COMMENTARY

It's the equity market's version of a hat trick: On Feb. 25, inflows into stock

mutual funds helped the Dow Jones industrial average, the Standard & Poor's

500-stock index, and the NASDAQ Composite all rack up new highs. The tech-heavy

NASDAQ rose the most and is up 12.5% for the year. Investors brushed off

Federal Reserve Chairman Alan Greenspan's cautionary musings about whether

turmoil in Asia would check inflationary tendencies in the U.S. Rebounding

Asian markets made that region's equity funds leaders in four-week total return.

      
                                              % change
      U.S. MARKETS                 Latest     Week   Year
      Dow Jones Industrials        8457.8      0.1    21.1
      NASDAQ Combined Composite    1766.5      3.0    31.8
      S&P MidCap 400                350.1      1.0    31.4
      S&P SmallCap 600              192.7      1.4    32.0
      S&P SuperComposite 1500       223.8      1.1    29.7
      
                                                % change
      SECTORS                      Latest     Week    Year
      Bloomberg Information Age     330.9      2.5    33.8
      S&P Financials                125.5      1.1    33.2
      S&P Utilities                 232.3      0.2    18.2
      PSE Technology                337.0      2.3    27.1
      
                                                 % change
      FOREIGN MARKETS              Latest      Week     Year
      London (FT-SE 100)           5745.1       0.4     32.7
      Frankfurt (DAX)              4635.8       0.2     43.2
      Tokyo (NIKKEI 225)         16,360.6      -1.5    -13.9
      Hong Kong (Hang Seng)      10,886.7       2.0    -19.6
      Toronto (TSE 300)            7002.1       0.8     12.9
      Mexico City (IPC)            4740.2       4.2     21.9
      
                                                         Week     Year
      FUNDAMENTALS                           Latest      ago       ago
      S&P 500 Dividend Yield                 1.48 %     1.51 %     1.79 %
      S&P 500 P/E Ratio (Last 12 mos.)       25.2       26.1       21.2
      S&P 500 P/E Ratio (Next 12 mos.)*      20.1       20.1       17.2
      First Call Earnings Revision*         -2.77 %    -3.43 %    -0.71 %
      
                                                        Week
      TECHNICAL INDICATORS                  Latest      ago        Reading
      S&P 500 200-day average                934.9      929.6      Positive
      Stocks above 200-day average            65.0 %     66.0 %    Neutral
      Options: Put/call ratio                 0.54       0.55      Negative
      Insiders: Vickers Sell/buy ratio        1.56       1.58      Positive
      
      BEST-PERFORMING             Last                                   Last 12
      GROUPS                      month%                                 months%
      HMOs                         28.4      Specialty Appar. Retailers   85.3
      Machine Tools                27.0      Broadcasting                 73.1
      Conglomerates                21.0      Airlines                     67.5
      Engineering & Constr.        20.6      Manufactured Housing         66.3
      Personal Loans               20.6      Homebuilding                 66.2
      
      WORST-PERFORMING            Last                                  Last 12
      GROUPS                      month%                                months%
      Gold                         -9.3      Gold                        -40.8
      Tobacco                      -3.5      Metals                      -40.5
      Pollution Control             0.1      Shoes                       -38.6
      Regional Telephone Cos.       0.3      Engineering & Constr.       -27.7
      Long-Dist. Telecomm.          0.4      Photography/Imaging         -24.8
      
      BLOOMBERG MONEY FLOW ANALYSIS
      
      Rebound ahead?  Stocks with most                            1-month
      significant buying on price weakness    Price                change
      Sun Microsystems                         44 9/16             - 9/16
      AMR                                     124 3/8              - 1/2
      BellSouth                                59 1/16             - 3/8
      American Home Products                   89 11/16            - 13/16
      SBC Communications                       75 1/8              - 13/16
      Dow Chemical                             87 3/16            -3 9/16
      
      Decline ahead?  Stocks with most                            1-month
      significant selling on price strength    Price               change
      Microsoft                                82 1/8             11 1/4
      Cisco Systems                            64 3/4              8  1/8
      Intel                                    92 3/8             14 11/16
      Dell Computer                           128 7/16            33 11/16
      Oracle                                   26 3/16             7  1/4
      WorldCom                                 37 15/16            4  13/16
      
      Data: Bloomberg Financial Markets; *First Call Corp.
      
                                   Latest    Week      Year
      KEY RATES                    week%     ago%      ago%
      MONEY MARKET FUNDS           5.14      5.16      4.95
      90-DAY TREASURY BILLS        5.29      5.20      5.22
      6-MONTH BANK CDS             5.03      5.09      5.01
      1-YEAR TREASURY BILLS        5.40      5.27      5.64
      10-YEAR TREASURY NOTES       5.61      5.49      6.56
      30-YEAR TREASURY BONDS       5.92      5.84      6.80
      LONG-TERM AA INDUSTRIALS     6.54      6.46      7.28
      LONG-TERM BBB INDUSTRIALS    6.95      6.91      7.61
      LONG-TERM AA TELEPHONES      6.83      6.74      7.48
      
               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        4.35%    4.28%     4.94%   4.86%
      PERCENT OF TREASURIES     77.52    78.11     83.48   83.34
      TAXABLE EQUIVALENT         6.30     6.20      7.16    7.04
      INSURED REVENUE BONDS      4.47     4.41      5.15    5.08
      PERCENT OF TREASURIES     79.66    80.48     87.05   87.11
      TAXABLE EQUIVALENT         6.48     6.39      7.46    7.36
      
      EQUITY FUNDS
      
      Leaders                                 Laggards
      Four-week total return            %     Four-week total return        %
      Guinness Flight Asia Sm. Cap     27.6   Prudent Bear               -13.3
      U.S. Global Inv. China Reg.      25.7   U.S. Global Investors Gold -12.3
      Colonial Newport Gr. China A     25.7   Rydex Precious Metals      -11.5
      DFA Pacific Rim Small Co.        25.5   Lexington Strat. Invmnts.  -11.0
      Montgomery Emerg. Asia R         23.2   PIMCo Precious Metals A    -10.3
      
      Leaders                                 Laggards
      52-week total return              %     52-week total return         %
      Munder Micro-Cap Equity Y        64.5   Midas                      -62.9
      Delaware Aggressive Gr. A        56.4   U.S. Global Investors Gold -62.9
      Texas Capital Val. & Gr.         53.2   Bull & Bear Gold Investors -60.7
      MFS Strategic Growth A           52.2   Invesco Strategic Gold     -60.1
      Fidelity Sel. Air Trans.         52.0   Gabelli Gold               -54.5
      
      EQUITY FUND CATEGORIES
      
      Leaders                                 Laggards
      Four-week total return             %    Four-week total return       %
      Pacific/Asia ex-Japan            13.6   Precious Metals             -6.7
      Technology                       12.2   Japan                       -3.8
      Mid-cap Growth                    8.7   Real Estate                 -0.9
      Small-cap Growth                  8.3   Utilities                    1.3
      Large-cap Growth                  8.1   Natural Resources            1.6
      
      Leaders                                 Laggards
      52-week total return              %     52-week total return          %
      Financial                        35.1   Precious Metals            -46.4
      Communications                   32.0   Pacific/Asia ex-Japan      -35.9
      Unaligned                        29.4   Diversified Pacific/Asia   -26.3
      Small-cap Value                  28.1   Diversified Emerging Mkts. -15.9
      Large-cap Growth                 27.4   Japan                      -10.4
      
      All data are as of market close Wednesday, Feb. 25, 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 Feb. 24. 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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