COMMENTARY

Rather than reap the rewards of a strong economy, stock market investors are losing ground. The same good economic news has pushed interest rates to the levels they were at before last summer's global financial crisis. That makes it difficult if not impossible for equities to move up. In the last week, the Dow Jones industrials gave up 1.3%, the Standard & Poor's 500 lost 2.1%. Tech stocks were hit hard, with the PSE Technology Index losing 6.1%. European bourses also suffered, hurt by slowing economic growth and a weakening euro.

STOCKS

                                                  % change
      U.S. MARKETS                       Latest      Week      Year
      Dow Jones Industrials              9275.9      -1.3         8.6
      NASDAQ Combined Composite          2265.2      -3.2        28.7
      S&P MidCap 400                      357.3      -1.2         1.0
      S&P SmallCap 600                    160.0      -1.2       -17.5
      S&P SuperComposite 1500             257.1      -2.0        14.3
                                                       % change
      SECTORS                             Latest     Week      Year
      Bloomberg Information Age           481.6      -5.5       48.8
      S&P Financials                      134.6       1.3        7.3
      S&P Utilities                       237.5      -1.3        1.8
      PSE Technology                      456.5      -6.1       37.0
                                                       % change
      FOREIGN MARKETS                    Latest      Week      Year
      London (FT-SE 100)                 6048.3      -4.1        5.5
      Frankfurt (DAX)                    4697.7      -7.2       -0.3
      Tokyo (NIKKEI 225)               14,170.4      -1.3      -17.1
      Hong Kong (Hang Seng)              9922.4       2.5      -12.6
      Toronto (TSE 300)                  6180.3      -2.5      -13.5
      Mexico City (IPC)                  4127.4      -3.3      -14.1
                                                     Week       Year
      FUNDAMENTALS                         Latest    ago        ago
      S&P 500 Dividend Yield               1.30%     1.25%       1.45%
      S&P 500 P/E Ratio (Last 12 mos.)     32.4      33.3        26.4
      S&P 500 P/E Ratio (Next 12 mos.)*    23.2      24.3        20.5
      First Call Earnings Revision*       -1.41%    -2.09%      -2.49%
                                                     Week
      TECHNICAL INDICATORS                Latest     ago         Reading
      S&P 500 200-day average            1132.7    1129.5        Positive
      Stocks above 200-day average         29.0%     31.0%       Positive
      Options: Put/call ratio              0.58      0.61        Negative
      Insiders: Vickers Sell/buy ratio     1.21      1.31        Positive
      Data: Bloomberg Financial Markets; *First Call Corp.
      
      BEST-PERFORMING              Last                                 Last 12
      GROUPS                       month%                               months%
      Insurance Brokers            18.0  Specialty Appar. Retailers     89.8
      Leisure Time                 13.4  Communications Equip.          76.1
      Restaurants                  11.0  Restaurants                    66.7
      Transportation Services      10.6  Computer Systems               61.5
      Multiline Insurers            7.2  Genl. Merchandise Chains       61.2
      WORST-PERFORMING            Last                                  Last 12
      GROUPS                      month%                                months%
      Instrumentation             -16.4  Oil & Gas Drilling            -59.6
      Metal & Glass Containers    -15.7  Metal & Glass Containers      -45.1
      Computer Systems            -15.1  Machine Tools                 -44.2
      Semiconductors              -15.1  Hospital Management           -40.1
      Tobacco                     -14.5  Oil-Well Equip. & Svcs.       -37.4
      
      BLOOMBERG MONEY FLOW ANALYSIS
      Rebound ahead?  Stocks with most                           1-month
      significant buying on price weakness    Price              change
      America Online                           86 11/16             - 1/32
      IBM                                     167 3/4              -7 1/2
      Airtouch Communications                  90 1/8              -2 7/8
      Vodafone Group-ADR                      179 11/16            -6 13/16
      Lucent Technologies                      99 15/16           -10 1/16
      Morgan Stanley Dean Witter               90 3/8              -1 3/8
      Decline ahead?  Stocks with most                            1-month
      significant selling on price strength   Price               change
      MCI WorldCom                            80  1/2               2 7/16
      Amgen                                   64                      5/32
      eBay                                    117 1/16             24 5/16
      Prodigy Communications                  35  7/8               7 3/4
      Comcast                                 68  5/8                 11/16
      Schering-Plough                         54  1/4                 1/4
      
      INTEREST  RATES
                                     Latest     Week       Year
                                     week%      ago%       ago%
      MONEY MARKET FUNDS             4.53       4.54       5.13
      90-DAY TREASURY BILLS          4.59       4.67       5.19
      6-MONTH BANK CDS               4.35       4.33       5.06
      1-YEAR TREASURY BILLS          4.88       4.85       5.43
      10-YEAR TREASURY NOTES         5.39       5.18       5.76
      30-YEAR TREASURY BONDS         5.69       5.51       6.05
      LONG-TERM AA INDUSTRIALS       6.58       6.40       6.65
      LONG-TERM BBB INDUSTRIALS      7.37       7.16       7.08
      LONG-TERM AA TELEPHONES        6.80       6.59       6.95
      
      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       4.19%        4.13%       4.98%         4.92%
      PERCENT OF TREASURIES    77.85        79.84       87.45         89.36
      TAXABLE EQUIVALENT        6.07         5.99        7.22          7.13
      INSURED REVENUE BONDS     4.31         4.25        5.23          5.16
      PERCENT OF TREASURIES    80.08        82.16       91.84         93.72
      TAXABLE EQUIVALENT        6.25         6.16        7.58          7.48
      
      EQUITY FUNDS
      Leaders                                 Laggards
      Four-week total return           %      Four-week total return            %
      Lexington Troika Russia        20.4     ProFunds UltraOTC Service     -20.0
      ProFunds UltraShort OTC Inv.   17.3     IAI Emerging Growth           -19.2
      Eaton Vance Grtr. India B      13.4     Wasatch Mid-Cap               -15.1
      American Heritage              13.3     Fidelity Select Electronics   -13.8
      Rydex Arktos Investor           8.8     Icon Technology               -13.4
      Leaders                                 Laggards
      52-week total return              %     52-week total return              %
      Internet                      264.5     Lexington Troika Russia       -77.6
      Amerindo Technology D         152.8     State St. Res. Glob. Res. B   -59.8
      Grand Prix                    113.7     American Heritage             -57.0
      ProFunds UltraOTC Investor    104.0     Offitbank Latin Amer. Sel.    -55.2
      WWW Internet                   86.7     Excelsior Latin America       -54.3
      EQUITY FUND CATEGORIES
      Leaders                                 Laggards
      Four-week total return            %     Four-week total return            %
      Financial                       1.9     Technology                     -8.2
      Pacific/Asia ex-Japan          -0.2     Small-cap Growth               -7.4
      Unaligned                     -1.7     Small-cap Blend                -6.5
      LaTin America                  -2.0     Small-cap Value                -6.1
      Large-cap Value                -2.0     Mid-cap Growth                 -5.1
      Leaders                                 Laggards
      52-week total return              %     52-week total return              %
      Technology                     37.3     Latin America                 -43.0
      Communications                 35.1     Diversified Emerging Mkts.    -31.4
      Large-cap Growth               25.9     Natural Resources             -30.8
      Large-cap Blend                12.5     Pacific/Asia ex-Japan         -19.4
      Health                         10.1     Real Estate                   -18.5
      
      All data are as of market close Wednesday, Mar. 3, 1999, 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 Mar. 2. 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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