FIDELITY SUMMER STREET TRUST, N-30D, 1997-06-18

FIDELITY SUMMER STREET TRUST
N-30D, 1997-06-18

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(2_FIDELITY_LOGOS)FIDELITY

CAPITAL & INCOME
FUND
ANNUAL REPORT
APRIL 30, 1997
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 27 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 31 Notes to the financial statements.

REPORT OF INDEPENDENT 37 The auditors' opinion.
ACCOUNTANTS

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Through the first four months of 1997, stock and bond markets experienced
the kind of short-term volatility that can affect them from time to time.
After climbing steadily upward for more than two years, stock prices saw a
sharp correction in late March and early April. Returns in the bond market
were essentially stagnant as the Federal Reserve Board implemented a
long-expected increase in short-term interest rates at the end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
The longer your investment time frame, the less likely it is that you will
be affected by short-term market volatility. A 10-year investment horizon
appropriate for saving for a college education, for example, enables you to
weather market cycles in a long-term fund, which may have a higher risk
potential, but also has a higher potential rate of return.
An intermediate-length fund could make sense if your investment horizon is
two to four years, while a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund. These funds seek
income and a stable share price by investing in high-quality, short-term
investments. Of course, it's important to remember that there is no
assurance that a money market fund will achieve its goal of maintaining a
stable net asset value of $1.00 per share, and that these types of funds
are neither insured nor guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). You can also look at the
fund's income, as reflected in the fund's yield, to measure performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Capital & Income 7.88% 70.24% 166.74%

Merrill Lynch High Yield Master 11.82% 71.94% 187.12%
Index

High Current Yield Funds Average 11.26% 65.89% 144.33%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Merrill Lynch High Yield
Master Index - a market capitalization weighted index of all domestic and
yankee high-yield bonds. Issues included in the index have maturities of at
least one year and have a credit rating lower than BBB-/Baa3, but are not
in default. To measure how the fund's performance stacked up against its
peers, you can compare it to the high current yield funds average, which
reflects the performance of mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past one year average represents a
peer group of 158 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Fidelity Capital & Income 7.88% 11.23% 10.31%

Merrill Lynch High Yield Master Index 11.82% 11.45% 11.12%

High Current Yield Funds Average 11.26% 10.63% 9.25%

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund had performed at a constant rate each
year. (Note: Lipper calculates average annual total returns by annualizing
each fund's total return, then taking an arithmetic average. This may
produce a slightly different figure than that obtained by averaging the
cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
Capital & Income ML High Yield Master
00038 ML002
1987/04/30 10000.00 10000.00
1987/05/31 9936.25 9954.94
1987/06/30 10100.31 10092.55
1987/07/31 10086.80 10147.47
1987/08/31 10190.01 10249.15
1987/09/30 9852.66 10013.33
1987/10/31 9459.24 9745.79
1987/11/30 9672.51 9992.25
1987/12/31 9796.91 10124.94
1988/01/31 10114.03 10402.00
1988/02/29 10393.36 10684.25
1988/03/31 10325.92 10666.58
1988/04/30 10401.37 10697.39
1988/05/31 10406.40 10753.22
1988/06/30 10613.57 10958.82
1988/07/31 10726.07 11074.63
1988/08/31 10730.58 11111.02
1988/09/30 10844.52 11223.01
1988/10/31 10961.13 11397.87
1988/11/30 10956.37 11440.56
1988/12/31 11030.06 11488.97
1989/01/31 11233.08 11661.27
1989/02/28 11295.59 11739.63
1989/03/31 11227.09 11729.19
1989/04/30 11185.60 11763.81
1989/05/31 11386.36 11980.37
1989/06/30 11626.14 12150.11
1989/07/31 11648.00 12207.65
1989/08/31 11646.90 12267.95
1989/09/30 11286.57 12151.16
1989/10/31 10785.97 11958.96
1989/11/30 10809.48 11985.76
1989/12/31 10675.38 11974.92
1990/01/31 10317.50 11740.88
1990/02/28 10131.67 11569.90
1990/03/31 10231.27 11726.30
1990/04/30 10264.01 11785.88
1990/05/31 10481.94 11998.77
1990/06/30 10715.63 12231.23
1990/07/31 10951.71 12489.70
1990/08/31 10688.79 12011.57
1990/09/30 10402.60 11489.17
1990/10/31 10073.05 11196.80
1990/11/30 10207.21 11291.65
1990/12/31 10264.77 11454.36
1991/01/31 10320.40 11616.27
1991/02/28 10838.15 12478.47
1991/03/31 11312.69 13015.00
1991/04/30 11785.06 13478.48
1991/05/31 11826.15 13544.30
1991/06/30 12075.36 13816.76
1991/07/31 12464.93 14147.82
1991/08/31 12633.34 14445.18
1991/09/30 12804.79 14629.17
1991/10/31 13116.67 15063.88
1991/11/30 13192.88 15237.88
1991/12/31 13325.65 15414.91
1992/01/31 14129.28 15953.86
1992/02/29 14726.09 16350.08
1992/03/31 15354.77 16578.21
1992/04/30 15668.37 16698.87
1992/05/31 15857.66 16965.23
1992/06/30 16040.25 17176.02
1992/07/31 16358.35 17524.02
1992/08/31 16522.27 17756.03
1992/09/30 16680.97 17958.34
1992/10/31 16511.60 17731.53
1992/11/30 16668.75 17982.65
1992/12/31 17063.40 18214.19
1993/01/31 17714.94 18662.69
1993/02/28 18082.92 19015.96
1993/03/31 18657.69 19345.63
1993/04/30 18806.78 19484.49
1993/05/31 19183.73 19746.78
1993/06/30 19929.20 20117.78
1993/07/31 20114.22 20334.01
1993/08/31 20279.21 20527.85
1993/09/30 20388.21 20629.14
1993/10/31 20798.07 21017.74
1993/11/30 21020.00 21132.69
1993/12/31 21312.85 21344.01
1994/01/31 21953.01 21811.76
1994/02/28 21942.39 21654.90
1994/03/31 21375.21 20949.23
1994/04/30 21150.18 20704.42
1994/05/31 21125.09 20630.65
1994/06/30 20853.19 20706.59
1994/07/31 20991.54 20852.15
1994/08/31 20993.26 20996.99
1994/09/30 20966.23 20989.04
1994/10/31 20830.35 21042.37
1994/11/30 20461.76 20863.38
1994/12/31 20330.24 21095.45
1995/01/31 20643.12 21393.53
1995/02/28 21475.59 22061.04
1995/03/31 21590.73 22368.05
1995/04/30 22130.43 22891.77
1995/05/31 22530.91 23606.96
1995/06/30 22614.42 23787.27
1995/07/31 23407.24 24059.21
1995/08/31 23481.18 24205.23
1995/09/30 23802.70 24482.16
1995/10/31 23852.49 24655.71
1995/11/30 23437.34 24896.38
1995/12/31 23733.45 25296.01
1996/01/31 23843.76 25695.52
1996/02/29 24297.56 25734.21
1996/03/31 24326.26 25664.32
1996/04/30 24725.11 25675.94
1996/05/31 24908.97 25861.11
1996/06/30 24823.83 26016.46
1996/07/31 24734.61 26193.09
1996/08/31 25084.44 26463.59
1996/09/30 25735.46 27031.38
1996/10/31 25859.94 27327.62
1996/11/30 26203.98 27880.11
1996/12/31 26440.84 28094.64
1997/01/31 26590.99 28310.55
1997/02/28 27123.48 28707.69
1997/03/31 26582.77 28388.85
1997/04/30 26645.51 28711.96
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Capital & Income Fund on April 30, 1987. As the chart shows, by
April 30, 1997, the value of the investment would have grown to $26,674 - a
166.74% increase on the initial investment. For comparison, look at how the
Merrill Lynch High Yield Master Index did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$28,712 - a 187.12% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will
do tomorrow. Bond prices,
for example, generally move
in the opposite direction of
interest rates. In turn, the
share price, return and yield
of a fund that invests in
bonds will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
YEARS ENDED APRIL 30,

1997 1996 1995 1994 1993

Dividend return 8.52% 9.87% 9.01% 9.34% 8.25%

Capital appreciation return -0.64% 1.85% -4.38% 3.12% 11.78%

Total return 7.88% 11.72% 4.63% 12.46% 20.03%

TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or capital gains paid
by the fund are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED APRIL 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 4.19(cents) 25.01(cents) 76.15(cents)

Annualized dividend rate 5.53% 5.39% 8.23%

30-day annualized yield 5.76% - -

DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.22 over
the past one month, $9.35 over the past six months, and $9.25 over the past
one year, you can compare the fund's income over these three periods. The
past one year dividends per-share includes additional distributions
required by federal tax regulations. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
A healthy economy and a
continued positive supply and
demand backdrop helped propel
the high-yield market to strong
returns over the 12 months that
ended April 30, 1997. During that
period, the Merrill Lynch High
Yield Master Index posted a total
return of 11.82%. By comparison,
the Lehman Brothers Aggregate
Bond Index - a broad measure
of the performance of the U.S.
taxable bond market - had a
total return of 7.09%. The
Standard & Poor's 500 Index - a
measure of the performance of
the U.S. stock market - returned
25.13%. The U.S. economy
continued to grow at a steady
pace and corporate earnings
remained strong. As a result,
the default rate continued at
levels well below historical
norms, as fewer companies failed
to make timely payments of
interest and principal on their
high-yield debt. While new
issuance reached record levels
this year, demand was strong
enough to absorb the supply, as
investors continued to pour
money into high-yield funds due
to their attractive yields and
risk-adjusted returns for the past
five years. Except for some short
periods of uncertainty, the interest
rate environment also was
relatively favorable. In addition,
concerns that stocks were
becoming overvalued helped
develop the concept of high-yield
bonds as a defensive alternative
to equities.
An interview with David Glancy, Portfolio Manager of Fidelity Capital &
Income Fund
Q. HOW DID THE FUND PERFORM, DAVID?
A. For the 12-month period that ended on April 30, 1997, the fund had a
total return of 7.88%. For the same period, the high current yield funds
average returned 11.26%, as tracked by Lipper Analytical Services. The
Merrill Lynch High Yield Master Index - a measure of the high-yield
market's performance - had a total return of 11.82% for the same 12-month
period.
Q. CAN YOU START BY TELLING US HOW THE HIGH-YIELD MARKET HAS PERFORMED
SINCE THE LAST REPORT SIX MONTHS AGO?
A. Sure. The high-yield market performed very well over the past six
months, fueled by several factors. First, default rates remained well below
historical levels. Second, many companies that have issued high-yield bonds
continued to benefit from a healthy domestic economy. Third, the high-yield
market's five-year record of posting attractive yields and risk-adjusted
returns attracted a large amount of investor dollars during the period.
Fourth, except for a brief period in March 1997, the interest rate
environment was relatively benign and the stock market was exceptionally
strong.
Q. WHY DID THE FUND LAG ITS PEERS?
A. There were several reasons. For one, the fund had a higher weighting
than many of its peers in higher-quality, lower-yielding bonds issued by
industrial and aerospace companies. While these investments posted
attractive gains during the period, they generally lagged the performance
of some higher-yielding and, in my view, more speculative companies. The
fund also suffered from its holdings in common stock issued by smaller
companies that also issue high-yield debt. Small-company stocks were
decidedly out of favor over the past six months as investors gravitated
toward large-capitalization companies. Additionally, the fund's stake in
cash and short-term investments - which stood at about 23% at the end of
the period - acted as a drag on performance. Losses from the sale of
long-held investments in financially distressed companies also dragged down
the fund's returns.
Q. WHY DID YOU KEEP THE FUND'S CASH BALANCE SO HIGH?
A. While very recent history suggests otherwise, a longer term view of the
history of the high-yield market points to the benefits of having cash on
hand when others don't. By doing so, I can exploit periodic market
opportunities that may creep up during a market downturn. What's more, I
felt that credit spreads - which measure the difference in yield between
high-yield corporate bonds and U.S. Treasuries - were too tight.
Historically, the spread between Treasuries and high-yield bonds tends to
be around 400 basis points - or four percentage points - but by the end of
the period, the spread between Treasuries - which are the highest-quality
bonds available - and high yield bonds remained narrow at 300 basis points.
In my view, the risks of business fundamentals deteriorating and of bond
prices suffering if interest rates rose were high. So I wanted to mitigate
some of those potential risks by keeping some of the fund in cash.
Q. WHICH HOLDINGS PERFORMED WELL DURING THE PERIOD?
A. Thermadyne, the fund's largest holding at the end of the period, was
also one of its best performers. The company is a leading worldwide
manufacturer of welding equipment and related products, and it continues to
grow earnings and pay down debt. Other companies in which the fund owned
both the common stock and high-yield debt did well, including defense
contractor Tracor, insurer American Financial and natural gas producer
TransTexas Gas.
Q. WHAT'S AHEAD FOR THE FUND?
A. Credit risk, as always, remains the primary concern in the high-yield
market. In my view, the yields of many high-yield bonds don't adequately
reflect credit risk. I think that many bond prices are vulnerable to both
higher interest rates and earnings disappointments. Given that, I'll
concentrate on finding high-yield bonds that I believe can continue to post
strong earnings and have shorter durations, making them less sensitive to
rising interest rates. Regarding common stocks in the fund, I'll continue
to focus on companies that are paying down debt rapidly and have real and
discernible earnings. Finally, I'll most likely continue to keep some cash
on hand in order to take advantage of opportunities that are attractively
priced.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: seeks income and
capital growth by investing
mainly in debt and equity
securities, with an emphasis
on lower-quality debt
securities
FUND NUMBER: 038
TRADING SYMBOL: FAGIX
START DATE: November 1,
1977
SIZE: as of April 30, 1997,
more than $2.0 billion
MANAGER: David Glancy,
since 1996; manager, Spartan
High Income Fund, 1993 to
1996; joined Fidelity in 1990
(checkmark)
DAVID GLANCY ON THE DEFAULT RATE
IN THE HIGH-YIELD MARKET:
"The default rate - or the
rate of bankruptcies -
among companies that issue
high-yield debt continues to
be very low and acceptable.
The low default rate reflects
the better underwriting
standards of 1993 and 1994
and good corporate profits
over the past couple of years
or so. However, the
incredible amount of money
coming into the high-yield
market over the past year, in
my view, has afforded
considerably suspect
business investments to be
funded. Defaults usually
occur two to three years after
issuance, and the more
speculative underwriting of
1995 and 1996 could prove
problematic for the high-yield
market going forward."
DISTRIBUTIONS
A total of 2.6% of the
dividends distributed during
the fiscal year was derived
from interest on U.S.
Government securities which
is generally exempt from state
income tax.
A total of 5% of the dividends
distributed during the fiscal
year qualifies for the
dividends-received deduction
for corporate shareholders.
The fund will notify
shareholders in January 1998
of these percentages for use
in preparing 1997 income tax
returns.
INVESTMENT CHANGES

TOP FIVE HOLDINGS AS OF APRIL 30, 1997
(BY ISSUER, EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Thermadyne Holdings Corp. 5.2 4.1

Gulf Canada Resources Ltd. 2.7 2.4

Panamsat LP 2.6 -

Revlon Consumer Products Corp. 2.3 1.5

First Nationwide Parent Holdings Ltd. 2.3 2.4

TOP FIVE MARKET SECTORS AS OF APRIL 30, 1997
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO

Media & Leisure 20.6 18.1

Industrial Machinery & Equipment 10.0 5.2

Finance 8.8 8.6

Energy 6.5 7.3

Aerospace & Defense 4.9 5.1

QUALITY DIVERSIFICATION AS OF APRIL 30, 1997
(MOODY'S RATINGS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Aaa, Aa, A 0.0 6.1

Baa 0.3 0.3

Ba 7.7 6.6

B 31.7 30.7

Caa, Ca, C 5.4 8.5

Nonrated 4.1 3.8

TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW AT APRIL 30, 1997, AND OCTOBER 31, 1996 ACCOUNT
FOR 3.6% AND 3.8%, RESPECTIVELY, OF THE FUND'S INVESTMENTS.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF APRIL 30, 1997* AS OF OCTOBER 31, 1996 **
Nonconvertible
bonds 48.1%
U.S. Treasury
obligations 0.0%
Convertible bonds,
preferred stocks 10.4%
Common stocks 17.0%
Short-term
investments 23.3%
Other 1.2%
FOREIGN
INVESTMENTS 3.9%
Nonconvertible
bonds 46.9%
U.S. Treasury
obligations 6.1%
Convertible bonds,
preferred stocks 8.2%
Common stocks 15.3%
Short-term
investments 20.5%
Other 3.0%
FOREIGN
INVESTMENTS 4.3%
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 23.3
Row: 1, Col: 3, Value: 17.0
Row: 1, Col: 4, Value: 10.4
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 47.3
Row: 1, Col: 1, Value: 3.0
Row: 1, Col: 2, Value: 20.5
Row: 1, Col: 3, Value: 15.3
Row: 1, Col: 4, Value: 8.199999999999999
Row: 1, Col: 5, Value: 6.1
Row: 1, Col: 6, Value: 46.9
*
**

INVESTMENTS APRIL 30, 1997

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 48.1%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
AEROSPACE & DEFENSE - 4.0%
AEROSPACE & DEFENSE - 3.8%
Alliant Techsystems, Inc. 11 3/4%, 3/1/03 B2 $ 18,025 $ 19,602
Fairchild Corp.:
12%, 10/15/01 Caa 11,335 11,505
13 1/8%, 3/15/06 Caa 2,780 2,808
RHI Holdings, Inc. 11 7/8%, 3/1/99 B2 14,420 14,420
Rohr, Inc. 11 5/8%, 5/15/03 Ba3 10,310 11,341
Wyman-Gordon Co. 10 3/4%, 3/15/03 Ba3 17,070 18,222
77,898
DEFENSE ELECTRONICS - 0.2%
Tracor, Inc. 8 1/2%, 3/1/07 (k) B1 3,860 3,802
TOTAL AEROSPACE & DEFENSE 81,700
BASIC INDUSTRIES - 1.8%
CHEMICALS & PLASTICS - 0.7%
American Pacific Corp. 11%, 2/21/02 (k) - 2,550 2,423
Sterling Chemicals Holdings, Inc.:
11 1/4%, 4/1/07 (k) B3 9,800 10,094
0%, 8/15/08 (g) Caa 3,480 2,210
14,727
METALS & MINING - 0.1%
Kaiser Aluminum & Chemical Corp.
9 7/8%, 2/15/02 B1 2,000 2,025
PACKAGING & CONTAINERS - 0.2%
Owens-Illinois, Inc. 11%, 12/1/03 Ba3 3,650 4,065
PAPER & FOREST PRODUCTS - 0.8%
Container Corp. of America gtd.
9 3/4%, 4/1/03 B1 1,040 1,075
Crown Paper Co. 11%, 9/1/05 B3 2,620 2,574
Repap Wisconsin, Inc. 9 1/4%, 2/1/02 B2 9,115 9,001
Repap New Brunswick, Inc. yankee
10 5/8%, 4/15/05 Caa 830 782
Stone Container Corp. 9 7/8%, 2/1/01 B2 3,000 2,831
16,263
TOTAL BASIC INDUSTRIES 37,080
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONSTRUCTION & REAL ESTATE - 0.5%
BUILDING MATERIALS - 0.5%
American Standard, Inc. 11 3/8%, 5/15/04 Ba3 $ 9,000 $ 9,540
REAL ESTATE - 0.0%
Grand Bay Residences of Key Biscayne
15%, 12/31/99 (j) - 167 934
TOTAL CONSTRUCTION & REAL ESTATE 10,474
DURABLES - 0.7%
TEXTILES & APPAREL - 0.7%
Glenoit Corp. 11% 4/15/07 (k) B3 3,000 3,045
Hat Brands, Inc.(b):
Series B, 12 5/8%, 9/15/02 - 14,630 8,047
Series D, 12 5/8%, 9/15/02 - 3,960 2,178
13,270
ENERGY - 1.8%
OIL & GAS - 1.8%
Forcenergy, Inc.:
9 1/2%, 11/1/06 B2 6,950 7,020
8 1/2%, 2/15/07 (k) B2 6,620 6,287
Mesa Operating Co.:
10 5/8%, 7/1/06 B2 6,350 6,922
0%, 7/1/06 (g) B2 9,530 6,862
TransTexas Gas Corp. 11 1/2%, 6/15/02 B2 9,225 10,263
37,354
FINANCE - 5.7%
CREDIT & OTHER FINANCE - 0.9%
Olympic Financial Ltd. 11 1/2%, 3/15/07 unit B2 19,200 18,432
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
FINANCE - CONTINUED
INSURANCE - 1.4%
American Financial Corp. 9 3/4%, 4/20/04 Baa $ 5,500 $ 5,844
American Premier Underwriters, Inc.
9 3/4%, 8/1/99 Ba1 5,000 5,219
Integon Capital I 10 3/4%, 2/15/07 (k) Ba3 17,400 16,530
Reliance Group 9%, 11/15/00 Ba3 1,000 1,020
28,613
SAVINGS & LOANS - 3.4%
First Nationwide Holdings, Inc.:
12 1/4%, 5/15/01 Ba2 11,510 12,690
9 1/8%, 1/15/03 Ba3 3,430 3,473
10 5/8%, 10/1/03 Ba3 5,820 6,212
First Nationwide Parent Holdings Ltd.
12 1/2%, 4/15/03 B3 43,700 48,070
70,445
TOTAL FINANCE 117,490
HEALTH - 0.7%
MEDICAL FACILITIES MANAGEMENT - 0.7%
Integrated Healthcare Facilities LP 10%, 12/6/96 (b) - 141 -
Tenet Healthcare Corp.:
8%, 1/15/05 Ba1 12,920 12,662
8 5/8%, 1/15/07 Ba3 2,490 2,458
15,120
INDUSTRIAL MACHINERY & EQUIPMENT - 5.0%
ELECTRICAL EQUIPMENT - 2.8%
L-3 Communications Corp. 10 3/8%, 5/1/07 (k) B2 2,260 2,328
Panamsat LP 0%, 8/1/03 (g) B3 55,120 52,433
Telex Communications, Inc. 10 1/2%, 5/1/07 B2 3,000 3,000
57,761
INDUSTRIAL MACHINERY & EQUIPMENT - 2.2%
Continental Global Group, Inc.
11%, 4/1/07 (k) B2 3,000 3,090
Howmet Corp. 10%, 12/1/03 B3 1,120 1,198
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Thermadyne Holdings Corp.:
10 1/4%, 5/1/02 B1 $ 11,711 $ 12,136
10 3/4%, 11/1/03 B3 27,196 28,216
44,640
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 102,401
MEDIA & LEISURE - 12.1%
BROADCASTING - 7.3%
Adelphia Communications Corp.
9 7/8%, 3/1/07 (k) - 17,890 16,906
Comcast UK Cable Partners Ltd. 0%, 11/15/07 B2 13,680 9,508
Diamond Cable Communications PLC yankee:
0%, 12/15/05 (g) B3 13,415 9,273
0%, 2/15/07 (g)(k) - 20,790 12,370
International Cabletel, Inc. 0%, 2/1/06 (g) B3 24,835 16,205
Lenfest Communications, Inc. 8 3/8%, 11/1/05 Ba3 7,000 6,668
Marcus Cable Operating Co. LP / Marcus
Cable Capital Corp. Ltd. 0%, 8/1/04 (g) B3 4,250 3,528
Olympus Communication LP / Olympus Capital
Corp. 10 5/8%, 11/15/06 (k) B1 4,420 4,486
Paxson Communications Corp.
11 5/8%, 10/1/02 B3 1,110 1,166
SCI Television, Inc. secured 11%, 6/30/05 Ba1 4,000 4,225
SFX Broadcasting, Inc. 10 3/4%, 5/15/06 B3 5,740 5,984
STC Broadcasting, Inc. 11%, 3/15/07 (k) B3 2,150 2,204
TCI Communications Financing III 9.65%, 3/31/27 Ba3 25,160 25,096
TCI Satellite Entertainment, Inc. (k):
10 7/8%, 2/15/07 B- 5,000 4,763
0%, 2/15/07 (g) B- 2,000 1,050
Telemundo Group, Inc. 7%, 2/15/06 (h) B1 28,280 26,404
Telewest PLC 0%, 10/1/07 (g) B1 600 406
150,242
ENTERTAINMENT - 0.7%
AMC Entertainment, Inc. 9 1/2%, 3/15/9 (k) B2 2,250 2,222
Alliance Gaming Corp. 12 7/8%, 6/30/03 B2 6,140 6,631
Viacom, Inc. 8%, 7/7/06 B1 5,000 4,688
13,541
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 0.4%
Coleman Holdings 0%, 5/27/98 B3 $ 10,000 $ 8,975
LODGING & GAMING - 3.7%
KSL Recreation Group, Inc. 10 1/4%,
5/1/07 (k) B3 2,270 2,295
GB Property Funding Corp. gtd. 1st mtg.
10 7/8%, 1/15/04 B3 7,230 6,073
Grand Casinos, Inc. 10 1/8%, 12/1/03 Ba3 7,500 7,613
HMH Properties, Inc. 9 1/2%, 5/15/05 Ba3 9,990 10,202
Harrah's Jazz Co. 14 1/4%, 11/15/01 (b) Caa 56,105 24,125
Horseshoe Gaming LLC 12 3/4%, 9/30/00 B1 17,270 18,824
Prime Hospitality Corp. 9 3/4%, 4/1/07 (k) B1 5,940 6,089
Sun International Hotels Ltd. 9%,
3/15/07 (k) Ba3 660 653
75,874
PUBLISHING - 0.0%
Maxwell Communication Corp. PLC euro
5%, 6/16/99 (c) - CHF 6 -
TOTAL MEDIA & LEISURE 248,632
NONDURABLES - 2.5%
FOODS - 0.1%
Del Monte Corp. 12 1/4%, 4/15/07 (k) Caa 1,250 1,288
HOUSEHOLD PRODUCTS - 2.4%
Revlon Consumer Products Corp.
10 1/2%, 2/15/03 B3 45,940 48,122
MacAndrews and Forbes Holdings, Inc.
13%, 3/1/99 - 1,835 1,846
49,968
TOTAL NONDURABLES 51,256
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
RETAIL & WHOLESALE - 2.9%
APPAREL STORES - 0.8%
Lamonts Apparel, Inc. 10 1/4%, 11/1/99
pay-in-kind (b)(k) - $ 18,686 $ 747
Specialty Retailers, Inc.:
10%, 8/15/00 B1 11,000 11,330
11%, 8/15/03 B3 5,180 5,413
17,490
GROCERY STORES - 2.1%
Pathmark Stores, Inc.:
11 5/8%, 6/15/02 Caa 5,580 5,524
9 5/8%, 5/1/03 B3 17,950 16,694
0%, 11/1/03 (g) Caa 24,010 14,766
Penn Traffic Co. 8 5/8%, 12/15/03 B3 7,000 5,670
42,654
TOTAL RETAIL & WHOLESALE 60,144
SERVICES - 1.8%
PRINTING - 0.1%
US Banknotes Corp. 10 3/8%, 6/1/02 B1 2,000 1,960
SERVICES - 1.7%
Borg-Warner Security Corp. 9 5/8%,
3/15/07 (k) B3 5,040 4,990
Orion Network Systems, Inc.:
11 1/4%, 1/15/07 unit B2 16,140 16,140
0%, 1/15/07 unit (g) B2 28,680 14,698
35,828
TOTAL SERVICES 37,788
TECHNOLOGY - 3.9%
COMMUNICATIONS EQUIPMENT - 3.7%
Echostar Satellite Broadcasting Corp.
0%, 3/15/04 (g) Caa 59,430 42,195
Echostar Communications Corp.
0%, 6/1/04 (g) B2 41,475 34,010
76,205
COMPUTER SERVICES & SOFTWARE - 0.2%
Anacomp, Inc. 10 7/8%, 4/1/04 (k) Caa 3,200 3,136
TOTAL TECHNOLOGY 79,341
NONCONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
TRANSPORTATION - 2.5%
AIR TRANSPORTATION - 1.5%
US Air, Inc.:
9 5/8%, 2/1/01 B3 $ 22,197 $ 22,419
9 5/8%, 9/1/03 B1 7,050 7,226
10%, 7/1/03 B3 1,700 1,717
31,362
RAILROADS - 0.9%
Transtar Holdings LP/Transtar Capital Corp.
0%, 12/15/03 (g) B- 22,790 19,144
TRUCKING & FREIGHT - 0.1%
Greyhound Lines, Inc. 11 1/2%, 4/15/07 (k) B3 2,000 2,035
St Johnsbury Trucking, Inc. 11%, 7/15/98
pay-in-kind (b)(j) - 7,550 1
2,036
TOTAL TRANSPORTATION 52,542
UTILITIES - 2.2%
CELLULAR - 0.6%
Globalstar LP/Globalstar Capital C unit
11 3/8%, 2/15/04 (k) B3 10,000 9,825
McCaw International Ltd. unit 0%,
4/15/07 (g)(k) CCC 5,000 2,444
Millicom International Cellular SA 0%,
6/1/06 (g) B3 1,260 882
13,151
TELEPHONE SERVICES - 1.6%
Brooks Fiber Properties, Inc.
0%, 3/1/06 (g) - 10,700 6,955
11 7/8%, 11/1/06 - 26,850 16,644
Mcleod, Inc. 0%, 3/1/07 (g)(k) B3 14,550 8,294
31,893
TOTAL UTILITIES 45,044
TOTAL NONCONVERTIBLE BONDS
(Cost $1,015,405) 989,636
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.2%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
U.S. GOVERNMENT AGENCY - 0.2%
First Chicago/Lennar Trust Series 97-CHL1
Class E 8.106%, 4/1/39 (l) (Cost $4,847) - $ 6,600 $ 4,950
COMMERCIAL MORTGAGE SECURITIES - 0.9%
CS First Boston Mortgage Securities Corp.
Series 1994-M1 Class E, 12.60%,
2/15/02 (k) - 7,392 7,373
Lennar Central Partners LP Series 1995-1 Class F,
11.70%, 5/15/05 (k) - 4,005 4,028
Resolution Trust Corp.:
commercial Series 1994-N2 Class 5-B,
10 5/8%, 12/15/04 (h)(k) B2 2,750 2,750
Series 1994-N2 Class 5-A,
10 5/8%, 12/15/04 (h)(k) B2 4,200 4,200
Series 1995-C2 Class F, 7%, 5/25/27 B1 26 24
TOTAL COMMERCIAL MORTGAGE SECURITIES
(Cost $18,410) 18,375
COMMON STOCKS - 17.0%
SHARES
AEROSPACE & DEFENSE - 0.9%
DEFENSE ELECTRONICS - 0.9%
Tracor, Inc. (a) 834,200 18,144
BASIC INDUSTRIES - 0.1%
CHEMICALS & PLASTICS - 0.1%
American Azide (warrants) (a)(j) 408 -
American Pacific Corp. (warrants) (a)(j) 242,857 61
Atlantis Group, Inc. (Trivest/Winston) (a)(j) 33,115 298
Trivest 1992 Special Fund Ltd. 11.4(f) 1,192
Plastic Specialties & Technology, Inc. (a) 2,500 -
Sterling Chemical Holdings (warrants) (a) 6,690 234
1,785
METALS & MINING - 0.0%
Commonwealth Aluminum Corp. 10,000 173
TOTAL BASIC INDUSTRIES 1,958
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Corimon SA CA sponsored ADR (a)(j) 1,359,203 $ 1,614
PureTec Corp. (a) 241,786 363
1,977
REAL ESTATE INVESTMENT TRUSTS - 0.0%
First Union Real Estate Equity &
Mortgage Investments 50,000 681
TOTAL CONSTRUCTION & REAL ESTATE 2,658
DURABLES - 0.1%
HOME FURNISHINGS - 0.0%
Polyvision Corp. (a) 154,746 39
TEXTILES & APPAREL - 0.1%
Hat Brands, Inc. (warrants) (a)(j) 246,278 800
HM/Hat Brands Trust Class I Unit (a)(j) 1,980,000 1,228
2,028
TOTAL DURABLES 2,067
ENERGY - 2.5%
ENERGY SERVICES - 0.0%
Key Energy Group, Inc. (warrants) (a) 67,910 582
Parker Drilling Co. (a) 4,800 37
619
OIL & GAS - 2.5%
Goodrich Petroleum Corp. (a) 358,125 224
Goodrich Petroleum Corp. (warrants) (a)(j) 460,000 -
Gulf Canada Resources Ltd. (a) 3,429,500 28,590
Mesa, Inc. (a) 1,695,700 8,690
Parker & Parsley Petroleum Co. 100,000 3,300
TransTexas Gas Corp. (a) 699,400 9,792
50,596
TOTAL ENERGY 51,215
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 2.0%
CREDIT & OTHER FINANCE - 0.3%
ContiFinancial Corp 49,600 $ 1,426
Olympic Financial Ltd. (a) 570,900 5,495
6,921
INSURANCE - 1.7%
American Annuity Group, Inc. 351,913 5,895
American Financial Group, Inc. 527,000 18,379
Integon Corp. 4,300 42
Vesta Insurance Group Corp. 225,200 9,402
33,718
TOTAL FINANCE 40,639
HOLDING COMPANIES - 0.0%
SDW Holdings Corp., Series B (warrants) (a) 12,555 213
INDUSTRIAL MACHINERY & EQUIPMENT - 4.1%
ELECTRICAL EQUIPMENT - 0.9%
Echostar Communications Corp. Class A (a) 1,245,622 18,840
INDUSTRIAL MACHINERY & EQUIPMENT - 3.2%
Thermadyne Holdings Corp. (a)(i) 2,424,935 65,776
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 84,616
MEDIA & LEISURE - 4.0%
BROADCASTING - 0.8%
Chancellor Broadcasting Co. Class A (a) 86,100 2,411
Chancellor Trust Class I Unit (j) 273 14,055
16,466
ENTERTAINMENT - 0.5%
Alliance Gaming Corp. (a)(i) 2,891,078 10,661
LODGING & GAMING - 2.7%
Bally Gaming International, Inc. (warrants) (a) 300,000 413
Grand Casinos, Inc. 150,000 1,650
Showboat, Inc. 686,700 13,992
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
Station Casinos, Inc. 15,000 $ 133
WHG Resorts and Casinos, Inc. (i) 413,600 3,878
WMS Industries, Inc. (i) 1,895,800 33,886
53,952
TOTAL MEDIA & LEISURE 81,079
NONDURABLES - 0.3%
BEVERAGES - 0.0%
Stroh Brewery Co. (warrants) (a) 25,067 90
TOBACCO - 0.3%
Consolidated Cigar Holdings, Inc. Class A (a) 273,500 6,292
TOTAL NONDURABLES 6,382
RETAIL & WHOLESALE - 0.0%
APPAREL STORES - 0.0%
Lamonts Apparel, Inc. (a) 307,603 29
Lamonts Apparel, Inc. (warrants) (a) 562,033 -
29
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Town & Country Jewelry Manufacturing Corp.
Class A (a) 1,116,816 349
Zale Corp. Unit (a)(j) 1,768,285 17
366
TOTAL RETAIL & WHOLESALE 395
SERVICES - 0.0%
Vestar/LPA Investment Corp. (a) 2,550 26
TECHNOLOGY - 0.1%
COMPUTER SERVICES & SOFTWARE - 0.1%
Midway Games, Inc. (a) 131,400 2,365
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - 0.3%
AIR TRANSPORTATION - 0.3%
AMR Corp. 26,200 $ 2,440
CHC Helicopter Corp. (warrants) (a) 108,320 -
US Airways Group, Inc. 100,000 3,237
5,677
UTILITIES - 2.5%
ELECTRIC UTILITY - 1.9%
Baycorp Holdings Ltd. (a) 25,849 187
El Paso Electric Co. (a)(i) 5,999,941 37,875
38,062
TELEPHONE SERVICES - 0.6%
Brooks Fiber Properties, Inc. 224,400 4,881
Nextlink Communications, Inc. unit (k) 180,400 8,479
13,360
TOTAL UTILITIES 51,422
TOTAL COMMON STOCKS
(Cost $320,049) 348,856
PREFERRED STOCKS - 10.4%
CONVERTIBLE PREFERRED STOCKS - 1.1%
ENERGY - 0.9%
OIL & GAS - 0.9%
Mesa, Inc. Series A, pay-in-kind 8% 2,785,968 17,761
RETAIL & WHOLESALE - 0.0%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Town & Country Corp. pay-in-kind 17,254 11
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
TECHNOLOGY - 0.2%
COMMUNICATIONS EQUIPMENT - 0.2%
Globalstar Telecommunications Ltd. 6 1/2% (k) 90,000 $ 4,680
TOTAL CONVERTIBLE PREFERRED STOCKS 22,452
NONCONVERTIBLE PREFERRED STOCKS - 9.3%
BASIC INDUSTRIES - 0.0%
PAPER & FOREST PRODUCTS - 0.0%
S D Warren Co. 14% exchangeable pay-in-kind 27,816 1,085
ENERGY - 1.3%
OIL & GAS - 1.3%
Gulf Canada Resources Ltd., Series 1, adj. rate 9,206,785 26,353
FINANCE - 1.1%
INSURANCE - 0.5%
American Annuity Group Capital Trust II 11,180 11,124
SAVINGS & LOANS - 0.6%
California Federal Bank 9 1/8%, 350,000 8,706
California Federal Bank 10 5/8% 24,390 2,622
11,328
TOTAL FINANCE 22,452
HOLDING COMPANIES - 0.2%
SDW Holdings Corp. 15% (k) 125,550 4,394
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
ELECTRICAL EQUIPMENT - 0.9%
Ampex Corp. 8% (j) 23,995 18,651
MEDIA & LEISURE - 4.5%
BROADCASTING - 4.5%
American Radio System pay-in-kind 11 3/8%, (k) 62,957 6,217
Cablevision System Corp.:
depositary shares 321,034 29,455
Series H, $11.75 pay-in-kind 77,038 7,299
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Chancellor Radio Broadcasting Co.:
Series A 190,700 $ 21,549
12% pay-in-kind (k) 57,500 5,664
Granite Broadcasting Corp. 12 3/4% pay-in-kind (k) 10,216 9,297
NTL Inc. 13% pay-in-kind (k) 4,700 4,559
Sinclair Capital 11 5/8%, (k) 30,000 3,000
Time Warner, Inc., Series M, 10 1/4% pay-in-kind 5,128 5,538
92,578
RETAIL & WHOLESALE - 0.5%
GROCERY STORES - 0.5%
Supermarkets General Holdings Corp. pay-in-kind $3.52 (a) 472,093 9,737
TECHNOLOGY - 0.6%
COMMUNICATIONS EQUIPMENT - 0.5%
Intermedia Communications, Inc. 13 1/2% (a) 1,004 9,714
COMPUTER SERVICES & SOFTWARE - 0.1%
ICG Holdings 14% 3/15/07 (k) 2,000 1,890
TOTAL TECHNOLOGY 11,604
UTILITIES - 0.2%
ELECTRIC UTILITY - 0.2%
El Paso Electric Co., Series A, 11.40% pay-in-kind 29,361 3,200
TOTAL NONCONVERTIBLE PREFERRED STOCKS 190,054
TOTAL PREFERRED STOCKS
(Cost $194,877) 212,506
PURCHASED BANK DEBT - 0.1%
PRINCIPAL
AMOUNT (D) (000S)
Art Store Holdings term loan (j):
9%, 7/31/97 $ 842 842
9%, 7/31/98 842 842
PURCHASED BANK DEBT - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (D) (000S) (000S)
Merry-Go-Round Enterprises, Inc. (b):
trade claim $ 41 $ -
trade claim 155 -
lease indemnity claim 1,226 -
TAK Communications term loan (b) 36,907 -
Welltech, Inc. Vanguard loan participation (b) 744 -
TOTAL PURCHASED BANK DEBT
(Cost $3,263) 1,684
CASH EQUIVALENTS - 23.3%
MATURITY AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.37%, dated
4/30/97 due 5/1/97 (Note 3) $ 470,333 470,263
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.42%, dated
4/30/97 due 5/1/97 (Note 3) 9,195 9,194
TOTAL CASH EQUIVALENTS
(Cost $479,457) 479,457
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,036,308) $ 2,055,464
CURRENCY ABBREVIATIONS
CHF - Swiss franc
LEGEND
1. Non-income producing
2. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
3. Non-income producing - the company moved to seek a court appointed
administrator under British bankruptcy law.
4. Principal amount is stated in United States dollars unless otherwise
noted.
5. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
6. Represents number of units held.
7. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
8. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
9. Affiliated company (see Note 9 of Notes to Financial Statements).
LEGEND - CONTINUED
10. Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000S)
American Azide
(warrants) 2/5/92 $ -
American Pacific
Corp. (warrants) 2/5/92 $ 61
Ampex Corp. 8% 2/16/95 $ 12,598
Art Store Holdings
term loan:
9%, 7/31/97 8/1/95 $ 842
9%, 7/31/98 8/1/95 $ 842
Atlantis Group, Inc.
(Trivest/Winston) 4/6/93 $ 39
Chancellor Trust
Class 1 Unit 10/12/94 $ 5,515
Corimon SA CA
sponsored ADR 7/27/95 $ 9,005
Goodrich Petroleum
Corp. (warrants) 2/5/93 $ 438
Grand Bay Residences
of Key Biscayne
15%, 12/31/99 7/20/95 $ 167
Hat Brands, Inc. 9/2/92
(warrants) to 2/23/94 $ -
HM/Hat Brands Trust
Class 1 Unit 2/22/94 $ 1,980
St. Johnsbury Trucking, Inc.
11%, 7/15/98 2/1/93 $ 2,827
Zale Corp. 2/6/91
unit to 7/30/93 $ -
11. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $199,927,000 or 9.8% of net
assets.
12. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 0.0% AAA, AA, A 0.0%
Baa 0.3% BBB 0.5%
Ba 7.7% BB 8.0%
B 30.5% B 31.1%
Caa 5.2% CCC 3.7%
Ca, C 0.0% CC, C 0.0%
D 1.2%
The percentage not rated by both S&P and Moody's amounted to 4.1%. FMR has
determined that unrated debt securities that are lower quality account for
3.6% of the total value of investment in securities.
INCOME TAX INFORMATION
At April 30, 1997, the aggregate cost of investment securities for income
tax purposes was $2,041,906,000. Net unrealized appreciation aggregated
$13,558,000, of which $127,493,000 related to appreciated investment
securities and $113,935,000 related to depreciated investment securities.
At April 30, 1997, the fund had a capital loss carryforward of
approximately $94,621,000 of which $52,848,000 and $41,773,000 will expire
on April 30, 1999 and 2005 , respectively.
The fund intends to elect to defer to its fiscal year ending April 30, 1998
approximately $51,841,000 of losses recognized during the period November
1, 1996 to April 30, 1997.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) APRIL 30, 1997

ASSETS

Investment in securities, at value (including repurchase $ 2,055,464
agreements of $479,457) (cost $2,036,308) -
See accompanying schedule

Receivable for investments sold 60,798

Dividends receivable 300

Interest receivable 17,236

Redemption fees receivable 13

Other receivables 3

TOTAL ASSETS 2,133,814

LIABILITIES

Payable for investments purchased $ 80,421

Payable for fund shares redeemed 6,639

Distributions payable 1,114

Accrued management fee 1,007

Other payables and accrued expenses 1,144

Collateral on securities loaned, at value 2,648

TOTAL LIABILITIES 92,973

NET ASSETS $ 2,040,841

Net Assets consist of:

Paid in capital $ 2,142,917

Undistributed net investment income 29,177

Accumulated undistributed net realized gain (loss) on (150,409)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 19,156
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 220,031 shares outstanding $ 2,040,841

NET ASSET VALUE, offering price and redemption price per $9.28
share ($2,040,841 (divided by) 220,031 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED APRIL 30, 1997

INVESTMENT INCOME $ 12,872
Dividends

Interest (including income on securities loaned of $105) 147,781

TOTAL INCOME 160,653

EXPENSES

Management fee $ 13,271

Transfer agent fees 4,281

Accounting and security lending fees 826

Non-interested trustees' compensation 39

Custodian fees and expenses 89

Registration fees 63

Audit 135

Legal 166

Interest 9

Miscellaneous 22

Total expenses before reductions 18,901

Expense reductions (172) 18,729

NET INVESTMENT INCOME 141,924

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (including realized loss of (87,172)
$25,240 on sale of investments in affiliated issuers)

Foreign currency transactions (371) (87,543)

Change in net unrealized appreciation (depreciation) on:

Investment securities 110,426

Assets and liabilities in foreign currencies 251 110,677

NET GAIN (LOSS) 23,134

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 165,058
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996

INCREASE (DECREASE) IN NET ASSETS

Operations $ 141,924 $ 187,004
Net investment income

Net realized gain (loss) (87,543) 53,617

Change in net unrealized appreciation (depreciation) 110,677 13,886

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 165,058 254,507
FROM OPERATIONS

Distributions to shareholders (180,254) (181,546)
From net investment income

In excess of net investment income - (33,323)

TOTAL DISTRIBUTIONS (180,254) (214,869)

Share transactions 280,897 461,604
Net proceeds from sales of shares

Reinvestment of distributions 156,531 187,273

Cost of shares redeemed (652,730) (675,669)

Redemption fees 925 1,296

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (214,377) (25,496)
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS (229,573) 14,142

NET ASSETS

Beginning of period 2,270,414 2,256,272

End of period (including undistributed net investment $ 2,040,841 $ 2,270,414
income of $29,177 and $55,904, respectively)

OTHER INFORMATION
Shares

Sold 30,268 49,805

Issued in reinvestment of distributions 17,049 20,325

Redeemed (70,439) (73,039)

Net increase (decrease) (23,122) (2,909)

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED APRIL 30,

1997 1996 1995 1994 C 1993

SELECTED PER-SHARE DATA

Net asset value, beginning $ 9.340 $ 9.170 $ 9.590 $ 9.300 $ 8.320
of period

Income from Investment .605 B .902 .814 .871 .645
Operations
Net investment income

Net realized and unrealized .093 .119 (.427) .249 .942
gain (loss)

Total from investment .698 1.021 .387 1.120 1.587
operations

Less Distributions

From net investment (.762) (.724) (.617) (.730) (.619)
income

In excess of net - (.133) (.202) (.119) -
investment income

Total distributions (.762) (.857) (.819) (.849) (.619)

Redemption fees added to .004 .006 .012 .019 .012
paid in capital

Net asset value, end of period $ 9.280 $ 9.340 $ 9.170 $ 9.590 $ 9.300

TOTAL RETURN A 7.88% 11.72% 4.63% 12.46% 20.03%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 2,041 $ 2,270 $ 2,256 $ 2,734 $ 2,124
(in millions)

Ratio of expenses to average .87% .98% .96% .97% .91%
net assets

Ratio of expenses to average .86% D .98% .96% .97% .91%
net assets after expense
reductions

Ratio of net investment 6.53% 8.03% 7.38% 6.78% 7.45%
income to average net
assets

Portfolio turnover rate 309% 119% 78% 100% 102%

Average commission rate E $ .0382

</TABLE>

A THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 8 OF NOTES TO FINANCIAL
STATEMENTS).
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C EFFECTIVE MAY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 8 OF
NOTES TO FINANCIAL STATEMENTS).
E FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1997

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Capital & Income (the fund) is a fund of Fidelity Summer Street
Trust (the trust)and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The financial statements have
been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the
date of the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued by a pricing service at their market values as determined by
their most recent bid prices in the principal market (sales prices if the
principal market is an exchange) in which such securities are normally
traded. Securities (including restricted securities) for which market
quotations are not readily available are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects of changes in foreign currency exchange
rates on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned and dividend income is recorded on the
ex-dividend date. The fund may place a debt obligation on non-accrual
status and reduce related interest income by ceasing current accruals and
writing off interest receivables when the collection of all or a portion of
interest has become doubtful based on consistently applied procedures,
under the general supervision of the Board of Trustees of the fund. A debt
obligation is removed from non-accrual status when the issuer resumes
interest payments or when collectibility of interest is reasonably assured.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net investment income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily
due to differing treatments for litigation proceeds, paydown gains/losses
on certain securities, foreign currency transactions, defaulted bonds,
market discount, partnerships, capital loss carryforwards and losses
deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions may
include temporary book and tax basis differences which will reverse in a
subsequent period. Any taxable income or gain remaining at fiscal year end
is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 365 days are subject to
a redemption fee equal to 1.50% of the proceeds of the redeemed shares. The
fee, which is retained by the fund, is accounted for as an addition to paid
in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency
2. OPERATING POLICIES - CONTINUED
FOREIGN CURRENCY CONTRACTS -
CONTINUED
contracts is determined using contractual currency exchange rates
established at the time of each trade. The cost of the foreign currency
contracts is included in the cost basis of the associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts. These
balances are invested in one or more repurchase agreements for U.S.
Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $39,343,000 or
1.9% of net assets.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. The fund is permitted to invest in
loans and loan participations, trade claims or other receivables. These
investments may include standby financing commitments that obligate the
fund to supply additional cash to the borrower on demand. Loan
participations involve a risk of insolvency of the lending bank or other
financial intermediary. At the end of the period, these investments
amounted to $1,684,000 or 0.1% of net assets.
3. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The maturity values of the joint trading account
investments were
3. JOINT TRADING ACCOUNT - CONTINUED
$470,333,000 at 5.37 % and $9,195,000 at 5.42%. The investments in
repurchase agreements through the joint trading account are summarized as
follows:
SUMMARY OF JOINT TRADING
DATED APRIL 30, 1997, DUE MAY 1, 1997
Number of dealers or banks 17
Maximum amount with one dealer or bank 18.5%
Aggregate principal amount of agreements $15,708,586,000
Aggregate maturity amount of agreements $15,710,928,000
Aggregate market value of transferred assets $16,044,206,000
Coupon rates of transferred assets 0.0% to 15 3/4%
Maturity dates of transferred assets 5/8/97 to 05/01/27
4. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $5,236,750,000 and $5,518,017,000, respectively, of which U.S.
government and government agency obligations aggregated $2,905,016,000 and
$2,903,144,000, respectively.
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1100% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .45%. For
the period, the management fee was equivalent to an annual rate of .61% of
average net assets. Effective July 1, 1996, FMR voluntarily agreed to
reduce the individual fund fee rate from .55% to .45%.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, is the fund's transfer, dividend disbursing and shareholder servicing
agent. FSC
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
receives account fees and asset-based fees that vary according to account
size and type of account. FSC pays for typesetting, printing and mailing of
all shareholder reports, except proxy statements. For the period, the
transfer agent fees were equivalent to an annual rate of .20% of average
net assets.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $21,000 for the period.
6. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $2,506,000 and
$2,648,000, respectively.
7. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balance during the period for which
loans were outstanding amounted to $26,013,000 and $9,787,000,
respectively. The weighted average interest rate was 5.74%.
8. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$119,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During the
period, the fund's custodian and transfer agent fees were reduced by
$42,000 and $11,000, respectively, under these arrangements.
9. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Alliance Gaming Corp. $ 4,326 $ 1,105 $ - $ 10,661
Barry's Jewelers, Inc. 124 568 - -
El Paso Electric Co. 9,872 226 - 37,875
Intelogic Trace, Inc. - 437 - -
Standard Brand Paint Co. - 24,410 - -
Thermadyne Holdings Corp. 1,804 - - 65,776
WHG Resorts and Casinos, Inc. - 699 - 3,878
WMS Industries, Inc. 3,982 1,794 - 33,886
TOTALS $ 20,108 $ 29,239 $ - $ 152,076
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Summer Street Trust and the Shareholders of
Fidelity Capital & Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Summer Street Trust: Fidelity Capital & Income Fund, including the
schedule of portfolio investments, as of April 30 , 1997, and the related
statement of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility
of the fund's management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Summer Street Trust: Fidelity Capital & Income Fund as of April
30, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 11, 1997
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INVESTMENT ADVISER
Fidelity Management & Research Company, Boston, MA
INVESTMENT SUB-ADVISERS
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(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert A. Lawrence, Vice President
David Glancy, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
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Phyllis Burke Davis *
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Edward C. Johnson 3d
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Boston, MA
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