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Week Ended August 5, 2011

Stocks suffered their biggest weekly drop in more than two years as bad economic news and concerns about Europe's credit crisis overcame relief about a last-ditch agreement in Congress to raise the debt ceiling and avert a default on U.S. debt. Selling was particularly acute on Thursday, when major U.S. stock indexes fell in their biggest single-day loss since the 2008 financial crisis. Stocks ended Friday on a mixed note, but both the Dow Jones Industrial Average and the S&P 500 have erased their gains for 2011.

Grim economic data this week included a report showing that manufacturing in July grew at the slowest pace in two years, followed by a Commerce Department report showing that consumer spending in June unexpectedly fell for the first time in two years. On Friday, the government reported that July payrolls rose by a stronger-than-expected 117,000 workers and the unemployment rate ticked down to 9.1% from 9.2%. However, the unexpectedly strong jobs report failed to quell talk that the U.S. recovery may be headed for a double-dip recession. Worries about European policymakers' ability to contain the sovereign debt crisis from spreading to Italy and Spain also fed pessimism about global growth prospects.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11444.61	-698.63	-1.15%
S&P 500	1199.38	-92.90	-4.63%
NASDAQ Composite	2532.41	-223.97	-4.54%
S&P MidCap 400	844.78	-98.64	-6.89%
Russell 2000	715.88	-80.85	-8.84%

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 August 5, 2011

Treasury yields fell sharply in the wake of the bipartisan agreement to raise the nation's debt ceiling, avoid default, and take some initial steps to narrow the federal budget deficit. Yields for all maturities declined, with the 30-year yield plunging well below 4%. The latest economic data suggested that the recovery has slowed further and perhaps even stalled. The unemployment rates in more than 90% of U.S. metropolitan regions rose in June, reflecting a nationwide slowdown in hiring, according to the Labor Department. With a stream of negative news casting a pall over the financial markets, the dose of optimism offered by the labor market on Friday was more than welcomed by investors. The report for July showed that the economy added 117,000 new jobs during the month, and the U.S. unemployment rate dropped a notch to 9.1%, down from 9.2% the month before. High unemployment, stagnant wages, and elevated gasoline prices have been crimping consumer spending, which accounts for about 70% of U.S. economic activity.

U.S. Treasury Yields¹
Maturity	August 5, 2011	July 29, 2011
2-Year	0.28%	0.36%
10-Year	2.55%	2.79%
30-Year	3.84%	4.13%

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, August 5, 2011.

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International Market

Week Ended July 29, 2011

International Stocks

Foreign stock markets closed lower for the week ending July 29, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -2.14%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-2.14%	3.69%
Europe ex-U.K.	-2.92%	6.02%
Denmark	-3.93%	-0.98%
France	-4.15%	7.03%
Germany	-2.47%	10.61%
Italy	-5.09%	1.36%
Netherlands	-2.62%	1.31%
Spain	-4.49%	7.79%
Sweden	-1.99%	1.24%
Switzerland	-0.69%	9.04%
United Kingdom	-1.32%	5.66%
Japan	-1.73%	-1.30%
AC Far East ex-Japan	-0.81%	4.22%
Hong Kong	1.35%	0.63%
Korea	-2.20%	10.48%
Malaysia	-0.80%	7.74%
Singapore	0.86%	6.23%
Taiwan	-1.44%	-1.56%
Thailand	0.22%	14.03%
EM Latin America	-1.32%	-4.91%
Brazil	-1.52%	-5.73%
Mexico	0.17%	-0.73%
Argentina	-1.86%	-11.40%
EM (Emerging Markets)	-1.28%	0.65%
Hungary	-2.05%	13.32%
India	-2.72%	-10.57%
Israel	-3.10%	-9.36%
Russia	-0.90%	12.31%
Turkey	5.23%	-12.79%

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 0.97%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	0.97%	7.32%
Europe
Denmark	1.78%	10.37%
France	1.25%	9.77%
Germany	1.60%	10.24%
Italy	-2.67%	3.03%
Spain	-2.04%	6.51%
Sweden	2.29%	12.89%
United Kingdom	2.12%	10.36%
Japan	1.62%	6.06%
Emerging Markets	1.10%	7.19%
Argentina	1.33%	1.97%
Brazil	1.61%	8.53%
Bulgaria	-0.10%	3.02%
Russia	1.08%	6.91%

International Currency Markets

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


Currency	Close (July 29, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	77.190	-1.51%	-5.07%
Euro	1.437¹	-0.03%	-7.11%
British pound	1.6415¹	-0.63%	-4.84%

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.