COMMENTARY

Stocks were slammed this week, even though interest rates retreated in the wake of good numbers on the inflation front. For the week, the Dow industrials were down an unnerving 4.0%, about the same as the decline in the Nasdaq. The new worry on Wall Street: earnings. Pity the company whose earnings came in below what analysts were expecting. Disappointments in such large-cap stocks as Hewlett-Packard and United Healthcare sent their stocks plummeting more than 10%. The decline in high-tech stocks reporting poor earnings was a lot worse.

MARKET ANALYSIS

                                                          % change
      U.S. STOCKS                                Latest      Week      52-week
      DOW JONES INDUSTRIALS                      5376.9      -4.0       16.2
      MIDSIZE COMPANIES (S&P MidCap Index)        220.2      -3.8       10.7
      SMALL COMPANIES (Russell 2000)              318.2      -4.4       10.8
      ALL COMPANIES (Russell 3000)                359.6      -3.5       14.6
      FUNDAMENTALS                               Latest    Week Ago    Year Ago
      90-DAY TREASURY BILL YIELD                  5.26%       5.27%     5.55%
      30-YEAR TREASURY BOND YIELD                 7.03%       7.08%     6.51%
      S&P 500 DIVIDEND YIELD                      2.26%       2.19%     2.45%
      S&P 500 PRICE/EARNINGS RATIO                18.7        18.9      16.8
                                                    % change (local currency)
      FOREIGN STOCKS                        Latest      Week      52-week
      LONDON (FINANCIAL TIMES 100)          3658.2      -2.9        7.4
      TOKYO (NIKKEI INDEX)                21,412.9      -1.7       30.4
      TORONTO (TSE COMPOSITE)               4940.0      -3.1        7.2
      TECHNICAL INDICATORS                         Latest   Week ago   Reading
      S&P 500 200-day moving average                634.1    656.1r    Positive
      Stocks above 200-day moving average            39.0%   55.0%r    Positive
      Speculative sentiment: Put/call ratio          0.89    0.72r     Positive
      Insider sentiment: Vickers sell/buy ratio      2.26     2.57     Neutral
      DATA: BLOOMBERG FINANCIAL MARKETS
      
      INDUSTRY GROUPS
                             % change                         % change
                            1-    12-  Strongest stock       1-    12-
      ONE-MONTH LEADERS   month month    in group            month month Price
      1.OIL AND GAS
       DRILLING           16.1   73.6  1.ROWAN COMPANIES     19.6  127.1  16 3/4
      2.OIL EXPLORATION                2.BURLINGTON
       AND PRODUCTION      9.5   15.1     RESOURCES          11.9   16.7  44 5/8
      3.NATURAL GAS        4.9   29.9  3.COLUMBIA GAS        12.7   60.4  52 1/8
                                          SYSTEM
      4.OIL WELL EQUIPMENT
       AND SERVICES        4.8   33.6  4.BAKER HUGHES        10.0   54.7  32 7/8
      5.ELECTRIC COMPANIES 2.2    4.9  5.TEXAS UTILITIES      6.9   25.7  42 3/4
                             % change                         % change
                           1-    12-     Weakest stock       1-     12-
      ONE-MONTH LAGGARDS   month month   in group           month  month Price
      1.TRUCKING          -31.3  -42.2   1.CALIBER SYSTEM   -41.0  -50.9  21 3/8
      2.HMOs              -22.5   -3.1   2.UNITED
                                            HEALTHCARE      -38.5  -30.2  32 1/8
      3.MACHINE TOOLS     -22.2  -37.8   3.GIDDINGS
                                            & LEWIS         -32.1  -38.6  11 1/8
      4.TOYS              -19.1    3.6   4.MATTEL           -21.0    4.4  22 1/8
      5.BROADCASTING      -16.3  -16.8   5.TELE-
                                            COMMUNICATIONS  -19.0  -20.8  14 3/8
      
      MUTUAL FUNDS
      LEADERS                            LAGGARDS
      Four-week total return    %        Four-week total return          %
      FIDELITY SELECT
       NATURAL GAS             9.2       PREMIER STRATEGIC GROWTH A    -22.4
      FIDELITY SELECT
       ENERGY SERVICE          7.8       JUNDT U.S. EMERGING GROWTH C  -19.3
      EXCELSIOR LONG-TERM 
      SUPPLY OF ENERGY         6.7       DEAN WITTER HEALTH SCIENCES   -17.7
      52-week total return     %         52-week total return             %
      LANDMARK SMALL CAP
       EQUITY A               77.2       STEADMAN TECHNOLOGY GROWTH    -35.9
      MONITREND GOLD          48.4       STEADMAN AMERICAN INDUSTRY    -29.5
      FREMONT U.S. MICRO-CAP  48.3       SELIGMAN COMMUNICATIONS
                                          & INFORM. D.                 -24.2
      MORNINGSTAR INC.
      
      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
         $11,599       $10,945           $10,530      $10,148     $10,119
         -4.03%         -1.09%            +0.11%       +0.72%      +1.49%
      DRI/McGRAW-HILL
      All data on this page are as of market close Wednesday, July 10, 1996, unless
      otherwise indicated. Industry groups include S&P 500 companies only; performance
      and share prices are as of market close July 9. Mutual fund returns are
      as of July 5. Relative portfolios are valued as of July 9. A more detailed
      explanation of this page is available on request. r=revised
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