Message-ID: <31241810.1075861466079.JavaMail.evans@thyme> Date: Mon, 19 Nov 2001 06:29:23 -0800 (PST) From: schwabalerts.marketupdates@schwab.com To: jeff.dasovich@enron.com Subject: Morning Market View for November 19, 2001 Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Schwab Alerts X-To: Dasovich, Jeff X-cc: X-bcc: X-Folder: \JDASOVIC (Non-Privileged)\Dasovich, Jeff\Deleted Items X-Origin: Dasovich-J X-FileName: JDASOVIC (Non-Privileged).pst Charles Schwab & Co., Inc. Email Alert Morning Market View(TM) for Monday, November 19, 2001 as of 9:30AM EST Information provided by Schwab Center for Investment Research MARKETS TO START WEEK ON A POSITIVE NOTE Equities were poised to continue the uptrend from overseas at the open on mostly upbeat homebuilding data. October housing starts reflected a softening but still robust market for new home building, while the more forward-looking building permits pointed to a potentially deteriorating situation. In equities news, home-improvement retailer Lowe's Companies (LOW,40) posted strong 3Q results and gave optimistic guidance, while oil giants Phillips Petroleum (P,52,f2) and Conono Inc. (COC,24,f2) announced a strategic merger. Phillips Petroleum has agreed to purchase rival Conoco Inc. for $15.4 billion, creating the third-largest U.S. oil company in a move to enhance competitive positioning. Conoco shareholders will receive 0.4677 shares of the combined company, ConocoPhillips, for each of their original shares, valuing the shares at $24.30, roughly equal to Friday's closing price. Additionally, Phillips' CEO said the company will eliminate jobs following the merger in an effort to reign in costs and cut duplicate positions. The companies hope to close the deal by the second half of 2002. Lowe's Companies posted a 24% rise in fiscal 3Q net income to $0.32 per share, $0.01 ahead of the First Call $0.31 per share consensus forecast. Sales rose 21% to $5.45 billion, with same-store sales rising 4%. The company's CEO noted strength in all product categories across every geographic region and said that consumer traffic accelerated during the quarter. Lowe's expects fiscal 2002 profits of $1.24-$1.25 per share, ahead of the Street's $1.23 mean estimate. Shares of Andrx Group (ADRX,63,f1) were higher in premarket activity after the generic drug maker reported Friday that the FDA had granted it permission to market a generic form of AstraZeneca PLC's (AZN,46,f2) Prilosec ulcer medication, which generated more than $6 billion in global sales last year. Although AstraZeneca's primary U.S. patent on the drug expired on Oct. 5, the London-based pharmaceutical manufacturer claims that generic versions of the drug would violate several related patents, which, if upheld, would prolong U.S. exclusivity rights for several years. ---------------------------------------------------------------- TREASURY AND ECONOMIC SUMMARY Treasuries rose following the release of this morning's housing starts data. Total starts for October fell 1.3% to a 1.552 million annual rate from September's revised 1.572 million pace. Analysts were expecting a 4.7% decline to an annual rate of 1.500 million starts. The weakness was most noticeable in the West. Despite the unexpected resiliency in the housing market, buoyed by historically low interest rates, the more forward-looking building permits fell 3.6% in October on the heels of a revised 2.7% decline the prior month. Permits were previously reported as having dropped 3.0% in September. ---------------------------------------------------------------- WORLD MARKETS Despite a Bundesbank report that German economic growth was sequentially flat in 3Q and may be weaker in 4Q, European bourses climbed higher on renewed optimism that lower interest rates and falling crude prices will eventually stimulate economic growth in 2002. The Bloomberg 500 index was up 1.3% as of 8:56 a.m. EST, led by computer-related and telecom stocks. The euro was lower against the dollar after hawkish European Central Bank officials commented that current euro-zone interest rates are appropriate. Asian markets were also higher, with Japan's Nikkei-225 index closing up 0.74%, in spite of the Bank of Japan's dour assessment of the economy, including concerns about the effects of declining exports and output on consumer sentiment and spending. The yen was lower against the dollar following the Bank of Japan's economic downgrade. Nevertheless, enthusiasm about an improving outlook in the U.S., as well as a softer yen, carried export stocks, including Toyota (TM,50,f2) and Sony Corp. (SNE,46) higher. Crude oil trailed lower again amid fresh concerns that Russia will offer nothing more in the way of concessions than a meager, symbolic production cut. ---------------------------------------------------------------- FUTURES WATCH In the December Globex futures contract as of 8:56 a.m. EST, the S&P 500 index was 7 points higher while the Nasdaq 100 index was up 19 points. The December DJIA futures contract was up 55 points (58 points above fair value) and the December crude oil futures traded on the NYMEX were down $0.79 at $17.24/barrel. 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