January 2010 Newsletter

Four Money Mistakes You Can Learn From More Details ARMed and Dangerous? More Details Hardship Withdrawals from 401(k) Plans More Details Ask the Experts: What can affect the cost of homeowners insurance? More Details Ask the Experts: How can I reduce the cost of my homeowners insurance? More Details --see disclaimer below--

Market Week: January 11, 2010

The Markets

Happy New Year, indeed: Stocks kicked off 2010 in fine style on Monday. Domestic indexes rose anywhere from 1.5% (the Dow) to 2.4% (the small-cap Russell 2000), and managed to inch up a bit further by week's end. That should please those who believe January's first five trading days imply something about the rest of the year.

Market/Index	2009 Close	Prior Week	As of 1/8/10	Week Change	YTD Change
DJIA	10428.05	10428.05	10618.19	1.82%	1.82%
NASDAQ	2269.15	2269.15	2317.17	2.12%	2.12%
S&P 500	1115.10	1115.10	1144.98	2.68%	2.68%
Russell 2000	625.39	625.39	644.56	3.07%	3.07%
Global Dow	1984.48	1984.48	2033.27	2.46%	2.46%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	3.85%	3.85%	3.83%	-2 bps	-2 bps

Last Week's Headlines

• The unemployment rate didn't improve in December, remaining at 10% (17.3% if discouraged workers and people working part-time involuntarily are included). Nonfarm payrolls cut 85,000 jobs during the month, but there also was a bit of good news. Revisions to November's numbers showed that rather than losing the 11,000 jobs previously estimated, the economy actually created 4,000 jobs. It may not be much but it's the first increase in nonfarm payrolls since December 2007. Temp services and health care added jobs, while construction, manufacturing, and wholesale trade continued to shed workers. November eurozone unemployment also hit 10%.
• U.S. construction spending was down by 0.6% in November from the previous month, and 13.2% from November 2008.
• U.S. manufacturing grew faster in December than it had in any month during the last three years, according to the Institute for Supply Management, whose index of purchasing managers rose to 55.9. The new orders index was at its highest level in five years, and European and Asian purchasing managers also reported increases.
• Pending home sales took a hit in November after the October rush to meet the previous deadline for the tax credit. The National Association of Realtors' index of signed contracts that had not yet closed dropped 16%, though the number is still 15.5% higher than it was last November.
• Federal Reserve's Open Market Committee (FOMC) minutes showed some division among committee members about whether to end Fed purchases of mortgage-backed securities early this year.
• Consumer borrowing declined dramatically in November, dropping at an annualized rate of 8.5%. The $17.5 billion that represents is the largest dollar decline since the Fed began tracking credit in 1943. Revolving credit (credit card use) dropped the most (18.5%).

Eye on the Week Ahead
Monday's Alcoa report kicks off the earnings season for Q4 2009. The Treasury will be busy, with bond auctions scheduled for every day except Friday. Consumer inflation numbers will round out the week as investors will watch to see if the market can digest last week's gains without getting a case of heartburn.
Key data releases: International trade (1/12); retail sales (1/14); inflation, industrial production, consumer sentiment (1/15).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

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