COMMENTARY

The stock market continued its wild roller-coaster ride. Concerns over

valuation kept volatility high, with the Dow Jones industrial average

plummeting as much as 177 points during the day on Aug. 22, only to regain 170

points before the close. A rise in consumer confidence and existing-home sales

fanned inflation fears and kept the bond market on edge, with the 30-year

Treasury closing at 6.65%. On Aug. 27, the Dow took an 84-point tumble, then

closed up 5 to clock in at 7787. The index fell 2.9% for the week ending Aug.

27.

      
                                           % change
      U.S. MARKETS                Latest  Week    Year
      
      Dow Jones Industrials       7787.3  -2.9    36.3
      NASDAQ Combined Composite   1595.5  -2.0    38.3
      S&P MidCap 400               314.2  -0.1    34.0
      S&P SmallCap 600             174.4   0.1    30.7
      S&P SuperComposite 1500      196.8  -2.4    36.8
      
                                              % change
      SECTORS                        Latest  Week    Year
      
      Bloomberg Information Age       292.5   -3.8    47.2
      S&P Financials                  104.6   -3.4    50.7
      S&P Utilities                   198.8   -0.2     3.5
      PSE Technology                  329.5   -2.7    60.3
      
                                         % change
      FOREIGN MARKETS          Latest   Week    Year
      
      London (FT-SE 100)        4906.9  -1.0    25.2
      Frankfurt (DAX)           3995.7  -5.4    55.9
      Tokyo (NIKKEI 225)      18,441.9  -4.2   -11.0
      Hong Kong (Hang Seng)   15,534.0  -2.0    36.5
      Toronto (TSE 300)         6674.2  -1.5    28.7
      Mexico City (IPC)         4912.9  -4.1    44.0
      
                                                        Week    Year
      FUNDAMENTALS                            Latest    ago      ago
      
      S&P 500 Dividend Yield                  1.65 %    1.62 %    2.16 %
      S&P 500 P/E Ratio (Last 12 mos.)        23.0      23.3      19.0
      S&P 500 P/E Ratio (Next 12 mos.)*       18.3      18.6      NA
      First Call Earnings Revision*          -1.06 %   -1.20  %   NA
      
                                                    Week
      TECHNICAL INDICATORS           Latest         ago         Reading
      
      S&P 500 200-day average         818.5        813.5        Positive
      Stocks above 200-day average     80.0 %       80.0 %      Negative
      Options: Put/call ratio          0.52         0.59        Negative
      Insiders: Vickers Sell/buy ratio 3.51         3.20        Negative
      
      BEST-PERFORMING               Last                        Last 12
      GROUPS                       month%                       months%
      
      Transportation Services       8.7     Trucking              118.0
      Heavy-Duty Trucks             5.9     Semiconductors        110.2
      Furnishings & Appliances      5.7     Oil & Gas Drilling     85.0
      Automobiles                   5.3     Computer Systems       84.9
      Oil-Well Equip. & Svcs.       5.2     Savings & Loans        78.9
      
      WORST-PERFORMING            Last                            Last 12
      GROUPS                      month%                          months%
      
      Soft Drinks                 -12.9     Gold Mining           -20.9
      Cosmetics                   -12.1     Photography/Imaging   -10.4
      Shoes                       -11.1     Hospital Management    -8.5
      Restaurants                 -10.0     Engineering & Constr.  -7.5
      Instrumentation              -9.6     Electric Companies      0.5
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                1-month
      significant buying on price weakness    Price   change
      
      IBM                                   103 5/16    -1 11/16
      Telebras-ADR                          131 1/16   -18 11/16
      Motorola                               77 9/16    -  7/8
      J.P. Morgan                           110 3/8     -  3/8
      Telefonos de Mexico-ADR                51 7/8     -  1/16
      Sears Roebuck                          57 1/2     -5 1/4
      
      Decline ahead?  Stocks with most                  1-month
      significant selling on price strength   Price      change
      
      Intel                                  92 11/16    4  1/8
      Dell Computer                          82 13/16    3  15/16
      Oracle                                 38 5/8      2  19/64
      Sun Microsystems                       50 15/16    4  13/16
      Cisco Systems                          77 9/16        3/16
      Apple Computer                         22 1/4      5 13/16
      
                                      Latest  Week    Year
      KEY RATES                       week%   ago%    ago%
      
      MONEY MARKET FUNDS              5.15    5.16    4.93
      90-DAY TREASURY BILLS           5.26    5.24    5.20
      6-MONTH BANK CDS                5.17    5.17    5.02
      1-YEAR TREASURY BILLS           5.58    5.53    5.76
      10-YEAR TREASURY NOTES          6.37    6.24    6.78
      30-YEAR TREASURY BONDS          6.65    6.54    6.97
      LONG-TERM AA INDUSTRIALS        7.15    7.05    7.53
      LONG-TERM BBB INDUSTRIALS       7.53    7.41    7.90
      LONG-TERM AA TELEPHONES         7.46    7.33    7.73
      
      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     4.71%   4.65%   5.29%   5.23%
      PERCENT OF TREASURIES   73.93   74.52   79.56   79.64
      TAXABLE EQUIVALENT      6.83    6.74    7.67    7.58
      INSURED REVENUE BONDS   4.86    4.79    5.52    5.45
      PERCENT OF TREASURIES   76.28   76.77   83.02   82.99
      TAXABLE EQUIVALENT      7.04    6.94    8.00    7.90
      
      EQUITY FUNDS
      EQUITY FUND CATEGORIES
      Leaders                                 Laggards
      Four-week total return           %      Four-week total return          %
      
      United Svcs. China Reg. Op.    11.2     Merrill Emerging Tigers B     -16.4
      Fidelity Select Electronics     8.9     Fidelity Emerging Markets     -14.0
      Seligman Commun. & Info. A      8.4     Van Eck Asia Infrastr. A      -10.7
      Robertson Steph. Info. Age A    8.1     Tocqueville Intl. Value       -10.7
      State St. Res. Glob. Res. A     8.0     Phoenix-Aberdeen New Asia A    -9.3
      
      Leaders                                 Laggards
      52-week total return             %      52-week total return           %
      
      Lexington Troika Russia        139.5    Bull & Bear Gold Investors   -44.9
      ITT Hartford Cap. Apprec. A     89.6    Frontier Equity              -43.8
      Fidelity Select Electronics     88.2    United Svcs. Gold Shares     -42.3
      American Heritage               76.7    Midas                        -39.6
      Fidelity Sel. Energy Serv.      74.0    Morgan Stan. Instl. Gold A   -39.4
      
      Leaders                         Laggards
      Four-week total return   %      Four-week total return         %
      
      Technology              3.7     Japan                        -5.8
      Precious Metals         3.2     Diversified Pacific/Asia     -5.7
      Natural Resources       2.7     Pacific/Asia ex-Japan        -4.8
      Small-cap Value         2.6     Diversified Emerging Markets -4.1
      Small-cap Blend         2.4     Latin America                -3.7
      
      Leaders                       Laggards
      52-week total return    %     52-week total return       %
      
      Financial             46.0    Precious Metals          -28.4
      Technology            44.6    Japan                     -6.8
      Latin America         43.2    Diversified Pacific/Asia   2.6
      Mid-cap Value         35.6    Pacific/Asia ex-Japan      8.5
      Small-cap Value       35.3    International Hybrid      16.3
      
      All data are as of market close Wednesday, Aug. 27, 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 Aug. 26. 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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