Week Ended February 18, 2011

U.S. stocks advanced for the third straight week. With the gains, the large-cap S&P 500 Index has now more than doubled from its bear market low (666.79) hit in March 2009. Several other major indexes had already doubled from their lows in recent months, although the Dow still needs to gain about 500 points, or 4%, from its current level to reach this milestone. The market's moves were muted at the start of the week as investors bid stocks slightly lower, perhaps in reaction to somewhat disappointing retail sales gains in January. A rise in energy stocks and positive earnings surprises from some prominent firms helped markets regain momentum on Wednesday, and news of mergers in the health care and retail segments also helped boost sentiment. On Thursday, the Labor Department reported that weekly jobless claims had risen by 25,000, but investors took the largely anticipated increase in stride. Better news arrived in the form of the Philadelphia Fed survey, which tracks manufacturing activity in the region and which reached its best level in seven years. After falling in early trading, stocks steadily rose as the day progressed. On Friday, the major indexes edged higher in light trading in advance of the President's Day holiday, ending the week near two-year highs.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	12391.25	117.99	7.03%
S&P 500	1343.01	13.86	6.79%
NASDAQ Composite	2833.95	24.51	6.83%
S&P MidCap 400	982.15	12.67	8.26%
Russell 2000	833.13	13.26	6.09%

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 February 18, 2011

The U.S. economy continued to show signs of emerging from the doldrums with new home construction rising 14.6% in January—the biggest increase in 20 months according to the Commerce Department. But as economic activity improves, inflation also seems to be breaking out all over. Wholesale prices in the U.S. increased sharply in the first month of the year due to higher costs for oil, pharmaceuticals, and other basic goods. Consumer prices were also up, with food prices in particular gaining traction. The U.S. was not the only country facing inflationary pressures. Inflation rose at an annualized rate of 4% in Britain, the largest jump in two years, and China, Argentina, and various emerging economies have recently taken measures to rein in escalating prices in their own countries. As central banks struggle to boost global economic activity, they invariably run the risk of setting off a new round of rising prices. The challenge now will be to "stay ahead of the curve," so to speak, and contain inflation while allowing the global economy to grow at a steady, sustainable pace. Treasury yields trended lower during the week.

U.S. Treasury Yields¹
Maturity	February 18, 2011	February 11, 2011
2-Year	0.75%	0.83%
10-Year	3.58%	3.63%
30-Year	4.69%	4.70%

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, February 18, 2011.

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International Market

Week Ended February 11, 2011

International Stocks

Foreign stock markets closed higher for the week ending February 11, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 0.09%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	0.09%	4.13%
Europe ex-U.K.	0.67%	5.80%
Denmark	1.44%	2.04%
France	1.25%	8.31%
Germany	2.22%	7.47%
Italy	0.46%	13.31%
Netherlands	1.33%	6.75%
Spain	-0.69%	12.05%
Sweden	0.52%	2.21%
Switzerland	-0.39%	-0.90%
United Kingdom	1.01%	5.76%
Japan	-0.48%	2.35%
AC Far East ex-Japan	-5.64%	-3.91%
Hong Kong	-5.74%	-2.28%
Korea	-5.88%	-2.63%
Malaysia	-2.98%	-0.75%
Singapore	-4.63%	-3.40%
Taiwan	-7.23%	-4.25%
Thailand	-5.80%	-11.33%
EM Latin America	0.21%	-4.84%
Brazil	1.03%	-4.80%
Mexico	-1.68%	-2.17%
Argentina	-3.76%	-6.93%
EM (Emerging Markets)	-3.39%	-5.06%
Hungary	-4.48%	9.85%
India	-2.12%	-15.88%
Israel	-1.88%	-4.26%
Russia	-2.40%	6.34%
Turkey	-1.31%	-6.82%

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 -1.08%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	-1.08%	-1.86%
Europe
Denmark	-0.25%	-1.13%
France	-0.11%	-0.75%
Germany	-0.01%	-1.05%
Italy	-0.99%	1.50%
Spain	-1.10%	2.29%
Sweden	0.40%	2.93%
United Kingdom	-0.29%	-0.70%
Japan	-1.86%	-3.83%
Emerging Markets	-0.96%	-1.34%
Argentina	-1.43%	-4.52%
Brazil	-1.45%	-1.37%
Bulgaria	-0.29%	-0.89%
Russia	0.03%	0.16%

International Currency Markets

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


Currency	Close (February 11, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	83.390	1.69%	2.74%
Euro	1.3551¹	0.02%	-1.01%
British pound	1.6001¹	0.36%	-2.20%

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.