Charles Schwab & Co., Inc.

       Midday Market View(TM) for Friday, October 19, 2001
                       as of 1:00PM EDT
  Information provided by Schwab Center for Investment Research 
                         and Bridge

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

----------------------------------
Market            Value     Change

DJIA           9,091.88    - 71.34
Nasdaq Comp.   1,633.87    - 18.85
S&P 500        1,058.18    - 10.43
----------------------------------
NYSE Advancing Issues        1,208	
NYSE Declining Issues        1,636
NYSE Trading Volume        586 mln
NASDAQ Advancing Issues      1,289
NASDAQ Declining Issues      1,840
NASDAQ Trading Volume      751 mln

==================================

U.S. TREASURIES
----------------------------------
Value            Yield      Change

6-month bill      2.07%        n/a
5-year note       3.76%       unch
10-year note      4.56%       unch
30-year bond      5.34%     + 3/32

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

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MARKETS LANGUISHING IN THE RED

Stocks were trading near the day's lows, despite largely 
positive earnings releases, as many corporations remained 
cautious about future prospects. This morning's September 
Consumer Price Index data were generally in line with 
expectations, while the August trade gap narrowed.

As of 11:56 a.m. EDT, the Dow Jones Industrial Average was down 
0.8%, and the Nasdaq Composite Index was 1.3% lower. The S&P 500 
Index was down 0.9%. Semiconductor, networking, wireless, 
transport and leisure were among the steepest decliners, while 
defense and select healthcare issues were higher.

Shares of Microsoft (MSFT,57,f1) were lower after the software 
giant offered cautious 2Q guidance as it anticipates sluggish 
demand for its Windows XP operating system amid languishing PC 
sales. The Dow component reported a fiscal 1Q profit, excluding 
charges, of $0.43 per share, beating the First Call consensus of 
$0.39 per share on a 6% rise in sales. Including the charge for 
investment writedowns, net income actually fell to $0.23 per 
share. Going forward, Microsoft forecast profits for 2Q of 
$0.49-$0.50 per share, just shy of the $0.51 per share First 
Call consensus estimate.

Network computer maker Sun Microsystems Inc. (SUNW,8.88,f1) 
reported a fiscal 1Q loss of $0.05 per share, excluding items, 
$0.01 better than the First Call consensus estimate, amid 
sluggish sales exacerbated by last month's attacks. Sun 
neglected to give guidance for the current quarter, choosing 
instead to wait for its regularly scheduled mid-quarter 
conference call.

Shares of Corning (GLW,8.02,f2) were lower after the fiber optic 
cable giant reported 3Q profits, excluding charges, of $0.09 per 
share, triple the $0.03 per share First Call consensus estimate, 
but sales declined 21%. Corning forecast a 4Q loss of between 
$0.20-$0.25 per share, below the $0.06 per share First Call 
consensus estimate amid lethargic demand for telecom products.

Internet auction vendor eBay Inc. (EBAY,53,f1&f4) posted 3Q 
earnings, excluding costs, of $0.12 per share, $0.01 ahead of 
the Street's mean forecast as revenues rose 71%. The company 
raised its 4Q revenue estimate by roughly $5 million and 
increased its 4Q earnings forecast by $0.02 per share but 
expressed concern about the potentially sluggish upcoming 
holiday season.

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TREASURY AND ECONOMIC SUMMARY

Bonds were mixed, with most of the strength confined to the 
short-end following this morning's relatively tame September 
Consumer Price Index, which rose 0.4%, according to the Labor 
Department. The core index, which excludes food and energy, rose 
0.2%. Analysts per Dow Jones Newswires were expecting 0.3% and 
0.2% increases, respectively. The rise in the overall CPI was 
mainly attributed to a 2.6% rise in energy costs as gasoline 
prices spiked higher during the month. However, energy prices 
have since declined substantially, and the relatively benign 
inflation backdrop remains conducive to further monetary easing.

In other economic news, the August U.S. trade deficit shrank 
more than expected, coming in at $27.11 billion. Exports grew 
1%, while imports declined 1.1% as business and consumer 
spending waned, according to the Commerce Department. Analysts 
per Dow Jones Newswires were expecting the trade gap to rise to 
$29 billion.

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WORLD MARKETS

European bourses remained in negative territory late in the day 
following the release of this morning's German IFO business 
sentiment index for September, which dropped to its lowest level 
in almost eight years. The IFO index fell to 85 from August's 
89.5, below economists' expectations, and the future prospects 
component fell to 90.6 from August's 95.9. The report spawned 
escalating rhetoric among members of the euro-zone toward 
pressuring the European Central Bank into decisive rate-cutting 
action. The euro continued to drop against the dollar following 
this morning's relatively neutral U.S. inflation data. An upbeat 
earnings report from Nokia Corp. (NOK,19.87,f2) offered little 
in the way of a reprieve, even though the company posted a 
smaller-than-expected 3Q loss and forecast a recovery for 
wireless handset sales in 4Q. The Bloomberg European 500 Index 
was down 1.54% as of 11:56 a.m. EDT.

William Johnson, Market Analyst

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