COMMENTARY

An uncertain week in the financial markets turned sprightly, with the most

encouraging action on July 8. Both the Standard & Poor's 500-stock index and

the NASDAQ composite rose to record highs on that date. Travelers Corp. and

Citicorp led the list of gainers, and a surge in Intel helped the NASDAQ.

Meanwhile, the Dow Jones industrial average rose 90 points to 9175, close to

its all-time high. The dollar climbed against the yen, after the Japanese

Prime Minister failed to elaborate on plans to cut taxes.

STOCKS

      
                                                        % change
      U.S. MARKETS                        Latest     Week     Year
      Dow Jones Industrials               9175.0     1.4      17.0
      NASDAQ Combined Composite           1935.4     1.1      30.2
      S&P MidCap 400                      369.6      1.1      25.5
      S&P SmallCap 600                    193.7      0.4      18.6
      S&P SuperComposite 1500             246.3      0.8      27.0
      
                                                        % change
      SECTORS                             Latest     Week     Year
      Bloomberg Information Age           358.9      0.9      29.0
      S&P Financials                      145.7      4.8      41.4
      S&P Utilities                       245.3      -1.0     22.6
      PSE Technology                      356.1      1.7      18.0
      
                                                   % change
      FOREIGN MARKETS             Latest       Week      Year
      London (FT-SE 100)          6009.6       1.5       26.2
      Frankfurt (DAX)             6013.1       1.8       48.3
      Tokyo (NIKKEI 225)          16,531.0     1.0       -16.1
      Hong Kong (Hang Seng)       8629.2       1.0       -41.3
      Toronto (TSE 300)           7451.3       1.1       13.3
      Mexico City (IPC)           4573.3       3.4       -5.4
      
                                                           Week      Year
      FUNDAMENTALS                           Latest        ago       ago
      S&P 500 Dividend Yield                  1.36%        1.38%     1.63%
      S&P 500 P/E Ratio (Last 12 mos.)        27.6         27.1      23.3
      S&P 500 P/E Ratio (Next 12 mos.)*       22.1         21.9      18.6
      First Call Earnings Surprise*           7.50%        NA%       4.01%
      
                                                           Week
      TECHNICAL INDICATORS                  Latest         ago      Reading
      S&P 500 200-day average               1027.0         1022.7   Positive
      Stocks above 200-day average           51.0%         48.0%    Neutral
      Options: Put/call ratio                0.49          0.50     Negative
      Insiders: Vickers Sell/buy ratio       1.99          2.05     Positive
      
      BEST-PERFORMING              Last                                  Last 12
      GROUPS                       month%                                months%
      Homebuilding                 19.8      Specialty Appar. Retailers  114.5
      Computer Software            18.0      Broadcasting                91.6
      Broadcasting                 14.6      Homebuilding                90.3
      Communications Equip.        14.3      Automobiles                 78.9
      Drug Chains                  13.8      Airlines                    78.0
      
      WORST-PERFORMING             Last                                  Last 12
      GROUPS                       month%                                months%
      Machine Tools                -18.4     Metals                       -45.0
      Oil & Gas Drilling           -15.3     Oil & Gas Drilling           -33.1
      Metals                       -10.6     Engineering & Constr.        -22.7
      Oil-Well Equip. & Svcs.      -10.2     Gold Mining                  -21.5
      Leisure Time                 -9.8      Hospital Management          -20.9
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                            1-month
      significant buying on price weakness    Price               change
      IBM                                     113 7/8             -4 15/16
      Berkshire Hathaway-A                    77,775              -225
      AT&T                                    56 3/16             -5 11/16
      J.P. Morgan                             122 11/16           -1
      BellSouth                               66 7/16             -3/8
      Berkshire Hathaway-B                    2598                -12
      
      Decline ahead?  Stocks with most                           1-month
      significant selling on price strength   Price              change
      WorldCom                                50 3/8             5 1/2
      Microsoft                               107 15/16          22 1/4
      Cisco Systems                           92 3/4             15 1/4
      Intel                                   75 1/8             5 13/16
      Dell Computer                           91                 7 5/16
      Qwest Communications Intl.              37 7/16            4 15/16
      
      INTEREST RATES
      
                                   Latest      Week      Year
      KEY RATES                    week%       ago%      ago%
      MONEY MARKET FUNDS           5.11        5.10      5.17
      90-DAY TREASURY BILLS        5.07        5.10      5.11
      6-MONTH BANK CDS             5.03        5.05      5.18
      1-YEAR TREASURY BILLS        5.32        5.38      5.53
      10-YEAR TREASURY NOTES       5.43        5.44      6.25
      30-YEAR TREASURY BONDS       5.62        5.62      6.56
      LONG-TERM AA INDUSTRIALS     6.24        6.23      7.02
      LONG-TERM BBB INDUSTRIALS    6.73        6.73      7.40
      LONG-TERM AA TELEPHONES      6.63        6.61      7.31
      
      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%     4.39%       4.93%      4.95%
      PERCENT OF TREASURIES   80.95     80.88       87.70      87.99
      TAXABLE EQUIVALENT      6.36      6.36        7.14       7.17
      INSURED REVENUE BONDS   4.56      4.56        5.16       5.18
      PERCENT OF TREASURIES   84.08     84.01       91.79      92.07
      TAXABLE EQUIVALENT      6.61      6.61        7.48       7.51
      
      MUTUAL FUNDS
      
      EQUITY FUNDS
      EQUITY FUND CATEGORIES
      Leaders                                  Laggards
      Four-week total return         %         Four-week total return        %
      ProFunds UltraOTC Investor    20.4       Lexington Troika Russia      -27.2
      DFA Japanese Small Co.        14.1       Guinness Flgt. Asia Sm. Cap  -11.3
      Amerindo Technology D         13.6       Fidelity Sel. Energy Serv.   -11.1
      Transamerica Prem. Sm. Co.    12.9       Potomac OTC/Short            -9.9
      Potomac OTC Plus              12.7       GMO Emerging Markets III     -9.6
      
      Leaders                                  Laggards
      52-week total return          %          52-week total return           %
      Transamerica Prem. Sm. Co.   77.5        Matthews Korea I             -66.8
      Transamerica Prem. Ag. Gr.   75.6        Lexington Troika Russia      -66.8
      Weitz Hickory                63.3        Lex. Crosby Sm. Cap Asia     -64.4
      Fidelity Select Brokerage    60.1        Montgomery Emerg. Asia R     -63.2
      Fidelity Select Retailing    53.9        Guinness Flgt. Asia Sm. Cap  -62.6
      
      EQUITY FUND CATEGORIES
      Leaders                                  Laggards
      Four-week total return        %          Four-week total return         %
      Large-cap Growth             5.6         Diversified Emerging Mkts.   -4.9
      Communications               5.4         Natural Resources            -3.4
      Japan                        4.8         Latin America                -3.2
      Technology                   3.9         Precious Metals              -3.0
      Mid-cap Growth               3.8         Pacific/Asia ex-Japan        -2.3
      
      Leaders                                 Laggards
      52-week total return          %         52-week total return            %
      Communications              36.5        Pacific/Asia ex-Japan        -52.3
      Financial                   34.5        Diversified Pacific/Asia     -39.9
      Large-cap Growth            29.8        Diversified Emerging Mkts.   -32.9
      Europe                      27.6        Precious Metals              -27.3
      Unaligned                   25.0        Latin America                -24.3
      
      All data are as of market close Wednesday, July 8, 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 July 7. 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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