Charles Schwab & Co., Inc.

Morning Market View(TM) for Friday, May 18, 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          11,225.70     -22.80
Nasdaq Comp.   2,191.43      -2.25
S&P 500        1,285.41      -3.08
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NYSE Advancing Issues        1,301
NYSE Declining Issues        1,341
NYSE Trading Volume        315 mln
NASDAQ Advancing Issues      1,478
NASDAQ Declining Issues      1,656
NASDAQ Trading Volume      481 mln

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U.S. TREASURIES
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Value            Yield      Change

1-year bill       3.71%        n/a
5-year note       5.00%     - 5/32
10-year note     5.41%      - 1/32
30-year bond      5.77%       unch

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

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U.S. TRADING SUMMARY

Negative news from a host of technology firms is weighing on the
headline indexes this morning. Disappointing news from
handheld-computer maker Palm, along with lackluster earnings
figures and forecasts from Dell and Agilent put a lid on early
trading. All three of the major bourses were squarely in the red
at the open as the negative news weighed. The heady equity gains
this week, coupled with the negative news, prompted investors to
take profits early in the session. Yet, bargain hunters stepped
up to the plate to help pare losses and push the major averages
back toward unchanged levels. Not surprisingly, computer software
and semiconductors are among the worst-performing issues in the
S&P 500, while drugs and financials are also doing poorly. Oil
and gas shares are rallying.

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JAPAN / EUROPE SUMMARY

European markets pared early losses and moved marginally into the
green amid light bargain-hunting at the end of the week. Energy
shares were the winners. The French CAC-40 posted a 0.8% gain
despite bellwether telecommunications firm Alcatel taking a
beating. Alcatel is in talks to buy Lucent Technologies,
according to the New York Times, and shares of the French giant
were down more than 6% on the news. Elsewhere, the German Dax
rose 0.3% and the London FTSE rose 0.4%. Across the Pacific,
Japanese shares closed slightly lower in mild trading. The
benchmark Nikkei-225 slipped 0.2% while the broader Topix fell
0.4%.

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CURRENCY SUMMARY

The U.S. dollar is higher against both the yen and the euro.
Renewed concerns over the European Central Bank's conduct of
monetary policy, along with weakness in European industrial
production data, have pushed the euro lower to 0.877 dollars. The
yen is under pressure after the Bank of Japan indicated that it
is considering buying back additional Japanese government debt.
Such a move would increase the amount of yen in circulation,
thereby reducing the exchange value of the Japanese currency. The
dollar is trading at around 123.6 yen per dollar from 122.6 yen
overnight.

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

** Dell Computer Corp. (DELL: 24.70, - 1.18) reported flat fiscal
first-quarter earnings after the close on Thursday and warned
that second-quarter results would lag estimates. Dell reported
net income of $462 million, or $0.17 per share, versus $466
million, or $0.17 per share in the same quarter last year. These
figures met the consensus estimate from First Call. Sales rose
10% to $8 billion in the quarter. However, Dell cut
second-quarter profit and sales estimates, citing an ongoing
price war against its competitors. The firm now sees
second-quarter earnings of $0.15 to $0.17 per share. Analysts
were expecting the company to earn $0.18 per share. The company
also warned that sales may decline 3% to 5% in the second
quarter.

** Shares of Palm Inc. (PALM: 5.03, - 2.02) have been hit hard
after the firm cut its fiscal fourth-quarter profit outlook in
half late Thursday and warned that it would take a $300 million
inventory write-down charge. Sluggish sales of current models,
along with delays in getting a next generation model to market,
caused the maker of the popular Palm handheld device to slash
revenue projections. The company cut its fourth-quarter revenue
outlook, forecasting sales of between $140 million and $160
million, compared to a previous forecast of $300 million to $315
million. Palm also dropped its planned acquisition of Extended
Systems (XTND: 10.06, + 0.12), citing the slow economy as the
main factor.

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ECONOMIC NEWS

** U.S. goods and services trade report for March showed a $31.2
billion deficit, compared to the previous $26.9 billion deficit.
The S&P MMS consensus estimate called for a $29.0 billion
deficit.

** U.S. Treasury budget scheduled for release at 2:00 p.m. EDT.

NEXT WEEK'S DATA

** MONDAY - No data.

** TUESDAY - No data.

** WEDNESDAY - No data.

** THURSDAY - Weekly initial jobless claims, April new home
sales.

** FRIDAY - April durable goods orders, revised first-quarter
U.S. Gross Domestic Product, April existing home sales,
University of Michigan final index of consumer sentiment for
May.

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