COMMENTARY

A spectacular start for the fourth quarter: The Dow Jones industrials closed

above the 5900 mark on Oct. 1 and Oct. 2. It's up 16% so far this year. The

broader Standard & Poor's 500-stock index also reached record levels. The stock

market is getting its strength from investor optimism about corporate earnings,

a modest drop in long-term interest rates, and heavy inflows into equity mutual

funds. Secondary stocks also turned in strong performances, but have not yet

broken records set in the spring.

MARKET ANALYSIS

      
                                                                % change
      U.S. STOCKS                                Latest      Week      52-week
      DOW JONES INDUSTRIALS                      5934.0      1.0       25.2
      MIDSIZE COMPANIES (S&P MidCap Index)       243.3       1.1       16.1
      SMALL COMPANIES (Russell 2000)             348.2       1.3       15.7
      ALL COMPANIES (Russell 3000)               395.2       1.3       18.7
      
      FUNDAMENTALS                               Latest    Week Ago    Year Ago
      90-DAY TREASURY BILL YIELD                 5.02%       5.04%       5.45%
      30-YEAR TREASURY BOND YIELD                6.83%       6.92%       6.43%
      S&P 500 DIVIDEND YIELD                     2.09%       2.11%       2.34%
      S&P 500 PRICE/EARNINGS RATIO               19.9        19.7        16.8
      
                                                    % change (local currency)
      FOREIGN STOCKS                        Latest      Week      52-week
      LONDON (Financial Times 100)          4015.1      2.0       13.3
      TOKYO (Nikkei Index)                  21,498.6    0.7       18.5
      TORONTO (TSE Composite)               5388.0      1.2       19.9
      
      TECHNICAL INDICATORS                       Latest   Week ago   Reading
      S&P 500 200-day moving average             650.7    648.9     Positive
      Stocks above 200-day moving average        59.0%    57.0%r    Neutral
      Speculative sentiment: Put/call ratio      0.53     0.51r     Negative
      Insider sentiment: Vickers sell/buy ratio  1.52     1.27      Positive
      
      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       17.8  101.6  ROWAN               22.8  151.7 18 7/8
       DRILLING
      2.MEDICAL PRODUCTS
       AND SUPPLIES       15.2  19.7   BOSTON SCIENTIFIC   24.8  31.6  57 1/4
      3.SEMICONDUCTORS    12.4 -7.5    MICRON TECHNOLOGY   28.0 -63.3  29 1/8
      4.DRUG CHAINS       11.9  28.9   RITE AID            14.1  29.9  36 3/8
      5.MANUFACTURED                   FLEETWOOD
       HOUSING            11.7  56.0    ENTERPRISES        11.7  56.0  31
      
                             % change                         % change
                           1-    12-     Weakest stock       1-     12-
      ONE-MONTH LAGGARDS   month month   in group           month  month Price
      1.SPECIALTY APPAREL -8.5   37.9    GAP               -18.6   58.3  28 1/2
       RETAILERS
      2.GOLD MINING       -5.8  -3.4     ECHO BAY MINES    -10.7  -18.4  8 7/8
      3.DEFENSE
       ELECTRONICS        -5.3   34.1    EG&G              -5.3   -9.0   17 3/4
      4.BROADCASTING      -5.1  -19.8    US WEST MEDIA     -7.6    NA    16 3/4
                                          GROUP
      5.ENGINEERING AND
       CONSTRUCTION       -5.0   6.5     FLUOR             -7.0    6.3   59 1/2
      
      MUTUAL FUNDS
      
      LEADERS                            LAGGARDS
      Four-week total return    %        Four-week total return          %
      1.ROBERTSON STEPHENS
       INFORMATION AGE        18.6       PIONEER INDIA B              -10.3
      2.MERRILL LYNCH
       TECHNOLOGY B           16.8       CAPPIELLO-RUSHMORE GOLD      -8.8
      3.PIMCo ADVISORS
       INNOVATION A           14.9       EV MARATHON GREATER INDIA    -8.1
      
      52-week total return     %        52-week total return             %
      1.LANDMARK SMALL CAP
       EQUITY A              72.4       STEADMAN TECHNOLOGY GROWTH    -44.9
      2.GT GLOBAL CONSUMER
       PRODS. & SVCS.        54.5       MATTHEWS KOREA                -24.5
      3.IDS PRECIOUS
       METALS A              53.0       UNITED SERVICES GOLD SHARES   -23.9
      
      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
         $12,118       $11,434          $10,519       $10,195      $9,728
          +0.51%        +1.54%           +0.11%        +1.58%      -1.10%
      
      DRI/McGRAW-HILL
      
      All data on this page are as of market close Wednesday, Oct. 2, 1996, unless 
      otherwise indicated. Industry groups include S&P 500 companies only; 
      performance and share prices are as of market close Oct. 1. Mutual fund returns 
      are as of Sept. 27. Relative portfolios are valued as of Oct. 1. A more 
      detailed explanation of this page is available on request. r=revised NA=Not 
      available
      
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