COMMENTARY

A generally dour week in the financial markets turned upbeat on June 23 and

24, when the market staged a rousing rally. The Dow Jones industrial average

climbed over 200 points, closing on June 24 at 8923.9. AT&T's agreement to buy

Tele-Communications Inc. drove the markets on June 24, while a rally in

computer and software stocks encouraged traders on June 23. The rally came

after the Dow fell 100 points on June 19, on concerns that U.S. earnings may

suffer if Japan's woes continue.

STOCKS

      
                                                     % change
      U.S. MARKETS                    Latest      Week       Year
      Dow Jones Industrials           8923.9      1.1        16.0
      NASDAQ Combined Composite       1877.8      5.7        29.8
      S&P MidCap 400                  357.5       1.3        24.5
      S&P SmallCap 600                188.8       1.7        18.8
      S&P SuperComposite 1500         240.7       2.2        26.8
      
                                                    % change
      SECTORS                       Latest       Week     Year
      Bloomberg Information Age     352.3        5.2      30.8
      S&P Financials                136.3        2.4      33.4
      S&P Utilities                 244.3       -0.2      24.7
      PSE Technology                343.7        5.0      19.9
      
                                                   % change
      FOREIGN MARKETS             Latest       Week      Year
      London (FT-SE 100)          5804.9      -0.5       25.1
      Frankfurt (DAX)             5779.9       1.2       52.2
      Tokyo (NIKKEI 225)          15,123.2     2.8      -26.9
      Hong Kong (Hang Seng)       8296.8       3.7      -44.9
      Toronto (TSE 300)           7264.4       1.0       11.5
      Mexico City (IPC)           4378.3       0.9      -0.4
      
                                                           Week      Year
      FUNDAMENTALS                           Latest        ago       ago
      S&P 500 Dividend Yield                  1.40%        1.43%     1.66%
      S&P 500 P/E Ratio (Last 12 mos.)        26.3         25.7      22.8
      S&P 500 P/E Ratio (Next 12 mos.)*       21.7         21.1      18.5
      First Call Earnings Revision*          -1.27%       -1.13%    -1.30%
      
                                                           Week
      TECHNICAL INDICATORS                  Latest         ago      Reading
      S&P 500 200-day average               1017.5         1012.9   Positive
      Stocks above 200-day average          44.0%          44.0%    Neutral
      Options: Put/call ratio               0.61           0.73     Neutral
      Insiders: Vickers Sell/buy ratio      2.18           2.35     Neutral
      
      BEST-PERFORMING     Last                                  Last 12
      GROUPS              month%                                months%
      Homebuilding        16.0       Specialty Appar. Retailers  113.5
      Computer Software   15.9       Broadcasting                78.6
      Drug Chains         11.7       Homebulding                 76.1
      Specialty Appar.    11.6       Automobiles                 74.9
       Retailers
      Personal Loans      10.8       Airlines                    71.6
      
      WORST-PERFORMING    Last                                 Last 12
      GROUPS              month%                               months%
      Machine Tools       -19.9      Metals                    -44.5
      Oil & Gas Drilling  -17.4      Gold Mining               -28.2
      Gold Mining         -15.8      Shoes                     -25.2
      Hospital Management -15.6      Leisure Time              -21.6
      Forest Products     -14.9      Hospital Management       -20.3
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                          1-month
      significant buying on price weakness    Price             change
      Citicorp                                149 1/8           -3 3/4
      IBM                                     111 3/4           -9 1/4
      Wells Fargo                             353 1/4           -20 3/8
      J.P. Morgan                             118 5/16          -11 3/4
      Merrill Lynch                           91 1/2            - 9/16
      GTE                                     57 1/2            -1 1/2
      
      Decline ahead?  Stocks with most                         1-month
      significant selling on price strength   Price             change
      Intel                                   75 1/4             9/16
      WorldCom                                47 15/16           2 3/16
      Cisco Systems                           86 7/8             10 7/8
      Dell Computer                           93 1/8             9 3/16
      Microsoft                               100 3/4            17 1/8
      Tellabs                                 69 3/8             3 15/16
      
      INTEREST RATES
                                   Latest      Week      Year
      KEY RATES                     week%      ago%      ago%
      MONEY MARKET FUNDS           5.09        5.10      5.15
      90-DAY TREASURY BILLS        5.02        5.23      5.07
      6-MONTH BANK CDS             5.06        5.07      5.19
      1-YEAR TREASURY BILLS        5.39        5.44      5.67
      10-YEAR TREASURY NOTES       5.46        5.54      6.45
      30-YEAR TREASURY BONDS       5.66        5.74      6.74
      LONG-TERM AA INDUSTRIALS     6.27        6.32      7.23
      LONG-TERM BBB INDUSTRIALS    6.73        6.79      7.64
      LONG-TERM AA TELEPHONES      6.61        6.65      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       4.39%      4.45%    4.93%      4.98%
      PERCENT OF TREASURIES     80.45      80.54    87.19      86.83
      TAXABLE EQUIVALENT        6.36       6.45     7.14       7.22
      INSURED REVENUE BONDS     4.56       4.58     5.17       5.17
      PERCENT OF TREASURIES     83.57      82.90    91.44      90.14
      TAXABLE EQUIVALENT        6.61       6.64     7.49       7.49
      
      MUTUAL FUNDS
      
      EQUITY FUNDS
      Leaders                              Laggards
      Four-week total return         %     Four-week total return         %
      ProFunds UltraOTC Investor   16.5    Pioneer India C               -25.5
      Amerindo Technology D        15.4    Eaton Vance Grtr. India A     -22.2
      Managers Capital Apprec.     14.0    Guinness Flgt. Asia Sm. Cap   -20.8
      Transamerica Prem. Sm. Co.   13.6    Newport Greater China A       -20.2
      PBHG Select Equity           13.0    Matthews Pacific Tiger I      -19.9
      
      Leaders                              Laggards
      52-week total return          %      52-week total return            %
      Delaware Aggressive Gr. A    57.3    Matthews Korea I               -70.0
      Weitz Hickory                56.1    Lex. Crosby Sm. Cap Asia       -64.1
      Fidelity Select Retailing    55.3    Morg. Stan. Inst. Asia Eq. A   -62.0
      Flag Investors Communics. A  51.9    Montgomery Emerg. Asia R       -61.8
      Fidelity Select Brokerage    50.9    Morgan Stan. Asian Grth. B     -61.1
      
      EQUITY FUND CATEGORIES
      Leaders                            Laggards
      Four-week total return     %       Four-week total return         %
      Large-cap Growth          4.3      Pacific/Asia ex-Japan        -15.9
      Communications            3.4      Precious Metals              -13.4
      Mid-cap Growth            3.1      Diversified Pacific/Asia     -10.9
      Technology                3.0      Diversified Emerging Mkts.   -10.3
      Utilities                 2.4      Natural Resources            -6.2
      
      Leaders                            Laggards
      52-week total return        %      52-week total return              %
      Communications            35.0     Pacific/Asia ex-Japan            -53.1
      Financial                 31.4     Diversified Pacific/Asia         -42.7
      Large-cap Growth          29.7     Precious Metals                  -37.3
      Europe                    27.4     Diversified Emerging Mkts.       -31.8
      Utilities                 25.7     Japan                            -29.0
      
      All data are as of market close Wednesday, June 24, 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 June 23, 1998. For a more detailed explanation, write or E-mail 
      figures@businessweek.com.  NA=Not available  **Vanguard Index 500 Fund
      
      
      
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