Week in Review: Market activity light as investors prepare for holidays and set sights on 2011

Global economic news

U.S. economy sees uptick as GDP revised slightly higher
The U.S. gross domestic product (GDP) grew at an annual pace of 2.6% in the third quarter, according to the U.S. Department of Commerce. GDP, the value of all goods and services produced, is the broadest measure of a country's economic activity. While the revised third-quarter GDP figure is slightly higher than the initial reading of 2.5%, it falls below the 2.7% level projected by many economists. The economy grew at a 1.7% annual rate in the second quarter.


Wave of credit downgrades threaten eurozone
The European sovereign debt crisis was on the minds of investors and market watchers around the world as Moody's Investors Service warned that it may lower Portugal's credit rating by as much as two notches. The warning came less than a week after the agency said it may downgrade its rating on Spanish and Greek government debt. On December 17, Moody's slashed Ireland's credit rating five levels to "Baa1" from "Aa2," leaving the country just above speculative grade or junk status. France is also at risk of losing its top "AAA" rating, and Belgium is facing a possible cut. Further credit rating downgrades could make it more costly for eurozone periphery nations to borrow in capital markets.


Existing home sales edge 5.6% higher in November
The National Association of Realtors said that sales of previously occupied homes in the United States increased to a 4.68 million annual rate in November, up 5.6% from October's 4.43 million. It was the third increase in sales of existing U.S. homes in the past four months.


Gas, oil prices up
Increased demand for petroleum has resulted in a 4% jump in gasoline prices since last month while crude oil prices rose above $90 per barrel for the first time since October 2008.


ECB to lend European banks $197 billion
The European Central Bank agreed to meet the liquidity needs of eurozone banks by lending them 149.5 billion euros ($196.8 billion USD) over a period of three months. While the central bank decided against giving 6- and 12-month loans, President Jean-Claude Trichet said that it will keep offering banks as much cash as needed through the first quarter of 2011 to help restore lending in the region.


U.S. initial jobless claims drop again
The U.S. Department of Labor reported that the number of Americans filing new unemployment claims decreased to 420,000 in the week ended December 18. The latest number of filings represents 3,000 fewer claims than the previous week's total.


Americans using less of their income to pay down debt
U.S. household financial obligations as a share of after-tax income fell to 16.78% in the third quarter from 16.97% the previous quarter. The drop indicates that Americans are allocating a smaller portion of their paychecks to paying off personal debt.


Airlines set to record biggest profits in over 10 years
The U.S. Department of Transportation reported that operating profits for airlines in the United States surpassed $7.1 billion in the first nine months of 2010. The figure exceeds the industry's full-year profit figures going back to at least 1999 when airlines reported profits of $6.89 billion for a full 12 months. This year's strong results are due in part to airfares, which are 13% higher than last year. New fees, including baggage fees, have also led to higher profits for the industry. According to the Bureau of Transportation Statistics, the industry collected $2.1 billion in fees during the third quarter alone. The airline industry lost more than $5.5 billion in 2008 at the height of the global recession.

Global corporate news

Global M&A activity jumps 16% in 2010
Deals in emerging markets helped spur a 16% increase in global mergers and acquisitions activity this year. According to preliminary data from Mergermarket, firms in developing countries closed 2,570 transactions worth a total $502.6 billion in the year to date. This figure represents a 42.9% increase over last year's $351.8 billion.

The year's two biggest deals were America Movil's $28.1 billion takeover of Carso Global Telecom and GDF Suez Energy International's $27.3 billion union with International Power. As more companies are seeking ways to spend their significant cash piles outside of their home markets, many industry analysts expect to see a continued upswing in M&A activity in emerging markets in 2011.


Other mergers and acquisitions news
Russian potash fertilizer producers OAO Uralkali and OAO Silvinit announced a long-anticipated merger earlier in the week. Uralkali reported that it is buying a 20% stake in Silvinit for $1.4 billion. The union will create a company with a market capitalization of nearly $24 billion.

Canada's Toronto-Dominion Bank agreed to purchase Chrysler Financial, the auto lender owned by private equity firm Cerberus Capital Management, for $6.3 billion. As part of the deal, Cerberus will retain about $1 billion of non-auto assets. The deal will place TD Bank in the top-five North American auto lenders. Chrysler Financial is no longer affiliated with the automaker whose name it bears.


Earnings update


ConAgra Foods reported a drop in profit for its fiscal second quarter ended November 28. Profit fell 16%, dropping to $200.9 million from $239.7 million a year ago. Net sales increased 2% to $3.16 billion, exceeding analysts' projections.


Adobe recorded a profit of $268.9 million for its fiscal fourth quarter ended December 3, up from a year-earlier loss of $32 million. The maker of Photoshop and Illustrator design software cited strong product sales and subscription revenue as reasons for its strong performance.


Walgreens said its profit for the quarter ended November 30 was $580 million, up 19% from the $489 million profit the drugstore chain reported a year earlier.


Dillard's appears to be on the verge of a comeback following a strong third quarter. The department store chain posted net income of $14.4 million, up from $8 million a year ago. Dillard's, after nearly three years of financial troubles, seems to have turned things around by shuttering stores that did not report strong sales numbers, doing a better job tracking inventory, and buying higher quality products.

The week ahead

• Japan's CPI, industrial production figures, and unemployment rate released Monday, December 27
• S&P/Case-Shiller Home Price Indices for 20 U.S. cities released Tuesday, December 28
• France's GDP released Tuesday, December 28
• U.S Conference Board's Consumer Confidence Index released Tuesday, December 28
• Initial jobless claims figures for U.S. released Thursday, December 30
• Chicago Purchasing Managers Index released Thursday, December 30
• Italy's ISAE Manufacturing and Mining Survey released Thursday, December 30
• Cal-Maine Foods, Redbook earnings released

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.
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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: Markets trend slightly upward on signs of growth

U.S. economic news

U.S. Congress passes $800 billion tax cut
After much negotiation, Congress approved an $858 billion bill, with $801 billion in tax cuts and $57 billion for extended unemployment insurance. The bill had bipartisan support as both Democratic and Republican lawmakers sought to prevent the across-the-board tax increase that would have occurred with the expiration of Bush administration tax cuts set for December 31.

Fed reaffirms plan to buy bonds
The Fed restated its intention to buy $600 billion in government securities in the next half year in an ongoing effort to stimulate the U.S. economy, bring down high unemployment, and avert deflation.


U.S. retail sales rise again; economic growth revised upward
Retail sales rose for the fifth-straight month in the United States, according to the U.S. Department of Commerce, matching their highest level since November 2007, before the recession began. Retail sales increased by 0.8% in November, and the October sales figure was bumped up to 1.7% growth from a previously estimated 1.2% increase. The stronger-than-expected retail sales prompted Macroeconomic Advisers to boost its tracking forecast for fourth-quarter gross domestic product to 3.1% from 2.7%.

Eurozone's weakest economies struggle
Despite signals of eurozone optimism this week, negative developments focused on the struggling economies of Spain, Greece, and Ireland. Moody's Investors Service downgraded Ireland's debt by five levels, to Baa1 from Aa2, a drop that reflected that the country's staggering banking losses and vulnerability to further economic weakness. Moody's also announced that it would put Spain's Aa1 government bond ratings on review for a possible downgrade. Meanwhile, Greek workers staged a nationwide general strike in protest against government austerity measures. Transportation was almost brought to a standstill. Hundreds of flights were cancelled and ferry and rail services suspended. Government offices, courts, hospitals, and schools were also affected.

EU summit produces accord
At an economic summit, European Union leaders agreed to create a mechanism that would contain future debt crises through cross-border guarantees between member states. The agreement led to strengthening of the euro against 15 of its most-traded counterparts.

German business confidence soars
German business confidence rose to its highest level since 1991, with the Munich-based Ifo institute's business climate index hitting 109.9 in December, up from 109.3 in November. Germany's unemployment rate fell for the seventeenth straight month in November, reaching its lowest rate - 7.5% - since April 1992.

German investor confidence also rose in December, with the German ZEW expectations survey climbing for the second month in a row, supported by increasingly broad-based economic growth. Expectations in the survey rose to 4.3 from 1.8 in November.


European economic growth uneven
Industrial production across the 16-country Eurozone grew 0.7% in October, the most recent month reported, and 6.9% annually, according to Eurostat, the European Commission's economic statistics agency. Also, while employment contracted 0.7% in both Greece and Spain during the third quarter, it grew 0.3% in Germany and 0.2% in France over the same period.

India, China forge stronger ties
A high-profile visit to India by Chinese Premier Wen Jiabao and 400 business executives set the stage for $20 billion in announced business deals between China and India. The countries set a $100 billion target for bilateral trade by 2015. India-China trade is expected to exceed $60 billion this fiscal year, up from $42 billion for the last fiscal year.

Inflation high in both India and China
India's annual inflation rate eased in November but remained elevated at 7.48%, down from 8.58% the previous month. Meanwhile, China's consumer price index increased 5.1% in November from a year earlier. China's government said it would raise its inflation target for 2011 to 4% from 3% this year. Observers noted that this could be a sign of greater tolerance for inflation, which could mean less aggressive tightening going forward.


U.S. jobless claims down
The number of U.S. workers filing initial claims for unemployment insurance fell by 3,000 to 420,000 in the week ended December 11, the U.S. Department of Labor reported. The four-week average confirmed the positive trend, declining by 5,250 to 422,750, its lowest level since August 2, 2008.


U.S. inflation tame
The U.S. Consumer Price Index increased 0.1% in November from October. The core CPI, excluding food and energy costs, also rose 0.1%. For the 12 months ended in November, prices rose 1.1% overall and 0.8% for the core CPI. This indicates inflation is not an immediate concern for the Fed, which frees it to pursue more stimulative action.

Global economic news

FedEx raises earnings outlook, is optimistic about global economy
Despite an 18% decline in quarterly profit, FedEx raised its annual earnings forecast on optimism about global economic trends. The courier, the world's largest international package-shipping firm, is viewed as an economic bellwether. Its quarterly results were brought down by legal charges and restructuring costs, but its international air freight business had improved demand and pricing.

Oracle posts robust profits
Oracle's second-quarter earnings rose 28% on strength in the business-software giant's traditional software business and its new hardware line. The company attributed the robust results to strong revenue growth and disciplined business management.


National Semiconductor earnings soar
Sharply higher sales and improved profit margins led National Semiconductor to a 78% jump in second-quarter profit. However, the chip maker issued a lukewarm revenue outlook.


RIM's profit soars on Blackberry sales
Canadian Blackberry maker Research in Motion's quarterly earnings leapt 45% as the sales volume of the company's popular smart phones rose 40% from a year earlier in the most recent quarter. However, the company faces tough competition from Apple's iPhone and Google's Android platform.


Bank of Montreal, Canada's fourth-largest bank, said it will acquire Marshall & Isley, a Milwaukee, Wisconsin-based bank, in a $4.1 billion share swap that will double BMO's presence in the U.S.

The week ahead

• Third quarter U.S. GDP estimate released Wednesday, December 22
• Final figures for third quarter UK GDP released Wednesday, December 22
• U.S. durable goods orders for November due out Thursday, December 23
• University of Michigan Consumer Sentiment Index released Thursday, December 23
• Nike, Carnival, and Walgreen's earnings reports due

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: Bond prices slump; stocks wobble amid U.S. tax deal squabbling

U.S. economic news

Democrats push back against tax compromise plan
Democrats in the U.S. House of Representatives withheld support for President Obama's tax package on Thursday by agreeing not to vote on the newly negotiated tax package in its current form. A leading Republican said the deal, highlighted by extensions of Bush-era tax cuts for two years and long-term jobless benefits, is flawed because it fails to address fiscal austerity measures that will be needed to help reduce the mounting federal deficit. Despite the Democrats' nonbinding resolution, the tax measure moved closer to passage in the Senate.


Consumer credit jumps in October
The U.S. Federal Reserve Board reported that the level of consumer borrowing in the United States rose to $2.4 trillion in October, an increase of $3.4 billion from September. The increase, the most in more than two years, was largely the result of a $9 billion increase in nonrevolving credit, which includes categories such as car loans, to $1.6 trillion. Revolving credit, almost entirely credit card debt, dropped 8.4% for the month, meaning that credit card use has fallen for a record 26th straight month.


Jobless claims drop
The U.S. Department of Labor said that the number of Americans filing initial unemployment claims fell to 421,000 in the week ended December 4. The figure is a decrease of 17,000 from a revised 438,000 claims filed the previous week.

U.S. and global corporate news

Three retailers head into holiday season with strong earnings
Talbots reported that its profit for the fiscal third quarter ended October 30 increased to $17 million from $14.6 million on higher margins. Still, the retailer lowered its earnings forecast for the year, raising concerns about its turnaround plan. Despite cutting debt, buying out its largest shareholder, and revamping its clothing line, revenue in stores open at least one year fell 7.1% for the same period.


Neiman Marcus Group, operator of its namesake store and Bergdorf Goodman, said its profit rose to $25.7 million for the quarter ended October 30. The latest figure, more than triple the $8.5 million profit the company reported a year ago, could be an indication that sales of luxury goods are on the rebound.


Costco posted a profit of $312 million for its first quarter ended November 21, up 18% from $266 million a year earlier. Revenue increased 11% to $19.24 billion, while sales increased 11% to $18.82 billion.

Global economic news

Eurozone officials disagree over size of bailout fund
Eurozone finance ministers met this week to discuss a number of issues, including the rescue package for Ireland, the creation of a temporary bailout fund for other struggling economies, and the possible establishment of a debt agency to issue "e-bonds" in lieu of national debt. Officials are split on the need to increase the size of any bailout fund as German Chancellor Angela Merkel rejected calls from Belgium and central bankers to boost the European Union's 750 billion euro emergency fund or begin joint bond sales to save countries such as Portugal and Spain.


Ireland's credit rating cut three levels
Ireland's credit rating was lowered to "BBB+" from "A+" by Fitch Ratings. It is the second downgrade of the country by Fitch in two months. Ireland agreed to an 85 billion euro bailout from European governments and the International Monetary Fund on November 28.


RBA, BOE hold rates steady
Australia's central bank voted this week to keep its benchmark interest rate unchanged at 4.75%. The Reserve Bank of Australia (RBA) said it expects inflation to remain contained over the "next few quarters." The Bank of England's Monetary Policy Committee also left its key interest rate unchanged at its all-time low rate of 0.5%.

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


--see disclaimer below--

Market Week: December 6, 2010

The Markets Domestic equities managed to shrug off Friday's disappointing unemployment figure, buoyed by back-to-back triple-digit midweek gains. However, bond prices took a hit as the 10-year Treasury yield returned to last summer's levels. Investment Company Institute data showed that investors pulled money out of municipal bond funds for the third week in a row, as they have been doing with domestic equity mutual funds since May.

Market/Index 2009 Close Prior Week As of 12/3 Week Change YTD Change DJIA 10428.05 11092.00 11382.09 2.62% 9.15% NASDAQ 2269.15 2534.56 2591.46 2.24% 14.20% S&P 500 1115.10 1189.40 1224.71 2.97% 9.83% Russell 2000 625.39 732.73 756.42 3.23% 20.95% Global Dow 1984.48 1978.32 2039.21 3.08% 2.76% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.85% 2.87% 3.03% 16 bps -82 bps Last Week's Headlines After idling at 9.6% for the previous three months, unemployment rose to 9.8% in November, while nonfarm payrolls remained static. Despite the onset of holiday shopping, retail businesses had job losses, though there were gains in temporary help and healthcare. People unemployed for more than 27 weeks represented almost 42% of the 15 million people without jobs. The manufacturing sector in the U.S. expanded in November for the 15th straight month. The 56.6 reading on the Institute for Supply Management's manufacturing index was the second fastest rate of growth in the last six months. The ISM's November reading on the services sector also increased slightly, with retail trade leading the way. European leaders said they would continue to buy bonds to help support troubled sovereign debt there, and the head of the European Central Bank assured investors that his organization will take whatever steps are necessary to protect the euro. Preliminary indications from post-Thanksgiving shopping were strong, according to the National Retail Federation, which reported Black Friday sales that were higher than the previous year and an increased volume of shoppers. The bipartisan National Commission on Fiscal Responsibility and Reform failed to muster enough votes to send its proposals for cutting the national deficit to Congress. Eye on the Week Ahead With few economic data releases scheduled for the week, eyes will be on Washington for any sign of a decision on tax cut extensions, and on Irish leaders who will vote on a new budget needed to implement the country's recent bailout. Key dates and data releases: International trade (12/10). 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: Eurozone debt crisis, slow U.S. labor recovery rock global financial markets

U.S. economic news

Employers add fewer jobs than expected
The U.S. economy added fewer jobs than expected in November, and the unemployment rate unexpectedly increased. Nonfarm payrolls increased 39,000, less than expected, and the jobless rate rose to 9.8%, the highest since April. Hours worked and earnings stagnated. The numbers underline the continued weakness in the labor market, whose turnaround is seen as key to economic recovery. This week the law that extended unemployment benefits to as long as 99 weeks expired after Democratic and Republican senators blocked rival attempts to renew it. That means that extended jobless benefits affecting about two million people are set to expire at the end of the year.

Other data suggest recovery gathering momentum
Despite the discouraging signs from the labor market, other reports showed momentum this week. Retailers have reported robust November sales as consumers kept spending despite high unemployment. U.S. manufacturing expanded for the sixteenth month in a row in November, according to the Institute for Supply Management. Factory output grew as consumers and businesses spent more on autos, computers, and other goods. Also last month, consumer confidence rose, according to the Consumer Confidence Index^®. The measure rose to 54.1 in November from 49.9 in October, reaching its highest level in five months

Housing prices still falling
The Standard & Poor's/Case-Shiller index of home values showed that home prices are falling faster in the nation's largest cities than in the rest of the country. The home-price index fell 0.7% in September from August. Eighteen of the 20 cities recorded monthly price declines.

House agrees to extend tax cuts
The U.S. House of Representatives approved legislation this week that would extend the current tax rates on income up to $250,000. They also agreed to allow taxes on higher earnings to increase. However, the legislation is expected to fail in the Senate.

U.S. and global corporate news

S&P puts several Portuguese banks on credit watch
Standard & Poor's said it has put several Portuguese banks on credit watch with negative implications after it did the same with Portugal's long-term rating earlier in the week. The banks put on watch include Banco Santander, Santander Totta, Banco Comercial Portugues, Banco Espirito Santo, Banco BPI and the state-owned Caixa Geral de Depositos. S&P said it believes "that Portugal's macroeconomic challenges and difficult external financing conditions will put pressure on the bank's operating environment, potentially weakening their creditworthiness."

Toll Brothers swings to profit
The luxury home builder Toll Brothers swung to a profit for the second quarter in a row. The builder was helped by a tax benefit and fewer writedowns. At the same time revenues fell less than expected.

Global economic news

ECB extends liquidity measures
As the crisis in Ireland rocked global markets, the European Central Bank opted to extend its special liquidity measures, abandoning plans to wind down emergency support for banks and government debt markets. ECB President Jean-Claude Trichet said the ECB would continue to offer unlimited liquidity to banks for as long as necessary. He added that the bank would continue its special bond purchasing program to support the weakened eurozone debt markets.

Eurozone and U.K. economies show slow recovery
Meanwhile, reports this week showed that the eurozone economy slowed sharply in the third quarter as business investment ground to a halt. The slowing investment suggests companies are still too uncertain about the prospects of recovery to commit more capital. In the United Kingdom, weak confidence and jobs cuts weighed down the dominant services sector, which expanded at a marginally slower pace in November.

India posts 8.9% growth for quarter
India posted an 8.9% year-over-year increase for the quarter ended September 30 as the country's economic expansion continued.


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

December 2010 Schnack Financial Newsletter

"Hi,

The opening paragraph of the report of the National Commission on Fiscal Responsibility and Reform reads as follows: Throughout our nation’s history, Americans have found the courage to do right by our children’s future. Deep down, every American knows we face a moment of truth once again. We cannot play games or put off hard choices any longer. Without regard to party, we have a patriotic duty to keep the promise of America to give our children and grandchildren a better life.

Every American should read it."
FULL REPORT


--Randy

Financial Tips for Twenty-Somethings You're on your own now. You've finished school, are working your first real job, and maybe you're even buying a home or getting married. Here are a few tips to help you start managing your finances. More Details

Cash-In Refinancing: Can You Benefit from This Growing Trend? Mortgage interest rates are at or near historic lows, but stricter lending standards and declining home values have made it harder to refinance. Enter cash-in refinancing. More Details

Fixed Annuities vs. CDs: Is One Better Than the Other? While some features are similar, fixed annuities and bank certificates of deposit (CDs) also have characteristics that differ. What works for you may depend on which of these factors best fits your financial situation and investment objectives. More Details

Can I roll over my traditional 401(k) plan distribution to a Roth IRA? You can roll most traditional 401(k) plan distributions to a Roth IRA. These are treated as taxable conversions. More Details Can I roll over my Roth 401(k) plan distribution to a Roth IRA? You can roll your Roth 401(k) plan distribution over to a Roth IRA. Your rollover will be tax free regardless of whether your distribution from the Roth 401(k) plan is qualified or nonqualified. More Details

Week in Review: World markets wary as eurozone watch intensifies

U.S. economic news

Economy grows 2.5% in third quarter
U.S. gross domestic product (GDP), the value of all goods and services produced in the country, rose at an annual seasonally adjusted rate of 2.5% during the period July through September. The figure is significantly higher than the 2.0% expansion rate reported by the U.S. Department of Commerce in its initial report released on October 29. The government cited stronger exports and increased consumer spending as reasons for the improved GDP. Consumer spending rose 0.4% in October after a 0.3% gain in September.


E-commerce on the rise, accounts for 4.2% of total retail sales
The Commerce Department said e-commerce sales hit $41.5 billion in the third quarter, up 15.1% from the fourth quarter of 2007 at the beginning of the recession. Retail sales excluding Internet sales were down 4.6% for the same time period. According to projections from a number of leading economists, the nation's retailers are cautiously optimistic about a strong holiday shopping season, which traditionally kicks off today, Black Friday. As many as 138 million shoppers are expected to hit stores this weekend.


New and existing home sales fall in October
Sales of new homes unexpectedly fell in October, despite near record-low borrowing costs. New home purchases decreased 8.1% to a 283,000 annual rate, according to figures from the Commerce Department. One group of economists surveyed had projected an increase to a 312,000 home annual pace. The National Association of Realtors said that sales of previously owned homes dipped 2.2% to a 4.43 million annual rate in October from 4.53 million units in September. The drop was larger than was projected by economists, who said sales would decrease to a 4.48 million home pace. Reasons cited for the sales declines include foreclosure moratoriums and a lack of credit in the U.S. housing market.


Initial jobless claims fall sharply
The U.S. Department of Labor said that new unemployment claims fell by 34,000 to a seasonally adjusted 407,000 in the week ending November 20. The drop means that the number of Americans filing for new unemployment benefits was as its lowest level since June 2008. Wall Street analysts had projected a much smaller drop in new claims.

U.S. and global corporate news

Campbell Soup reported its sales slipped 1.4% in the fiscal first quarter ended October 31, 2010, while net income fell 8.2% to $279 million from $304 million a year ago. Heavy promotional spending in the quarter by the world's biggest soup maker failed to spur sales. Campbell's, one of the first large U.S. packaged food makers to focus heavily on reducing salt across its product line, believes it has addressed the sodium issue and is turning its attention to creating better-tasting soups and more varieties.

Cost cuts helped Hormel Foods post a profit of $121.1 million for the fiscal fourth quarter ended October 31, up 17% from $103.9 million one year ago. Hormel, the maker of Spam and Dinty Moore stews, set its earnings outlook for the upcoming year at $3.10 to $3.20 per share. These figures exceed the average analyst estimate of $3.05 per share.


Del Monte Foods agreed on Thursday to a $4 billion takeover by an investor group led by Kohlberg Kravis Roberts & Co. KKR, Vestar Capital Partners, and Centerview Partners bid $19 per share in cash for the maker of pet foods and canned vegetables. If the deal goes through, it would be one of the year's largest private-equity buyouts.

Global economic news

Ireland gets EU, IMF funds; European leaders disagree over eurozone bailout
Although Ireland has enough money to pay its debts until the middle of 2011, it requested a rescue package from the European Union and the International Monetary Fund amid concerns that the cost of bailing out its banks would overwhelm government finances. EU finance ministers accepted Ireland's request for a three-year package of loans totaling approximately 85 billion euros. Of the total, 35 billion euros will be allocated for bailing out ailing banks and 50 billion euros will help finance the Irish government. As part of the bailout, the government said it will cut spending by nearly 20% and raise income taxes to narrow the country's budget deficit to 3% of gross domestic product by the end of 2014.

The EU commission announced a proposal on Wednesday to double the size of Europe's 440 billion euros bailout fund for eurozone governments. The proposal was quickly dismissed by Germany. The heightened tension in the region comes as investors and world leaders fear the eurozone debt crisis could expand to Portugal and Spain.


Eurozone's private sector grows despite debt problems
Financial information services company Markit said that the preliminary composite purchasing managers' index for the eurozone rose to 55.4 in November from 53.8 in October. Growth in the region's private sector was boosted by strong expansion in France and Germany. The increase surpassed projections of economists, who forecast the composite measure would increase to 53.9.

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.

Standard & Poor's 500 Stock Index measures the broad U.S. stock market.
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: Markets await Irish aid package

U.S. economic news

Inflation at lowest level since 1957
Two key inflation gauges showed muted price movements in October. The U.S. Department of Labor reported that the seasonally-adjusted consumer price index (CPI) rose 0.2% from September and 1.2% from October 2009. The core inflation rate excluding food and energy prices was unchanged from September and rose 0.6% from a year earlier.

Meanwhile, wholesale prices remained under control. The Producer Price Index (PPI), which measures how much manufacturers pay for goods and services, rose a seasonally adjusted 0.4% for finished goods in October from September, and 4.3% from a year ago. However, the core index, without food and energy prices included, declined 0.6% last month, in its sharpest monthly drop in four years. The core index was up just 1.5% year over year.


Retail sales rise 1.2%
U.S. consumers appeared to be loosening their purse strings, as retail sales increased 1.2% in October, the fourth consecutive month of rising spending and the largest monthly increase since March. Retail sales risen to their highest level since August 2008.


Fed to require bank capital plans
All 19 banks that went through stress tests in early 2009 will have to submit capital plans to the Fed early next year to demonstrate their ability to withstand losses. This initiative is part of the Fed's efforts to bolster bank supervision in the wake of the financial crisis and make sure large banks are on solid financial ground.


U.S. mortgage delinquencies decline
The rate of U.S. mortgage delinquencies fell in the third quarter of 2010, though still remained quite high. According to the Mortgage Bankers Association, the delinquency rate on single-family homes fell to 9.13%, a drop of 0.72 percentage points. The percentage of loans in foreclosure proceedings fell to 4.39% from 4.57%.


U.S. jobless claims rise slightly
The number of U.S. workers filing first-time claims for unemployment insurance rose 2,000 to 439,000 in the week ended November 13, the U.S. Department of Labor reported. Meanwhile, the four-week moving average of initial claims fell 4,000 to 443,000, its lowest level since September 2008.

U.S. and global corporate news

GM revs up finances with IPO
In the second largest U.S. initial public offering ever, General Motors raised $15.8 billion through common shares in its offering, selling 478 million shares at $33 per share, a higher-than-expected price. Counting additional shares that underwriters may exercise their right to sell, the total common stock sale could reach $18.1 billion. GM also raised $4.35 billion in preferred shares as the automaker sought to re-establish its financial independence after being bailed out by the federal government last year.


Big box stores in the black
A number of high-profile large companies posted third-quarter profits. Wal-Mart's third-quarter earnings climbed 9.3% on strong international operations, but same-store sales in the U.S. fell for the sixth consecutive quarter, reflecting tight spending by low-income earners.


Home Depot's earnings jumped 21% as cost controls and share repurchases offset the impact of the weak U.S. economy. The home improvement retailer also boosted its profit expectations for the year. Competing firm Lowe's also reported rising profits, with earnings up 17% after reduced discounts and increased sales of private-label profits helped offset a shortfall in overall sales. In contrast to Home Depot, Lowe's reduced its full-year outlook.


Sears loss widens while Penney's profit soars
Sears Holdings' third-quarter loss grew as sales fell substantially and the retailer continued to lose business to rivals. Comparable-store sales at Sears' namesake stores declined by 8.2% while the company's Kmart stores comparable-store sales fell just 0.7%, leading to a small profit within the division. In contrast, J.C.Penney's third-quarter earnings rose 63% under improving sales conditions. However, the retailer's inventory rose 6.2% from a year ago, and its gross margin, which indicates profitability, fell slightly.

Global economic news

Irish economic rescue package imminent
The Irish government, despite its distaste for depending on foreign financing, indicated that it would accept an international bailout to rescue its troubled banking industry. Late in the week, the government was negotiating a loan package with the IMF and European Union. Details of the loan, reportedly in the tens of billions of euros, were still being finalized. The Central Bank of Ireland said Friday that largely technical discussions with international delegations would continue for days to come.


China acts to curb inflation
The Chinese government made two decisive moves to counter inflation this week, with China's State Council announcing Wednesday that it would limit price increases on a wide range of products, including grain, oil, sugar and cotton. On Friday, China increased bank reserve requirements for the second time in two weeks, essentially withdrawing cash from the banking system. Last week, official data showed China's consumer price index rose 4.4% year over year in October, its fastest pace in two years and above the targeted 3% inflation rate for 2010.


Spanish economy stalls; bond sales ease fears
Spain's economy continued to struggle in the third quarter, as its gross domestic product remained unchanged from the previous quarter and up just 0.3% from a year earlier, according to the country's National Statistics Institute. Sales of close to $5 billion (3.65 billion euros) of long-term bonds on Thursday paid higher yields than two months ago, resulting in a higher level of confidence in the country's weak economy and troubled banking sector.


Germany's economic indicators are positive
German economic expectations rose more than expected in November. A closely watched economic-expectations index increased to 1.8 points in November from -7.2 points in October. The increase followed six consecutive months of decline. Additionally, a Centre for European Economic Research survey of analysts and institutional investors jumped 8.9 points to 82.5 points.


Eurozone inflation rises
Inflation in the 16 countries that use the euro climbed at the fastest rate in almost two years in October. Eurostat reported that consumer prices rose by 0.4% from September to October, and by 1.9% from a year earlier. The core rate of inflation excluding the prices for food and energy stood at 1.1% in October.

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 tenuous as G-20 wraps up without firm recovery plan

U.S. economic news

Trade gap narrows more than expected
The U.S. trade gap fell 5.3% to $44 billion in September from $46.5 billion in August, according to the U.S. Department of Commerce. The trade deficit is $379.1 billion year to date, up 40% from the same period last year. U.S. exports were $154.1 billion in September, their highest level in over two years. Imports were $198.1 billion for the month. Exports were boosted by service-sector exports and a weak U.S. dollar.


New jobless claims drop to lowest level since July
The U.S. Department of Labor said that the number of first-time filers for unemployment benefits decreased 24,000 to 435,000 in the week ended November 6. The decline brings new jobless claims to their lowest level in four months. The better-than-expected weekly numbers follow last week's optimistic jobs report, which said 151,000 workers were added to nonfarm payrolls in October.


Federal commission proposes $4 trillion in deficit cuts
The federal government's 18-member fiscal commission released a preliminary report that recommends reducing the deficit by $4 trillion over the next 10 years. The report, which has drawn criticism from the political left and the right, calls for significant spending cuts beginning in 2012, including cuts in Social Security benefits, reductions in domestic and defense spending, and the elimination of popular tax breaks. The commission will make its formal recommendations to President Obama on December 1.

U.S. and global corporate news

Third-quarter earnings continued to climb, with nearly 75% of companies in the Standard & Poor's 500 Stock Index reporting profits that are up significantly from a year ago.


General Motors contributed to the quarter's overall positive earnings results by reporting a profit of $1.96 billion as revenue rose 20%. It was the automaker's third-straight quarterly profit and its best quarter since 1999. The latest results were a marked turnaround from the $1.2 billion loss the company posted a year ago. GM's earnings report was released ahead of next week's planned initial public offering - the first time the company is selling shares to the public since it emerged from bankruptcy in July 2009.


Macy's posted a profit of $10 million for the period ended October 30, compared with a prior-year loss of $35 million. The company has benefited from prior consolidations of its divisions, the introduction of several new brands, and a strategy to tailor its offerings to local markets. The turnaround for the department store operator could be a positive sign for retailers, as Macy's typically kicks off the earnings season for major retailers and is seen by many analysts as a barometer of consumer spending.


Cisco Systems reported solid quarterly results but issued a weak sales forecast for the second straight quarter. The computer network equipment maker projected its revenue will increase by less than half of what analysts had projected for its November through January quarter. That disappointing outlook triggered a selloff in technology companies on Thursday.

Global economic news

Tensions high, expectations low as G-20 summit convenes
World leaders met for the Group of 20 Summit in Seoul, South Korea, this week to debate international trade imbalances and develop plans to support a global recovery. Major topics discussed during the two-day summit included currency manipulation, trade gaps, and protectionism. The United States faced a number of setbacks throughout the meetings as President Obama was unable to secure a bilateral free trade agreement with South Korea. The United States was also the target of severe criticism from a number of countries, including China, Japan, Russia, Germany, and the eurozone following the Fed's controversial decision last week to buy $600 billion in U.S. Treasury securities over an eight-month period.


U.S. delegation faces roadblocks in Seoul, especially with China
The United States entered the trade gap discussions at a significant disadvantage. While the U.S. trade gap narrowed slightly to $44 billion in September, China announced a huge trade surplus, $27.2 billion in October, up a staggering 61% from September. The widening trade gap has only heightened tensions between the two countries. The United States was unsuccessful in pressuring China's President Hu Jintao on the importance of currency revaluation, in part because of the Fed's second round of quantitative easing. China believes the Fed's latest move will lead to continued depreciation of the U.S. dollar and an eventual creditor crisis. As a result, the state-backed Dagong Global Credit Rating Co. on Tuesday downgraded its credit rating for the United States to "A+" from "AA."

Leaders of the G-20 nations, despite failing to agree on definitive recovery steps, particularly on the U.S.-China currency dispute, outlined a number of macroeconomic policies and agreed to "refrain" from all-out currency warfare.


China inflation rate hits 25-month high
China's inflation rate jumped to 4.4% in October, according to a Beijing statistics bureau report. The increase was due largely to a 10.1% increase in food prices. The increase exceeded the country's official target rate of 3.0% and was a significant jump from September's 3.6% rate. Although inflation has so far been restricted to food, price increases could spread as funds from Beijing's economic stimulus measures and a surge in bank lending begin to impact the economy.

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.
Standard & Poor's 500 Stock Index measures the broad U.S. stock market.

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 rally after Fed announces it will pump $600 billion into U.S. economy

U.S. economic news

Fed details more quantitative easing plans
On Wednesday, the Fed announced that it would purchase an additional $600 billion of longer-term Treasury securities by June in a second round of quantitative easing. The central bank said it would also keep reinvesting principal payments from its securities holdings. Demand for Treasuries jumped on the news and pushed the yield of the two-year and five-year notes down to record lows.


Employment rises more than expected
Employment rose more than expected in October, bolstering optimism about the economic recovery. Payrolls climbed by 151,000 jobs, and the jobless rate held at 9.6%. The report also showed gains in hours worked and earnings. Average hourly earnings increased 1.7% in October from the same month last year. The numbers brought increased optimism that improvement in the labor market will boost household spending.


Data show uneven recovery
Other economic news from October continued to point to an uneven recovery. The Institute for Supply Management reported that manufacturing and service sector activity picked up. U.S. productivity exceeded expectations and rose at a 1.9% annual rate in the third quarter. U.S. retailers posted mixed results, with luxury apparel faring well.

U.S. and global corporate news

EPS top estimates at 77% of companies
Earnings per share have topped estimates at about 77% of the companies in the Standard & Poor's 500 Stock Index reporting since October 7, according to data compiled by Bloomberg. Net income has increased 32% for the group amid 9.8% growth in sales.


BNP posts 46% profit increase
BNP Paribas reported a 46% increase in third-quarter profits amid strong growth in its consumer banking networks.


American International Group posted a $2.4 billion net loss for the third quarter because of various restructuring charges totaling $4.5 billion. Its main insurance business, however, improved from a year ago.


Toyota Motor posted a lower-than-expected increase in fiscal second-quarter profit but raised its full-year outlook as operating income gains in Asia offset continued losses in Europe and Japan. Nissan Motor and
Honda Motor also raised their full-year earnings forecasts this week but warned that the yen's rapid rise against other currencies was an ongoing risk to the bottom line.

Global economic news

ECB, BOE, BOJ hold rates steady
The European Central Bank kept interest rates at a record low of 1% for the nineteenth month, and the Bank of England left its key rate at 0.5% and maintained its asset purchase program at £200 billion. The Bank of Japan kept interest rates at ultra low levels and finalized its plan to buy exchange-traded funds and real estate investment trusts in a ¥5 trillion asset program that it first announced last month.


Australia and India increase rates
Central banks in Australia and India raised rates to stem inflation pressures. China also signaled that an increase may be imminent.

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.

Standard & Poor's 500 Stock Index measures the broad U.S. stock market. It is not possible to invest directly in an index.


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

Small Business Jobs Act

Small Business Jobs Act

Week in Review: Strong earnings, job numbers unable to allay investor concerns

U.S. economic news

Fed may take more "measured approach" with additional economic stimulus
The U.S. Federal Reserve Board's long awaited quantitative easing policy will most likely be announced following its next policy meeting on November 3. The Wall Street Journal noted this week that the Fed is likely to buy "a few hundred billion" dollars in U.S. Treasury bonds over a period of "several months" to pressure interest rates and stimulate the economy. This amount is well below the $500 billion to $2 trillion figures that have been projected by some analysts and industry experts.


Jobless claims drop to three-month low
The U.S. Department of Labor reported this week that initial unemployment claims unexpectedly fell by 21,000 to 434,000 in the week ended October 23. This was the second weekly drop in the number of new unemployment applicants in the past two weeks. Some economists believe that the latest figures could be an indication that the job market is finally stabilizing.


New home sales climb in September
The U.S. Department of Commerce said that the number of new home sales in September grew 6.6% from August to a seasonally adjusted annual level of 307,000 units. The jump in sales is potentially good news for the battered housing market, which saw sales throughout most of the summer that were the slowest on record since 1963.


Consumer confidence edges up
According to several leading economists, concerns about the job market appear to be keeping U.S. consumer sentiment largely in check. The Conference Board's Consumer Confidence Index increased only slightly to 50.2 in October from a revised 48.6 in September. September's reading was the lowest since February and down sharply from 53.2 in August. A reading of 90 indicates a healthy economy.


U.S. and global corporate news


Exxon Mobil, the largest U.S. oil company by market value, reported third-quarter earnings of $7.35 billion, up from $4.73 billion a year earlier. Strong refining margins, higher commodity prices, and a 20% jump in oil production all contributed to this 55% jump in net income, surpassing analyst projections.


Ford Motor posted record third-quarter earnings gains of 70%, with net income rising to $1.7 billion from $997 million a year ago. The automaker cited a strong product line, momentum in North America, and continued success at Ford Credit as some of the reasons for the company's dramatic turnaround. It was the sixth consecutive quarterly profit for the only U.S. carmaker who avoided a bankruptcy filing last year. Ford's previous best third-quarter earnings were $1.1 billion in 1997.


ArcelorMittal, the world's largest steelmaker, said net profit for the three months ended September 30 was $1.35 billion compared with $910 million for the same period a year earlier. Despite a 48% increase in profits, the Luxembourg-based company cautioned that the remainder of 2010 will likely be difficult, and the firm forecasted lower prices and weak demand.


Procter & Gamble reported that its fiscal first-quarter earnings declined 6.8%, to $3.08 billion from $3.31 billion a year earlier, as higher commodity costs negatively impacted margins. Still, the latest profit figures for the world's largest consumer product company exceeded some analysts' estimates.

Global economic news

U.K.'s economy expands in third quarter
Britain's economy grew at a faster pace than projected during the third quarter, according to a preliminary estimate from the Office for National Statistics. Gross domestic product increased 0.8% between July and September from the second quarter. Most economists had projected growth of only 0.4% for the quarter, following the previous quarter's 1.2% growth rate. After the better-than-expected GDP figures were released, Standard & Poor's raised Britain's credit rating to stable from negative.


Bank of Japan revises growth forecast downward, holds interest rate steady
Japan's central bank said in its October outlook report that the country's economy will grow 2.1% in the year through March 2011 and 1.8% the following year. In July the bank had forecast growth of 2.6% and 1.9%, respectively. The bank, in a statement addressing its moderated forecast, cited declining demand in overseas markets such as the United States and China, the approaching end of government stimulus measures, and the strongly performing yen, which has risen to near historic levels against the dollar. In a separate move, the Bank of Japan voted to keep its key interest rate untouched at 0% to 0.1%.


German consumer confidence unchanged
GfK AG, the Nuremberg-based market research firm, said that its consumer sentiment index will remain at 4.9 in November, its highest level since May 2008. The figure is based on a survey of nearly 2,000 people. German unemployment declined for a fifteenth-straight month in October.


Switzerland consumer index falls to lowest level in six months
Switzerland's economic recovery may be stalling, at least according to one consumer indicator. UBS AG's index of consumption dropped to 1.7 in September from 1.95 in August. The latest figure is the lowest index reading since March. The consumer indicator is based on new car sales, retail sales, overnight hotel stays within the country by Swiss residents, consumer confidence, and UBS credit card transactions.

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 steady as corporate earnings continue to surprise to the upside

U.S. economic news

Beige book shows modest recovery
The U.S. Federal Reserve Board's "beige book" showed a modest pace for economic recovery. The report failed to quell speculation that policymakers will increase asset purchases to spur inflation and employment. Eight Federal Reserve banks reported some form of growth, according to the beige book survey, which is released two weeks before meetings of central bank policymakers.


Jobless claims fall
Initial unemployment claims fell 23,000 to 452,000 in the week ended October 16. While lower, the claims remain at a level that indicates businesses are doing little hiring.


Mortgage applications drop
The number of mortgage applications in the United States dropped by the most in four months. The drop was led by an 11% decline in refinancing, which fell as mortgage rates rose.

U.S. and global corporate news

Of the 129 companies in the Standard & Poor's 500 Stock Index that have reported results since October 7, 111 beat analysts' per-share earnings estimates, according to data compiled by Bloomberg. Analysts surveyed by Bloomberg predict 24% growth in third-quarter profits from a year earlier for S&P 500 companies.


Morgan Stanley's, Goldman Sachs' profits drop; Wells Fargo beats estimates
Morgan Stanley's third-quarter earnings fell 67% from a year earlier as a steep drop in trading volumes weighed on results at Wall Street's second-largest investment bank. Revenue in the firm's international securities unit dropped 42% from a year earlier.


Goldman Sachs Group reported its third-quarter net income fell 40% from a year earlier, and net revenue declinded 28%, hurt mostly by a steep downturn in fixed-income and stock trading.


Wells Fargo reported record third-quarter profits that beat most analysts' estimates as credit conditions improved. Results included a 13% increase from its community banking division.

Global economic news

China raises rates
To combat inflation, China unexpectedly raised interest rates for the first time since 2007 . China's move is part of an effort to dry up some of the liquidity made available to combat global recession.


U.K. government details spending cuts
The British government detailed sweeping spending cuts that are intended to help the country reduce its £155 billion budget deficit. Treasury chief George Osborne this week unveiled £81 billion in cuts over four years. It is hoped that by weaning the United Kingdom off robust public spending, lending costs can be kept low, giving a boost to the private sector.


German business confidence rises
German business confidence rose unexpectedly in October to the highest level in three and a half years. The positive sentiment suggests that growth may not slow as much as some economists had forecast. The Munich-based Ifo Institute said its business climate rose to 107.6 from 106.8 in September.

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 as 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 on 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; boston.com.