COMMENTARY

Comments by the Federal Reserve chairman, Alan Greenspan, sent the financial

markets into a tailspin on Oct. 8. Greenspan said it would be "unrealistic"

to expect more of the same gains sustained by the markets in the past two

years. Stocks plummeted--ending a five-day rally. The Dow Jones industrial

average fell 83 points, from 8178 to 8095, on the news, and the S&P 500, which

climbed to a record high of 983 on Oct. 7, slipped nine points. Bonds and the

dollar were also hurt.

      
                                             % change
      U.S. MARKETS                Latest    Week    Year
      
      Dow Jones Industrials       8095.1    1.0     35.7
      NASDAQ Combined Composite   1741.8    3.0     40.4
      S&P MidCap 400               338.6    1.8     38.8
      S&P SmallCap 600             191.9    2.1     38.0
      S&P SuperComposite 1500      210.3    1.9     38.9
      
                                              % change
      SECTORS                      Latest    Week   Year
      
      Bloomberg Information Age    309.6     2.7    44.5
      S&P Financials               116.5     3.2    56.4
      S&P Utilities                205.3    -0.6     6.2
      PSE Technology               345.2     3.7    53.3
      
                                            % change
      FOREIGN MARKETS           Latest    Week     Year
      
      London (FT-SE 100)        5262.1    -1.0      30.4
      Frankfurt (DAX)           4347.2     3.6      61.5
      Tokyo (NIKKEI 225)      17,619.2    -1.2     -16.3
      Hong Kong (Hang Seng)   14,838.5    -1.4      22.6
      Toronto (TSE 300)         7193.5     2.1      32.3
      Mexico City (IPC)         5300.3    -1.0      58.7
      
                                                        Week     Year
      FUNDAMENTALS                           Latest     ago      ago
      
      S&P 500 Dividend Yield                  1.54 %    1.60 %   2.07 %
      S&P 500 P/E Ratio (Last 12 mos.)        24.5      24.2     20.1
      S&P 500 P/E Ratio (Next 12 mos.)*       19.5      18.8      NA
      First Call Earnings Surprise*           4.88 %    2.70 %    NA
      
                                                         Week
      TECHNICAL INDICATORS                    Latest     ago     Reading
      
      S&P 500 200-day average                 847.2     841.3    Positive
      Stocks above 200-day average             85.0 %    84.0 %  Negative
      Options: Put/call ratio                  0.45      0.47    Negative
      Insiders: Vickers Sell/buy ratio         3.60      3.62    Negative
      
      BEST-PERFORMING         Last                                Last 12
      GROUPS                  month%                              months%
      
      Trucking                 31.8         Trucking               214.4
      Oil & Gas Drilling       23.7         Invest. Banking/Brkrge. 99.7
      Invest. Banking/Brkrge.  19.8         Oil & Gas Drilling      91.3
      Gold Mining              14.8         Savings & Loans         87.2
      Long-Dist. Telecomm.     14.7         Semiconductors          85.3
      
      WORST-PERFORMING         Last                                Last 12
      GROUPS                  month%                               months%
      
      Steel                    -8.1         Photography/Imaging    -18.2
      Photography/Imaging      -7.6         Engineering & Constr.  -10.1
      Metal & Glass Containers -6.8         Hospital Management     -9.2
      Hospital Management      -6.7         Shoes                   -7.2
      Genl. Merchandise Chains -6.0         Gold Mining             -6.3
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                            1-month
      significant buying on price weakness    Price               change
      Micron Technology                        33 15/16            -10 3 /4
      Lockheed Martin                         107                   -3/8
      Atmel                                    35 1/4               -2 7/16
      Cigna                                   174 1/4              -17 1/16
      Motorola                                 72 3/16              -3 1/16
      Kulicke & Soffa                          47 1/8               -3
      
      Decline ahead?  Stocks with most                            1-month
      significant selling on price strength   Price               change
      
      WorldCom                                 38 1/16              6 3/8
      Dell Computer                            99 7/8              12 7/8
      3Com                                     51 1/16              2 3/8
      Cisco Systems                            78 1/2                 11/16
      Pfizer                                   61 3/4               4 11/16
      Ciena                                    55 1/2               6 1/4
      
      Data: Bloomberg Financial Markets; *First Call Corp.
      
                                Latest   Week   Year
      KEY RATES                  week%   ago%   ago%
      
      MONEY MARKET FUNDS         5.14    5.14   4.98
      90-DAY TREASURY BILLS      5.08    5.10   5.12
      6-MONTH BANK CDS           5.18    5.19   5.04
      1-YEAR TREASURY BILLS      5.42    5.44   5.53
      10-YEAR TREASURY NOTES     6.08    6.04   6.53
      30-YEAR TREASURY BONDS     6.36    6.33   6.79
      LONG-TERM AA INDUSTRIALS   6.85    6.78   7.32
      LONG-TERM BBB INDUSTRIALS  7.21    7.17   7.74
      LONG-TERM AA TELEPHONES    7.16    7.11   7.52
      
      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       4.56      4.56      5.14    5.14
      PERCENT OF TREASURIES    75.04     75.59     80.79   81.31
      TAXABLE EQUIVALENT        6.61      6.61      7.45    7.45
      INSURED REVENUE BONDS     4.72      4.71      5.38    5.37
      PERCENT OF TREASURIES    77.67     78.08     84.56   84.95
      TAXABLE EQUIVALENT        6.84      6.83      7.80    7.78
      
      EQUITY FUND CATEGORIES
      
      Leaders                                 Laggards
      Four-week total return         %        Four-week total return          %
      
      Fidelity Sel. Energy Serv.    14.8      DFA Japanese Small Co.        -18.7
      Fidelity Select Brokerage     14.8      Morgan Stan. Asian Grth. C    -14.7
      GT Global Natural Res. A      14.2      Merrill Emerging Tigers B     -14.7
      Cohen & Steers Spec. Eq.      14.0      Morg. Stan. Instl. Asia Eq. A -14.6
      Weitz Hickory                 13.3      Invesco Asian Growth          -14.0
      
      Leaders                                 Laggards
      52-week total return            %       52-week total return           %
      
      Lexington Troika Russia      168.3      DFA Japanese Small Co.       -49.0
      Fidelity Sel. Energy Serv.    95.6      Bull & Bear Gold Investors   -44.4
      Hartford Cap. Apprec. A       92.6      United Svcs. Gold Shares     -42.7
      Fidelity Select Brokerage     81.7      Fontaine Global Growth       -38.0
      Evergreen U.S. Real Est. Y    81.3      Midas                        -37.8
      
      Leaders                                 Laggards
      Four-week total return      %           Four-week total return          %
      
      Real Estate                8.7          Pacific/Asia ex-Japan         -8.3
      Financial                  8.1          Diversified Pacific/Asia      -5.5
      Health                     7.7          Japan                         -4.3
      Europe                     7.6          Diversified Emerging Markets   0.1
      Communications             7.6          Technology                     3.0
      
      Leaders                                 Laggards
      52-week total return     %              52-week total return        %
      
      Financial               54.0            Precious Metals           -22.9
      Latin America           44.5            Japan                     -11.9
      Real Estate             42.3            Diversified Pacific/Asia   -6.5
      Small-cap Value         42.2            Pacific/Asia ex-Japan      -3.5
      Mid-cap Value           38.7            International Hybrid       14.7
      
      All data are as of market close Wednesday, Oct. 8, 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 Oct. 7. 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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