Week Ended March 28, 2013

S&P 500 ends at a fresh record high; erases losses from 2008 crisis { This statement is ridiculous and an embarrassment for T. Rowe Price in light of the QE dollar debasement market frothing follies that’s left the nominal closes far less in real terms, especially when adjusted for real inflation! }

U.S. stocks rose during a holiday-shortened week, lifted by surprisingly strong economic data and relief after banks in Cyprus reopened without incident following a two-week closure. On Thursday, the Standard & Poor's 500 Index surpassed its record closing high set in October 2007 after flirting with the milestone for the past two weeks. The S&P 500's fresh record close means that the U.S. stock market benchmark has recouped all of its losses from the 2008 financial crisis. The Dow Jones industrials exceeded its 2007 all-time high on March 5.

Economic data confirms recovery; Cypriot banks reopen without drama

The week's economic data largely beat forecasts, providing more evidence that the U.S. recovery is gaining traction. On Thursday, revised Commerce Department figures showed that gross domestic product in last year's final quarter rose at a 0.4% annual pace, better than a 0.1% prior estimate, driven by corporate spending on buildings and a smaller trade gap. Earlier reports this week showed that U.S. durable goods orders rose more than expected in February and home prices increased in January by the most since 2006.

Overseas, banks in troubled eurozone member Cyprus opened Thursday for the first time since the government froze bank accounts on March 16 as it negotiated with European lenders about securing a financial bailout. Many investors had feared a panic-filled run on Cypriot banks when they reopened, but there were no reports of trouble despite the implementation of capital controls.

Fed expected to taper bond purchases this year

Good corporate earnings growth and the Federal Reserve's ongoing efforts to spur the economy through its $85 billion per month bond-buying program have underpinned the stock rally. With more data showing the U.S. economy getting stronger, speculation is growing over how and when the Fed will end its unprecedented monetary stimulus. Despite the onset of higher taxes and the federal sequester, economists at T. Rowe Price expect that a stronger private sector will limit the impact of tighter fiscal policies and keep forward momentum in the economy intact. We expect the Fed will begin to reduce the pace of its monthly bond purchases early in the second half of 2013.

The U.S. stock market is closed on March 29, 2013, for Good Friday.

U.S. Stocks1

Index2

Friday's Close

Week's Change

% Change
Year-to-Date

DJIA

14578.54

66.51

11.25%

S&P 500

1569.19

12.30

10.03%

NASDAQ Composite

3267.52

22.52

8.21%

S&P MidCap 400

1154.66

16.75

13.15%

Russell 2000

953.23

7.88

12.23%

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 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.