U.S. Stock Market

Week Ended January 14, 2011

Stocks continued to advance in the second week of the year, bringing the large-cap indexes to their best level since the summer of 2008 and helping the S&P MidCap 400 end the week at an all-time high. Investors started the week in a cautious mood, concerned over reports that Portugal might be forced to follow Ireland and Greece in accepting a bailout from international lenders. These fears eased somewhat as the week progressed, and markets moved sharply higher on Wednesday as investors were relieved to see a successful auction of Portuguese government debt. Stocks slipped back a bit on Thursday when the Labor Department reported a surprising jump in weekly jobless claims, although some observers questioned whether recent snowstorms had inflated the numbers by delaying earlier filings. More economic news arrived Friday, when the Federal Reserve announced a larger-than-expected rise in industrial production in December. The Commerce Department reported that retail sales grew 0.6% for the month, slightly short of expectations. The week also saw the beginnings of the fourth-quarter earnings reporting season. Investors were somewhat disappointed in sales growth at industrial bellwether Alcoa, but the first major bank to report, J.P. Morgan Chase, announced profits that topped expectations.

U.S. Stocks1

Index2

Friday's Close

Week's Change

% Change
Year-to-Date

DJIA

11787.38

112.62

1.81%

S&P 500

1293.24

21.74

2.83%

NASDAQ Composite

2755.30

52.13

3.86%

S&P MidCap 400

931.07

20.54

2.63%

Russell 2000

807.21

20.18

2.79%

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 4:10 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 14, 2011

The U.S. economy ended 2010 on an encouraging note, according to the Federal Reserve's Survey of Economic Conditions. Fed Chairman Ben Bernanke predicted that the U.S. economy would continue to strengthen in 2011, although he thought it might take as long as five years for unemployment, now at 9.4%, to fall to a historically normal level of about 6%. The labor market is not the only discouraging area; real estate also looks fairly bleak, with home values down 26% from their peak in June 2006, the steepest decline since the 1930s, according to online real estate database Zillow. RealtyTrak expects foreclosures this year to surpass the record 1 million foreclosures that occurred in 2010, as a large number of unemployed homeowners struggle to make payments. The most problematic areas are the ones that experienced the biggest booms, namely Nevada, Arizona, Florida, and California. At the same time, inflation has been creeping up, posting its largest increase in nearly a year at the end of December. Much of the rise was attributed to higher food and energy costs. Treasury yields were mostly stable during the week, closing near their levels of a week earlier.

U.S. Treasury Yields1

Maturity

January 14, 2011

January 7, 2011

2-Year

0.58%

0.59%

10-Year

3.32%

3.32%

30-Year

4.53%

4.47%

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 14, 2011.

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International Market

 

Week Ended January 07, 2011

International Stocks

Foreign stock markets closed lower for the week ending January 07, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -0.82%.

 

Region/Country

Week's Return

% Change Year-to-Date

EAFE

-0.82%

-0.82%

Europe ex-U.K.

-2.47%

-2.47%

Denmark

-1.22%

-1.22%

France

-1.59%

-1.59%

Germany

-2.76%

-2.76%

Italy

-1.18%

-1.18%

Netherlands

-2.39%

-2.39%

Spain

-6.07%

-6.07%

Sweden

-2.09%

-2.09%

Switzerland

-2.62%

-2.62%

United Kingdom

0.93%

0.93%

Japan

0.78%

0.78%

AC Far East ex-Japan

1.55%

1.55%

Hong Kong

4.68%

4.68%

Korea

2.94%

2.94%

Malaysia

4.05%

4.05%

Singapore

1.34%

1.34%

Taiwan

-2.92%

-2.92%

Thailand

0.26%

0.26%

EM Latin America

-0.72%

-0.72%

Brazil

-0.51%

-0.51%

Mexico

1.24%

1.24%

Argentina

0.81%

0.81%

EM (Emerging Markets)

-0.35%

-0.35%

Hungary

1.96%

1.96%

India

-5.14%

-5.14%

Israel

-0.58%

-0.58%

Russia

-0.66%

-0.66%

Turkey

1.69%

1.69%

 

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 -2.75%.

 

Region/Country

Week's Return

% Change Year-to-Date

Developed Markets

-2.75%

-2.75%

Europe

 

 

Denmark

-2.91%

-2.91%

France

-3.11%

-3.11%

Germany

-2.97%

-2.97%

Italy

-3.29%

-3.29%

Spain

-3.60%

-3.60%

Sweden

-2.18%

-2.18%

United Kingdom

-1.62%

-1.62%

Japan

-2.75%

-2.75%

Emerging Markets

0.60%

0.60%

Argentina

0.61%

0.61%

Brazil

1.35%

1.35%

Bulgaria

-0.07%

-0.07%

Russia

0.33%

0.33%

 

International Currency Markets

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

 

Currency

Close
(January 07, 2011)

Week's Return
(U.S. $)

% Change
Year-to-Date (U.S. $)

Japanese yen

82.975

2.25%

2.25%

Euro

1.29831

3.23%

3.23%

British pound

1.55711

0.55%

0.55%

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.