Message-ID: <29122904.1075861484001.JavaMail.evans@thyme> Date: Fri, 2 Nov 2001 06:29:14 -0800 (PST) From: schwabalerts.marketupdates@schwab.com To: jeff.dasovich@enron.com Subject: Morning Market View for November 02, 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 Friday, November 2, 2001 as of 9:30AM EST Information provided by Schwab Center for Investment Research WEAK EMPLOYMENT DATA FAILS TO PHASE MARKETS Equity index futures were lower but climbing back from earlier losses suffered as a result of this morning's dismal employment report. The unemployment rate climbed to its highest level in almost five years as the impact of the terrorist attacks has served to prolong the economic malaise. In equities news, the Justice Department has officially agreed to a settlement in the anti-trust case against Microsoft Corp. (MSFT,62,f1). The U.S. Justice department announced that it had agreed to a settlement with Microsoft, which will be presented to the Federal Judge overseeing the case today. The accord will impose a "broad range" of restrictions for the company lasting for at least five years. The 18 states involved in the antitrust case have not agreed to the provisions of the settlement and are expected to ask Judge Colleen Kollar-Kotelly for an extension of time to review the terms. BEA Systems (BEAS,11.70,f1) reduced its 3Q and 4Q guidance after the bell last night and said that it would be forced to cut up to 10% of its staff, owing to the sluggish economy. The application server software maker said it expects 3Q earnings, excluding charges and items, of $0.05-$0.06 per share, below the First Call $0.08 per share consensus, amid lower than expected revenue. BEAS is forecasting 4Q revenue growth in the low single digits and earnings of $0.06-$0.07 per share, below the Street's mean $0.09 per share estimate. Health insurance giant Cigna Corp. (CI,72) posted 3Q profits of $1.66 per share, excluding a $33 million gain from the sale of a reinsurance business, well ahead of the First Call consensus estimate of $1.58 per share. However, the company's medical risk loss ratio rose by 1.6%, suggesting potential profit margin erosion going forward. Medical risk loss ratio is a key measure of medical cost coverage ability. ---------------------------------------------------------------- TREASURY AND ECONOMIC SUMMARY Treasuries were mixed after swinging wildly following the release of this morning's weaker-than-expected employment report. According to the Labor Department, the unemployment rate rose to 5.4% in October from September's 4.9% level. Analysts per Dow Jones Newswires were looking for a rate of 5.2%. Non-farm payrolls declined by 415,000, the largest one-month drop since 1980, after September's downward revision to a 213,000 decline from the previously reported 199,000 drop. Average hourly earnings rose to $14.47 from the prior month's $14.45. The services-producing sector cut 241,000 jobs, while the manufacturing industry eliminated 142,000 positions. The bleak employment situation, reflecting the economic impact of the terrorist attacks, leaves the door open for continued aggressive monetary easing. ---------------------------------------------------------------- WORLD MARKETS Technology stocks paced the advance in Europe on the heels of a Semiconductor Industry Association report yesterday. The report indicates that September was the third-consecutive month of a decelerating demand slowdown. However, the gains were muted somewhat by the release of a worse-than-expected German Purchasing Managers' Index report. The business index for October fell to 42.0 from September's 45.1, its seventh-consecutive month of contraction. UK insurance giant Prudential PLC (PUK,21) said that it will cut 2,100 jobs to lower expenses. Consumer staples giant Unilever (UL,29) reported better-than-expected 3Q operating profits and stuck to its guidance for at least 10% growth in fiscal year earnings. The euro was slightly higher against the U.S. dollar. The Bloomberg European 500 index was up 0.43% as of 8:53 a.m. EST. Asian stocks were mixed but mostly higher on strength in the brokerage and technology sectors. Results were mixed as semiconductor stocks got a big boost on the favorable SIA report, but electronic components maker TDK Corp. (TDK,47) posted weak fiscal first-half profits, lowered full-year guidance and warned of more job cuts amid waning demand. Although a Liberal Democratic Party panel is pushing for inflation targets in Japan, Bank of Japan Governor Masaru Hayami called the idea "absurd," despite rhetoric from the BOJ Finance Minister aimed at mitigating deflationary pressures. The yen was slightly higher against the dollar. ---------------------------------------------------------------- FUTURES WATCH In the December Globex futures contract as of 8:53 a.m. EST, the S&P 500 index was unchanged (1 point below fair value) while the Nasdaq 100 index was also unchanged (7 points below fair value). The December DJIA futures contract was down 15 points (27 points below fair value) and the December crude oil futures traded on the NYMEX were down $0.12 at $20.27/barrel. 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) 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. (C)2001 Charles Schwab & Co., Inc. 1) Schwab Capital Markets L.P. makes a market in this security. 2) Schwab is a specialist in this security. 3) Schwab has managed or co-managed a public offering in this security within the last three years. 4) An employee of Schwab is a Director of this company. 5) An analyst covering this stock has an investment position. Commercial use or redistribution in any form, print or electronic, is prohibited. Distribution by Quris, Inc.