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Week Ended November 19, 2010

The large-cap indexes were basically flat for the week, while the smaller-cap S&P Midcap 400 and Russell 2000 Indexes registered modest gains. Although investors paid some attention to scattered earnings reports and domestic economic data, overseas developments appeared to drive U.S. markets. Stock prices fell sharply on Tuesday, mirroring a steep drop in China's market brought about by renewed concerns about steps the Chinese government might take to bring down inflationary pressures. Worries about a lack of progress in addressing Ireland's mounting debt problems also weighed on sentiment. Concerns over Ireland diminished on Thursday, helping U.S. markets nearly regain Tuesday's losses. Reports surfaced that Irish officials, having earlier denied the need for an aid package, had begun negotiating with officials from the International Monetary Fund and the European Central Bank. The start of trading Friday brought news that China had increased banking reserve requirements in order to tighten monetary policy and head off inflation. Stocks fell initially on the news but ended the session flat. The week's economic data were mixed but probably modestly positive on balance. Retail sales expanded at a healthy clip in October, thanks largely to a strong rise in auto sales. Weekly jobless claims inched higher, but the number of continuing claims fell to its lowest level since the eve of the financial crisis in September 2008. A regional manufacturing index showed a strong gain, and the Conference Board's Leading Economics Index rose for October. A sharp drop in new housing construction in October was a dark spot in the week's data, although the decline was concentrated in the highly volatile multifamily sector.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11203.33	10.75	7.43%
S&P 500	1199.72	0.51	7.59%
NASDAQ Composite	2518.12	-0.09	10.97%
S&P MidCap 400	850.33	6.46	17.02%
Russell 2000	724.59	4.29	14.28%

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 19, 2010

Inflation is still nowhere in sight. Consumer prices rose a moderate 0.2% in October, with higher gasoline prices accounting for most of the increase. With volatile food and energy prices stripped out, the core consumer index was actually unchanged for the third month in a row. Over the past year, the core index has gone up only 0.6%, the smallest year-over-year rise since the index came into being in 1957. Accelerating inflation is more of an issue in Asia, and both China and South Korea have taken measures to rein in rising prices. Investors, however, have been acting as though inflation in the U.S. could become a problem down the road. While the Federal Reserve has been buying Treasury bonds in an effort to keep rates low and stimulate the economy, fixed income investors have been selling their own holdings, which has driven yields on some issues to their highest levels in more than three months (prices and yields move counter to each other). If this trend continues for any time, it could eventually defeat the Fed's goal of lowering borrowing costs and stoking consumer demand, according to The Wall Street Journal. Treasury yields were mixed during the week, as the 10-year yield moved higher and shorter- and longer-term rates held fairly steady.

U.S. Treasury Yields¹
Maturity	November 19, 2010	November 12, 2010
2-Year	0.50%	0.50%
10-Year	2.87%	2.77%
30-Year	4.24%	4.26%

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 19, 2010.

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International Market

Week Ended November 12, 2010

International Stocks

Foreign stock markets closed lower for the week ending November 12, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -2.29%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-2.29%	6.27%
Europe ex-U.K.	-3.40%	2.11%
Denmark	-2.10%	27.10%
France	-4.07%	-1.15%
Germany	-2.55%	8.24%
Italy	-3.82%	-10.04%
Netherlands	-3.35%	1.77%
Spain	-3.50%	-15.72%
Sweden	-3.72%	24.46%
Switzerland	-3.28%	8.71%
United Kingdom	-1.65%	10.16%
Japan	0.13%	7.56%
AC Far East ex-Japan	-2.47%	17.77%
Hong Kong	-1.70%	27.07%
Korea	-3.02%	16.91%
Malaysia	-1.91%	32.55%
Singapore	-0.72%	21.66%
Taiwan	-2.25%	9.42%
Thailand	-4.51%	56.61%
EM Latin America	-4.13%	11.35%
Brazil	-4.98%	3.59%
Mexico	-1.34%	20.63%
Argentina	-5.43%	67.81%
EM (Emerging Markets)	-3.00%	15.89%
Hungary	-8.44%	-4.00%
India	-4.65%	20.56%
Israel	-3.31%	-3.01%
Russia	-0.37%	9.23%
Turkey	-4.08%	40.65%

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 -2.27%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	-2.27%	8.21%
Europe
Denmark	-2.98%	5.67%
France	-2.93%	2.83%
Germany	-2.83%	3.29%
Italy	-3.50%	-2.34%
Spain	-3.22%	-4.84%
Sweden	-4.00%	10.15%
United Kingdom	-1.85%	7.36%
Japan	-1.61%	15.94%
Emerging Markets	-2.08%	15.25%
Argentina	-4.85%	34.95%
Brazil	-1.77%	13.67%
Bulgaria	0.01%	9.50%
Russia	-1.57%	11.31%

International Currency Markets

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


Currency	Close (November 12, 2010)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	82.370	1.24%	-13.02%
Euro	1.3703¹	2.35%	4.50%
British pound	1.6152¹	0.35%	-0.02%

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.