Charles Schwab & Co., Inc.

Morning Market View(TM) for Wednesday, May 16, 2001
as of 11:00AM EDT
Information provided by Standard & Poor's

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U.S. INDICES
(11:00a.m. EDT)

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Market            Value     Change

DJIA          10,927.00    + 54.10
Nasdaq Comp.   2,094.63     + 9.05
S&P 500        1,254.26     + 4.82
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NYSE Advancing Issues        1,422
NYSE Declining Issues        1,242
NYSE Trading Volume        260 mln
NASDAQ Advancing Issues      1,405
NASDAQ Declining Issues      1,627
NASDAQ Trading Volume      472 mln

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U.S. TREASURIES
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Value            Yield      Change

1-year bill       3.66%        n/a
5-year note       4.94%     + 2/32
10-year note      5.46%     + 9/32
30-year bond      5.84%    + 26/32

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

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U.S. TRADING SUMMARY

After a shaky open, the headline U.S. indexes have been able to
overcome initial weakness and move into positive territory.
Stocks were under pressure at the open of regular trading as an
earnings warning from chip-equipment giant Applied Materials
weighed while another warning from phone titan Sprint also
impacted. Even a lighter-than-expected headline Consumer Price
Index figure, a key measure of inflationary pressure, could not
help the technology sector find a bid initially. Traders remained
steadfastly concerned about the health of upcoming corporate
profits, with the news from Applied Materials only fanning their
growing fears that the worst is not yet over. However, bargain
hunters came in and propped up the sagging indexes. By midmorning
all indices were in the green with the Dow up 0.50%, Nasdaq up
0.43% and the S&P 500 up 0.38%.

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JAPAN / EUROPE SUMMARY

European equities were all lower in midafternoon European trading
as an earnings warning from U.S. firm Applied Materials added
pressure. The French CAC-40 has lost 1.1% while the German Dax
and London FTSE have fallen 0.8%. Elsewhere, Japanese shares were
crushed as the global weakness in technology and
telecommunications shares spread like a contagion. The Nikkei-225
was hammered for a 2.6% loss while the broader Topix dumped 1.6%
of its value. Furthermore, the Federal Reserve's reiteration of
weakness in the U.S. economy, which was in the statement
accompanying Tuesday's rate decision, added pressure to Japanese
and European equities overnight.

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CURRENCY SUMMARY

The dollar has fallen to its lowest level in about a week against
the euro, as traders took another look at the Federal Reserve's
statement yesterday and found that they did not like the
implication that conditions in the U.S. economy remain on the
weak side. The pair is trading around 0.884 dollars per euro from
around 0.876 dollars overnight. The dollar surged higher against
the yen overnight, trading to 124 yen as weakness in Japanese
stocks weighed on the yen. However, profit-taking has pulled the
greenback off its overnight highs and it is now trading around
123.4 yen.

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MAJOR COMPANY / INDUSTRY NEWS
(All prices as of 11:05 a.m. EDT)

** Applied Materials (AMAT: 50.17, + 0.28) reported fiscal
second-quarter profits that were at the low end of expectations.
The firm also warned that fiscal third-quarter profits would be
well below current expectations. Applied Materials revealed that
it earned $269 million, or $0.32 per share, excluding a
restructuring charge. Earnings were expected to hit between $0.32
and $0.37 per share, according to the First Call survey. In the
same quarter last year, Applied Materials earned $0.53 per share.
For the upcoming third quarter, the company expects earnings per
share to break even or come in just slightly above breakeven
levels. The forecast represents a dramatic divergence from
analysts' expectations, which were for the firm to earn a profit
of $0.22 per share according to First Call.

** Sprint (FON: 21.07, - 0.51) downgraded its fiscal
second-quarter earnings guidance, along with its full-year 2001
profit estimates, due to the impact of bad debts and lower
demand. The phone giant now expects earnings at its core FON
division to hit between $4.3 billion and $4.4 billion for all of
2001. Earnings per share for the second quarter are expected in
the $0.28 to $0.30 range, compared with the results from the
First Call survey that had the average analyst estimate pegged at
$0.32 per share. Note that Sprint excluded its Sprint PCS (PCS:
23.83, - 0.17) wireless division from this guidance.

** Brocade Communications (BRCD: 44.45, + 1.95), a major supplier
of fiber optic switches, reported second-quarter earnings that
were in line with already-lowered profit projections. The company
said that it made $12.0 million, or $0.05 per share, versus $13.3
million, or $0.06 per share, in the same quarter last year.
Revenues rose 86% to $115.2 million.

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ECONOMIC NEWS

** Consumer Price Index for April rose 0.3%, following the
previous 0.1% increase. The S&P MMS consensus estimate called for
a 0.4% rise.

** Housing starts for April were at the 1.61 million unit pace,
compared to the previous 1.59 million unit pace. The consensus
estimate was for a 1.60 million unit pace.

** THURSDAY - Weekly initial jobless claims, May Philadelphia
Federal Reserve index, April leading economic indicators.

** FRIDAY - March U.S. trade report, April Treasury budget.

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