COMMENTARY

The Dow Jones industrials moved up to a classier neighborhood--the 7000 block

of Wall Street. Stocks first cleared the millennial mark on Feb. 13, slipped

and came back for a 7067 high on Feb. 18. Stocks may run into some resistance

at these levels. The price-earnings ratio for the Standard & Poor's 500 is over

17, while the fair value for the current level of interest rates is 16. Even if

the bull takes a rest, it has been one heck of year so far. The Dow's up 8.9%;

the S&P, 9.7%. Mid-cap and small-cap stocks trail the big boys, as they've done

since last summer.

                                                     % change
      U.S. MARKETS                        Latest     Week    Year
      Dow Jones Industrials               7020.1      0.8     27.6
      NASDAQ Combined Composite           1365.6      0.5     25.2
      S&P MidCap 400                       269.0      1.2     18.3
      S&P SmallCap 600                     148.6      1.8     19.6
      S&P SuperComposite 1500              174.0      1.2     24.4
      
                                                       % change
      SECTORS                             Latest     Week    Year
      Bloomberg Information Age            249.7      0.1     21.5
      S&P Financials                        95.8      3.6     44.3
      S&P Utilities                        199.4     -0.3     -1.7
      PSE Technology                       269.2      2.5     27.2
      
                                                       % change
      FOREIGN MARKETS                     Latest     Week    Year
      London (FT-SE 100)                  4357.4      1.2     16.4
      Frankfurt (DAX)                     3233.8      0.5     34.8
      Tokyo (NIKKEI 225)                18,599.1      1.0    -10.2
      Hong Kong (Hang Seng)             13,106.3     -2.6     13.0
      Toronto (TSE 300)                   6248.9      1.4     24.3
      Mexico City (IPC)                   3875.0      1.9     30.2
      
                                                     Week     Year
      FUNDAMENTALS                          Latest    ago     ago
      S&P 500 Dividend Yield                1.78%    1.84%    2.13%
      S&P 500 P/E Ratio (Last 12 mos.)      21.4     20.6     18.8
      S&P 500 P/E Ratio (Next 12 mos.)*     17.2     16.7      NA
      First Call Earnings Revision*        -0.34%   -0.41%     NA
      
                                                    Week
      TECHNICAL INDICATORS                 Latest    ago      Reading
      S&P 500 200-day average              701.4    698.1     Positive
      Stocks above 200-day average          73.0%    70.0%    Negative
      Options: Put/call ratio               0.58     0.62     Negative
      Insiders: Vickers Sell/buy ratio      1.78     1.76     Positive
      
                                          Latest     Week     Year
      KEY RATES                            week%     ago%     ago%
      MONEY MARKET FUNDS                    4.96     4.95     4.97
      90-DAY TREASURY BILLS                 5.09     5.14     4.99
      6-MONTH BANK CDS                      5.01     5.01     4.61
      1-YEAR TREASURY BILLS                 5.44     5.52     5.09
      10-YEAR TREASURY NOTES                6.31     6.43     6.01
      30-YEAR TREASURY BONDS                6.58     6.71     6.39
      LONG-TERM AA INDUSTRIALS              6.99     7.15     6.81
      LONG-TERM BBB INDUSTRIALS             7.39     7.50     7.24
      LONG-TERM AA TELEPHONES               7.27     7.39     7.17
      
      BEST-PERFORMING                 Last                          Last 12
      GROUPS                         month%                         months%
      Savings & Loans                 27.1    Shoes                  111.7
      Invest. Banking/Brokrge.        24.8    Semiconductors          84.5
      Shoes                           16.0    Savings & Loans         70.2
      HMOs                            15.4    Oil & Gas Drilling      65.9
      Trucking                        15.3    Invest. Banking/Brkrge. 62.7
      
      WORST-PERFORMING                Last                            Last 12
      GROUPS                          month%                          months%
      Oil & Gas Drilling             -15.6    Gold Mining            -20.2
      Oil Exploration & Prod.        -15.4    Trucking               -19.0
      Oil-Well Equip. & Svcs.         -9.1    Broadcasting           -17.3
      Communications Equip.           -8.1    Machine Tools          -15.3
      Engineering & Constr.           -7.1    Steel                  -12.1
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                     1-month
      significant buying on price weakness    Price        change
      IBM                                     145  1/4    -21  3/4
      Motorola                                 62  1/8     -5  3/8
      Atmel                                    38  1/2     -5  3/8
      DuPont                                  109  1/2     -1  1/4
      Read-Rite                                27  1/8     -3  5/8
      Ascend Communications                    62  3/8    -16  3/8
      Intel                                   154  5/8      9  3/8
      Microsoft                                97  3/8      6  5/8
      Sun Microsystems                         33  3/4      1  3/8
      Amgen                                    59  1/2      5  1/2
      Worldcom                                 27           1
      Dell Computer                            74  5/8     11  1/16
      
      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     4.75%   4.81%   5.35%   5.41%
      PERCENT OF TREASURIES   75.36   75.03   81.39   80.67
      TAXABLE EQUIVALENT      6.88    6.97    7.75    7.84
      INSURED REVENUE BONDS   4.82    4.92    5.54    5.64
      PERCENT OF TREASURIES   76.47   76.75   84.28   84.09
      TAXABLE EQUIVALENT      6.99    7.13    8.03    8.17
      
      EQUITY FUNDS
      Leaders                          Laggards
      Four-week total return         %  Four-week total return         %
      American Heritage           21.3  Pin Oak Aggressive Stock    -12.2
      Lexington Troika Russia     20.5  GT Glob. Natural Res. A     -11.6
      Merrill Mid. East/Africa A  12.6  Fidelity Sel. Natural Gas   -11.2
      Fidelity Sel. Brokerage     11.9  Van Wagoner Emerging Gr.    -11.2
      SIFE Trust I                 9.5  TCW/DW Mid-Cap Equity        -8.7
      
      Leaders                           Laggards
      52-week total return           %  52-week total return           %
      Vontobel Eastern Europ. Eq. 86.7  United Svcs. Gold Shares    -40.9
      Interactive Inv. Tech Val.  67.5  Steadman Technology Grth.   -38.7
      State St. Res. Glob. Res. A 66.1  DFA Japanese Small Co.      -34.4
      Portico MicroCap Instl.     61.0  Fidelity Japan Small Co.    -31.6
      Warburg Small Co. Val. Com. 50.5  Matthews Korea              -30.2
      
      EQUITY FUND CATEGORIES
      Leaders                           Laggards
      Four-week total return%           Four-week total return%
      Financial                    7.6  Natural Resources            -3.6
      Latin America                7.3  Small-cap Growth             -3.0
      Health                       5.4  Technology                   -2.9
      Diversified Emerging Markets 3.8  Pacific ex-Japan             -2.3
      Precious Metals              3.7  Mid-cap Growth               -0.9
      
      Leaders                           Laggards
      52-week total return           %  52-week total return            %
      Financial                   37.6  Japan                       -18.0
      Real Estate                 32.8  Precious Metals             -12.0
      Latin America               32.0  Diversified Pacific          -2.9
      Large-cap Blend             24.4  Pacific ex-Japan              1.4
      Large-cap Growth            24.1  Communications                7.1
      
      All data are as of market close Wednesday, Feb. 18, 1997, 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 Feb. 17. For a more detailed explanation, write to us or E-mail 
      figures@businessweek.com  NA=Not available  r=revised  **Vanguard Index 500 Fund
      
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