CNN reported today that the "CNN effect" may deter consumer spending.

No, the network isn't referring to the nausea induced by Connie Chung's hour-long train wreck of a show, the sweaty palms and panting caused by Paula Zahn's rising hemline, the heebie-jeebies one feels watching James Carville spit and bark, or the deep slumber brought about by Aaron Brown's lullaby tone on NewsNight.

The "CNN effect," according to CNN, is the idea that consumers will be glued to its news coverage during the early days of war with Iraq, rather than shopping or dining out. The network failed to indicate how this might differ from the "Fox effect" or the "MSNBC effect," but we assume those viewers, unaware of the war, will be spending willy-nilly.

In today's Motley Fool Take:

The Oracle Knows

Things are always surprisingly calm in the eye of a storm. And there's no mistaking the tempest brewing at Oracle(Nasdaq: ORCL).

According to an International Data Corp. report, the company is losing market share in its flagship database-management software business to IBM(NYSE: IBM) and Microsoft(Nasdaq: MSFT). Internally, the reshuffling of its sales force in January rocked Oracle. But it's been a perfect storm, as the company delivered on the bottom line by keeping its operating margins in check.

Last night, the world's second-largest software company posted earnings of $0.11 per share on revenue of $2.31 billion in its fiscal third quarter. Analysts were dead-on with the top-line target, but Oracle was able to squeeze another penny per share on the way down.

The stock opened significantly lower this morning on the news that software license revenue was off by 4% for the quarter, and that currency gains factored into the estimate-besting profit. But the market seems to be missing an impressive achievement from Oracle. It was able to grow both revenue and earnings in a very difficult climate of moribund information technology spending. What's more, by maintaining operating margins of 34.5% -- steady with last year's showing -- it kept business humming along at an even pace. Sure, IBM swiped some market share, but Big Blue suffered a dip in operating margins last quarter to get there. Oracle stayed true to its model.

An interesting nugget from last night's report was CEO Larry Ellison's shot at rival SAP(NYSE: SAP), when he noted that Oracle's suite of solutions is cheaper than SAP's and easier to implement. Anyone familiar with the brash and colorful Ellison knows he's not one to mince words. He loves to use the company's quarterly reports to bash the competition. However, Germany's SAP had mostly escaped his verbal lashings. As a matter of fact, two years ago, he predicted that SAP and Oracle would be the only two software companies left standing in the enterprise software space.

Why, this time, did Ellison single out SAP over stateside rivals IBM and Microsoft -- both easy targets in the past? Well, they're gaining on Oracle right now, and it's best not to draw any ire or send attention their way. Ellison's a shrewd, tactical bulldog. As Oracle CEO, he knows what's up.

Discussion Board of the Day: Oracle

Where do you stand on the prospects for the country's second-largest software company? Is CEO Larry Ellison a genius, or simply a legend in his own mind? Will the company win back market share from IBM and Microsoft? All this and more -- in the Oracle discussion board. Only on

Are You Saving Enough?

Survey results released yesterday reveal that U.S. workers are suffering from savings hubris.

According to Trust & Consequences: Closing the Retirement Awareness Gap, many people have a false sense of how well they're actually doing in preparing for retirement. Nearly half of those surveyed say they are contributing the maximum to their 401(k)s. Yet data compiled by the U.S. Government and the Employee Benefit Research Institute (EBRI) show that only 11% of American workers, in fact, contribute the maximum.

Plus, the average worker contributes only about half of what their employer plans allow -- just 6.8% of their pre-tax salary, compared to the 15% rate most plans permit.

The study, commissioned by CIGNA Retirement & Investment Services, surveyed more than 750 employees across the United States, all of whom participate in a 401(k) or other employer-sponsored retirement plan.

Not surprisingly, fear of war, general apathy, and confusion about plan options play a role in stopping workers from socking money away for the future. And 39% feel they are "underwater," stating they can barely keep up with bills and don't believe they can afford to contribute more.

If you're apathetic about saving, perhaps some cold, hard numbers will change your mind. A 401(k) plan of $50,000 (that's the national average) amounts to roughly $2,500 a year during retirement. Hardly enough to spend your golden years ingesting champagne and caviar.

Here are a few tips on improving your lot in retired life:

Education: Run the numbers -- your numbers -- and see how you're doing. Use our retirement calculators, or check out the Plan the Perfect Retirement How-To Guide. (TMF Money Advisor members can use the DirectAdvice online financial planning tool.)

Evaluation: How does your employer's retirement-savings plan measure up? If you can spare a minute, here's a 60-second guide to maximizing your 401(k).

Incentive: How's this for motivation? A lot of employers offer free money to those who contribute to their work retirement plan. Take advantage of the free dough.

Ideas: Think you can't squeeze another dime from your budget? Consider where your wallet is leaking on a daily basis. And forgive the shameless plug, but The Motley Fool Personal Finance Workbook can help get all your money matters on track.

Patience: War and a weak economy are frightening right now. But remember, the market goes up and down -- sometimes violently one way or the other -- during the short term. But it has a way of righting itself over the long term. So be patient, grasshopper.

Now, go ask your HR department for the paperwork to up your 401(k) contribution.

Quote of Note

"Being president is like being a jackass in a hailstorm. There's nothing to do but to stand there and take it." -- Lyndon B. Johnson

Pfizer Sells Cheap. Novartis Reaps?

Health-care giant Pfizer(NYSE: PFE), the fifth-largest publicly traded U.S. company by market capitalization, will sell its Enablex urinary incontinence drug candidate to Swiss-based Novartis(NYSE: NVS) for $225 million. It just might be a good deal for the buyer.

Monday, Pfizer and Pharmacia(NYSE: PHA) reported that they and the Federal Trade Commission agreed on which drugs to sell to satisfy regulatory concerns over the two companies' pending $54 billion merger. The Enablex move would pluck one incontinence drug from Pharmacia's $700 million-a-year medicine cabinet of three. The $225 million sticker price for Enablex, which should receive a Food and Drug Administration decision later this year, is a fire-sale price for Novartis because the drug, if approved, could reap over $1 billion a year in sales.

Pfizer's prescription drugs are household names, and its Viagra, Lipitor, Zoloft, and Celebrex greet us regularly on television. Like diversified health-care giant Johnson & Johnson(NYSE: JNJ), Pfizer has large over-the-counter operations, too, with rock-solid brands such as Rolaids, Listerine, Desitin, and Visine.

Less known in the U.S. is Novartis, formed by the 1996 record-setting merger of drug giants Ciba-Geigy and Sandoz. While its drugs aren't everyday conversation pieces, Novartis peddles familiar consumer products Ex-Lax, Maalox, and Triaminic. In a nod to the importance of the U.S. market and domestic research talent, the company recently said it would almost triple the size of its U.S. facility in Cambridge, Mass., investing $4 billion over 10 years. In the meantime, Enablex will bolster an unspectacular drug development pipeline.

Though Novartis's $24 billion trailing-12-month sales are 70% of Pfizer's, the market rewards it only stingily with a market cap under 50% of its competitor's $190 billion. Both shares sell for a P/E of 21, and both pay dividends yielding about 2%. Each company had recent-year earnings bumps -- Pfizer's from 1999 to 2000, and Novartis's from 2000 to 2001 -- but each has recovered or exceeded those previous highs. Is either a buy?

For investors who want to own a large health-care company as part of a diversified portfolio, each warrants special caution. Pfizer will be digesting a huge competitor. Despite its history of successful mergers, investors can't ignore academic research strongly suggesting that, in general, large mergers rarely create long-term shareholder value.

The first of Novartis's two challenges is information. As a foreign company whose shares trade in the U.S. as American Depository Receipts, it files only annual (not quarterly) reports with the SEC. The second is that no sales force can match Pfizer's, so Novartis may not be able to extract $1 billion a year from Enablex. This may have kept other buyers from besting the $225 million price.

It's tough to find value right now in the big drug-maker world, though periodic, or Drip, investing is an antidote. Deep-value investor Matt Richey recently counseled to wait on Johnson & Johnson shares until they sell for under 20 times free cash flow, and I opined that Schering-Plough(NYSE: SGP) shares are still too pricey for the risks from its FDA and SEC woes.

Your mileage may vary, especially if you have industry expertise. But we're currently unable to say with comfort that any large drug maker is a deal, satisfying ourselves for now with the question that has plagued language-challenged investors since 1996: Is it Novar-tis or Novar-tee? Qui sait?

Shameless Plug: Open an IRA Before April 15

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Quick Takes

In somewhat surprising news, USA Interactive(Nasdaq: USAI) struck a deal to buy up the remaining shares of Expedia(Nasdaq: EXPE) it doesn't already own. It attempted to do so several months ago, but the online travel leader rebuffed the offer, calling it inadequate. The $3.3 billion stock-for-stock transaction will reward Expedia shareholders with a 30% premium over yesterday's closing price. USA Interactive -- a multimedia conglomerate whose properties include Home Shopping Network, Ticketmaster,, and -- also said Chairman and CEO Barry Diller will give up those same roles at Vivendi Universal Entertainment(NYSE: V). Diller said his time with the company was "never intended to be permanent," but USA would still remain a shareholder.

Trading in HealthSouth(NYSE: HRC) has been suspended for two days. The SEC charged the company and CEO Richard Scrushy with "massive accounting fraud." The nation's largest provider of rehabilitative health-care and outpatient surgery is accused of overstating earnings by at least $1.4 billion since 1999 "in order to meet or exceed Wall Street earnings expectations."

Bristol-Myers Squibb (NYSE: BMY) is at it again, saying it will restate earnings for two more years, 1997 and 1998. Nine days ago, the drug maker restated earnings for 1999 through the first half of 2002.

FedEx (NYSE: FDX) delivered third-quarter earnings that were up 23% over year-ago levels. It would have done even better, but lost some business to the severe winter weather.

In local news, nothing happened at all for the second straight day.

And Finally...

Today on

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