Investor Confidence Index Declines in March; Six Months after Initial Launch, State Street's Unique Measure has become a Key Economic Indicator

March 23, 2004

BOSTON--(BUSINESS WIRE)--March 23, 2004--State Street Associates, a subsidiary of State Street Corporation (NYSE: STT), the world's leading provider of services to institutional investors, released today the results of the State Street Investor Confidence Index(SM) for March 2004.

According to the March index, investor confidence declined 1.7 points from February's revised reading of 93.9.

Developed by Harvard University professor Ken Froot and Paul O'Connell of State Street Associates, the index shows that institutional investor confidence has fallen by 16.8 points from its December 2003 high of 109.0.

"Our index confirms the view that equity prices at the end of 2003 had reflected a complacency about significant risks that is now gone. Sentiment shifted strongly to the negative beginning in January 2004 and has continued this pattern in each of the last two months," said Froot.

"The index decline of 1.7 points, coming on the heels of a two-month decline of 15.1, is a substantial drawdown in sentiment by historical standards," added O'Connell. "Institutional investors caught this 2004 cold before consumers began to sniffle."

In the six months since its initial launch in September 2003, the State Street Investor Confidence Index(SM) has become 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 of thousands of professional investors and their investment decisions.

About State Street Associates:

Founded in 1999 in Cambridge, Mass., State Street Associates develops portfolio and flow research, currency management, asset allocation services and designs strategy tools to support the needs of global portfolio managers.

About the State Street Investor Confidence Index(SM)

The index will be released at 10 a.m. Eastern time in Boston on the second to last Tuesday of each month and released globally. More information on the State Street Investor Confidence Index, and a calendar of release dates, is available at http://www.statestreet.com/investorconfidenceindex. The previous month's calculations for the index will be revised to account for trading activity through the end of the reporting period.

About State Street

State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management, research and analytics and trading services. With $9.4 trillion in assets under custody and $1.1 trillion in assets under management, State Street operates in 24 countries and more than 100 markets worldwide. For more information, visit State Street's Web site at www.statestreet.com.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those related to the pace at which State Street adds new clients or at which existing clients use additional services, the value of global and regional financial markets, the pace of cross-border investment activity, changes in interest rates, the pace of worldwide economic growth and rates of inflation, the extent of volatility in currency markets, consolidations among clients and competitors, State Street's business mix, the dynamics of markets State Street serves, and State Street's success at integrating and converting acquisitions into its business. Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street's 2003 annual report and subsequent SEC filings. State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, March 23, 2004, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

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    CONTACT: State Street CorporationHannah Grove, 617-664-3377
             or
             Carolyn Cichon, 617-664-8672

    SOURCE: State Street Corporation