Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Wednesday, October 24, 2001
as of 9:30AM EDT
Information provided by Schwab Center for Investment Research


EARNINGS, EARNINGS, AND MORE EARNINGS

Amid a flurry of mixed earnings results and cautious guidance, 
equity index futures were pointing to a slightly positive open 
for stocks ahead of today's Beige Book economic summary at 2:00 
p.m. EDT.

Personal computer maker Compaq Computer (CPQ,9.40,f2&f4) said it 
incurred a 3Q loss, excluding items, of $0.07 per share, $0.01 
shy of the First Call consensus estimate, owing to sluggish 
demand, supply problems and competitive pressures. Looking 
ahead, Compaq lowered its 4Q outlook, saying its expects an 
operating loss of $0.03 per share, lower than the break-even 
First Call consensus estimate.

Long distance giant AT&T (T,17.70,f2), said 3Q profits, 
excluding costs and a $13.5 billion gain from parting with its 
wireless business, were $0.04 per share, in line with the First 
Call consensus estimate. Sales fell nearly 8% for the period on 
a slump in long-distance service demand.

Internet retailing giant Amazon.com (AMZN,9.55,f2) said its 3Q 
loss, excluding items, narrowed to $0.16 a share, matching the 
First Call consensus estimate, on revenues of $639.3 million, 
slightly below the Street's $650.3 million mean forecast. The 
company attributed the slimmer loss to cost cutting at its 
warehouses. Going forward, Amazon said it expects 4Q sales to be 
flat to 10% higher, down from its previous guidance of a 10%-20% 
increase. The new estimate would put sales in the range of $970 
million to $1.07 billion, below the First Call consensus of 
$1.10 billion.

Eastman Kodak (EK, 34), the largest photography company, 
reported 3Q operating profits of $0.52 per share, in line with 
the Street's estimates. The Dow component announced that it will 
eliminate as many as 4,000 workers, and that 4Q operating 
profits will be about one-third of the First Call consensus 
estimate of $0.46 cents per share, due to the economic malaise.

DuPont Co. (DD,42) posted 4Q profits of $0.13 per share, ahead 
of the Fist Call consensus estimate of $0.10 per share, but the 
chemical giant and Dow component warned that 4Q earnings would 
be roughly $0.12 per share, below the Street's mean $0.17 per 
share forecast, in anticipation of sluggish demand.

Aerospace and diversified manufacturer Honeywell International 
(HON,28,f2) reported 3Q profits, excluding charges, of $0.44 per 
share, matching the First Call consensus estimate. Including a 
$1 billion charge for job cuts and restructuring, Honeywell 
posted a net loss of $0.38 a share. The Dow component said its 
aerospace business was hurt by sluggish demand in the airline 
industry, aggravated by the September attacks.

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TREASURY AND ECONOMIC SUMMARY 

Bonds were slightly higher ahead of today's 2:00 p.m. EDT Beige 
Book report on the economy, which will serve as a basis of 
discussion and policy at the upcoming Nov. 6 Federal Open Market 
Committee meeting. Additional monetary easing is likely given 
the backdrop of relatively subdued inflation and a weak economy.

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WORLD MARKETS 

European bourses were mixed with strength in paper, insurance 
and manufacturing stocks. The Bloomberg European 500 Index was 
down 0.05% as of 8:57 a.m. EDT. Economic data, reflecting waning 
inflation in Germany and France, fostered speculation that the 
European Central Bank will cut the benchmark lending rate at 
Thursday's meeting. The euro was marginally higher against the 
dollar following the news.

Asian markets were mixed with Japan's Nikkei-225 Index falling 
0.55%. Technology and pharmaceutical stocks were lower, while 
banking and communication stocks were among the best performers. 
Banks got a boost as the coalition party pushed to expand the 
authority of the Resolution and Collection Corporation to 
redress the bad loan situation. The dollar was slightly higher 
against the yen in early morning activity. Crude oil was trading 
lower following an American Petroleum Institute report that 
inventories rose a larger-than-expected 1.6% in the U.S.

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FUTURES WATCH 

In the December Globex futures contract as of 8:55 a.m. EDT, the 
S&P 500 Index was up 2.5 points (4 points above fair value), 
while the Nasdaq 100 index was down 1 point (5 points above fair 
value). The December DJIA futures contract was up 7 points (21 
points above fair value), and the December crude oil futures 
traded on the NYMEX were down $0.31 at $21.54/barrel.

William Johnson, Market Analyst

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