Despite promising announcements from McDonald's(NYSE: MCD) and telecom giant AT&T(NYSE: T), the Dow never rallied from Texas Instruments'(NYSE: TXN) disappointing earnings news at market open. The Dow and S&P 500 slipped more than 1.1% at market close, and the Nasdaq fell 1.3%, putting a damper on optimism after a two-week turnaround.

Not to be outdone, the FOOL 50 traded down over 1.4% today.

In today's Motley Fool Take:

Texas Instruments Goes South

Is Texas Instruments'(NYSE: TXN) miss your loss? When the semiconductor giant posts soft third-quarter results and gives an even bleaker fourth-quarter outlook, one has to consider the domino effect on other industries.

While operating profits of $139 million reversed last year's loss for the period, the company's bottom line still fell short, despite its 4% revenue growth sequentially to $2.25 billion. And that's not just TI's business. In many ways, it's the entire tech sector talking.

See, few companies are as important as TI in gauging the health of the economic recovery. From personal-computer equipment to its role as the leading cell phone chip maker, leading indicators come out in droves when the company steps up to the podium. In short, when this bellwether rings, people listen.

Investors in Nokia(NYSE: NOK) and other handset makers might take heart that TI's wireless business didn't buckle late into the quarter. That's the real worry for others, here: TI started the quarter strongly, but closed in poor fashion. That's important since it's now expecting a 10% sequential decline in revenue for the current quarter.

While the company's third-quarter strength in analog chips and digital signal processors, along the way to producing improvement in free cash flow, was initially comforting, that growth was undone last month. With orders slowing, even an expected uptick in its wireless division in the fourth quarter won't help.

The stock got hammered at the open today, opening 22% lower at $13.40, and with good reason. TI is taking steps back at a time when the economy is supposed to be inching forward. Will it bounce back? The company's sector is cyclical, so, by definition it will go through its ups and downs. But will it be sooner rather than later? Probably, but check back in three months to see what lies deep in the heart of Texas.

Discussion Board of the Day: Texas Instruments

Did you know that Texas Instruments is about more than just fancy calculators? Do you think the company will turn things around sooner rather than later? All this and more -- in the Texas Instruments discussion board. Only on

Kmart Sticks With Stewart

Attention Kmart shoppers: Our bluelight special on Martha Stewart items will continue indefinitely... come hell, high water, or jail time.

That's the message the bankrupt retailer is sending out today, even as Stewart prepares to face charges for her connection to the insider trading scandal at ImClone Systems(Nasdaq: IMCL).

A source told the Associated Press today that the SEC has informed Stewart it intends to file civil securities fraud charges against her. The lifestyle maven is accused of selling ImClone shares after being tipped to regulatory problems with the company's cancer drug, Erbitux. Former CEO Samuel Waksal has already pled guilty to insider trading.

Unlike Waksal, Stewart would not face jail time if convicted of the civil charges. However, federal prosecutors in the Manhattan U.S. attorney's office are also investigating the case, so she could still face criminal charges.

In the meantime, her clothing and bedding products are still outselling all other lines, according to Kmart(NYSE: KM) President Julian Day. The Washington Postsays even though Stewart's troubles could affect profits -- and the company's plan to emerge from bankruptcy next year -- Kmart isn't backing down. Not only has Stewart been prominently featured in recent advertising, but we'll also see her first-ever line of holiday decorations next month.

It may be a risky strategy, but considering her Everyday line accounted for $1.5 billion in sales last year, the company has little choice but to ride Stewart's coattails -- even through the mud.

Quote of Note

"If you're going through hell, keep going." -- Winston Churchill

Budget Blunders

It comes as no surprise to half of us that sticking to a budget is a Sisyphean endeavor. And now there's proof!

According to a poll by American Consumer Opinion as reported in the San Antonio Business Journal, half of the 3,136 people polled said they don't always stay within their monthly budgets.

What's more, the higher the income level, the more likely we blow the monthly stipend. Those with incomes in excess of $100,000 were the most likely to break the bank (58.9%), compared to respondents with an annual household income of $35,000 or less (43.3%).

Some of us are in no place to lecture, so here we present some tried-and-true tactics for pointing your financial wagon to the high road:

  • See what a difference it can make to reduce your spending. We've got a host of other budgeting calculators that will spew out the glories of sticking to a budget in irrefutable black-and-white dollar figures.
  • Have an emergency stash at the ready to cover those inevitable budget busters. Here's a 60-Second Guide to establishing some short-term savings.
  • If you've got debt, get hands-on help paying it off with our free (!) Get Out of Debt guide.
  • Read this brief post from a budgeting convert, Storytelr1, who shares his secret to living within his means. And then join the host of Fools on the Living Below Your Means discussion board for some of the best advice around.
  • And finally, we've got a plan: Devote just 15 minutes a day for the next five days to Certify Your Finances so that they pass muster.

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Quick Takes

When a broker downgrades other financial services companies, is it little more than a case of self-flagellation? Merrill Lynch(NYSE: MER) downgraded the shares of Legg Mason(NYSE: LM), Charles Schwab(NYSE: SCH), and Goldman Sachs(NYSE: GS) this morning. If this were a playground sandbox, they would all turn to Merrill and chant: "We are rubber. You are glue. Whatever you say bounces off of us and sticks to you."

Think Blockbuster(NYSE: BBI) would kill for a rewind button today? After topping earnings through most of the past year, the company missed its third-quarter targets. While it still sees 30% earnings growth this year, it posted just $0.28 a share in net profits for the September period. While that's an improvement on last year's $0.24-a-share showing, it's three cents below Wall Street's expectations. In the words of the company's own marketing slogan, used in the late 1990s: Wow! What a difference!

Painting a pretty picture, Sherwin-Williams(NYSE: SHW) topped analyst estimates with a few coats to spare. The fact that the paint specialist is rocking shouldn't come as much of a surprise. With interest rates at historic lows, the housing market has been booming. Tack on those who have opted to stay home, refinance, and use some monthly savings toward redecorating their homestead, and it's easy to see why Sherwin-Williams is brushing past projections. Those gains helped offset weakness overseas and in the automotive paint divisions. Gross margins improved, as its pro forma profits rose by 23%, despite only a 4% increase in sales.

Just in time for Halloween, a monster is spawning. TMP Worldwide(Nasdaq: TMPW), parent company of the leading employment services site, announced it will spin off its eResources and Executive Search businesses as a separate entity by early next year. The stock could use a favorable referral or two, given that shares have fallen by 85% since hitting all-time highs two years ago.

And Finally...

Today on Matt Richey highlights four small caps with promise.... Earnings calls can provide valuable information about a company's management. Tom Jacobs explains.... In Fool's School, your kids might not like veggies, but they'll like investing! Here's why.... Our Community says just say "Yes" to dividends.... And the Post of the Day: Cisco Systems.

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