From: schwabalerts.marketupdates@schwab.com
To: jeff.dasovich@enron.com
Date: 2001-05-17 11:45:00+00:00
Subject: Midday Market View for May 17, 2001

Charles Schwab & Co., Inc.

Midday Market View(TM) for Thursday, May 17, 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          11,281.10    + 65.20
Nasdaq Comp.   2,201.82    + 35.38
S&P 500        1,292.38     + 7.39
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NYSE Advancing Issues        1,822
NYSE Declining Issues        1,161
NYSE Trading Volume        745 mln
NASDAQ Advancing Issues      2,292
NASDAQ Declining Issues      1,344
NASDAQ Trading Volume     1.17 bln

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

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

1-year bill       3.68%        n/a
5-year note       4.99%     - 8/32
10-year note      5.45%    - 1/32
30-year bond      5.81%    + 16/32

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

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U.S. TRADING SUMMARY

Equities continued to consolidate early morning gains as
technology stocks moved higher on positive earnings news and
confidence that the economy may turn upward in the final three
months of this year. Indeed, earnings guidance from Oracle added
to the growing chorus that feels an economic upturn is not far
away. With the Federal Reserve keeping the possibility of
interest-rate cuts on the table, traders felt confident putting
money back to work. Sectors outperforming during today's session
included entertainment, computer systems and drugs. Sectors
bucking the positive trend included financials, telephone and
insurance.

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U.S. TREASURY SUMMARY

Longer-dated issues are outperforming shorter-dated issues at
midday. Shorter-dated issues are lower in price on strength in
stocks and lowered Federal Reserve easing expectations while the
longer-dated issues outperform on reduced inflation expectations,
the Treasury buyback of debt and reports that Argentina is a
buyer of long-dated debt instruments. The long end is higher in
price, pushing yields lower, as the market continues to reduce
expectations of inflation after yesterday's tame Consumer Price
Index data. The bond was also supported by today's economic data
as initial jobless claims declined, indicating to some that the
labor market may not be as weak as previously thought.

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CURRENCY SUMMARY

The U.S. dollar is little changed versus the euro, but has
slipped lower against the yen when compared with morning levels.
Indeed, the greenback has eroded to around 122.5 yen per dollars
from 123.0 yen per dollars this morning. As for the euro, the
dollar is trading around the 0.882 level.

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

** Discount retailer K-Mart (KM: 10.68, + 0.55) reported a fiscal
first-quarter loss due to costs related to improving store
operations and the liquidation of inventory. The nation's
second-largest discount retailer reported losing $25 million, or
$0.05 per share, versus making a profit of $22 million, or $0.06
a share in the same quarter last year. If early retirement and
employee severance charges had not been included, the loss would
only have been $10 million, or $0.02 per share. Analysts had
expected the company to lose $0.07 per share, so the company did
report a narrower-than-expected dip in the red, excluding
one-time charges.

** Citigroup (C: 50.71, - 1.08) is buying Mexican bank Banacci,
Mexico's second largest, in a cash-and-stock deal valued at $12.5
billion. The deal still has to be approved by regulators, but if
given the green light, the buyout will close in the fiscal fourth
quarter of this year. Citigroup stated that the acquisition of
Banacci will also help it gain market share with the Hispanic
population in the U.S. Further, Citigroup has applied to list its
shares on the Mexican Stock Exchange, and it will be the first
international company to do so if the merger is approved.

** Transmeta (TMTA: 13.50, + 0.40), a manufacturer of low-power
semiconductor chips, bagged another large computer giant as Sharp
Electronics of Japan introduced a new laptop computer that uses
Transmeta's Crusoe chip. Transmeta now has all the major laptop
manufacturers using its new generation chip technology. Just last
week Toshiba joined the ranks of firms using Crusoe.

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RESEARCH SPOTLIGHTS

** Wells Fargo Van Kasper upgraded shares of Novellus Systems
Inc. (NVLS: 53.54, + 0.69) from a buy to a strong buy rating.

** Merrill Lynch upgraded shares of Acxiom Corp. (ACXM: 17.10, -
0.06) from an intermediate-term neutral to an intermediate-term
accumulate rating.

** Wells Fargo Van Kasper upgraded shares of KLA-Tencor Corp.
(KLAC: 54.86, - 0.01) from a buy to a strong buy rating.

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