There's no question that the price of oil has rippling effects across the world's economy and in those steadfast companies we put our dollars into. But when you're allocating money to stocks in your IRA or just building wealth for your future, do you careen back and forth on a froth of emotion created by the up-and-down prices of crude?

We didn't think so. But that's what traders did today, as the price of oil pulled back off its all-time high set last week. All of a sudden, money poured into stocks, and the Dow, S&P 500, and Nasdaq each leapt more than 1%.

You, on the other hand, stayed the course and stuck to your investment plan: Finding great companies at good prices, no matter what the rest of the market was doing.

In today's Motley Fool Take:

A Gateway to Recovery?


Alyce Lomax

(TMF Lomax)

Is this the Gateway(NYSE: GTW) to redemption? Gateway has made yet another step toward wooing consumers in the retail space. Today, it announced that its computers will be available in CompUSA stores.

If you recall, Gateway ditched its own retail stores back in April, though it still offers direct telephone and Internet sales. It is already featuring its wares in Best Buy(NYSE: BBY), Costco(Nasdaq: COST), and Office Depot(NYSE: ODP); the Best Buy hookup led Foolish colleague Rick Munarriz to predict that more big-name electronics retailers might come on board, which indeed seems to be coming to pass.

In the aisles of CompUSA, Gateway will directly compete with rival Hewlett-Packard(NYSE: HPQ), which handed out some degree of quarterly disappointment last week. Overall, both companies of course contend with the PC provider that many see as the market leader: Dell(Nasdaq: DELL), which delivered shining results last week. And of course, there is Apple(Nasdaq: AAPL) and its loyal following as well.

Indeed, it's good news for the PC retailer, which has had tough times in a very competitive space. Unfortunately, today market research firm Gartner dampened its outlook for PC purchases, which had been looking pretty good. (Last quarter, Gateway reported a 62% increase in PC shipments over the same period last year.) Last quarter, Gartner expected a 13.4% increase in PC shipments for the year; now it has ratcheted the number down just a tad to a 12.6% increase.

It shouldn't be too surprising to anyone that the high gas prices, rising interest rates, and other pressures might make some consumers think twice before buying new computers. Though who knows, maybe Gateway's low-priced strategy will help it excel in such an environment.

Shares of Gateway increased more than 5% in recent trading as the deal puts Gateway into CompUSA's 226 retail stores and on its website. Investors like Gateway's cash cushion as well as CEO Wayne Inouye's vows to bring the company back to profitability by 2005 after years of losses. However, although today's deal is definitely another good sign that Gateway's making the right moves, there remains the possibility of some tough months ahead as well as high-profile competition.

Alyce Lomax does not own shares of any of the companies mentioned.

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When Meg Met Craig


Tim Goh

eBay (Nasdaq: EBAY) will not have to fake any excitement about acquiring a 25% stake in craigslist, a popular Internet bulletin board with classified ads and forums. With coverage of 45 cities and a billion page views a month from more than 5 million unique visitors, craigslist certainly has a strong online presence.

Though they have a similar goal in building online communities, there are many differences between the two sites. eBay uses feedback to signify trustworthiness, while craigslist offers complete anonymity for posters. Where eBay makes its revenue by charging for listing fees and a percentage of the final auction value, craigslist's revenue comes from charging employers to post job listings in San Francisco, New York, and Los Angeles. All other listings are free.

In fact, many craigslist devotees are fans precisely because of the non-commercial nature the site has had from day one. craigslist turned down an offer for banner advertising from Microsoft(Nasdaq: MSFT) Sidewalk early in its history, and until today the site has eschewed banner ads. The mind-set of many users can be seen from the comments on founder Craig Newmark's blog, where worried fans posted conspiracy theories about the site starting to charge for listings or practicing censorship in the near future.

Craigslist junkies need not worry that their favorite site will "sell out" anytime soon, however. The equity eBay purchased was owned by a former craigslist employee who initiated the transaction. Newmark emphasized in his blog, "I made craigslist into a real company in '99, and made it a corporation (on paper, not attitude)." Spokeswoman Susan MacTavish Best reiterates this sentiment: "Craigslist has never sought any outside money, and that's not going to change."

Given this stance, what does the purchase provide eBay? Well, creating a site that replicates craigslist is no problem for a giant such as eBay. Generating the amount of traffic craigslist does while fostering a fervent grassroots community is a whole different story. The investment allows eBay an in-depth look at a market it has yet to conquer and lets it swap knowledge and expertise. Since eBay does not expect the purchase to change its financial guidance for the third quarter, essentially eBay has given itself the chance to learn more about localized classifieds with negligible impact to its bottom line. And that sounds like a good deal to me. I'll have what eBay is having.

Fool contributor Tim Goh does not own any stake in the companies mentioned.

Discussion Board of the Day: Rollercoaster Loving Fools

Have you ever been to Cedar Fair's flagship Cedar Point park? What's the wildest roller coaster that you have ever been on? Have you heard about the new scream machines being built at Paramount's King's Island or Busch Gardens Tampa next year? All this and more -- in the Rollercoaster Loving Fools discussion board. Only on

Lowe's is Building on Trends


Phil Wohl

Like many homeowners, I try to do as many do-it-yourself jobs as possible. I just finished painting my kids' rooms with paint and brushes I bought at Home Depot(NYSE: HD), and my wife and I bought all of our appliances from Lowe's(NYSE: LOW).

With rates on 30-year mortgages hitting a four-month low last week and Fed Chairman Alan Greenspan holding the line on his quarter-point interest rate hikes (for the time being), the outlook for home improvement retailers remains optimistic. The strong housing cycle doesn't appear to be changing just yet; high oil prices and weak unemployment figures gave Greenspan economic pause for a minute.

Scanning Lowe's second-quarter earnings release, it appears that the company is about to hit another of its housing minibooms. The quarter started well in May, took a slight dip in June, and then finished very strong in July. This positive trend has trickled into the third quarter, which prompted the company to raise its expectations from $0.64 a share to a range of $0.65 to $0.66 per share. Lowe's also forecasts a healthy 15% revenue increase for the third quarter; sales were previously expected to be about $8.98 billion but are now seen at $9.11 billion.

Lowe's shares are up nearly 6% today in early trading on the positive trend development, which basically swept aside the fact that the company missed its earnings target by a few cents in the second quarter ($0.89 reported vs. $0.91 expected). What impresses me about Lowe's is that it is expecting 3% to 4% increases in same-store sales in the face of difficult year-over-year comparisons. The company preaches continual "store investment" and "excellent customer service," and it delivers. I have had nothing but positive experiences, including replacing a toilet that I bought and didn't like. Lowe's not only helped me pick out a new one but also installed it at no charge and hauled off the old toilet.

With trends and cycles being important to investors, it is always critical to see what's coming in order to ride a positive wave or avoid potential problems. And with interest rates and the housing market still strong, consumers continue to gravitate to home improvement stores. I see Lowe's shares, which are currently trading at only 15 times the 2005 earnings forecast of $3.35 per share, as a very attractive investment relative to its expected 24% growth rate next year.

Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.

Quote of Note

"A man is a success if he gets up in the morning and gets to bed at night, and in between he does what he wants to do." -- Bob Dylan

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