Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Thursday, December 27, 2001
as of 9:30AM EST
Information provided by Schwab Center for Investment Research


MARKETS LOOK TO OPEN SLIGHTLY HIGHER

U.S. equity index futures are pointing to a slightly higher open 
as economic and equity news is sparse this morning. Apple 
Computer (AAPL,22,f1) said its retail outlets may report a loss 
in 2002 and TMP Worldwide (TMPW,42,f1) stated it would not boost 
its offer for Hotjobs.com (HOTJ,10.67,f1). U.S. Treasuries are 
flat and world markets are higher.

TMP Worldwide, provider of the popular Monster.com web site, 
reported that it would not increase its bid for competitor 
Hotjobs.com, saying it had offered "full and fair value" for the 
entity. Hotjobs announced on Monday that it would accept a $436 
million offer from rival bidder Yahoo! (YHOO,17.51,f1) if TMP 
did not increase its proposal, which has shrunk since June given 
declines in TMP's stock. If the acquisition fails, TMP is 
entitled to as much as $17 million in termination and 
reimbursement fees from Hotjobs and the company would remain the 
No. 1 online recruitment site.

Apple Computer said it now expects its retail stores to incur a 
loss in 2002, contrary to forecasts made last May predicting 
retail profitability for the year ending in fiscal 2002. Apple 
blamed the setback on the economic recession in the U.S. and the 
slowdown in the PC market, exacerbated by the terrorist attacks. 
The California-based computer maker opened 27 retail stores this 
year, two more than originally planned.

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TREASURY AND ECONOMIC SUMMARY 

U.S. Treasury prices are little changed across the curve ahead 
of today's record $23 billion 2-year note auction. Friday's 
economic plate is full as initial jobless claims, originally 
scheduled for release this morning, will be released tomorrow. 
In addition, consumer confidence figures, the Chicago Purchasing 
Managers' Index, new and existing home sales, and durable goods 
orders will be reported.

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WORLD MARKETS 

European markets are marginally higher with the Bloomberg 
European 500 index up 0.8% as of 8:53 a.m. EST, led by bank, 
telecom and energy shares. In economic news, French business 
confidence rose to 90.0 in December, higher than the 89.5 
estimate per Bloomberg and November's 89.0 reading. On the 
corporate front, Nestle SA (NSRGY,52,f1) paid $641 million to 
General Mills (GIS,52,f2) in a joint venture giving it the 
rights to Haagen-Dazs in the U.S. and Canada. Oil-related issues 
also did well as companies like Royal Dutch Petroleum NV 
(RD,49,f2) rose on expectations that OPEC will announce its 1.5 
million barrel per day production cut on Friday. The euro is 
trading higher versus the U.S. dollar.

Asian markets finished higher as the Nikkei 225 index advanced 
2.6% with technology and export issues leading the way. In 
economic news, the Ministry of Economy, Trade and Industry 
reported that Japanese industrial production declined a 
seasonally adjusted 1.8% in November to the lowest level in 14 
years. Prime Minister Junichiro Koizumi reiterated plans to cut 
spending and force banks to write of bad debt, saying, "... we 
must press on with employment measures and structural reforms." 
Following the positive retail news in the U.S. yesterday, 
exporters fared well with companies like Sony Corp. (SNE,44) 
advancing. The yen fell versus the U.S. dollar given the weak 
economic data.

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FUTURES WATCH 

In the March Globex futures contract as of 8:51 a.m. EST, the 
S&P 500 index was up a point (3 points above fair value) while 
the Nasdaq 100 index was 1 point higher (5 points above fair 
value). The March DJIA futures contract was down 7 points (25 
points above fair value), and the February crude oil futures 
traded on the NYMEX were down $0.68 at $20.59/barrel.

Jeffrey Reeve, Market Analyst 

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