COMMENTARY

The unfolding crisis in Asia continued to roil the markets. Earnings worries

led the Dow Jones industrial average down 222.2 points on Jan. 9. Better than

expected earnings from Intel helped computer-related stocks stage a late rally,

but a closer look at Intel's numbers renewed fears of slower sales growth.

Consumer prices rose just 0.1% in December, and on the whole, 1997 had the

smallest annual price increase in more than ten years. The yield on the 30-year

Treasury bond fell from 5.79% to 5.69% before inching back to 5.74%.

      
                                                   % change
      U.S. MARKETS                Latest       Week       Year
      
      Dow Jones Industrials       7784.7      -1.5        15.7
      NASDAQ Combined Composite   1548.8      -0.8        16.1
      S&P MidCap 400               320.0      -1.8        22.1
      S&P SmallCap 600             173.8      -2.3        17.6
      S&P SuperComposite 1500      205.3      -0.8        24.3
      
                                                  % change
      SECTORS                    Latest        Week       Year
      
      Bloomberg Information Age   295.9        0.8        23.1
      S&P Financials              114.1       -1.8        34.8
      S&P Utilities               229.6        0.6        13.2
      PSE Technology              286.9       -1.3        12.0
      
                                                  % change
      FOREIGN MARKETS             Latest      Week       Year
      
      London (FT-SE 100)          5106.9      -2.2        22.8
      Frankfurt (DAX)             4190.1      -4.6        40.2
      Tokyo (NIKKEI 225)        15,122.0       0.6       -16.4
      Hong Kong (Hang Seng)       9226.6      -3.3       -33.0
      Toronto (TSE 300)           6351.1      -3.6         4.7
      Mexico City (IPC)           4650.1      -5.9        24.7
      
                                                       Week     Year
      FUNDAMENTALS                       Latest        ago       ago
      
      S&P 500 Dividend Yield              1.60 %       1.59 %    1.88                %
      S&P 500 P/E Ratio (Last 12 mos.)    23.8         24.6      21.6
      S&P 500 P/E Ratio (Next 12 mos.)*   18.7         19.0      16.5
      First Call Earnings Surprise*       3.12 %      -4.70 %    4.59                %
      
                                                         Week
      TECHNICAL INDICATORS                 Latest        ago      Reading
      
      S&P 500 200-day average              903.8        899.6     Positive
      Stocks above 200-day average          57.0 %       64.0 %   Neutral
      Options: Put/call ratio               0.68         0.55     Neutral
      Insiders: Vickers Sell/buy ratio      1.80         1.90     Positive
      
      BEST-PERFORMING          Last                                     Last 12
      GROUPS                  month%                                    months%
      
      Defense Electronics      11.6          Trucking                    157.7
      Photography/Imaging       7.1          Airlines                     70.5
      Long-Distance Telecom.    6.9          Specialty Appar. Retailers   66.8
      Semiconductors            6.6          Broadcasting                 65.9
      Drugs                     6.2          Invest. Banking/Brkrge.      62.9
      
      WORST-PERFORMING        Last                                      Last 12
      GROUPS                  month%                                    months%
      
      Oil & Gas Drilling      -18.1          Metals                      -41.8
      Savings & Loans         -12.6          Engineering & Constr.       -40.0
      Invest. Banking/Brkrge.  -9.2          Gold Mining                 -37.1
      Metals                   -9.1          Shoes                       -32.4
      Oil-Well Equip. & Svcs.  -8.8          Photography/Imaging         -27.8
      
                            BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                             1-month
      significant buying on price weakness      Price               change
      
      Telebras-ADR                             106 1/4            -1 3/4
      Citicorp                                 114                -18 1/8
      Wells Fargo                              315 7/8            -21 7/16
      Microsoft                                132 1/8            -4
      Chase Manhattan                          103 5/8            -8 5/8
      Coca-Cola                                 65 3/8            - 1/2
      
      Decline ahead?  Stocks with most                             1-month
      significant selling on price strength      Price             change
      
      Intel                                     76 15/16           4 13/16
      Cisco Systems                             56                 4 21/64
      Applied Materials                         29 15/16           1 7/8
      KLA-Tencor                                38 5/16            3 15/16
      PeopleSoft                                34 5/16            1 7/16
      Qwest Communications Intl.                65 3/8             5 7/8
      
      Data: Bloomberg Financial Markets; *First Call Corp.
      
                                    Latest     Week          Year
      KEY RATES                     week%      ago%          ago%
      
      MONEY MARKET FUNDS            5.23       5.25          4.95
      90-DAY TREASURY BILLS         5.14       5.23          5.19
      6-MONTH BANK CDS              5.18       5.20          5.01
      1-YEAR TREASURY BILLS         5.18       5.31          5.60
      10-YEAR TREASURY NOTES        5.45       5.55          6.53
      30-YEAR TREASURY BONDS        5.74       5.80          6.77
      LONG-TERM AA INDUSTRIALS      6.37       6.41          7.26
      LONG-TERM BBB INDUSTRIALS     6.71       6.74          7.68
      LONG-TERM AA TELEPHONES       6.70       6.74          7.47
      
                         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      4.24%   4.37%        4.82%   4.95%
      PERCENT OF TREASURIES   77.80   79.10        84.03   85.63
      TAXABLE EQUIVALENT       6.14    6.33         6.99    7.17
      INSURED REVENUE BONDS    4.35    4.46         5.02    5.13
      PERCENT OF TREASURIES   79.82   80.73        87.52   88.74
      TAXABLE EQUIVALENT       6.30    6.46         7.28    7.43
      
      EQUITY FUND
      Leaders                                 Laggards
      Four-week total return          %       Four-week total return         %
      
      Bailard, Biehl Diversa         8.8      Lexington Crosby Sm. Asia    -28.5
      Fountain Sq. Balanced A        8.1      U.S. Glob. Inv. China Reg.   -28.0
      Fountain Sq. Qual. Gr. A       6.9      Guinness Flgt. Asia Sm. Cap  -27.5
      American Heritage              5.8      Montgomery Emerg. Asia R     -24.9
      Fidelity Select Telecom.       4.9      Colonial Newport Gr. Ch. A   -24.6
      
      Leaders                                 Laggards
      52-week total return            %       52-week total return           %
      
      Pilgrim Amer. Bank & Thr. A   52.6      Midas                        -61.3
      Fidelity Sel. Brokerage       51.2      Invesco Strategic Gold       -59.7
      Smith Barn. Telecom. Income   50.1      Matthews Korea               -59.4
      FBR Small Cap Financial       49.7      US Global Investors Gold     -59.4
      Evergreen U.S. Real Est Y     48.5      Bull & Bear Gold Investors   -59.2
      
      EQUITY FUND CATEGORIES
      Leaders                                 Laggards
      Four-week total return          %       Four-week total return          %
      
      Communications                 2.3      Pacific/Asia ex-Japan        -15.4
      Utilities                      1.8      Diversified Pacific/Asia      -8.4
      Technology                     1.3      Diversified Emerging Mkts.    -7.3
      Real Estate                    1.0      Latin America                 -6.8
      International Hybrid          -0.2      Natural Resources             -6.7
      
      Leaders                                 Laggards
      52-week total return            %       52-week total return            %
      
      Financial                     37.4      Pacific/Asia ex-Japan        -46.3
      Communications                23.9      Precious Metals              -45.8
      Large-cap Blend               22.4      Diversified Pacific/Asia     -32.7
      Utilities                     21.8      Diversified Emerging Mkts.   -17.4
      Small-cap Value               21.6      Japan                        -16.9
      
      All data are as of market close Wednesday, Jan. 14, 1998, 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 Jan. 13. 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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