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U.S. Stock Market

Week Ended March 18, 2011

Stocks endured another down week, although a rally on Thursday and Friday helped mitigate the losses. Both the Nasdaq and S&P 500 dipped into negative territory for the year; the S&P 500 was able to emerge slightly higher by the end of the week, however. The major indexes followed markets around the world by turning sharply lower early in the week as investors shunned risk in response to the worsening nuclear situation in Japan. Comments by European and U.S. officials suggesting that the situation with the disabled nuclear reactors was worse than the Japanese government had acknowledged dealt a particular blow to investor confidence. Continued fighting in Libya also weighed on sentiment, as did news that housing starts in the U.S. had fallen in January to their lowest level since records began in 1960. U.S. markets regained some momentum on Thursday, helped by a good report on weekly jobless claims, news that a regional manufacturing gauge had reached its highest level since 1984, and an upbeat report from shipping giant FedEx. Some hints of progress in cooling radioactive material at the disabled Japanese nuclear plant also appear to have boosted sentiment. On Friday, markets continued their climb, boosted by the announcement of United Nations approval of a no-fly zone designed to stop attacks on rebels in Libya, as well as concerted efforts by the world’s leading central banks to prevent a continued climb in the Japanese yen.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11858.52	-185.42	2.43%
S&P 500	1279.21	-25.07	1.72%
NASDAQ Composite	2643.67	-71.94	-0.35%
S&P MidCap 400	942.69	-10.25	3.91%
Russell 2000	793.20	-12.00	1.01%

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.

In a unanimous decision, the Federal Reserve declared that the U.S. economy remains on a firm footing and the nation’s central bank will continue with its expansive monetary policy, including its plan to purchase an additional $600 billion worth of Treasury bonds. The Fed did not mention the unfolding tragedy in Japan, but it believes that the stimulative monetary policy currently in place will be enough to shield the domestic economy from turmoil abroad. The Fed acknowledged that rising food and energy prices are putting upward pressure on inflation. The producer price index rose a seasonally adjusted 1.6% in February, double the increase of the month before, and consumer prices rose 0.5%, the biggest jump in almost two years. At the same time, the Fed thinks the pickup in prices is "transitory," and the central bank is not concerned at the moment about long-term inflation risks. A flight to safety continued during the week, driving Treasury bond prices higher and yields lower (prices and yields move counter to each other).

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

Foreign stock markets closed lower for the week ending March 11, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -3.35%.

International bond markets in developed countries were higher this week, with the J.P. Morgan Global Government Bond Less U.S. Index gaining 0.1%.

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

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).

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

U.S. Treasury Yields¹
Maturity	March 18, 2011	March 11, 2011
2-Year	0.58%	0.62%
10-Year	3.28%	3.39%
30-Year	4.43%	4.54%


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-3.35%	2.13%
Europe ex-U.K.	-2.98%	4.31%
Denmark	-2.75%	4.75%
France	-3.33%	6.19%
Germany	-3.83%	3.81%
Italy	-2.41%	11.39%
Netherlands	-2.85%	6.49%
Spain	-2.06%	9.68%
Sweden	-1.74%	0.05%
Switzerland	-2.88%	0.31%
United Kingdom	-4.01%	2.12%
Japan	-3.52%	0.97%
AC Far East ex-Japan	-2.12%	-2.56%
Hong Kong	-0.75%	-1.41%
Korea	-4.26%	-3.26%
Malaysia	-1.73%	-0.10%
Singapore	-0.49%	-4.03%
Taiwan	-3.87%	-6.00%
Thailand	1.39%	-1.22%
EM Latin America	-3.23%	-4.24%
Brazil	-3.42%	-2.98%
Mexico	-2.00%	-3.61%
Argentina	-2.91%	-11.56%
EM (Emerging Markets)	-2.59%	-3.46%
Hungary	-4.68%	10.31%
India	-2.03%	-12.57%
Israel	-1.09%	-6.31%
Russia	-3.86%	8.57%
Turkey	5.41%	-8.16%


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	0.10%	0.50%
Europe
Denmark	-0.58%	1.50%
France	-0.47%	2.00%
Germany	-0.54%	1.56%
Italy	-0.79%	3.34%
Spain	-0.90%	4.89%
Sweden	-0.34%	5.14%
United Kingdom	-0.86%	1.63%
Japan	0.96%	-1.53%
Emerging Markets	0.44%	0.57%
Argentina	-0.42%	-5.00%
Brazil	0.37%	0.90%
Bulgaria	-0.08%	0.87%
Russia	-0.06%	1.98%


Currency	Close (March 11, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	81.815	-0.68%	0.87%
Euro	1.384¹	1.08%	-3.16%
British pound	1.6015¹	1.54%	-2.29%

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