COMMENTARY

A lackluster week in the financial markets. The Dow Jones industrial average

and the S&P 500 both climbed on Oct. 13--Columbus Day--and Oct. 14, but

faltered on Oct. 15. On that day, stocks fell marginally--the Dow was down 38

points, to 8058. Earnings concerns beset traders after Intel Corp. reported

lower-than-estimated profits. But gains in airline stocks cushioned the damage.

The dollar showed little change against the major currencies, and bonds were

weakened by concern that the Federal Reserve may raise interest rates.

      
                                             % change
      U.S. MARKETS                Latest    Week    Year
      
      Dow Jones Industrials       8058.0    -0.5    34.2
      NASDAQ Combined Composite   1723.4    -1.1    37.0
      S&P MidCap 400              338.8      0.1    38.3
      S&P SmallCap 600            191.5     -0.2    36.8
      S&P SuperComposite 1500     208.8     -0.7    37.5
      
                                              % change
      SECTORS                      Latest    Week   Year
      
      Bloomberg Information Age    304.1     -1.8   40.7
      S&P Financials               115.2     -1.1   55.3
      S&P Utilities                206.9      0.8   7.3
      PSE Technology               343.2     -0.6   49.1
      
                                            % change
      FOREIGN MARKETS           Latest    Week      Year
      
      London (FT-SE 100)        5263.7     0.0      29.9
      Frankfurt (DAX)           4193.7    -3.5      53.7
      Tokyo (NIKKEI 225)        17,331.4  -1.6     -19.1
      Hong Kong (Hang Seng)     13,384.2  -9.8      7.2
      Toronto (TSE 300)         7128.9    -0.9      30.1
      Mexico City (IPC)         5345.2     0.8      64.4
      
                                                        Week     Year
      FUNDAMENTALS                           Latest     ago      ago
      
      S&P 500 Dividend Yield                  1.56%     1.54%    2.05%
      S&P 500 P/E Ratio (Last 12 mos.)        24.5      24.5     20.3
      S&P 500 P/E Ratio (Next 12 mos.)*       19.2      19.5     NA
      First Call Earnings Surprise*           3.41%     4.88%    NA
      
                                                         Week
      TECHNICAL INDICATORS                    Latest     ago     Reading
      
      S&P 500 200-day average                 852.6     847.2    Positive
      Stocks above 200-day average            84.0%     85.0%    Negative
      Options: Put/call ratio                 0.49      0.45     Negative
      Insiders: Vickers Sell/buy ratio        3.36      3.60     Negative
      
      BEST-PERFORMING         Last                                Last 12
      GROUPS                  month%                              months%
      
      Trucking                 32.4        Trucking                232.2
      Invest. Banking/Brkrge.  20.8        Invest. Banking/Brkrge.  98.7
      Broadcasting             15.9        Oil & Gas Drilling       85.4
      Oil & Gas Drilling       14.2        Savings & Loans          79.7
      Communications Equip.    13.8        Heavy-Duty Trucks        75.7
      
      WORST-PERFORMING           Last                               Last 12
      GROUPS                    month%                              months%
      
      Steel                      -8.2         Photography/Imaging    -19.7
      Pollution Control          -5.5         Engineering & Constr.  -10.1
      Genl. Merchandise Chains   -5.5         Gold Mining             -9.8
      Chemicals                  -4.1         Hospital Management     -8.1
      Specialty Appar. Retailers -3.4         Shoes                   -6.0
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                            1-month
      significant buying on price weakness    Price               change
      Micron Technology                       37  1/2             -2  15/16
      Lockheed Martin                         104 15/16           -   1/2
      Atmel                                   35  7/16            -2  7/16
      Smart Modular Technologies              64  1/2             -5  7/8
      American Home Products                  70  15/16           -2  5/16
      Cigna                                   171                 -19 1/8
      
      Decline ahead?  Stocks with most                            1-month
      significant selling on price strength   Price               change
      
      WorldCom                                36  3/4             1  15/16
      Ascend Communications                   33  1/16               9/16
      Dell Computer                           99                  11 5/8
      Cisco Systems                           80  15/16           11 3/16
      Amgen                                   48  3/8               15/16
      3Com                                    53  1/4             4  5/16
      
      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      5.03      5.06     5.17
      6-MONTH BANK CDS           5.18      5.18     5.03
      1-YEAR TREASURY BILLS      5.50      5.38     5.58
      10-YEAR TREASURY NOTES     6.10      5.94     6.56
      30-YEAR TREASURY BONDS     6.40      6.24     6.85
      LONG-TERM AA INDUSTRIALS   6.86      6.72     7.35
      LONG-TERM BBB INDUSTRIALS  7.23      7.10     7.76
      LONG-TERM AA TELEPHONES    7.19      7.04     7.56
      
      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      4.64       4.56     5.22    5.14
      PERCENT OF TREASURIES    76.01      75.04    81.61   80.79
      TAXABLE EQUIVALENT       6.72       6.61     7.57    7.45
      INSURED REVENUE BONDS    4.79       4.72     5.45    5.38
      PERCENT OF TREASURIES    78.50      77.67    85.20   84.56
      TAXABLE EQUIVALENT       6.94       6.84     7.90    7.80
      
      Data: Bloomberg Financial Markets
      
      EQUITY FUNDS
      
      Leaders                                 Laggards
      Four-week total return         %        Four-week total return          %
      
      Blanchard Precious Metals     16.4      Guinness Flight Asia Sm. Cap  -17.6
      Pioneer Gold B                14.9      DFA Japanese Small Co.        -15.9
      Rydex Precious Metals         14.6      Lexington Crosby Sm. Cap Asia -15.9
      Am. Cent. Global Gold         14.4      Eaton Vance Grtr. China B     -15.5
      Fidelity Sel. Amer. Gold      14.3      United Svcs. China Reg. Op.   -14.9
      
      Leaders                                 Laggards
      52-week total return            %       52-week total return           %
      
      Lexington Troika Russia       149.5     DFA Japanese Small Co.        -48.8
      Fidelity Sel. Energy Serv.    95.0      Bull & Bear Gold Investors    -45.1
      Hartford Cap. Apprec. A       87.6      United Svcs. Gold Shares      -41.7
      Fidelity Sel. Brokerage       80.1      Midas                         -38.0
      Evergreen US Real Est.Eq.Y    80.0      Fontaine Global Growth        -36.7
      
      EQUITY FUND CATEGORIES
      
      Leaders                              Laggards
      Four-week total return      %        Four-week total return          %
      
      Precious Metals            10.8      Pacific/Asia ex-Japan         -7.6
      Latin America              7.8       Diversified Pacific/Asia      -3.0
      Communications             6.6       Japan                         -1.0
      Europe                     6.2       Domestic Hybrid                2.1
      Health                     5.5       Large-cap Value                2.2
      
      Leaders                              Laggards
      52-week total return        %        52-week total return            %
      
      Financial                  52.1      Precious Metals               -22.9
      Latin America              46.5      Japan                         -11.0
      Small-cap Value            42.2      Diversified Pacific/Asia      -7.3
      Real Estate                39.7      Pacific/Asia ex-Japan         -6.6
      Small-cap Blend            38.2      International Hybrid           14.0
      
      All data are as of market close Wednesday, Oct. 15, 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. 14. For a more detailed explanation, write to us or E-mail 
      figures@businessweek.com.  NA=Not available  **Vanguard Index 500 Fund
      
      Data: Morningstar, Inc.
      
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