COMMENTARY

Stocks bounced like ping-pong balls in the wake of Fed Chairman Greenspan's

remarks questioning whether the market was overvalued. But while both the Dow

and the S&P 500 index retreated for the week, the NASDAQ composite rose. The

reason: a strong performance by the high techs, especially Intel and Microsoft.

On a split basis, Microsoft was up 6 3/4 for the week, and Intel zoomed 7 1/2

on Dec. 11 when Merrill Lynch raised its 1997 per share earnings estimate from

$7 to $9 and its target price from $160 to $200.

      
                                                % change
      U.S. MARKETS                     Latest   Week    52-week
      Dow Jones Industrials            6403.4   -0.3     23.5
      NASDAQ Combined Composite        1309.1    0.9     23.3
      S&P MidCap 400                    253.3   -1.0     16.4
      S&P SmallCap 600                  144.0   -0.6     19.7
      S&P SuperComposite 1500           159.6   -0.6     19.3
      
                                                % change
      SECTORS                          Latest   Week    52-week
      Bloomberg Information Age         234.2   -0.6     18.3
      S&P Financials                     81.2   -1.0     30.0
      S&P Utilities                     196.6   -1.7      0.7
      PSE Technology                    252.7    0.2     21.1
      
                                               % change
      FOREIGN MARKETS                  Latest  Week    52-week
      London (FT-SE 100)               3982.5   -1.5      9.0
      Frankfurt (DAX)                  2841.1   -0.9     25.0
      Tokyo (NIKKEI 225)             20,568.4   -0.4      7.0
      Hong Kong (Hang Seng)          13,189.6   -1.8     34.1
      Toronto (TSE 300)                5781.7   -2.2     22.0
      Mexico City (IPC)                3241.8   -4.4     24.3
      
                                                Week    Year
      FUNDAMENTALS                     Latest   ago      ago
      S&P 500 Dividend Yield            1.95%   1.94%    2.21%
      S&P 500 P/E Ratio (Last 12 mos.)  20.8    20.8     17.6
      S&P 500 P/E Ratio (Next 12 mos.)* 16.1    16.2       NA
      First Call Earnings Revision*    -0.52%  -0.95%      NA
      
                                              Week
      TECHNICAL INDICATORS             Latest  ago       Reading
      S&P 500 200-day average          673.5   671.2     Positive
      Stocks above 200-day average      68.0%   68.0%    Neutral
      Options: Put/call ratio           0.53    0.54     Negative
      Insiders: Vickers Sell/buy ratio  1.91    1.85     Positive
      
      Data: Bloomberg Financial Markets; *First Call Corp.
      
                                      Latest    Week    Year
      KEY RATES                        week%    ago%    ago%
      MONEY MARKET FUNDS                4.95    4.95      NA
      90-DAY TREASURY BILLS             4.96    5.03    5.45
      6-MONTH BANK CDS                  5.22    5.20    5.43
      1-YEAR TREASURY NOTES             5.49    5.41    5.35
      10-YEAR TREASURY BONDS            6.38    6.11    5.71
      30-YEAR TREASURY BONDS            6.61    6.40    6.04
      LONG-TERM AA INDUSTRIALS          7.17    6.94    6.67
      LONG-TERM BBB INDUSTRIALS         7.64    7.36    7.05
      LONG-TERM AA TELEPHONES           7.32    7.09    6.96
      
      BEST-PERFORMING            Last                           Last 12
      GROUPS                    month%                          months%
      Tobacco                    17.2    Oil & Gas Drilling      106.9
      Computer Systems           13.5    Shoes                    76.4
      Instrumentation            13.2    Computer Software        47.5
      Machine Tools              12.4    Money Center Banks       41.1
      Broadcasting               11.5    Personal Loans           37.8
      
      WORST-PERFORMING           Last                           Last 12
      GROUPS                    month%                          months%
      Manufactured Housing      -17.6    Trucking                -29.3
      Genl. Merchandise Chains   -6.2    Broadcasting            -17.8
      Specialty Retailers        -5.8    Machine Tools           -13.5
      Soft Drinks                -5.5    Steel                    -8.9
      Hardware & Tools           -4.9    Long-Dist. Telecomm.     -8.8
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most
      significant buying on                         1-month
      price weakness                      Price     change
      Ascend Communications              71 3/4     -1 5/8
      General Electric                   98 1/8     -3 7/8
      Apple Computer                     24 1/2     -1 1/2
      Bell Atlantic                      60 3/8     -  3/4
      BellSouth                          38 3/4     -1 7/8
      
      Decline ahead?  Stocks with most
      significant selling on price                  1-month
      strength                           Price      change
      Coca-Cola                          49 5/8     -2 3/8
      Microsoft                          81 7/8     10 1/16
      Dell Computer                      59 5/8     14 7/16
      Cisco Systems                      67 3/8        7/8
      Informix                           24 3/8      3 3/4
      Intel                             129 1/8      5 1/4
      Oracle                             49 3/8      3 3/4
      
      BLOOMBERG MUNI YIELD EQUIVALENTS
      Taxable equivalent yields on AAA-rated, tax-exempt municipal bonds, assuming a 
      31% federal tax rate.
      
                                10-yr. bond     30-yr. bond
                               Latest  Last    Latest  Last
                               week    week    week    week
      GENERAL OBLIGATIONS      4.81%   4.67%   5.45%   5.31%
      PERCENT OF TREASURIES   75.45   76.58   82.36   83.10
      TAXABLE EQUIVALENT       6.97    6.77    7.90    7.70
      INSURED REVENUE BONDS    4.95    4.79    5.71    5.55
      PERCENT OF TREASURIES   77.67   78.55   86.27   86.85
      TAXABLE EQUIVALENT       7.17    6.94    8.28    8.04
      CHARTS BY ALBERTO MENA/BW
      
      EQUITY FUNDS
      
      Leaders                               Laggards
      Four-week total return          %     Four-week total return         %
      United Svcs. China Region     24.5    Pioneer India A              -9.5
      Merrill Technology A          13.0    Bull & Bear Gold Investors   -9.2
      Ivy China Region A            10.7    United Svcs. Gold Shares     -9.1
      Princ. Preserv. PSE Tech 100  10.2    Midas                        -8.8
      Fidelity Sel. Electronics      9.6    Fidelity Japan Small Co.     -8.4
      
      Leaders                               Laggards
      52-week total return             %    52-week total return            %
      State St. Res. Glob. Res. A   79.4    Steadman Technology Grth.    -32.3
      Interactive Inv. Tech Val.    68.5    Matthews Korea               -29.5
      Portico MicroCap Instl.       60.1    United Svcs. Gold Shares     -25.0
      PBHG Technology & Commun.     56.4    Pioneer India B              -22.3
      Fidelity Sel. Energy Serv.    51.3    Apex Mid Cap Growth          -20.9
      
      EQUITY FUND OBJECTIVES
      Leaders                               Laggards
      Four-week total return           %    Four-week total return          %
      Specialty-Technology           7.3    Specialty-Precious Metals     -4.4
      Specialty-Real Estate          4.0    Specialty-Utilities            0.7
      Specialty-Financial            3.3    Europe                         0.8
      Small Company                  2.9    Diversified Emerging Market    0.9
      Growth and Income              2.8    Foreign                        0.9
      
      Leaders                               Laggards
      52-week total return             %    52-week total return             %
      Specialty-Natural Resources   32.8    Specialty-Precious Metals      7.2
      Specialty-Real Estate         28.6    Pacific                        8.4
      Specialty-Financial           27.9    Specialty-Communication        9.4
      Europe                        22.4    Specialty-Utilities           12.2
      Growth and Income             21.9    Diversified Emerging Market   12.5
      
      All data are as of market close Wednesday, Dec. 11, 1996, unless otherwise 
      indicated. Industry groups include S&P 500 companies only.  Fundamentals, 
      technical indicators, Bloomberg money flow analysis, and mutual fund returns 
      are as of Dec. 10. For a more detailed explanation, write to us or E-mail 
      figures@businessweek.com  NA=Not available  **Vanguard Index 500 Fund
      
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