From: schwabalerts.marketupdates@schwab.com
To: jeff.dasovich@enron.com
Date: 2001-10-23 13:31:09+00:00
Subject: Morning Market View for October 23, 2001

Charles Schwab & Co., Inc.
Email Alert

Morning Market View(TM) 
for Tuesday, October 23, 2001
as of 9:30AM EDT
Information provided by Schwab Center for Investment Research


STOCKS, YANKEES ON A TEAR

Much like the recent winning trend of the world champion New 
York Yankees, stocks were poised to add to recent gains at the 
open as earnings season continues in full swing amid the 
backdrop of an ongoing retaliatory campaign and bioterrorism 
scares.

Telecommunication equipment giant Lucent Technologies 
(LU,6.90,f2) said its loss for the fiscal 4Q widened to $0.27 
per share, excluding $8 billion in restructuring and one-time 
charges, worse than the $0.23 per share First Call consensus 
estimate. Including the charges, Lucent's loss widened to $2.59 
per share. The company cited the elimination of jobs and some of 
its product lines for the charges. Going forward, Lucent 
anticipates a sequential fall in revenue in fiscal 1Q before a 
rise in fiscal 2Q sales.

Leading U.S. oil company and Dow component Exxon Mobil 
(XOM,41,f2) posted 3Q earnings, excluding items, of $0.48 per 
share, below the First Call consensus of $0.50 per share on a 
9.5% revenue decline amid softening demand and weaker crude 
prices. In a similar story, oilfield services company 
Schlumberger Ltd. (SLB,48,f2) reported 3Q earnings of $0.34 per 
share, $0.01 lower than the Street's mean forecast.

Pharmaceutical titan Bristol-Myers Squibb (BMY,60,f2) posted 3Q 
earnings of $0.63 per share, in line with the First call 
consensus. Sales of the company's diabetes and blood-clotting 
drugs offset declining sales of its flagship cancer and anxiety 
medicines.

Insurance and financial services company MetLife (MET,26) 
reported that it was eliminating roughly 1,900 jobs in a move to 
cut costs amid weakening conditions in the sector. The Snoopy 
and Charlie Brown purveyor also reduced its claims estimates 
associated with the Sept. 11 attacks to roughly $210 million, 
down from the previous forecast of $250 million to $300 million. 
The company expects 3Q operating profits of $0.29-$0.31 per 
share.

Mobile-phone company AT&T Wireless (AWE,12.94,f2) said 3Q 
profits rose to $0.03 per share, well above the $0.02 per share 
loss expected by the Street. The company said that it added an 
additional 748,000 mobile customers during the quarter and sales 
rose 25%, but it plans to leave the fixed wireless business and 
take a related pretax 4Q charge.

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TREASURY AND ECONOMIC SUMMARY 

Bonds were slightly lower as stocks were poised to open higher. 
Bonds will likely take direction from the equities market absent 
any significant economic data or Fed speak.

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WORLD MARKETS 

Technology stocks once again led European bourses higher, with 
the Bloomberg European 500 Index up 1.99% as of 8:57 a.m. EDT. 
Dutch banking company ABN Amro (ABN,14.79,f2) lowered its fiscal 
year 2001 earnings guidance in the wake of the terrorist 
attacks, while drug giant GlaxoSmithKline PLC (GSK,55) saw its 
3Q earnings rise 20%, slightly above expectations. The dollar 
continued its upward trend against the euro as traders 
anticipate a quicker economic recovery in the U.S. than in other 
parts of the world. Adding to the gloomy economic landscape, 
Italian business confidence fell to 84 in September from 
August's 96, well below expectations. However, September's 
French consumer spending data was unexpectedly higher.

Asian markets were higher with Japan's Nikkei-225 finishing up 
2.80% led by strength in technology and exporters owing to 
continued weakness in the yen. The Japanese currency continued 
to slide against the dollar amid a government report that 
investors have sought better returns in foreign bonds since the 
beginning of the second half of the fiscal year. In earnings 
news, Chartered Semiconductor (CHRT,18.70,f1) reported a 
better-than-expected 3Q loss of $118.3.million and said it was 
close to a bottom in the beleaguered chip industry.

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FUTURES WATCH 

In the December Globex futures contract as of 8:57 a.m. EDT, the 
S&P 500 Index was up 4.5 points (7 points above fair value), 
while the Nasdaq 100 Index was up 15.5 points (17 points above 
fair value). The December DJIA futures contract was up 28 points 
(47 points above fair value) and the December crude oil futures 
traded on the NYMEX were up $0.10 at $22.36/barrel.

William Johnson, Market Analyst

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