FOOL ON THE HILL An Investment Opinion
How a Recession Begins
By Bill Mann (TMF Otter)

Over history, all of our great economic collapses have happened directly or indirectly as a result of too much leverage. This week the Office of the Comptroller of the Currency issued a report saying that troubled corporate debt to the largest U.S. banks has grown to $100 billion, or 5.2% of their total loan portfolio, up from 2.5% two years ago. This rise in high-risk debt, in a time of huge economic expansion, is an ideal catalyst for a rapid and violent descent into recession.
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RULE BREAKER PORTFOLIO A QuickNews Extra
USInternetworking's Vision
By Paul Commins (TMF Buster)

USInternetworking, an August Rule Breaker focus company, endured a series of Wall Street downgrades this week. On the heels of a rapid, two-month stock price decline, these downgrades hit like a swift kick in the face. Can we argue that this is just another failure of short-term-focused Wall Street to see the future of business computing? Or is there a fatal flaw in the USi model? The fact that USi's competitors are also getting pounded suggests the former. A review of recent USi customer acquisitions argues the latter.
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RULE MAKER PORTFOLIO A QuickNews Extra
Watch the Business, Not the Stock
By Zeke Ashton (TMF Centaur)

When making decisions on whether to buy, sell, or hold, it is easy to let the stock market influence your actions. We are considering selling Gap because of the direction of the business, not the stock price. And while Intel's stock may get hammered today on bad news, we aren't tempted to sell it, because it still meets our investing criteria. Rule Makers watch the business, not the stock.
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FOOL RESEARCH A QuickNews Extra
Oracle vs. Siebel
By John Del Vecchio (TMF Fuz)

Rule Makers Siebel Systems and Oracle Corporation are often compared with each other in the e-business software sector. However, understanding their business model and challenges ahead are more important then the numbers. Motley Fool research analyst gives his point of view.
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FOOL PLATE SPECIAL An Investment Opinion
Manugistics Still Strong
By Brian Lund (TMF Tardior)

Manugistics has appreciated substantially in the last year as it turned around from a disastrous fiscal year 1999. The company has surpassed expectations and achieved operating profitability for the first time in 11 quarters. Still, the company has lost the momentum it had in curtailing its swelling accounts receivable. In the last two quarters, cash flow has suffered as receivables have again begun to rise. It's important to keep an eye on this trend in the future.
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Cable & Wireless' Raw Deal
By Bill Mann (TMF Otter)

Cable & Wireless (C&W) selected a cash and stock deal from upstart Pacific Century Cyberworks (PCCW) in February for $35 billion in cash and stock for its Hong Kong Telecom subsidiary. There was also an all-cash deal on the table from Singapore Telecom for a lower amount, but the PCCW bid and mystique won out. So C&W, which was trying to raise cash and exit Hong Kong, ended up a large shareholder in an ambitious company with big ideas, big debt, and minimal assets save the carrier just sold to it by C&W. Now, seven months later, C&W's take from the deal is significantly below the then market price of Hong Kong Tel, as PCCW's buoyant stock has tanked.
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Should Dell Follow Intel?
By Todd Lebor

The market broadsided Intel today, dropping the stock more than 20% in afternoon trading, after it announced an earnings warning for Q3 yesterday due to weak demand in Europe. The market's knee-jerk reaction would be to follow suit and slam the PC box makers, but the story's not that simple. Compaq, for example, announced its European demand is tracking within its expectations. So what's all the hubbub about?
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AOL/NTT DoCoMo in Wireless Partnership
By Chris Rugaber (TMF RFK)

Japan's NTT DoCoMo confirmed a partnership with AOL this morning. The deal should bring DoCoMo's wildly successful wireless Internet service, i-mode, to the United States, where it will face a completely different market. Nevertheless, if the joint venture between the companies can add a wireless carrier to the mix, there may be a new, formidable player in town.
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Priceline's 48 Hours
By Nico Detourn (TMF Nico)

Even with strong brand recognition, priceline's name-your-own-price system is still a challenge. The company says that changing the business paradigm is going to take consumer some education. But did the recent 48 Hours report reveal a weakness in the model?
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BREAKFAST WITH THE FOOL
Intel's Q3 Sales Off Thanks to Europe
By LouAnn Lofton (TMF Lou2)

Computer chip-maker Intel (Nasdaq: INTC) announced after the closing bell yesterday that its third-quarter revenues will fall below expectations. The company's revenues had been expected to be between $9 billion and $9.1 billion, which is 9-10% higher than its revenues from its second quarter. However, Intel told the Street yesterday that its revenues will increase only 3-5% sequentially, which translates into sales between $8.5 billion and $8.7 billion.
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Today's Market Movers

Ups

Financial merger mania: Business Week's "Inside Wall Street" column reported that discount broker Charles Schwab (NYSE: SCH) and investment bank Goldman Sachs (NYSE: GS) have held informal talks about hitching up, which boosted Schwab $5, or 16.7%, to $35. Sachs wasn't completely left out, rising $1.63 to $114.88.

Handheld computer-maker Handspring (Nasdaq: HAND) jumped $11.38 to close at $62.75, after receiving coverage with a "Strong Buy" rating from analysts at CIBC World Markets, who noted the company's 20% share of the hand-held wireless Internet access device market. Their report also projected sales to jump from 8 million units last year to more than 67 million by 2005.

Online flower-seller 1-800-Flowers Inc. (Nasdaq: FLWS) deserves a bouquet after signing a new five-year agreement with America Online (NYSE: AOL) to be the exclusive flower purveyor on six different AOL properties. The stock rose $0.95, or 20.8%, to close at $5.44. The deal replaces an earlier four-year contract announced last year.

Downs

Chipmaker Intel Corp (Nasdaq: INTC) fell $13.53, or 22%, to $47.94 on news the company would not meet Street expectations due to weaker demand in Europe. The news sent other tech stocks tumbling. Apple Computer Inc. (Nasdaq: AAPL) fell $4.50 to $52.19 and Dell Computer (Nasdaq: DELL) dropped 3.50, or 9.2%, to close at $34.44.

More major chip equipment makers fell after an important analyst downgrade and monthly industry figures showed order rates had hardly improved. Chartered Semiconductor Manufacturing Ltd. (Nasdaq: CHRT) fell $4.88 to $68.13. Novelus Systems Inc. (Nasdaq: NVLS) dropped $5 to $52.75. KLA-Tencor Corp. (Nasdaq: KLAC) declined $5.94 to $43.38.

More bad news for radio stocks sent the sector down. Radio Once Inc. (Nasdaq: ROIA) announced its fiscal third-quarter revenue would be lower than Street expectations and dropped $3.00 to $10.94. The operator of radio stations that serves black audiences fell $3.00 to $10.94. Citadel Communications fell $0.19 to $16.31. Cox Radio (NYSE: CXR) reached its 52-week low and fell $0.25 to $17.50.

AmSouth Bancorp. (NYSE: ASO) announced it would take pre-tax charge of $280 million in the fiscal third-quarter due a restructuring. The company also announced its profit will be as much as $0.10 below Street expectations. The bank fell $3.44, or 21%, to $13.13.

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