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Week Ended February 26, 2010

The major U.S. indices closed lower on the week but finished the month with moderate gains despite concerns about the economy. For the month, small- and mid-cap shares strongly outperformed their large-cap peers. The Commerce Department announced that the economy grew at a 5.9% annual rate in the fourth quarter of 2009, an increase from last month's initial estimate of 5.7% and the fastest pace in over six years. However, many economists expect growth to slow in 2010 due to continued weak consumer demand. This view was supported by Tuesday's Conference Board report showing a greater-than-expected drop in consumer confidence in February. The housing market also remains fragile due to tight lending standards and employment worries for potential buyers. Reports this week showed that sales of both new and existing homes fell in January, the former number hitting a record-low rate. U.S. markets also responded to developments in Greece, where government leaders met with European finance officials to discuss progress in reducing the country's budget deficit to a manageable level. Investors are concerned that Greece could default on its debt, or that its woes could spread to other heavily indebted countries, resulting in increased risk aversion.

U.S. Stocks¹
Index²	Friday’s Close	Week’s Change	% Change Year-to-Date
DJIA	10325.26	-77.09	-0.99%
S&P 500	1104.49	-4.68	-0.95%
NASDAQ Composite	2238.26	-5.61	-1.36%
S&P MidCap 400	738.36	-1.80	1.61%
Russell 2000	630.12	-1.38	-0.62%

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 26, 2010

Consumer confidence took a surprising tumble in February, reflecting investors' concerns about the strength of the economic recovery. The Conference Board reported that its widely watched consumer confidence index fell more than 10 points, to 46.0 from 56.5 the month before. Analysts had been expecting a small drop to 55. A reading above 90 signals that the economy is on solid ground, so the sharp decline indicates that we have a long way to go before we put the recession safely behind us. Consumer confidence is particularly important since consumer demand accounts for more than two-thirds of total economic activity. Federal Reserve Chairman Ben Bernanke told Congress that continuing low interest rates are necessary to support the economy. He was optimistic about the long-term prospects for a recovery, but he maintained that low-cost borrowing over an "extended period" will be necessary to stimulate growth. Indeed, the economy grew at an annualized rate of 5.9% in the fourth quarter of 2009, according to the latest reading, but that brisk pace is not expected to continue. Treasury rates fell against the backdrop of the subdued economic outlook.

U.S. Treasury Yields¹
Maturity	February 26, 2010	February 19, 2010
2-Year	0.80%	0.92%
10-Year	3.60%	3.78%
30-Year	4.55%	4.71%

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 26, 2010.

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Week Ended February 19, 2010

International Stocks

Foreign stock markets closed higher for the week ending February 19, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 1.71%.


Region/Country	Week’s Return	% Change Year-to-Date
EAFE	1.71%	-5.55%
Europe ex-U.K.	3.33%	-8.00%
Denmark	1.57%	2.01%
France	3.86%	-9.16%
Germany	3.23%	-9.58%
Italy	2.65%	-11.39%
Netherlands	2.23%	-6.69%
Spain	3.69%	-16.05%
Sweden	2.42%	-1.12%
Switzerland	3.96%	-2.50%
United Kingdom	2.83%	-5.02%
Japan	-2.57%	-0.96%
AC Far East ex-Japan	-0.96%	-7.00%
Hong Kong	-1.79%	-6.10%
Korea	-0.77%	-4.61%
Malaysia	0.35%	-1.24%
Singapore	-0.21%	-6.20%
Taiwan	0.00%	-9.24%
Thailand	0.46%	-5.79%
EM Latin America	4.46%	-4.05%
Brazil	5.07%	-5.65%
Mexico	4.12%	-4.46%
Argentina	3.24%	-2.46%
EM (Emerging Markets)	1.27%	-5.51%
Hungary	2.85%	-4.92%
India	0.77%	-5.94%
Israel	0.82%	0.49%
Russia	4.18%	-1.20%
Turkey	4.46%	-2.70%

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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 -1.57%.


Region/Country	Week’s Return	% Change Year-to-Date
Developed Markets	-1.57%	-2.17%
Europe
Denmark	-1.20%	-4.43%
France	-1.08%	-4.63%
Germany	-1.12%	-4.47%
Italy	-0.86%	-5.23%
Spain	-0.92%	-5.44%
Sweden	-0.24%	-1.48%
United Kingdom	-2.31%	-5.67%
Japan	-2.18%	1.06%
Emerging Markets	0.19%	0.18%
Argentina	0.51%	-9.41%
Brazil	0.47%	-0.08%
Bulgaria	0.12%	-0.57%
Russia	0.34%	1.30%

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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 19, 2010)	Week’s Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	91.985	2.16%	-1.21%
Euro	1.3513¹	0.72%	5.82%
British pound	1.5417¹	1.44%	4.53%

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.