Friday morning headlines

Market falling: Second day in a row stocks have opened sharply lower. Weaker-than-expected earnings from Citigroup and GE are seen as discouraging signs.

Consumer confidence sinks: Index is at its lowest level in 11 months. No wonder Obama's numbers are so bad. (Reuters)

Economists more upbeat: The majority (64 percent) surveyed by the WSJ said that the economy would get better over the next 12 months. Only 20 percent expect a double-dip recession.

Dormant inflation: Consumer prices in the L.A. area fell 0.2 percent from May to June and were up only 0.9 percent over the last year. (OC Register)

BP encouraged: No sign so far of an underground leak. (USA Today)

What will Apple do?: Company announces how it plans to deal with the reception problem on its iPhone 4. Recall appears unlikely. Other possibilities include offering an in-store fix or a carrying case that should fix the problem. (PC World)

Apple engineers knew of phone problem: But CEO Steve Jobs liked the design so much that the company went ahead with development, reports the WSJ. Somebody called it "a perfect storm of Apple's design methodology."

The electronics giant kept such a shroud of secrecy over the iPhone 4's development that the device didn't get the kind of real-world testing that would have exposed such problems in phones by other manufacturers, said people familiar with the matter.

Who gets Goldman's $550 million?: The U.S. Treasury picks up $300 million and the rest goes to two banks in Europe that were allegedly duped by the Wall Street firm. (LAT)

Banks report mixed bag: Citigroup's second-quarter net fell 10 percent from a year ago, though that might reflect a boost in profits in 2009 when the bank sold off Smith Barney. At Bank of America, earnings were down, but they topped expectations. (AP, Bloomberg)

Paul Allen to give away half his fortune: The Microsoft co-founder joins a number of wealthy philanthropists (among them Eli Broad) who are devoting half their worth to charity. (NYT)

Udvar-Hazy starts firm: The aircraft leasing pioneer parted company with AIG, so now he's on his own with Century City-based Air Lease Corp. More than $3 billion in financing has already been secured. (LAT)

RealD opens higher: The Bev Hills-based 3D movie technology firm, which raised $200 million in its IPO, shot up more than 22 percent above its offering price this morning. (Reuters)

Tesla to work with Toyota: The plan is to develop an electric version of Toyota's RAV4 small crossover vehicle. The two companies announced a partnership to develop and build electric cars at the shuttered NUMMI factory in the Bay area. (AP)

Whitman out-raises Brown: Since the primary, she's picked up more than $2 million in contributions since the primary, compared with Jerry's $516,000. Of course, that doesn't count her own $20 million check. (California Watch)