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Week Ended March 26, 2010

The major indexes moved higher for the week but gave up much of their gains Thursday afternoon. Health care stocks rallied Monday as investors appeared to reconsider some of their worst-case scenarios for the sectors following the passage of health care reform over the weekend. Stocks continued their advance on Tuesday, when a smaller-than-anticipated drop in existing home sales in February boosted hopes for a durable economic recovery. The major indexes reached new highs for the year early Thursday in response to a sizable drop in weekly jobless claims and further assurance from Federal Reserve Chairman Ben Bernanke that the central bank would keep short-term interest rates extremely low for "an extended period." Stock prices fell back to end the week, however, apparently in response to a sharp rise in Treasury yields, which prompted further concerns about the sustainability of the large U.S. fiscal deficit.

U.S. Stocks¹
Index²	Friday’s Close	Week’s Change	% Change Year-to-Date
DJIA	10850.36	108.38	4.05%
S&P 500	1166.59	6.69	4.62%
NASDAQ Composite	2395.13	20.72	5.55%
S&P MidCap 400	787.02	1.89	8.30%
Russell 2000	678.18	4.46	6.96%

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 March 26, 2010

Federal Reserve Chairman Ben Bernanke reiterated that record low interest rates are necessary to stimulate economic growth. In his testimony before Congress on Thursday, he pointed to continuing weak labor and housing markets as rationales for the Fed's expansive monetary policy. Bernanke would not be pinned down on when he thinks the Fed might have to tighten credit, saying only that a change in policy would be in order when the "expansion matures." Underscoring his remarks, the Commerce Department reported that the economy grew at an annualized rate of 5.6% in the fourth quarter of 2009, the strongest showing in six years. Most economists believe, however, that this pace was stimulus-driven and is unlikely to continue. Indeed, growth in the first quarter of this year appears to be chugging along at about a 3% annualized rate. The Fed is currently facing its most delicate balancing act under Bernanke's tenure. Moving to raise short-term rates too quickly could derail the recovery, while waiting too long raises the risks of fueling escalating inflation and planting the seeds for a new bubble down the road. Treasury yields went up during the week, propelled by weakening demand and fears about the U.S.'s ability to finance its huge budget deficit.

U.S. Treasury Yields¹
Maturity	March 26, 2010	March 19, 2010
2-Year	1.05%	0.99%
10-Year	3.85%	3.69%
30-Year	4.74%	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, March 26, 2010.

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Week Ended March 19, 2010

International Stocks

Foreign stock markets closed lower for the week ending March 19, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -0.11%.


Region/Country	Week’s Return	% Change Year-to-Date
EAFE	-0.11%	-0.09%
Europe ex-U.K.	-1.11%	-3.43%
Denmark	0.64%	8.02%
France	-1.56%	-5.07%
Germany	-1.03%	-5.27%
Italy	-1.20%	-7.91%
Netherlands	-2.29%	-3.04%
Spain	-2.82%	-14.07%
Sweden	-1.14%	7.74%
Switzerland	0.56%	3.39%
United Kingdom	-0.54%	-2.12%
Japan	1.56%	7.47%
AC Far East ex-Japan	1.32%	0.65%
Hong Kong	2.14%	3.34%
Korea	1.25%	3.20%
Malaysia	-0.89%	5.30%
Singapore	0.85%	-0.31%
Taiwan	1.56%	-3.75%
Thailand	6.86%	10.77%
EM Latin America	-1.62%	-0.93%
Brazil	-2.38%	-2.85%
Mexico	1.57%	4.72%
Argentina	0.77%	0.09%
EM (Emerging Markets)	0.55%	1.16%
Hungary	1.11%	9.98%
India	2.15%	3.85%
Israel	0.58%	7.66%
Russia	-0.99%	4.61%
Turkey	2.26%	-3.39%

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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 -0.61%.


Region/Country	Week’s Return	% Change Year-to-Date
Developed Markets	-0.61%	-0.87%
Europe
Denmark	-1.33%	-2.89%
France	-1.41%	-3.57%
Germany	-1.36%	-3.36%
Italy	-1.63%	-4.26%
Spain	-1.70%	-4.27%
Sweden	-0.92%	1.43%
United Kingdom	-0.24%	-6.46%
Japan	0.13%	2.82%
Emerging Markets	0.32%	3.76%
Argentina	4.70%	1.81%
Brazil	-0.03%	2.48%
Bulgaria	0.78%	1.74%
Russia	0.17%	3.95%

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International Currency Markets

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


Currency	Close (March 19, 2010)	Week’s Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	90.510	-0.24%	-2.86%
Euro	1.3528¹	1.66%	5.71%
British pound	1.5016¹	1.06%	7.02%

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.