Week Ended October 8, 2010
U.S. stocks ended the week
higher, with large-caps outperforming small- and mid-caps. Much of the gains
came on Tuesday, when the large-cap S&P 500 Index jumped more than 2%. The
markets responded to an Institute for Supply Management report showing that the
service sector expanded by a greater-than-expected amount in September. It was
the ninth straight month of expansion, though growth has slowed somewhat from
the pace earlier in the year. Stock markets around the world also reacted
positively to Tuesday's news that the Bank of Japan would take further measures
to support the nation's sluggish economy through central bank asset purchases.
On Friday, the Labor Department's much-anticipated employment report showed
that the private sector added jobs in September, but they were more than offset
by state and local government downsizing. The unemployment rate remained steady
at 9.6%. Markets reacted positively to the report, as the blue chip Dow Jones
Industrial Average breached the 11,000 level for the first time since May. The
weak employment report, along with comments from Federal Reserve Chairman Ben
Bernanke earlier in the week, increased investor expectations that the Fed
would follow Japan's path and engage in security purchases to stimulate the
economy, an option that has been a heavily discussed topic since it was
suggested in the Fed's September meeting.
|
U.S. Stocks1 |
|||
|
Index2 |
Friday's Close |
Week's Change |
% Change |
|
DJIA |
11006.48 |
176.80 |
5.55% |
|
S&P
500 |
1165.15 |
18.91 |
4.49% |
|
NASDAQ
Composite |
2401.91 |
31.16 |
5.85% |
|
S&P
MidCap 400 |
811.36 |
7.48 |
11.65% |
|
Russell
2000 |
679.29 |
0.87 |
7.13% |
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.
____________
Week Ended October 8, 2010
The U.S. dollar tumbled to
an eight-month low against the euro and has fallen 7% during the past six weeks
against a basket of various foreign currencies. Global financial experts warned
that competing devaluations of currencies in an effort to bolster exports could
derail the global economic recovery. Much of the problem is due to U.S.
frustration with China, which has been deliberately keeping its currency weak
to make its exports more affordable, according to spokesmen for the Obama
administration. European officials have also expressed their concerns about
China's currency policy. The dollar has fallen across the globe in recent
weeks, reaching a record low against the Swiss franc, a 27-year low against the
Australian dollar, and a 15-year low versus the Japanese yen. The currency war
is viewed by some as a new form of economic protectionism. Countries with weak
currencies gain a temporary advantage in their balance of trade with other
nations, but manipulation of currency valuations threatens to undermine
harmonious trade relations over the long run. Yields on shorter-term U.S.
Treasuries fell sharply during the week against the backdrop of the volatile
currency exchange market; the 30-year yield moved higher.
|
U.S. Treasury Yields1 |
||
|
Maturity |
October 8, 2010 |
October 1, 2010 |
|
2-Year |
0.34% |
0.41% |
|
10-Year |
2.38% |
2.51% |
|
30-Year |
3.74% |
3.71% |
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 8, 2010.
___________
Week Ended October 01, 2010
International
Stocks
Foreign stock markets closed higher for the week ending October
01, 2010 with the broad international measure, the MSCI EAFE Index (Europe,
Australasia, and Far East), gaining 0.39%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
EAFE |
0.39% |
1.90% |
|
Europe ex-U.K. |
0.20% |
-1.19% |
|
Denmark |
0.35% |
21.83% |
|
France |
-0.15% |
-4.93% |
|
Germany |
0.58% |
0.21% |
|
Italy |
1.21% |
-11.82% |
|
Netherlands |
0.50% |
0.43% |
|
Spain |
-0.88% |
-14.00% |
|
Sweden |
0.28% |
25.03% |
|
Switzerland |
-0.45% |
4.96% |
|
United
Kingdom |
-0.11% |
3.76% |
|
Japan |
0.88% |
3.55% |
|
AC
Far East ex-Japan |
2.35% |
12.28% |
|
Hong Kong |
2.30% |
17.66% |
|
Korea |
3.52% |
14.11% |
|
Malaysia |
1.39% |
30.22% |
|
Singapore |
1.85% |
15.87% |
|
Taiwan |
2.20% |
5.02% |
|
Thailand |
6.08% |
48.58% |
|
EM
Latin America |
4.55% |
9.84% |
|
Brazil |
5.49% |
4.77% |
|
Mexico |
1.65% |
10.66% |
|
Argentina |
0.50% |
41.74% |
|
EM
(Emerging Markets) |
3.14% |
12.11% |
|
Hungary |
5.00% |
0.55% |
|
India |
3.81% |
22.08% |
|
Israel |
-1.33% |
0.21% |
|
Russia |
2.92% |
4.06% |
|
Turkey |
2.82% |
29.62% |
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
1.71%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
Developed
Markets |
1.71% |
8.71% |
|
Europe |
|
|
|
Denmark |
2.62% |
7.17% |
|
France |
2.32% |
4.12% |
|
Germany |
2.32% |
4.63% |
|
Italy |
2.37% |
-0.56% |
|
Spain |
2.44% |
-2.31% |
|
Sweden |
1.16% |
13.06% |
|
United
Kingdom |
0.89% |
7.46% |
|
Japan |
1.34% |
15.46% |
|
Emerging
Markets |
1.34% |
14.63% |
|
Argentina |
2.66% |
21.54% |
|
Brazil |
0.80% |
14.18% |
|
Bulgaria |
0.55% |
7.01% |
|
Russia |
0.39% |
10.54% |
International
Currency Markets
On the currency front, the U.S. dollar was weaker against the
major currencies for the week.
|
|
|||
|
Currency |
Close |
Week's Return |
% Change |
|
Japanese
yen |
83.285 |
-1.12% |
-11.78% |
|
Euro |
1.37471 |
-2.01% |
4.19% |
|
British
pound |
1.58111 |
0.02% |
2.09% |
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.