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HEROES

Networking products maker 3Com Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COMS)") else Response.Write("(Nasdaq: COMS)") end if %> gained $1 15/16 to $27 5/16 as The Wall Street Journal reported that the company will spend $100 million over the next two years to form joint ventures in China, which 3Com expects will eventually be "very significant" to its revenues. However, the real factor moving the stock today was speculation that chip giant Intel <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %> will make a bid for all or part of 3Com's business. While some speculators live and die by the old "buy on the rumor, sell on the news" adage, there is little reliable proof that any deal is forthcoming from the companies. But for fun, a possible agreement could be in the works for 3Com's network interface card (NIC) unit, which has had its nose bloodied lately by Intel's aggressive pricing strategies. Unfortunately for Intel, a NIC link-up would almost surely raise the antitrust hounds' ears, as the combined operation would control an estimated 70% of the market for the devices.

Biopharmaceutical company Biogen <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BGEN)") else Response.Write("(Nasdaq: BGEN)") end if %> took a ride $5 7/8 higher to $57 1/2 after CIBC Oppenheimer raised the firm's rating to "buy" from "hold" with a 12-month price target of $58 per share. The upgrade is the second this week for the Cambridge, Massachusetts-based company, which earlier got a lift when Goldman Sachs placed the stock on its "recommend list" alongside rival Amgen <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMGN)") else Response.Write("(Nasdaq: AMGN)") end if %>. While the circumstances are different, Biogen seems to be benefiting from the recent positive vibe from investors about Amgen and the biotech sector in general. The buzz overshadowed Immunex's <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: IMNX)") else Response.Write("(Nasdaq: IMNX)") end if %> announcement today that Phase III trials of its Novantrone drug had a "statistically significant impact" on the relapse rate of patients with progressive multiple sclerosis. If approved by the FDA, Novatrone will compete head-to-head with Biogen's MS drug, Avonex. Immunex closed up $3 5/8 to $59 1/2.

The American Petroleum Institute said in a report that U.S. oil inventories dropped by a larger-than-expected 6.7 million barrels last week, sending the price of oil up in trading today. The roughly 2% inventory drop was due to a hurricane in the Gulf of Mexico, which reduced imports into the U.S. and gave stateside oil folks a sliver of hope that the ongoing worldwide oil glut may actually end some day. Contract oil driller Rowan Companies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RDC)") else Response.Write("(NYSE: RDC)") end if %> gained $7/8 to $12 1/4, Cliffs Drilling <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CDG)") else Response.Write("(NYSE: CDG)") end if %> rose $1 7/8 to $20 1/4, Noble Drilling <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NE)") else Response.Write("(NYSE: NE)") end if %> advanced $1 3/16 to $14 13/16, and Transocean Offshore <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RIG)") else Response.Write("(NYSE: RIG)") end if %> climbed $1 1/4 to $28 3/4. On the oil services side, EVI Weatherford <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EVI)") else Response.Write("(NYSE: EVI)") end if %> moved up $2 1/2 to $20 7/8, Cooper Cameron <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RON)") else Response.Write("(NYSE: RON)") end if %> gained $3 7/16 to $30, and Varco International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VRC)") else Response.Write("(NYSE: VRC)") end if %> rose $1 3/16 to $10 1/8.

QUICK TAKES: Russian wireless telecommunications company Vimpel-Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VIP)") else Response.Write("(NYSE: VIP)") end if %> rose $1 1/8 to $9 3/16 after Russian President Boris Yeltsin nominated former foreign minister and spy chief Yevgeny Primakov to be the country's next Prime Minister. Primakov will have the task of trying to right the sinking Russian economy... Gold mining stocks gained ground after the price of gold rose, helped by the dollar's decline against the yen and other currencies. Since gold is priced in dollars, a slide in the greenback's value means foreign investors can get more gold for their currencies. Newmont Gold Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NGC)") else Response.Write("(NYSE: NGC)") end if %> gained $2 7/8 to $22 11/16, Ashanti Goldfields <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ASL)") else Response.Write("(NYSE: ASL)") end if %> picked up $1 3/8 to $7 7/16, Anglogold Ltd. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AU)") else Response.Write("(NYSE: AU)") end if %> tacked on $2 7/16 to $23 3/8, Barrick Gold Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ABX)") else Response.Write("(NYSE: ABX)") end if %> rose $1 9/16 to $18 1/16, and Placer Dome <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PDG)") else Response.Write("(NYSE: PDG)") end if %> added $1 1/8 to $11 15/16.

Periphonics Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PERI)") else Response.Write("(Nasdaq: PERI)") end if %> gained $1 5/8 to $7 1/4 after the designer of automated call center products said it expects to report fiscal Q1 revenues of $30 million, up 35% from a year ago. The firm also forecast EPS between $0.07 and $0.09, up from $0.01 last year and above the $0.08 per share loss expected by the Street... Thrift holding company Calumet Bancorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CBCI)") else Response.Write("(Nasdaq: CBCI)") end if %> moved up $3 to $29 1/2 after privately held bank holding company FBOP Corp. agreed to buy the company for $111.6 million in cash, or $32 per Calumet share (excluding merger-related charges)... Drug abuse diagnostic products maker Biosite Diagnostics <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BSTE)") else Response.Write("(Nasdaq: BSTE)") end if %> advanced $11/16 to $6 1/2 after announcing a 1 million share buyback plan after the bell yesterday.

Pharmaceutical document management and network integration services provider Integrated Systems Consulting Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ISCG)") else Response.Write("(Nasdaq: ISCG)") end if %> rose $3/4 to $11 1/8 after agreeing to merge with healthcare information management services firm First Consulting Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: FCGI)") else Response.Write("(Nasdaq: FCGI)") end if %>. First Consulting fell $1 3/16 to $16 1/4... Specialty railroad tracks and mechanical products maker ABC Rail Products Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ABCR)") else Response.Write("(Nasdaq: ABCR)") end if %> steamed ahead $1 3/16 to $12 after reporting fiscal Q4 EPS of $0.34, beating the Street's mean estimate by $0.03... Disk drive maker Seagate Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %> was lifted $1 7/8 to $22 1/4 by a NationsBanc Montgomery Securities upgrade to "buy" from "hold"... Oil and gas producer and refiner Atlantic Richfield <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ARC)") else Response.Write("(NYSE: ARC)") end if %> pumped out a $3 3/8 gain to $64 5/8 after refuting reports yesterday that its huge Los Angeles refinery had been damaged by a flare problem earlier in the week.

GOATS

Satellite communications company Loral Space & Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LOR)") else Response.Write("(NYSE: LOR)") end if %> nose-dived $5 1/16 to $13 after its 42%-owned international consortium Globalstar Telecommunications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GSTRF)") else Response.Write("(Nasdaq: GSTRF)") end if %> said 12 satellites were destroyed when a rocket carrying them crashed shortly after launch in Kazakhstan. Globalstar plunged $7 1/8 to $10 3/4. Other Globalstar investors also fell: Qualcomm <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QCOM)") else Response.Write("(Nasdaq: QCOM)") end if %>, which has a 6% stake, dropped $5 to $44 1/2, and AirTouch Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ATI)") else Response.Write("(NYSE: ATI)") end if %>, with a 5% stake, lost $2 to $58 3/8. Globalstar, which is building a satellite-based worldwide telecommunications network, says it still hopes to have the network operating by the end of next year (the initial target was mid-1999), possibly using 32 satellites instead of 48. In all, it had planned to have an additional eight backup satellites in orbit and another eight on the ground for a total of 64. This was the first of three launches scheduled to put 36 satellites for the network into orbit. Globalstar is investigating the crash and assessing its schedule for future launches.

Investment banking giant Merrill Lynch <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MER)") else Response.Write("(NYSE: MER)") end if %> was cut $3 3/4 to $55 1/2 as banks and brokerages in general were slashed yet again as fears over a recession and credit risk in everything from humdrum commercial loans all the way to sovereign foreign debt worried investors. With leverage far greater than money center banks (though effective leverage is about on par with money center banks), investors are moving away from the unknown in Merrill. In addition, though the banking sector looks cheap on 1999 earnings estimates, it's probably best to start pricing these companies at the low end of the estimate range. Morgan Stanley Dean Witter <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MWD)") else Response.Write("(NYSE: MWD)") end if %> slid $1 3/4 to $48 5/16, J.P. Morgan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: JPM)") else Response.Write("(NYSE: JPM)") end if %> shed $1 3/8 to $85 3/4, American Express <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AXP)") else Response.Write("(NYSE: AXP)") end if %> lost $7 3/16 to $69 1/2, Citicorp <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CCI)") else Response.Write("(NYSE: CCI)") end if %> sank $4 13/16 to $88 1/4, Chase Manhattan <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CMB)") else Response.Write("(NYSE: CMB)") end if %> tumbled $1 7/8 to $42 3/4, NationsBank <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NB)") else Response.Write("(NYSE: NB)") end if %> tanked $3 7/16 to $50 5/16, NationsBank merger partner BankAmerica <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BAC)") else Response.Write("(NYSE: BAC)") end if %> dropped $3 1/4 to $56 1/8, BankBoston <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BKB)") else Response.Write("(NYSE: BKB)") end if %> finished down $3 5/16 to $33 1/2, First Union <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FTU)") else Response.Write("(NYSE: FTU)") end if %> was clipped $1 1/4 to $49 1/2, Bankers Trust <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BT)") else Response.Write("(NYSE: BT)") end if %> dipped $1 1/4 to $63 1/16, and Banc One <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ONE)") else Response.Write("(NYSE: ONE)") end if %> was trimmed $1 7/8 to $41 3/8.

QUICK CUTS: Consumer products giant Procter & Gamble <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PG)") else Response.Write("(NYSE: PG)") end if %> shed another $2 3/4 to $69 1/8 after the company said it expects a "mid-single digit" increase in fiscal first quarter earnings per share. Analysts had been expecting about an 8% rise in EPS... Food and drug store operator Fred Meyer Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FMY)") else Response.Write("(NYSE: FMY)") end if %> was cut $1 7/8 to $37 7/8 after reporting Q2 EPS of $0.29 (before charges), a penny down from last year but in line with estimates... Reinsurance company General Re Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GRN)") else Response.Write("(NYSE: GRN)") end if %> fell $9 1/4 to $195 1/4 after UST Securities lowered its rating on the company to "sell" from "buy," saying that the share price falling below $205 is a red flag on the stock.

Come fly the strike-happy skies! The nation's fifth largest airline Continental Airlines <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAI.B)") else Response.Write("(NYSE: CAI.B)") end if %> fell $1 13/16 to $36 13/16 as its regional pilots union declared an impasse in labor negotiations and asked to be released from talks, which could mean, yes, a strike. Speaking of strikes, Northwest Airlines <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NWAC)") else Response.Write("(Nasdaq: NWAC)") end if %> slipped $3/4 to $25 3/4... On the ground, Ford Motor Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: F)") else Response.Write("(NYSE: F)") end if %> skidded for a $2 11/16 loss to $43 1/4 after delaying plans for a global bond sale because of widening yield spreads and volatility in the corporate bond market... Lender Silicon Valley Bancshares <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SIVB)") else Response.Write("(Nasdaq: SIVB)") end if %> was pummeled for a $10 27/32 loss to $14 13/16 as analysts said the company would report higher loan losses and nonperforming assets.

Ciena Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CIEN)") else Response.Write("(Nasdaq: CIEN)") end if %> dropped another $3 7/16 to $16 5/16 after the telecommunications equipment company lost out on a wavelength division multiplexing equipment deal worth at least $100 million with privately held Digital Teleport... Trident International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TRDT)") else Response.Write("(Nasdaq: TRDT)") end if %>, which markets proprietary impulse ink jet technology, plummeted $2 1/8, or 20.2%, to $8 3/8 after warning that it expects fiscal Q4 EPS between $0.19 and $0.21, short of analysts' mean estimate of $0.30... Agricultural and construction equipment maker Case Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CSE)") else Response.Write("(NYSE: CSE)") end if %> was ditched for a $3 7/8 loss to $23 7/8 after the company warned it expects Q3 earnings (before restructuring charges) to be "moderately below" those of a year ago and earnings for the year to drop roughly 25% due to lower demand for agricultural equipment... Teen casual apparel marketer dELiA*s Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DLIA)") else Response.Write("(Nasdaq: DLIA)") end if %> was ripped for a $7 11/16 loss to $6 3/16 after reporting a fiscal Q2 loss of $0.01 a share, down from a profit of $0.03 per share for the year-ago period and compared with analysts' expectations of breakeven results.

FOOL ON THE HILL
An Investment Opinion
by Alex Schay

Globalstar's Crash Course

The stock of Globalstar Telecommunications Ltd. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GSTRF)") else Response.Write("(Nasdaq: GSTRF)") end if %> burned up $7 1/8 to $10 3/4 on earth today, in tandem with the company's launch vehicle that flamed out in the upper atmosphere yesterday. The Globalstar partnership announced that a rocket carrying 12 of its satellites didn't last more than five minutes in the air before a malfunction led to the loss of all of the satellites. Globalstar began as a partnership between Loral Corp. and Qualcomm Inc., but after Loral merged with Lockheed Martin in 1996, Loral's interests in Globalstar, together with its other space assets, were combined into Loral Space & Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LOR)") else Response.Write("(NYSE: LOR)") end if %>. The crash of the Ukrainian Zenit 2 rocket (whose engine failed during take-off), launched from the Baikonur space center in Kazakhstan, will result in a delay of the partnership's commerical satellite communications service roll-out until the end of 1999 -- or possibly even later.

As it is presently designed, the Globalstar satellite system hopes to offer 800 million to 1 billion minutes per month of telecommunications connection capacity and will ostensibly be available just about anywhere on earth (excluding use by polar bears and some mariners in the middle of the ocean). The system is a low earth orbit constellation (LEO) consisting of 48 satellites along with eight orbiting "spares," which can be used as replacements for any of the primary 48 if one or more should fail. Too bad the partnership only has eight satellites floating around in the ether now, which should indicate to readers that the launch of these twelve satellites (representing 25% of the core grouping) was actually a crucial portion of Globalstar's initial infrastructure build. Many analysts are saying, "I told you so" today after voicing concern about the partnership's strategy of putting too many costly eggs into one potentially unstable basket -- even though the Zenit fail rate up until yesterday was only 10%.

Planned Calendar of Scheduled Launches

Launch   Launch   Launch      Number of         Launch 
 Date     Vehicle  Provider    Satellites         Site 
  
 2/14/98  Delta    Boeing           4     Cape Canaveral, FL 
 4/24/98  Delta    Boeing           4     Cape Canaveral, FL 
 3Q98     Zenit    NPO Yuzhnoya    12     Baikonur, Kazakhstan 
 4Q98     Zenit    NPO Yuzhnoya    12     Baikonur, Kazakhstan 
 4Q98     Zenit    NPO Yuzhnoya    12     Baikonur, Kazakhstan 
 1Q99     Soyuz    Starsem          4     Baikonur, Kazakhstan 
 1Q99     Soyuz    Starsem          4     Baikonur, Kazakhstan 
 2Q99     Soyuz    Starsem          4     Baikonur, Kazakhstan 
 (Company Data)

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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