Charles Schwab & Co., Inc.
Email Alert

Midday Market View(TM) 
for Wednesday, November 7, 2001
as of 1:00PM EST
Information provided by Schwab Center for Investment Research
and Bridge 


U.S. INDICES
(1:00 p.m. EST)

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Market            Value     Change

DJIA           9,581.08    - 10.04
Nasdaq Comp.   1,843.90     + 8.82
S&P 500        1,117.51     - 1.35
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NYSE Advancing Issues        1,481	
NYSE Declining Issues        1,446
NYSE Trading Volume        633 mln
NASDAQ Advancing Issues      1,527
NASDAQ Declining Issues      1,700
NASDAQ Trading Volume      957 mln

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U.S. TREASURIES
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Value            Yield      Change

6-month bill      1.75%        n/a
5-year note       3.48%    + 11/32
10-year note      4.19%    + 16/32
30-year bond      4.79%    + 32/32

The tables above look best when viewed in a fixed-width font, 
such as "Courier."

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STOCKS ATTEMPTING TO RECAPTURE EARLY LOSSES

Mostly gloomy corporate news, including an ominous earnings 
report and outlook from Qualcomm Inc. (QCOM,54,f1), was offset 
by better-than-expected productivity gains in 3Q as stocks 
recovered from this morning's lows to trade mixed at midday.

As of 11:52 a.m. EST, the Dow Jones Industrial Average was down 
0.1%, while the Nasdaq was 0.5% higher. The S&P 500 Index was 
down 0.1%. Homebuilding, networking and consumer finance stocks 
were among the best performers, while energy-related, retail and 
health care issues led the decliners.

Shares of Qualcomm Inc. were lower after the wireless 
communication company posted 4Q earnings, excluding items, of 
$0.23 per share, lower than the First Call consensus estimate of 
$0.25 per share, due to slumping global demand and missed 
interest payments from Mexican wireless company Pegaso PCS. 
Qualcomm also lowered its fiscal 2002 guidance, saying that most 
of the growth won't come until the second half, and the company 
expects pro forma earnings in 1Q in the range of $0.21-$0.24 per 
share, below the Street's previous $0.27 per share mean 
forecast.

Shares of Aetna Inc. (AET,30,f2) were under pressure, even 
though the largest U.S. health insurer said it incurred a 3Q 
loss, excluding items, of $0.34 per share, ahead of the Street's 
$0.55 per share loss estimate. Revenues declined roughly 8% to 
$6.2 billion as the company blamed rising health care costs and 
underpriced insurance plans for its woes. Chief Executive John 
Rowe said, "We continue to experience high medical costs, which 
are causing us to fall short of our ultimate goals."

The stock of Maxim Integrated Products Inc. (MXIM,53,f1) took a 
hit after the semiconductor manufacturer said fiscal 1Q profits 
fell 49% to $0.17 a share, $0.01 ahead of the Street's mean 
forecast. Maxim blamed sluggish demand for semiconductors amid a 
weakening economy, as sales for the period fell 43% to $239.4 
million. Going forward, company executives said fiscal 2Q 
profits and sales will rise only slightly above 1Q figures.

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TREASURY AND ECONOMIC SUMMARY

Bonds generally rose following this morning's productivity 
report that suggested a non-inflationary environment, but 
profit-taking hit the short-end following yesterday's rise after 
the Federal Open Market Committee interest-rate cut and 
accompanying statement, which hinted at more easing. According 
to the Labor Department, 3Q non-farm productivity rose at an 
annualized pace of 2.7%, ahead of analysts' forecasts per Dow 
Jones Newswires of a 2.1% gain. Unit labor costs rose 1.8%, less 
than Bloomberg's 2.4% forecast. Real hourly compensation rose at 
a 3.8% annual rate. The Labor Department said the productivity 
gains and slower pace of the labor cost increase could be 
attributed to a 3.6% reduction in the number of hours worked 
during the quarter, partly because of the tragic Sept. 11 
attacks.

In other news, wholesale inventories declined 0.1% in September 
from August's revised 0.2% drop, according to the Commerce 
Department. Bloomberg analysts were expecting a 0.3% drop. 
Wholesale sales fell 1.3% after August's 0.5% rise. As a result, 
the inventory-to-sales ratio, a key measure of how many months 
it would take to deplete current inventory, rose to 1.32 from 
August's 1.30.

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WORLD MARKETS

European markets were higher late in the session amid heightened 
expectations for a rate cut by the European Central Bank 
following this morning's weak economic data. The business 
climate indicator for the euro-zone fell to -1.14 in October 
from September's -0.57, while German factory orders fell a 
worse-than-expected 4.1% in September from August's revised 0.8% 
rise, it's biggest drop in six years. Bundesbank President Ernst 
Weltke attempted to mollify trader's fears by saying that 
"Sentiment is worse than the actual situation" and that the 
economic malaise is temporary. The dollar recouped some of its 
losses upon the release of the better-than-expected productivity 
numbers but remained lower against the euro. The Bloomberg 
European 500 Index was up 0.74% as of 11:52 a.m. EST on strength 
in chemical and manufacturing stocks.

William Johnson, Market Analyst

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