Charles Schwab & Co., Inc.
Email Alert

Midday Market View(TM) 
for Thursday, October 25, 2001
as of 1:00PM EDT
Information provided by Schwab Center for Investment Research
and Bridge 


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

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Market            Value     Change

DJIA           9,238.57   - 107.05
Nasdaq Comp.   1,704.26    - 27.28
S&P 500        1,071.97    - 13.23
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NYSE Advancing Issues        1,225	
NYSE Declining Issues        1,699
NYSE Trading Volume        562 mln
NASDAQ Advancing Issues      1,306
NASDAQ Declining Issues    1,916  
NASDAQ Trading Volume      917 mln

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U.S. TREASURIES
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Value            Yield      Change

6-month bill      1.99%        n/a
5-year note        3.73%     - 6/32
10-year note      4.53%     - 6/32
30-year bond      5.28%     - 5/32

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

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STOCKS SUFFER MORE ECONOMIC BLUES

Stocks slid at the open and remained firmly in negative 
territory following this morning's mostly ominous economic 
releases, as the fallout from the September attacks continues. 
Durable goods orders dropped sharply, lending further support to 
the notion of a contraction in 3Q, while first-time jobless 
claims hit their highest level in almost a decade. Existing home 
sales also weakened as prospective buyers put large purchases on 
hold.

As of 11:54 a.m. EDT, the Dow Jones Industrial Average was down 
1.3%, with the Nasdaq Composite Index lower by 2%. The S&P 500 
Index was down 1.3%. Retailing, software, semiconductor and 
communication stocks paced the decliners, while oil-related, 
healthcare and transport issues were widely higher.

Shares of American International Group (AIG,81) were lower after 
the company posted an 81% decline in 3Q earnings as a result of 
the terrorist attacks, its acquisition of American General Corp. 
and debt write-offs. Excluding the charges, but including the 
$820 million in World Trade Center claims, the insurance giant 
posted operating earnings of $0.55 per share, ahead of the First 
Call consensus estimate of $0.54 per share.

Shares of Electronic Data Systems (EDS,64,f2) were higher after 
the computer systems consulting company posted 3Q earnings, 
excluding items, of $0.69 per share, $0.01 ahead of the Street's 
mean estimate. CFO James Daley said he expects the company to 
continue to grow earnings in the double-digit range, and EDS 
remains comfortable with the Street's 4Q consensus earnings 
forecast of $0.78 per share.

Long distance and data services company WorldCom Group 
(WCOM,12.32,f1) reported a 41% decline in 3Q profits to $0.16 
per share, matching the First Call consensus forecast. Revenues 
rose 12%, boosted by growth in the company's data and Internet 
services segments, and the company's CEO, Bernard Ebbers, said 
he expects WorldCom's growth segments to gain market share, 
despite the current economic malaise.

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TREASURY AND ECONOMIC SUMMARY

Bonds held on to gains at midday following the release of 
largely pessimistic economic data this morning. Durable goods 
orders for September fell 8.5%, according to the Commerce 
Department, much worse than the expected 1.3% decline per Dow 
Jones Newswires, suggestive of a potential 3Q economic 
contraction. Excluding transportation, orders fell 5.5% as 
aircraft orders plummeted 29%. Excluding defense, orders fell 
9.1%, while defense capital goods orders rose 4.6%.

Initial jobless claims rose by 8,000 to 504,000 for the week 
ended Oct. 20, according to the Labor Department, the first time 
above the 500,000 level since 1992. Analysts were looking for an 
increase to 500,000. The four-week moving average of claims rose 
to 505,000, a 10-year high, and continuing claims for the week 
ended Oct. 13 increased to 3,654,000, an 18-year high.

The 3Q employment cost index rose 1.0%, slightly above the Dow 
Jones Newswires forecast of a 0.9% increase. Year over year, the 
increase was 4.1% through September, above the 3.9% 
year-over-year reading through June. Most of the increase was 
attributed to a 1.6% rise in benefits costs for the quarter, 
while wages and salaries rose 0.8% versus 2Q's 1.0% rise. The 
government said the data was not distorted by the Sept. 11 
attacks.

Existing home sales plunged in September, down 11.7% to a 
seasonally adjusted annual rate of 4.89 million units, less than 
the Bloomberg consensus forecast of a decline to a 5.20 million 
rate. The drop was the largest since 1995 as consumers pulled 
back following the attacks. According to the National 
Association of Realtors, the inventory of unsold homes rose to a 
5.4-month supply from August's 4.8 reading.

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WORLD MARKETS

Technology stocks led European bourses lower late in the session 
following the dismal economic data in the U.S. and the European 
Central Bank's decision to leave the benchmark lending rate 
unchanged at 3.75%. The Bloomberg European 500 Index was down 
2.04% as of 11:54 a.m. EDT. European Central Bank President Wim 
Duisenberg said, "If there were to be a further improvement in 
inflation prospects, then that would provide for further room to 
maneuver on monetary policy." The euro was virtually flat 
against the U.S. dollar in choppy trading following this 
morning's uninspiring economic situation.

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