Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Friday, December 28, 2001
as of 9:30AM EST
Information provided by Schwab Center for Investment Research


FUTURES POINT TO HIGHER OPEN

U.S. equity index futures are pointing to a higher open as 
economic data is bountiful this morning and equity news is very 
sparse. Initial jobless claims and November durable goods orders 
came in slightly better than expected. U.S. Treasuries are lower 
and world markets are higher.

Cable television operator Cablevision Systems Corp. (CVC,47,f2) 
said it plans to eliminate 600 positions, or 4% of its work 
force, in order to reign in costs amid a renewed strategic 
outlook. Cablevision said it will take a $55 million 4Q charge 
for the cuts, which will encompass reductions in corporate and 
administrative functions in different business units.

Allegheny Energy (AYE,36.39) reported that it anticipates 
lower-than-expected earnings for 2001 and 2002, citing milder 
weather and softer electricity sales. The utility stated it now 
expects to earn $3.60-$3.70 per share for 2001 and 2002, lower 
than First Call's $3.90 per share and $4.15 per share consensus, 
respectively.

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TREASURY AND ECONOMIC SUMMARY 

U.S. Treasury prices are lower across the curve following the 
release of this morning's economic data. Initial jobless claims 
for the week ended Dec. 22 increased by 7,000 to 392,000. 
Analysts were expecting an increase to 400,000 according to Dow 
Jones Newswires. The four-week moving average of claims fell to 
413,250 from 438,500 while continuing claims for the week ended 
Dec. 15 rose 23,000 to 3,700,000.

Durable goods orders for November declined 4.8%, slightly less 
than the 5.0% decrease expected per Dow Jones Newswires. October 
durable goods orders were revised lower to a 12.5% increase from 
the 12.7% rise previously reported. Durable goods orders 
excluding defense increased 2.7% while orders excluding 
transportation rose 1.1%.

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WORLD MARKETS 

European markets are higher with the Bloomberg European 500 
index up 1% as of 8:50 a.m. EST, led by telecom and machinery 
shares. In economic news, French unemployment rose to 9% in 
November, matching estimates but coming in at the highest level 
in a year. The euro-zone M3 money supply grew at an 8% rate in 
November, potentially reducing chances for European Central Bank 
interest-rate cuts. On the corporate front, HSBC Plc 
(HBCYF,11.5), one of Europe's largest banks, announced it 
intends to purchase an 8% stake in the Bank of Shanghai, marking 
the first time a foreign commercial bank will own part of a 
mainland Chinese bank. The euro is trading slightly lower versus 
the U.S. dollar. Crude oil is higher after OPEC officially 
agreed to reduce output by 1.5 million barrels per day at its 
meeting in Cairo.

Asian markets finished higher as the Nikkei 225 index advanced 
0.8%, with brokerage and communication issues leading the way. 
In economic news, Japanese unemployment rose to 5.5% in 
November, the highest level in almost 50 years according to 
Bloomberg. Adding to the negative outlook, Japan's chief cabinet 
secretary said, "It's very unfortunate that unemployment will 
rise as the government presses on with its structural reforms, 
but it can't be avoided." According to the Nihon Keizai 
newspaper, Sony Corp. (SNE,44) is in discussions with Fujitsu 
Ltd. (FJTSY,37) regarding the acquisition of Japan's largest 
Internet service provider, Nifty Corp. The yen rose versus the 
U.S. dollar amid hints from government officials that using 
public funds to help fledgling banks is "one option."

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FUTURES WATCH 

In the March Globex futures contract as of 8:50 a.m. EST, the 
S&P 500 index was up 4 points (5 points above fair value) while 
the Nasdaq 100 index was 15 points higher (16 points above fair 
value). The March DJIA futures contract was up 32 points (37 
points above fair value), and the February crude oil futures 
traded on the NYMEX were up $0.30 at $21.20/barrel.

Jeffrey Reeve, Market Analyst

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