COMMENTARY

The news on the inflation front was sweet indeed. The producer price index for

the month of May actually fell and consumer prices were up just a smidgen. But

bonds tanked. The yield on 30-year Treasuries rose to 7.19%, up from 6.95% last

week. As one trader put it: "There's just no demand at the long end." The

fear is that with employment surging and retail sales rebounding, the Federal

Reserve will soon jack up rates no matter what the inflation numbers are now

showing. In the face of rising rates, stocks could do little but retreat.

MARKET ANALYSIS

      
                                                                % change
      U.S. STOCKS                                Latest      Week      52-week
      DOW JONES INDUSTRIALS                      5668.3      -0.5       26.2
      MIDSIZE COMPANIES (S&P MidCap Index)       241.3       -0.4       24.3
      SMALL COMPANIES (Russell 2000)             359.7       -1.1       29.0
      ALL COMPANIES (Russell 3000)               384.3       -1.3       25.9
      
      FUNDAMENTALS                     Latest   Week Ago     Year Ago
      90-DAY TREASURY BILL YIELD       5.25%       5.21%       5.61%
      30-YEAR TREASURY BOND YIELD      7.19%       6.95%       6.57%
      S&P 500 DIVIDEND YIELD           2.13%       2.10%       2.49%
      S&P 500 PRICE/EARNINGS RATIO     19.2        19.7        16.5
      
                                                % change (local currency)
      FOREIGN STOCKS                     Latest       Week     52-week
      LONDON (FINANCIAL TIMES 100)       3769.2       0.4       12.9
      TOKYO (NIKKEI INDEX)               22,104.8     1.0       50.8
      TORONTO (TSE COMPOSITE)            5094.6      -1.9       13.4
      
      TECHNICAL INDICATORS                      Latest   Week ago  Reading
      S&P 500 200-day moving average            622.5     619.6    Positive
      Stocks above 200-day moving average       63.0%     67.0%r   Neutral
      Speculative sentiment: Put/call ratio     0.59      0.53r    Negative
      Insider sentiment: Vickers sell/buy ratio 2.24      2.24     Neutral
      
      INDUSTRY GROUPS
                             % change                         % change
                            1-    12-  Strongest stock       1-    12- 
      ONE-MONTH LEADERS   month month in group              month month Price
      MANUFACTURED HOUSING 19.9 46.5  FLEETWOOD ENTERPRISES 19.9  47.9  30 7/8
      TOBACCO              15.9 41.5  PHILIP MORRIS         17.8  47.5 103 5/8
      SHOES                11.9 95.1  NIKE                  13.4 164.9 105 5/8
      LEISURE TIME         10.6 36.4  BALLY ENTERTAINMENT   19.6 195.9  28 1/4
      SPECIALTY RETAILERS  10.2 28.8  CIRCUIT CITY STORES   20.3  21.3  36 3/8
      
                             % change                       % change
                           1-    12-   Weakest stock       1-     12- 
      ONE-MONTH LAGGARDS   month month in group           month  month Price
      GOLD MINING          -10.5  9.4  ECHO BAY MINES     -13.2   26.9 11 1/2
      MACHINE TOOLS         -9.6 -7.1  CINCINNATI MILACRON-10.4   -8.7 23 5/8
      METALS                -8.7 19.6  ASARCO             -12.4    1.3 29 1/4
      STEEL                 -8.4 -7.1  INLAND STEEL       -11.5  -30.2 20 1/4
                                       INDUSTRIES
      ALUMINUM              -7.2 19.3  ALCOA               -9.1   33.8 59 7/8
      
      MORNINGSTAR INC.
      
      MUTUAL FUNDS
      
      LEADERS                            LAGGARDS
      Four-week total return    %        Four-week total return        %
      GAMERICA CAPITAL A       9.7       RYDEX PRECIOUS METALS       -8.6
      PATHFINDER               9.5       BENHAM GLOBAL GOLD          -7.9
      PERKINS OPPORTUNITY      8.7       INVESCO STRATEGIC GOLD      -7.5
      
      52-week total return      %        52-week total return          %
      TURNER SMALL CAP EQUITY 89.9       STEADMAN TECHNOLOGY GROWTH  -13.9
      PBGH SELECT EQUITY      87.9       UNITED SERVICE CHINA REGION  -7.3
                                         OPPORT
      TCW/DW SMALL CAPITALI-  83.0       EV MARATHON GREATER INDIA    -6.9
      ZATION 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. stocks  Foreign stocks  Money market fund   Gold   Treasury bonds
       $12,803         $11,652         $10,536         $10,134    $10,057
       -0.24%          -0.48%          +0.11%          -1.45%     -1.32%
      
      All data on this page are as of market close Wednesday, June 12, 1996, unless 
      otherwise indicated. Industry groups include S&P 500 companies only; 
      performance and share prices are as of market close June 11. Mutual fund 
      returns are as of June 7. Relative portfolios are valued as of June 11. A more 
      detailed explanation of this page is available on request. r=revised
      
Before it's here, it's on the Bloomberg Terminal. LEARN MORE