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Week Ended July 15, 2011

Stocks retreated during the week as investors remained focused on overseas developments and kept a nervous eye on developments in Washington. Share prices fell sharply on Monday in response to new concerns about the Italian banking sector and worries that fallout from the European credit crisis might spread to some of its larger economies. Moody's added to investors' worries on Tuesday, when the ratings agency lowered Ireland's credit rating to "junk" status. Wednesday brought some relief to markets, thanks largely to a suggestion from Federal Reserve Chairman Ben Bernanke that the central bank would be willing to consider another round of stimulus if economic growth weakens further. The Fed leader appeared to recant those remarks on Thursday, however, which sent stocks back lower. Bernanke told lawmakers that the time for further action had not yet come while also observing that inflation pressures had picked up in the recent months. Bernanke's testimony also addressed the stalled debt limit negotiations in Washington. Although markets appeared to be taking the looming deadline to come to an agreement largely in stride, Bernanke warned that the nation risked a "self-inflicted wound" to the still-frail recovery. Credit ratings agencies also warned that the U.S. might suffer a ratings downgrade if an agreement was not reached in time. Early quarterly earnings reports proved generally positive, helping mitigate the week's losses.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	12479.73	-177.47	7.79%
S&P 500	1316.14	-27.66	4.65%
NASDAQ Composite	2789.80	-70.01	5.16%
S&P MidCap 400	976.11	-28.87	7.59%
Russell 2000	828.25	-24.70	5.47%

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 15, 2011

Negotiations in Washington to resolve the debt ceiling and budget deficit issues dragged on through the week, with no agreement in sight on Friday. Once again, the credit rating agencies warned about an unprecedented downgrade of the government's debt if the administration and the legislators fail to come to terms by the August 2 deadline. Federal Reserve Chairman Ben Bernanke weighed in on the subject, talking about "a calamitous outcome" if the impasse remains. Bernanke also expressed concern about the sluggish pace of economic growth and said the central bank might provide another round of monetary stimulus if the labor and housing markets do not pull out of their slump. Treasury yields fell on the news. So far, the markets have been acting as though the major political parties will reach an agreement in time for the government to avoid defaulting on its debt obligations.

U.S. Treasury Yields¹
Maturity	July 15, 2011	July 8, 2011
2-Year	0.35%	0.39%
10-Year	2.91%	3.01%
30-Year	4.25%	4.28%

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 15, 2011.

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International Market

Week Ended July 8, 2011

International Stocks

Foreign stock markets closed lower for the week ending July 08, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -0.5%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-0.50%	5.34%
Europe ex-U.K.	-2.77%	9.15%
Denmark	-1.14%	2.50%
France	-3.59%	12.77%
Germany	-1.56%	13.81%
Italy	-8.28%	3.84%
Netherlands	-2.13%	4.60%
Spain	-6.70%	9.89%
Sweden	-1.54%	5.32%
Switzerland	-0.13%	9.24%
United Kingdom	0.06%	6.38%
Japan	2.74%	-1.65%
AC Far East ex-Japan	2.17%	5.46%
Hong Kong	1.75%	0.36%
Korea	3.76%	14.29%
Malaysia	1.34%	10.08%
Singapore	1.14%	3.24%
Taiwan	0.48%	-1.24%
Thailand	6.14%	8.48%
EM Latin America	-2.38%	-2.47%
Brazil	-3.23%	-3.04%
Mexico	-0.57%	0.77%
Argentina	0.54%	-6.11%
EM (Emerging Markets)	0.72%	2.70%
Hungary	-4.30%	18.28%
India	1.06%	-7.43%
Israel	2.13%	-5.17%
Russia	0.50%	12.35%
Turkey	-0.62%	-8.66%

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 -0.49%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	-0.49%	4.05%
Europe
Denmark	0.02%	7.34%
France	-0.42%	7.52%
Germany	-0.11%	7.63%
Italy	-3.80%	5.59%
Spain	-2.91%	7.97%
Sweden	-1.13%	9.16%
United Kingdom	1.33%	5.59%
Japan	-0.01%	0.85%
Emerging Markets	0.24%	5.36%
Argentina	-1.16%	0.04%
Brazil	0.34%	6.15%
Bulgaria	0.32%	3.48%
Russia	0.33%	5.29%

International Currency Markets

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


Currency	Close (July 8, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	80.665	-0.28%	-0.55%
Euro	1.4259¹	1.55%	-6.28%
British pound	1.6051¹	-0.03%	-2.52%

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.