Charles Schwab & Co., Inc.

       Midday Market View(TM) for Thursday, September 13, 2001
                       as of 1:00PM EDT
  Information provided by Schwab Center for Investment Research 
                         and Bridge

+--------------------------------------------------------------+
+                                                              +
+                TUESDAY'S NATIONAL TRAGEDY                    +
+                                                              +
+  Schwab provides answers to your questions about the markets +
+  and your money. Also, listen to a special audio message     +
+  from Chairman Mr. Charles Schwab on the tragedy.            +
+                                                              +
+            http://q1.schwab.com/s/r?l=781                    +
+--------------------------------------------------------------+


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

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

DJIA          n/a        n/a
Nasdaq Comp.   n/a        n/a
S&P 500        n/a        n/a
----------------------------------
NYSE Advancing Issues          n/a	
NYSE Declining Issues          n/a
NYSE Trading Volume            n/a
NASDAQ Advancing Issues        n/a
NASDAQ Declining Issues        n/a
NASDAQ Trading Volume          n/a

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

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

6-month bill      3.09%        n/a
5-year note       3.93%     - 5/32
10-year note      4.62%     - 1/32
30-year bond      5.39%     + 7/32

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

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INTERNATIONAL MARKETS HIGHER, BONDS SOAR

Global markets added to earlier gains, while bonds advanced as 
investors flocked to the presumed safety of the U.S. Treasury 
market. According to a Bloomberg report, the yield on the 
two-year Treasury note reached a 43-year low of 2.98% in a 
flight to quality reaction. Meanwhile, in economic news, reports 
reflecting souring consumer sentiment and a weakening jobs 
picture had little effect as the markets remain focused on 
Tuesday's catastrophe.

In equities news, Chuck Hill, research director at First Call, 
is now estimating that U.S. companies' 4Q profit may fall by as 
much as 10-15%, due to the potential economic reverberations 
resulting from Tuesday's attack. Previously, First Call forecast 
a decline on the order of at least 5%. Airlines, hotels, leisure 
stocks and retailers are expected to bear the brunt of the 
shortfall, if consumer confidence wanes. In fact, the 
International Air Transport Association has estimated that costs 
could run as high as $10 billion for major American and 
International carriers, owing to the widely-anticipated 
slackening demand.

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TREASURY AND ECONOMIC SUMMARY

While the U.S. equity market remains closed until further 
notice, bonds rallied, particularly on the short-end of the 
curve, as investors sought the relative safety of U.S. 
Treasuries. Bonds were helped higher by speculation that the Fed 
may cut rates before the Oct. 2 Federal Open Market Committee 
meeting.

In economic news, a preliminary release of the University of 
Michigan's consumer sentiment survey, conducted prior to 
Tuesday's attack, showed that consumer sentiment dropped sharply 
through Sept. 10 from the August figure. The consumer sentiment 
index plummeted to 83.6, down from August's 91.5 and well below 
the Bloomberg forecast of 91.0. The current conditions component 
fell to 93.5 from August's 101.2, and the future expectations 
component plunged to 77.2 from August's 85.2. Although the bond 
market, which appears to be focusing on the bigger picture, had 
little if any, reaction to the report, it appears that consumers 
may have been starting to sour on the economy, even before 
Tuesday's calamity.

Initial jobless claims came in higher than expected, rising to 
431,000 for the week of Sept. 8, according to the Labor 
Department. A poll per Dow Jones Newswires was looking for an 
increase to 405,000. The prior week's figures were revised 
upward to 410,000. The four-week moving average of claims rose 
to 411,000 and continuing claims rose to 3,345,000 suggesting a 
deteriorating jobs situation.

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WORLD MARKETS

European bourses extended gains in late-day trading, led by a 
partial recovery in the world's largest insurance stocks, after 
some of the companies, which got hammered yesterday, said that 
claims related to Tuesday's damage would be lower than initially 
forecast. Investors also sought the relative safety of defensive 
issues, while energy and auto stocks led the downside action. 
The Bloomberg European 500 Index was up 0.83% as of 11:57 a.m. 
EDT.

The U.S. dollar fell against the euro on light volume, even as 
the Group of Seven nations said it was prepared to support the 
currency, as necessary, to mitigate a potentially worsening 
economic situation. However, the European Central Bank decided 
to keep the benchmark interest rate for the euro-zone on hold at 
4.25% for the time being, following the ECB President's remarks 
that reducing rates further would be seen as a panic reaction to 
the situation at hand. Nevertheless, the major international 
central banks have already provided liquidity to the financial 
markets with yesterday's $120 billion injection into their 
domestic financial systems and have indicated that they will 
coordinate with the Fed and other major central banks to ensure 
smooth, ongoing market operations.

The yen extended its gains against the dollar after Japan's 
Finance Minister said he didn't see any immediate need for 
taking action in the foreign exchange market, despite the 
previous comments coming out of the G-7.

William Johnson, Market Analyst

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