Charles Schwab & Co., Inc.
Email Alert

Midday Market View(TM) 
for Friday, December 28, 2001
as of 12:30PM EST
Information provided by Schwab Center for Investment Research
and Bridge 


U.S. INDICES
(12:30 p.m. EST)

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Market            Value     Change

DJIA          10,131.94     + 0.63
Nasdaq Comp.   1,988.15    + 11.73
S&P 500        1,159.91     + 2.78
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NYSE Advancing Issues        1,740	
NYSE Declining Issues        1,218
NYSE Trading Volume        428 mln
NASDAQ Advancing Issues      1,888
NASDAQ Declining Issues      1,576
NASDAQ Trading Volume      649 mln

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U.S. TREASURIES
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Value            Yield      Change

6-month bill      1.83%        n/a
5-year note       4.42%     - 4/32
10-year note      5.10%     - 8/32
30-year bond      5.53%    - 29/32

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

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MARKETS MIXED AMID POSITIVE DATA

U.S. equities are mixed midday, off morning highs, amid a 
plethora of economic data and very limited equity news. Consumer 
confidence, new home sales and initial jobless claims came in 
higher than expected. U.S. Treasuries are lower and European 
markets are higher.

As of 11:49 a.m. EST, the Dow Jones Industrial Average is down 
0.1%, while the Nasdaq Composite Index is 0.4% higher. The S&P 
500 Index is up 0.1%. Biotech, airline and energy shares are 
pacing the advancers while consumer products and transportation 
issues are leading the decliners.

Shares of Allegheny Energy (AYE,35) are lower following news 
that it anticipates earnings of $3.60-$3.70 per share in 2001 
and flat 2002 profits, lower than the First Call consensus of 
$3.90 per share and $4.15 per share, respectively.

Chip equipment provider Nanometrics Inc. (NANO,21,f1) is down 
after saying it sees 4Q sales falling 25% from 3Q levels, worse 
than its previous flat 4Q forecast, as a result of the slowing 
economy and excess inventories among its customers.

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TREASURY AND ECONOMIC SUMMARY

U.S. Treasury prices are lower at the long-end following the 
release of this morning's stronger-than-expected economic data. 
In positive economic news, the Conference Board's index of 
consumer confidence rose to 93.7 in December, much better than 
Bloomberg's 83.0 estimate and November's revised 84.9 reading. 
The present situation index, which evaluates current economic 
conditions, increased to 96.9 from 96.2 while the 
forward-looking future expectations index jumped noticeably from 
77.3 in November to 91.5 in December. Overall, the report 
reflects a significant boost in consumer optimism regarding the 
U.S. economy.

The Chicago Purchasing Managers' Index, a precursor to the 
National Association of Purchasing Management index to be 
released Monday, rose to 41.4 in December, well below the 45.0 
estimate per Bloomberg but higher than November's 41.1 reading. 
The index indicates contraction in the region's manufacturing 
sector at a slightly slower rate than in November. The new 
orders index rose to 43.9 from 41.4 while the inventories 
component fell to 33.8 from 36.3, suggesting inventory depletion 
will eventually lead to new production. The prices paid 
sub-index rose to 46.8 from November's 40.1.

In a sign of continued resiliency in the housing markets, new 
home sales for November rose 6.4% to 934,000, better than the 
880,000 level expected per Dow Jones Newswires. The supply of 
new homes fell to 4.0 months from October's 4.3 months. November 
existing home sales increased 0.6% to a 5.21 million unit annual 
rate, slightly higher than the 5.16 million unit rate analysts 
were expecting per Bloomberg.

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. Excluding a 69.8% drop in 
defense orders following October's joint strike fighter 
contract, durable goods orders increased 2.7%. Orders excluding 
transportation rose 1.1% as aircraft and aircraft parts orders 
fell 57.9%.

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WORLD MARKETS

European markets are higher with the Bloomberg European 500 
index up 1.3% as of 11:49 a.m. EST, led by technology-related 
shares. In economic news, French unemployment rose to 9% in 
November, 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. Marking 
the first time a foreign commercial bank will own part of a 
mainland Chinese bank, European lender HSBC Plc (HBCYF,11.5) 
announced it intends to purchase an 8% stake in the Bank of 
Shanghai. The euro is trading slightly lower versus the U.S. 
dollar. Crude oil is higher on news that OPEC officially agreed 
to reduce output by 1.5 million barrels per day starting Jan. 1.

Jeffrey Reeve, Market Analyst

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