Charles Schwab & Co., Inc.
Email Alert

Midday Market View(TM) 
for Friday, November 16, 2001
as of 1:00PM EST
Information provided by Schwab Center for Investment Research
and Bridge 


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

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Market            Value     Change

DJIA           9,851.98    - 20.41
Nasdaq Comp.    1,893.90     - 6.67
S&P 500        1,136.28     - 5.96
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NYSE Advancing Issues        1,656	
NYSE Declining Issues        1,301
NYSE Trading Volume        675 mln
NASDAQ Advancing Issues      1,700
NASDAQ Declining Issues      1,615
NASDAQ Trading Volume      885 mln

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U.S. TREASURIES
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Value            Yield      Change

6-month bill      2.01%        n/a
5-year note       4.26%    - 22/32
10-year note      4.87%    - 27/32
30-year bond      5.27%    - 24/32

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

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STOCKS LOWER IN LACKLUSTER TRADING

U.S. equities were down marginally midday amid mixed economic 
releases and tepid earnings reports. Industrial production 
reflected continued weakness in the manufacturing sector, while 
inflation at the consumer level roughly matched expectations. 
Companies reporting earnings mostly met estimates, though 
forward guidance was cautious.

As of 11:56 a.m. EST, the Dow Jones Industrial Average was down 
0.1%, while the Nasdaq Composite Index was down 0.1%. The S&P 
500 Index was down 0.4%. Financials and computer-related stocks 
paced the decliners, while communications equipment and drugs 
paced the advancers.

Shares of PC giant Dell Computer (DELL,27,f1) were lower after 
it recorded 3Q net earnings of $0.16 per share, $0.01 higher 
than the First Call consensus, on a 10% decline in revenue. The 
company reported that it captured market share from its 
competitors amid a pronounced price war as PC demand slumped. 
Amid some analysts' concerns, CEO Michael Dell said, "the 
convergence of Windows XP, Pentium 4, low-cost broadband and 
wireless networking is creating a feature nucleus for a new 
upgrade cycle." Going forward, Dell forecast 4Q earnings of 
$0.16 per share, in line with the Street's consensus, and said 
it saw sales rising only slightly from 3Q levels.

Electronics-testing equipment maker Agilent Technologies 
(A,24,f2) reported a fiscal 4Q loss of $0.60 per share, matching 
estimates, as demand for its equipment fell amid a slump in 
semiconductor orders and the telecommunications industry. The 
company said it expects flat sales over the next two quarters 
and a fiscal 1Q loss excluding charges of $0.40-$0.60 per share, 
versus the mean $0.49 per share loss consensus. Agilent also 
said it will eliminate another 4,000 workers and offer $1 
billion in debt.

Shares of Starbucks Corp. (SBUX,17.31,f1) were brewing lower 
after the company reported 4Q earnings of $0.14 per share, 
matching expectations, but lowered its earnings guidance for 
fiscal 2002. Citing "an uncertain economic environment," the 
coffee giant stated it now anticipates full-year profits of 
$0.54-$0.55 per share, down from the $0.56-$0.58 per share 
forecast the company made in July. A number of analysts' cut 
their views on the company following the news.

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TREASURY AND ECONOMIC SUMMARY

Bonds were down midday, despite a brief reprieve following this 
morning's industrial production data. In another sign of the 
weakness plaguing the industry, industrial output for October 
dropped for a 13th-consecutive month, declining 1.1%, according 
to the Federal Reserve Board, its biggest one-month drop since 
1990. Analysts per Dow Jones Newswires were expecting a 0.9% 
drop. Capacity utilization declined to 74.8, its lowest level 
since June 1983, from September's slightly upwardly revised 
75.7, roughly matching expectations.

In an earlier release, October consumer prices declined 0.3% 
versus the 0.2% drop forecast by Dow Jones Newswires, owing 
primarily to a huge drop in energy prices, according to the 
Labor Department. The core index, which excludes the volatile 
energy and food components, rose 0.2%, slightly more than the 
consensus forecast for a 0.1% rise. Energy prices declined 6.3%, 
the biggest drop in more than 15 years, and transportation 
prices slumped 2.2%. The relatively quiet inflation environment 
is generally bond-friendly and leaves the door open for further 
monetary easing if deemed necessary by the Fed.

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WORLD MARKETS

European markets were higher later in the day, with the 
Bloomberg European 500 index up 0.63% as of 11:56 a.m. EST. 
Energy and financials paced the advancers, while mining and 
beverages drove the decliners. Much of the lift to European 
equities could be attributed to a bounce in crude oil prices off 
yesterday's 2-1/2-year lows. On the economic front, inflation in 
the euro-zone remained tame as the consumer price index matched 
expectations, declining 0.1% in October and increasing 2.4% year 
over year. The euro was higher versus the dollar amid lackluster 
U.S. equity performance and marginal gains in European bourses.

Jeffrey Reeve, Market Analyst

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