Charles Schwab & Co., Inc.

       Midday Market View(TM) for Wednesday, September 5, 2001
                       as of 1:00PM EDT
  Information provided by Schwab Center for Investment Research 
                         and Bridge

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

----------------------------------
Market            Value     Change

DJIA          9,979.09    - 18.40
Nasdaq Comp.   1,744.40    - 26.38
S&P 500        1,125.59     - 7.35
----------------------------------
NYSE Advancing Issues        1,147	
NYSE Declining Issues        1,778
NYSE Trading Volume        608 mln
NASDAQ Advancing Issues      1,082
NASDAQ Declining Issues      2,246
NASDAQ Trading Volume      863 mln

==================================

U.S. TREASURIES
----------------------------------
Value            Yield      Change

6-month bill      3.29%        n/a
5-year note       4.51%       unch
10-year note      4.96%     + 2/32
30-year bond      5.47%     + 1/32

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

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WAYWARD MARKETS DRIFT LOWER

Stocks trended slightly lower this morning as investors remained 
indecisive on a day devoid of any significant news headlines. On 
the economic front, revised 2Q non-farm productivity was 
basically in line with expectations, but much higher than 1Q. 
Technology shares were lower, extending the downtrend from 
Europe after a pessimistic analyst report hit telecommunication 
stocks.

As of 11:54 p.m. EDT, the Dow Jones Industrial Average was down 
0.05%, with the Nasdaq Composite Index giving up 1.1%. For the 
second straight day, health care and pharmaceutical issues led 
advancers, while banks led the decliners.

Shares of Walgreen Co. (WAG,36,f2) led drugstore retailers 
higher after reporting that August sales at stores open at least 
a year rose 11.6% from the year-ago period, while total August 
sales rose 17.2% from the same period. Most of the increase was 
in pharmacy same-store sales, which were up 17.5% in August, 
year-over-year.

Shares of Genentech Inc. (DNA,45,f2) drifted lower despite the 
company's report that the Food and Drug Administration had 
approved its Cathflo Activase product aimed at dissolving blood 
clots that frequently occur within catheters inserted into veins 
to dispense medication. Genentech emphasized that Cathflo 
Activase is the only thrombolytic product available to address 
catheter complications.

Brokerage stocks were higher after UBS Warburg upgraded its 
rating on a number of stocks in the group. Warburg believes that 
3Q will mark the trough for many of theses companies.

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TREASURY AND ECONOMIC SUMMARY

Bonds were mixed, but mostly flat, as the stock market's 
indecisive action provided few cues for Treasury investors. 
Bonds were trading slightly higher after the release of this 
morning's 2Q revised non-farm productivity data from the 
Department of Labor showed a 2.1% annualized gain. The number 
was slightly above the Dow Jones Newswires forecast of a 2.0% 
gain, but below the original 2Q report of a 2.5% increase. 
Productivity growth for 1Q had been reported as a mere 0.1%.

Revised unit labor costs for 2Q rose 2.7%, in line with the 
Street's mean forecast, but higher than the previously reported 
2.1% increase as inflation adjusted hourly compensation rose 
1.7%. However, the figures are much lower than 1Q's 5% increase. 
Productivity gains were enhanced over 1Q largely owing to a 
reduction in hours worked as companies quickly cut staff in 
reaction to the economic slowdown. This latest increase in 
non-farm productivity is closer to the recent average of 
approximately 2.5% growth for the five years prior to 2001.

In other economic news, a report by Challenger, Gray & Christmas 
showed that announced job cuts in August fell 32% to 140,019 
from July's 205,975. The telecommunications sector bore the 
brunt of most of the layoffs, continuing the recent trend. The 
three-month moving average rose to 470,000, with total announced 
job-cuts rising to 1,123,356 for 2001.

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WORLD MARKETS

The Bloomberg European 500 Index drifted lower, down 1.43% as of 
11:54 a.m. EDT. Ericsson (ERICY,3.91,f1), Marconi 
(MONI,1.16,f1), and Alcatel SA (ALA,13.49,f2) led the decline in 
the telecommunications sector after Merrill Lynch forecasted a 
further drop in spending on mobile-phone networks. Alcatel 
accentuated the pain when it said that meeting its full-year 
earnings forecast would be difficult. The euro was flat against 
the U.S. dollar, conceding earlier gains as traders booked 
profits on a slow news day. Meanwhile, the British pound was 
higher versus the buck after some positive economic reports 
suggested that the British economy could be on its way back. 
British retail sales for August rose at the fastest pace in 
almost five years, while housing prices rose again, extending a 
recent trend.

William Johnson, Market Analyst

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