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Week Ended September 23, 2011

Stocks gave up their previous week's gains and more as investors worried about the European debt crisis and signs of a global economic slowdown. The market's selloff began Wednesday afternoon, following the Federal Reserve's announcement of new measures designed to revive lending and economic growth. The Fed's decision to shift its Treasury holdings into longer-term securities—known as "Operation Twist"—had been widely anticipated. Investors seemed alarmed by policymaker's assessment of economic conditions, however, which was more dire than many had expected. Financial stocks also took a hit as investors worried that by buying longer-term Treasuries and forcing down long-term rates relative to short-term rates, the Fed might place further stress on banks, which rely on borrowing cheaply and lending at higher rates. The Fed did surprise many by announcing that it would renew its purchases of mortgage-backed securities in an effort to bring down mortgage rates and spur refinancing. While such a move promised to both boost the housing sector and overall consumption by lowering mortgage payments, many investors appeared skeptical that it would have a significant impact. European policymakers' efforts to boost the Continent's banking system were met with similar skepticism. Overseas markets fell sharply in response to growing fears that Greece would default on its debt and that the euro zone was slipping back into recession. Worries increased as well about cooling growth in emerging markets. A gauge of Chinese manufacturing activity indicated contraction in the world's leading growth engine, suggesting that weakening demand in developed markets might weigh heavily on the global economy.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	10771.48	-737.61	-6.96%
S&P 500	1136.43	-79.58	-9.64%
NASDAQ Composite	2483.23	-139.08	-6.39%
S&P MidCap 400	792.49	-72.61	-12.65%
Russell 2000	650.19	-63.70	-17.20%

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 September 23, 2011

Treasury prices ended the week on a mixed note. Yields on the benchmark 10-year bond and the 30-year bond fell from the previous week as investors sought safety in U.S. government debt amid growing fears that the world economy is slipping into another recession. Two-year notes rose slightly from the prior-week period. As in recent weeks, Treasury yields continued to touch new lows, with the 10-year bond yield at one point hitting a record low of 1.67%, according to Bloomberg. Fears about a double-dip recession, unease about a possible Greek debt default, and speculation that world policymakers are unable to stem the worsening euro zone debt crisis have hammered investor sentiment, bolstering the Treasury market in recent weeks. In economic news, on Wednesday, the Federal Reserve announced it would increase its share of longer-term debt by $400 billion and reinvest maturing housing debt in mortgage-backed securities, a move intended to reduce long-term interest rates and boost the ailing mortgage market. The Fed also stated that there are "significant downside risks to the economic outlook including strains in global financial markets," underscoring the fragile state of the U.S. economy. In another downbeat report, a private survey of more than 100 economists released Wednesday forecast home prices would fall 2.5% in 2011, followed by an increase of only 1.1% a year through 2015. Home prices have already fallen 31.5% from their peak in 2005, according to Standard & Poor's Case-Shiller's 20-city Index.

U.S. Treasury Yields¹
Maturity	September 23, 2011	September 16, 2011
2-Year	0.22%	0.17%
10-Year	1.83%	2.06%
30-Year	2.90%	3.33%

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, September 23, 2011.

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International Market

Week Ended September 16, 2011

International Stocks

Foreign stock markets closed higher for the week ending September 16, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 2.22%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	2.22%	-10.94%
Europe ex-U.K.	3.45%	-14.40%
Denmark	0.23%	-20.63%
France	2.20%	-14.58%
Germany	7.71%	-17.02%
Italy	3.85%	-22.68%
Netherlands	2.78%	-15.95%
Spain	6.85%	-9.33%
Sweden	1.90%	-16.77%
Switzerland	1.61%	-7.45%
United Kingdom	2.35%	-5.30%
Japan	2.77%	-10.25%
AC Far East ex-Japan	-2.69%	-10.78%
Hong Kong	-3.41%	-11.23%
Korea	-1.48%	-9.89%
Malaysia	-5.47%	-4.78%
Singapore	-1.69%	-9.17%
Taiwan	-1.63%	-13.80%
Thailand	-3.80%	0.31%
EM Latin America	0.37%	-15.03%
Brazil	0.60%	-16.82%
Mexico	1.23%	-10.45%
Argentina	2.69%	-27.62%
EM (Emerging Markets)	-1.50%	-13.14%
Hungary	-3.43%	-22.89%
India	-0.72%	-21.94%
Israel	-0.67%	-27.03%
Russia	-2.46%	-11.23%
Turkey	4.18%	-22.83%

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 0.57%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	0.57%	7.65%
Europe
Denmark	0.13%	11.06%
France	-0.18%	9.03%
Germany	0.11%	10.61%
Italy	0.40%	0.34%
Spain	0.15%	7.00%
Sweden	-2.92%	11.86%
United Kingdom	-0.80%	10.86%
Japan	1.26%	7.34%
Emerging Markets	-1.03%	6.91%
Argentina	-2.63%	-10.57%
Brazil	-1.18%	9.43%
Bulgaria	-0.08%	3.33%
Russia	-0.32%	7.11%

International Currency Markets

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


Currency	Close (September 16, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	76.875	-1.14%	-5.50%
Euro	1.3785¹	-0.53	-2.75%
British pound	1.5795¹	0.63%	-0.88%

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.