices fell 4.1 percent on Friday, down more than 17 percent in the quarter. Copper, a key industrial metal that is a proxy for growth expectations, was down 25.8 percent over the last three months.

"There is a lot of fear that GDP growth is going to slow down, or it's not going to be as fast as consensus estimates assume," said Adam Krejcik, an analyst at Roth Capital in Newport Beach, California. "Generally speaking, there is a lot of fear out there, just a crisis of confidence."

Mining stocks were among the worst performers, hit by the news of slowing growth in China, the world's second-largest economy and an engine of global growth.

EURO OFF, BONDS FLY AMID THE GLOOM

The euro slipped versus the U.S. dollar and posted its biggest monthly drop in nearly a year, weighed down by the lack of a visible solution to the euro zone's deepening debt troubles.

The single currency fell to a low of $1.3384 and was last at $1.3392, down 1.5 percent for the day. For the month of September, the euro lost 6.6 percent, its weakest performance since November 2010.

In contrast, a gauge of the U.S. dollar against major currencies rose 0.9 percent.

A boost to the euro after Germany's parliament approved new powers for the euro-zone bailout fund proved fleeting after the data on the slump in German retail sales in August.

Leaders in Germany's ruling coalition said they opposed moves to increase states' liabilities to the bailout fund, keeping alive concerns that Europe will not be able to do enough to prevent the crisis from spreading.

The deepening economic gloom has prompted investors to slash bets on risky assets for most of the quarter that ended Friday.

The retreat continued to push safe-haven U.S. Treasury debt prices higher on Friday, with longer-maturity bonds posting their best quarter since the final period of 2008.

U.S. Treasuries held steady at higher price levels after the New York Fed announced the initial schedule for its $400 billion bond program, known as Operation Twist.

The benchmark 10-year note was last up 25/32 in price to yield 1.9172 percent, down from 2.00 percent late on Thursday.

The 30-year bond jumped 3-3/32 in price to yield 2.917 percent, down from 3.06 percent.

(Additional reporting by Karen Brettell, Wanfeng Zhou and Edward Krudy; Editing by Leslie Adler, Jan Paschal and Dan Grebler)

A steep slide on Friday closed out a fifth month of losses as weak economic data from China sparked fears of a global economic slowdown while investment bank Morgan Stanley plummeted on concerns about its exposure to European banks.

The S&P 500 index has lost more than 14 percent this quarter and over 7 percent in September alone. As of Thursday, Wall Street's deep downturn in the third quarter wiped out $2.2 trillion of the Wiltshire 5000 index -- the broadest measure of U.S. stocks.

"Why is the market so soft and so weak? Because '08 is still fresh in people's memories," said Joseph Mazzella, a senior trader at Knight Capital in Jersey City, New Jersey.

Stocks have been battered by the threat of a slowdown and fears that a Greek debt default could spark a credit shock similar to that caused by Lehman Brothers in September 2008, sending markets into a tailspin.

Fears of a hard landing in the world's second largest economy joined the potent mix troubling investors after China's manufacturing sector shrank for the third month in a row.

HSBC's China flash purchasing managers index showed the longest contractional streak since 2009 in a worrying sign for the world economy, which has looked to China as a rare source of expansion.

"The economic engine that has been driving growth has been China and if that comes undone, it gets scary again," said Mazzella.

Investors will be eyeing China's official PMI, due out on Saturday, which may have edged up again in September. Any disappointment there will be a blow for markets.

Financial shares stumbled with Morgan Stanley, which fell 10.5 percent to $13.51 as investors appeared to react to fear signals in credit markets.

The cost of insuring Morgan Stanley's five-year bonds spiked in recent days to almost three times what it was on June 30. It shares have erased all their gains of the last three year.

The Dow Jones industrial average dropped 240.60 points, or 2.16 percent, to 10,913.38. The Standard & Poor's 500 Index fell 28.98 points, or 2.50 percent, to 1,131.42. The Nasdaq Composite Index lost 65.36 points, or 2.63 percent, to 2,415.40.

Wall Street's "fear gauge," the CBOE volatility index, or VIX, rose more than 10 percent to 42.96, its highest close since mid-August and indicating investors expect more volatility ahead.

"There is a lot of fear that GDP growth is going to slow down, or it's not going to be as fast as consensus estimates assume," said Adam Krejcik, an analyst at Roth Capital in Newport Beach, California. "Generally speaking there is a lot of fear out there, just a crisis of confidence."

Through Thursday, the MSCI All Country World Index had lost about $4.7 trillion in market capitalization. The U.S. benchmark S&P 500 has lost about $1.7 trillion in market cap during the quarter.

Euro zone annual consumer prices unexpectedly rose in September 3.0 percent and followed surprisingly higher inflation in Germany.

In what may be a precursor to the quarterly earnings season, Ingersoll Rand Plc tumbled 12.1 percent to $28.09 after the industrial conglomerate cut its third-quarter and full-year earnings forecast to below market estimates. The Morgan Stanley cyclical index dropped 3.6 percent.

Markets showed little reaction two U.S. economic reports that were stronger than analysts expected.

Business activity in the U.S. Midwest grew more than expected in September, buoyed by new orders and a jump in employment.

The Institute for Supply Management-Chicago business barometer surprisingly rose in September more than economists had forecast.

U.S. consumer sentiment improved in late September but worries persisted about jobs and finances, which could curb household spending in the coming months, the Thomson Reuters/University of Michigan final September reading of the overall index on consumer sentiment showed.

About four stocks fell for every one that rose on the New York Stock Exchange. On the Nasdaq, about 7 stocks fell for every two that rose.

About 8.58 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above this year's daily average of 7.96 billion.

(Additional reporting by Himank Sharma; Editing by Kenneth Barry)