Message-ID: <16801494.1075852561176.JavaMail.evans@thyme> Date: Mon, 22 Oct 2001 06:25:37 -0700 (PDT) From: schwabalerts.marketupdates@schwab.com To: jeff.dasovich@enron.com Subject: Morning Market View for October 22, 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)\Deleted Items X-Origin: Shankman-J X-FileName: JSHANKM (Non-Privileged).pst Charles Schwab & Co., Inc. Morning Market View(TM) for Monday, October 22, 2001 as of 9:30AM EDT Information provided by Schwab Center for Investment Research ================================================================ LACKLUSTER PREMARKET ACTIVITY Stocks were poised to open flat to lower in the absence of any significant economic news until mid-week, amid primarily cautious earnings news. Earnings season resumes this week as roughly 160 of the S&P 500 companies will report, according to First Call. Minnesota Mining & Manufacturing (MMM,102) reported 3Q operating earnings of $1.10 per share, $0.01 higher than the First Call mean estimate as global sales declined 7%. The Dow component said profits fell 12.4% from the year ago period mainly due to a slowing U.S. economy. Going forward, 3M lowered its 4Q earnings guidance to a range of $0.95-$1.05 per share, versus its previous $1.05 forecast. Wireless, data communications and phone service provider SBC Communications (SBC,44,f2) posted 3Q profits, excluding items, of $0.59 per share, $0.01 below the First Call consensus estimate as business conditions worsened in recent months. The Dow component plans to cut capital expenditures by 20% in 2002 and eliminate several thousand jobs as it attempts to achieve "meaningful growth in 2002." Dell Computer (DELL,24,f1) and EMC Corp. (EMC,11.51,f2) announced a five-year alliance aimed at growing both companies' storage system segments. The companies have agreed to co-market EMC's CLARiiON enterprise storage systems line in an effort to broaden Dell's storage presence, while enabling EMC to better position itself in the Windows NT and 2000 storage segments. ---------------------------------------------------------------- TREASURY AND ECONOMIC SUMMARY Bonds were narrowly higher as stocks adopted a mixed to slightly negative tone in premarket activity. The economic picture this week doesn't heat up until Wednesday's release of the Fed's Beige Book at 2:00 p.m. EDT. ---------------------------------------------------------------- WORLD MARKETS European trading was mixed with computer-related, telecom and energy stocks leading the Bloomberg European 500 Index narrowly higher, up 0.46% as of 8:54 a.m. EDT. Energy stocks were boosted by heightened speculation that OPEC stands ready to cut production in anticipation of increasing global crude inventories through Q4 2001 and Q1 2002. The euro was softer against the dollar amid concerns that the hawkish European Central Bank's monetary policy has been less stimulative than that of the Fed's in the U.S. Asian markets were mixed, but Japan's Nikkei-225 Index eked out a slight gain, up 0.25% at the close. Retail, pharmaceutical and export stocks were among the best performers, while banking shares led the declines. Select technology shares were also softer after a weekly report showed that DRAM prices had slipped below $1 as manufacturers struggled to trim inventories. The yen was lower against the dollar after Japan's All Industries Index declined 0.2% in August from the prior month, reflecting deteriorating economic conditions even before Sept. 11. ---------------------------------------------------------------- FUTURES WATCH In the December Globex futures contract as of 8:54 a.m. EDT, the S&P 500 Index was up 0.5 points (2 points below fair value), while the Nasdaq 100 Index was flat. The December DJIA futures contract was down 13 points (26 points below fair value), and the November crude oil futures traded on the NYMEX were down $0.04 at $21.79/barrel. 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