Charles Schwab & Co., Inc.

Midday Market View(TM) for Tuesday, May 22, 2001
as of 1:00PM EDT
Information provided by Standard & Poor's

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

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Market            Value     Change

DJIA          11,301.20    - 36.70
Nasdaq Comp.   2,312.46     + 6.87
S&P 500        1,313.30     + 0.47
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NYSE Advancing Issues        1,420
NYSE Declining Issues        1,563
NYSE Trading Volume        704 mln
NASDAQ Advancing Issues      1,936
NASDAQ Declining Issues      1,734
NASDAQ Trading Volume     1.35 bln

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U.S. TREASURIES
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Value            Yield      Change

1-year bill       3.71%        n/a
5-year note       4.96%     + 2/32
10-year note      5.39%     - 2/32
30-year bond      5.77%     - 9/32

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

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U.S. TRADING SUMMARY

Weakness in the Dow continued to weigh on the NASDAQ and S&P 500
at the middle of the trading day. Yet, the losses were small and
well contained throughout the morning as investors digested a
week of heady gains in the NASDAQ. With little economic data on
this week's calendar, and an upcoming three-day weekend, traders
were somewhat hesitant to commit more capital given the lack of
additional information about the state of the U.S. economy.
Industries bucking today's consolidative trend and moving higher
included financials, computer software and communications
equipment firms. Industries struggling along with the broader
market included a host of defensive sectors including drugs,
health care and oil.

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U.S. TREASURY SUMMARY

Shorter-dated Treasury issues continued to outperform the
longer-dated issues into midday trading. With no economic data on
the calendar, investors are digesting previous data and
repositioning their holdings among different Treasury debt issues
as some inflationary concerns remain. These inflation concerns
have resulted in players selling the bond to buy shorter-dated
securities. Shorter-dated issues are also getting support from a
mild equity safety bid as all three equity indices have been
unable to extend Monday's gains. Traders were also listening to
comments from a variety of Federal Reserve speakers, whose words
had little net effect on Treasuries.

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CURRENCY SUMMARY

A lack of market-moving data or events during North American
trading kept the U.S. dollar in a fairly subdued range this
morning. The dollar has managed to edge modestly higher versus
the yen to about the 122.8 yen level, pushing off morning lows of
about 122.5 yen. Meanwhile, the greenback has strengthened to
around 0.865 dollars per euro. The dollar lost ground against the
yen overnight following the release of data suggesting that the
Japanese economy was not as weak as many had feared. However,
weaker-than-anticipated European data boosted the dollar against
the euro during European trading hours.

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MAJOR COMPANY / INDUSTRY NEWS
(All prices as of 1:05 p.m. EDT)

** The Securities and Exchange Commission began an investigation
into unusual transactions between Xerox (XRX: 10.60, - 0.75) and
Citigroup's (C: 52.60, + 1.04) Citibank unit that may have helped
boost ailing Xerox's profit and revenue statements, reports The
Wall Street Journal. The SEC has subpoenaed Citibank for its
records on Xerox's Brazil division regarding the transactions. A
former Xerox employee charges that Xerox improperly booked
erroneously inflated revenue of roughly $140 million and pretax
profits of $80 million. According to the article, Citibank does
not appear to have done anything wrong by arranging the
transactions for Xerox. Neither company would comment on the
matter.

** Office product retailing giant Staples Inc. (SPLS: 16.26, +
0.74) reported fiscal first-quarter profits that were in line
with expectations. Staples also stated that while its second
quarter will be weak, the company still believes that it is on
target to meet full-year estimates with stronger third- and
fourth-quarter results. Staples reported earning $40 million, or
$0.09 per share in the fiscal first quarter, which was just
slightly below the $44.2 million, or $0.10 per share earned in
the same quarter last year. Revenues increased 4% to $2.7
billion.

** Vivendi Universal (V: 68.80, + 0.43) is on the acquisition
trail again. After offering to purchase MP3.com (MPPP: 4.87, +
0.02) yesterday, Vivendi announced that it is in preliminary
talks to buy U.S. publisher Houghton Mifflin (HTN: 55.75, + 2.25)
for a minimum of $1.7 billion, reported The Wall Street Journal.
The merger would allow Vivendi, Europe's biggest media company,
to expand its publishing business to the United States and beyond
its scope of Europe.

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RESEARCH SPOTLIGHTS

** Robertson Stephens upgraded shares of Neurocrine Biosciences
(NBIX: 36.03, - 2.00) to a strong buy rating.

** Union Securities upgraded shares of Aspen Technology Inc.
(AZPN: 26.27, - 1.92) from a buy to a strong buy rating.

** ABN Amro upgraded shares of E.Piphany (EPNY: 16.21, + 0.51)
from a hold to an add rating.

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