STOCKS

COMMENTARY

Fed Chairman Alan Greenspan hinted on Sept. 4 that he might lower interest

rates to alleviate the global financial crisis. Mulling that over Labor Day

weekend, investors returned on Sept. 8 and started buying again. The Dow Jones

industrials jumped 380.5 points, nearly 5%, the best one-day gain ever. Though

it gave back 158.3 points on Sept. 9, the Dow still managed to finish up 1.1%

for the week--making it the best week for the blue chips in the last two

months. Japan and especially Hong Kong, up 7.5%, enjoyed rebounds, but

Europe's bourses had mixed results.

      
                                                             % change
      U.S. MARKETS                              Latest    Week      Year
      Dow Jones Industrials                     7865.0    1.1       1.9
      NASDAQ Combined Composite                 1624.6    2.0       -0.9
      S&P MidCap 400                            299.2     1.8       -7.3
      S&P SmallCap 600                          148.1     -0.2      -18.3
      S&P SuperComposite 1500                   211.7     1.6       6.6
      
                                                            %  change
      SECTORS                                   Latest    Week      Year
      Bloomberg Information Age                 336.5     3.2       15.0
      S&P Financials                            106.9     -2.5      -0.1
      S&P Utilities                             237.6     2.3       17.6
      PSE Technology                            309.0     2.9       -5.9
      
                                                             % change
      FOREIGN MARKETS                           Latest    Week      Year
      London (FT-SE 100)                        5311.3    1.4       8.3
      Frankfurt (DAX)                           5040.9    1.4       24.5
      Tokyo (NIKKEI 225)                        14,755.5  2.6       -21.1
      Hong Kong (Hang Seng)                     7905.5    7.5       -46.6
      Toronto (TSE 300)                         5871.8    3.3       -13.3
      Mexico City (IPC)                         3167.3    -0.4      -34.3
      
                                                          Week      Year
      FUNDAMENTALS                              Latest    ago       ago
      S&P 500 Dividend Yield                    1.54%     1.58%     1.63%
      S&P 500 P/E Ratio (Last 12 mos.)          24.3      22.8      23.6
      S&P 500 P/E Ratio (Next 12 mos.)*         19.5      18.9r     16.6
      First Call Earnings Revision*             -4.69%    -3.78%    -0.44%
      
                                                          Week
      TECHNICAL INDICATORS                      Latest    ago        Reading
      S&P 500 200-day average                   1061.0    1059.9    Negative
      Stocks above 200-day average              18.0%     15.0%     Positive
      Options: Put/call ratio                   0.58      0.81      Negative
      Insiders: Vickers Sell/buy ratio          0.98      1.03      Positive
      
      BEST-PERFORMING          Last                                  Last 12
      GROUPS                   month%                                months%
      Electric Companies        5.0       Broadcasting                60.9
      International Oil         4.5       Drug Chains                 54.7
      Food Chains               3.4       Drugs                       49.6
      Foods                     2.7       Long-Dist Telecomms.        49.4
      Restaurants               2.3       Specialty Appar. Retailers  45.3
      
      WORST-PERFORMING        Last                                   Last 12
      GROUPS                  month%                                 months%
      Invest. Banking/Brkrge. -31.5       Oil & Gas Drilling         -58.0
      Money Center Banks      -28.1       Metals                     -51.0
      Leisure Time            -22.9       Leisure Time               -47.7
      Shoes                   -22.2       Shoes                      -42.1
      Soft Drinks             -21.4       Engineering & Constr.      -40.9
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                               1-month
      significant buying on price weakness              Price         change
      Intel                                             81 29/32     -4 23/32
      Citicorp                                          98 11/16     -53 13/16
      Merck                                             125 1/2      -5/8
      America Online                                    95 1/4       -17 1/2
      IBM                                               125 15/16    -3 15/16
      BankAmerica                                       63 3/8       -19 15/16
      
      Decline ahead?  Stocks with most                                1-month
      significant selling on price strength             Price          change
      Dell Computer                                     59 15/16      4 13/16
      American Home Products                            52 3/16       15/16
      British Petroleum-ADR                             80 3/16       4 3/16
      Royal Dutch Petroleum-NYS                         49 15/16      2 11/16
      Kellogg                                           33 3/8        2 1/4
      BMC Software                                      51 1/4        1/2
      
      INTEREST RATES
      
                                                        Latest    Week      Year
      KEY RATES                                         week%     ago%      ago%
      MONEY MARKET FUNDS                                5.10      5.11      5.16
      90-DAY TREASURY BILLS                             4.85      4.91      5.11
      6-MONTH BANK CDS                                  5.05      5.05      5.17
      1-YEAR TREASURY BILLS                             4.79      4.91      5.61
      10-YEAR TREASURY NOTES                            4.93      5.10      6.37
      30-YEAR TREASURY BONDS                            5.27      5.34      6.66
      LONG-TERM AA INDUSTRIALS                          6.27      6.28      7.12
      LONG-TERM BBB INDUSTRIALS                         6.80      6.88      7.53
      LONG-TERM AA TELEPHONES                           6.53      6.65      7.43
      
      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%     4.24%     4.88%     4.88%
      PERCENT OF TREASURIES            86.05     83.60     92.67     91.42
      TAXABLE EQUIVALENT               6.14      6.14      7.07      7.07
      INSURED REVENUE BONDS            4.41      4.42      5.04      5.05
      PERCENT OF TREASURIES            89.50     87.15     95.71     94.61
      TAXABLE EQUIVALENT               6.39      6.41      7.30      7.32
      
      MUTUAL FUNDS
      
      EQUITY FUNDS
      Leaders
      Four-week total return                              %
      Guinness Mainland China                           23.2
      Guinness Flight China                             16.5
      Prudent Bear                                      16.4
      Newport Greater China A                           16.1
      U.S. Global Inv. China Reg.                       13.9
      
      Laggards
      Four-week total return                              %
      Lexington Troika Russia                          -51.3
      Montgomery Latin Amer. R                         -36.9
      Excelsior Latin America                          -35.7
      Invesco Latin American Gr.                       -35.2
      Offitbank Latin Amer. Select                     -33.3
      
      Leaders
      52-week total return                                %
      Smith Barney Telecomms. Inc.                      43.3
      Weitz Hickory                                     38.5
      Invesco European                                  35.2
      Janus Twenty                                      34.7
      Scudder Greater Europe Gr.                        34.0
      
      Laggards
      52-week total return                                %
      Lexington Troika Russia                          -87.9
      Guinness Flgt. Asia Sm. Cap                      -67.3
      Lex. Crosby Sm. Cap Asia                         -65.4
      Matthews Korea I                                 -65.1
      Montgomery Emerg. Asia R                         -65.0
      
      EQUITY FUND CATEGORIES
      Leaders
      Four-week total return                             %
      Pacific/Asia ex-Japan                             4.0
      Precious Metals                                   3.1
      Japan                                             1.2
      Diversified Pacific/Asia                          0.3
      Utilities                                        -1.0
      
      Laggards
      Four-week total return                              %
      Latin America                                    -28.1
      Diversified Emerging Mkts.                       -15.5
      Small-cap Growth                                 -11.5
      Small-cap Blend                                  -11.0
      Small-cap Value                                   -9.9
      
      Leaders
      52-week total return                                %
      Utilities                                         16.8
      Europe                                            14.6
      Communications                                    14.2
      Large-cap Growth                                   8.8
      Large-cap Blend                                    5.8
      
      Laggards
      52-week total return                                %
      Latin America                                    -53.4
      Pacific/Asia ex-Japan                            -52.5
      Diversified Emerging Mkts.                       -47.2
      Diversified Pacific/Asia                         -40.1
      Precious Metals                                  -39.6
      
      All data are as of market close Wednesday, Sept. 9, 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 Sept.8. For a more detailed explanation, write to us or E-mail 
      figures@businessweek.com.  r=revised  **Vanguard Index 500 Fund
      
      
      
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