COMMENTARY

The bears took over for most of the last week. Long-term interest rates shot

over 7% on May 2, which triggered a torrent of sell orders for the blue chips.

Even the high-flying OTC market couldn't buck the trend. The Dow industrials

dropped four days in a row, falling as low as 5342 on May 8, when the Dow

staged an impressive turnaround and rallied to close at 5474.1. Street watchers

credited stocks' rebound with a successful Treasury bond auction that helped

nudge rates down.

MARKET ANALYSIS

                                                           % change
      U.S. STOCKS                                Latest  Week   52-week
      DOW JONES INDUSTRIALS                      5474.1  -1.8   24.3
      MIDSIZE COMPANIES (S&P MidCap Index)       232.6   -2.3   24.4
      SMALL COMPANIES (Russell 2000)             345.2   -1.5   28.9
      ALL COMPANIES (Russell 3000)               370.2   -1.6   24.4
      
      FUNDAMENTALS                               Latest  Week ago  Year ago
      90-DAY TREASURY BILL YIELD                 5.13%   5.12%     5.79%
      30-YEAR TREASURY BOND YIELD                6.96%   6.91%     7.00%
      S&P 500 DIVIDEND YIELD                     2.18%   2.16%     2.54%
      S&P 500 PRICE/EARNINGS RATIO               18.9    19.2      16.2
      
                                                 % change (local currency)
      FOREIGN STOCKS                             Latest    Week    52-week
      LONDON (FINANCIAL TIMES 100)               3707.3    -2.6    12.7
      TOKYO (NIKKEI INDEX)                       21,728.6  -0.4    29.1
      TORONTO (TSE COMPOSITE)                    5160.8    0.2     0.5
      
      TECHNICAL INDICATORS                       Latest  Week ago Reading
      S&P 500 200-day moving average             609.3   607.1    Positive
      Stocks above 200-day moving average        60.0%   66.0%r   Neutral
      Speculative sentiment: Put/call ratio      0.61    0.49     Neutral
      Insider sentiment: Vickers sell/buy ratio  2.32    2.36     Neutral
      BLOOMBERG FINANCIAL MARKETS
      
      INDUSTRY GROUPS
                           % change                      % change
                          1-    12-  Strongest stock    1-    12- 
      ONE-MONTH LEADERS  month month in group           month month Price
      1 SEMICONDUCTORS    14.7   8.7 LSI LOGIC          21.4   3.2  34 3/4
      2 COMMUNICATIONS    11.5  55.3 DSC COMMUNICATIONS 26.4 -17.8  31 1/8
        EQUIPMENT 
      3 SHOES             11.4  80.8 NIKE               13.3 141.7  92 3/4
      4 SPECIALTY APPAREL  9.9  38.4 CHARMING SHOPPES   23.0  35.4  6 11/16
        RETAILERS 
      5 OFFICE EQUIPMENT   8.1  26.9 XEROX              16.3  22.4  149 3/4
        AND SUPPLIES 
      
                             % change                     % change
                           1-    12-   Weakest stock     1-     12- 
      ONE-MONTH LAGGARDS   month month in group         month  month Price
      1 FINANCIAL SERVICES -11.8 23.1  FEDERAL NATL.     -16.6  26.6 28 1/4
                                       MORTGAGE ASSN.
      2 DRUGS              -11.1 38.9  ELI LILLY         -15.1  46.8 54 7/8
      3 TRUCKING            -9.2 -5.7  YELLOW            -13.5 -40.4 11 1/4
      4 HMOs                -9.2 61.4  UNITED HEALTHCARE -13.0  53.2 54 3/8
      5 INVESTMENT          -8.8 23.0  TRAVELERS GROUP   -13.5  33.7 57
        BANKING/BROKERAGE 
      MORNINGSTAR INC.
      
      MUTUAL FUNDS
      
      LEADERS                     LAGGARDS
      Four-week total return  %   Four-week total return        %
      1 PBHG TECHNOLOGY     14.5  FIDELITY SELECT             -8.5
        & COMMUNICATIONS          AIR TRANSPORTATION 
      2 FIRST AMERICAN      14.0  INVESCO STRATEGIC           -5.6
        TECHNOLOGY C              FINANCIAL SERVICES 
      3 FIDELITY EXPORT     13.7  NEW ENGLAND GROWTH A        -5.5
      52-week total return    %   52-week total return          %
      1 TURNER SMALL        92.3  STEADMAN TECHNOLOGY GROWTH -15.8
        CAP EQUITY 
      2 PBHG SELECT EQUITY  89.6  WRIGHT EQUIFUND-GERMANY     -9.5
      3 FRANKLIN GLOBAL     85.9  STEADMAN INVESTMENT         -6.2
        HEALTH CARE 
      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.       Foreign       Money          Treasury
         stocks     stocks        market fund    bonds       Gold
         $12,597    $11,577       $10,544        $10,470     $10,406
         -1.45%     -0.24%        +0.11%         -2.28%      +0.33%
      
      All data on this page are as of market close Wednesday, May 8, 1996, unless 
      otherwise indicated. Industry groups include S&P 500 companies only; 
      performance and share prices are as of market close May 7. Mutual fund returns 
      are as of May 3. Relative portfolios are valued as of May 7. A more detailed 
      explanation of this page is available on request. r=revised
      
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