Week Ended October 29, 2010
U.S. stocks were largely
flat for the week, although the technology-focused Nasdaq recorded a modest
gain to close out October. Investors weighed another round of generally
favorable earnings reports against worries about the strength of the recovery
and how aggressive the Federal Reserve might be in attempting to stimulate
growth and bring down unemployment. Markets got a boost to start the week when
the National Association of Realtors announced that existing home sales had jumped
in September by 10%, the biggest monthly gain on record. While a revival in
home sales was buttressed later in the week by news of a similar jump in sales
of new homes, a gauge of home prices showed a second monthly decline in August.
On Wednesday, investors bid large-caps modestly lower, apparently in response
to reports that the Federal Reserve would be less aggressive than many hoped in
its new round of quantitative easing—widely referred to as QE2—which
investors widely expect to be announced following the next policy meeting in
early November. Investors kept a close eye on the U.S. dollar, which wavered
relative to other currencies in response to mixed economic signals and
speculation about the scope of QE2. A decline in the dollar is generally perceived
as beneficial to corporate profits, as U.S. exports become more competitive in
overseas markets.
|
U.S. Stocks1 |
|||
|
Index2 |
Friday's Close |
Week's Change |
% Change |
|
DJIA |
11118.49 |
-14.07 |
6.62% |
|
S&P
500 |
1183.26 |
0.18 |
6.11% |
|
NASDAQ
Composite |
2507.41 |
28.02 |
10.50% |
|
S&P
MidCap 400 |
829.13 |
4.22 |
14.10% |
|
Russell
2000 |
703.87 |
0.30 |
11.01% |
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 29, 2010
U.S. Treasury yields ended
mostly higher as investors sold off government bonds early in the week. Fears
seemed to be growing that the Federal Reserve's stimulative monetary policy
could eventually lead to high inflation a major threat to owners of long-term
bonds. The yields on Treasury inflation-protected securities (TIPS), which
provide higher income to investors when consumer prices increase, fell as the
yields on ordinary Treasuries rose. In fact, the Treasury auctioned TIPS at a
negative yield for the first time ever on Monday. With the sub-zero yield,
investors paid a premium for inflation protection and will realize a positive
return only if inflation heats up. Along with inflation, the bond market's
focus in recent weeks has been on the central bank's expected resumption of
asset purchases to support a slowing economic recovery. Speculation that the
Fed would pump as much as $2 trillion into the financial system helped drive up
the prices of bonds and other securities in anticipation of the event. However,
bond prices fell sharply after a midweek article in The Wall Street Journal
suggested that the Fed's program might turn out to be smaller and more gradual
than many assumed. Bond buyers returned at the end of the week. On Friday, the
Commerce Department reported that the nation's gross domestic product rose by
an estimated 2% in the third quarter. Although in line with expectations, many
viewed the meager growth rate as reinforcement of the need for Fed actions.
|
U.S. Treasury Yields1 |
||
|
Maturity |
October 29, 2010 |
October 22, 2010 |
|
2-Year |
0.34% |
0.35% |
|
10-Year |
2.60% |
2.56% |
|
30-Year |
3.99% |
3.94% |
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 29, 2010.
___________
Week Ended October 22, 2010
International
Stocks
Foreign stock markets closed lower for the week ending October
22, 2010 with the broad international measure, the MSCI EAFE Index (Europe,
Australasia, and Far East), losing -0.45%.
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
EAFE |
-0.45% |
5.58% |
|
Europe ex-U.K. |
0.27% |
4.26% |
|
Denmark |
0.04% |
26.46% |
|
France |
0.39% |
0.93% |
|
Germany |
1.09% |
7.91% |
|
Italy |
1.46% |
-5.92% |
|
Netherlands |
-1.04% |
3.66% |
|
Spain |
-0.17% |
-8.50% |
|
Sweden |
1.12% |
29.72% |
|
Switzerland |
-1.25% |
8.23% |
|
United
Kingdom |
-1.45% |
5.65% |
|
Japan |
-0.33% |
5.79% |
|
AC
Far East ex-Japan |
-0.96% |
15.39% |
|
Hong Kong |
-0.01% |
22.82% |
|
Korea |
-1.15% |
16.04% |
|
Malaysia |
-0.72% |
31.87% |
|
Singapore |
-1.00% |
19.18% |
|
Taiwan |
-0.92% |
4.79% |
|
Thailand |
-1.39% |
52.08% |
|
EM
Latin America |
-2.98% |
10.11% |
|
Brazil |
-4.71% |
3.13% |
|
Mexico |
1.38% |
16.62% |
|
Argentina |
3.85% |
51.80% |
|
EM
(Emerging Markets) |
-1.43% |
14.19% |
|
Hungary |
-0.65% |
4.06% |
|
India |
-0.98% |
20.86% |
|
Israel |
-1.37% |
1.07% |
|
Russia |
2.01% |
8.96% |
|
Turkey |
-0.09% |
44.03% |
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
-0.79%
|
|
||
|
Region/Country |
Week's Return |
% Change Year-to-Date |
|
Developed
Markets |
-0.79% |
10.08% |
|
Europe |
|
|
|
Denmark |
-1.13% |
7.46% |
|
France |
-1.15% |
4.74% |
|
Germany |
-1.15% |
5.02% |
|
Italy |
-1.07% |
1.27% |
|
Spain |
-1.18% |
-0.71% |
|
Sweden |
-0.91% |
13.52% |
|
United
Kingdom |
-2.08% |
5.97% |
|
Japan |
-0.18% |
17.99% |
|
Emerging
Markets |
-0.34% |
15.84% |
|
Argentina |
-2.13% |
28.29% |
|
Brazil |
-0.55% |
15.39% |
|
Bulgaria |
0.13% |
8.11% |
|
Russia |
-0.67% |
11.85% |
International
Currency Markets
On the currency front, the U.S. dollar was stronger against the
major currencies for the week.
|
|
|||
|
Currency |
Close |
Week's Return |
% Change |
|
Japanese
yen |
81.420 |
0.09% |
-14.34% |
|
Euro |
1.39251 |
0.62% |
2.95% |
|
British
pound |
1.5671 |
2.14% |
2.97% |
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.