Charles Schwab & Co., Inc.

Midday Market View(TM) for Wednesday, May 16, 2001
as of 1:00PM EDT
Information provided by Standard & Poor's

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

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Market            Value     Change

DJIA          11,024.80   + 151.90
Nasdaq Comp.   2,111.01    + 25.43
S&P 500        1,263.78    + 14.34
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NYSE Advancing Issues        1,800
NYSE Declining Issues        1,159
NYSE Trading Volume        653 mln
NASDAQ Advancing Issues      1,878
NASDAQ Declining Issues      1,681
NASDAQ Trading Volume     1.01 bln

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U.S. TREASURIES
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Value            Yield      Change

1-year bill       3.66%        n/a
5-year note       4.97%     - 2/32
10-year note      5.48%     + 4/32
30-year bond      5.88%    + 13/32

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

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U.S. TRADING SUMMARY

Stocks staged an impressive comeback after a slew of negative
earnings reports and preannouncements had the NASDAQ on the ropes
in very early trading. Lowered expectations from both Applied
Materials and Sprint dominated the market at the open, but a
nonthreatening report on consumer prices spurred optimism that
the Fed has room to further lower interest rates without igniting
inflation. The NASDAQ quickly recouped all of its early losses
and surged into the green by more than 1%. Defensive buying in
the Dow helped the index push above the psychologically important
11,000 level for the first time since February.

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U.S. TREASURY SUMMARY

Treasuries were mixed at midday with the bond outperforming on a
rebound from yesterday's oversold condition and from a bullish
Consumer Price Index report. The long bond was particularly
strong as it rebounded from the prior session's loss of more than
a point. The Consumer Price Index added to the positive sentiment
as its slightly softer numbers alleviated some inflation fears.
But the rally in equities has kept the shorter-dated issues under
some pressure. Other debt supply has also weighed on the short to
intermediate issues, with a number of large deals hitting the
market.

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CURRENCY SUMMARY

The U.S. dollar is little changed from morning levels against the
euro and the yen. Indeed, the dollar is trading around the 123.6
yen per dollar level and at about the 0.885 dollar per euro
level. The dollar was pushed lower against the euro overnight on
concerns over U.S. economic conditions.

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

** Shares of Krispy Kreme Doughnuts (KREM: 57.49, + 8.09) are
surging after the firm reported better-than-expected earnings for
its fiscal first quarter and upped estimates for 2002 and 2003.
The doughnut chain announced that earnings increased to $5.7
million, or $0.20 per diluted share, versus $3 million, or $0.13
per share, in the same quarter last year. Analysts had expected
the company to earn $0.17 per share. Revenues rose to $87.9
million from last year's $70.9 million. Moreover, Krispy Kreme
stated that full-year 2002 earnings will hit $0.08 above the
current First Call estimate and 2003 earnings will hit $0.14
above the consensus analyst estimate.

** Weak customer sales didn't stop luxury jeweler Tiffany & Co.
(TIF: 33.54, - 0.15) from posting rising first-quarter profits
and beating Wall Street expectations on an ex-items basis.
Tiffany reported earning $30.8 million, or $0.20 per diluted
share, versus $30.4 million, or $0.20 per share in the same
quarter last year. Wall Street expected the firm to earn $0.18
per share on an ex-items basis. Sales dropped 3% to $336.4
million. However, note that Tiffany's profit from operations was
$28.6 million, or $0.19 per share. Such a figure represents a 6%
decline in income from the same quarter last year.

** TD Waterhouse Group (TWE: 10.93, - 0.43), the nation's
second-largest discount brokerage firm, announced that profits
plunged in the fiscal second quarter as investors shied away from
both trading and margin borrowing during a rocky period for
equities. Waterhouse reported net income of $6.5 million, or
$0.02 per share, versus raking in $76.6 million, or $0.20 per
share, in the same quarter last year.

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RESEARCH SPOTLIGHTS

** ABN Amro upgraded shares of BEA Systems (BEAS: 36.67, + 2.63)
from an add to a buy rating.

** Robertson Stephens upgraded shares of Sonic Automotive (SAH:
12.67, + 0.62) from a buy to a strong buy rating.

** Raymond James upgraded shares of Public Storage Inc. (PSA:
26.97, + 0.02) from a market performer to a buy rating.

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