COMMENTARY

Bond bulls stampeded on Sept. 16 when the August consumer price index weighed

in with lower-than-expected inflation. The 30-year U.S. Treasury bond staged

the year's biggest one-day gain, cutting the yield by 0.16 percentage points.

The bond rally carried over to blue-chip stocks, which have been struggling of

late. All told, the Dow Jones industrials were up 2.2% for the week, and

small-caps and mid-caps continued to make gains, too. Lower rates gave an extra

boost to financial stocks. The S&P Financials index climbed over 4%.

STOCKS

      
                                                     % change
      U.S. MARKETS                  Latest        Week     Year
      Dow Jones Industrials         7886.4        2.2      33.9
      NASDAQ Combined Composite     1666.5        1.7      38.5
      S&P MidCap 400                 330.4        2.4      38.1
      S&P SmallCap 600               184.5        1.8      35.7
      S&P SuperComposite 1500        203.7        2.5      38.0
      
                                                 % change
      SECTORS                      Latest     Week     Year
      
      Bloomberg Information Age     296.8      1.4     41.7
      S&P Financials                111.4      4.1     56.5
      S&P Utilities                 206.0      2.0      8.2
      PSE Technology                333.8      1.7     52.6
      
                                                   % change
      FOREIGN MARKETS              Latest       Week      Year
      
      London (FT-SE 100)           5013.1        2.2       26.2
      Frankfurt (DAX)              4010.5       -1.0       52.6
      Tokyo (NIKKEI 225)         17,683.3       -5.5      -17.0
      Hong Kong (Hang Seng)      14,411.2       -2.7       24.0
      Toronto (TSE 300)            6898.1        1.9       30.9
      Mexico City (IPC)            5009.6        3.9       49.4
      
                                                         Week      Year
      FUNDAMENTALS                         Latest        ago        ago
      
      S&P 500 Dividend Yield                1.60 %       1.62 %      2.12 %
      S&P 500 P/E Ratio (Last 12 mos.)      23.9         23.6        19.5
      S&P 500 P/E Ratio (Next 12 mos.)*     18.9         18.6        NA
      First Call Earnings Revision*        -0.98  %     -0.44%       NA
      
                                                        Week
      TECHNICAL INDICATORS                  Latest       ago    Reading
      
      S&P 500 200-day average               831.1       826.9   Positive
      Stocks above 200-day average           84.0 %     84.0    Negative
      Options: Put/call ratio                0.58       0.47    Negative
      Insiders: Vickers Sell/buy ratio       3.43       3.47    Negative
      
      Data: Bloomberg Financial Markets; *First Call Corp.
      
      BEST-PERFORMING               Last                                Last 12
      GROUPS                       month%                               months%
      
      Trucking                       37.9        Trucking                176.1
      Oil & Gas Drilling             22.4        Savings & Loans         102.0
      Specialty Appar. Retailers     18.2        Oil & Gas Drilling       98.4
      Oil-Well Equip. & Svcs.        17.8        Invest. Banking/Brkrge.  94.4
      Invest. Banking/Brkrge.        13.4        Semiconductors           92.5
      
      WORST-PERFORMING              Last                              Last 12
      GROUPS                        month%                            months%
      
      Hospital Management           -12.0        Photography/Imaging   -23.3
      Shoes                          -9.8        Gold Mining           -23.1
      Metals                         -9.8        Hospital Management   -18.3
      Photography/Imaging            -9.0        Shoes                  -8.7
      Gold Mining                    -8.0        Engineering & Constr.  -8.4
      
                             BLOOMBERG MONEY FLOW ANALYSIS
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                         1-month
      significant buying on price weakness  Price              change
      
      IBM                                   99 5/8             -4 3/8
      Citicorp                             131 7/16            -3 3/4
      Micron Technology                     40 7/8             -3  5/8
      Motorola                              68 11/16           -11 1/4
      International Paper                   53 1/16            -1 1/16
      Telebras-ADR                         125 5/8             -2 3/8
      
      Decline ahead?  Stocks with most                          1-month
      significant selling on price strength   Price             change
      
      Intel                                 95 13/16             1 1/4
      Microsoft                            136 3/8               2 1/2
      Dell Computer                         92 3/8              10
      Oracle                                39 9/16              1 1/16
      WorldCom                              35 7/8               4 3/16
      Sun Microsystems                      50 13/16             3 1/16
      
      INTEREST RATES
      
                               Latest       Week     Year
      KEY RATES                 week%       ago%     ago%
      
      MONEY MARKET FUNDS         5.15       5.16      4.97
      90-DAY TREASURY BILLS      5.09       5.11      5.31
      6-MONTH BANK CDS           5.17       5.17      5.05
      1-YEAR TREASURY BILLS      5.43       5.61      5.83
      10-YEAR TREASURY NOTES     6.09       6.37      6.81
      30-YEAR TREASURY BONDS     6.39       6.66      7.00
      LONG-TERM AA INDUSTRIALS   6.90       7.12      7.57
      LONG-TERM BBB INDUSTRIALS  7.27       7.53      7.96
      LONG-TERM AA TELEPHONES    7.18       7.43      7.74
      
                        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        4.57       4.66%     5.15       5.24%
      PERCENT OF TREASURIES     74.99      73.24     80.57      78.72
      TAXABLE EQUIVALENT         6.62       6.75      7.46       7.59
      INSURED REVENUE BONDS      4.70       4.82      5.36       5.48
      PERCENT OF TREASURIES     77.12      75.76     83.84      82.32
      TAXABLE EQUIVALENT         6.81       6.99      7.77       7.94
      
      MUTUAL FUNDS
      
      EQUITY FUNDS
      
      Leaders                                 Laggards
      Four-week total return          %       Four-week total return           %
      
      Fidelity Sel. Energy Serv.    18.0      Merrill Emerging Tigers B      -13.0
      GT Glob. Natural Res. A       15.0      Fidelity Japan Small Co.       -12.5
      Bridgeway Ultra-Small Co.     14.8      Morgan Stan. Asian Grth. C     -11.8
      Perritt Capital Growth        14.4      Morg. Stan. Instl. Asia Eq. A  -10.8
      Phoenix Small Cap A           14.0      Blanchard Precious Metals      -10.5
      
      Leaders                                 Laggards
      52-week total return           %        52-week total return           %
      
      Lexington Troika Russia       142.2     Bull & Bear Gold Investors   -48.8
      Fidelity Sel. Energy Serv.     92.4     United Svcs. Gold Shares     -47.3
      Hartford Cap. Apprec. A        89.8     Midas                        -45.2
      Fidelity Select Electronics    79.6     Morgan Stan. Instl. Gold A   -44.8
      State St. Research Aurora A    75.1     Gabelli Gold                 -43.3
      
      EQUITY FUND CATEGORIES
      
      Leaders                                 Laggards
      Four-week total return    %             Four-week total return        %
      
      Small-cap Growth         8.4            Japan                        -8.3
      Small-cap Blend          7.4            Diversified Pacific/Asia     -7.6
      Small-cap Value          6.6            Pacific/Asia ex-Japan        -7.1
      Health                   6.4            Precious Metals              -6.1
      Natural Resources        5.4            Diversified Emerging Markets -3.2
      
      Leaders                                 Laggards
      52-week total return      %             52-week total return       %
      
      Financial               49.6            Precious Metals          -32.7
      Technology              40.0            Japan                    -10.5
      Small-cap Value         39.8            Diversified Pacific/Asia  -4.4
      Latin America           37.8            Pacific/Asia ex-Japan      0.5
      Mid-cap Value           37.2            International Hybrid      12.6
      
      All data are as of market close Wednesday, Sept. 17, 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 Sept. 16. 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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