Bear Stearns' Research Department Initiates Coverage of Two Capital Goods Sectors; Ann Duignan Launches Coverage of US Machinery and Multi-Industry Companies.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 3, 2003

Bear, Stearns & Co. Inc. today initiated coverage of two capital goods sectors: US machinery and multi-industry. Ann Duignan, who recently joined the firm as a managing director, launched equity research coverage of Parker-Hannifin Corp. (PH) and Caterpillar Inc. (CAT) with an "Outperform", Ingersoll-Rand Company (IR) and Eaton Corp. (ETN) at "Peer Perform" and Deere & Co. (DE) with an "Underperform". Duignan rates the US machinery sector "market weight".

According to Duignan, North American coal production and a drop in demand for agricultural equipment are just two themes affecting US machinery. "A slight boost in industrial production and a pick up in coal mining as the year progresses should help drive demand for equipment replacement parts," said Duignan who added that Caterpillar and Parker-Hannifin stand to benefit the most from those sector positives. "At the same time, demand for agricultural equipment has been declining, there are fewer dollars going into manufacturing capacity expansion and used construction equipment prices continue to fall. There are quite a few opposing forces at work here."

One of the other forces at work in the sector is the trucking cycle. "There should be growing demand for heavy-duty trucks," said Duignan. "I expect a rebound in the number of heavy-duty trucks purchased to pick-up starting next year."

(***) Bear Stearns does and seeks to do business with companies covered in its research reports. As a result investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report.

(***) Investors should consider this report as only a single factor in making their investment decision.

Please refer to the last page for important disclosure information.

For a copy of the initiations of coverage, members of the press may call Monica Orbe at [phone].

Founded in 1923, The Bear Stearns Companies Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., a leading investment banking and securities trading and brokerage firm. With approximately $32.0 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors. Headquartered in New York City, the company has approximately 10,500 employees worldwide. For additional information about Bear Stearns, please visit the firm's Web site at http://www.bearstearns.com.

Bear, Stearns & Co. Equity Research Rating System:

Ratings for Stocks (vs. analyst coverage universe):

Outperform (O) - Stock is projected to outperform analyst's industry coverage universe over the next 12 months.

Peer Perform (P) - Stock is projected to perform approximately in line with analyst's industry coverage universe over the next 12 months.

Underperform (U) - Stock is projected to underperform analyst's industry coverage universe over the next 12 months.

Ratings for Sectors (vs. regional broader market index):

Market Overweight (MO) - Expect the industry to perform better than the primary market index for the region over the next 12 months.

Market Weight (MW) - Expect the industry to perform approximately in line with the primary market index for the region over the next 12 months.

Market Underweight (MU) - Expect the industry to underperform the primary market index for the region over the next 12 months.

Bear, Stearns & Co. Ratings Distribution as of April 14, 2003:

(%Rated companies / %Banking client in the last 12 months)

Outperform: 37.0 / 24.8

Peer Perform: 44.7 / 17.7

Underperform: 17.3 / 9.6

Not Rated: 1.0 / 20.0

The costs and expenses of Equity Research, including the compensation of the analyst(s) that prepared this report, are paid out of the Firm's total revenues, a portion of which is generated through investment banking activities.