COMMENTARY

As the stock market's best year in two decades drew to a close, investors took

profits. After reaching a high of 5216.5 on Dec. 13, the Dow industrials fell

as low as 5059 and then rebounded to 5106 on Dec. 27. As expected, the Federal

Reserve cut short-term interest rates, but that didn't count for much with bond

buyers, who instead focused on the budget impasse between President Clinton and

the GOP-controlled Congress. Looking abroad, the long-ailing Japanese and

Mexican stock markets staged yearend rallies.

MARKET ANALYSIS

      
                                                              % change
      U.S. STOCKS                               Latest    Week     52-week
      DOW JONES INDUSTRIALS                     5105.9    -0.1     33.0
      MIDSIZE COMPANIES (S&P MidCap Index)      216.4     2.1      28.6
      SMALL COMPANIES (Russell 2000)            314.1     2.6      28.1
      ALL COMPANIES (Russell 3000)              350.5     0.9      33.1
      
      FUNDAMENTALS                              Latest    Week ago Year ago
      90-DAY TREASURY BILL YIELD                5.02%     5.22%    5.59%
      30-YEAR TREASURY BOND YIELD               6.00%     6.10%    7.83%
      S&P 500 DIVIDEND YIELD                    2.23%     2.24%    2.79%
      S&P 500 PRICE/EARNINGS RATIO              17.4      17.3     17.0
      
                                                 % change (local currency)
      FOREIGN STOCKS                            Latest    Week     52-week
      LONDON (FINANCIAL TIMES 100)              3676.4    2.8      18.8
      TOKYO (NIKKEI INDEX)                      20,011.8  4.6      1.8
      TORONTO (TSE COMPOSITE)                   4684.2    0.7      11.5
      
      TECHNICAL INDICATORS                      Latest    Week ago Reading
      S&P 500 200-day moving average            557.5     554.4    Positive
      Stocks above 200-day moving average       64.0%     62.0%    Neutral
      Speculative sentiment: Put/call ratio     0.56      0.72     Negative
      Insider sentiment: Vickers sell/buy ratio 1.24      1.24     Positive
      BLOOMBERG FINANCIAL MARKETS
      
      INDUSTRY GROUPS
      
                              % change                     % change
                             1-    12-   Strongest stock  1-    12-
      ONE-MONTH LEADERS      month month in group         month month Price
      1 HEALTH CARE SERVICES 18.6  55.8  AMGEN            21.6  96.8  57 5/8
      2 OIL AND GAS DRILLING 18.4  33.8  ROWAN            24.2  54.0   9 5/8
      3 DRUGS                10.7  66.6  ELI LILLY        15.2  73.2  56 1/2
      4 OIL WELL EQUIPMENT    8.8  33.7  McDERMOTT        22.4 -14.2  21 7/8
        AND SERVICES                     INTERNATIONAL
      5 MEDICAL PRODUCTS      8.8  64.9  ST. JUDE MEDICAL 20.6  54.6  39 15/16
      
                              % change                     % change
                             1-    12-   Weakest stock    1-    12-
      ONE-MONTH LAGGARDS     month month in group         month month Price
      1 ALUMINUM             -9.6  19.2  ALCOA            -11.2  22.4 51 1/2
      2 SPECIALTY APPAREL    -9.5   6.1  GAP              -13.8  38.5 41 3/8
        RETAILERS RETAILERS
      3 GENERAL MERCHANDISE  -6.7   8.4  KMART            -18.8 -51.4  6 1/2
        CHAINS
      4 PAPER CONTAINERS     -6.7  -8.6  STONE CONTAINER   -9.8 -22.5 13 3/4
      5 METALS               -6.1   7.0  ASARCO           -13.2   5.7 30 3/8
      MORNINGSTAR INC.
      
      MUTUAL FUNDS
      
      LEADERS                             LAGGARDS
      Four-week total return          %   Four-week total return         %
      1 FIDELITY SELECT             11.7  STEADMAN AMERICAN            -5.8
        ENERGY SERVICE                    INDUSTRY
      2 EVERGREEN U.S. REAL         11.4  KEYSTONE AMERICA HARTWELL    -5.4
        ESTATE EQUITY Y                   EMERG. GR. B
      3 WRIGHT EQUIFUND-MEXICO      11.4  AMERICAN PERFORMANCE         -5.4
                                          AGGRESSIVE GRTH.
      
      52-week total return            %   52-week total return           %
      1 ALGER CAPITAL APPRECIATION  77.5  EV MARATHON GREATER INDIA   -33.2
      2 FIDELITY SELECT ELECTRONICS 73.8  WRIGHT EQUIFUND-MEXICO      -32.3
      3 GOVETT SMALLER COMPANIES A  72.4  STEADMAN TECHNOLOGY GROWTH  -28.0
      DRI/McGRAW-HILL
      
      RELATIVE PORTFOLIOS
      Dollar amounts represent the present value of $10,000 invested one year ago in 
      each portfolio
      
      Percentages indicate five-day total returns
      
         U.S.      Treasury   Foreign   Money
         stocks    bonds      stocks    market fund   Gold
         $13,678   $13,334    $12,030   $10,564       $10,198
         +1.23%    +1.40%     +2.80%    +0.12%        +0.61%
      
      All data on this page are as of market close Wednesday, Dec. 27, 1995, unless 
      otherwise indicated. Industry groups include S&P 500 companies only; 
      performance and share prices are as of market close Dec. 26. Mutual fund 
      returns are as of Dec. 22. Relative portfolios are valued as of Dec. 26. A more 
      detailed explanation of this page is available on request. r=revised
      
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