COMMENTARY
      Bond prices fell during the week, pushing the rate on long-term Treasury bonds 
      up over 6.7%. Still, the  stock market, with the exception of technology 
      companies, seemed to shrug it off. Money appeared to be moving into beaten-up 
      sectors such as financials, transportation, and utilities. Those sectors are 
      interest-rate sensitive, and their strength suggests rates are near their 
      peak.
      
      STOCKS
      
                                               -----------% change--------
                                                         Year-to   Last 12
      U.S. MARKETS              Jan. 12        Week      date      months
      
      Dow Jones Industrials     11,551.1       3.9       0.5       21.9
      Nasdaq Composite          3849.9         -0.7      -5.4      65.9
      Nasdaq 100                3478.1         -0.8      -6.2      79.3
      S&P MidCap 400            432.7          1.5       -2.7      12.6
      S&P SmallCap 600          192.0          2.0       -2.9      8.7
      S&P SuperComposite 1500   301.0          2.1       -2.5      15.1
      S&P/BARRA Growth          855.6          1.3       -3.6      23.7
      S&P/BARRA Value           602.4          3.1       -1.3      6.4
      S&P Basic Materials       139.3          0.3       0.8       20.0
      S&P Capital Goods         1084.7         4.1       -2.3      25.5
      S&P Energy                848.4          3.7       1.7       19.9
      S&P Financials            126.6          4.6       -4.9      -5.2
      S&P REIT                  75.9           4.4       3.1       -10.1
      S&P Transportation        609.1          6.2       2.0       -11.2
      S&P Utilities             237.9          3.7       4.7       -6.7
      GSTI Internet             635.6          -8.8      -10.8     48.1
      Morgan Stanley Cyclical   584.3          3.2       -0.2      17.1
      PSE Technology            932.3          2.5       -4.1      93.6
      
                                                        ------------% change-------
                                                                  Year-to   Last 12
      GLOBAL MARKETS                     Jan. 12        Week      date      months
      S&P Euro Plus                      1485.7         2.5       -4.3      17.0
      London (FT-SE 100)                 6532.8         0.0       -5.7      8.3
      Frankfurt (DAX)                    6912.8         6.3       -0.7      32.9
      Tokyo (NIKKEI 225)                 18,677.4       -1.7      -1.4      39.8
      Hong Kong (Hang Seng)              15,714.2       -0.8      -7.4      46.7
      Toronto (TSE 300)                  8360.0         2.9       -0.7      24.7
      Mexico City (IPC)                  7174.1         6.1       0.6       107.4
      
                                                        Week      Year
      FUNDAMENTALS                       Jan. 11        ago       ago
      S&P 500 Dividend Yield             1.17%          1.20%     1.27%
      S&P 500 P/E Ratio
       (Trailing 12 mos.)                31.9           31.1      32.3
      S&P 500 P/E Ratio (Next 12 mos.)*  24.7           24.0      24.1
      First Call Earnings Surprise*      17.14%         19.18%    15.13%
      *First Call Corp.
      
                                                        Week
      TECHNICAL INDICATORS               Jan. 11        ago       Reading
      S&P 500 200-day average            1350.9         1431.1    Positive
      Stocks above 200-day average       29.0%          25.0%     Positive
      Options: Put/call ratio            0.45           0.46      Negative
      Insiders: Vickers Sell/buy ratio   0.68           0.66      Positive
      
      BEST-PERFORMING                 Last                                 Last 12
      GROUPS                          month%                               months%
      Health-Care Services            37.6       Instrumentation            151.9
      Instrumentation                 22.5       Communications Equip.      83.6
      Metals                          18.1       Aluminum                   76.2
      Entertainment                   16.9       Health-Care Services       75.6
      Semiconductors                  16.1       Semiconductors             68.3
      
      WORST-PERFORMING                Last                                  Last 12
      GROUPS                          month%                                months%
      Regional Telephone Cos.         -12.5      Pollution Control          -61.5
      Money Center Banks              -11.0      Tobacco                    -52.7
      Major Regional Banks            -10.2      Office Equip. & Supplies   -49.4
      Housewares                      -9.0       Manufactured Housing       -48.5
      Toys                            -8.8       Food Chains                -38.2
      
      INTEREST RATES
      
                                                 Week      Year
      KEY RATES                       Jan. 12    ago       ago
      MONEY MARKET FUNDS              5.39%      5.39%     4.71%
      90-DAY TREASURY BILLS           5.43       5.43      4.45
      1-YEAR TREASURY BILLS           6.12       6.00      4.49
      10-YEAR TREASURY NOTES          6.70       6.49      4.74
      30-YEAR TREASURY BONDS          6.71       6.53      5.16
      30-YEAR FIXED MORTGAGE!         8.29       8.16      6.85
      !BanxQuote, Inc.
      
      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
      GENERAL OBLIGATIONS             5.17%                5.94%
      TAXABLE EQUIVALENT              7.49                 8.61
      INSURED REVENUE BONDS           5.33                 6.21
      TAXABLE EQUIVALENT              7.72                 9.00
      
      MUTUAL FUNDS
      
      EQUITY FUND CATEGORIES
      
      Leaders                                      Laggards
      Four-week total return          %            Four-week total return   %
      Health                          18.6         Financial                -4.4
      Real Estate                     11.3         Domestic Hybrid          1.5
      Technology                      10.1         Large-cap Value          1.8
      Diversified Emerging Mkts.      10.0         Utilities                2.0
      Mid-cap Growth                  9.3          Communications           2.3
      
      Leaders                                      Laggards
      52-week total return            %            52-week total return     %
      Technology                      106.6        Financial                -9.5
      Japan                           98.1         Precious Metals          -8.0
      Diversified Pacific/Asia        78.2         Real Estate              -1.9
      Diversified Emerging Mkts.      67.7         Small-cap Value          1.7
      Latin America                   66.8         Large-cap Value          2.2
      
      
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