Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Monday, October 29, 2001
as of 9:30AM EST
Information provided by Schwab Center for Investment Research


MARKETS LOOKING AT WEAK OPEN

Equity index futures were pointing to a downside open for 
stocks, continuing the overseas trend, as earnings season winds 
down. With no major economic news on the docket today, corporate 
announcements painted the headlines.

Satellite-TV service provider EchoStar Communications 
(DISH,26,f1) agreed to purchase General Motor Corp.'s (GM,45,f2) 
Hughes Electronics (GMH,15.35,f2) unit for about $31.5 billion 
in cash, stock and assumed debt after top rival News Corp. 
(NWS,29) withdrew its bid for the company. The deal values 
Hughes at $18.44 per share, a 20% premium to its closing price 
on Friday. The transaction would give EchoStar nearly a 91% 
share of the satellite-TV market, which could provoke regulatory 
scrutiny.

Commercial and military aircraft maker Boeing Co. (BA,38,f2) cut 
its sales forecasts for next year by $1 billion to $55 billion 
after failing to secure the government's bid to build the new 
Joint Strike Fighter. However, the company's CEO said that the 
news won't have a "material impact" on the aerospace giant's 
2001 outlook. The potentially largest defense contract ever, 
valued at nearly $200 billion, was awarded to Boeing's top rival 
Lockheed Martin (LMT,50,f2) on Friday.

Humana Inc. (HUM,11.20) reported 3Q earnings of $0.18 per share, 
in line with the First Call consensus forecast, on a 1% decline 
in revenues as the health insurer exited non-core markets. 
Humana, like many of the health insurance giants that have 
recently reported strong earnings growth, has benefited from 
increased insurance premiums and cost-reduction efforts.

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TREASURY AND ECONOMIC SUMMARY 

Bonds rose across the curve as cautious sentiment prevailed 
ahead of this week's economic data, including tomorrow's October 
consumer confidence and 3Q advance Gross Domestic Product on 
Wednesday. Analysts per Bloomberg are looking for a 95.5 reading 
for consumer confidence, down from September's 97.6 level. The 
mean forecast for 3Q GDP is for a decline of 1.0% versus 2Q's 
0.3% increase. The more significant National Association of 
Purchasing Management survey and employment situation reports 
fall on Thursday and Friday, respectively.

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WORLD MARKETS 

European bourses were weaker this morning with softness in 
banking, telecom and pharmaceutical shares. Shares of Morgan 
Crucible Co. (MCRUF,2.75) were being punished after the UK 
manufacturer of wireless components reported worse-than-expected 
profits on slumping demand. The Bloomberg European 500 Index was 
off 0.99% as of 8:52 a.m. EST. The euro was higher against the 
dollar as traders remained cautious ahead of this week's 
economic data in the U.S.

Asian stocks were lower with weakness concentrated in banking 
and technology shares, despite hints from Chartered 
Semiconductor's (CHRT,20,f1) CFO that the company may ship more 
chips in 4Q than 3Q as orders begin to pick up. Banks were lower 
after Japan's Financial Services Agency said that inspections of 
the nation's banks as part of the government's new reform plan 
had commenced. Japan's Nikkei-225 Index closed down 1.69% as 
industrial production for September declined a 
worse-than-expected 2.9% from the previous period's 0.8% 
increase. The Bank of Japan's Policy Board lowered its core 
estimate of economic growth for fiscal year 2001. Also, The yen 
was higher against the dollar. Crude oil climbed as Saudi Arabia 
and the United Arab Emirates indicated that OPEC was ready to 
cut output in the face of slumping demand.

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FUTURES WATCH 

In the December Globex futures contract as of 8:52 a.m. EST, the 
S&P 500 Index was down 3.5 points (7 points below fair value) 
while the Nasdaq 100 index was down 1.5 points (10 points below 
fair value). The December DJIA futures contract was down 39 
points (71 points below fair value) and the December crude oil 
futures traded on the NYMEX were up $0.33 at $22.36/barrel.

William Johnson, Market Analyst

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