U.S. Stock Market

Week Ended May 13, 2011

Large-cap stocks moved modestly lower for the week, while the technology-oriented Nasdaq was flat, and the smaller-cap indexes registered small gains. Stocks climbed at the start of the week, helped in part by news that Microsoft was buying online phone and video software firm Skype Technologies for $8.5 billion. Investors also were encouraged by news of gains in wholesaler inventories and sales, as well as a small rebound in commodity prices after their tumble the previous week. Stocks reversed course alongside commodity prices on Wednesday, however. Oil prices fell sharply in response to a surprising rise in crude inventories, which helped drag down energy shares. Thursday brought news of a drop in weekly jobless claims and a modest rise in April retail sales, but investors seemed more attuned to another partial recovery in commodities prices, which helped the market reverse a large loss earlier in the day. The indexes resumed their downward trajectory on Friday, however, as investors appeared to react to a rise in the U.S. dollar to its highest level in a month. Once again, the day's economic data seemed to have little effect on sentiment. The University of Michigan reported a rise in its preliminary gauge of consumer sentiment for the month, while the Labor Department announced that consumer prices had increased by 0.4% in April. The 0.2% rise in the core rate excluding food and energy prices was more modest, but the data appeared to confirm a general trend of firming price pressures.

U.S. Stocks1

Index2

Thursday's Close

Week's Change

% Change
Year-to-Date

DJIA

12595.75

-42.99

8.79%

S&P 500

1337.77

-2.43

6.37%

NASDAQ Composite

2828.47

0.91

6.62%

S&P MidCap 400

993.92

5.02

9.55%

Russell 2000

835.92

1.90

6.45%

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.

 

 

 ____________

U.S. Bond Market

Week Ended May 13, 2011

The latest reports from the Labor Department indicate that rising inflation is emerging as a possible concern in the months ahead. The producer price index for April rose 0.8%. Even after stripping out volatile food and energy prices, the index was up 0.3%. Commodity prices, including oil, have since fallen, but the Federal Reserve is closely monitoring the data. The consumer price index, which more immediately affects the purchasing power of individuals, also rose in April by 0.4%, although the increase amounted to 0.2% when oil and food are excluded. This follows a rise of 0.5% for overall consumer prices a month earlier, so the trend is definitely on an upward trajectory. The big question at the moment is when the Fed will unwind its loose monetary policy and start to raise interest rates to stay ahead of the inflation curve. Most analysts do not expect such a move to take place until late this year or early 2012. The news barely affected Treasury yields, which were fairly stable during the week.

U.S. Treasury Yields1

Maturity

May 13, 2011

May 6, 2011

2-Year

0.54%

0.55%

10-Year

3.18%

3.16%

30-Year

4.32%

4.29%

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, May 13, 2011.

 

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International Market

Week Ended May 6, 2011

International Stocks

Foreign stock markets closed lower for the week ending May 06, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -2.02%.

 

Region/Country

Week's Return

% Change Year-to-Date

EAFE

-2.02%

7.51%

Europe ex-U.K.

-2.62%

14.23%

Denmark

-3.07%

9.70%

France

-2.88%

15.97%

Germany

-2.58%

16.70%

Italy

-4.33%

18.05%

Netherlands

-1.49%

12.78%

Spain

-3.35%

18.81%

Sweden

-3.10%

12.15%

Switzerland

-0.54%

11.32%

United Kingdom

-2.96%

7.84%

Japan

1.10%

-3.46%

AC Far East ex-Japan

-2.30%

4.02%

Hong Kong

-1.39%

0.64%

Korea

-3.37%

10.77%

Malaysia

-2.68%

3.41%

Singapore

-3.46%

1.36%

Taiwan

-0.46%

1.63%

Thailand

-6.04%

4.52%

EM Latin America

-3.89%

-2.49%

Brazil

-3.95%

-2.05%

Mexico

-5.40%

-3.15%

Argentina

-1.73%

-14.87%

EM (Emerging Markets)

-3.26%

1.85%

Hungary

-3.80%

29.32%

India

-4.34%

-10.17%

Israel

-2.34%

-7.52%

Russia

-5.27%

10.66%

Turkey

-2.57%

2.06%

 

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 -0.42%.

 

Region/Country

Week's Return

% Change Year-to-Date

Developed Markets

-0.42%

4.44%

Europe

 

 

Denmark

-1.76%

6.71%

France

-1.94%

7.14%

Germany

-1.85%

6.71%

Italy

-1.54%

10.02%

Spain

-1.40%

11.12%

Sweden

-2.38%

10.04%

United Kingdom

-1.26%

6.37%

Japan

1.05%

0.74%

Emerging Markets

0.62%

2.76%

Argentina

-1.25%

-1.89%

Brazil

1.06%

3.48%

Bulgaria

0.45%

2.59%

Russia

0.42%

3.26%

 

International Currency Markets

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

 

Currency

Close
(May 6, 2011)

Week's Return
(U.S. $)

% Change
Year-to-Date (U.S. $)

Japanese yen

80.615

-0.65%

-0.61%

Euro

1.45071

2.22%

-8.13%

British pound

1.64231

1.54%

-4.90%

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.