U

Week Ended May 7, 2010

After getting off to a good start, stock prices declined sharply during the week. Investors appeared to react to growing concerns about the Greek debt crisis and its potential impact on larger economies in Europe. A slowdown in European economic growth would weigh on exports and profits of U.S. companies with operations in the region, trends that would be accentuated if the euro continued to decline against the U.S. dollar. Investors also worried about signs that European banks were becoming more reluctant to lend to one another, raising fears of a repeat of the financial contagion of late 2008. Against this backdrop, stock prices began falling Tuesday and picked up momentum. On Thursday, markets suffered a blistering selloff before rapidly recovering some losses, leading to speculation that a trading error or the failure of some computerized trading systems may have been partially to blame. Worries over the situation in Europe overshadowed generally positive U.S. economic news. Manufacturing expanded in the U.S. at its fastest pace in six years, according to one gauge, and pending home sales rose sharply in March. On Friday, the Labor Department announced that employers had expanded payrolls by 290,000 in April, and the government revised its estimate of March payroll growth sharply higher as well.

U.S. Stocks¹
Index²	Friday’s Close	Week’s Change	% Change Year-to-Date
DJIA	10379.60	-629.01	-0.46%
S&P 500	1110.87	-75.81	-0.38%
NASDAQ Composite	2265.64	-195.55	-0.15%
S&P MidCap 400	756.64	-66.42	4.12%
Russell 2000	654.26	-65.19	3.18%

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.

____________________________

U.S. Bond Market

Week Ended May 7, 2010

Financial turbulence in Europe and its possible repercussions for the U.S. economy roiled financial markets during the week. Not even a positive labor report on Friday, indicating that 290,000 new jobs were added in April, was enough to calm investor fears. (A rise in the unemployment rate from 9.7% to 9.9% was portrayed in a positive light, reflecting the entry of more than 800,000 new job-seekers into the market.) The financial uncertainty led to a flight to quality as investors sought a safe haven for their money. Treasury yields declined as investors rushed into the sector (prices and yields move counter to each other). Just a few weeks earlier, the two-year yield was above 1.00%, but it closed well below that level on Friday.

U.S. Treasury Yields¹
Maturity	May 7, 2010	April 30, 2010
2-Year	0.81%	0.96%
10-Year	3.41%	3.66%
30-Year	4.27%	4.52%

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, May 7, 2010.

____________________________

Week Ended April 30, 2010

International Stocks

Foreign stock markets closed lower for the week ending April 30, 2010 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), losing -1.76%.


Region/Country	Week’s Return	% Change Year-to-Date
EAFE	-1.76%	-0.80%
Europe ex-U.K.	-2.96%	-5.46%
Denmark	0.61%	16.36%
France	-3.65%	-8.75%
Germany	-2.45%	-4.27%
Italy	-5.49%	-13.65%
Netherlands	-2.78%	-1.35%
Spain	-4.31%	-19.27%
Sweden	-1.16%	13.50%
Switzerland	-2.62%	-0.52%
United Kingdom	-3.16%	-1.71%
Japan	1.34%	8.08%
AC Far East ex-Japan	0.05%	3.00%
Hong Kong	-1.47%	-0.05%
Korea	0.50%	9.91%
Malaysia	0.92%	13.77%
Singapore	-0.46%	4.45%
Taiwan	0.09%	-1.38%
Thailand	0.65%	10.40%
EM Latin America	-1.22%	1.33%
Brazil	-1.03%	-0.98%
Mexico	-2.63%	8.00%
Argentina	-3.19%	5.88%
EM (Emerging Markets)	-0.32%	3.72%
Hungary	-0.30%	13.01%
India	-0.18%	6.82%
Israel	-4.35%	2.16%
Russia	-2.74%	6.03%
Turkey	0.46%	11.80%

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 0.25%.


Region/Country	Week’s Return	% Change Year-to-Date
Developed Markets	0.25%	-2.26%
Europe
Denmark	0.47%	-2.58%
France	0.28%	-3.84%
Germany	0.22%	-3.60%
Italy	-0.77%	-5.83%
Spain	-0.76%	-6.71%
Sweden	-0.15%	2.00%
United Kingdom	1.11%	-3.46%
Japan	0.50%	-0.25%
Emerging Markets	-0.56%	4.31%
Argentina	-0.89%	5.39%
Brazil	-0.32%	3.24%
Bulgaria	-0.49%	2.98%
Russia	-0.90%	3.75%

International Currency Markets

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


Currency	Close (April 30, 2010)	Week’s Return (U.S. $)	% Change Year-to-Date (U.S. $)
Japanese yen	94.010	-0.27%	0.97%
Euro	1.3297¹	0.48%	7.33%
British pound	1.5307¹	0.30%	5.21%

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.