ATM's
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Charter One Financial (CF 7) has agreed to be acquired by Royal Bank of Scotland's (RBSPF 11) subsidiary, Citizens Financial, for $10.5 billion. The combination will create an organization in the U.S. with about $121 billion in assets and will enable the bank to extend its reach beyond the New England and mid-Atlantic region and into the
Midwest. The deal is expected to close in 4Q.

CVS Corp. (CVS 7) posted 1Q net income of $0.59 per share, ahead of the First Call estimate of $0.56, on a 8.1% rise in sales to $6.8 billion. The drugstore chain said same-store sales rose 6.4%, led by an 8.3% increase in same-store pharmacy sales.

Citing an increase in assets under management and an improvement in margins, Legg Mason (LM 7) reported fiscal 4Q net earnings of $1.21 per share, topping the Street's estimate of $1.15, as revenues jumped 49% to $560 million.

Whole Foods Market (WFMI 7) posted net income of $0.54 per share, ahead of analysts' estimates of $0.50, as sales rose 24% to $902 million, and same-store sales surged 17.1%. The retailer of organic food sees sales rising 18%-22% in 2004 but warned of difficult comparisons in 2005.

TREASURY AND ECONOMIC SUMMARY
Ahead of the 10:00 a.m. EDT release of the ISM Non-Manufacturing Index, Treasuries are trading higher in early morning action following the Federal Open Market Committee's interest-rate decision and policy statement yesterday afternoon. Per a survey by Bloomberg, economists are expecting the index to remain well into expansionary territory with a reading of 65.0, down slightly from 65.8. A figure above 50.0 is expansionary, and a figure below 50 is contractionary.

In secondary economic news, the U.S. Mortgage Bankers Association Purchase Index increased 4.1%, signaling the housing market remains strong, while the Refinancing Index rose 4.7% despite slightly higher mortgage rates.

WORLD MARKETS
Equities in Europe have bounced off early morning lows and are little changed in midday trading. Adding to the lackluster backdrop, unemployment in Germany for April edged up to 10.5% from 10.4%, worse than an expected unchanged reading, while the number of employed fell by 20,000 versus expectations of a 10,000 decline, as the weak recovery has not spread to the labor market. The eurozone service Purchasing Managers' Index for April remained in expansionary territory, inching up to 54.5 from 54.4, but lower than a forecast rise to 55.0. Highlighting the weakness in private consumption, eurozone retail sales in March fell 0.2%, generally in line with expectations, following February's downward revision. The global recovery has provided a needed lift to exports, which has been the primary driver for Europe's tepid recovery. Unlike the vigorous recovery in the U.S., the mild expansion in Europe has not boosted consumer spending.

In corporate news, BMW (BAMXF) reported net income of 523 million euros, up from last year's 510 million euros, but just under expectations of 528 million euros. The dollar is weaker against the euro and is at a 4-week low after the Fed hinted that a rate hike is not in the immediate future.

The Nikkei 225 Index remains closed due to an extended public holiday in Japan. Taiwan's benchmark index plunged 5.4% as fears that a slowdown in China's expansion will negatively impact its economy. In Hong Kong, the Hang Seng Index declined 1.2% amid similar concerns. China's economy has expanded at a torrid pace in recent months. Fears among Chinese officials that runaway economic growth will overheat the economy has led to signals among the countries leaders that a possible rate hike may not be far off. In currency trading, the yen is higher against the dollar.

Provided by Faux Bank Center for Investment Research