Here’s the latest action:

Stock market rises — The U.S. markets rose on Thursday, with the Dow gainin 172 points to 8691. The S&P 500 rose 1.3 percent to 908, while the tech-heavy Nasdaq fell 0.73 percent to 1603.

Vinod Khosla does an interview
— The famed VC talks about making fuel from algae, why there wasn’t a dotcom bubble, and why he’s a Republican for Obama. More at TechFlash.

Microsoft beats predictions, but warns of weak outlook: Microsoft slightly beat earnings expectations in its second-fiscal quarter, but it warned that results would be affected by the economic downturn in the rest of the fiscal year. Revenue was up 9 percent, while earnings were up 2 percent. For the rest of the fiscal year that ends June 30, the company lowered its guidance below current estimates on earnings and revenues.

Sony halves outlook– The weakening economy and the strong Japanese yen prompted the electronics giant to cut its earnings forecast.

Xerox cutting 3,000 jobs
About five percent of the work force will be cut in the next six months.

Co-founder of iRobot resignsHelen Greiner resigns abruptly. Colin Angle, CEO, will take her place.

Autodesk buys Softimage Avid Technology sells its 3-D animation software business to Autodesk for $35 million. Now Autodesk will have a suite of tools: Softimage, Maya, and 3ds Max.

Alawar buys stakes in two casual game studiosAlawar Entertainment will take majority stakes in Russia’s Friday’s Games and Ukraine’s Five-BN. Now Alawar will have five internal game studios making casual games.

New massively multiplayer online game company surfacesRay Flame Entertainment Inc. has raised an $800,000 round of funding from InnoBridge Ventures to make free-to-play games.

New version of Gmail mobile — Just in time for the T-Mobile G1 phone with Google Android software, Google has released version 2.0 of its Gmail mobile software. It should speed performance and allow for the creation of multiple accounts on a phone.

Samsung and Netflix partner on video streamingSamsung’s new Blu-ray players will be able to access Netflix’s online video streaming service.

Ooyala adds “hyper-syndication” to its Backlot video distribution and analytics tool — Now you can use Ooyala’s tool to export video of all sizes to YouTube and other video sites.

Taking real world problems to the virtual worldTheirs was a virtual marriage, not a real one. But a divorced woman murdered her ex-husband’s avatar in the online game Maple Story. The deed gets her jail time for hacking.

iPhone tethering plan in trouble
The iPhone’s tethering plan has been delayed because of AT&T’s concerns about the impact on its network.