Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Wednesday, November 21, 2001
as of 9:30AM EST
Information provided by Schwab Center for Investment Research


STOCKS POISED TO OPEN SLIGHTLY LOWER

Equity index futures were lower but off of early lows following 
better-than-expected economic data, reflecting possible 
stabilization in the job market. The futures had been down 
earlier amid contrasting earnings forecasts and a downgrade on 
technology titan Microsoft Corp. (MSFT,65,f1). Biotech 
bellwether Amgen Inc. (AMGN,58,f1) offered optimistic sales and 
earnings guidance, while Analog Devices (ADI,42,f2) was more 
pessimistic. Treasuries fell on the jobless numbers, while bleak 
European economic data limited strength in the euro-zone.

In equities news, Microsoft Corp. was lower in the premarket 
session after a Salomon Smith Barney analyst downgraded the 
company, citing extended valuation due to potentially overly 
optimistic sales forecasts for the new Xbox video-game box. The 
analyst blamed the current economic malaise as well as 
competition from Japanese video-game manufacturers for his 
concerns.

Shares of Amgen Inc. were higher in premarket activity after the 
company revised its estimated earnings growth rate upward, 
saying that sales of its new Aranesp anemia drug and Kineret 
arthritis treatment will push up its earnings growth rate to 20% 
in 2002, on the heels of 10%-12% growth this year. The company 
also reaffirmed its previous targets of compound sales and 
earnings growth in the low 20% range for the years 2001 through 
2005. Amgen said that the forecasts excluded potential profits 
that would be realized if either Aranesp or a longer-acting form 
of its current Neupogen drug were approved for use in cancer 
patients.

Communications chipmaker Analog Devices Inc. reported fiscal 4Q 
profits excluding items of $0.14 per share, ahead of the lowered 
First Call consensus estimate of $0.12 per share. Sales for the 
quarter fell 47% to $423.3 million, as companies such as Nortel 
Networks (NT,8.07,f2) and Ericsson (ERICY,5.05,f1) curbed new 
orders amid sluggish demand in the telecom industry. Looking to 
the fiscal 1Q, ADI said that sales will likely fall 5% below 4Q, 
and it expects earnings to come in at the low end of the 
Street's estimates.

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TREASURY AND ECONOMIC SUMMARY 

Treasuries retreated following this morning's 
better-than-expected jobless claims report. According to the 
Labor Department, first-time claims fell 15,000 to 427,000 for 
the week ended Nov. 17 from the prior week's downwardly revised 
442,000 level. Analysts per Dow Jones Newswires were looking for 
an increase in claims to 450,000. The four-week moving average 
of claims fell to 454,250 and continuing claims through the week 
ended Nov. 10 fell to 3,734,000. The drop in initial claims 
reflects potential firming in the job market, but continuous 
claims, while improving, still remain near an 18-year high. 
Traders will also be looking to this morning's approximately 
9:45 a.m. EST release of the University of Michigan's consumer 
sentiment index for further direction.

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WORLD MARKETS 

A fresh eight-year low in the October German IFO business 
sentiment index and a European Union Commission downgrade of 
economic growth prospects capped gains in European bourses. The 
IFO index fell to a worse-than-expected 84.7 reading from 
September's 85.0 level, fueling speculation that Germany may not 
be able to avoid a recession. Adding to the worries, the 
European Union Commission slashed its euro-zone growth forecasts 
to 1.6% for 2001 and 1.3% for 2002 from previous estimates of 
2.8% and 2.9%, respectively. In equities news, Dutch banking 
company ING Groep NV (ING,26) posted a smaller-than-expected 
drop in 3Q net profit to 901 million euros and reiterated 
full-year guidance. The euro was lower against the dollar 
following the German IFO report, while the Bloomberg European 
500 index was up 0.2% as of 8:54 a.m. EST.

Asian stocks were mixed, but Japan's Nikkei-225 index closed up 
0.8% on strength in banking shares. Asahi Bank (ASIBY,7.75) 
reported that it disposed of a larger-than-expected amount of 
non-performing loans, sparking optimism that more companies in 
the sector may follow suit. The yen was lower against the dollar 
after Bank of Japan Governor Masaru Hayami intimated that 
injecting more money into the banking system would do little to 
stimulate the economy.

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FUTURES WATCH 

In the December Globex futures contract as of 9:14 a.m. EST, the 
S&P 500 index was 1.5 points lower while the Nasdaq 100 index 
was down 2.5 points. The December DJIA futures contract was down 
15 points and the January crude oil futures traded on the NYMEX 
were up $0.20 at $19.35/barrel.

William Johnson, Market Analyst

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