DJIA            8693.28    -21.37      (-0.25%) 
 S&P 500         1098.06     -3.14      (-0.29%) 
 Nasdaq          1842.69    -12.43      (-0.67%) 
 Value Line ndx   867.98     -6.28      (-0.72%) 
 30-Year Bond    99 6/32      unch  5.55% Yield 
 

HEROES

Dell Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> continued to roll on, gaining $8 3/8 to $117 15/16 today after reporting second quarter results late yesterday that once again blew the rest of the industry off the face of the earth. The direct seller of computer systems reported its 18th consecutive quarter of record revenues and 14th consecutive quarter of 40% or more year-over-year growth in revenues. The company ended the quarter as the industry's leader in profitability, revenue and unit growth, and in asset management. Because Dell has tweaked its asset management to the point that it turns over its entire inventory once every 8 days, it was able to leverage that inventory expertise over flat PC prices during a period when component prices were at one point declining by 1% per week. This was a major factor in the company reporting a 72% rise in Q2 EPS of $0.50 and in growing revenues 41% year-over-year.

Construction and engineering firm Fluor Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FLR)") else Response.Write("(NYSE: FLR)") end if %> rose $3 7/8 to $44 1/2 after reporting fiscal Q3 EPS of $0.81, up from last year's $0.79 and walloping the Street's mean estimate of $0.70. However, the firm said a nearly 9% reduction in the number of shares outstanding during the quarter added $0.06 per share to its earnings. Still, the company seems to be turning itself around after a dismal performance last year, when Fluor overreached in its global expansion efforts and got nailed by the Street. The firm said gross margins at its main Fluor Daniel engineering and construction unit have shown sequential quarterly improvement in fiscal 1998, as Fluor has shifted its near-term global operations focus away from the troubled Asian region and toward the growing markets in North and South America. The strategy should keep the company in track to meet its fiscal 1998 earnings objectives, according to newly installed Chairman and CEO Phil Carroll.

Oil and gas drilling equipment and services provider Dresser Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DI)") else Response.Write("(NYSE: DI)") end if %> rose $2 5/8 to $31 1/2 after reporting fiscal Q3 EPS of $0.61, up from $0.49 last year and a nickel ahead of the Street's mean estimate. Merger partner Halliburton <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HAL)") else Response.Write("(NYSE: HAL)") end if %> picked up $2 5/8 to $31 7/8 on the news. Other oil services firms and contract drillers also gained ground today, as The Wall Street Journal reported that insiders at companies such as Schlumberger <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SLB)") else Response.Write("(NYSE: SLB)") end if %> and Ensco International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ESV)") else Response.Write("(NYSE: ESV)") end if %> have been buying shares of their companies recently. Schlumberger added $1 9/16 to $55 7/16, Ensco rose $1 1/4 to $13 9/16, Cliffs Drilling <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CDG)") else Response.Write("(NYSE: CDG)") end if %> gained $1 13/16 to $21 1/2, R&B Falcon <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FLC)") else Response.Write("(NYSE: FLC)") end if %> advanced $1 3/16 to $13 1/4, Global Marine <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GLM)") else Response.Write("(NYSE: GLM)") end if %> tacked on $1 1/4 to $13 7/8, Varco International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VRC)") else Response.Write("(NYSE: VRC)") end if %> gained $13/16 to $12 15/16, and BJ Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BJS)") else Response.Write("(NYSE: BJS)") end if %> moved up $1 to $18.

QUICK TAKES: Database software firm Oracle Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORCL)") else Response.Write("(Nasdaq: ORCL)") end if %> gained $1 1/8 to $24 7/16 as the company launched a $25 million advertising campaign in an effort to overtake rival SAP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SAP)") else Response.Write("(NYSE: SAP)") end if %> as the leader of the enterprise applications market. SAP fell $13/16 to $56 1/4... Pizza Hut and Taco Bell restaurant operator Tricon Global Restaurants <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: YUM)") else Response.Write("(NYSE: YUM)") end if %> slurped up a $3 7/8 gain to $36 3/8 after saying better-than-expected operating performance will result in fiscal Q3 EPS about 50% above last year's $0.56, which is well ahead of the $0.57 the Street had been expecting... Biopharmaceutical company Centocor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CNTO)") else Response.Write("(Nasdaq: CNTO)") end if %> rose $2 7/16 to $37 3/8 after Morgan Stanley Dean Witter reiterated its "strong buy" rating and Merrill Lynch reiterated its "near-term buy" rating on the stock.

Movie studio operator Metro-Goldwyn-Mayer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MGM)") else Response.Write("(NYSE: MGM)") end if %> roared $2 7/8 higher to $18 3/16 after financier Kirk Kerkorian's Tracinda Corp. increased its stake in the firm to 90% by acquiring the MGM shares held by Australia's Seven Network for $389 million... Auto parts maker Federal-Mogul Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FMO)") else Response.Write("(NYSE: FMO)") end if %> added $4 3/8 to $67 1/2 after Merrill Lynch raised its fiscal 1999 earnings estimate to $4.95 per share from $4.60 per share following the firm's purchase of Cooper Industries' <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBE)") else Response.Write("(NYSE: CBE)") end if %> auto parts unit yesterday... Thrift holding company GA Financial <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: GAF)") else Response.Write("(AMEX: GAF)") end if %> gained $1 3/8 to $17 after setting a plan to buy back up to 5% of its outstanding shares.

Digital imaging and printing plate technologies firm Presstek <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRST)") else Response.Write("(Nasdaq: PRST)") end if %> moved up another $1 3/4 to $11 3/4 after signing a one-year $5 million deal yesterday to provide film coating equipment to thin film coatings producer Southwall Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SWTX)") else Response.Write("(Nasdaq: SWTX)") end if %>. Southwall rose $7/16 to $5 1/16... Organizer notebooks maker Day Runner <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DAYR)") else Response.Write("(Nasdaq: DAYR)") end if %> sprinted ahead $1 1/2 to $20 1/4 after reporting fiscal Q4 EPS of $0.39, beating the Street's mean estimate by a penny. The company also named current president James Freeman its new CEO... Medical and surgical products distributor Owens & Minor <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: OMI)") else Response.Write("(NYSE: OMI)") end if %> moved up $1/2 to $12 13/16 after signing a prime vendor agreement with privately held community healthcare services provider Sutter Health worth a total of $315 million over five years.

Gemstar International Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GMSTF)") else Response.Write("(Nasdaq: GMSTF)") end if %> rose $1 3/8 to $41 3/8 after the maker of the VCR Plus+ instant TV programming system said its board has authorized a plan to buy back up to $100 million of its outstanding shares... Peerless Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PLSS)") else Response.Write("(Nasdaq: PLSS)") end if %> jumped $1 1/2 to $6 3/8 after the designer of software for community banks and credit unions agreed to be acquired by fellow computer systems firm Jack Henry & Associates <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JKHY)") else Response.Write("(Nasdaq: JKHY)") end if %> in a stock swap valuing Peerless at about $7.25 per share. Jack Henry fell $1 19/32 to $44... Auto retailer and solid waste hauler Republic Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RII)") else Response.Write("(NYSE: RII)") end if %> gained $13/16 to $18 5/8 after agreeing to buy two auto dealers in Florida and Maryland for an unspecified amount of cash.

Provident Financial Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PFGI)") else Response.Write("(Nasdaq: PFGI)") end if %> gained $3 1/4 to $49 1/4 after the financial services company was chosen to replace Transatlantic Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TRH)") else Response.Write("(NYSE: TRH)") end if %> on the Standard & Poor's MidCap 400 index. Transatlantic fell $2 1/4 to $92 1/8... Auto components maker SPX Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SPW)") else Response.Write("(NYSE: SPW)") end if %> added another $1 9/16 to $58 1/8 after winning a contract yesterday to market BMW authorized service equipment to 350 BMW auto centers in the U.S.

Ratings Movers

Notebook computer modems maker Xircom Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XIRC)") else Response.Write("(Nasdaq: XIRC)") end if %> climbed $1 13/16 to $26 1/2 courtesy of a Morgan Stanley Dean Witter upgrade to "outperform" from "neutral"... Cancer and AIDS drugs developer Agouron Pharmaceuticals <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AGPH)") else Response.Write("(Nasdaq: AGPH)") end if %> tacked on $2 3/4 to $26 3/8 following a Bear Stearns upgrade to "buy" from "neutral"... SDL Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SDLI)") else Response.Write("(Nasdaq: SDLI)") end if %> gained $4 1/8 to $23 1/2 after CIBC Oppenheimer started coverage of the semiconductor laser and optoelectronic chip company with a "strong buy" rating... Family apparel retailer Stage Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SGE)") else Response.Write("(NYSE: SGE)") end if %> climbed $15/16 to $15 15/16 after Bear Stearns raised its rating to "buy" from "attractive"... Cruise line operator Royal Caribbean Cruises <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RCL)") else Response.Write("(NYSE: RCL)") end if %> steamed ahead $3 to $32 as Merrill Lynch raised its long-term rating to "buy" from "accumulate."

GOATS

Discount clothing catalog retailer Brylane Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BYL)") else Response.Write("(NYSE: BYL)") end if %> tanked $11 7/16, or 31.8%, to $24 1/2 after warning that it anticipates lower-than-expected sales in the second half of the year. The New York-based purveyor of catalogs such as Lane Bryant, Chadwick's of Boston, and Lerner expects sales to grow 7.5% for the rest of year -- analysts were predicting 10% revenue growth. Sales have suffered at its Lerner catalog because the clothes haven't kept up with current fashions. The company is in the process of revamping its Lerner offerings and expects an improvement in sales next spring. Next month, Brylane will launch a new home products catalog called Gramercy Home. Today the company reported pro forma Q2 EPS of $0.67, compared with $0.56 a year ago and in line with estimates, and announced plans to repurchase all of its $125 million 10% Senior Subordinated Notes due 2003 at the stated call price of 105% this fall. Merrill Lynch lowered its rating on the company to "hold" from "buy" and cut its 1998 EPS estimate by $0.18 to $3.10 and 1999 EPS by $0.35 to $3.55.

"System on a Chip" company LSI Logic <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LSI)") else Response.Write("(NYSE: LSI)") end if %> plunged $2 5/8 to $15 5/8 after warning that Q3 results will be lower than analysts' estimates. Fewer-than-anticipated orders are expected to result in 5% to 10% lower revenues and EPS in the low-to-mid teens compared with analysts' expectations of $0.23 per share, the same as last year. The Milpitas, Calif.-based specialty chip maker has been hard hit by more competition as well as the Asian economic crisis. Not only has demand for its products in Asia fallen, but the strong U.S. dollar also has hurt revenues because the company bills some of its customers in Japanese yen. Today's warning was the second in a month -- the first came when the company reported Q2 earnings in late July and said it expected flat Q3 revenues and EPS. Merrill Lynch lowered its near- and long-term ratings on LSI to "neutral" from "accumulate," and BT Alex. Brown cut its rating to "buy" from "strong buy."

QUICK CUTS: Netscape Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCP)") else Response.Write("(Nasdaq: NSCP)") end if %> was cut $1 1/4 to $30 7/8 after late yesterday reporting breakeven EPS, which was slightly better than analysts' estimates of a loss of $0.02... Internet portal company Excite Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XCIT)") else Response.Write("(Nasdaq: XCIT)") end if %> fell $1 9/16 to $43 1/4 on news that its senior vice president and co-founder Joseph Kraus has filed with the SEC to sell 65,000 shares. Yahoo! <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> fell as well, losing $2 to $95 1/4... Healthcare electronic data interchange and transaction processing services company Envoy Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ENVY)") else Response.Write("(Nasdaq: ENVY)") end if %> nose-dived $3 11/16 to $22 13/16 after announcing it has hired an additional independent appraisal firm to review its accounting of intangible assets acquired by the company after questions regarding valuation from the SEC.

Integrated circuits manufacturer Analog Devices <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ADI)") else Response.Write("(NYSE: ADI)") end if %> tumbled $2 3/4 to $21 1/2 after reporting fiscal Q3 EPS of $0.15 (excluding a $17 million restructuring charge and a $3.6 million equity loss in WaferTech), down from $0.27 a year ago and lower than analysts' expectations of $0.19... Liquid crystal display (LCD) modules maker Three-Five Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TFS)") else Response.Write("(NYSE: TFS)") end if %> sank $5 5/16 to $9 13/16 after warning it expects Q3 results to be between breakeven and a loss of $0.10 a share compared with the First Call estimate by one analyst of $0.16 a share... Interconnect solutions manufacturer Merix Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MERX)") else Response.Write("(Nasdaq: MERX)") end if %> tanked $1 3/4 to $5 after announcing it expects to report a wider-than-expected fiscal Q1 loss before a restructuring charge of $0.85 to $0.95 per share. The company's restructuring will include plant closings and layoffs of nearly 500 employees.

Measurement, color printing, and video and networking firm Tektronix Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TEK)") else Response.Write("(NYSE: TEK)") end if %> was pummeled for a $7 15/16 loss to $23 after announcing it expects fiscal Q1 EPS of $0.07 to $0.12, sharply lower than last year's $0.52 and the analysts' mean estimate of $0.54. The company blamed the shortfall in part on the expected operating loss announced today by Merix, in which Tektronix holds a 27% stake... Branded footwear distributor and retailer Genesco Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GCO)") else Response.Write("(NYSE: GCO)") end if %> tanked $2 7/8 to $6 5/16 after warning it expects a weaker Q3 due to slow sales in its Jarman stores. The company reported Q2 EPS of $0.25, up from $0.15 last year and analysts' expectations of $0.18... Temporary manpower Labor Ready <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LBOR)") else Response.Write("(Nasdaq: LBOR)") end if %> was dragged down $7 3/4 to $21 1/2 on rumors of accounting irregularities, which the company denied.

Sub-prime mortgage lender AMRESCO Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMMB)") else Response.Write("(Nasdaq: AMMB)") end if %> lost $2 1/2 to $20 despite saying it knew of "no logical reason" why its stock was falling... Managed care company Foundation Health Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FHS)") else Response.Write("(NYSE: FHS)") end if %> dropped $2 3/8 to $13 7/8 as it announced that it is "aware of no corporate developments that would account for the unusual trading activity in the Company's Common Stock"... Farm equipment maker Deere & Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DE)") else Response.Write("(NYSE: DE)") end if %> pulled back $2 9/16 to $38 1/8 after ABN AMRO downgraded its rating on the company to "hold" from "buy" on weakening farm sector fundamentals... Spaghetti Warehouse <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SWH)") else Response.Write("(NYSE: SWH)") end if %> was hung out to dry today, falling $1 1/8 to $6 11/16 after Dallas-based private investment firm ConQuest Partners announced that it withdrew its bid to acquire the restaurant chain on concerns regarding the company's probable future financial performance.

Wholesale food distributor and grocery chain operator Richfood Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RFH)") else Response.Write("(NYSE: RFH)") end if %> slipped $15/16 to $21 9/16 after reporting fiscal Q1 EPS of $0.28 versus $0.30 in the year-earlier period and a penny short of estimates due to some expected initial dilution from its recent acquisitions of Farm Fresh and Shoppers Food Warehouse... Internet advertising agency 24/7 Media <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TFSM)") else Response.Write("(Nasdaq: TFSM)") end if %> shed yet another $1 7/8 to $14 after jumping 45% following its initial public offering on Friday at a price of $14 per share... Nerve stimulation and medical devices company Cyberonics <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CYBX)") else Response.Write("(Nasdaq: CYBX)") end if %> lost another $1 11/16 to $6 7/8 after late Monday reporting a wider-than-expected fiscal Q4 loss of $0.30 per share... Highway contractor Granite Construction <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GVA)") else Response.Write("(NYSE: GVA)") end if %> slid $4 5/16 to $27 1/8 after Salomon Smith Barney cut its rating on the company to "neutral" from "outperform" on valuation concerns.

Russian-related shares continued their free fall in concert with stocks on the Russian Trading System. Vimpel-Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VIP)") else Response.Write("(NYSE: VIP)") end if %> was cut $3 11/16 to $21 1/4, Rostelecom <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ROS)") else Response.Write("(NYSE: ROS)") end if %> fell $11/16 to $5 9/16, and the Morgan Stanley Russia Fund <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RNE)") else Response.Write("(NYSE: RNE)") end if %> lost $7/8 to $12... Magazine publisher Reader's Digest Association <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RDA)") else Response.Write("(NYSE: RDA)") end if %> was shredded $1 9/16 to $21 7/8 after reporting Q4 EPS of $0.05, a penny short of estimates... Carbon fiber maker Zoltek Cos. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ZOLT)") else Response.Write("(Nasdaq: ZOLT)") end if %> was jolted for a $1 7/8 loss to $15 3/4 after The Wall Street Journal's "Heard on the Street" column reported that the company is being investigated by the SEC on allegations it released an early copy of its July 23 earnings report to hometown brokerage firm Pauli & Co.

West TeleServices Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WTSC)") else Response.Write("(Nasdaq: WTSC)") end if %> slipped $1 5/16 to $12 7/8 after a group of investors announced it has withdrawn its proposal and terminated all discussions to acquire the telecommunications services company after a special committee of the company's board of directors told the investors it would not be able to recommend their final bid of $15.50 a share... Enterprise computing products and services company AlphaNet Solutions <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALPH)") else Response.Write("(Nasdaq: ALPH)") end if %> plunged $1 5/16 to $5 7/16 after Parker/Hunter Inc. downgraded its rating on the company, citing attrition in its base of consultants... Healthcare management company Magellan Health Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MGL)") else Response.Write("(NYSE: MGL)") end if %> lost $2 to $14 1/4 after announcing that it has ended negotiations to sell its 50% interest in Charter Behavioral Health Systems to Crescent Operating Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COPI)") else Response.Write("(Nasdaq: COPI)") end if %> due to the difficult market environment for healthcare companies.

FOOL ON THE HILL
An Investment Opinion
by Dale Wettlaufer

ROE, ROE, ROE Your Boat (Pt. 2)

Yesterday, we started to look at how the quality of one company's return on equity (ROE) is not necessarily equal to another company's. The main proof of this observation is a three-factor shorthand of a model that actually has five factors. Known as the DuPont ROE model, it looks like this:

       Revenues     Net Income      Assets 
 ROE = --------  x  -----------  x  -------- 
         Assets       Revenues         SE

        Net Income 
 ROE =  ------------ 
             SE

        Revenues       Net Income 
 ROA =  ----------  x  ------------ 
          Assets         Revenues

CONFERENCE CALLS

Please see the Motley Fool's Conference Calls page for call information and links to synopses.

WE DELIVER - Get The Evening News delivered
to your e-mailbox every evening!

ANOTHER FOOLISH THING

See something moving a stock that we didn't cover?
E-mail the Fool News Team
and we will start working on the story.
Unfortunately, we cannot answer every e-mail
or respond to individual questions.

Contributing Writers Yi-Hsin Chang (TMF Puck), a Fool Brian Graney (TMF Panic), Fool Two Alex Schay (TMF Nexus6), Fool, too Dale Wettlaufer (TMF Ralegh), Final Fool Editing Brian Bauer (TMF Hoops), another Fool Bob Bobala (TMF Bobala), a Fool's Fool Jennifer Silber (TMF Amused), Fool at last