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Charles Schwab & Co., Inc.
Email Alert Midday Market View(TM) for Wednesday, November 7, 2001 as of 1:00PM EST Information provided by Schwab Center for Investment Research and Bridge U.S. INDICES (1:00 p.m. EST) ---------------------------------- Market Value Change DJIA 9,581.08 - 10.04 Nasdaq Comp. 1,843.90 + 8.82 S&P 500 1,117.51 - 1.35 ---------------------------------- NYSE Advancing Issues 1,481 NYSE Declining Issues 1,446 NYSE Trading Volume 633 mln NASDAQ Advancing Issues 1,527 NASDAQ Declining Issues 1,700 NASDAQ Trading Volume 957 mln ================================== U.S. TREASURIES ---------------------------------- Value Yield Change 6-month bill 1.75% n/a 5-year note 3.48% + 11/32 10-year note 4.19% + 16/32 30-year bond 4.79% + 32/32 The tables above look best when viewed in a fixed-width font, such as "Courier." ================================================================ STOCKS ATTEMPTING TO RECAPTURE EARLY LOSSES Mostly gloomy corporate news, including an ominous earnings report and outlook from Qualcomm Inc. (QCOM,54,f1), was offset by better-than-expected productivity gains in 3Q as stocks recovered from this morning's lows to trade mixed at midday. As of 11:52 a.m. EST, the Dow Jones Industrial Average was down 0.1%, while the Nasdaq was 0.5% higher. The S&P 500 Index was down 0.1%. Homebuilding, networking and consumer finance stocks were among the best performers, while energy-related, retail and health care issues led the decliners. Shares of Qualcomm Inc. were lower after the wireless communication company posted 4Q earnings, excluding items, of $0.23 per share, lower than the First Call consensus estimate of $0.25 per share, due to slumping global demand and missed interest payments from Mexican wireless company Pegaso PCS. Qualcomm also lowered its fiscal 2002 guidance, saying that most of the growth won't come until the second half, and the company expects pro forma earnings in 1Q in the range of $0.21-$0.24 per share, below the Street's previous $0.27 per share mean forecast. Shares of Aetna Inc. (AET,30,f2) were under pressure, even though the largest U.S. health insurer said it incurred a 3Q loss, excluding items, of $0.34 per share, ahead of the Street's $0.55 per share loss estimate. Revenues declined roughly 8% to $6.2 billion as the company blamed rising health care costs and underpriced insurance plans for its woes. Chief Executive John Rowe said, "We continue to experience high medical costs, which are causing us to fall short of our ultimate goals." The stock of Maxim Integrated Products Inc. (MXIM,53,f1) took a hit after the semiconductor manufacturer said fiscal 1Q profits fell 49% to $0.17 a share, $0.01 ahead of the Street's mean forecast. Maxim blamed sluggish demand for semiconductors amid a weakening economy, as sales for the period fell 43% to $239.4 million. Going forward, company executives said fiscal 2Q profits and sales will rise only slightly above 1Q figures. ---------------------------------------------------------------- TREASURY AND ECONOMIC SUMMARY Bonds generally rose following this morning's productivity report that suggested a non-inflationary environment, but profit-taking hit the short-end following yesterday's rise after the Federal Open Market Committee interest-rate cut and accompanying statement, which hinted at more easing. According to the Labor Department, 3Q non-farm productivity rose at an annualized pace of 2.7%, ahead of analysts' forecasts per Dow Jones Newswires of a 2.1% gain. Unit labor costs rose 1.8%, less than Bloomberg's 2.4% forecast. Real hourly compensation rose at a 3.8% annual rate. The Labor Department said the productivity gains and slower pace of the labor cost increase could be attributed to a 3.6% reduction in the number of hours worked during the quarter, partly because of the tragic Sept. 11 attacks. In other news, wholesale inventories declined 0.1% in September from August's revised 0.2% drop, according to the Commerce Department. Bloomberg analysts were expecting a 0.3% drop. Wholesale sales fell 1.3% after August's 0.5% rise. As a result, the inventory-to-sales ratio, a key measure of how many months it would take to deplete current inventory, rose to 1.32 from August's 1.30. ---------------------------------------------------------------- WORLD MARKETS European markets were higher late in the session amid heightened expectations for a rate cut by the European Central Bank following this morning's weak economic data. The business climate indicator for the euro-zone fell to -1.14 in October from September's -0.57, while German factory orders fell a worse-than-expected 4.1% in September from August's revised 0.8% rise, it's biggest drop in six years. Bundesbank President Ernst Weltke attempted to mollify trader's fears by saying that "Sentiment is worse than the actual situation" and that the economic malaise is temporary. The dollar recouped some of its losses upon the release of the better-than-expected productivity numbers but remained lower against the euro. The Bloomberg European 500 Index was up 0.74% as of 11:52 a.m. EST on strength in chemical and manufacturing stocks. William Johnson, Market Analyst ================================================================ LOGIN to access your account: https://investing.schwab.com/trading/start ---------------------------------------------------------------- To unsubscribe or modify your Email Alert customization options, log in using the link below or copy and paste it into your browser's address window: https://investing.schwab.com/trading/start?SANC=EAMyAlerts ---------------------------------------------------------------- Notice: All email sent to or from the Charles Schwab corporate email system may be retained, monitored and/or reviewed by Schwab personnel. (0801-11478) Information provided by Bridge Information Systems. Copyright 2001 Bridge Information Systems. Charles Schwab & Co., Inc. ("Schwab") is a member of the NYSE, other major U.S. Securities Exchanges, and SIPC. Schwab is a specialist in various securities on the Pacific, Boston and Cincinnati Stock Exchanges and is subsidiary of The Charles Schwab Corporation, which is listed on the NYSE and trades under the symbol "SCH". Schwab Capital Markets L.P. is a member of the NASD and SIPC. Schwab Capital Markets L.P. is also a subsidiary of The Charles Schwab Corporation and is a market maker in approximately 4,900 securities. Schwab Center for Investment Research ("SCIR") is part of Charles Schwab & Co., Inc. The information contained herein is obtained from sources believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. Schwab does not assess the suitability or the potential value of any particular investment. All expressions of opinions are subject to change without notice. The Charles Schwab Corporation, Schwab, Schwab Capital Markets L.P. and its officers, directors, employees, consultants and/or members of their families may have a position in, and may from time to time, purchase or sell any of the mentioned or related securities including derivatives in such securities. At any given time, Schwab specialists, or Schwab Capital Markets L.P. market makers, may have an inventory position, either "long" or "short" in any security mentioned in this report as a result of their specialist/market making functions, respectively. Additionally, Schwab or Schwab Capital Markets L.P. may be on the opposite side of orders executed on the floor of the Pacific, Boston and/or Cincinnati Stock Exchanges or over-the-counter market respectively, as well. Schwab (or persons related thereto) or consultants may perform or solicit investment banking or other business from any company mentioned in this report. 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