Week Ended October 15, 2010
Large-cap stocks rose
modestly and reached five-month highs as the third-quarter earnings reporting
season began in earnest. Small-cap shares and the technology-oriented Nasdaq
had stronger gains. While investors were encouraged by some positive earnings surprises,
they also appeared to react to indications that the Federal Reserve would take
additional steps to boost the economy. On Tuesday, sentiment got a boost after
the Federal Reserve released the minutes of its latest meeting, which revealed
policymakers were considering additional stimulus "before long." Fed
Chairman Ben Bernanke bolstered hopes for additional action on Friday, when he
announced in a speech that high unemployment and undesirably low inflation made
the "case for further action." Rising commodity prices and signs of
continued strong growth in China also gave stock indexes a lift by bolstering
the shares of industrials and materials firms. Stocks fell back a bit on
Thursday, as investors worried about a rise in weekly jobless claims and a
widening in the U.S. trade deficit in August. Banks performed poorly as
investors worried about fallout from revelations that some banks used so-called
"robo signers" to process foreclosures. Friday brought some good news
to end the week and helped the broader market shake off the slump in banking
shares. Retail sales rose significantly in August, a regional manufacturing
index expanded more than anticipated, and a favorable earnings report from
Google led to a gain for technology shares.
|
U.S. Stocks1 |
|||
|
Index2 |
Friday's Close |
Week's Change |
% Change |
|
DJIA |
11062.78 |
56.30 |
6.09% |
|
S&P
500 |
1176.19 |
11.04 |
5.48% |
|
NASDAQ
Composite |
2468.77 |
66.86 |
8.80% |
|
S&P
MidCap 400 |
819.76 |
8.39 |
12.81% |
|
Russell
2000 |
704.43 |
25.14 |
11.10% |
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 15, 2010
Federal Reserve Chairman
Ben Bernanke announced on Friday that the Fed will take further steps to
strengthen the economy by buying more Treasury bonds, but he was not specific
about the extent of the program. By buying bonds, the central bank injects more
liquidity into the economy, which in turn acts as a stimulus for additional
growth. In doing so, the Fed runs the risk of fueling inflation, but with
inflation currently at an extremely low level, the Fed is willing to run that risk.
Further news on the Fed's stimulus program is expected at its next meeting
early next month. "There would appear—all things being equal—to
be a case for further action," Bernanke said. The price of gold soared to
an all-time high in anticipation of the news, and the U.S. dollar continued to
slide on world currency markets. Historically low interest rates and an
increase in the money supply have served to debase the American greenback in
relation to other currencies. Yields on shorter-term U.S. Treasuries rose
during the week after falling sharply a week earlier.
|
U.S. Treasury Yields1 |
||
|
Maturity |
October 15, 2010 |
October 8, 2010 |
|
2-Year |
0.36% |
0.34% |
|
10-Year |
2.57% |
2.38% |
|
30-Year |
3.98% |
3.74% |
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 15, 2010.
___________
Week Ended October 08, 2010
International
Stocks
Foreign stock markets closed higher for the week ending October
08, 2010 with the broad international measure, the MSCI EAFE Index (Europe,
Australasia, and Far East), gaining 2.74%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
EAFE |
2.74% |
4.69% |
|
Europe ex-U.K. |
2.87% |
1.65% |
|
Denmark |
2.16% |
24.45% |
|
France |
3.32% |
-1.77% |
|
Germany |
2.62% |
2.83% |
|
Italy |
3.10% |
-9.09% |
|
Netherlands |
1.91% |
2.35% |
|
Spain |
3.96% |
-10.59% |
|
Sweden |
0.68% |
25.88% |
|
Switzerland |
2.82% |
7.92% |
|
United
Kingdom |
1.95% |
5.79% |
|
Japan |
3.16% |
6.82% |
|
AC
Far East ex-Japan |
1.57% |
14.04% |
|
Hong Kong |
2.70% |
20.84% |
|
Korea |
1.99% |
16.38% |
|
Malaysia |
0.32% |
30.63% |
|
Singapore |
0.98% |
17.00% |
|
Taiwan |
0.36% |
5.40% |
|
Thailand |
0.02% |
48.60% |
|
EM
Latin America |
1.19% |
11.15% |
|
Brazil |
1.06% |
5.88% |
|
Mexico |
2.41% |
13.32% |
|
Argentina |
0.71% |
42.75% |
|
EM
(Emerging Markets) |
1.41% |
13.69% |
|
Hungary |
2.51% |
3.07% |
|
India |
-0.24% |
21.79% |
|
Israel |
-0.53% |
-0.32% |
|
Russia |
2.72% |
6.89% |
|
Turkey |
5.98% |
37.36% |
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
1.79%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
Developed
Markets |
1.79% |
10.66% |
|
Europe |
|
|
|
Denmark |
1.60% |
8.89% |
|
France |
1.70% |
5.89% |
|
Germany |
1.59% |
6.30% |
|
Italy |
2.16% |
1.59% |
|
Spain |
2.12% |
-0.25% |
|
Sweden |
1.20% |
14.41% |
|
United
Kingdom |
1.20% |
8.75% |
|
Japan |
1.96% |
17.72% |
|
Emerging
Markets |
1.23% |
16.04% |
|
Argentina |
4.55% |
27.07% |
|
Brazil |
1.43% |
15.82% |
|
Bulgaria |
0.57% |
7.62% |
|
Russia |
1.32% |
11.99% |
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 |
81.850 |
-1.75% |
-13.74% |
|
Euro |
1.39331 |
-1.35% |
2.89% |
|
British
pound |
1.59321 |
-0.77% |
1.34% |
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.