STOCKS

COMMENTARY

Merger mania continued as news spread of a possible deal between Germany's

Daimler Benz AG and Chrysler Corp. The market focused on a spate of economic

reports, searching for signs of inflation. The news was mixed: After one

report showed signs that manufacturing was slowing, other statistics, such as

rising auto sales, showed strong growth. The Dow Jones industrial average hit

a record 9192.7 on May 4, then fell on fears of a rate hike. Still, the yield

on the 30-year Treasury bond fell from 6.07% on Apr. 29 to 5.94% on May 6.

      
                                                % change
      U.S. MARKETS                 Latest    Week      Year
      Dow Jones Industrials        9054.7    1.2       27.8
      NASDAQ Combined Composite    1856.7    0.0       40.3
      S&P MidCap 400               373.3     0.8       40.2
      S&P SmallCap 600             200.7     0.7       37.4
      S&P SuperComposite 1500      237.1     0.9       36.0
      
                                                 % change
      SECTORS                     Latest     Week      Year
      Bloomberg Information Age    348.5     1.0       39.5
      S&P Financials               132.2     -0.1      44.2
      S&P Utilities                239.1     1.3       24.1
      PSE Technology               358.5     0.6       34.1
      
                                               % change
      FOREIGN MARKETS              Latest    Week     Year
      London (FT-SE 100)           5992.4    2.7       32.1
      Frankfurt (DAX)              5229.8    2.4       47.2
      Tokyo (NIKKEI 225)           15243.8   -1.0      -24.0
      Hong Kong (Hang Seng)        10109.1   -3.5      -25.7
      Toronto (TSE 300)            7678.7    0.9       25.6
      Mexico City (IPC)            4927.9    -2.0      30.6
      
                                                   Week      Year
      FUNDAMENTALS                       Latest    ago        ago
      S&P 500 Dividend Yield             1.40%     1.43%     1.79%
      S&P 500 P/E Ratio (Last 12 mos.)   26.7      25.9      20.9
      S&P 500 P/E Ratio (Next 12 mos.)*  21.7      21.4      17.1
      First Call Earnings Surprise*      2.74%     2.65%     3.52      %
      
                                                     Week
      TECHNICAL INDICATORS              Latest       ago      Reading
      S&P 500 200-day average           989.1        983.4    Positive
      Stocks above 200-day average      61.0%        57.0%    Neutral
      Options: Put/call ratio           0.41         0.54     Negative
      Insiders: Vickers Sell/buy ratio  3.19         3.18     Negative
      
      BEST-PERFORMING            Last                                  Last 12
      GROUPS                    month%                                 months%
      Computer Systems           17.4      Specialty Appar. Retailers    113.7
      Specialty Appar. Retailers 15.2      Broadcasting                  96.8
      Paper Containers           9.6       Homebuilding                  86.2
      Entertainment              9.5       Communications Equip.         75.2
      Oil-Well Equipment & Svcs. 9.1       Personal Loans                70.9
      
      WORST-PERFORMING         Last                                Last 12
      GROUPS                  month%                               months%
      Commercial Services     -18.6        Metals                  -35.0
      Invest. Banking/Brkrge. -12.1        Shoes                   -20.0
      Food Chains             -10.2        Engineering & Constr.   -20.0
      Transportation Svcs.    -9.4         Photography/Imaging     -13.0
      Personal Loans          -8.6         Gold Mining             -12.8
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                  1-month
      significant buying on price weakness  Price        change
      Citicorp                              149 11/16     -30 13/16
      Chase Manhattan                       137           -10
      Oracle                                25 13/16      -1 5/16
      Telebras-ADR                          119 1/2       -5 7/8
      Motorola                              56 3/16       -3 11/16
      AT&T                                  61 3/16       -4 5/8
      
      Decline ahead?  Stocks with most                    1-month
      significant selling on price strength   Price        change
      Pfizer                                111 3/4        8 1/2
      Cisco Systems                         73 5/8         4 5/8
      Dell Computer                         87 11/16       22 7/16
      Infoseek                              32 1/32        113/16
      Lernout & Hauspie Speech Prod.        58 7/8         8 1/4
      Eli Lilly                             66 5/16        5 3/16
      
      Data: Bloomberg Financial Markets; *First Call Corp.
      
      INTEREST RATES
      
                                 Latest    Week     Year
      KEY RATES                  week%     ago%     ago%
      MONEY MARKET FUNDS         5.09      5.10      5.10
      90-DAY TREASURY BILLS      5.09      5.05      5.22
      6-MONTH BANK CDS           5.07      5.07      5.23
      1-YEAR TREASURY BILLS      5.39      5.48      5.94
      10-YEAR TREASURY NOTES     5.64      5.81      6.75
      30-YEAR TREASURY BONDS     5.94      6.07      6.96
      LONG-TERM AA INDUSTRIALS   6.51      6.66      7.48
      LONG-TERM BBB INDUSTRIALS  6.97      7.10      7.93
      LONG-TERM AA TELEPHONES    6.78      6.91      7.72
      
      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      4.52%   4.58%     5.11%     5.18%
      PERCENT OF TREASURIES    80.00   78.89     86.03     85.36
      TAXABLE EQUIVALENT       6.55    6.64      7.41      7.51
      INSURED REVENUE BONDS    4.69    4.75      5.30      5.37
      PERCENT OF TREASURIES    83.01   81.82     89.23     88.49
      TAXABLE EQUIVALENT       6.80    6.88      7.68      7.78
      
      MUTUAL FUNDS
      
      EQUITY FUNDS
      Leaders                                Laggards
      Four-week total return        %        Four-week total return          %
      Fidelity Sel. Computers      16.0      Steadman Technology Grth.     -11.9
      Fidelity Sel. Energy Serv.   14.9      Prudent Bear                  -10.5
      Northern Technology          11.6      Montgomery Emerg. Asia R      -10.2
      ProFunds UltraOTC Inv.       10.8      Colonial Newport Gr. China A  -8.4
      Pin Oak Aggressive Stock     10.7      Eaton Vance Grtr. China C     -8.1
      
      Leaders                                Laggards
      52-week total return          %        52-week total return             %
      Munder Micro-Cap Equity Y    84.6      Matthews Korea I              -55.0
      FMI Focus                    81.8      Lex. Crosby Sm. Cap Asia      -51.9
      Delaware Aggressive Gr. A    79.5      U.S. Global Investors Gold    -50.3
      Safeco Growth No Load        78.6      Morgan Stan. Asian Grth. C    -49.8
      Weitz Hickory                75.5      Morg. Stan. Inst. Asia Eq. A  -49.7
      
      EQUITY FUND CATEGORIES
      Leaders                                Laggards
      Four-week total return        %        Four-week total return          %
      Technology                   6.8       Pacific/Asia ex-Japan         -5.0
      Natural Resources            3.3       Real Estate                   -2.1
      Japan                        3.2       Utilities                     -1.7
      Europe                       2.3       Diversified Pacific/Asia      -1.7
      Communications               2.2       Precious Metals               -1.3
      
      Leaders                                Laggards
      52-week total return          %        52-week total return            %
      Communications               50.0      Pacific/Asia ex-Japan         -35.5
      Financial                    47.1      Diversified Pacific/Asia      -26.8
      Small-cap Blend              38.9      Precious Metals               -24.0
      Europe                       38.6      Japan                         -11.9
      Unaligned                    37.7      Diversified Emerging Mkts.    -8.0
      
      All data are as of market close Wednesday, May 6, 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 May 5. 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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