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CHAPTER 17

The Stock Market

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The Value of Outstanding Shares of Domestically Issued Stock since 1982 (End of

Year)

*Through second quarter 2001.

SOURCE: Flow of Funds of the United States, Z1, Board of Governors of the Federal Reserve System, various issues.

19821983198419851986198719881989199019911992199319941995199619971998199920002001*

Year

$1,562.5 1,856.0 1,789.2 2,270.4 2,682.6 2,710.3 3,076.3 3,819.7 3,542.6 4,863.4 5,430.9 6,306.2 6,333.3 8,495.710,255.813,201.315,427.819,576.317,168.815,863.3*

Corporate Equities

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The Returns to Stocks and Bonds over Time

ArETURN TO STOCKS IS MEASURED BY THE Standard and Poor’s 500 Composite Index and includes reinvestment of dividends.bReturn to bonds is measured by Moody’s AAA Rated Corporate Bond Index and includes reinvestment of interest.cThrough September 28, 2001.SOURCE: Global Financial Data, Los Angeles, California.

Value of $100 invested in bonds in 1969b

Value of $100 invested in stocks in 1969a

1970 1975 1980 1985 1990 1995 2000 2001c

Year

$5,000

4,000

3,000

2,000

1,000

0

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Net Non-U.S. Purchases of U.S. Stocks

U.S. Dollars, in Billions

*Annualized through second quarter 2001.

SOURCE: Flow of Funds of the United States, Z1, Board of the Federal Reserve System, September 18, 2001, page 22.

200

150

120

100

80

60

40

20

0'95 '96 '97 '98 '99 '00 '01*

11.2

42.0

67.8

112.3

11.1

193.8

151.0

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The Ten Largest Companies (Measure by Market Value) Traded on the Big Board, July

2001

Ten Largest NYSE-Listed Companies

JULY 2001JULY 2001 JULY 2001

Company Name

General Electric Co.Exxon Mobil Corp.Pfizer IncCitigroup IncWal-Mart StoresAmerican International GroupAOL Time Warner IncIntl Business Machines CorpJohnson & Johnson Merck& Co

Symbol

GeXOMPFE

CWMTAIGAOLIBMJNJ

MRK

Market Cap ($bil.)

432.2288.1260.2252.7249.9194.1193.6182.8163.8155.9

NYSE Average Daily Volume

20,87654010,958,63713,242,71811,257,568 7,428,327 4,849,42313,078,036 7,748,647 8,183,296 6,710,387

Market Cap ($bil.)

506.9278.2165.9237.6244.9203.8117.4202.9129.3167.0

SOURCE: http://www.NYSE.com.

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The Companies that Make Up the Dow as of August 31, 2001

Alcoa

American Express

AT&T

Boeing

Caterpillar

Citigroup Inc.

Coca-Cola

DuPont

Eastman Kodak

Exxon Mobil Corp.

General Electric Co.

General Motors Corp.

Hewlett-Packard Co.

Home Depot

Honeywell International Inc.

IBM

Intel Corp.

International Paper

J. P. Morgan Chase & Co.

Johnson & Johnson

McDonald’s Corp.

Merck & Co.

Microsoft Corp.

Minn. Mining & Manufacturing

Philip Morris Cos.

Procter & Gamble Co.

SBC Communications

United Technologies Corp.

Wal-Mart

Walt Disney

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The Value of the DJIA, S&P 500, NYSE

Composite, and NASDAQ since 1985

Stock Market Indices(End of Period)

19851986198719881989199019911992199319941995199619971998199920002001*

1,546.67 1,895.95 1,938.83 2,168.57 2,753.20 2,633.66 3,168.83 3,301.11 3,754.09 3,834.44 5,117.12 6,448.27 7,908.25 9,181.4311,497.1210,786.90 9,323.54

Dow Jones Industrial Average

211.28 242.17 247.08 277.72 353.40 330.22 417.09 435.71 466.45 459.27 615.93 740.74 970.431,229.231,469.251,320.281,087.22

S&P 500

121.58138.58138.23156.26195.04180.49229.44240.21259.08250.94329.51392.30511.19595.81650.30656.87557.60

NYSE Composite

324.93 348.83 330.47 381.38 454.82 373.84 586.34 676.95 776.80 751.961,052.131,291.031,570.352,192.694,069.312,470.521,745.73

NASDAQ Composite

As of November 2, 2001.

SOURCE: Global Financial Data, Los Angeles, California

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Daily Average of Stock Market Volume and Values Traded since 1985

1985198619871988198919901991199219931994199519961997199819992000*

109.2141.0188.9161.5165.5156.8178.9202.3264.5291.4346.1412.0526.9673.6808.9953.8

NYSE

8.3 11.8 13.9 9.9 12.4 13.2133.3 14.2181.1 17.9 20.1 22.1 24.4 28.9 32.7 37.1

AMEX

82.1 113.6 149.8 122.8 133.1 131.9 163.3 190.8 263.0 295.1 401.4 543.7 647.8 801.71,081.81,542.0

NASDAQ

3.9 5.4 7.4 5.4 6.1 5.2 6.0 6.9 9.0 9.712.216.022.829.035.540.0

NYSE

0.9 1.5 2.0 1.4 1.7 1.8 2.7 3.5 5.3 5.8 9.513.017.722.943.779.7

NASDAQ

As of July 2001.SOURCE: Securities Industry Association

Stock Market Volume(Daily Avg., Mils. of Shs.)

Value Traded(Daily Avg., $ Bils.)