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Week Ended February 19, 2010

Stocks rose for the holiday-shortened week. On Tuesday, the broad indexes enjoyed their biggest gains since November. Investors responded to a positive reading on a regional manufacturing survey, a rise in a gauge of homebuilder sentiment, and increased hopes that the debt problems plaguing Greece might be resolved with the help of other European countries. The rest of the week brought additional favorable news on the economy. The government reported a healthy increase in factory output in January, housing starts rose more than expected during the month, and the Conference Board’s index of leading indicators suggested the economy would keep expanding through the first half of the year. But a surprising jump in weekly jobless claims reported Thursday was the dark spot in an the otherwise sunny picture. The Federal Reserve appeared to signal that financial conditions had improved somewhat. After the close of trading on Thursday, the Fed announced that it was raising the discount rate it charges member banks for emergency loans by 0.25%. The Fed left the more closely watched federal funds rate unchanged, however, and investors seemed to take the news in stride, bidding stocks slightly higher to end the week.

U.S. Stocks¹
Index²	Friday’s Close	Week’s Change	% Change Year-to-Date
DJIA	10402.35	303.21	-0.25%
S&P 500	1109.17	33.66	-0.53%
NASDAQ Composite	2243.87	60.34	-1.11%
S&P MidCap 400	740.16	24.20	-1.86%
Russell 2000	631.50	22.02	-0.41%

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 February 19, 2010

Treasury yields rose across the board on the week. On Thursday, the Federal Reserve surprised traders by raising its discount rate—the interest charged to banks for emergency loans—by a quarter percentage point to 0.75%. Despite assurances from Fed officials that the benchmark federal funds rate would remain near zero for an “extended period,” their move was read as an initial step toward tightened monetary policy. It also followed the release of minutes from the Federal Open Market Committee’s recent meeting, where some members expressed the opinion that the central bank should soon begin to reduce its balance sheet by selling securities purchased to support fragile lending markets. A gradual return to normalized monetary policy would be confirmation of improving economic conditions, but many fear that higher borrowing costs could impede the recovery. The inflation picture was mixed. The Labor Department reported that producer prices rose more than anticipated in January, while the consumer price index posted a surprising decline when volatile food and energy prices were excluded. The week also saw President Obama sign an executive order creating a bipartisan commission tasked with finding solutions for the ballooning federal budget deficit, a growing concern for the U.S. bond market.

U.S. Treasury Yields¹
Maturity	February 19, 2010	February 5, 2010
2-Year	0.92%	0.83%
10-Year	3.78%	3.69%
30-Year	4.71%	4.64%

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 19, 2010.

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Week Ended February 12, 2010

International Stocks

Foreign stock markets closed higher for the week ending February 12, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 1.03%.


Region/Country	Week’s Return	% Change Year-to-Date
EAFE	1.03%	-7.14%
Europe ex-U.K.	0.91%	-10.97%
Denmark	-0.05%	0.44%
France	0.52%	-12.54%
Germany	0.64%	-12.41%
Italy	0.86%	-13.67%
Netherlands	0.89%	-8.73%
Spain	1.19%	-19.04%
Sweden	2.15%	-3.46%
Switzerland	1.73%	-6.22%
United Kingdom	1.77%	-7.63%
Japan	-0.56%	1.65%
AC Far East ex-Japan	3.13%	-6.10%
Hong Kong	3.74%	-4.39%
Korea	3.60%	-3.87%
Malaysia	1.34%	-1.59%
Singapore	3.35%	-6.01%
Taiwan	2.64%	-9.24%
Thailand	0.39%	-6.22%
EM Latin America	4.68%	-8.16%
Brazil	5.43%	-10.20%
Mexico	1.97%	-5.36%
Argentina	2.90%	-5.51%
EM (Emerging Markets)	2.70%	-6..69%
Hungary	2.91%	-7.56%
India	3.23%	-6.66%
Israel	-0.53%	-0.33%
Russia	-2.93%	-5.16%
Turkey	-1.08%	-6.86%

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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 -0.47%.


Region/Country	Week’s Return	% Change Year-to-Date
Developed Markets	-0.47%	-0.61%
Europe
Denmark	-0.61%	-3.27%
France	-0.58%	-3.58%
Germany	-0.73%	-3.38%
Italy	-0.14%	-4.41%
Spain	0.70%	-4.56%
Sweden	1.61%	-1.24%
United Kingdom	-1.20%	-3.44%
Japan	-0.59%	3.31%
Emerging Markets	0.79%	0.00%
Argentina	0.58%	-9.87%
Brazil	1.09%	-0.38%
Bulgaria	0.38%	-0.69%
Russia	0.35%	0.95%

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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 12, 2010)	Week’s Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	90.00	0.71%	-3.44%
Euro	1.361¹	0.44%	5.14%
British pound	1.5642¹	0.02%	3.14%

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.