Week in Review: Stocks mixed as investors weigh eurozone bailout hopes against slowing economy

U.S. and global economic news

Germany agrees to increase bailout contributionGermany's parliament approved legislation to increase the eurozone bailout fund's lending capacity to €440 billion, from around €250 billion, and to make the fund more flexible. The move was lauded as the clearing of a major hurdle in the path to the containment of Europe's sovereign debt crisis. Also this week, the Greek Parliament approved a new property tax law in a closely watched vote, a key step in the country's efforts to secure further aid.

Standard & Poor's and Fitch downgrade New Zealand's debtStandard & Poor's and Fitch Ratings downgraded New Zealand's local currency debt amid concern that government and household debt are expanding. New Zealand is the first Asia-Pacific nation in a decade to have its debt cut from AAA. S&P cut the local currency debt one level to AA+. Foreign currency debt was cut to AA from AA+.

Eurozone inflation hits three-year highEuropean inflation unexpectedly accelerated at the fastest pace in almost three years; the rate for September jumped to 3% from 2.5% in August. The increase further complicated the work of the European Central Bank as it fights to contain the region's debt crisis. Germany's inflation rate rose in September to 2.8%, from 2.5% in August.

Chinese manufacturing shrinks for third monthChinese manufacturing shrank for the third month in a row as measures of new orders and export demand fell. 

U.S. consumer spending, new home sales fallU.S. consumer spending slowed in August as incomes unexpectedly dropped for the first time in almost two years; that drop forced households to dig into their savings. Purchases rose 0.2% after a 0.7% increase the previous month. Also in August, sales of new homes fell to a seasonally adjusted annual rate of 295,000, which was down from 302,000 a month earlier. The inventory of new homes fell to 162,000, the lowest level on record since 1963. In July U.S. home prices rose for a fourth month but remain lower than they were a year ago.

U.S. and global corporate news

Amazon debuts Kindle FireAmazon, the world's largest online retailer, debuted its e-reader Kindle Fire. The company is betting that its device, which is smaller and less than half the price of Apple's iPad, can present a challenge to that popular product.

BofA to charge for debit card useBank of America announced plans to charge customers $5 per month to use their debit cards. Other banks are expected to follow with similar moves, which are intended to make up for funds lost to a new regulation that puts a cap on how much banks can charge merchants for debit card transactions.

The week ahead

• The Institute for Supply Management reports on national manufacturing activity on Monday, October 3.
• Markit publishes its eurozone purchasing managers index on Monday, October 3.
• The Bank of Japan ends its two-day policy meeting on Friday, October 7. 
• The U.S. Bureau of Labor Statistics releases the unemployment rate on Friday, October 7.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.

Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News;Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

--see disclaimer below--

Week in Review: Stagnant jobs situation troubles markets

U.S. and global economic news

U.S. job growth fizzlesU.S. employment stagnated in August, with no job growth, according to the monthly nonfarm payroll report released by the Labor Department Friday morning. It was the first time in 11 months there was no net increase in U.S. jobs. The disappointing news, however, was influenced by the 45,000 Verizon workers who were out of work because they were on strike at the time the report was compiled. Still, the report's employment picture fell far short of the 60,000- to 65,000-job gain that had been anticipated by economists, and the U.S. unemployment rate remained at 9.1%. 

More significantly, the weak showing reflected a lack of confidence among U.S. employers following the debt-ceiling showdown in Washington, the S&P downgrade of U.S. debt, the plummeting stock market, and ongoing concerns about Europe’s sovereign debt crisis. While the report conveyed a flat employment picture, it did indicate an increase of 17,000 jobs in the private sector.



ADP reports 91,000 more private sector jobsPrivate businesses added 91,000 jobs in August, on a seasonally adjusted basis, according to a report released by payroll giant Automatic Data Processing (ADP) and Macroeconomic Advisers, a consultancy. Almost all the hiring occurred at small businesses (a gain of 58,000) and medium-size businesses (30,000 new jobs). Businesses with 500 or more employees added only 3,000 jobs.


U.S. manufacturing growth stays surprisingly strongU.S. manufacturing activity grew slightly in August, according to the Institute for Supply Management’s factory index, which fell slightly to 50.6 from 50.9 in July. Economists had expected a drop to 48.5.


Weekly jobless claims ease slightly in United StatesInitial claims for unemployment benefits by U.S. workers fell by 12,000 to a seasonally adjusted 409,000 in the week ended August 27, according to the Labor Department. However, the four-week moving average of new claims rose by 1,750 to 410,250.



Consumer confidence indices slipU.S. consumers lost confidence in August, according to several confidence gauges. The Conference Board’s index of consumer confidence dropped to 44.5 from 59.2 in July, its lowest reading since April 2009. The survey also showed that consumers expect inflation to rise to 5.8% in the next 12 months. Bloomberg’s Consumer Confidence Index fell to -49.1 from -47.0 in July, its second lowest level in two years. The Thomson Reuters/University of Michigan final index of consumer confidence in August slipped to its lowest level since November 2008.


Consumer spending rose in JulyU.S. consumers spent more than expected in July, on the basis of a report from the U.S. Department of Commerce, which showed that consumer spending rose 0.8%, the largest gain in five months. Income rose 0.3%, and the savings rate slowed to 5.0% from 5.5% in June, a trend that suggests a rise in confidence about the economy.


Eurozone confidence fadesEconomic confidence among Eurozone businesses and consumers fell in August. The Economic Sentiment Indicator declined for the sixth-straight month, to 98.3 in August from 103.0 in July, the European Commission reported. It was the weakest reading since March 2010 and far below the 100.5 expected by economists. The consumer confidence index slid to -16.5 from -11.2, its largest one-month decline since 1990. In a separate report, Eurostat, the European Union statistics office, reported that inflation remained at 2.5% in August and unemployment stood unchanged at 10.0% in July.



Global manufacturing activity slumpsManufacturing activity slumped across much of the world in August, according to various reports. Manufacturing in the Eurozone contracted, U.K. factory activity hit a two-year low, and a Chinese manufacturing index straddled the line between expansion and contraction, at 50.9, just above its 29-month low recorded in July. South Korea’s purchasing managers' index fell into negative territory, to 49.7 from 51.3 in July.



German economic resilience a positive sign for EuropeBullish reports from Germany indicate that Europe’s largest and strongest economy continues to grow. Unemployment remained at its lowest level in two decades in August as unemployment fell for the twenty-sixth consecutive month. The unemployment rate remained at 7%, its lowest level since German reunification in 1991. Machine orders grew 9% in July from a year earlier.


Canadian economy shrinksCanada’s economic output shrank unexpectedly in the second quarter, its first contraction in two years. Canada depends heavily on international trade and has been hurt by the U.S. and European economic slowdown. Canadian GDP declined 0.1% in the second quarter, for an annualized 0.4% contraction. Among the G-7 nations, only Japan and Canada had a contraction in economic activity in the second quarter.

U.S. and global corporate news

U.S. auto sales riseSales rose in August for U.S. car manufacturers. Chrysler Group reported a 31% jump in sales, while General Motors and Nissan Motor each reported close to a 20% increase and Ford Motor had an 11% gain. Because of a slow recovery in production after the March tsunami, Japan’s Honda Motor and Toyota Motor reported decreases in U.S. sales of 24.3% and 12.7%, respectively.




U.S. Justice Department a hard sell on mergerThe U.S. Department of Justice filed an antitrust lawsuit to block a proposed $39-billion merger between AT&T and T-Mobile USA, saying that it would substantially decrease competition, lead to higher prices, and reduce product innovation.

Bombardier profit soarsCanada’s transportation giant Bombardier posted a 53% jump in second-quarter profit as revenue grew in both its aerospace and transportation divisions.

The week ahead

• The European Union reports its quarterly gross domestic product data on Tuesday, September 6.
• The U.S. Federal Reserve Board releases its "Beige Book," providing commentary on current economic conditions, on Wednesday, September 7.
• Germany, France, the U.K., Canada, and Australia release their monthly trade figures next week.
• The U.S. Commerce Department releases its trade balance data for August on Thursday, September 8.
• The U.S. Labor Department publishes its weekly report on unemployment insurance claims on Thursday, September 8.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.


Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

U.S. and global economic news

European debt concerns grow; ECB buys more bondsOn Monday and again Tuesday, the European Central Bank bought Italian and Spanish government bonds to stabilize borrowing costs for the European Union’s third- and fourth-largest economies in a critical and dramatic move to stem Europe’s growing debt crisis. The ECB’s bond purchase program had been inactive for four months before the central bank resumed purchases of Portuguese and Irish bonds last week.

Eurozone production slipsEurozone industrial production shrank 0.7% from May to June, the European Union’s statistics office reported. France’s economy had no growth in the second quarter, while Greece’s economic output contracted 6.9% from a year earlier.

U.S. Treasuries continue to serve as safe havenDespite the downgrade of U.S. sovereign debt from AAA to AA+ by Standard & Poor’s, demand for U.S. Treasury securities remained very high this week. Yields, moving in the opposite direction to bond prices, fell to 2.10% for the 10-year Treasury note on Wednesday and just 0.17% for the two-year note. Yields rose slightly by Friday – to 2.25% and 0.19%, respectively – as a more optimistic mood settled the market somewhat. Few alternatives exist to U.S. Treasuries, given their depth and liquidity, with more than $9.3 trillion in debt outstanding.

U.S. consumer confidence plummetsConfidence among U.S. consumers fell in August to its lowest point since May 1980. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment plunged to 54.9 from 63.7 in July. A decline to 62 was expected in a Bloomberg News survey. Rising pessimism after the downgrade of U.S. debt and the current stock market volatility could weigh down consumer spending.

Gold benefits from heightened uneaseGold lived up to its reputation as an investment to hold amid uncertainty and volatility. The price of an ounce of gold in a forward contract rose to $1,817on Wednesday before dipping below $1,800 Thursday.

U.S. retail sales riseRetail and food services sales were 0.5% higher in the United States in July from June, as consumers spent more on gasoline, electronics, and other merchandise.

U.S. productivity weakened in second quarterU.S. worker productivity fell for the second consecutive quarter, as employee output per hour declined at an annual rate of 0.3% in the second quarter of 2011 after falling 0.6% the previous three months. Declining efficiency and rising costs are disincentives for companies to hire more staff or increase pay.

Jobless claims easeInitial claims for unemployment benefits by U.S. workers fell by 7,000 to a seasonally adjusted 395,000 in the week ended August 6, according to the U.S. Department of Labor. The four-week moving average of new claims fell by 3,250 to 405,000.

German exports dropGerman exports declined in June, in another sign of economic weakness in Europe. Exports from Germany fell 1.2% from May while imports rose 0.3%. Demand for German-produced goods eased as neighboring countries sought to reduce spending because of the sovereign debt crisis and the demand for fiscal restraint.

U.S. and global corporate news

Commerzbank hurt by Greek debt exposureCommerzbank, Germany’s second-largest bank, had a 93% drop in its net profit in the second quarter from the year-earlier period after writing down all of its Greek sovereign debt exposure. Operating profit fell 77%. However, Commerzbank said its core bank is on track for a 2011 operating profit higher than last year’s 1.98 billion euros.

McDonald’s same-store sales up 5.1%Same-store sales at McDonald’s restaurants rose 5.1% in July, as the fast-food giant’s sales grew in all regions. McDonald’s continues to benefit from competitive pricing and an increasingly diverse menu. The company’s system-wide sales grew 14% in July.

Macy’s, Polo, Kohl’s profits up, Penney flatDepartment store chain Macy’s increased its earnings 64% in the second quarter from a year earlier. Same-store sales grew 6.4% while online sales were up 40%. Polo Ralph Lauren posted a 52% rise in first-quarter earnings and projects revenue growth in the high teens to low-20% range.Kohl’s reported a 17% increase in profits, but sales were up less than 4%, below analysts’ expectations. JCPenney had flat profits and lower sales, reflecting its departure from its catalog business.

Cisco SystemsNetworking equipment maker Cisco Systems had a 36% drop in net income in its fiscal fourth quarter as a result of a $772 million restructuring charge. Its revenue rose 3.3% from the year-earlier period, higher than analyst expectations, and the firm’s CEO, John Chambers, said Cisco was making solid progress on turning its fortunes around.

The week ahead

• The U.S. Department of Commerce releases housing starts data on Tuesday, August 16.

• European Union publishes flash GDP data on Tuesday, August 16.

• The U.S. Department of Labor publishes Consumer Price Index figures on Thursday, August 18.

• Existing home sales published by the National Association of Realtors on Thursday, August 18.

• U.S. Conference Board publishes leading indicators report on Thursday, August 18.

• Corporate earnings reports from Lowe’s, Dell, Home Depot, Wal-Mart, Deere during the week.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.

Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News;Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

Schnack Financial Newsletter for August 2011

Talking to Your Child about College Expectations If you're the parent of a high school student, it's never been more important to have a grown-up conversation with your child about college expectations. While every family is different, a frank discussion should help both parties get on the same page. Talking points can include costs, grades, and course of study. More Details

Medicare and Medicaid: Do You Know the Difference? Medicare and Medicaid are similar-sounding programs that are easily confused, but these government-run health-care programs are quite different. Here's a look at the coverage each provides. More Details

All about Indices Do you know how an index works, and why understanding the nuts and bolts of a specific index can make a difference to your portfolio? More Details

I'm buying a laptop online--will I have to pay sales tax? Whether or not you owe sales tax on an online purchase depends on a number of factors, including whether the online company that you're purchasing your goods from has a substantial presence in your state. More Details Can I deduct state sales tax on my federal income tax return? Individuals who itemize deductions on Schedule A of Form 1040 in 2011 can elect to deduct state and local general sales tax in lieu of deducting state and local income tax. More Details

Week in Review: Unresolved U.S. debt drama weighs on markets - Week ending July 29, 2011

Global economic news

U.S. economy barely expands in second quarterThe U.S. economy grew anemically in the second quarter. Gross domestic product grew at an annualized, seasonally adjusted pace of 1.3%, the U.S. Department of Commerce reported. The rate of growth in the first quarter was revised downward, to 0.4% from the earlier estimate of 1.9%. Economists had expected the GDP to rise 1.8% in the second quarter. Consumer spending rose at an annualized 0.1% rate, its weakest level in two years.

Spain on review for debt downgradeMoody's Investors Service placed Spain's "Aa2" credit rating on review for a possible downgrade. The yield on Spain's 10-year government bond rose 1.7 percentage points to 6.136%, widening the spread between Spanish sovereign debt and similar German debt to 354.2 basis points. This underscores the financial strain the second Greek bailout package is having on other financially weak European countries.

U.S. jobless claims fall to 398,000Initial jobless claims fell by 34,000 to 398,000 for the week ended July 23, below the 400,000 level, which generally indicates an economy with overall job growth. The four-week average fell by 8,500 to 413,750.

Chicago Purchasing Managers’ Index fallsThe Chicago Purchasing Managers’ Index decreased to 58.8 in July, from 61.1 in June, according to the Institute for Supply Management. A reading of 60.2 had been expected. Readings above 50 indicate an expanding business sector. 

U.S. home sale contracts rise in JuneThe number of contracts to buy previously owned U.S. homes surprisingly rose in June, as buyers were attracted to lower house prices and lower borrowing costs. The 2.4% rise in pending home sales followed a gain of 8.2% in May. Because of high cancellation rates, however, its difficult to gauge whether this will lead to higher home sales.

May home prices flatU.S. home prices rose in May from April but remained below year-earlier levels. The Case-Shiller index of 10 major metropolitan areas rose 1.1% and the 20-city index was 1% higher in May than a month earlier. Year to year, prices for the two indexes were down 3.6% and 4.5%, respectively.

Durable-goods orders dropDurable-goods orders fell by 2.1% in June, the second decline in three months, pointing to ongoing economic sluggishness, according to the U.S. Commerce Department.

Consumer confidence gets mixed readingU.S. consumer confidence rose in July, according to the Conference Board. Its monthly index of consumer confidence rose to 59.5 from 57.6 in June. However, the Bloomberg Consumer Comfort Index fell to -46.8 in the week ended July 24, from a reading of -43.3 the previous week. The Reuters/University of Michigan’s consumer sentiment index fell to 63.7 in July from 71.5 in June.

Eurozone confidence dipsBusinesses and consumers in the eurozone grew less confident about their prospects in July, according to the Economic Sentiment Index, the European Commission’s monthly survey of economic confidence. The measure dropped to 103.2 from 105.4 in June. It was the ESI’s fifth-straight monthly decline.

U.K. consumer confidence fallsConsumer confidence in the U.K., already sagging, fell further in July. A sentiment index fell to -30, its lowest point since April, from -25 in June and -22 a year earlier. All components of the index fell. The U.K. economy grew a meager 0.2% in the second quarter after being flat for the previous half year.

India fights inflation with higher interest rates
The Reserve Bank of India, the country’s central bank, raised interest rates by 0.5 percentage points to 8.0%, its eleventh increase since March 2010. Indian inflation reached 9.44% in June.

German inflation creeps higherConsumer prices rose 0.4% in Germany in July, and 2.4% from a year earlier. Because Germany is dependent on the European Central Bank (ECB) for monetary policy and the ECB must also watch out for weak European economies, Germany may have to accept rising inflation for now.

Global corporate news

UPS delivers higher profitsGlobal shipping firm United Parcel Service posted a 26% growth in second-quarter profit on strength in China and Europe. UPS said it expects robust profit growth on international routes in the coming months. 

European carmakers outpace American rivalsGerman auto maker Daimler and France’s PSA Peugeot-Citroen both announced healthy profit increases this week, while Ford’s profit fell andChrysler posted a loss for the second quarter. Peugeot reported a 19% rise in profit for the first half of 2011 despite the impact of the Japanese earthquake and tsunami and the production interruption that created. Daimler had a 29% rise in second-quarter net profit on thriving demand for new trucks and luxury cars in many major global markets. Ford’s profit was trimmed by spending on new-model development and higher prices for commodities. Chrysler’s loss was due to a $551 million one-time charge to repay loans to the United States and Canadian governments. 

Higher prices boost oil giants’ profitsRoyal Dutch Shell, British Petroleum, and Exxon all benefited from higher oil prices in the quarter ending June 30. BP bounced back from a $17-billion loss a year ago, stemming from a $32-billion charge to cover costs of the Gulf of Mexico oil spill, to a second-quarter net profit of $5.62 billion this year. Total revenue rose 39% in the quarter. Shell’s profits rose to $8.7 billion from $4.4 billion a year ago. Exxon’s net income was $10.7 billion, up from $7.6 billion a year ago.

RIM, Nokia and Nintendo show impact of losses to AppleResearch in Motion, Nokia, and Nintendo continue to struggle in the face of very tough competition from Apple and Google in the smart phone space. Research in Motion announced a plan to cut 2,000 jobs, 11% of its workforce, as the BlackBerry maker struggles with shrinking market share of North American smart phone sales. Nokia’s debt was downgraded two notches, to "Baa2" from "A3," by Moody’s Investor Service, reflecting the sharp deterioration of Nokia’s market position. Apple and Samsung Electronics overtook Nokia for the top two positions in the global smartphone market in the second quarter, according to market research firm Strategy Analytics. Nintendo cut its profit forecast for the year ending next March by more than 80% as its 3DS hand-held player has been hurt by gamers’ appetite for games that can be played online or on smart phones, including Apple’s iPhone.

Dunkin’ Donuts serves up IPO, coffee competition to heat upThe hunger for initial public offerings continued this week, with 11 IPOs, including an offering from Dunkin’ Donuts that raised $423 million, and will promote the franchiser’s growth.

The Week Ahead

• Pfizer, Comcast, MasterCard, Prudential, and Time Warner report earnings next week.
• The European Monetary Union releases its unemployment report on Monday, August 1.
• The ADP monthly employment report is released on Wednesday, August 3.
• The Bloomberg Consumer Confidence Index is released on Thursday, August 4.
• The U.S. nonfarm payroll report and U.K. producer price index are released on Friday, August 5. 

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.

Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News;Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

Week in Review: Stocks higher as debt deals and positive earnings cheer investors

U.S. and global economic news

European leaders agreed to aid package for GreeceEuropean leaders on Thursday agreed on a plan to reduce Greece's debt burden in an effort to prevent contagion to other weak economies in the eurozone. The overall size of the bailout package to cover Greece's financial gap is €109 billion and will include the participation of the International Monetary Fund and the private sector. The plan also cuts interest rates on bailout loans to Greece and doubles the repayment period to 15 years. Officials said the interest rates on Ireland's and Portugal's bailout loans will be cut to the same low level. European leaders also agreed on new steps to prevent the spread of Greece's debt problems. In the wake of the debt deal, Fitch Ratings said the role of the private sector in the Greek bailout plan would constitute a "restrictive default." In other words, the proposed debt exchange implies a 20% net present value loss for banks and Greek government debt holders. 



U.S. lawmakers continue debate over deficit reduction dealIn the United States, Congress and the White House continued negotiations to cement a deal to increase the government's borrowing authority while cutting spending and overhauling the tax code. The White House has said if the government's $14.29 trillion debt ceiling is not raised by August 2, the United States will run out of cash to pay its bills. Standard & Poor's repeated  a warning that there is a 50% chance that it will lower the U.S. credit rating within three months. The company first warned of this possibility on July 14. 


Weekly U.S. jobless claims riseU.S. jobless claims unexpectedly rose last week after declining for two weeks in a row. Claims increased  by 10,000 to a seasonally adjusted 418,000, after declining for two weeks in a row. The four-week moving average of new claims, considered a more reliable indicator of the performance of the labor market, fell last week by 2,750 to 421,250. Economists consider the economy to be adding more jobs than it is shedding when  the weekly claims number falls below 400,000.


German business confidence fallsGerman business confidence fell more than expected in July, according to the Ifo Institute's business climate index, which dropped to its lowest level in nine months.



U.S. home sales fallSales of previously owned homes fell 0.8% in June to a seasonally adjusted annual rate of 4.77 million, the lowest level in seven months, amid weakness in the job market and overall economy. It was the third-straight monthly decline and worse than forecast. Also in June home construction rose to the highest level in five months. Compared with the same month a year earlier, new home construction was up 16.7%; however construction is still below a healthy level, which economists say would be a pace of 1 million to 1.5 million units. In June, that annual level was at 629,000. Meanwhile, the National Association of Home Builders reported that confidence among homebuilders rose in July from June but remained at depressed levels as the housing market continued to struggle.


U.S. leading indicators riseThe Conference Board reported that its index of U.S. leading indicators rose 0.3% in June  from a 0.8% increase  in May. The gauge measures the outlook for the next three to six months.


U.S. and global corporate news



Morgan Stanley performance surprises investorsMorgan Stanley posted a smaller-than-expected second-quarter loss, which sent the company's stock surging the most in two years. The loss came from a $1.7 billion charge related to the conversion of Mitsubishi UFJ Financial Group's preferred Morgan Stanley stake. Morgan Stanley posted a 14% gain in trading revenue and was the only major U.S. bank to report a gain in this area. Bank of America reported losses of $8.83 billion in the second quarter as mortgage-related charges outweighed lower credit costs. Goldman Sachs Group's second-quarter profit came in at $1.05 billion, significantly lower than expectations, after market conditions led the firm to reduce risk taking to the lowest levels in five years. Even so, profits rose 77% from $613 million a year ago.



Tech companies report strong profitsApple's fiscal third-quarter earnings more than doubled, exceeding analysts' expectations, as the company reported surging sales of the iPhone and iPad. Microsoft's profit rose 30% in its fiscal fourth quarter helped by the software and service contracts of its corporate customers. IBM reported an 8% increase in net income as the 100-year-old company got a boost from robust sales of new models of its mainframes. The company also lifted its profit forecast amid buoyant demand for software. Intel, the world's largest chipmaker, reported that its sales rose 21% while net income rose to $2.95 billion from $2.89 billion in the year-earlier quarter. The company also forecast third-quarter sales that exceeded some analysts' estimates. EMC reported a 28% gain in second-quarter earnings as companies increased spending on storage products and software for Internet-based computing, and eBay reported a 25% jump in revenue, while net income fell 31%.


Coke, Johnson & Johnson, and Harley-Davidson announce resultsCoca-Cola's second-quarter profit rose 18%. The company got a boost from a bottler acquisition and from strong volume growth overseas. Johnson & Johnson reported a 20% decline in second-quarter profit on costs associated with its exit from its heart-device business and product recalls. Profits, however, exceeded Wall Street expectations. Harley-Davidson, the largest U.S. motorcycle manufacturer, said profit rose after it increased sales in the U.S. market for the first time in almost five years.



Borders to liquidate remaining storesBorders was forced to liquidate its remaining 399 stores after receiving too few bids in a bankruptcy auction. The company, which employs about 10,700 people, is now expected to go out of business by the end of September.


Zillow raises $69.2 million in IPOZillow, the online real estate information service, raised $69.2 million in its initial public offering.


Express Scripts to buy Medco; CNOOC to purchase OPTI CanadaExpress Scripts agreed to buy Medco Health Solutions for $29.1 billion in cash and stock. In merging, the companies will form the largest manager of drug prescription services with nearly a third of the market. China's largest offshore-oil producer, CNOOC, agreed to buy bankrupt Canadian oil sands developer OPTI Canada for about $2.1 billion. The agreement comes as China seeks to invest in energy projects amid a global commodities boom. In past deals, Chinese firms have targeted minority stakes in Canadian companies.



Harry Potter movie sales set recordThe last of the long-running series of Harry Potter films, Harry Potter and the Deathly Hallows — Part 2, from Time Warner's Warner Bros. Pictures set a sales record for its U.S. opening and took in nearly one half a billion dollars worldwide.

The week ahead

• 3M, Boeing, Exxon Mobil, DuPont, Merck, and Chevron report earnings next week.
• The Standard & Poor's/Case-Shiller Composite-20 Home Price Index is released on Tuesday, July 26.
• The Conference Board reports on consumer confidence on Tuesday, July 26.
• The European Commission publishes its consumer confidence indicator for the eurozone on Thursday, July 28.
• The Nomura/JMMA (Japan Materials Management Association) Purchasing Managers' Index is released Thursday, July 28.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk.

Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.


Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

MARKET WEEK: JULY 11, 2011

The Markets Friday's disappointing employment numbers took the edge off equities' earlier gains, but the domestic indices managed to remain in the plus column for the week. The small-cap Russell 2000 and the NASDAQ had the strongest showing. Meanwhile, Treasury bonds benefitted from the anxiety caused by the bad jobs report; the 10-year yield reversed much of its 34-basis-point jump of the previous week.

Market/Index 2010 Close Prior Week As of 7/8 Week Change YTD Change DJIA 11577.51 12582.77 12657.20 .59% 9.33% NASDAQ 2652.87 2816.03 2857.60 1.55% 7.80% S&P 500 1257.64 1339.67 1343.81 .31% 6.85% Russell 2000 783.65 840.04 852.57 1.49% 8.79% Global Dow 2087.44 2156.11 2148.99 -.33% 2.95% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.30% 3.22% 3.03% -19 bps -27 bps Last Week's Headlines After two months in which the jobless count remained relatively static, the unemployment rate rose slightly in June to 9.2%. According to the Bureau of Labor Statistics, only 18,000 new jobs were added to the nation's payrolls. That's dramatically lower than both the average 215,000 jobs added monthly between February and April and gains seen in a report on private-sector payrolls earlier in the week. Long-term unemployed workers (those without a job for 27 weeks or more) represented 44.4% of the total, and including underemployed workers would push the unemployment rate to 16.2%. Most private-sector industries saw little change, while government employment continued to trend down. It was Portugal's turn to be the focus of euroangst. Moody's downgraded the country's sovereign debt to Ba2 (non-investment grade) with a negative outlook, indicating further downgrades are likely. The downgrade also helped push up borrowing costs for other troubled eurozone countries, including Italy. Meanwhile, Standard & Poor's warned that a restructuring of Greek debt would be considered a "selective default." The European Central Bank raised a variety of interest rates for the second time this year, increasing its benchmark rate to 1.5% to try to combat inflation that is running at roughly 2.7%. The Bank of China raised its primary rate from 6.31% to 6.56%; a 5.5% inflation rate there brought on the third increase this year. By contrast, the Bank of England kept its key rate stable at 0.5%. Discussions continued between the White House and congressional leaders on how to tackle deficit disputes--at least temporarily--and pass legislation raising the nation's borrowing limit before the Treasury's August 2 deadline. Though the U.S. services sector declined 1.3% in June from the previous month, the Institute for Supply Management's index still remained above 50, indicating expansion for the 19th consecutive month. Eye on the Week Ahead Alcoa's Monday announcement represents the unofficial kickoff of the second-quarter earnings season. Minutes of the Fed's last meeting could provide additional insight into members' post-QE2 outlook, and inflation data will be watched for signs of acceleration. Finally, as the debt deadline nears, it could have an effect on investors' psyches. Key dates and data releases: Federal Reserve Open Market Committee (FOMC) minutes, international trade (7/12); wholesale inflation, retail sales (7/14); consumer inflation, industrial production (7/15). 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. Equities data reflect price change, not total return. 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. --see disclaimer below--

Market Week: Week ending July 1, 2011

The Markets Greek revival: After domestic equities' weeks-long downdraft, last week's five straight days of fireworks were something to celebrate. The Dow had triple-digit gains on all but one of those days, while the Global Dow gained more in a single week than it did in the entire first quarter. The S&P 500 had its biggest percentage gain since mid-2009, while the NASDAQ and Russell 2000 built on the prior week's strong performances. However, the renewed confidence in equities wasn't good news for Treasury debt. As the Fed's QE2 bond-buying program came to an end, the yield on the 10-year note had its biggest weekly gain of the year, pushing prices down.

Market/Index 2010 Close Prior Week As of 7/1 Week Change YTD Change DJIA 11577.51 11934.58 12582.77 5.43% 8.68% NASDAQ 2652.87 2652.89 2816.03 6.15% 6.15% S&P 500 1257.64 1268.45 1339.67 5.61% 6.52% Russell 2000 783.65 797.79 840.04 5.30% 7.20% Global Dow 2087.44 2041.17 2156.11 5.63% 3.29% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.30% 2.88% 3.22% 34 bps -8 bps Last Week's Headlines The Greek parliament approved a €78 billion package of budget cuts, tax increases, and asset sales. The austerity measures were needed to forestall default on the country's bonds in two weeks, obtain another installment of last year's bailout package, and enhance the odds of receiving future aid. Whether they signal better things to come or simply the start of the traditional home-buying season, home prices were up by a welcome 0.7% in April. It was the first increase in eight months for the S&P/Case-Shiller home price index. Consumer spending stalled in May but the 0.3% lift in incomes roughly equaled April's increase, according to the Bureau of Economic Analysis. However, adjusted for inflation and taxes, income was up 0.1%, and inflation-adjusted spending fell 0.1%. U.S. manufacturing accelerated in June, rising 1.8%; new orders, production, and inventories also rose during the month. It was the 23rd consecutive month of expansion in the sector, according to the Institute for Supply Management. Construction spending fell slightly in May, the Commerce Department said, and was 7.1% below that of last May. French Finance Minister Christine Lagarde was named to replace Dominique Strauss-Kahn as managing director of the International Monetary Fund, which plays a key role in international assistance for Greece. Eye on the Week Ahead After last week's strong gains, the possibility of some profit-taking can't be ruled out as traders return from the holiday weekend. The latest unemployment data on Friday will also be of interest, and the European Central Bank will meet on Thursday to decide whether to raise interest rates. Key dates and data releases: factory orders (7/5); U.S. services sector (7/6); unemployment/payrolls (7/8). 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. Equities data reflect price change, not total return. 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. --see disclaimer below--

Week in Review: Stocks rally as Greece's austerity plans opens way for EU bailout

Global economic news

Greece approves austerity measuresOn Thursday Greek Prime Minister George Papandreou won a second vote from lawmakers to implement his €78 billion package of budget cuts, asset sales, and tax hikes. The package qualifies the country to receive the next tranche of aid from the European Union. Deutsche Bank and Allianz, Germany's largest bank and insurer, were among the country's firms that agreed to reinvest in Greek debt to help avoid the euro area's first default. They agreed to roll over at least €2 billion of Greek bonds maturing in 2014. German and French lenders are the largest foreign holders of Greek debt, and their participation may help the European Union meet a goal of getting banks to roll over at least €30 billion worth of bonds.


IMF says global markets will suffer if the United States fails to raise debt ceilingThe International Monetary Fund said global markets will suffer if the U.S. Congress does not approve an increase in the $14.3 trillion debt ceiling. It also cautioned about the risk of a sudden increase in interest rates or a sovereign downgrade if lawmakers fail to reach a budget and debt compromise. U.S. Democrats and Republicans have been negotiating to find a way to cut the long-term deficit and raise the nation's $14.3 trillion debt ceiling. In April, Standard & Poor's put the U.S. government on notice that it risks losing its top credit rating if policymakers do not agree on a plan by 2013 to reduce budget deficits and the national debt. Moody's Investors Service in June said that it would put the U.S. government's "Aaa" rating under review for a downgrade unless there is progress on increasing the limit by mid-July. August 2 is the "hard deadline" on which the United States will no longer be able to meet all of its debt obligations, according to President Barack Obama.


Euro gets boost from expectations of ECB rate hikeThe euro hit its highest level in nearly three weeks on bets that the European Central Bank will raise interest rates next week to curb inflation. ECB President Jean-Claude Trichet signaled that officials are determined to raise borrowing costs next week with risks to price stability on the upside. "We are in a state of strong vigilance, and we stand ready to act in a firm and timely manner to avoid that recent price developments give rise to broad-based inflationary pressures over the medium term," Trichet said this week.


Manufacturing slows globally, rises unexpectedly in United StatesManufacturing slowed globally as weakening U.S. growth and Europe's debt crisis damped demand for goods. China's factory index fell to the lowest level since 2009, and in the 17-nation euro area, the gauge dropped to an 18-month low. German manufacturing expanded at the weakest pace in 17 months. Manufacturing increased at the slowest pace in nine months in India, and contracted in Italy, Ireland, Spain, and Greece. On Friday, however, the Institute for Supply Management reported that U.S. manufacturing growth unexpectedly picked up in June.


Italy passes budget cuts in hopes of avoiding debt contagionThe Italian cabinet passed Prime Minister Silvio Berlusconi's proposal of €47 billion in deficit- cutting measures intended to balance the budget by 2014. The cuts are an effort to shield Italy from the debt-crisis contagion. Italy still faces a possible downgrade according to an e-mail from Standard & Poor's on Friday.


Japan's Tankan survey shows corporate sentiment fell sharply after earthquake and tsunamiThe Bank of Japan's quarterly Tankan survey showed that Japanese corporate sentiment fell sharply in the aftermath of the March 11 earthquake; the closely watched index for large manufacturers dropped for the first time in over a year. However, large Japanese companies said they will boost capital spending 4.2% in fiscal 2011. A separate report showed Japan's industrial production rose at the fastest pace in more than 50 years led by carmakers as they restored plant operations after the tsunami and earthquake.


IMF names Lagarde to managing director postThe International Monetary Fund named French Finance Minister Christine Lagarde as its next managing director. Lagarde is the first woman and the eleventh consecutive European to lead the institution considered to be the world's emergency lender. She takes the reins after the resignation of Dominique Strauss-Kahn, who was released from house arrest on Friday as the sexual assault case against him began to unravel.


U.S. home prices slow pace of declineU.S. home prices slowed their pace of decline in April. Prices rose 0.7% in April compared with March according to the Standard & Poor's Case-Shiller 20-city home price indices. Foreclosures and bruised consumer confidence continue to weigh on the housing market however.


Corn prices dropCorn fell more than 10% in two days this week after the U.S. Department of Agriculture said U.S. farmers planted a bigger crop than analysts were expecting.

U.S. and global corporate news

Toyota and Honda sales fall in JapanToyota Motor and Honda Motor led a 23% drop in domestic vehicle sales, a tenth straight monthly decline, after the nation's earthquake disrupted production. Toyota's deliveries dropped 28% from a year earlier. Sales at Honda dropped 32%.


BJ's Wholesale soldBJ's Wholesale Club agreed to be bought by Leonard Green & Partners and CVC Capital Partners for about $2.8 billion. The transaction, which is subject to shareholder approval, is expected to close in the fourth quarter.


BYD jumps 41% in trading debutBYD, the Chinese automaker partially owned by investor Warren Buffett's Berkshire Hathaway, jumped 41% in its trading debut in Shenzen.


NewsCorp sells MyspaceThe Wall Street Journal reported that NewsCorp sold music and entertainment Web site Myspace to Specific Media, a little-known ad-targeting firm, for $35 million in cash and stock. The one-time popular Internet site was acquired six years ago for $580 million.

The week ahead

• European Union finance ministers holds a conference call on Saturday, July 2, to free up a fifth installment of aid to Greece from last year's bailout.
• Eurostat releases its producer price index for the eurozone on Monday, July 4.
• The U.S. Census Bureau reports on new orders from U.S. manufacturers on Tuesday, July 5.
• ECB policymakers meet Thursday, July 7, to vote on whether to raise the eurozone's main refinancing rate.
• Japan reports its trade balance on Thursday, July 7.

Stay focused and diversified
In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk.

Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.


Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

--see disclaimer below--

Week in Review: Markets volatile as Greece seeks aid, data show sluggish recovery

Global economic news

EU leaders promise aid to GreeceEuropean Union leaders promised to help Greece avoid a debt default as long as Greek Prime Minister George Papandreou pushes through a package of budget cuts next week. Leaders pledged to do whatever it takes to stabilize the eurozone economy. Greece has been in talks with European and international officials over €5.5 billion ($7.9 billion) in austerity measures as a necessary step to receiving its next quarterly disbursement on its existing loan as well as securing a second aid package. Greece will now have to get €78 billion of austerity measures through parliament.

U.S. Federal Reserve Board lowers growth forecastThe U.S. Federal Reserve Board lowered its forecasts for economic growth and employment in 2011 and 2012. The Fed now projects economic growth of 2.7% to 2.9% in 2011, down from 3.1% to 3.3%. It currently predicts an unemployment rate of 8.6% to 8.9% in the final quarter of this year, compared with a rate of 8.4% to 8.7% projected in April. However, the Fed noted that several factors holding back growth are temporary, including the impact of higher energy prices and disruptions to manufacturing caused by Japan’s earthquake.


Japan posts near-record trade deficitJapan recorded its second-largest trade deficit ever in May, as the nation continued to feel the aftereffects of its March earthquake and tsunami and subsequent disruption to exports. Higher fuel costs caused the price of imports to rise. Despite Japan’s recent struggles, many analysts expect the economy to resume growth in the July-to-September quarter, because industrial output has started to show signs of improvement.


Italian banks trading haltedTrading in Italian banks was suspended Friday after a sharp drop in stock prices. It is rumored that several Italian banks could fail a Europe-wide stress test in July. Moody’s Investors Service also warned that some Italian banks face possible debt rating downgrades.


U.S. durable goods reboundA 1.9% rebound in orders for long-lasting manufactured goods in May, reported by the U.S. Department of Commerce, gave hope that recent economic weakness would turn out to be temporary. Durable goods orders had fallen 2.7% in April after the March 11 earthquake and tsunami in Japan had caused disruptions in the supply of automobile and electronics components.



U.S. first-quarter gross domestic product revised up to 1.9%The U.S. economy grew slightly faster in the first quarter of 2011 than had been previously estimated. The Commerce Department revised its GDP growth figure to an inflation-adjusted annualized rate of 1.9% from its previous estimate of 1.8%.


U.S. home sales fall furtherThe National Association of Realtors reported that both existing and new home sales slowed in May. Sales of previously occupied homes in the United States fell 3.8% from April to their lowest level in six months. Purchases of new U.S. houses fell 2.1% from April, according to the Commerce Department. However, preliminary figures showed a jump in contract signings, a trend that points to a possible pickup in future sales.


U.S. jobless claims upInitial claims for unemployment benefits by U.S. workers rose by 9,000 to a seasonally adjusted 429,000 in the week ended June 18. The four-week moving average of new claims remained unchanged from the previous week’s revised figure of 426,250.


U.S. consumer confidence dropsU.S. consumer confidence fell in the period ended June 19 for the first time in five weeks, according to the Bloomberg Consumer Comfort Index, which dropped to -44.9 from -44.0 a week earlier. A high unemployment rate, higher food costs, and lower home values all contributed.


Eurozone consumer confidence slipsConsumers in the 17 countries that use the euro were slightly less confident in June, according to an early estimate from the European Commission’s monthly survey. The measure of confidence slipped to -10.0 from -9.9 in May. Both readings were better than April’s -11.9.


Eurozone economies contract overallGermany and France were the only eurozone nations in which private-sector activity grew in June. Most of the remaining 15 nations had economic contractions for the first time since November 2009. Output by both manufacturing and services firms slowed, sending the Markit eurozone Purchasing Managers’ Composite Index down to 53.6 in June from 55.8 in May.


German business confidence rises; economic expectations fallGerman business confidence improved in June, its first move upward since February, according to German research institute Ifo. Business confidence reached 114.5, up from 114.2 in May. Another report showed economic expectations fell much more than expected in June. The Center for European Economic Research, ZEW’s widely watched index fell to -9.0 in June from a revised 3.1 in May. A decline to -4.1 had been forecast.

Global corporate news

FedEx posts sharply better profit, issues positive forecastFedEx reported a 33% growth in its quarterly profit and forecast annual 2012 earnings above Wall Street expectations. Because of the world’s largest air-cargo carrier’s extensive reach, it is seen as a bellwether of global trade. While acknowledging the short-term impact of higher oil prices, poor weather, and Japan’s earthquake, FedEx forecasts a 3% rise in U.S. gross domestic product in 2012, after 2.5% growth in 2011, and a 4.3% rise in U.S. industrial production in 2012 after a 4.2% increase in 2011.


Oracle posts strong profits, but softness in hardwareTechnology giant Oracle posted a 36% rise in profits and a 13% growth in revenue for its fiscal fourth quarter. However, declining hardware product sales — a new area for Oracle as a result of its Sun Microsystems acquisition last year — gave investors cause for concern. Meanwhile, Oracle’s traditional software business thrived, with new sales up 19%.


Lennar earnings down 65%Homebuilder Lennar reported a 65% decrease in its second-quarter profit, exceeding very low expectations, as oversupply and foreclosures weighed on home prices and sales. Lennar’s overall revenue fell by 6.1%, and its revenue from home sales was off by 6.5%.


Kroger profit higherSupermarket chain Kroger posted a 16% increase in its fiscal first-quarter earnings, surpassing estimates, as the company benefited from cost controls and sales growth. Kroger increased sales 11% on low prices and a strategy of building customer loyalty.


Supreme Court sides with Wal-Mart on lawsuitThe Supreme Court threw out an enormous employment-discrimination lawsuit against Wal-Mart Stores, ruling that 1.6 million female alleged victims had too little in common to form a single class of plaintiffs. The decision on the largest class-action lawsuit in U.S. history is expected to affect other employment class-action suits.

The week ahead

• On Monday, June 27, the U.S. Department of Labor releases the core Personal Consumption Expenditures prices data for May.
• On Monday, June 27, Nike releases its quarterly earnings report.
• On Tuesday, June 28, the Conference Board releases the June Consumer Confidence report.
• On Wednesday, June 29, General Mills and Monsanto release their quarterly earnings reports.
• On Thursday, June 30, the U.S. Labor Department releases weekly data on initial jobless claims.
• On Friday, July 1, the European Union, the United Kingdom, and Germany release data on their PMI Manufacturing Indexes.

Stay focused and diversified

In any market environment, we strongly believe that investors should stay diversified across a variety of asset classes. By working closely with your financial advisor, you can help ensure that your portfolio is properly diversified and that your financial plan supports your long-term goals, time horizon, and tolerance for risk. Diversification does not guarantee a profit or protect against loss.

The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell, or an indication of trading intent on behalf of any MFS product.

Securities discussed may or may not be holdings in any of the MFS funds. For a complete list of holdings for any MFS portfolio, please see the most recent annual, semiannual, or quarterly report. Full holdings are also available on the individual Fund Profile tab in the Products and Performance section of mfs.com.


Past performance is no guarantee of future results.

Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News; Financial Times; Forbes.com; CNNMoney.com; msnbc.com.

--see disclaimer below--