Updated from 2:38 p.m. EDT

School Specialty ( SCHS) rose after it posted first-quarter earnings of $36.9 million, or $1.57 a share, compared with $34.6 million and $1.44 a share a year ago. Excluding the impact of option expensing, earnings were $1.61 a share. Revenue increased 7.6% to $385.4 million. Analysts were looking for earnings of $1.53 a share. The school-supplies distributor also confirmed its guidance for fiscal 2007. Shares were up $2.52, or 7.8%, to $34.85.

Gateway was climbing after the computer company said it was selected by the Los Angeles Unified School District as the hardware vendor for the Business Tools for Schools project. The agreement is for more than 1,200 E-4500 desktop PCs with 17-inch LCD monitors. Shares climbed 17 cents, or 12%, to $1.50.

Loral Space & Communications ( LORL) gained after a unit of the satellite communications company received a contract to build the TerreStar-2 MSS satellite for TerreStar Networks. TerreStar-2 is scheduled for delivery in 2009 and will have a service life of 15 years. Shares advanced $1.54, or 6.3%, to $26.04.

Jo-Ann Stores stumbled as the retailer's second-quarter loss widened to $21.2 million, or 90 cents a share, from $5.1 million, or 23 cents a share, a year ago. Sales fell to $363.2 million from $383.8 million. Wall Street expected the company to post a loss of 84 cents a share. The company also reaffirmed its earlier outlook for fiscal 2007. Shares fell 32 cents, or 2.2%, to $14.22.

Shares of InterOil ( IOC) tumbled Tuesday afternoon after the company reported weaker-than-expected quarterly results. As reported on our sister site, RealMoney.com, the results were apparently released prior to their scheduled time after the close.

Australian-based oil company posted a loss of 60 cents per share vs. expectations for a profit of 2 cents per share, and revenue of $124.7 million vs. the expected $197.5 million. InterOil shares were recently down $2.75, or 17.9%, to $12.65 in heavy volume.