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Week Ended January 13, 2012

Large-cap stocks were modestly higher for the week, as initial enthusiasm for fourth-quarter earnings gave way somewhat to renewed concerns about the European debt crisis. The technology-oriented Nasdaq and the smaller-cap indexes recorded solid gains. Alcoa, traditionally the first major company to report profits, started the quarterly earnings season out on a strong note on Monday. The metals giant reported that sales had increased a bit more than expected, while the company anticipated aluminum to be in short supply on global markets in 2012. The news from Europe was less sanguine, however. Investors worried as France and Germany appeared to be putting new conditions on their bailout package for Greece. On Friday, stocks tumbled following rumors sourced to a senior eurozone official that Standard & Poor's was preparing to downgrade the credit ratings of several European nations. Indeed, confirmation arrived Friday afternoon that S&P was cutting France's credit rating by one notch, from AAA to AA+. A shortfall in revenue reported by JPMorgan Chase—another closely watched early earnings report—also weighed on sentiment to end the week. After a series of pleasant surprises over the past month, the week's economic data were not as upbeat. Weekly jobless claims climbed back toward the 400,000 level, and December retail sales did not meet expectations. A rise in the Thomson Reuters/University of Michigan gauge of consumer sentiment to an eight-month high may have helped stem the market's losses on Friday, however.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	12422.06	62.14	1.67%
S&P 500	1289.09	11.28	2.50%
NASDAQ Composite	2710.67	36.45	4.05%
S&P MidCap 400	906.60	15.22	3.09%
Russell 2000	764.21	14.54	3.17%

This chart is for illustrative purposes only and does not represent the performance of any specific security. Past performance cannot guarantee future results.

¹Source of data Reuters, obtained through Yahoo! Finance Closing data as of 4 p.m. ET.

²The Dow Jones Industrial Average and the Standard & Poor's 500 Stock Index of blue chip stocks, the Standard & Poor's MidCap 400 Index, and the Russell 2000 Index are unmanaged indexes representing various segments by market capitalization of the U.S. equity markets. The Nasdaq Composite is an unmanaged index representing the companies traded on the Nasdaq stock market and the National Market System.

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U.S. Bond Market

Week Ended January 13, 2012

Just when the U.S. economy appeared to be running smoothly, news released during the week threw up a speed bump of sorts. Retail sales rose at their weakest pace in seven months in December, according to the Commerce Department, indicating that holiday spending may have been weaker than originally thought. In the labor market, first-time claims for unemployment benefits increased by the highest amount in six weeks, suggesting that the U.S. recovery remains shaky despite a recent decline in the unemployment rate. Some analysts had expressed fears that the drop in the unemployment rate may have been due to workers leaving the workforce. A spokesman for the Federal Reserve said that additional stimulus might be needed to spur economic growth, although no one expects the U.S. central bank to take any new action this early in the year. In international news, talks between Greece and its creditor banks to slash the country's towering load of debt collapsed on Friday, with Greece warning of "catastrophic" results if a deal to swap bonds is not reached soon. At the same time, Standard & Poor's downgraded France's credit rating from AAA to AA, dealing another blow to the European Union. Treasury yields slid as a result, with the 10-year yield falling below 3% after rising above that level a week earlier.

U.S. Treasury Yields¹
Maturity	January 13, 2012	January 6, 2012
2-Year	0.22%	0.26%
10-Year	1.87%	1.96%
30-Year	2.91%	3.01%

This table is for illustrative purposes only. Past performance cannot guarantee future results.

¹Source of data: Bloomberg.com, as of 4 p.m. ET Friday, January 13, 2012.

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International Market

Week Ended January 6, 2012

International Stocks

Foreign stock markets closed lower for the week ending January 06, 2012 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -0.4%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-0.40%	-0.40%
Europe ex-U.K.	-1.63%	-1.63%
Denmark	0.09%	0.09%
France	-2.76%	-2.76%
Germany	0.71%	0.71%
Italy	-4.39%	-4.39%
Netherlands	-3.33%	-3.33%
Spain	-5.46%	-5.46%
Sweden	0.42%	0.42%
Switzerland	-1.11%	-1.11%
United Kingdom	0.54%	0.54%
Japan	-0.13%	-0.13%
AC Far East ex-Japan	0.56%	0.56%
Hong Kong	0.35%	0.35%
Korea	-0.04%	-0.04%
Malaysia	0.13%	0.13%
Singapore	2.48%	2.48%
Taiwan	1.05%	1.05%
Thailand	-0.41%	-0.41%
EM Latin America	2.42%	2.42%
Brazil	3.03%	3.03%
Mexico	0.61%	0.61%
Argentina	10.82%	10.82%
EM (Emerging Markets)	1.20%	1.20%
Hungary	-7.48%	-7.48%
India	3.56%	3.56%
Israel	5.85%	5.85%
Russia	3.67%	3.67%
Turkey	-1.38%	-1.38%

International Bond Markets

International bond markets in developed countries were lower this week, with the J.P. Morgan Global Government Bond Less U.S. Index losing -1.51%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	-1.51%	-1.51%
Europe
Denmark	-2.55%	-2.55%
France	-4.35%	-4.35%
Germany	-2.21%	-2.21%
Italy	-2.80%	-2.80%
Spain	-4.70%	-4.70%
Sweden	-1.77%	-1.77%
United Kingdom	-1.30%	-1.30%
Japan	-0.23%	-0.23%
Emerging Markets	-0.39%	-0.39%
Argentina	3.29%	3.29%
Brazil	-0.29%	-0.29%
Bulgaria	0.12%	0.12%
Russia	0.23%	0.23%

International Currency Markets

On the currency front, the U.S. dollar was stronger against the major currencies for the week.


Currency	Close (January 6, 2012)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	77.115	0.23%	0.23%
Euro	1.2714¹	2.06%	2.06%
British pound	1.5408¹	0.86%	0.86%

¹U.S. dollars per national currency unit.

Sources: Foreign stock markets and currency sections are from Rimes Technologies, using MSCI data. International bond markets are from J.P. Morgan.

Note: All returns are in U.S. dollars. All bond indices are J.P. Morgan. All stock indices are Morgan Stanley Capital International (MSCI).

Equity Indices
EAFE:	MSCI Europe, Australasia, and Far East Index
Europe Ex-U.K.:	MSCI Europe ex-U.K. Index
Far East Ex-Japan:	MSCI AC Far East ex-Japan Index
Latin America:	MSCI Emerging Markets Latin America Index
Emerging Markets:	MSCI Emerging Markets Index

Bond Indices
Developed Markets:	J.P. Morgan Global Government Bond Less U.S. Index
Emerging Markets:	J.P. Morgan Emerging Markets Bond Index Plus

All charts are for illustrative purposes only and do not represent the performance of any specific security. Past performance cannot guarantee future results.