COMMENTARY

The Dow industrials were poised to hurdle the 6100 barrier when profit-taking

set in and stocks backed off. Still, the momentum of this market has put the

bears--who have been forecasting a big correction--into a state of shock.

Earnings surprises, especially on the upside, were responsible for some big

moves. Better-than-expected earnings from Netscape Communications, for example,

sent its stock up more than 5 points, or 12%, on Oct. 23. The next kick up

could come from lower interest rates.

MARKET ANALYSIS

      
                                                                % change
      U.S. STOCKS                                Latest      Week      52-week
      DOW JONES INDUSTRIALS                      6036.5       0.3       27.0
      MIDSIZE COMPANIES (S&P MidCap Index)       243.6       -0.4       15.8
      SMALL COMPANIES (Russell 2000)             342.9       -1.6       15.1
      ALL COMPANIES (Russell 3000)               399.5       -0.1       19.8
      
      FUNDAMENTALS                               Latest    Week Ago    Year Ago
      90-DAY TREASURY BILL YIELD                 5.11%       5.12%       5.38%
      30-YEAR TREASURY BOND YIELD                6.82%       6.86%       6.32%
      S&P 500 DIVIDEND YIELD                     2.04%       2.05%       2.35%
      S&P 500 PRICE/EARNINGS RATIO               19.9        20.3        16.3
      
                                                    % change (local currency)
      FOREIGN STOCKS                        Latest      Week      52-week
      LONDON (Financial Times 100)          4028.4       0.1       13.9
      TOKYO (Nikkei Index)                  21082.2     -1.5       17.3
      TORONTO (TSE Composite)               5576.2       1.7       28.7
      
      TECHNICAL INDICATORS                       Latest   Week ago   Reading
      S&P 500 200-day moving average             657.4    655.0      Positive
      Stocks above 200-day moving average        59.0%    61.0%      Neutral
      Speculative sentiment: Put/call ratio      0.57     0.55r      Negative
      Insider sentiment: Vickers sell/buy ratio  1.69     1.56       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       28.8  158.6  ROWAN                 30.9  225.0 22 3/4
       DRILLING
      2.MANUFACTURED      16.9  68.3   FLEETWOOD ENTERPRISES 16.9  68.3  34 1/2
       HOUSING
      3.OIL-WELL          12.7  50.1   BAKER HUGHES          19.1  73.9  35 7/8
       EQUIPMENT AND SERVICES
      4.SAVINGS AND LOANS 10.3  12.8   AHMANSON (H.F.)       12.9  10.7  29 5/8
      5.DRUGS             8.0   29.0   PFIZER                12.5  38.3  84 3/8
      
                             % change                         % change
                           1-    12-     Weakest stock       1-     12-
      ONE-MONTH LAGGARDS   month month   in group           month  month Price
      1.DEFENSE           -14.6  24.8    EG&G              -14.6  -6.7   17 1/2
       ELECTRONICS
      2.HMOS              -12.8  2.7     UNITED HEALTHCARE -13.5  -25.9  36 3/4
      3.BROADCASTING      -12.3 -25.0    TELE-             -19.8  -30.3  12 5/8
                                          COMMUNICATIONS
      4.SPECIALTY PRINTING -8.6 -8.9     DELUXE            -13.5   2.7   32 7/8
      5.HOSPITAL           -6.3  4.9     COLUMBIA HCA      -6.5    3.8   35 5/8
       MANAGEMENT                         HEALTHCARE
      
      MUTUAL FUNDS
      
      LEADERS                            LAGGARDS
      Four-week total return    %        Four-week total return          %
      1.FIDELITY SELECT       14.1       PIONEER INDIA B               -9.4
       ENERGY SERVICE
      2.INSIGHTFUL INVESTOR   13.8       EV MARATHON GREATER INDIA     -8.5
       GROWTH
      3.STATE STREET RESEARCH 10.6       LEXINGTON STRATEGIC           -7.6
       GLOBAL RES. C                      INVESTMENTS
      
      52-week total return     %        52-week total return             %
      1.DREYFUS AGGRESSIVE   80.5       STEADMAN TECHNOLOGY GROWTH    -38.7
       GROWTH
      2.LANDMARK SMALL CAP   75.2       MATTHEWS KOREA                -21.4
       EQUITY A
      3.STATE STREET         73.5       PIONEER INDIA B               -20.6
       RESEARCH GLOBAL RES. C
      
      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
         $12,400       $11,921           $10,516      $10,085      $9,938
          +0.57%        +0.71%            +0.11%       +0.04%      +0.68%
      
      DRI/McGRAW-HILL
      
      All data on this page are as of market close Wednesday, Oct. 23, 1996, unless 
      otherwise indicated. Industry groups include S&P 500 companies only; 
      performance and share prices are as of market close Oct. 22. Mutual fund 
      returns are as of Oct. 18. Relative portfolios are valued as of Oct. 22. A more 
      detailed explanation of this page is available on request. r=revised NA=Not 
      available
      
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