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In today's Motley Fool Take:

Welcome Back, Potter

Harry Potter's latest wizard trick? Disappearing -- as in the vanishing act performed by copies of Harry Potter and the Order of the Phoenix flying off the shelves over the weekend. That's jolly good news for Scholastic(Nasdaq: SCHL), which distributes the Potter books stateside. Writing delays in J.K. Rowling's fifth installment in the Harry Potter series held back the book's release, but it's clear that while absence may not make the heart grow fonder, it certainly makes the pocketbooks flutter.

All told, Scholastic claims that it sold 5 million copies of the book on Saturday. That's an astounding figure, even if it includes pre-orders that have been building over the past few months. But which retailer is making a killing? If you believe the hype, all of them had an excellent weekend. (Nasdaq: AMZN) reports that it sold 1.3 million copies worldwide before Saturday's official release, with 790,000 being scooped up domestically. Borders(NYSE: BGP) is clinging to a figure of 750,000 globally, while Barnes & Noble(NYSE: BKS) sold 896,000 copies through its bricks-and-mortar stores and BNBN) online arm.

Add it up and roughly half of Scholastic's sales came from those three vendors. It's clear that the book retailer as a species is far from dead. Even as Books-a-Million(Nasdaq: BAMM) and trade for two bucks and change apiece, this is an industry that is unlikely to buckle to the mighty discount department store giant Wal-Mart(NYSE: WMT).

Sure, Wal-Mart has topped Toys "R" Us(NYSE: TOY) for the playthings crown and it continues to threaten the supermarket sector with its growing grocery offerings. However, either Wal-Mart's typical customer just isn't much into reading or folks have come to depend on book specialists for their hardcover and paperback bestsellers.

While it's impressive to note that Amazon is outselling the established chains, it's even more significant to consider the strength of the industry as a whole. Sorry, Wal-Mart, this is a niche that has read up on you. Market dominance? Nope. Just settle for a footnote.

Discussion Board of the Day: British Invasion

Were you one of those camping out at midnight to grab one of the first Harry Potter books over the weekend? Did you hurt your back trying to carry the massive book home? All this and more -- in the British Invasion discussion board. Only on

Quote of Note

"Only someone who's been as broke as I was could appreciate how happy I am. I appreciate every day not having to worry about money." -- J.K. Rowling, Harry Potter author, Newsweek

Tenet Spreads the Pain

Shares of Tenet Healthcare(NYSE: THC) are coughing up losses of nearly 23% today, as the hospital operator's dire earnings warning is making the market sick.

Tenet didn't give an exact number for its second-quarter earnings, but noted that through the first two months of the quarter (April and May), income from continuing operations was $0.02 a share. For the full quarter, analysts were expecting $0.34 a share.

For its third and fourth quarters, the company hopes to make a combined $0.40-$0.50 a share -- below the combined $0.70 analysts were looking for. In the 12-month period beginning July 1, Tenet anticipates earning $0.80-$1.00 a share, a substantially smaller amount than the expected $1.45.

A month after CEO Jeffrey Barbakow -- who was the highest-paid CEO in the country last year, despite Tenet's drop from $50 a share to $12 -- was forced out, the company is realizing that its self-inflicted pain is going to take some serious time to clear up. Namely, Tenet's aggressive Medicare billing practices, which it voluntarily gave up in January of this year, are making it difficult for the firm to adjust to a world where it doesn't get the bulk of its income from those sky-high outlier payments.

Additionally, Tenet is still under multiple investigations, related to those Medicare payments as well as other potential troubles within the company. The Internal Revenue Service also says that Tenet owes $269 million in back taxes and interest, a figure that's more than double what the company expected. Tenet's appealing the ruling.

Increasing costs aren't helping matters, sticking Tenet in the middle of a whirlwind of hurt generated both by industry trends and prior management's poor choices. All this leaves interim CEO Trevor Fetter with a long hard path ahead, as evidenced by his statement that Tenet's "transitional period" will extend into the first half of 2004.

Shareholders can't be certain that all the bad news is out here, a situation that's enough to make anyone feel a bit nauseous.

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Investors Ignore Greenspan

While there's little question that Federal Reserve Chairman Alan Greenspan is one of the most influential figures on the financial markets, apparently not many listen to him when he talks about stock valuations.

According to a study released by the Fed, of the 10 times since 1989 that Mr. Greenspan commented about the level of the markets, only twice was there a significant reaction: In July 1998, the S&P 500 dropped 1.6% when he spoke of "unrealistic forecasts" for corporate earnings, and there was a 2.8% fall in October 1999 when he warned that the market had a history of sharp reversals. Even those drops are relatively minor, and the markets recovered from them rather quickly.

It's interesting to note that Greenspan's famous "irrational exuberance" remarks in December 1996 had little effect, and the market continued to surge forward for more than three years afterward. It's also interesting that the S&P, which had fallen as much as 30%, is still down about 10% from the day he uttered those words. In stark contrast, the much more volatile Nasdaq rose over 150%, then crashed downward more than 50% from that day, and now stands about 18% lower.

The authors of the study, Fed Governor Donald Kohn and economist Brian Sack, said perhaps Greenspan's remarks have been a little too "indirect" to influence investors. "However," they said, "we feel that the more likely explanation is that the market participants simply choose not to strongly update their beliefs about the appropriate valuation of assets based on the chairman's comments." Also, "It is hard to beat what is already priced into the market."

The study did find that Greenspan has much more influence in other areas, especially the bond market. The Federal Open Market Committee meets later this week, and is expected to lower interest rates once again.

Quick Takes

Idec Pharmaceuticals (Nasdaq: IDPH) and Biogen(Nasdaq: BGEN) agreed to a merger today. Biogen shareholders will receive 1.15 shares of Idec for each of their Biogen shares. The $6.8 billion deal -- second largest in biotech history behind Amgen's(Nasdaq: AMGN) $10 billion buyout of Immunex -- will bring together Idec's cancer-therapy drugs and Biogen's strengths in the autoimmune area. Tom Jacobs will have more on the merger on the morrow.

Hong Kong is feeling largely unmasked today, as the World Health Organization says SARS is no longer a threat there. With no new cases reported in the past 20 days, the WHO removed the territory from its list of infected areas.

Super-retailer Wal-Mart(NYSE: WMT) said today it expects to meet its June sales goal of a 2% to 4% increase over the year-ago period. Meanwhile, shares of No. 1 drugstore chain Walgreen(NYSE: WAG) dropped 7% despite reporting record sales and earnings for the third quarter. The problem, it seems, is the company needed help from a legal settlement to reach its forecast.

In local news, County Community College will no longer be serving ice water in the Union Cafe, because the person with the recipe has taken a job elsewhere.

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, Reggie Santiago, Kate Southerland, Dayana Yochim