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Week Ended October 7, 2011

Markets moved higher as concerns about the European debt crisis ebbed once again and data suggested the U.S. economic recovery, while hardly robust, was proving more resilient than many had expected. The major indexes reached their lows for the year early at the start of the week as investors reacted to news over the weekend from Greece that it would not meet its 2011 deficit targets. Bank stocks were particularly hard hit, and the S&P 500 retreated into bear territory—commonly defined as a 20% or greater drop from the index's highs—on Tuesday morning. Markets rebounded late Tuesday, however, as investors appeared to be encouraged by reports that European officials were considering measures to bolster the Continent's banking system. Better-than-expected U.S. economic data provided a tailwind for market gains later in the week. On Wednesday, the private payrolls processing firm ADP reported that its tally of private payrolls had increased by 91,000 in September, which raised hopes for the Labor Department's more comprehensive report on Friday. Indeed, the government's data showed that private employment increased by 137,000 in the month. Previous months' figures were also revised higher, but the unemployment rate remained at an elevated 9.1%. Investors were further encouraged by data showing modest expansion in the manufacturing and service sectors, and preliminary retail sales data for September showed many national chain stores reporting good sales increases over last year.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11103.12	189.74	-4.10%
S&P 500	1155.46	24.04	-8.12%
NASDAQ Composite	2479.35	63.95	-6.54%
S&P MidCap 400	799.08	17.77	-11.92%
Russell 2000	655.93	11.78	-16.47%

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 October 7, 2011

Treasury yields ended the week higher. Better-than-expected data caused investors to reevaluate long-term U.S. economic and inflation prospects even as Federal Reserve officials restated their concerns about the fragility of the recovery. On Tuesday, Fed Chairman Ben Bernanke told Congress that the recovery was "close to faltering" and pledged that the central bank was willing to take further action to stimulate growth if needed. Surprisingly favorable reports later in the week on the labor market, retail sales, and service sector activity boosted investor sentiment and helped take the spotlight off Bernanke's comments. On Friday, Federal Reserve Bank of Atlanta president Dennis Lockhart noted that he would support additional Fed action if conditions warranted, but he noted that the economy was "not dramatically weakening," and rather "sort of bumping along." The week saw heightened attention to stresses in the European banking system. Although debt concerns appeared to intensify in Greece, Italy, and Spain, investors were encouraged by a commitment from the European Central Bank to provide assistance to eurozone banks facing losses from sovereign debt holdings.

U.S. Treasury Yields¹
Maturity	October 7, 2011	September 30, 2011
2-Year	0.28%	0.25%
10-Year	2.06%	1.90%
30-Year	3.00%	2.90%

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, October 7, 2011.

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International Market

Week Ended September 30, 2011

International Stocks

Foreign stock markets closed higher for the week ending September 30, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 2.84%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	2.84%	-14.62%
Europe ex-U.K.	4.77%	-17.37%
Denmark	2.56%	-22.16%
France	4.85%	-18.29%
Germany	4.87%	-20.58%
Italy	7.66%	-22.97%
Netherlands	6.09%	-17.19%
Spain	6.44%	-9.48%
Sweden	4.48%	-21.99%
Switzerland	3.69%	-9.78%
United Kingdom	2.14%	-10.66%
Japan	1.68%	-10.75%
AC Far East ex-Japan	1.29%	-18.84%
Hong Kong	-3.66%	-20.99%
Korea	5.49%	-16.69%
Malaysia	1.68%	-10.38%
Singapore	-1.69%	-17.06%
Taiwan	2.84%	-19.85%
Thailand	-4.32%	-12.45%
EM Latin America	1.20%	-25.69%
Brazil	0.93%	-28.02%
Mexico	2.50%	-19.69%
Argentina	-3.48%	-37.28%
EM (Emerging Markets)	2.23%	-21.66%
Hungary	4.76%	-32.04%
India	2.52%	-26.73%
Israel	-0.63%	-30.90%
Russia	1.78%	-24.01%
Turkey	5.53%	-23.07%

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 -1.05%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	-1.05%	6.16%
Europe
Denmark	-1.67%	8.99%
France	-1.14%	6.18%
Germany	-1.78%	7.78%
Italy	-0.45%	-2.81%
Spain	-0.17%	5.26%
Sweden	-0.49%	8.84%
United Kingdom	0.56%	10.16%
Japan	-1.35%	7.08%
Emerging Markets	0.27%	3.75%
Argentina	-1.26%	-19.62%
Brazil	-0.38%	7.74%
Bulgaria	-0.08%	0.74%
Russia	-0.61%	1.45%

International Currency Markets

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


Currency	Close (September 30, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	77.080	1.06%	-5.22%
Euro	1.3417¹	0.75%	-0.01%
British pound	1.5578¹	-0.91%	0.50%

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.