COMMENTARY

Despite a mini-sell-off on Sept. 24, stocks posted gains for the week. The

tech-laden NASDAQ combined index hit new highs on Sept. 23 and small-cap stocks

showed strength. But the big news was in the bond market. Fixed-income

securities continued their rally in the wake of signs that inflation was

remaining dormant. The yield on the 30-year Treasury fell to 6.31%, only

slightly above the low for the year. Particularly encouraging: the strong

demand for the 5-year Treasury notes auctioned on Sept. 24. Mexican stocks

staged a huge rally.

STOCKS

                                                    % change
      U.S. MARKETS                     Latest      Week     Year
      
      Dow Jones Industrials            7906.7      0.3      34.6
      NASDAQ Combined Composite        1687.4      1.3      38.9
      S&P MidCap 400                    329.6     -0.2      37.4
      S&P SmallCap 600                  185.9      0.8      36.4
      S&P SuperComposite 1500           204.0      0.1      37.6
      
                                             % change
      SECTORS                     Latest    Week    Year
      
      Bloomberg Information Age    300.8     1.3    42.9
      S&P Financials               111.5     0.1    56.2
      S&P Utilities                206.1     0.0     8.4
      PSE Technology               339.1     1.6    52.2
      
                                               % change
      FOREIGN MARKETS              Latest    Week      Year
      
      London (FT-SE 100)           5077.2     1.3      29.8
      Frankfurt (DAX)              4102.4     2.3      55.5
      Tokyo (NIKKEI 225)         18,420.1     4.2     -13.0
      Hong Kong (Hang Seng)      14,205.4    -1.4      23.0
      Toronto (TSE 300)            7011.8     1.6      32.3
      Mexico City (IPC)            5210.6     4.0      58.2
      
                                                       Week     Year
      FUNDAMENTALS                           Latest     ago      ago
      
      S&P 500 Dividend Yield                  1.59 %   1.60 %    2.11 %
      S&P 500 P/E Ratio (Last 12 mos.)        24.1     23.9      19.7
      S&P 500 P/E Ratio (Next 12 mos.)*       19.0     18.9       NA
      First Call Earnings Revision*          -1.48 %  -0.98 %     NA
      
                                                         Week
      TECHNICAL INDICATORS                   Latest      ago       Reading
      
      S&P 500 200-day average                 836.2      831.1      Positive
      Stocks above 200-day average             83.0 %     84.0 %    Negative
      Options: Put/call ratio                  0.47       0.58      Negative
      Insiders: Vickers Sell/buy ratio         3.76       3.43      Negative
      
      BEST-PERFORMING              Last                             Last 12
      GROUPS                      month%                            months%
      
      Trucking                     31.2      Trucking                183.8
      Invest. Banking/Brkge.       16.8      Invest. Banking/Brkge.  106.2
      Oil & Gas Drilling           14.5      Savings & Loans         101.7
      Specialty Appar. Retailers   11.8      Oil & Gas Drilling       89.9
      Transportation Services      11.7      Semiconductors           85.4
      
      WORST-PERFORMING       Last                                 Last 12
      GROUPS                 month%                               months%
      
      Hospital Management     -9.6       Photography/Imaging      -20.4
      Metals                  -9.0       Gold Mining              -18.2
      Photography/Imaging     -7.8       Hospital Management      -15.3
      Specialty Printing      -6.7       Engineering & Constr.    -11.4
      Engineering & Constr.   -6.5       Shoes                     -5.8
      
      BLOOMBERG MONEY FLOW ANALYSIS
      
      Rebound ahead?  Stocks with most                         1-month
      significant buying on price weakness    Price            change
      
      IBM                                    103  1/4         -1 3/4
      Citicorp                               134  1/4          - 7/16
      Micron Technology                       37  1/16        -8 3/4
      International Paper                     53  3/4          - 7/8
      American Express                        80  3/4          - 5/16
      Motorola                                68  3/16       -11 3/8
      
      Decline ahead?  Stocks with most                      1-month
      significant selling on price strength   Price         change
      
      Intel                                   99 1/8        4 15/16
      Dell Computer                          100 3/8       15 11/16
      WorldCom                                35 11/16      3 11/16
      Applied Materials                      100 5/8          9/16
      Pfizer                                  62            6 3/8
      Quantum                                 42 7/16       5 3/4
      
      Data: Bloomberg Financial Markets; *First Call Corp.
      
                                    Latest     Week    Year
      KEY RATES                     week%      ago%    ago%
      
      MONEY MARKET FUNDS             5.14      5.15    4.98
      90-DAY TREASURY BILLS          4.92      5.10    5.17
      6-MONTH BANK CDS               5.17      5.17    5.07
      1-YEAR TREASURY BILLS          5.44      5.46    5.73
      10-YEAR TREASURY NOTES         6.03      6.10    6.77
      30-YEAR TREASURY BONDS         6.31      6.39    6.99
      LONG-TERM AA INDUSTRIALS       6.77      6.90    7.51
      LONG-TERM BBB INDUSTRIALS      7.16      7.27    7.92
      LONG-TERM AA TELEPHONES        7.10      7.18    7.70
      
      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      4.57     5.15    5.15
      PERCENT OF TREASURIES   75.73     74.99    81.56   80.57
      TAXABLE EQUIVALENT       6.62      6.62     7.46    7.46
      INSURED REVENUE BONDS    4.72      4.70     5.38    5.36
      PERCENT OF TREASURIES   78.21     77.12    85.20   83.84
      TAXABLE EQUIVALENT       6.84      6.81     7.80    7.77
      
      Leaders                                 Laggards
      Four-week total return          %       Four-week total return           %
      
      Cappiello-Rushmore Emrg. Gr.   16.5     Morgan Stan. Asian Grth. C     -16.9
      Perritt Capital Growth         14.9     Morg. Stan. Instl. Asia Eq. A  -16.2
      Fidelity Select Biotech.       14.8     Merrill Emerging Tigers B      -16.2
      BT Investment Small Cap        13.8     Guinness Flight Asia Sm. Cap   -16.0
      Bridgeway Ultra-Small Co.      13.7     Fidelity Southeast Asia        -15.7
      
      Leaders                                 Laggards
      52-week total return            %       52-week total return           %
      
      Lexington Troika Russia       149.5     Bull & Bear Gold Investors   -49.3
      Fidelity Sel. Energy Service   95.8     United Svcs. Gold Shares     -47.3
      Hartford Cap. Apprec. A        93.2     Midas                        -45.5
      American Heritage              81.4     Morgan Stan. Instl. Gold A   -44.3
      Fidelity Select Electronics    78.7     Lexington Strategic Invmnts. -42.4
      
      Leaders                          Laggards
      Four-week total return  %        Four-week total return          %
      
      Small-cap Growth       8.7       Pacific/Asia ex-Japan         -11.3
      Health                 8.3       Diversified Pacific/Asia       -8.5
      Small-cap Blend        7.4       Precious Metals                -6.7
      Financial              7.2       Japan                          -5.9
      Small-cap Value        6.6       Diversified Emerging Markets   -2.7
      
      Leaders                          Laggards
      52-week total return   %         52-week total return           %
      
      Financial             51.7       Precious Metals              -30.8
      Latin America         43.5       Japan                         -9.8
      Small-cap Value       41.2       Diversified Pacific/Asia      -6.0
      Technology            39.3       Pacific/Asia ex-Japan         -4.7
      Real Estate           38.5       International Hybrid          13.7
      
      All data are as of market close Wednesday, Sept. 24, 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. 23. 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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