Wal-Mart (WMT) is getting back to basics in its $30 billion clothing business. The nation’s biggest retailer is planning a shakeup of its apparel unit and the firing of “a significant number of workers” at its Bentonville, Ark., headquarters, The New York Times reports. Wal-Mart will move some 30 merchandising jobs to New York as it seeks to narrow its focus on basic clothes its customer base wants. Wal-Mart has tried in recent years to pull in more upscale consumers by offering more stylish clothing, but that effort met with limited success. The company’s Metro7 jeans, for instance, sold well in some urban stores but were rejected by Wal-Mart shoppers in most of the country. Now, the executive who led the upscale clothing push is gone, and Wal-Mart is looking to sell more brightly colored T-shirts, the Times reports. The new direction, as simple as it seems, certainly sounds like a better fit.

A four-year-long restructuring is paying dividends at Kodak (EK). The imaging company swung to a fourth-quarter profit from continuing operations of $92 million, or 31 cents a share, from a year-ago continuing operations loss of $15 million, or a nickel a share. Revenue rose 3% from a year ago to $3.22 billion. Revenue from Kodak’s digital side - the business that Kodak has chosen to emphasize over film sales, at the cost of nearly 28,000 job cuts since 2004 - rose 15% from a year ago to $2.26 billion. Earnings in the digital business rose to $146 million from $141 million a year earlier. Kodak chief Antonio Perez cited last year’s rollout of Kodak’s standalone digital photo printer as a sign of the company’s renewed purpose. “We successfully entered the $50 billion consumer inkjet market and exceeded our first-year printer sales goal,” he said in Wednesday’s press release. “What’s more, third-party data indicates that Kodak is enjoying a 30% price premium over the industry average.” For the first time in years, the picture at Kodak actually looks pretty good.

How low can Yahoo (YHOO) go? The Internet giant disappointed Wall Street for the umpteenth time with Tuesday afternoon’s softer-than-expected 2008 forecast, sending shares sliding 11% to within a dollar of their 52-week low. Yahoo pledged to cut 1,000 jobs and boost its investment in services users want, but analysts are wondering how the company’s display advertising business will hold up in a recession. Yahoo’s latest poor performance comes amid a selling spree in the tech sector, where Apple (AAPL) has lost a third of its value this month and Intel (INTC) has dropped 23%. Even Google, which is due to post its fourth-quarter numbers after the close Thursday, is down 20%. So will the wave of selling sweep Yahoo even lower? A drop Wednesday looks like a good bet, but analyst Clay Moran of Stanford Group justifies his hold rating by telling Bloomberg television that at Tuesday’s postclose lows, Yahoo stock is trading at nine times its 2008 cash flow estimates - toward the low end of the media industry’s average multiple of eight to 12 times cash flow. Maybe, with the help of a Fed interest rate cut this afternoon, Yahoo shares will catch a bid again.

Yahoo (YHOO) took another hit in late trading Tuesday after the Internet giant’s revenue guidance for the first quarter and 2008 came in at the low end of Wall Street’s expectations. The Sunnyvale, Calif., company posted a solid fourth quarter, making $206 million, or 15 cents a share, for the quarter ended Dec. 31, down from the year-ago $269 million, or 19 cents a share. Excluding certain costs, earnings were 20 cents a share for the latest quarter. Net revenue, excluding the money Yahoo shares with its search advertising partners, rose 14% from a year ago to $1.4 billion. Analysts were looking for an 11-cent profit on sales of $1.4 billion.

But as it has done repeatedly in recent quarters, Yahoo offered guidance for coming periods that’s below what Wall Street was expecting. The company said it expects net revenue of $1.28 billion to $1.38 billion for the first quarter, compared with a $1.37 billion Wall Street estimate, and $5.35 billion to $5.95 billion for the year, compared with the $5.9 billion Wall Street estimate.

“We are pleased with our results this quarter and believe we are prioritizing and investing appropriately to achieve our strategic objectives,” finance chief Blake Jorgensen said. “As we operationalize our strategy in 2008, we will remain focused on generating long-term shareholder value.” For now, investors are still wondering how deeply Yahoo might cut its work force as its struggles to compete with rivals such as Google (GOOG) in a slowing ad market — which is why the stock dropped 7% in late action to within 50 cents of its 52-week low.

Clearwire (CLWR) surged Tuesday on reports that the wireless company’s partnership with Sprint Nextel (S) may be resurrected. The Wall Street Journal reported that Sprint has resumed talking with Clearwire about a deal that would bring in outside players such as Intel (INTC) to fund a high-speed network using WiMax technology. The reversal comes just two months after Sprint backed away from an earlier plan to team up with Clearwire on a WiMax project. As Fortune’s Stephanie Mehta pointed out two months ago, the technology has been heavily hyped but so far little deployed. Yet given Sprint’s desperate straits — the company has been losing postpaid wireless subscribers at an alarming clip, and new chief Dan Hesse is expected to roll out another round of layoffs next month — reviving the Clearwire deal makes sense. Sprint, after all, would get help building a service that could help it compete with rivals AT&T (T) and Verizon (VZ) — while buying Hesse time to fix the free-falling cell phone service business. As for Clearwire, it continues to combine the promise of a new wireless technology with the economics of a classic dot-com — so don’t be surprised if Tuesday’s rally fades in coming days.

VMWare (VMW) stock got pummeled Tuesday, losing a third of its value after the software company posted soft fourth-quarter revenue and offered a 2008 outlook that disappointed Wall Street. Fears that the company’s stellar growth will slow also punished parent EMC (EMC), whose shares dropped 9% even after the networking storage company posted stronger-than-expected fourth-quarter numbers. The VMWare shortfall got analysts to thinking about what might happen to the company’s volatile shares even before Tuesday’s bloodbath got under way.

In a note late Monday, Robert W. Baird analyst Daniel Renouard cut his price target to $80 from $110, while retaining a neutral rating. Nothing new on that front: He had that same rating back when he began covering the stock back in August - when he dubbed VMWare fairly valued at $60. Since then, VMWare has spiked to $125, calling the fairly valued view into some question, before plunging on Tuesday back to $56.

So what’s Renouard’s call here? Everyone remain on the sidelines, please. “Although we remain big believers in VMware’s growth prospects longer term,” Renouard wrote Monday night, “we believe management’s expectations of license revenue growth deceleration warrants a wait-and-see approach on the stock given macro uncertainty and potential pricing pressure.” Waiting and seeing has worked so well in the past, after all.

UnitedHealth (UNH) tumbled 3% Tuesday after the Los Angeles Times reported the health insurer could face a billion-dollar fine tied to failures to pay claims. The newspaper says the California insurance department “uncovered 133,000 alleged violations of state laws and regulations regarding payments for medical care” at UnitedHealth’s Pacificare unit, which was acquired by the Minneapolis-based HMO two years ago. The Times says a separate probe of Pacificare by the state department of managed health care found that 30% of medical claims it reviewed were improperly denied.

The findings won’t surprise HMO customers, most of whom are no stranger to bureaucratic indifference. Still, UnitedHealth insists it has taken steps to fix the problems and that many of the issues have been resolved. UnitedHealth, which previously scored headlines for an executive pay scandal tied to the apparent manipulation of stock option grants, adds that it doesn’t believe it deserves a big fine.

“While there is a theoretical maximum penalty, we believe the commissioner will take into consideration the fact that the vast majority of the violations were administrative in nature and did not result in harm to our members,” the company said in a press release Tuesday. “For example, over 80,000 of the noted violations were related to not sending providers an acknowledgement letter for claims received. However, the majority of these claims were paid on time.” Of course, that still leaves a minority of customers whose claims were delayed or ignored. Chances are good that they would like to see Pacificare face justice - and get the maximum penalty.

Countrywide (CFC) rose early Tuesday after the mortgage lender swung to a fourth-quarter loss. Countrywide lost $422 million, or 79 cents a share, for the quarter ended Dec. 31,  reversing the year-ago profit of $622 million, or $1.01 a share. The company’s mortgage banking unit swung to a $623 million pretax loss, as loan funding dropped 48% from a year ago, and the banking operations posted a pretax loss of $279 million. “While considerably improved from the previous quarter,” CEO Angelo Mozilo said, “Countrywide’s results for the fourth quarter of 2007 were adversely impacted by further credit deterioration across the industry and continued illiquidity in the secondary mortgage markets.” The results made a mockery of Mozilo’s claim back in October, when he unveiled a $1.2 billion loss for the third quarter, that the company had “laid the foundation for a return to profitability in the fourth quarter.” No matter, though. Countrywide shares rallied as the report showed the company is still in business - which should be enough to keep suitor Bank of America (BAC) happy for now.

A clash of the corporate titans brews at IAC/InterActiveCorp (IACI), Barry Diller’s Internet conglomerate. The Wall Street Journal reports that media mogul John Malone is suing to wrest control of the operator of the Ask.com search engine from Diller. The dispute stems from Diller’s latest plan to change the structure of IAC with a spinoff of four operating units. Malone, whose Liberty Media (LINTA) owns a big stake in IAC, alleges Diller engaged in “misconduct” in structuring the deal to minimize Liberty’s control of the restructured company. Liberty seeks to have Diller and some other directors removed from the IAC board. Diller rejects the claims and says, “I am beginning to think these people are insane.”

Insane or not, Malone is no stranger to hard-ball tactics. Less than two years ago, he quietly took a big voting stake in Rupert Murdoch’s News Corp. (NWSA) and used that position to wrest control of DirecTV (DTV) from Murdoch. Meanwhile, Diller’s greatest claim to fame of late is his designation by The New York Times in late 2006 as the most overpaid CEO in America - and that was before IAC shares lost a third of their value of the past year. It’s easy to see why investors aren’t crazy about that arrangement.

VMWare (VMW) plunged 24% in late trading Monday after the software company missed Wall Street’s fourth-quarter revenue estimate. The Palo Alto, Calif., spinoff of EMC (EMC) made $78 million, or 19 cents a share, for the quarter ended Dec. 31, up from the year-ago $31 million, or 9 cents a share. Excluding certain costs, earnings were 26 cents a share - 2 cents ahead of the analyst consensus estimate. But sales, despite rising 80% from a year ago to $412 million, missed the $417 million analyst estimate.

Investors fled the stock, sending VMWare shares tumbling $19 to $64 and parent EMC sliding 10% to $15 and change. That was somewhat predictable, given that VMWare shares rose fourfold in just over two months after their August initial public offering to hit $125 back on Halloween. And though the stock’s momentum has clearly ebbed, Fortune’s Adam Lashinsky noted at the time of the IPO that unlike some short-lived tech faves, VMWare has a business that should continue to bring in profits for some time. “VMware actually solves a problem that matters to big technology buyers,” Lashinsky wrote on his Go West blog. “Its virtualization approach allows companies with massive server farms to more efficiently use their server capacity.” Sounds like a good idea - as long as you don’t bet the farm on the stock.