State Street Marks First Anniversary of the Launch of Industry's First Quantitative Indicator of Professional Investor Behavior

Cambridge, Mass. ... State Street Associates, the research unit of State Street Global Markets, released today the results of the State Street Investor Confidence Index^SM for September 2004. State Street Global Markets is the investment research and trading arm of State Street Corporation (NYSE: STT).

According to the September index, investor confidence decreased 1.2 points to 85.3 from August's revised reading of 86.5.

Developed by Harvard University professor Ken Froot and Paul O'Connell of State Street Associates, the index shows that in September the risk appetite of institutional investors resumed the downward trend that was interrupted in August.

"Institutional investors are registering their concerns about growth and the level of current prices," said O'Connell. "Even in the context of falling long-term dollar interest rates and oil prices, the appetite for risk-taking remains subdued. Technology is no longer a concentrated place of weakness; this month we see slightly lower inflows across many sectors."

"Last autumn, there was a strong sense of optimism, building on hopes of renewed growth and low inflation," commented Froot. "Beginning in January 2004, that gave way to a protracted regime in which professional investors repeatedly cut back on risk. They saw more moderate growth, sustained future interest rate increases by the Fed, growing concerns with commodity and energy prices, global uncertainty, and a U.S. election without a clear national favorite. We don't yet see what the catalyst will be for breaking the current logjam in investor confidence."

Since its launch in September of 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 and decisions of thousands of professional investors and their investment decisions.

"As the pioneer in independent research and decision support tools for the buy-side community, we are pleased with the traction that the index has garnered over the past year," said Stanley Shelton, executive vice president of State Street Global Markets. "Our clients continue to recognize the value of our research offering and unique insight that only State Street can offer."

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 is released globally at 10 a.m. Eastern time in Boston on the second to last Tuesday of each month. More information on the State Street Investor Confidence Index, and the calendar of release dates, is available at http://www.statestreet.com/investorconfidenceindex. The previous month's calculations for the index are 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, investment research and trading services. With $9.1 trillion in assets under custody and $1.2 trillion in assets under management, State Street operates in 24 countries and more than 100 markets worldwide.

State Street Global Markets provides trading services in foreign exchange, equities, fixed income, derivatives and money market products to institutional investors worldwide. It is the leading provider of transition management and portfolio rebalancing. State Street Global Markets' Global Link network, which is used by 80 percent of the world's largest investors, integrates unique flow-based research and leading-edge electronic trading and crossing platforms to provide access to liquidity and to analytical and trading tools that are designed to enhance returns and reduce risk.

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, September 21 2004, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.