Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Friday, October 26, 2001
as of 9:30AM EDT
Information provided by Schwab Center for Investment Research


SOFT MARKET OPEN

Futures point to a slightly lower market open as JDS Uniphase 
(JDSU,9.96,f2) and VeriSign (VRSN,53.34,f1) issued revenue 
warnings with their quarterly earnings reports. The University 
of Michigan's index of consumer confidence is scheduled for 
release at 10:00 a.m. EDT.

Fiber-optic equipment maker JDS Uniphase said it incurred a 
fiscal 1Q loss of $1.2 billion or $0.93 per share. CFO Anthony 
Muller said the company would have lost $0.03 per share if 
restructuring and merger related costs were excluded, matching 
the consensus First Call estimate. JDS Uniphase blamed a slump 
in demand for telecommunications equipment for its woes, but the 
company's CEO said he sees a "low-point" in demand by December 
or March. As a result JDS Uniphase said it expects a loss of 
$0.01-$0.02 per share in the fiscal 2Q on a 10%-15% sequential 
drop in sales.

Biotech behemoth Amgen (AMGN,58,f1) reported 3Q net income of 
$0.30 per share, $0.01 better than the First Call consensus 
estimate. The company said sales of Neupogen, its treatment to 
prevent infections in chemotherapy patients, rose 2% to $353 
million, while sales of its two anemia drugs, Epogen and 
Aranesp, rose 4.6% to $520 million. Chief Executive Kevin Sharer 
said Aranesp will drive 4Q sales growth and fiscal year 2001 
sales and earnings should rise 10%-12%.

Internet security provider VeriSign reported 3Q pro-forma income 
excluding charges of $0.28 per share, ahead of the Street's 
expectations for earnings of $0.16 per share, but warned that 4Q 
revenues would fall short of expectations. Including charges, 
VeriSign said it lost $1.91 per share.

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TREASURY AND ECONOMIC SUMMARY 

Bonds were narrowly mixed in early trading with some strength on 
the short end and weakness on the long end. The University of 
Michigan will release its index of consumer confidence at 10:00 
a.m. EDT. Analysts per Bloomberg are expecting a slight decline 
to a reading of 82.5. Also at 10:00 a.m., new home sales are 
expected to fall to a rate of 860,000 for September.

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WORLD MARKETS 

European stocks were generally higher, led by technology shares, 
following the Nasdaq's 2.5% rise yesterday. Shares of mobile 
network provider Ericsson (ERICY,4.35,f1) were higher, despite a 
wider-than-expected 3Q loss, after the company named Michael 
Treschow as chairman. As of 8:55 a.m. EDT, the Bloomberg 
European 500 Index was up 1.32%. 3Q Gross Domestic Product in 
the UK rose a better-than-expected 0.6%. The euro was little 
changed versus the dollar.

Japanese stocks fell on weakness in semiconductor and auto sales 
following the weaker-than-expected durable goods report in the 
U.S. yesterday. Chip maker Toshiba (TOSBF,3.85) reported a 
larger-than-expected loss for the six months ended Sept. 30. The 
Nikkei-225 Index fell 0.78% while the yen was little changed 
versus the dollar.

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FUTURES WATCH 

In the December Globex futures contract as of 8:50 a.m. EDT, the 
S&P 500 Index was down 3.4 points (2 points below fair value) 
while the Nasdaq 100 index was down 12 points (16 points below 
fair value). The December DJIA futures contract was down 42 
points (14 points below fair value) and the December crude oil 
futures traded on the NYMEX were unchanged at $22.01/barrel.

Isaia Carucci, Market Analyst

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