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Week Ended October 21, 2011

Stocks posted mixed returns for the week ended October 21, 2011. Blue chip stocks in the Dow Jones Industrial Average and the S&P 500 Index moved higher as investors grew more hopeful that European leaders would stem the Continent's financial crisis, while the tech-laden Nasdaq Composite Index generated losses. Overall, volatility remained high, and equities took investors on a rollercoaster ride throughout the week. Markets plunged on Monday, after two weeks of gains. Fear reemerged that U.S. economic growth and corporate earnings might be faltering and that progress on the eurozone sovereign debt problem had stalled. The next day, stocks recouped almost all of their losses in a late-day rally after news that the leaders of France and Germany had agreed to increase the size of the eurozone bailout fund to $2.7 trillion. Equity markets reversed course again on Wednesday, following the release of the Fed's "beige book" report, which contained a cautious assessment of the U.S. economy. Technology stocks fell sharply after Apple reported disappointing revenues and earnings. European sovereign debt issues were again in the spotlight on Thursday, and markets seesawed violently but ended the session about where they began. On Friday, stocks posted strong, across-the-board gains as several large companies reported solid earnings and the jobs picture appeared to improve. The Labor Department reported that unemployment rates fell in half of the U.S. states in September. Nationwide, employers added 103,000 jobs in September and claims for unemployment benefits fell to a six-month low—news that helped ease concerns that the economy was slipping back into recession. The unemployment rate has nonetheless remained stuck near 9% for the past two years.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11808.79	164.30	2.00%
S&P 500	1238.25	13.67	-1.54%
NASDAQ Composite	2637.46	-30.39	-0.58%
S&P MidCap 400	859.40	4.60	-5.27%
Russell 2000	710.42	-1.01	-9.53%

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 21, 2011

Investors finally found a ray of hope in economic data released during the week. Federal Reserve Chairman Ben Bernanke said the U.S. economy is growing more slowly than he would like, but the U.S. does not appear to be headed into another recession. First-time jobless claims fell to their lowest level since last April. September housing starts rose 15% over the previous month, primarily driven by multifamily housing starts, which climbed to a three-year high. In addition, the results of the October Philadelphia Fed business outlook survey dispelled fears of an immediate recession thanks to sharp rebounds in orders and shipments, which outweighed a drop in inventories. The encouraging news was tempered by an increase in wholesale prices, which rose sharply because of higher costs for gasoline, food, and some household items, revealing inflationary pressures in the production pipeline. Consumer prices also went up in September at a rate of 0.3%. As economic activity begins to pick up, the usual tradeoff is higher inflation in the months ahead. Still, the Fed is unlikely to push short-term interest rates higher until signs of a sustained economic upturn are clearly visible. Longer-term Treasury yields were fairly stable during the week, closing near their levels of the week before.

U.S. Treasury Yields¹
Maturity	October 21, 2011	October 14, 2011
2-Year	0.27%	0.26%
10-Year	2.21%	2.24%
30-Year	3.27%	3.22%

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 21, 2011.

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International Market

Week Ended October 14, 2011

International Stocks

Foreign stock markets closed higher for the week ending October 14, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 4.5%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	4.50%	-8.99%
Europe ex-U.K.	6.44%	-9.50%
Denmark	4.38%	-20.09%
France	6.80%	-9.14%
Germany	8.18%	-10.91%
Italy	8.11%	-12.12%
Netherlands	7.92%	-8.33%
Spain	4.22%	-2.30%
Sweden	6.65%	-14.86%
Switzerland	4.32%	-4.54%
United Kingdom	4.31%	-3.42%
Japan	0.40%	-12.26%
AC Far East ex-Japan	5.39%	-14.50%
Hong Kong	5.20%	-15.38%
Korea	5.98%	-11.85%
Malaysia	4.31%	-4.95%
Singapore	6.37%	-12.73%
Taiwan	2.75%	-18.08%
Thailand	6.13%	-6.14%
EM Latin America	7.16%	-18.40%
Brazil	7.88%	-20.21%
Mexico	6.14%	-12.84%
Argentina	10.69%	-29.60%
EM (Emerging Markets)	5.89%	-16.69%
Hungary	12.27%	-21.56%
India	5.43%	-23.95%
Israel	2.77%	-27.45%
Russia	10.35%	-16.63%
Turkey	3.48%	-23.35%

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 0.1%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	0.10%	6.77%
Europe
Denmark	1.54%	10.44%
France	0.69%	6.51%
Germany	1.67%	9.44%
Italy	1.39%	-0.58%
Spain	1.37%	7.78%
Sweden	1.31%	11.34%
United Kingdom	0.09%	11.45%
Japan	-0.96%	6.72%
Emerging Markets	1.98%	6.58%
Argentina	6.71%	-12.82%
Brazil	1.28%	9.99%
Bulgaria	0.67%	1.35%
Russia	2.58%	4.54%

International Currency Markets

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


Currency	Close (October 14, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	77.365	0.78%	-4.83%
Euro	1.3865¹	-2.76%	-3.35%
British pound	1.5799¹	-1.17%	-0.91%

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.