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Week Ended December 9, 2011

The broad indexes ended higher for the week as optimism about a resolution to the European debt crisis waxed, waned, and then waxed again. Stocks rallied on Monday in response to reports that the leaders of France and Germany had agreed on the outlines of new rules that would allow tighter integration of European economies. As an important meeting of European leaders in Brussels approached on Friday, however, investors grew increasingly concerned that the latest rescue plan would once again prove insufficient. In particular, worries mounted that the European Central Bank (ECB) would not broaden its role in boosting banks and providing liquidity. Markets tumbled on Thursday afternoon, following a warning from the ECB's new president, Mario Draghi, that the bank's willingness to absorb member government debt was "neither infinite nor eternal." Investors were also discouraged by rumors that Germany would oppose key parts of the agreement being negotiated in Brussels. The week ended on an encouraging note, however, as word arrived that an all-night negotiating session had resulted in a plan to grant the European Court of Justice unprecedented authority to overrule national laws within the 17-member eurozone that did not result in minimal deficit spending. Yields on Spanish and Italian debt rose somewhat following the announcement, suggesting skepticism that the new spending laws would rectify past imbalances. Still, markets rallied to end the week as equity investors appeared to welcome signs of renewed unity within Europe, as well the allocation of additional resources to the Continent's rescue fund. A rise in a gauge of U.S. consumer sentiment to a six-month high may have also boosted investors' outlook.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	12184.26	164.84	5.24%
S&P 500	1255.19	10.91	-0.19%
NASDAQ Composite	2646.85	19.92	-0.23%
S&P MidCap 400	886.69	5.50	-2.27%
Russell 2000	747.15	12.41	-4.85%

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 December 9, 2011

The European Central Bank (ECB) issued a denial that it was planning a large-scale action to solve Europe's ongoing debt crisis. Instead, the ECB ordered European banks to increase their capital by 114.7 billion euros, and it cut the main overnight lending rate by 0.25% to 1.00%, its second monetary easing in just five weeks. Bond rating agency Standard & Poor's further rattled the financial markets with a warning that it was putting the credit ratings of the entire 27-nation European Union on watch for a possible downgrade from AAA. The week's news was not all dire, however. Initial jobless claims in the U.S. fell to a nine-month low in November, and a panel of analysts at UCLA said the U.S. remains mired in a slump but a new recession in 2012 is unlikely. The news resulted in mixed results for Treasuries, with short-term yields falling and long-term yields rising slightly by the close of business on Friday.

U.S. Treasury Yields¹
Maturity	December 9, 2011	December 2, 2011
2-Year	0.22%	0.25%
10-Year	2.06%	2.03%
30-Year	3.11%	3.02%

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, December 9, 2011.

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International Market

Week Ended December 2, 2011

International Stocks

Foreign stock markets closed higher for the week ending December 02, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 9.09%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	9.09%	-10.04%
Europe ex-U.K.	10.82%	-12.35%
Denmark	7.13%	-14.43%
France	11.97%	-13.23%
Germany	12.03%	-11.98%
Italy	12.13%	-17.76%
Netherlands	11.18%	-11.72%
Spain	11.70%	-8.34%
Sweden	14.22%	-14.60%
Switzerland	7.74%	-7.49%
United Kingdom	8.57%	-2.40%
Japan	5.24%	-13.27%
AC Far East ex-Japan	8.51%	-11.52%
Hong Kong	5.89%	-14.69%
Korea	11.98%	-5.65%
Malaysia	6.53%	-1.05%
Singapore	8.28%	-13.13%
Taiwan	6.72%	-19.42%
Thailand	10.00%	0.50%
EM Latin America	10.64%	-16.40%
Brazil	11.23%	-17.97%
Mexico	11.50%	-10.01%
Argentina	6.48%	-36.67%
EM (Emerging Markets)	9.53%	-14.28%
Hungary	11.83%	-27.09%
India	8.96%	-28.85%
Israel	8.21%	-26.69%
Russia	9.86%	-9.40%
Turkey	10.56%	-28.70%

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 1.57%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	1.57%	5.05%
Europe
Denmark	2.48%	12.08%
France	4.26%	2.96%
Germany	2.16%	7.65%
Italy	4.97%	-8.21%
Spain	7.31%	3.04%
Sweden	3.05%	11.80%
United Kingdom	0.37%	13.53%
Japan	-0.39%	5.87%
Emerging Markets	1.50%	8.34%
Argentina	4.88%	-14.42%
Brazil	0.72%	12.17%
Bulgaria	0.69%	1.88%
Russia	2.09%	7.38%

International Currency Markets

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


Currency	Close (December 2, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	77.950	0.35%	-4.05%
Euro	1.3431¹	-1.22%	-0.11%
British pound	1.5627¹	-0.92%	0.19%

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.