PRESS DIGEST - Wall Street Journal - July 31

July 31 (Reuters) - The following were the top stories in The Wall Street Journal on Friday. Reuters has not verified these stories and does not vouch for their accuracy.

* Many companies in the U.S., while still hurting, are seeing signs of a bottom and growing cautiously optimistic about an uptick by year's end.

* U.S. White House officials and lawmakers were studying how to keep alive the government's cash-for-clunkers incentive program because of concerns the program's $1 billion budget may have been exhausted after just one week.

* Nine banks in the U.S. that received government aid money paid out bonuses of nearly $33 billion last year -- including more than $1 million apiece to nearly 5,000 employees -- despite huge losses that plunged the U.S. into economic turmoil, New York Attorney General Cuomo revealed.

* U.S. Federal regulators have escalated the number of wounded banks they have essentially put on probation, with some of the targeted banks complaining that the action is too harsh.The Federal Reserve and the Office of the Comptroller of the Currency have issued more of the so-called memorandums of understanding so far this year than they did for all of 2008, according to data obtained from the agencies under Freedom of Information Act requests.

* A privately owned German company, Knauf Gips, warned its Iranian employees working in Iran that they would be immediately dismissed if caught in antigovernment protests.

* Delphi Corp DPHIQ.PK won court approval to sell its assets to its lenders and General Motors Co, clearing the way for the auto-parts supplier to end its four-year stay in bankruptcy.

* U.K.-based investment fund Hermitage Capital Management is seeking help from U.S. courts in gathering evidence of an alleged $230 million tax fraud in Russia that affected three of its companies there.

* The U.S. Pension Benefit Guaranty Corp will soon seize a pension plan covering about 11,000 workers from auto supplier Metaldyne Corp, a person familiar with the matter said.

* The number of U.S. workers filing new claims for state jobless benefits rose last week, but they remain below peak levels reached in the spring.

* Southwest Airlines Co (LUV.N) jumped into a bankruptcy-court auction for Frontier Airline Holdings Inc, potentially thwarting a rival bid with a $113.6 million offer for the smaller carrier.

* U.S. President Barack Obama's nominee to head the agency that regulates the railroad industry said he would be "proactive" in addressing shippers' allegations of pricing abuses by freight-rail companies, and indicated that a law that deregulated the industry is outdated.

* Microsoft Corp (MSFT.O) CEO Steve Ballmer said that investors failed to appreciate the value a search deal his company struck with Yahoo Inc (YHOO.O) will generate for the struggling Internet giant.

* The global recession's withering impact on petroleum prices and demand dragged down profits at Exxon Mobil Corp (XOM.N) and Royal Dutch Shell PLC (RDSa.L), two of the world's largest oil companies.

* AnnTaylor Stores Corp (ANN.N) disclosed expanded cost cuts and predicted a 20 percent drop in second-quarter sales.

* Wealthy taxpayers have inundated the Internal Revenue Service in recent weeks with requests to come clean for past tax evasion, amid a government crackdown on undeclared income from overseas accounts.

* Alcatel-Lucent SA (ALUA.PA) posted its first quarterly profit since its creation in 2006, while its chief executive said he foresees the company returning to "normal" profitability by 2011 after breaking even this year.

* Nintendo Co (7974.OS) said its profit plunged more than 60 percent in the fiscal first quarter as sales of its hit Wii videogame consoles collapsed in the U.S. and elsewhere on a shortage of new blockbuster games to reel in recession-hit consumers.