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Week Ended December 16, 2011

Markets retreated as doubts grew that a plan for tighter European fiscal integration announced the previous week would head off the continent's debt crisis. Stocks fell sharply at the start of the week, following warnings from Moody's Investor Service and Fitch Ratings that the agreement would not prevent further credit rating downgrades and that a significant slowdown in growth was probably ahead in Europe. The U.S. Federal Reserve disappointed some investors on Tuesday, when policymakers failed to announce a third round of quantitative easing following their scheduled rate-setting meeting. Investors were also discouraged by comments from Germany's Chancellor Angela Merkel, who indicated that she opposed increasing the size of the eurozone's bailout fund. The U.S. economy continued to demonstrate surprising resiliency in the face of the European debt crisis, however, which helped mitigate losses for the week. The Labor Department reported that weekly jobless claims had fallen to their lowest level since May 2008. A closely watched regional manufacturing gauge also improved, and investors were encouraged by healthy shipping volumes reported by FedEx, often considered a bellwether of economic activity.

U.S. Stocks¹
Index²	Friday's Close	Week's Change	% Change Year-to-Date
DJIA	11866.62	-317.64	2.50%
S&P 500	1219.66	-35.53	-3.02%
NASDAQ Composite	2555.33	-91.52	-3.68%
S&P MidCap 400	853.54	-33.15	-5.92%
Russell 2000	720.34	-26.81	-8.27%

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 16, 2011

The Federal Reserve issued a warning that ongoing turmoil in Europe could "pose significant downside risks" to the global economy. So far, the U.S. economy has continued to expand at a moderate pace, with noticeable improvements in the labor market, but a prolonged recession in Europe has the potential to derail U.S. growth in 2012. Underscoring Europe's turmoil, the euro dropped to its lowest level against the U.S. dollar since January 2011, briefly falling below $1.30 in value at one point. The euro had reached a high of around $1.48 in May. At the same time, the price of gold plummeted during the week, skidding nearly 5% on Wednesday to below $1,600 an ounce for the first time in three months. Despite the gridlock in Washington and the credit downgrade of U.S. Treasury bonds last summer, investors have been flocking to the dollar as the "safe haven" of choice. The news drove 10- and 30-year Treasury yields sharply lower during the week.

U.S. Treasury Yields¹
Maturity	December 16, 2011	December 9, 2011
2-Year	0.23%	0.22%
10-Year	1.85%	2.06%
30-Year	2.85%	3.11%

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 16, 2011.

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International Market

Week Ended December 9, 2011

International Stocks

Foreign stock markets closed lower for the week ending December 09, 2011 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -0.88%.


Region/Country	Week's Return	% Change Year-to-Date
EAFE	-0.88%	-10.83%
Europe ex-U.K.	-0.57%	-12.85%
Denmark	-1.06%	-15.34%
France	-0.45%	-13.62%
Germany	-2.06%	-13.79%
Italy	-0.35%	-18.05%
Netherlands	0.68%	-11.12%
Spain	0.65%	-7.75%
Sweden	-1.51%	-15.89%
Switzerland	0.58%	-6.95%
United Kingdom	-0.43%	-2.82%
Japan	-0.64%	-13.83%
AC Far East ex-Japan	-3.08%	-14.24%
Hong Kong	-2.17%	-16.54%
Korea	-3.82%	-9.26%
Malaysia	-2.78%	-3.80%
Singapore	-4.41%	-16.96%
Taiwan	-3.59%	-22.31%
Thailand	-0.37%	0.14%
EM Latin America	0.02%	-16.38%
Brazil	-0.23%	-18.16%
Mexico	-0.13%	-10.12%
Argentina	-0.11%	-36.74%
EM (Emerging Markets)	-2.76%	-16.65%
Hungary	-3.34%	-29.52%
India	-4.92%	-32.35%
Israel	-1.67%	-27.91%
Russia	-9.56%	-18.06%
Turkey	-2.57%	-30.53%

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 0.37%.


Region/Country	Week's Return	% Change Year-to-Date
Developed Markets	0.37%	5.44%
Europe
Denmark	-1.76%	10.11%
France	0.00%	2.96%
Germany	-0.44%	7.18%
Italy	0.79%	-7.48%
Spain	-1.04%	1.97%
Sweden	0.98%	12.90%
United Kingdom	0.69%	14.32%
Japan	0.70%	6.61%
Emerging Markets	0.32%	8.69%
Argentina	2.73%	-12.09%
Brazil	1.10%	13.41%
Bulgaria	-0.19%	1.69%
Russia	-1.33%	5.96%

International Currency Markets

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


Currency	Close (December 9, 2011)	Week's Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	77.620	-0.43%	-4.49%
Euro	1.3365¹	0.49%	0.38%
British pound	1.5621¹	0.04%	0.23%

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.