COMMENTARY

Bond traders had a brutal week. First, Jeffrey Vinik's surprise resignation as

manager of Fidelity's $57 billion Magellan Fund fanned fears that Magellan's

bond holdings would flood the market. Then, speculation that inflation fears

would lead the Federal Reserve to raise interest rates boosted the yield on the

30-year Treasuries from 6.86% to 6.94% in just one day. Rising rates hurt

stocks, and after flirting with 5800, the Dow closed the week down 1.8%.

Meanwhile, the dollar fell from its recent highs against the yen and the mark.

MARKET ANALYSIS

                                                         % change
      U.S. STOCKS                           Latest    Week     52-week
      DOW JONES INDUSTRIALS                 5673.8    -1.8     27.1
      MIDSIZE COMPANIES (S&P MidCap Index)  238.7     -1.5     25.7
      SMALL COMPANIES (Russell 2000)        359.1     -1.5     32.9
      ALL COMPANIES (Russell 3000)          383.3     -1.5     26.9
      
                                           % change (local currency)
      FOREIGN STOCKS                    Latest    Week      52-week
      LONDON (FINANCIAL TIMES 100)      3775.7    0.3       13.7
      TOKYO (NIKKEI INDEX)              22,021.5  0.3       42.7
      TORONTO (TSE COMPOSITE)           5209.8    -0.6      17.1
      
      FUNDAMENTALS                      Latest    Week ago  Year ago
      90-DAY TREASURY BILL YIELD        5.18%     5.18%     5.80%
      30-YEAR TREASURY BOND YIELD       6.94%     6.81%     6.65%
      S&P 500 DIVIDEND YIELD            2.13%     2.09%     2.51%
      S&P 500 PRICE/EARNINGS RATIO      19.4      19.7      16.4
      
      TECHNICAL INDICATORS                    Latest  Week ago  Reading
      S&P 500 200-day moving average          616.8   614.5     Positive
      Stocks above 200-day moving average     66.0%   68.0%r    Neutral
      Speculative sentiment: Put/call ratio   0.54    0.50r     Negative
      Insider sentiment: Vickers
       sell/buy ratio                         2.22    2.14      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 SOFT DRINKS      12.5  50.4  COCA-COLA        13.2   54.3  46
      2 TOBACCO          10.8  36.9  PHILIP MORRIS    12.0   43.1 100
      3 SHOES             9.0  88.3  NIKE             11.2  151.0  98 3/8
      4 SPECIALTY APPAREL 9.0  44.5  CHARMING SHOPPES 27.3   80.0   7 7/8
        RETAILERS
      5 HOMEBUILDING      8.7   9.0  CENTEX           15.4    9.7  31
      
                             % change                     % change
                         1-    12-   Weakest stock       1-    12-
      ONE-MONTH LAGGARDS month month in group            month month Price
      1 INSTRUMENTATION  -5.0  22.9  PERKIN-ELMER        -6.7  47.0 52 3/8
      2 METALS           -4.9  24.6  PHELPS DODGE        -9.4  26.2 69 3/4
      3 STEEL            -3.9   0.6  INLAND STEEL        -9.9 -20.3 21 5/8
                                     INDUSTRIES
      4 HMOs             -3.7  53.0  UNITED HEALTHCARE  -10.1  45.3 52 1/2
      5 MACHINE TOOLS    -3.5  -2.6  CINCINNATI MILACRON -5.2  -3.9 24 7/8
      MORNINGSTAR INC.
      
      MUTUAL FUNDS
      
      LEADERS                          LAGGARDS
      Four-week total return       %   Four-week total return       %
      1 NICHOLAS-APPLEGATE       15.7  T. ROWE PRICE JAPAN        -5.5
        MINI-CAP GR. INSTL.
      2 PERKINS OPPORTUNITY      15.0  HERCULES PACIFIC           -5.4
        BASIN VALUE
      3 BERGER NEW GENERATION    13.7  FRANKLIN TEMPLETON JAPAN   -5.2
      
      52-week total return         %   52-week total return         %
      1 TURNER SMALL CAP EQUITY 102.0  STEADMAN TECHNOLOGY GROWTH -9.7
      2 PBHG SELECT EQUITY       98.0  WRIGHT EQUIFUND-GERMANY    -8.7
      3 TCW/DW SMALL             93.0  EV MARATHON GREATER INDIA  -7.2
        CAPITALIZATION GROWTH
      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
         $12,900    $11,333       $10,539       $10,437     $10,291
         -0.14%     -1.17%        +0.11%        +0.15%      +0.01%
      
      All data on this page are as of market close Wednesday, May 29, 1996, unless 
      otherwise indicated. Industry groups include S&P 500 companies only; 
      performance and share prices are as of market close May 28. Mutual fund returns 
      are as of May 24. Relative portfolios are valued as of May 28. A more detailed 
      explanation of this page is available on request. r=revised
      
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