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Week Ended November 18, 2011

Stocks finished the week lower as encouraging economic data in the U.S. failed to compensate for growing worries about European debt markets. Italian bond yields climbed back above 7% after the assumption of power by a new government in Italy over the weekend failed to assuage investors' concerns about the sustainability of the country's debt. French yields rose as well, and Spanish yields hit their highest level since the country joined the eurozone, leading to worries that the financial "contagion" was continuing to spread. U.S. stocks suffered both from worries that export markets in Europe would be hit, and that the U.S. financial system might be infected. While most large U.S. banks have taken steps to reduce their exposure to European sovereign debt, bank stocks fell at midweek when Fitch Ratings warned that U.S. banks could be "greatly affected" by the worsening situation in Europe. Even as Europe stumbled, however, signs suggested that the U.S. economy was regaining its footing. Retail sales rose by more than expected in October, reflecting a rise in consumer confidence gauges, while weekly jobless claims fell to their lowest level in seven months. The Conference Board's index of future economic activity also rose to its highest level since February. Investor sentiment may have reflected worries that the pickup in the pace of the recovery would be undermined by policy blunders on this side of the Atlantic, however. As the deadline for a deficit-reduction plan from the congressional "supercommittee" approached with scant signs of progress, investors began to brace themselves for a replay of the debt limit debacle last summer.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11796.16	-357.52	1.89%
S&P 500	1215.65	-48.20	-3.34%
NASDAQ Composite	2572.50	-106.25	-3.03%
S&P MidCap 400	861.53	-30.49	-5.04%
Russell 2000	719.16	-25.47	-8.42%

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 November 18, 2011

Retail sales rose 0.5% in October, reflecting solid growth in purchases of nonautomotive goods despite modest gains in income. Weak automobile sales restrained an even stronger overall gain. At the same time, consumer prices moderated, although the increases were held in check by a 3.1% drop in gasoline prices. The cost of food increased just 1.0% in October, breaking a nine-month string of outsized gains. Core inflation, which excludes food and energy prices, rose 2.1% from October 2010 through October 2011 and has been trending higher. Consumer inflation is unlikely to fall significantly in the near term, assuming that the economy continues to expand, according to T. Rowe Price estimates. The domestic news had to be viewed against the backdrop of the ongoing sovereign debt crisis in Europe and its potential to derail global economic growth. Treasuries were mixed during the week, with the two-year yield rising and longer-term yields declining from their levels of a week earlier.

U.S. Treasury Yields¹
Maturity	November 18, 2011	November 11, 2011
2-Year	0.28%	0.23%
10-Year	2.01%	2.06%
30-Year	2.99%	3.13%

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, November 18, 2011.

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International Market

Week Ended November 11, 2011

International Stocks

Foreign stock markets closed lower for the week ending November 11, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -0.22%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-0.22%	-8.93%
Europe ex-U.K.	0.34%	-10.60%
Denmark	2.17%	-15.52%
France	0.59%	-11.65%
Germany	1.27%	-10.26%
Italy	2.24%	-15.24%
Netherlands	-0.40%	-9.54%
Spain	0.32%	-6.54%
Sweden	-1.03%	-12.82%
Switzerland	-1.34%	-6.52%
United Kingdom	0.71%	0.01%
Japan	-1.72%	-14.16%
AC Far East ex-Japan	-3.41%	-11.86%
Hong Kong	-3.27%	-14.04%
Korea	-5.02%	-8.13%
Malaysia	-1.56%	-3.26%
Singapore	-3.70%	-13.34%
Taiwan	-3.44%	-17.59%
Thailand	-0.64%	-4.68%
EM Latin America	0.86%	-13.64%
Brazil	0.23%	-15.87%
Mexico	2.96%	-6.67%
Argentina	7.51%	-33.13%
EM (Emerging Markets)	-1.85%	-13.43%
Hungary	-1.33%	-29.37%
India	-4.15%	-24.96%
Israel	-0.45%	-24.25%
Russia	0.53%	-9.74%
Turkey	-0.34%	-24.71%

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 0.45%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	0.45%	6.95%
Europe
Denmark	0.39%	12.49%
France	-2.28%	3.77%
Germany	-0.02%	10.97%
Italy	-1.21%	-5.33%
Spain	-1.54%	3.86%
Sweden	0.70%	13.81%
United Kingdom	0.77%	16.55%
Japan	1.61%	7.49%
Emerging Markets	-0.32%	8.89%
Argentina	-2.09%	-9.37%
Brazil	-0.14%	12.05%
Bulgaria	-0.51%	2.45%
Russia	-0.51%	7.21%

International Currency Markets

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


Currency	Close (November 11, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	77.070	-1.44%	-5.24%
Euro	1.3735¹	0.17%	-2.38%
British pound	1.6079¹	-0.33%	-2.70%

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.