Week Ended January 28, 2011
A sharp sell-off on Friday
left the broad stock indexes lower for the week; smaller-cap indexes managed a
small gain. Investors began the week in a buying mood, seemingly satisfied with
the stream of fourth-quarter earnings reports and optimistic that the President’s
State of the Union speech would reflect a more business-friendly climate in
Washington. Disappointing earnings from prominent industrials and health care
firms drained some of the enthusiasm as the week went on, but investors
appeared to focus on surprisingly favorable economic data. A 17.5% jump in new
home sales in December, following on the heels of a solid gain in November, was
particularly encouraging, and consumer sentiment gauges increased more than
anticipated. Good earnings in the technology sector on Thursday helped the
markets overcome news that weekly jobless claims jumped to a three-month high.
Durable goods data were also modestly disappointing. Stocks came under heavy
selling pressure on Friday, however, as investors appeared to react to an over
4% rise in oil prices brought about by political turmoil in Egypt. Leading
Internet retailer Amazon.com also soured the mood by reporting sales and
operating margins that fell short of expectations, and automaker Ford fell
sharply after reporting a surprising decline in earnings.
|
U.S.
Stocks1 |
|||
|
Index2 |
Friday's Close |
Week's Change |
% Change |
|
DJIA |
11823.70 |
-48.14 |
2.13% |
|
S&P 500 |
1276.35 |
-7.00 |
1.49% |
|
NASDAQ Composite |
2686.98 |
-2.56 |
1.29% |
|
S&P MidCap 400 |
917.74 |
3.38 |
1.16% |
|
Russell 2000 |
776.20 |
2.58 |
-1.16% |
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.
____________
Week Ended January 28, 2011
The U.S. economy grew at an
annualized rate of 3.2% in the fourth quarter of 2010 as consumer spending
advanced at its strongest pace in more than four years. The good news on the
economy, however, was not enough to induce the Federal Reserve to alter its
stimulative monetary policy. Following its first meeting in 2011, the Federal
Open Market Committee announced that it would keep short-term interest rates at
historically low levels and move forward with a $600 billion Treasury bond
purchase program. The pickup in economic growth, while welcome, is not enough
to significantly lower unemployment, which stood at 9.4% at the end of last
year. If unemployment remains above 9%, it could dampen consumer demand, which
accounts for more than two-thirds of U.S. economic activity. The housing market
also remains weak, with new home sales in 2010 dropping for the fifth
consecutive year to the lowest level in 47 years. Treasury yields declined in
the face of escalating uprisings in Egypt and other countries in the region.
|
U.S.
Treasury Yields1 |
||
|
Maturity |
January 28, 2011 |
January 21, 2011 |
|
2-Year |
0.55% |
0.61% |
|
10-Year |
3.33% |
3.41% |
|
30-Year |
4.53% |
4.57% |
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 28, 2011.
___________
Week Ended January 21, 2011
International
Stocks
Foreign stock markets closed lower for the week ending January
21, 2011 with the broad international measure, the MSCI EAFE Index (Europe,
Australasia, and Far East), losing 0%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
EAFE |
0.00% |
1.87% |
|
Europe ex-U.K. |
1.79% |
3.95% |
|
Denmark |
0.70% |
0.66% |
|
France |
2.26% |
6.23% |
|
Germany |
1.23% |
3.11% |
|
Italy |
4.42% |
10.39% |
|
Netherlands |
1.81% |
4.38% |
|
Spain |
6.82% |
13.26% |
|
Sweden |
-0.68% |
1.11% |
|
Switzerland |
0.42% |
-1.26% |
|
United Kingdom |
-1.00% |
2.28% |
|
Japan |
-1.91% |
-0.62% |
|
AC Far East
ex-Japan |
-2.16% |
0.77% |
|
Hong Kong |
-1.04% |
3.97% |
|
Korea |
-2.66% |
1.90% |
|
Malaysia |
-1.74% |
2.86% |
|
Singapore |
-1.09% |
-0.03% |
|
Taiwan |
-0.65% |
0.16% |
|
Thailand |
-4.34% |
-4.76% |
|
EM Latin America |
-1.93% |
-1.81% |
|
Brazil |
-2.12% |
-1.16% |
|
Mexico |
-1.39% |
-0.86% |
|
Argentina |
2.94% |
1.79% |
|
EM (Emerging
Markets) |
-1.97% |
-1.21% |
|
Hungary |
6.22% |
12.04% |
|
India |
0.52% |
-8.80% |
|
Israel |
-1.76% |
0.28% |
|
Russia |
-0.15% |
4.79% |
|
Turkey |
-4.51% |
-3.76% |
International
Bond Markets
International bond markets in developed countries were higher
this week, with the J.P. Morgan Global Government Bond Less U.S. Index gaining
0.7%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
Developed Markets |
0.70% |
-0.85% |
|
Europe |
|
|
|
Denmark |
1.00% |
0.22% |
|
France |
1.18% |
0.41% |
|
Germany |
0.89% |
-0.07% |
|
Italy |
1.77% |
2.22% |
|
Spain |
2.63% |
2.93% |
|
Sweden |
0.77% |
1.42% |
|
United Kingdom |
0.34% |
-0.11% |
|
Japan |
0.24% |
-2.51% |
|
Emerging Markets |
-0.78% |
0.12% |
|
Argentina |
-1.07% |
1.66% |
|
Brazil |
-0.61% |
0.88% |
|
Bulgaria |
-0.10% |
-0.22% |
|
Russia |
-0.43% |
0.49% |
On the currency front, the U.S. dollar was weaker against the
major currencies for the week.
|
|
|||
|
Currency |
Close |
Week's Return |
% Change |
|
Japanese yen |
82.660 |
-0.19% |
1.88% |
|
Euro |
1.35851 |
-1.67% |
-1.26% |
|
British pound |
1.59911 |
-0.69% |
-2.14% |
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.