Charles Schwab & Co., Inc.

Midday Market View(TM) for Tuesday, July 31, 2001
as of 1:00PM EDT
Information provided by Standard & Poor's

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

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Market            Value     Change

DJIA          10,546.40   + 144.70
Nasdaq Comp.   2,050.20    + 32.36
S&P 500        1,219.36    + 14.84
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NYSE Advancing Issues        1,977
NYSE Declining Issues        1,032
NYSE Trading Volume        584 mln
NASDAQ Advancing Issues      1,992
NASDAQ Declining Issues      1,473
NASDAQ Trading Volume      854 mln

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U.S. TREASURIES
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Value            Yield      Change

1-year bill       3.40%        n/a
5-year note       4.50%     + 6/32
10-year note      5.03%     + 6/32
30-year bond      5.50%     + 3/32


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

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U.S. TRADING SUMMARY

Equities didn't flinch at the weak U.S. economic data released
this morning as the major averages hovered around opening levels
and took the news in stride. The headline indexes quickly moved
higher and extended their gains ahead of the noon hour before
some consolidation set in. The broad-based rally saw the Dow
initially taking the lead, then handing the ball off to the
tech-heavy NASDAQ, which shot higher by about 1.8% at midday. On
the technical front, resistance for the NASDAQ lies at its
50-day moving average of 2,097. Outperforming industries in the
S&P 500 included the drug, financial, health care, semiconductor
and computer software/system industries. The oil, electric and
railroad sectors were under-performing.

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U.S. TREASURY SUMMARY

Treasuries were higher by midday as a slew of weak data helped
bolster investor confidence that the slowing economy would spur
the Fed to again lower interest rates. Indeed, the whole yield
curve was in the green by midday with the short end
outperforming its longer-term counterparts, even though stocks
were enjoying a strong rally of their own. Data on both consumer
confidence and a regional measure of manufacturing activity
showed much larger-than-expected declines, which bode poorly for
the economy and suggested that activity in manufacturing may not
have hit bottom yet. The data suggested to some that the Fed may
have to be more aggressive than previously thought. Others,
however, felt that the data was weak, but would just add to the
Fed's resolve to continue on its expected path of cutting
interest rates by 25 basis points at its next meeting in August.

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CURRENCY SUMMARY

Talk is circulating that the Brazilian Central Bank has been
behind the dollar's rally back to 125 yen from 124.6 yen. The
bank floated a 200 billion yen ($1.6 billion) bond issue today
and the speculation is that the bank has sold the yen proceeds
to buy dollars. Elsewhere, euro bulls have been frustrated by
the lack of follow-through buying on the weak U.S. data
offering. The euro briefly touched 0.878 dollars per euro, but
has since sunk below the 0.875 level.

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MAJOR COMPANY / INDUSTRY NEWS
(All prices as of 1:05 p.m. EDT)

** DirecTV, a unit of General Motors' (GM: 63.98, + 1.08) Hughes
Corp. (GMH: 19.32, + 0.02) division, is preparing to sue about 1
million people who are pirating DirecTV's signal using
unauthorized access cards and equipment, according to The Wall
Street Journal. DirecTV wants damages from the illegal users and
has shifted its focus from the distributors of the equipment to
the many who use it. As many as 100,000 names and addresses were
collected from searches of alleged illegal equipment operators.
DirecTV has sent strongly worded mailings to the individuals
suspected of pirating the digital signals.

** Large utility firm Entergy (ETR: 37.54, + 0.25) reported
fiscal second-quarter earnings that beat Wall Street's recently
raised estimates. The company reported earning almost $239
million, or $1.06 per share, versus roughly $224 million, or
$0.98 per share, in the year-ago quarter. Analysts had the
company pegged to earn $0.95 on average. Strong profits from its
nuclear power and energy trading divisions helped boost
earnings.

** Online brokerage firm Ameritrade Holdings (AMTD: 6.41, +
0.50) agreed on Tuesday to acquire rival firm National Discount
Brokers Group, which is a subsidiary of Deutsche Bank AG. The
price tag was $154 million in an all-stock deal in which
Ameritrade will issue between 21 million and 32 million shares
to finance the deal. When the deal is finally complete, National
Discount Brokers will own between 10% and 14% of Ameritrade's
stock.

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RESEARCH SPOTLIGHTS

** Goldman Sachs upgraded shares of Freeport McMoran Copper &
Gold Inc. (FCX: 10.73, + 0.23) from a market outperformer to
their U.S. recommended list.

** Salomon Smith Barney upgraded shares of Express Scripts
(ESRX: 58.00, + 0.96) from an outperform to a buy rating.

** A.G. Edwards upgraded shares of DST Systems (DST: 47.02, +
0.57) from an accumulate to a buy rating.

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