(FORTUNE Magazine) – CORPORATE PERFORMANCE Cover Stories

32 America's Most Admired Corporations Merck is No. 1 for the second year in a row -- and IBM falls out of the magic circle. by Ellen Schultz

38 Let's Hear It From the Winner -- and From a Loser Merck chief Roy Vagelos tells how he plans to stay on top. Walter Williams of Bethlehem Steel explains why it shouldn't rank 302nd.

42 How Companies Rank in 33 Industries

56 Big Changes at Big Brown The conservative owner-managers at United Parcel Service are turning aggressive. Watch out, Federal Express ! by Kenneth Labich

64 Companies to Watch

THE ECONOMY Fortune's Forecast for the Next 18 Months:

68 Surprising Help From the Crash Black Monday cooled an overheated economy. by Todd May Jr.

81 What the Forecast Means for 16 Industries It's good news for airlines, bad for autos, appliances, and housing.

MANAGING 88 How CEOs Manage Their Time The busiest people in business have developed strategy and tactics for making the most of their 60-hour weeks. It helps to leave the big problems for weekends -- and to have two secretaries. by Ford S. Worthy

MONEY & MARKETS 101 A Champion Stock Promoter An obscure over-the-counter broker has been touting five tiny companies whose stock prices defy logic and gravity. Regulators suspect market manipulation. by Brett Duval Fromson

EXECUTIVE LIFE 109 Black Executives: How They're Doing Statistically, not very well. Too few have the education or training that corporations most need, and they still face discrimination. For all that, some blacks have triumphed in major U.S. companies. by Colin Leinster

POLITICS & POLICY 124 A Report Card on Reagan With a year to go in his paradox-filled presidency, he has flunked the course in budget balancing but scored three unequivocal successes. And his Russian seminar with Mikhail Gorbachev looks promising. by Lee Smith

4 The Editor's Desk

8 News/Trends Texaco's restless shareholders, travel spots where the dollar still has heft, business fads for '88, and more.

25 Letters to Fortune

145 Fortune People The welcome Wolf at United Airlines' door, Diane Sawyer and the Mayflower Madam on the podium, David Stockman's new view of federal spending, and more. by Nancy J. Perry

148 On the Rise

151 Personal Investing Corporations that do best as the dollar droops. by John J. Curran

Capital gains from service companies that boast a high-tech edge. Crash or no crash, dividends are headed up. One reason: the new tax law.

Portfolio Talk: Money manager and newsletter publisher Martin Zweig.

159 Office Hours Restructurers: It's time to worry about morale. by Walter Kiechel III

165 Keeping Up Bill Moyers's thoughtful smile, insider trading Hollywood style, and other matters. by Daniel Seligman

173 Books & Ideas Leadership -- in theory and winning practice. by Warren Bennis

Cover: Illustration by Brian Bailey from photographs by E. J. Camp -- Onyx.