The change is largely attributable to a downward revision of some composite indexes
including industrial production data due to seasonal adjustments.
All three of the Conference Board's composite indexes
the leading, coincident, and lagging indicators of economic activity--rose in October.
In the past few months, the market has looked much like it did in the first three months of the year, when the largest stocks in the Standard & Poor's 500 and Nasdaq Composite indexes
soared while many other stocks lagged.
The Bureau of Economic Analysis (BEA) is revising its composite indexes of leading, coincident, and lagging indicators, the key indexes in its analytic system designed to help predict peaks and troughs in the business cycle.
The improved methodology for calculating the composite indexes is derived from the "modified" methodology, described in an article in the June 1992 Survey of Current Business, that has been used to calculate the alternative coincident index presented each month in the Survey on page C-21.
13, 1998--Standard & Poor's Financial Information Services will make the following changes in the S&P MidCap 400 and S&P REIT Composite Indexes
after the close of trading on Thursday, October 15, 1998:
At the forefront of BEA's cyclical indicators system are the composite indexes of leading, coincident, and lagging indicators.
Because the combination of prompt availability and reasonable accuracy is an especially important requirement of composite indexes, only monthly series that are available on a timely basis and are not subject to large revisions are considered when selecting components of the three composites.
For example, a quick look at most REIT composite indexes
shows that they lump the year-to-date performance of the mortgage sector in with the lower performance of the retail or factory-outlet sector.
The composite indexes
are the key elements in an analytic system designed to signal peaks and troughs in the business cycle.
The composite indexes
and related series will also be available from The Conference Board on diskette and from the Commerce Department on STAT-USA's Economic Bulletin Board.
The Department of Commerce has selected The Conference Board to take over the preparation and dissemination of the composite indexes
of leading, coincident, and lagging indicators.