Charles Schwab & Co., Inc.

       Midday Market View(TM) for Thursday, October 18, 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          9,194.70    - 38.27
Nasdaq Comp.   1,654.75     + 8.41
S&P 500        1,071.52     - 5.57
----------------------------------
NYSE Advancing Issues        1,110	
NYSE Declining Issues        1,777
NYSE Trading Volume        594 mln
NASDAQ Advancing Issues      1,457
NASDAQ Declining Issues      1,767
NASDAQ Trading Volume      926 mln

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

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

6-month bill      2.10%        n/a
5-year note       3.78%     + 1/32
10-year note      4.56%     + 1/32
30-year bond      5.30%     - 1/32

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

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STOCKS REMAIN RANGEBOUND

Stocks were mixed against the backdrop of the ongoing 
bioterrorism threat, higher-than-expected jobless claims data, 
and a myriad of contrasting earnings reports, including some Dow 
components.

As of 11:58 a.m. EDT, the Dow Jones Industrial Average was down 
0.3%, but the Nasdaq Composite Index was 0.6% higher. The S&P 
500 Index was down 0.4%. Semiconductor, auto, oil-related and 
healthcare stocks were lower, while networking and biotech 
stocks were higher.

Shares of Texas Instruments (TXN,28,f2) continued lower after 
the wireless chip titan reported a 3Q pro forma loss of $0.03 
per share, $0.01 better than the First Call consensus as global 
demand for wireless and telecom equipment products weakened 
further. The company estimated a 4Q pro forma loss of $0.09 per 
share versus the Street's expectation of a $0.01 per share loss 
and declined to forecast when it would be profitable, but it 
said it anticipates a bottom in chip sales in 4Q.

Shares of Siebel Systems (SEBL,17.32,f1&f4) were slightly lower 
after the software company reported 3Q earnings of $0.07 per 
share, below the Street's $0.09 mean forecast, and the company's 
CEO said that the post-attack environment has been extremely 
difficult. However, he expects business conditions to ripen in 
the second half of next year and said he was comfortable with 
analysts' 4Q estimates of $0.09-$0.14 per share.

Advanced Micro Devices (AMD,9.70,f2) reported a 3Q loss, 
excluding charges, of $0.28 per share, in line with the Street's 
estimate owing to a decline in PC sales and price competition 
form rival Intel Corp. (INTC,24,f1&f4). However, AMD's CEO said 
that the company is well positioned going forward with the 
release of its new Athlon XP processors.

Merck (MRK,67,f2) was trading lower after the Dow component 
lowered guidance for future sales of Vioxx as wholesalers 
accumulated excess stockpiles of the drug. Merck reported 2Q 
earnings of $0.84 per share, in line with the First Call 
consensus estimate. Earlier, Eli Lilly (LLY,76,f2) reported 3Q 
earnings of $0.66 per share, matching the Street's lowered 
consensus, but warned of continued erosion in Prozac sales, 
depressing fiscal year 2001 and fiscal year 2002 growth 
estimates.

Shares of General Motors (GM, 41,f2) were trading lower after 
the company announced quarterly earnings, excluding charges, of 
$0.85 per share, ahead of the first call consensus estimate of 
$0.80 per share. However, GM lowered 4Q guidance as a result of 
pricing pressures associated with rental car sales.

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TREASURY AND ECONOMIC SUMMARY

Bonds were mixed in choppy trading amid new anthrax scares, even 
as Homeland Security Director Tom Ridge sought to placate 
concerns about the magnitude of the threat. The government's 
anticipated $1.5 billion 30-year debt buyback added to noise at 
the long end of the curve.

Earlier, bonds had reacted positively to this morning's economic 
data, which showed a rise of 6,000 initial jobless claims to 
490,000 for the week ended Oct. 13 after an upward revision of 
16,000 in the prior week, according to the Labor Department. 
Analysts per Dow Jones Newswires had forecast a rise to 472,000. 
The four-week moving average of claims rose to 491,250 and 
continuing claims through the week ended Oct. 6 rose to 
3,649,000, the highest level in more than 18 years. The report 
could portend an increase in the unemployment rate in the coming 
weeks.

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WORLD MARKETS

European bourses remained in negative territory late in the 
session with the Bloomberg European 500 Index off 1.51% as of 
11:57 a.m. EDT. Computer-related and telecommunications stocks 
trended lower as software giant SAP AG (SAP,25,f2) reported a 3Q 
loss at the lower range of estimates and cut its fiscal year 
2001 revenue estimates. The U.S. dollar firmed against the euro 
following Ridge's statements to appease the anthrax anxiety. 
Earlier, Germany's Finance Minister Hans Eichel slashed growth 
rate estimates for the country for both 2001 and 2002. Moreover, 
European Central Bank officials said that they remain focused on 
containing inflation, raising speculation that the ECB won't 
reduce interest rates soon enough.

William Johnson, Market Analyst

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