May 21, 2004/ FW/ ---State Street Associates, the research and development division of State Street Global Markets, released on May 18 the results of the State Street Investor Confidence Index^SM for May 2004. State Street Global Markets (SSGM) is the investment research and trading arm of State Street Corporation (NYSE:STT).

According to the May index, investor confidence declined by 0.6 points from April's revised reading of 92.0. However, April investor confidence was revised upwards by 1.2 points.

Developed by Harvard University professor Ken Froot and Paul O'Connell of State Street Associates, the index shows that institutional investor confidence has been essentially flat at 91.4 for the past two months, having declined from its recent high of 109.0 in December 2003.

"Professional investors made substantial downward adjustments in the risk of their portfolios in the first few months of 2004, but are now clearly in a holding pattern awaiting fresh news. By cutting risk, they prepared their portfolios for possible early increases in rates by the Fed," said Paul O'Connell.

"In the fourth and fifth months, professional investors rested. Right now, it's a war of attrition, with recent positive earnings surprises battling against Asian overheating, prospective US Fed rate increases, and soaring commodity prices," said Ken Froot. "Professional investors know the risks, and their prior efforts to take risk off the table anticipated this struggle."

The State Street Investor Confidence Index^SM is a key economic indicator for asset owners, investment managers and central banks. As the only index providing a quantitative measure tracking the common buying patterns of institutional investors around the world, the State Street Investor Confidence Index^SM offers a unique look into the investment behavior and decisions of thousands of professional investors and their investment decisions.

For more information, please log on to www.statestreet.com/investorconfidenceindex