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Week Ended February 12, 2010

Large-cap benchmarks managed a modest gain for the week, while the smaller-cap indexes and the technology-oriented Nasdaq fared somewhat better. On Monday, stocks fell to their lowest levels since early November in response to a report that the Fed would soon release details on plans to scale back its current policy of extraordinary monetary stimulus. Continuing worries about financial instability in Europe also weighed on sentiment. News that Germany was considering measures to help Greece deal with its fiscal problems helped stocks rebound on Tuesday. Stocks enjoyed further gains Thursday, when the government reported a larger-than-expected drop in weekly and continuing jobless claims—a welcome reversal to a recent pattern of worsening labor market data. The week ended on somewhat of a down note, however, as investors’ worries over fragility in Europe were buttressed by data showing almost no economic growth in the region in the last quarter of 2009. News that China was taking further steps to tighten monetary policy also unsettled investors.

U.S. Stocks¹
Index²	Friday’s Close	Week’s Change	% Change Year-to-Date
DJIA	10099.14	86.91	-3.15%
S&P 500	1075.51	9.33	-3.55%
NASDAQ Composite	2183.53	42.41	-3.77%
S&P MidCap 400	715.96	18.87	-1.48%
Russell 2000	609.48	16.98	-3.88%

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 February 12, 2010

Treasury yields rose during the week. On Wednesday, Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee that “we have been working to ensure that we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus.” Although investors have long known that the Fed could not keep its current policy in place indefinitely, nervousness over Bernanke’s testimony appeared to help send government bond yields higher. The rise in yields and decline in prices occurred despite continuing worries over the financial situation in Greece and its possible spillover effects elsewhere in Europe, a factor which might normally send investors to the safe haven of the Treasury market. While Europe appeared to be struggling, reports on the U.S. economy released during the week were generally favorable. On Thursday, the Labor Department reported a larger-than-expected decline in weekly jobless claims, breaking a pattern of recent reports that indicated renewed weakening in the labor market.

U.S. Treasury Yields¹
Maturity	February 12, 2010	February 5, 2010
2-Year	0.83%	0.75%
10-Year	3.69%	3.56%
30-Year	4.64%	4.51%

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, February 12, 2010.

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Week Ended February 5, 2010

International Stocks

Foreign stock markets closed higher for the week ending February 5, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -3.86%.


Region/Country	Week’s Return	% Change Year-to-Date
EAFE	-3.86%	-8.09%
Europe ex-U.K.	-5.72%	-11.77%
Denmark	-2.56%	0.49%
France	-6.04%	-12.99%
Germany	-4.75%	-12.97%
Italy	-6.50%	-14.41%
Netherlands	-6.20%	-9.53%
Spain	-9.36%	-19.99%
Sweden	-3.08%	-5.49%
Switzerland	-4.63%	-7.82%
United Kingdom	-4.65%	-9.24%
Japan	0.32%	2.23%
AC Far East ex-Japan	-3.03%	-8.95%
Hong Kong	-1.34%	-7.83%
Korea	-2.98%	-7.21%
Malaysia	-2.04%	-2.90%
Singapore	-3.25%	-9.06%
Taiwan	-5.44%	-11.57%
Thailand	-1.35%	-6.59%
EM Latin America	-3.73%	-12.27%
Brazil	-4.37%	-14.82%
Mexico	-1.03%	-7.19%
Argentina	-5.16%	-8.18%
EM (Emerging Markets)	-3.79%	-9.14%
Hungary	-10.81%	-10.17%
India	-4.53%	-9.59%
Israel	-0.11%	0.20%
Russia	-4.58%	-2.30%
Turkey	-7.92%	-5.84%

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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 -0.22%.


Region/Country	Week’s Return	% Change Year-to-Date
Developed Markets	-0.22%	-0.14%
Europe
Denmark	-0.94%	-2.67%
France	-1.12%	-3.02%
Germany	-1.05%	-2.68%
Italy	-1.25%	-4.27%
Spain	-1.87%	-5.22%
Sweden	-0.96%	-2.80%
United Kingdom	-2.13%	-2.26%
Japan	1.24%	3.92%
Emerging Markets	-0.65%	-0.79%
Argentina	-4.72%	-10.40%
Brazil	-0.51%	-1.46%
Bulgaria	-1.37%	-1.07%
Russia	-0.22%	0.60%

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International Currency Markets

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


Currency	Close (February 5, 2010)	Week’s Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	89.360	-1.45%	-4.18%
Euro	1.3671¹	1.65%	4.72%
British pound	1.5645¹	2.37%	3.12%

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.