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Week Ended December 10, 2010

The major indexes recorded gains for the week, with the S&P 500 and the technology-oriented Nasdaq indexes handily outpacing the Dow and reaching their highest levels since 2008. Stock prices enjoyed a solid bounce Tuesday morning in reaction to the previous evening's announcement that the White House and Congressional Republicans had negotiated a broad deal to extend tax cuts and unemployment benefits. As a result, most economists significantly boosted their estimates for growth in the coming year, even as many worried that the deal only exacerbated the nation's long-term fiscal problems. As evidence of concerns about both new Treasury issuance needed to fund the tax cuts and the inflationary implications of faster economic growth, bond investors reacted to the announcement by bidding up the yield on the 10-year Treasury note by 22 basis points (0.22%)—the biggest daily jump in well over a year. Treasury yields continued to rise on Thursday, hitting their highest level since June. Increased optimism about the U.S. economy fed a rise in the U.S. dollar, which weighed on commodities prices along with materials and energy stocks, but a rally in financials stocks helped offset these losses and led the market to end the week with gains. The week's economic data were modestly encouraging. Jobless claims fell more than expected over the previous week, and a gauge of consumer sentiment rose more than anticipated.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11410.32	28.23	9.42%
S&P 500	1240.40	15.69	11.24%
NASDAQ Composite	2637.54	46.08	16.23%
S&P MidCap 400	899.04	12.30	23.72%
Russell 2000	776.19	18.69	22.41%

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 10, 2010

The U.S. trade deficit narrowed significantly in October thanks to greater demand for American goods overseas, according to the Commerce Department. The $38.7 billion deficit was 13.2% lower than it was a month earlier. On the domestic front, the compromise tax package hung in the balance in the Senate, with members of the President's own party voicing objections to some of the provisions. The Senate seemed likely to pass the measure after making a few changes to the bill, but there was greater opposition in the House to extending tax cuts for the highest income earners. If the Congress fails to adopt some version of the bill, everyone's taxes will automatically rise in 2011. President Obama expressed confidence on Friday that the tax cuts will be extended. The bond market responded as though it agreed with the President, as investors drove Treasury yields sharply higher during the week.

U.S. Treasury Yields¹
Maturity	December 10, 2010	December 3, 2010
2-Year	0.63%	0.48%
10-Year	3.32%	3.02%
30-Year	4.43%	4.32%

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 10, 2010.

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International Market

Week Ended December 03, 2010

International Stocks

Foreign stock markets closed higher for the week ending December 03, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 3.08%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	3.08%	5.49%
Europe ex-U.K.	3.28%	0.63%
Denmark	3.02%	25.08%
France	2.19%	-4.88%
Germany	3.01%	9.41%
Italy	2.56%	-14.82%
Netherlands	2.38%	-0.94%
Spain	6.65%	-19.57%
Sweden	6.87%	31.67%
Switzerland	2.28%	7.99%
United Kingdom	2.06%	6.39%
Japan	3.20%	11.27%
AC Far East ex-Japan	3.09%	17.41%
Hong Kong	2.90%	24.45%
Korea	5.21%	20.60%
Malaysia	0.87%	32.05%
Singapore	2.22%	18.91%
Taiwan	4.22%	13.76%
Thailand	5.22%	58.25%
EM Latin America	3.42%	12.40%
Brazil	4.10%	4.34%
Mexico	2.27%	23.60%
Argentina	2.33%	74.38%
EM (Emerging Markets)	3.79%	16.01%
Hungary	6.40%	-8.25%
India	5.85%	16.70%
Israel	1.57%	-1.03%
Russia	6.41%	15.02%
Turkey	1.82%	30.33%

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 1.16%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	1.16%	5.50%
Europe
Denmark	0.33%	0.98%
France	0.43%	-1.45%
Germany	0.70%	-0.61%
Italy	1.34%	-5.55%
Spain	2.21%	-9.50%
Sweden	2.12%	8.63%
United Kingdom	0.20%	3.48%
Japan	1.52%	14.53%
Emerging Markets	-0.01%	13.98%
Argentina	-1.18%	34.13%
Brazil	-0.14%	12.77%
Bulgaria	-0.38%	8.05%
Russia	0.16%	9.51%

International Currency Markets

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


Currency	Close (December 03, 2010)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	82.655	-1.68%	-12.63%
Euro	1.3383¹	-1.26%	6.73%
British pound	1.5719¹	-0.69%	2.66%

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.