STOCKS

COMMENTARY

After rallying in anticipation of an interest rate cut by the Federal Reserve,

the stock market greeted the 25 basis-point cut with a big yawn on Sept. 29

and closed down for the day. The market slid even further the next day, with

the Dow Jones industrial average plunging 238 points, or 3%, on worries that

the economic woes of Asia and Latin America will deal a painful blow to

corporate profits in the U.S. The flight to quality continued, with the yield

on the 30-year Treasury bond dropping to 4.97%.

      
                                                                    % change
      U.S. MARKETS                                      Latest    Week      Year
      Dow Jones Industrials                             7842.6    -3.8      -2.2
      NASDAQ Combined Composite                         1693.8    -3.8       0.2
      S&P MidCap 400                                    307.0    -3.6      -7.7
      S&P SmallCap 600                                   151.2    -3.8     -19.6
      S&P SuperComposite 1500                            214.4    -4.5       3.9
      
                                                                     % change
      SECTORS                                           Latest    Week      Year
      Bloomberg Information Age                         354.5     -2.7      17.7
      S&P Financials                                    107.0     -8.5      -5.2
      S&P Utilities                                     255.5      0.9      23.7
      PSE TechnolOgy                                    319.8     -4.5      -3.9
      
                                                                     % change
      FOREIGN MARKETS                                   Latest    Week      Year
      London (FT-SE 100)                                5064.4    -2.9      -4.8
      Frankfurt (DAX)                                   4474.5    -4.8       6.6
      Tokyo (NIKKEI 225)                              13,406.4    -2.8      -24.9
      Hong Kong (Hang Seng)                             7883.5     5.1      -47.6
      Toronto (TSE 300)                                 5614.1    -6.7      -20.3
      Mexico City (IPC)                                 3569.9    -8.5      -33.3
      
                                                                  Week      Year
      FUNDAMENTALS                                      Latest    ago        ago
      S&P 500 Dividend Yield                            1.52%     1.54%     1.60%
      S&P 500 P/E Ratio (Last 12 mos.)                  25.0      24.4      24.2
      S&P 500 P/E Ratio (Next 12 mos.)*                 20.3      19.8      18.8
      First Call Earnings Revision*                    -5.79%    -5.87%    -1.48%
      
                                                                  Week      
      TECHNICAL INDICATORS                              Latest    ago      Reading
      S&P 500 200-day average                           1065.8    1063.9   Negative
      Stocks above 200-day average                      22.0%     20.0%    Positive
      Options: Put/call ratio                           0.57      0.67     Negative
      Insiders: Vickers Sell/buy ratio                  0.65      0.66     Positive
      
      BEST-PERFORMING               Last                              Last 12
      GROUPS                        month%                            months%
      Gold Mining                   52.3      Drug Chains              54.1
      Oil Exploration & Production  23.9      Broadcasting             49.7
      Natural Gas                   18.3      Drugs                    49.2
      Food Wholesalers              16.7      Long-Dist. Telecomm.     42.3
      Defense Electronics           16.4      Food Chains              39.2
      
      WORST-PERFORMING              Last                               Last 12
      GROUPS                        month%                             months%
      Machine Tools                 -24.0     Oil & Gas Drilling       -60.8
      Invest. Banking/Brkrge.       -23.2     Leisure Time             -51.9
      Toys                          -18.7     Metals                   -49.7
      Metal & Glass Containers      -17.6     Machine Tools            -42.7
      Department Stores             -15.0     Transportation Svcs.     -40.8
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                              1-month
      significant buying on price weakness              Price       change
      Citicorp                                          97 3/4      -10 9/16
      BankAmerica                                       62 1/4      -2 1/4
      Procter & Gamble                                  72 7/16     -4 1/16
      Eastman Kodak                                     77 15/16    -3/16
      Xerox                                             87 1/2      -5/16
      Merrill Lynch                                     50 1/8      -15 7/8
      
      Decline ahead?  Stocks with most                              1-month
      significant selling on price strength             Price       change
      Dell Computer                                     67 13/16    17 13/16
      Cisco Systems                                     64 5/8      10 3/64
      MCI Worldcom                                      50 9/16      9 5/8
      Microsoft                                        112 7/8      16 15/16
      Tellabs                                           44 5/8       2 3/8
      PeopleSoft                                        33 7/16      5 5/16
      
      INTEREST RATES
      
                                                        Latest    Week      Year
      KEY RATES                                         week%     ago%      ago%
      MONEY MARKET FUNDS                                5.05      5.06      5.14
      90-DAY TREASURY BILLS                             4.36      4.68      5.10
      6-MONTH BANK CDS                                  4.82      4.86      5.19
      1-YEAR TREASURY BILLS                             4.39      4.59      5.44
      10-YEAR TREASURY NOTES                            4.42      4.67      6.04
      30-YEAR TREASURY BONDS                            4.97      5.17      6.33
      LONG-TERM AA INDUSTRIALS                          6.03      6.17      6.78
      LONG-TERM BBB INDUSTRIALS                         6.79      7.04      7.17
      LONG-TERM AA TELEPHONES                           6.45      6.60      7.11
      
      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             4.14%     4.16%     4.78%     4.83%
      PERCENT OF TREASURIES          93.67     89.16     96.04     93.45
      TAXABLE EQUIVALENT              6.00      6.03      6.93      7.00
      INSURED REVENUE BONDS           4.29      4.33      4.97      5.03
      PERCENT OF TREASURIES          97.36     92.81    100.06     97.32
      TAXABLE EQUIVALENT              6.22      6.28      7.20      7.29
      
      MUTUAL FUNDS
      
      EQUITY FUNDS
      Leaders                                 Laggards
      Four-week total return          %       Four-week total return          %
      Pioneer Gold A                46.5      Potomac OTC/Short            -13.2
      Fidelity Select Gold          46.3      ProFunds UltraBear Serv.     -11.8
      Am. Cent. Global Gold         45.3      Lexington Troika Russia       -9.8
      Fidelity Sel. Prec. Mets.     44.5      Kemper Europe B               -7.5
      USAA Gold                     44.2      Weitz Hickory                 -7.1
      
      Leaders                                 Laggards
      52-week total return            %       52-week total return            %
      Smith Barney Telecomm. Inc.   48.8      Lexington Troika Russia      -88.8
      Flag Investors Communs. A     35.7      Guinness Flgt. Asia Sm. Cap  -63.8
      Janus Twenty                  35.6      Matthews Korea I             -62.6
      Icon Telecomms. & Utilities   34.5      Frontier Equity              -62.4
      Fidelity Sel. Health Care     33.0      Lex. Crosby Sm. Cap Asia     -61.6
      
      EQUITY FUND CATEGORIES
      Leaders                                 Laggards
      Four-week total return         %        Four-week total return        %
      Precious Metals              36.3       Japan                       -2.6
      Natural Resources            15.6       Europe                      -2.6
      Pacific/Asia ex-Japan        12.5       Foreign                     -0.7
      Health                       10.7       World                        1.5
      Technology                    9.6       International Hybrid         1.7
      
      Leaders                                 Laggards
      52-week total return            %       52-week total return            %
      Utilities                     18.9      Pacific/Asia ex-Japan        -49.0
      Communications                13.9      Latin America                -47.9
      Large-cap Growth               8.6      Diversified Emerging MkTs.   -45.8
      Large-cap Blend                5.3      Diversified Pacific/Asia     -39.2
      Health                         4.2      Precious Metals              -32.1
      
      All data are as of market close Wednesday, September 30, 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. 29. 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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