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Week Ended July 9, 2010

Investors appeared to come back refreshed from the holiday weekend and bid stocks sharply higher. The broad indexes scored their biggest weekly gains in nearly a year despite the market's closure on Monday. Stock prices surged on Wednesday as investors appeared to anticipate the release of healthy earnings reports in the coming days, optimism that was fed by a favorable profit forecast by a prominent financial firm. Sentiment may also have been boosted by the release of details on stress tests of European banks, which many hope will resolve uncertainty in the sector, as well as word of a merger in the technology sector. Gains continued on Thursday after the Labor Department reported a large drop in weekly jobless claims. Some retailers also reported stronger-than-expected increases in June sales.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	10197.72	511.24	-2.21%
S&P 500	1077.93	55.35	-3.33%
NASDAQ Composite	2196.45	104.66	-3.20%
S&P MidCap 400	739.89	37.60	1.82%
Russell 2000	628.64	27.27	-0.86%

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 July 9 2010

Inventories held by wholesalers rose in May for the fifth month in a row, but retail sales fell for the first time in more than a year, suggesting that the economy is still struggling to gain some traction. Weak sales could discourage businesses from increasing their orders and result in a slowdown in production. Nevertheless, we do not believe the economy is heading back into a recession. Sharp increases in productivity as a result of cost-cutting appear to be coming to an end, setting the stage for an eventual improvement in job gains and household spending. Modest but continued growth would bode well for credit-sensitive securities including lower-grade corporate issues at the expense of Treasuries—particularly if risk aversion begins to subside and Treasury yields turn higher. Longer-term Treasury yields did rise during the week, pushing the 10-year yield back above 3% and the 30-year bond above 4%.

U.S. Treasury Yields¹
Maturity	July 9, 2010	July 2, 2010
2-Year	0.62%	0.62%
10-Year	3.06%	2.98%
30-Year	4.04%	3.94%

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, July 9, 2010.

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International Market

Week Ended July 2, 2010

International Stocks

Foreign stock markets closed lower for the week ending July 02, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -2.47%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-2.47%	-12.96%
Europe ex-U.K.	-1.70%	-16.83%
Denmark	-0.75%	6.23%
France	-2.24%	-21.29%
Germany	-1.50%	-13.94%
Italy	-1.91%	-25.50%
Netherlands	-2.38%	-13.35%
Spain	0.02%	-30.47%
Sweden	-2.07%	0.43%
Switzerland	-1.87%	-8.58%
United Kingdom	-2.72%	-14.42%
Japan	-2.54%	-3.06%
AC Far East ex-Japan	-3.38%	-5.57%
Hong Kong	-3.16%	-4.01%
Korea	-5.08%	-6.16%
Malaysia	-0.54%	9.23%
Singapore	0.02%	-0.70%
Taiwan	-3.02%	-13.32%
Thailand	-0.25%	11.21%
EM Latin America	-4.18%	-8.70%
Brazil	-3.99%	-12.85%
Mexico	-6.03%	-2.29%
Argentina	-5.68%	-0.87%
EM (Emerging Markets)	-3.51%	-6.49%
Hungary	3.39%	-18.94%
India	-1.85%	0.27%
Israel	-1.30%	-11.28%
Russia	-3.75%	-10.15%
Turkey	0.65%	2.69%

International Bond Markets

International bond markets in developed countries were higher this week, with the J.P. Morgan Global Government Bond Less U.S. Index gaining 2.41%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	2.41%	-0.04%
Europe
Denmark	2.66%	-4.33%
France	3.19%	-6.91%
Germany	2.73%	-5.99%
Italy	3.01%	-10.97%
Spain	2.44%	-14.09%
Sweden	2.28%	-0.91%
United Kingdom	2.03%	-0.14%
Japan	2.31%	8.68%
Emerging Markets	0.22%	5.09%
Argentina	-1.59%	-2.17%
Brazil	0.63%	5.80%
Bulgaria	0.16%	0.35%
Russia	-0.02%	2.69%

International Currency Markets

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


Currency	Close (July 2, 2010)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	87.695	-1.81%	-6.16%
Euro	1.2602¹	-2.52%	12.17%
British pound	1.5189¹	-1.41%	5.94%

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.