COMMENTARY

A mixed week in the financial markets. On Mar. 25, the Federal Reserve raised

the overnight bank lending rate one-quarter of a point, to 5.5%, and

fixed-income investors were worried that other hikes may be in the offing.

Bonds fell on the move. But the stock market's reaction was mild. The Dow Jones

industrial average fell 29 points, to 6876, after the decision was announced.

The Dow had climbed 100 points on Mar. 24, as investors speculated that any

rate hike would be limited.

                                                        % change
      U.S. MARKETS                           Latest    Week    Year
      Dow Jones Industrials                  6880.7     0.0     21.3
      NASDAQ Combined Composite              1269.1     1.6     16.6
      S&P MidCap 400                          261.4     1.0     14.2
      S&P SmallCap 600                        141.2     0.1     12.3
      S&P SuperComposite 1500                 169.2     0.6     20.0
      
                                                          % change
      SECTORS                                 Latest   Week    Year
      Bloomberg Information Age               237.0     3.2     20.4
      S&P Financials                           90.8     0.0     35.3
      S&P Utilities                           193.4     0.3     -0.5
      PSE Technology                          251.5     4.3     26.4
      
                                                         % change
      FOREIGN MARKETS                        Latest    Week    Year
      London (FT-SE 100)                     4301.5    -0.7     17.5
      Frankfurt (DAX)                        3418.1     3.1     36.8
      Tokyo (NIKKEI 225)                   18,472.5    -0.1    -12.1
      Hong Kong (Hang Seng)                12,776.4     1.0     16.3
      Toronto (TSE 300)                      6122.8     0.6     22.8
      Mexico City (IPC)                      3842.9    -0.6     24.2
      
                                                        Week    Year
      FUNDAMENTALS                            Latest    ago      ago
      S&P 500 Dividend Yield                   1.86%   1.86%    2.15%
      S&P 500 P/E Ratio (Last 12 mos.)         20.7    20.8     19.2
      S&P 500 P/E Ratio (Next 12 mos.)*        16.6    16.6       NA
      First Call Earnings Revision*           -0.99%  -1.08%      NA
      
                                                      Week
      TECHNICAL INDICATORS                    Latest   ago      Reading
      S&P 500 200-day average                  717.9  715.1     Positive
      Stocks above 200-day average             64.0%   67.0%    Neutral
      Options: Put/call ratio                  0.69    0.67     Neutral
      Insiders: Vickers Sell/buy ratio         1.94    1.79     Positive
      
                                               Latest  Week    Year
      KEY RATES                                week%   ago%    ago%
      MONEY MARKET FUNDS                       4.96    4.96    4.85
      90-DAY TREASURY BILLS                    5.34    5.29    5.13
      6-MONTH BANK CDS                         5.07    5.04    4.81
      1-YEAR TREASURY BILLS                    5.87    5.79    5.38
      10-YEAR TREASURY NOTES                   6.78    6.74    6.25
      30-YEAR TREASURY BONDS                   6.98    6.99    6.59
      LONG-TERM AA INDUSTRIALS                 7.47    7.47    7.16
      LONG-TERM BBB INDUSTRIALS                7.81    7.81    7.57
      LONG-TERM AA TELEPHONES                  7.67    7.67    7.42
      
      BEST-PERFORMING          Last                           Last 12
      GROUPS                  month%                           months%
      Oil & Gas Drilling       16.8    Semiconductors           83.5
      Trucking                 13.7    Oil & Gas Drilling       75.6
      Oil-Well Equip. & Svcs.  10.4    Savings & Loans          59.0
      Newspaper Publishing      8.0    Shoes                    53.4
      Restaurants               7.8    Invest. Banking/Brkrge.  42.6
      
      WORST-PERFORMING         Last                            Last 12
      GROUPS                  month%                           months%
      Photography/Imaging     -14.0    Machine Tools           -28.3
      Engineering &  Constr.  -12.5    Gold Mining             -26.0
      Shoes                   -11.1    Engineering &  Constr.  -22.0
      Tobacco                  -9.7    Broadcasting            -14.2
      Hospital Management      -8.7    Steel                   -12.9
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                       1-month
      significant buying on price weakness        Price       change
      IBM                                        135 7/8     -11
      General Electric                           105          -1 1/4
      Texas Instruments                           77 1/4      -3 3/8
      Compaq Computer                             77          -4 3/4
      Citicorp                                   115 3/4      -6 1/8
      Procter & Gamble                           120 1/4      -1 1/2
      
      Decline ahead?  Stocks with most                        1-month
      significant selling on price strength       Price       change
      Boeing                                     105 5/8       1 1/2
      Netscape Communications                     32 3/4       1 3/4
      Altera                                      47 1/2       1 1/2
      PacifiCare Health Systems                   85           2 1/8
      McDonald's                                  47 1/2       2 5/8
      L.M. Ericsson-ADR                           33  3/4      1 1/2
      
      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      4.99%   4.94%   5.59%   5.54%
      PERCENT OF TREASURIES   73.68   73.33   80.13   79.34
      TAXABLE EQUIVALENT       7.23    7.16    8.10    8.03
      INSURED REVENUE BONDS    5.14    5.07    5.86    5.79
      PERCENT OF TREASURIES   75.89   75.26   84.00   82.92
      TAXABLE EQUIVALENT       7.45    7.35    8.49    8.39
      
      EQUITY FUNDS
      Leaders                                Laggards
      Four-week total return           %     Four-week total return         %
      American Heritage              11.5    Steadman American Ind.       -16.3
      EV Trad. Greater India          8.7    Calvert Strat. Growth A      -15.6
      Pioneer India B                 8.0    IAI Emerging Growth          -14.7
      Prudent Bear                    5.5    Am.Cent.-20th C. Giftrust    -14.5
      Fidelity Sel. Energy Serv.      5.4    Steadman Associated          -14.5
      
      Leaders                                Laggards
      52-week total return              %    52-week total return             %
      Vontobel Eastern Europ. Eq.    55.4    Steadman Technology Grth.    -41.1
      Morgan Stan. Inst. Lat. Am. A  50.8    United Svcs. Gold Shares     -40.5
      State St. Res. Glob. Res. A    50.1    Matthews Korea               -36.9
      Morgan Stanley Latin Amer. A   49.4    DFA Japanese Small Co.       -35.0
      Delaware Pooled Real Estate    48.5    Fidelity Japan Small Co.     -33.2
      
      EQUITY FUND CATEGORIES
      Leaders                                Laggards
      Four-week total return            %    Four-week total return          %
      Real Estate                     2.3    Technology                    -9.2
      Unaligned                      -0.6    Small-cap Growth              -7.7
      Natural Resources              -0.8    Precious Metals               -7.2
      Europe                         -1.3    Mid-cap Growth                -5.5
      Utilities                      -2.0    Communications                -5.5
      
      Leaders                                Laggards
      52-week total return              %    52-week total return             %
      Real Estate                    35.7    Japan                        -16.8
      Financial                      32.7    Precious Metals              -15.4
      Latin America                  32.3    Diversified Pacific/Asia      -3.2
      Europe                         19.8    Pacific/Asia ex-Japan          0.1
      Large-cap Blend                19.7    Small-cap Growth               0.2
      
      All data are as of market close Wednesday, Mar. 26, 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 Mar. 25. 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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