Scandal shook the Miss America Pageant recently when two Miss North Carolinas arrived in Atlantic City for the contest. Because her ex-boyfriend released topless photos to the press, Miss North Carolina No. 1 first sacrificed her crown. She later wanted it back, so a messy court battle ensued.

Between that and the other52nd contestant in the pageant, imagine the panic and pandemonium among the contestants who thought they hadn't reviewed enough U.S. geography before the contest.

But don't change the flag just yet. North Carolina No. 1 lost the case, despite her congeniality and flattering evening wear, so North Carolina No. 2 will appear in Saturday's pageant.

The Motley Fool 50 lost 5% on the week after coming in last in the swimsuit portion of the competition.

In today's Motley Fool Take:

Energy Drops at Duke

Shares of Duke Energy(NYSE: DUK), the second-largest U.S. utility owner, were off as much as 15% this morning after the company warned on earnings for both this year and next. The stock's drop was the largest in almost 15 years, according to Bloomberg. (It lost about 5% by market close.)

At one time, Duke Energy was famous for being the market's lowest volatility stock, routinely trading in a one-year range that spanned no more than five points. Not so this year. The stock is off more than 50% from its 52-week high of $41.35.

The market didn't take well to news that this year's earnings estimate was being reduced by nearly 20% to $1.95 to $2.05 versus the previous consensus of $2.46. Perhaps worse was the warning on next year's earnings, which the company now says will be flat with 2002 and off sharply from the previous consensus estimate of $2.61. Even this revised outlook for flat earnings assumes a somewhat tenuous "modest improvement in market conditions."

The company blamed the earnings miss on poor results in its energy trading division, a segment which has been in a slump ever since the collapse of Enron. "The young merchant energy sector has experienced both an extreme up cycle and an equally extreme down cycle," said CEO Richard Priory. In other words, getting into energy trading has been a mistake.

The issue now is Duke's massive debt load, which has increased dramatically over the past two years, from $13 billion at the end of 2000 to $22 billion presently. Nevertheless, the signal from the bond market is that this debt is fairly secure. According to Bloomberg, Duke's 6.25% coupon notes maturing in 2012 fell to $1,062 per $1,000 of face value from $1,078, pushing up the yield on the debt to 5.4% from 5.18%.

Even with the current tumult facing the company and the electrical industry as a whole, this conservatively managed company may deserve Fools' attention given the tasty dividend yield of 5.5%.

Quote of Note

"Life is pain, princess... Anyone who says differently is selling something." -- Wesley, The Princess Bride

Chronic Depression at Home Depot

This spoof is brought to you by Bill Mann (TMF Otter).

Oh, that General Electric(NYSE: GE) executive training! GE alumnus and current CEO of Home Depot(NYSE: HD) Bob Nardelli explains reports of poor customer service at the company's stores by saying, "Service is related directly to morale, and morale in our company is directly related to stock price... When the market fell, (store associates) fell."

Seeing as Home Depot stock is down more than 30% on the year, you'd expect that its store associates would be mighty surly these days. Intrigued, I decided to do some investigating myself. Please note that all facts have been changed in the hopes of making this story more interesting.

I went to my local Home Depot, in Fairfax, Va., to look around. You noticed it right away -- the place was nearly devoid of sales staff. Those present had bleary eyes and seemed distracted. And, yes, even surly.

I asked for help with some paint. Apparently that was the wrong thing to ask the guy who was manning the paint desk. "Paint?! Oh, yeah, great. Our stock is down 64 cents today, and you want paint? I'll bet you want one of those happy pastel colors, huh? Your room? What about my stock options?!"

"Wow, it's worse than I thought," I thought. In a room just off the sales floor, I caught a glimpse of some Home Depot sales folks. Must've been fifteen of 'em. Some had been crying. They were all staring at a television screen that I couldn't see, but I assume CNBC was on. Suddenly the room erupted in cheer. "Up 11 cents! Hallelujah!" one exclaimed. And, although I can't confirm this, I swear another said, "Oh, frabjous day!" They quickly went back to the sales floor, breathing sighs of relief.

I noticed that one guy, whom I'll call Edwin (because, well, that was the name on his smock), had been cheerfully going about his business while his co-workers mourned. I asked him about Nardelli's comments.

"Do you think that your co-workers' performance declines whenever your stock price goes down?"

"No, we are generally very busy during sales," answered Edwin, cryptically.

"That's not what I'm asking. When Home Depot's stock price goes down, do you notice a change?"

"Yes, I understand what you are asking," said Edwin, helpfully. "It depends on what we have in stock, you see? Some items are expensive and some are not. When the expensive stock here goes on sale, it is very difficult. Many questions. Sometimes I even have to go out to install it for people."

He smiled.

"No, I'm talking about your shares. What happens then?"

"But, sir, we only sell things here. We don't share them. You have to buy them."

Edwin looked at me like I was insane. I wasn't inclined to disagree. I asked him where the brass cleaner was, and made my exit.

As I left, a pallor returned over Home Depot. An analyst had just downgraded the company. Little does he know he's talking about a company that has buildings full of seriously depressed people with easy access to power tools.

Shameless Plug: Fool Perks

As another company once put it, membership has its privileges. From special yields on certificates of deposits to free issues of Investor's Business Daily, we've always got some Fool perks for you. Take advantage of them, and check back often for more.

CSFB's Two-Step Misstep

Email, our beloved near-instantaneous way of talking to friends and workers alike, can come back and bite -- hard. That's the situation two analysts from Credit Suisse's(NYSE: CSR) Credit Suisse First Boston (CSFB) find themselves in now, after joking about a little ratings dance dubbed the "Agilent Two-Step." One analyst, Tim Mahon, sent email in 2000 to another, Elliott Rogers, encouraging him to publicly have a "buy" rating on Agilent(NYSE: A) while "verbally everyone knows your position."

Isn't this refrain from the big investment-banking houses becoming sickeningly familiar? Love the stock publicly and recommend it to as many hapless souls as possible, while secretly thinking the company's not all that. But, hey, maybe you'll get some investment-banking business out of them.

The suspicion that investment banks have been behaving this way as a matter of course is not new. What's so disturbing to see, though, as revelations like these creep up from houses on the Street, is that the deception was not only willful but calculated and even trivial.

To be so flip as to actually call it the "Agilent Two-Step" paints an ugly picture of the way some business was done at CSFB. Apparently we're not the only ones who think so, as Massachusetts's top state securities regulator has filed a criminal referral with New York's attorney general on the matter. Because of Massachusetts law, regulators there could only file civil charges; in New York, however, where the actions took place, criminal charges are available.

Pointing to a heap of emails, the Massachusetts regulators claim that not only was there zero regard for fiduciary duty, but that a pattern of bad behavior at CSFB is evident, with analysts thinking one thing and saying another. That's illegal (not to mention despicable).

For its part, CSFB says that, in the two years since the emails were written, the company has taken steps to improve its analysts' independence. That's nice and all, but it won't save the company from criminal prosecution should New York's regulators agree with the evidence presented by Massachusetts and decide to file charges. The road to analyst independence is already littered with refuse from Salomon Smith Barney and Merrill Lynch. Looks like Credit Suisse First Boston may be up next.

Carnival Quietly Rebounds

Give Carnival(NYSE: CCL) credit. Despite one of the toughest periods for travel in recent memory, the cruise-line operator is not just treading water, but actually showing slight profit growth.

For the three months ended Aug. 31, the company gained $0.85 a share on revenue of $1.44 billion, beating the consensus estimate of $0.77. In the same period last year Carnival earned $0.84 a share and recorded $1.49 billion in revenue. It's worth noting that the comparison period from last year predated Sept. 11. The closely watched net revenue yield -- which is net revenue per available "berth day" -- fell less than 1%.

Customers are still booking cruises much closer to sailing dates than last year, which makes it tougher to offer a solid assessment of future sales. Nonetheless, CEO Micky Arison is upbeat about the fourth quarter, predicting a 1% to 3% rise in net revenue yield.

Carnival's quarter has to be heartening to others in -- or reliant on -- the travel industry. From hotel chains to online booking companies to restaurants, a huge part of the economy depends on travel and tourism... whether by plane, train, or automobile. Any indication that things are on the rebound is more welcome than a "clean restrooms" sign after a long drive.

Discussion Board of the Day: Best Travel Spots/Tips

If you need to know about timeshares in Maui, wineries in St. Louis, or even the advantages of e-tickets over paper tickets, we've got just the place for you. For anything and everything travel-related, tune in and turn on to the Best Travel Spots/Tips discussion board. Only on

Quick Takes

Wireless giant Qualcomm(Nasdaq: QCOM) told investors yesterday it would be shipping more cell-phone chips than expected. Today, the company's stock price jumped 8%. The news also lifted others in the sector, including Ericsson(Nasdaq: ERICY) and Sprint PCS Group(NYSE: PCS).

Medtronic (NYSE: MDT) will pay Boston Scientific(NYSE: BSX) $175 million to settle several patent infringement lawsuits between the two medical device makers. The companies also agreed to a limited number of cross-license patents.

A Bloomberg news survey shows that a majority of Wall Street's biggest bond-trading firms believe the Federal Reserve will keep interest rates as they are for the rest of the year.

Saying he's simply too busy to do an effective job, Oracle(Nasdaq: ORCL) Chairman and CEO Larry Ellison has resigned his spot on the board of directors for Apple Computer(Nasdaq: AAPL). However, he says he still plans to offer advice to CEO Steve Jobs.

In local news, crowds continue to flock to the Tucker farm to see the new baby calf born last Tuesday. Nicknamed "Roadie," the animal has a small fuzzy patch on its rear end that resembles the state of Rhode Island.

And Finally...

Today on Don't follow the masses. These short sellers are cruising for a bruising.... In our Tax Center, don't gamble with taxes.... "Consolidated" financial statements, in Fool's School.

Bob Bobala, Robert Brokamp, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim