Market Week: April 25, 2011

The Markets Take that, S&P: Domestic equities rebounded from a downdraft that followed Standard & Poor's warning about U.S. debt, ending the holiday-shortened week with solid gains. Buoyed by some positive corporate earnings, the S&P 500 made another run at 1340 but remained in the trading range of roughly 1300-1340 that it's been in since early February. The Dow ended the week at its highest level in almost three years and took the lead from the small-cap Russell 2000 in the year-to-date performance sweepstakes. Treasury bonds also seemed to thumb their noses at the S&P warning. Ten-year Treasury yields ended the week basically flat; in fact, the Treasury had to set a minimum positive coupon rate for an auction of five-year Treasury Inflation-Protected Securities (TIPS), which had been trading in the secondary market with a negative yield.

Market/Index 2010 Close Prior Week As of 4/22 Week Change YTD Change DJIA 11577.51 12341.83 12505.99 1.33% 8.02% Nasdaq 2652.87 2764.65 2820.16 2.01% 6.31% S&P 500 1257.64 1319.68 1337.38 1.34% 6.34% Russell 2000 783.65 834.98 845.64 1.28% 7.91% Global Dow 2087.44 2177.52 2207.21 1.36% 5.74% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.30% 3.43% 3.42% -1 bps 12 bps Last Week's Headlines Standard & Poor's issued a negative long-term outlook on U.S. debt, saying the potential for a prolonged stalemate over how to deal with budget shortfalls increases the chance of a downgrade of the nation's AAA bond rating in the next two years unless the issues are addressed. Building permits were up 11.2% in March compared to February, and housing starts rose 7.2%, the Commerce Department said. However, both were still down more than 13% from last March. Sales of existing homes were up 3.7% in March, according to the National Association of Realtors®. While not stellar, the figure is an improvement over February's 8.9% decline. Gold hit a new record of $1,500 an ounce just two months after first reaching $1,400, while oil prices showed few signs of retreating. After rising for seven consecutive months, regional manufacturing tracked by the Philadelphia Federal Reserve Bank fell sharply in April. Though the 18.5% figure for the Philly Fed's manufacturing index still represented growth, it was a far cry from March's 43.4% increase. The Conference Board's index of leading economic indicators was up 0.4% in March. The most positive factors were the 10-year Treasury/Fed funds interest rate spread and increased housing permits, while consumer expectations were a drag on the index. Eye on the Week Ahead Some Nasdaq-listed stocks could see volatility in advance of the May 2 rebalancing of the stocks that comprise the Nasdaq 100 index. The announcement coming out of the Federal Open Market Committee meeting--the next-to-last before the scheduled demise of quantitative easing (QE2) at the end of June--will be scrutinized for any clues about possible policy shifts. Finally, the initial estimate for Q1 economic growth will be of interest. Key dates and data releases: new-home sales (4/25); home prices (4/26); durable goods orders, Federal Open Market Committee (FOMC) announcement (4/27); Q1 gross domestic product (GDP) initial estimate, pending home sales (4/28); personal income/spending (4/29). 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 steady as investors eye inflation, first-quarter earnings

Global economic news


U.S. cost of living rises for ninth month

The U.S. Consumer Price Index increased 0.5% for a second month. The rise was led by a 3.5% increase in energy costs, a 5.6% surge in gas prices, and a 0.8% gain in food costs. Excluding volatile food and energy prices, the core gauge rose 0.1%, less than forecast. It is the ninth month in a row that the U.S. cost of living has increased. Producer prices also continued their rise last month, gaining a seasonally adjusted 0.7%, as energy costs mounted. Underlying inflation pressures, as measured by the core index, gained a more-than-expected 0.3%. While faster than anticipated, that inflation level is still in line with the U.S. Federal Reserve Board's unofficial inflation target of 2.0%.

China's rapid growth continues

China's economy in the first quarter grew 9.7% from a year earlier, down from a 9.8% rate in the fourth quarter. Inflation accelerated to nearly a three-year high as the CPI rose in March by 5.4% from a year earlier, up from 4.9% in February. That was the fastest rise since July 2008. China's leaders have said that taming inflation is their top priority for the year.

Euro hits 15-month high amid rate hike expectations

The euro hit a 15-month high against the dollar this week amid expectations that the European Central Bank will raise rates to control inflation. This week, the European Union reported a record monthly increase in eurozone inflation that pushed the annualized rate for March to a 29-month high. Investor optimism that officials will succeed in containing the European debt crisis also supported the euro in spite of Ireland's downgrade and lingering worries of a Greek default.
Moody's cuts Irish debt rating

Moody's Investors Services cut Ireland's credit rating by two levels on Friday to the lowest investment grade and left the country's outlook at negative. That downgrade came only one day after Fitch Ratings affirmed its "BBB+" rating and removed the threat of downgrade. Ireland's government, like those in other peripheral eurozone countries, is struggling to lower its budget deficit and restore economic growth.
U.S. Congress passes budget deal, averting shutdown

The U.S. Congress gave its final approval to legislation that will cut government spending by $38.5 billion. The passage of the bill averted a government shutdown that had been slated for the end of day on Thursday.
U.S. data show economy still struggling

Economic data showed economic growth in the United States is still struggling to recover from the recession that ended in June 2009. New U.S. jobless claims rose by 27,000 to a seasonally adjusted 412,000 last week. Claims thus reached their highest level in two months. U.S. retail sales rose a weaker-than-expected 0.4% in March but, excluding gas sales, were up only 0.1%. Even so, on Friday, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose in April from a 16-month low as job gains helped Americans deal with rising fuel costs.
Singapore tightens policy

Singapore tightened monetary policy on Thursday as it reported a strong first quarter for the economy. Singapore's speedy growth should be a bellwether for other emerging economies in the region and comes on the back of strong economic data from China.
Global corporate news

Alcoa kicks off earnings season with profit reports

Aluminum maker Alcoa was the first blue-chip company to report first-quarter earnings this week. The company swung to profit in the first quarter because of improved sales and higher prices in most major markets.
Google's profits fall short of expectations

Google reported an 18% profit increase for the first quarter. Those earnings for the Internet bellwether fell short of forecasts amid a 54% surge in operating costs as the company tried to retain staff and expand beyond its core Internet search business.
Banks post profits

Bank of America's first-quarter profit fell 35%, and revenue dropped across the majority of its business lines. Even so, it was the first time in three quarters that the largest U.S. lender by assets reported a profit. Meanwhile JPMorgan's profit rose 67%, but the bank is still struggling to boost revenue amid sluggish loan growth and mounting mortgage costs.

Zipcar's IPO draws greater-than-expected demand

Zipcar, the Cambridge, Massachusetts-based car sharing company, raised $174.3 million in its initial public offering this week after increasing the shares. Its shares soared as much as 75% on its first day of trading. Zipcar was one of seven companies that launched initial public offerings this week.
The week ahead

Earnings season continues with reports throughout the week from names including Citigroup, Amazon, Intel, IBM, and Johnson & Johnson.

The U.S. census bureau releases reports on building permits and housing starts on Tuesday, April 19.

Markit releases its eurozone Purchasing Managers' Index on Tuesday, April 19.

The Mortgage Bankers' Association reports U.S. mortgage applications, and the National Association of Realtors releases U.S. existing home sales data on Wednesday, April 20.

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 calm as economic recovery offsets political uncertainties

Global economic news

U.S. budget battle showdown down to wireWith high stakes and credibility on the line, and facing a firm deadline of midnight Friday, Democrats and Republicans in the U.S. Congress kept negotiating the 2011 federal budget overnight Thursday into Friday morning. At issue: proposed spending cuts of $33 billion to $40 billion and political differences on various issues. At stake: shutting down all-but-essential government services, furloughing 800,000 federal employees, and cutting off paychecks to workers. Among many ripple effects: suspending government mortgage loan guarantees to lower-income families, closing national parks and leaving tourist industry workers without pay, and stopping government economic data collection. A 20-day government shutdown in late 1995 reportedly cut economic growth by a full percentage point in that quarter.


U.S. jobless claims shrink furtherThe number of new claims for unemployment benefits fell by 10,000 to 382,000 during the week ended April 2, marking the seventh decrease in 10 weeks. The four-week average fell by 5,750 to 389,500.


U.S. service sector growth easesThe U.S. nonmanufacturing sector grew in March, but at a slower pace than February, according to the Institute for Supply Management. The ISM nonmanufacturing purchasing managers’ index fell to 57.3 from 59.7 in February.


March retail sales strongAmerican consumers spent more freely in March, allowing retailers – from discounters to sellers of luxury brands -– to post strong sales figures. A group of 25 retailers tracked by Thomson Reuters posted a 1.7% rise in same-store sales in March. Costco reported a 13% rise in same-store sales, while Victoria Secret’s parent firm Limited Brands increased sales by 14%. Higher-end retailers Saks and Nordstrom also had robust results. Target, Kohl’s, and JC Penney were among the retail chains with declining same-store sales.


ECB raises interest ratesThe European Central Bank raised its benchmark interest rate on Thursday by 0.25 percentage points, as was widely anticipated. The ECB must walk a fine line, between controlling inflation, already at a 2.6% annual rate last month, and not creating obstacles to economic recovery for troubled eurozone member countries Greece, Ireland, and Portugal.



China raises interest rates for fourth time; inflation still highChina’s central bank raised interest rates for the fourth time in six months in its latest effort to tame inflation and stop the world’s fastest-growing economy from overheating. Consumer prices in China rose 4.9% in February while producer prices were 7.2% higher. Even with tighter controls in place, many economists cited in The New York Times see China’s economy growing 9% in 2011 with a 3% annual inflation rate.


Portuguese government to receive bailout packageThe Portuguese government is seeking financial assistance from the European Union as it strives to regain solid financial footing. A package worth €90 billion ($129 billion) is being worked on involving the European Commission, European Central Bank, and International Monetary Fund. It could take several weeks to work out an austerity program that would accompany the bailout. Portugal is the third nation in the eurozone, after Greece and Ireland, to ask for a bailout.


Portuguese debt downgrade led to rising yieldsPortugal’s debt rating continued to plummet and its government bond yields soared this week after Moody’s Investor Service downgraded Portugal’s long-term bonds by one level, to "Baa1" from "A3." Standard & Poor’s lowered its rating for Portuguese debt by three notches in two cuts in the last couple of weeks. The Portuguese government paid an average yield of 5.117% on six-month Treasury bills at an auction on Wednesday, compared with 2.984% at a March 2 auction. The average yield on 12-month Portuguese Treasury bills rose to 5.902%, from 4.441% on March 16.


Japanese business confidence fallsJapanese business sentiment is sagging after March’s devastating earthquake and tsunami, according to a quarterly survey released Monday by Japan’s central bank. Sentiment went from a reading of plus 3 before the earthquake to minus 2 afterwards. Economists believe overall industrial production slumped by 10% in March compared with February and the economic fallout could continue for months. Meanwhile, a so-called "economy watchers survey" that regularly questions hotel and restaurant workers, barbers, and tax drivers on economic sentiment fell to 27.7 in March from a reading of 48.4 in February.


Toyota, Japanese airlines to resume activityToyota said it would resume limited production from April 18 to 27 at its Japanese plants, where half of all its vehicles sold globally are built. Japan’s major airlines plan to restart flights to the Sendai airport, which had shut downs after the March 11 tsunami.


Eurozone business growth eases slightlyPrivate-sector growth in the eurozone eased a bit in March, according to a survey released this week by financial information firm Markit. Its eurozone composite output index eased to 57.6 from 58.2 in February. Any reading above 50 indicates economic growth.


German manufacturing orders, industrial production riseGerman manufacturing orders were 2.4% higher in February than January, as domestic and eurozone demand improved. This adds to a 3.1% increase in January orders. Meanwhile, German industrial production rose 1.6% in February from January and 14.8% from February 2010, another strong sign of economic recovery in Germany.

Global corporate news

TI chips in $6.5 billion for National SemiconductorTexas Instruments offered $6.5 billion in cash to buy its rival semiconductor chipmaker National Semiconductor. The bid represented a 78% premium over National’s stock price at the time of the bid, indicating how highly TI values National’s niche of making chips based on analog technology that are used in cell-phone radio signals and in the management of power consumption in computers.


Bombardier profits take offCanadian plane, train and snowmobile maker Bombardier rode a big pickup in business-jet orders to much higher fourth-quarter earnings. The Montreal-based firm almost tripled its net aerospace orders in its latest quarter while selling 10 times as many business aircraft as a year earlier, propelling its profits 82% higher than the year-earlier quarter.



Bite taken out of Apple’s size on Nasdaq 100Apple will have a large bite taken out of its weighting on the closely tracked Nasdaq 100 Index as part of a large and rare rebalancing of the index on May 2. After the rebalancing, Apple will make up 12% of the Nasdaq 100 versus 20% today. The rebalancing was partly driven by Apple’s meteoric rise, as the firm’s shares have grown more than fourfold in two years, causing Apple to have too great an impact on one of the most heavily traded stock indices. More than $330 billion of assets track the Nasdaq 100 through ETFs, mutual funds, options, and futures.


KB Home loss grows on weak home salesHome builder KB Home saw its first-quarter loss more than double from a year earlier on falling orders and a substantial decrease in revenue. Deliveries fell 28% and net orders were 32% lower. The year-over-year comparison was unfavorable partly because of the temporary boost provided by last year’s federal tax credit for homebuyers.


Toyota faces possible downgradeMoody’s Investor Service said it has put Toyota Motor and its subsidiaries on review for a possible downgrade as a result of the financial impact caused by the March 11 earthquake and tsunami and the resulting interruption of automobile and auto parts production. Moody’s is also closely watching the quake’s impact on Nissan Motor and Honda Motor.


Dish wins Blockbuster dealIn a dramatic marathon bankruptcy auction, Dish Network made a winning $320-million bid for the assets of Blockbuster, the movie-rental chain. Dish may use some Blockbuster stores to sell subscriptions to its service and is reportedly interested in some synergies from Blockbuster’s on-demand business in a potential effort to challenge Netflix.

The week ahead

• German CPI data released Tuesday, April 12
• JPMorgan Chase earnings due Wednesday, April 13
• Google earnings due Thursday, April 14
• Chinese GDP released Friday, April 15
• US CPI data released Friday, April 15
• Michigan consumer sentiment survey released Friday, April 15

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--

Estate Tax Changes under the 2010 Tax Relief Act

Estate Tax Changes under the 2010 Tax Relief Act

Market Week: April 4, 2011

The Markets An improving employment picture helped propel domestic equities higher once again despite yet another surge in oil prices. The Standard & Poor's 500 ended the week just shy of its recent high of 1343 in February, while the small-cap Russell 2000 is now at its highest level since July 2007. Meanwhile, the Nasdaq continued to lag the other indexes for the year.

Market/Index	2010 Close	Prior Week	As of 4/1	Week Change	YTD Change
DJIA	11577.51	12220.59	12376.72	1.28%	6.90%
Nasdaq	2652.87	2743.06	2789.60	1.70%	5.15%
S&P 500	1257.64	1313.80	1332.41	1.42%	5.95%
Russell 2000	783.65	823.85	846.77	2.78%	8.05%
Global Dow	2087.44	2166.09	2197.24	1.44%	5.26%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	3.30%	3.46%	3.46%	0 bps	16 bps

Last Week's Headlines

• Unemployment fell slightly in March, to 8.8%. It's the fourth straight decline from November's 9.8% and the lowest rate in two years. Nonfarm payrolls added 216,000 jobs during the month, mostly in business and professional services, health care, leisure/hospitality, and mining.
• Consumer spending was up once again in February, the Commerce Department said, rising more than twice as much as disposable personal incomes. Spending increased by 0.7% compared to January, while incomes rose 0.3%. The savings rate also fell slightly, from 6.1% of income to 5.8%.
• Construction spending fell 1.4% in February to the lowest level since October 1999, and was down 6.8% from the previous February.
• Manufacturing expansion continued in March, though at a slightly slower rate than the previous month. The Institute for Supply Management said 15 industries reported expansion, while only 2--wood products and primary metals--contracted.
• Home prices fell once again in January, when the S&P/Case-Shiller index of 20 leading metropolitan areas showed an average 1% decline from December. They are now down 3.1% from the previous January.
• Portuguese and Greek sovereign debt got additional downgrades from Standard & Poor's, putting Portugal's rating just above junk status. And Ireland agreed to provide an additional €24 billion in financial support to four major Irish banks so bondholders would not suffer losses.

Eye on the Week Ahead

Scheduled announcements by several foreign central banks, including those of Japan, Great Britain, and the European Union, will be watched for potential interest rate hikes. And unless an agreement can be reached in advance of yet another deadline for a potential government shutdown at week's end, Washington budget battles could be of interest.

Key dates and data releases: U.S. services sector, Federal Open Market Committee minutes (4/5); wholesale trade/inventories (4/8).


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: U.S. markets have strong first quarter amid global uncertainty

Global economic news

U.S. economy creates 216,000 jobs; unemployment rate dips to 8.8%In a sign that the U.S. labor market may be strengthening, the nation’s companies added 216,000 jobs in March, more than the 190,000 gain projected by a number of leading economists. The U.S. Department of Labor reported that the jobless rate fell again in March to a two-year low of 8.8%. The government’s jobs creation figure is even higher than the 201,000 jobs ADP Employer Services estimated were added to U.S. payrolls last month.

Home prices in U.S. drop again in JanuaryThe average price of single-family homes in 20 major U.S. metropolitan areas fell 3.1% from a year ago, according to the Standard & Poor’s/Case-Shiller Home Price Index. January is the sixth month in a row that U.S. home prices have fallen. Eighteen of the twenty markets covered by the survey recorded year-over-year price declines.

Consumer spending in U.S. rises in FebruaryU.S. consumer spending jumped 0.7% in February, the eighth-straight month of increases. In addition, the U.S. Department of Commerce said that personal incomes rose 0.3% for the month. Still, higher consumer prices absorbed a significant portion of the spending increase. After inflation, the increase was a more modest 0.3%.

U.S. Treasury recoups TARP fundsThe U.S. Department of the Treasury reported that money it loaned to banks during the financial crisis has been paid back. The federal bailout and its Troubled Asset Relief Program (TARP) is currently $6 billion in the black. Still, according to published reports, Treasury Secretary Timothy Geithner admitted that the federal government has “more work to do repairing the damage caused by the crisis and strengthening the recovery, but today is an important milestone in our efforts to recover taxpayer dollars as we continue winding down TARP.”

Confidence of U.S. consumers falls from three-year highThe Conference Board’s Consumer Confidence Index fell more than anticipated to 63.4 in March from a revised 72.0 in February. The sharp decline in confidence was driven by a number of global and economic factors, including rising gas and oil prices, the Japan crisis, and ongoing unrest in the Middle East.

America’s CEOs report encouraging outlook for sales, jobsThe Business Roundtable, an association of CEOs at the largest U.S. companies, reported in its first-quarter survey that nearly all its members expect sales to increase over the next six months. More than 60% expect additional investment in their businesses, and over half plan to hire more workers in the next two quarters.

U.S. businesses expand at a faster-than-expected paceThe Institute for Supply Management said its business barometer slipped to 70.6 in March from a reading of 71.2 in February. The index surpassed the 69.6 median projected by economists surveyed by Bloomberg News. An index reading greater than 50 indicates business expansion.

S&P downgrades Greece, PortugalRatings agency Standard & Poor’s lowered its rating of Greek sovereign debt two notches to “BB-” from “BB+,” dropping the country’s debt further into junk territory. S&P also cut Portugal’s senior debt rating by one notch to “BBB-” from “BBB.” The most recent cut follows last week’s two-notch downgrade of Portugal, which is now close to losing its investment-grade status for the first time. The outlook for both countries’ ratings remains negative, according to S&P. Greece has already accepted a three-year plan of emergency help from the European Union and International Monetary Fund. Standard & Poor’s expects Portugal to ask the IMF and the European Financial Stability Facility for a similar bailout package.

Irish banks need additional €24 billionA plan to nationalize Ireland’s banking sector may be imminent after a third round of stress tests revealed that the country’s banks will need an additional capital influx of €24 billion. The stress tests are a condition of the bailout the Irish government agreed to with the European Union and International Monetary Fund in November. With the latest bailout, the total cost of the bank rescue is approximately €70 billion. Ireland’s government also announced plans for an overhaul of the country’s banking system aimed at restoring investor confidence.

Eurozone confidence slips in MarchAn index of executive and consumer sentiment in the 17-nation euro region fell slightly to 107.3 in March from a revised 107.9 in February, the European Commission said. The drop in the confidence measure was larger than economists had forecast, as rising oil prices, Middle East unrest, and Japan’s earthquake resulted in rising pessimism for global growth prospects. February’s reading was the highest for the index since August 2007.

German unemployment falls to lowest level since 1992The number of Germans who were out of work dropped a seasonally adjusted 55,000 to 3.01 million, according to the Nuremberg-based Federal Labor Agency. That is the lowest level since June 1992. Germany’s unemployment rate fell to 7.1% in March from 7.3% the month before.

Global corporate news

Fujitsu says impact of Japan’s earthquake to be in “billions of yen”Following the country’s March 11 earthquake and tsunami, Japanese electronics conglomerate Fujitsu will have to revise its earnings forecasts for the fiscal year ending this month. Fujitsu’s president said the quake’s impact on earnings “will likely exceed several billions of yen.” Fujitsu, which has resumed most of its operations in the quake-hit region, is among several major Japanese companies affected by one of the largest natural disasters in the country’s history.

Harry & David to file for bankruptcy protectionHarry & David announced it is preparing to file for Chapter 11 bankruptcy protection. In a “prearranged” deal with creditors, the specialty gourmet fruit retailer will convert its bond debt to equity and seek to raise additional capital through a new stock sale. The company has been struggling as consumers cut back in the weak economy. In January, the 75-year-old retailer reported that revenue during the critical holiday quarter fell nearly 2%, and last month the company cut approximately 100 jobs.

EBay to buy GSI Commerce for $2.4 billionEBay agreed to purchase e-commerce company GSI Commerce for $2.4 billion, extending eBay’s reach into Internet retailing and intensifying the company’s rivalry with Amazon. GSI’s core business is providing e-commerce infrastructure — e-store technology, payment processing, fulfillment, marketing, and customer service — for more than 180 top brands and retailers.

GE to purchase stake in ConverteamGeneral Electric agreed to pay $3.2 billion in cash for a controlling stake inConverteam, the power conversion company. The acquisition of the French company, which serves a variety of industries including oil and gas companies, is the latest in a string of deals totaling $11 billion over the past six months aimed at expanding GE’s energy business. They have also acquired Dresser Inc., Wellstream Holdings, Lineage Power Holdings, and John Wood Group’s well support division.

Qihoo goes publicChinese Internet company Qihoo 360 went public this week on the New York Stock Exchange, and the company’s shares immediately doubled at the start of trading. The Internet software company, which sells antivirus software and security services, raised more than $175 million in its IPO. Qihoo also makes the second-most-used Internet browser in China, behind Microsoft’s Internet Explorer.

Galaxy reports profit dropGalaxy Entertainment Group said its net profit fell 22% last year in part because of one-time accounting and valuation adjustments. The casino operator, controlled by the family of tycoon Lui Che Woo, reported that net profit totaled HK$898.46 million last year, down from HK$1.15 billion in 2009. Galaxy is moving ahead with plans to open a HK$14.9 billion casino-resort in Macau’s lucrative Cotai area.

The week ahead

• Institute for Supply Management’s Services Index data released Tuesday, April 5
• China’s Consumer Price Index released Wednesday, April 6
• U.S. initial jobless claims data released Thursday, April 7
• U.S. consumer credit data released Thursday, April 7
• Bank of England announcement due Thursday, April 7
• Canada’s Labour Force Survey results due Friday, April 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.

--see disclaimer below--

MARKET WEEK: MARCH 28, 2011

The Markets Investors brushed aside disappointing housing data and debt concerns in Europe to push domestic equities higher for the week. The Dow and S&P 500 regained 12,000 and 1,300 respectively and both small caps and the tech-heavy Nasdaq saw new enthusiasm. That renewed interest in stocks helped send the price of 10-year Treasuries back down as yields rose.

Market/Index 2010 Close Prior Week As of 3/25 Week Change YTD Change DJIA 11577.51 11858.52 12220.59 3.05% 5.55% Nasdaq 2652.87 2643.67 2743.06 3.76% 3.40% S&P 500 1257.64 1279.21 1313.80 2.70% 4.47% Russell 2000 783.65 794.66 823.85 3.67% 5.13% Global Dow 2087.44 2093.63 2166.09 3.46% 3.77% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.30% 3.28% 3.46% 18 bps 16 bps Last Week's Headlines New-home sales plummeted almost 17% in February, hitting the lowest point since record-keeping began in 1963, the Commerce Department said. Sales also were down 28% from the previous February. Hardest hit were sales in the Northeast, now down 50% from a year ago, and the Midwest, down almost 41% in the same time. Sales of existing homes also fell sharply in February, according to the National Association of Realtors®. The 9.6% decline followed three straight months of increases. Though they were 26.4% higher than last July's low, sales were still down 2.8% from February 2010. All-cash purchases hit a record 33% of all sales, and distressed homes sold at a discount represented 39% of total sales. Durable goods orders fell in February, according to the Commerce Department. The 0.9% drop was the fourth decline in five months. New orders for capital goods (other than defense-related equipment and aircraft), which indicate the level of business spending, were down 1.3%. Despite another downgrade of the country's sovereign debt, the Portuguese parliament rejected a proposed combination of tax increases and budget cuts, potentially increasing the need for a bailout from fellow European Union members. The country's prime minister, who proposed the austerity package, resigned and a new government will need to be formed. Also, Moody's downgraded the credit rating of 30 Spanish banks, citing as one reason pressures from a recent deterioration in that country's sovereign debt, which was downgraded earlier this month. The final figure for Q4 gross domestic product (GDP) showed the economy grew at an annualized rate of 3.1%, higher than previously thought and higher than Q3's 2.6%. For all of 2010, the economy grew almost 3%, a vast improvement from 2009's decline of 2.6%. After-tax corporate profits were up 20.4% in 2010 compared to 2009's 5.1% increase. Eye on the Week Ahead Investors will watch to see if the market continues to recover from its recent bruising and extends its upward march. A data-intensive Friday will see new employment, construction, and manufacturing indicators. Key dates and data releases: personal income/spending (3/28); home prices (3/29); unemployment/payrolls, construction spending, U.S. manufacturing (4/1). 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: Positive growth and earnings reports push global markets higher

Global economic news

U.S. economy grew 3.1% in the fourth quarterThe U.S. economy grew more than had been estimated in the fourth quarter of 2010, according to revised figures from the U.S. Department of Commerce. The 3.1% annual rate of growth was led by a 4% rise in consumer spending. The 2010 U.S. economic growth rate of 2.9% was the country’s highest annual growth rate in five years. Corporate profits rose 29% last year, their largest annual gain since 1948.


Portugal's crisis deepens; prime minister resignsPortugal’s political and economic crisis deepened as it came closer to an international bailout after the country’s parliament rejected a proposed austerity plan and the prime minister resigned. The cost of Portuguese borrowing hit a new high after the country’s debt was downgraded by two notches by Standard & Poor’s, to BBB from A, and Fitch cut its rating for Portugal to A-.


New eurozone bailout fund createdEuropean finance ministers set up a new bailout fund that will be able to lend €500 billion ($710 billion) to eurozone member nations in need. The fund, which will require €80 billion in cash from the 17 eurozone countries, will replace the current temporary fund in 2013.


U.S. consumer sentiment downConsumer sentiment in the United States fell more than expected in March on higher gasoline prices and in the wake of Japan’s earthquake and tsunami. The Thomson Reuters/University of Michigan Index of Consumer Sentiment fell to 67.5, its lowest reading since November 2009, from 77.5 in February.


U.S. new home sales hit record lowSales of new single-family homes fell to a record low in February, with prices dipping to their lowest point since December 2003, according to a report from the Commerce Department. Home sales fell 16.9% in February from the previous month to a seasonally adjusted level of 250,000 units, the lowest since records began in 1963. February sales were down 28% from a year earlier.


U.S. existing home sales down 9.6%Sales of existing, or previously occupied, U.S. homes slid 9.6% in February to their lowest level in almost nine years, the National Association of Realtors reported. The results were worse than forecast.


U.S. jobless claims fallA trend of fewer first-time jobless claims continued in the week ended March 19, as unemployment benefits claims fell by 5,000 to 382,000. The four-week moving average fell to 385,250, its lowest level since July 2008. And, the total number of people continuing to receive jobless benefits declined by 2,000 to 3.72 million, the smallest amount since September 2008.


U.S. durable goods orders slowU.S. orders for durable goods fell 0.9% in February, the third decline in four months for manufacturers’ orders for goods meant to last at least three years. Despite the recent downturn, year-to-date orders are 7.6% higher than for the same period last year.


Japanese consumer prices continue to slideJapan’s core consumer price index fell 0.3% in February from a year earlier, the 24^th consecutive month it has declined. Analysts are unsure what impact the March 11 earthquake and tsunami will have. Reconstruction spending could put pressure on prices to rise, possibly offset by weakening consumer spending.


Ireland's economy shrinksIreland’s gross domestic product shrank by 1.6% in the fourth quarter of 2010, according to the country’s Central Statistics Office. The country’s gross national product shrank 2.1% in 2010 after a 10.7% decline in 2009.


Eurozone recovery slowsEconomic recovery in the eurozone continued in March, but at a slower pace, according to Markit Economics’ composite purchasing managers' index, which fell to 57.5 from 58.2 in February.


U.K. inflation reaches 4.4%U.K. annual inflation rose at its fastest rate in more than two years in February, up from a 4% annual increase in January. Inflation now is at twice the Bank of England’s targeted 2% rate, putting pressure on the central bank to increase its interest rate. Contributing to higher inflation are increases in the cost of housing services such as water, electricity, gas, and other fuels.

Global corporate news

AT&T purchase of T-Mobile to be reviewed closelyAT&T has agreed to buy T-Mobile USA from Deutsche Telekom for $39 billion, creating the largest cellular company in the United States, and leaving only two other major U.S. competitors – Verizon and Sprint Nextel. However, the proposed deal is expected to face very close scrutiny and a political battle in Washington, as politicians consider the impact on competition, costs, and consumers.


Oracle income rises after its Sun acquisitionBusiness software developer Oracle reported a 78% jump in income on a 37% rise in revenue for its fiscal third quarter. Results were boosted by its acquisition of Sun Microsystems a year ago.


Japan’s manufacturers begin to resume operationsJapan’s automakers had mixed plans for resuming production after the earthquake. Nissan Motor restarted its auto assembly operations and parts manufacturing this week, while Toyota Motor plans to resume production of three hybrid models next Monday, March 28. Honda Motor extended the suspension of its two domestic auto assembly operations through April 3 and canceled orders for May. One issue affecting these firms was inconsistent power supply for makers of computer chips used in the vehicles. Manufacturing stoppages could curb global auto production – estimated at 75 million vehicles this year – by 5 million units.


U.S. Federal Reserve denies Bank of America dividend increaseThe Federal Reserve Board rejected a Bank of America proposal to increase its dividend in 2011. The central bank gave no reason for the rejection, which led observers to speculate that it had to do with results of the latest government stress tests for the nation’s 19 largest holding companies.


Inditex profit, sales rise on global expansionSpain’s Inditex, the world’s largest fashion retailer, posted a 32% rise in net profit in 2010. It plans to add up to 500 stores to its 5,044 existing stores in 77 countries this year. Included are 120 new stores slated for China, where Inditex already owns 143 stores.


Best Buy hurt by slow sales, tough competitionBig-box electronics retailer Best Buy saw its fourth-quarter earnings fall 16% on weak computer and television sales and stiff competition from online retailers and discount stores.

The week ahead

• Japan’s industrial production report released Tuesday, March 29
• U.S. consumer confidence survey results released Tuesday, March 29
• European Union economic sentiment data released Wednesday, March 30
• U.S. jobless claims data released Thursday, March 31
• Bombardier earnings due Thursday, March 31
• U.S. employment report released Friday, April 1

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: MARCH 21, 2011

The Markets After the Japanese disaster returned domestic equities to roughly where they were on New Year's Eve, the indexes began rebounding on Thursday, though they couldn't repair all of the damage. The three-day selling streak cost the S&P 47 points, but almost half of that loss was regained by week's end. Ten-year Treasuries gained from safe-haven buying.

Market/Index 2010 Close Prior Week As of 3/18 Week Change YTD Change DJIA 11577.51 12044.09 11858.52 -1.54% 2.43% NASDAQ 2652.87 2715.61 2643.67 -2.65% -.35% S&P 500 1257.64 1304.28 1279.21 -1.92% 1.72% Russell 2000 783.65 802.83 794.66 -1.02% 1.40% Global Dow 2087.44 2138.29 2093.63 -2.09% .30% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.30% 3.40% 3.28% -12 bps -2 bps Last Week's Headlines As the nuclear and humanitarian crisis in Japan unfolded, experts began debating the extent and nature of its impact on the world's third-largest individual economy, and the potential reverberations elsewhere. The glass-half-full side argued that rebuilding will contribute to future economic growth. However, less optimistic analysts feared that at least in the short term, the loss of Japanese tourism, commodities purchases, employment opportunities, and investment dollars--not to mention the uncertain long-term environmental impact, especially if the reactor situation worsens--could impede the global economic recovery. The Japanese yen hit a record high of $.0127 against the dollar on Friday as investors began exchanging foreign currencies for yen in anticipation of rebuilding efforts and fear that Japan might cut its purchases of U.S. Treasuries. However, the G-7 nations intervened by selling yen to help stabilize its value, which fell a bit over the weekend. The Consumer Price Index rose 0.5% in February, primarily because of higher food and energy costs (gas alone was up more than 19% from a year ago). The Bureau of Labor Statistics said the accelerating price increases helped push the annual consumer inflation rate to 2.1%, with food and energy accounting for roughly half of that increase. Wholesale prices were up 1.6% in February, for a 5.6% increase since the same time last year. As with the Consumer Price Index, higher food and energy costs were the culprit; excluding food and energy, core prices were up only 0.2%, though it was the third straight monthly increase. According to the Bureau of Labor Statistics, core prices have now risen 1.8% from last year. The Federal Reserve noted the increase in inflationary pressures, but said it expects recent price increases in energy and commodities to be temporary. Though it sees the economic recovery on a sounder footing, it said weaknesses in housing and overall construction continue to keep inflation in check. As it continues to monitor the situation, it plans to continue its QE2 bond purchases through the end of the second quarter. Housing starts dropped a dramatic 22.5% from January, according to the Census Bureau, and were 20.8% below February 2010. The Federal Reserve Board said U.S. industrial production reversed course in February, falling 0.1% after three straight months of increases. Unseasonably warm weather caused a 4.5% drop in utilities output but manufacturing output rose 0.4%. The Treasury Department said taxpayers have received repayments of roughly $244 billion--more than 99%--of the $245 billion disbursed to banks under the TARP program to help stabilize the financial system in the wake of the 2008 financial crisis. Eye on the Week Ahead With earnings season in the rear-view mirror and options expiration out of the way, there is little to distract investors from the simultaneous geopolitical, environmental, and humanitarian crises around the world. The Libyan and Bahraini conflicts will likely keep a spotlight on oil supply. Key dates and data releases: home resales (3/21); new home sales (3/23); durable goods orders (3/24); final Q4 gross domestic product (3/25). 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: Global markets volatile after Japanese disaster

Global economic news

U.S. import prices rise sharply, core inflation stableThe price of goods imported into the United States rose 1.4% in February from January, as costs for energy, food and industrial supplies increased, the U.S. Department of Labor reported. Overall, prices were 8.5% higher than a year earlier. Excluding oil products, import prices were 3.5% higher than in February 2010. Meanwhile, U.S. consumer prices rose by 0.5% from January to February, and prices in February were 2.1% higher than a year earlier. The annual underlying inflation rate — excluding energy and food — was 1.1% in February.


U.S. jobless claims drop; four-week average lowest since 2008
The number of first-time claims made for unemployment insurance fell by 16,000 to 385,000 in the week ended March 12, the Labor Department reported. The four-week average of new claims fell 7,000, to its lowest level since July 2008.


U.S. factory production increases againProduction in U.S. factories increased in February for the sixth straight month, but overall industrial output declined for the first time since October because unseasonably warm weather reduced consumption of gas and electricity. Industrial production is 12% higher than in June 2009, but still 6% from its pre-recession peak in September 2007.


U.S. regional manufacturing gauge hits 27-year highA gauge of manufacturing activity in the mid-Atlantic area rose in March to its highest level since January 1984. The Federal Reserve Bank of Philadelphia’s general business activity index jumped to 43.4 in March, from 35.9 in February. The Philadelphia Fed’s new orders measure rose to 40.3 in March, its highest since November 1983.


U.S. Federal Reserve reassures investorsIn a volatile week, the U.S. Federal Reserve Board calmed the markets by upgrading its economic outlook and predicting that the inflationary impact of increased commodity prices would be transitory.


U.S. housing starts fallHousing starts in the United States fell in February to their slowest pace since April 2009. The drop in housing starts from January was the sharpest monthly plunge — 22.5% — since March 1984, according to figures released by the U.S. Department of Commerce.


Eurozone employment rises, output grows slightlyThe number of people employed across the eurozone increased in the fourth quarter of 2010, the first such increase in two years, according to data released by Eurostat, the EU’s statistics agency. Employment grew in Germany, France, and Italy, but fell in Spain and Portugal. Data on eurozone industrial output in January was positive as well. Industrial output grew 0.3% from December and 6.6% from January 2010, reported Eurostat.

Global corporate news

Disruption at Japanese automakers could have far-reaching impactProduction at various Japanese automakers was suspended for the week, and into next week in some cases, as the companies struggled with supply shortages, damages to their facilities, power outages, and in some cases, difficulties for employees in traveling to work. Toyota Motor, Honda Motor, Suzuki Motor, Mazda Motor, Nissan Motor, and Isuzu Motors were all affected by interruptions. In the United States, General Motors said Thursday that production at a plant in Louisiana would be interrupted next week because of a shortage of parts from Japan.


Berkshire Hathaway to buy Lubrizol for $9 billionBerkshire Hathaway announced that it would purchase Lubrizol, a specialty chemical maker based in Ohio, for $9 billion in cash in one of the largest deals for Warren Buffett. Berkshire has $38 billion in cash available for such acquisitions.


U.S. Treasury 99% repaid for TARP fundsSix banks repaid the U.S. Department of the Treasury a total of $475 million in funds borrowed through the Troubled Asset Relief Program (TARP) this week. TARP was created in 2008 to help banks survive the credit crisis. To date, $244 billion of the $245 billion of money received through TARP has been repaid. The Treasury estimates that TARP bank programs will eventually generate a $20 billion profit for taxpayers.


FedEx has positive outlookFedEx maintained a bullish outlook for revenue despite hurdles presented by Japan’s crisis and unrest in the Middle East and North Africa. FedEx’s profit for the quarter ended February 28 was down 4% from a year earlier because of harsh weather and rising fuel prices. FedEx is considered an economic bellwether because of the vast extent of its shipments.


Lufthansa returns to a profitGerman airline Lufthansa earned a profit of €1.1 billion in 2010, after a loss of €34 million in 2009. Revenue for the airline rose 22% as passenger and cargo air traffic rose. Cost-cutting and higher ticket prices contributed to the profit.


Williams-Sonoma net profit up 28%Williams-Sonoma, a seller of housewares and home-decor products, grew its profit by 28% on strength in its direct-to-consumer business, which includes catalog and Web sales.

The week ahead

• General Mills earnings due Wednesday, March 23
• Oracle earnings due Thursday, March 24
• U.S. durable goods orders released Thursday, March 24
• U.S. initial jobless claims released Thursday, March 24
• Japanese CPI data released Thursday, March 24
• U.S. GDP data update due Friday, March 25
• Germany’s Ifo business survey data to be released Friday, March 25

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: MARCH 14, 2011

The Markets Investors continued to try to figure out which way domestic equities are headed, but the indexes weren't being much help. The Dow industrials have now made a round trip back to the 12,000 level since early February. The S&P 500 has bounced around between roughly 1300 and 1340 during the same time, though the large caps have recently begun to pull away from the Russell 2000 and the Nasdaq. By week's end, the Japanese disaster had yet to have a substantial impact on U.S. equities, though 10-year T-bond yields rose slightly.

Market/Index 2010 Close Prior Week As of 3/11 Week Change YTD Change DJIA 11577.51 12169.88 12044.09 -1.03% 4.03% NASDAQ 2652.87 2784.87 2715.61 -2.48% 2.36% S&P 500 1257.64 1321.15 1304.28 -1.28% 3.71% Russell 2000 783.65 824.99 802.83 -2.69% 2.45% Global Dow 2087.44 2200.15 2138.29 -2.81% 2.44% Fed. Funds .25% .25% .25% 0 bps 0 bps 10-year Treasuries 3.30% 3.49% 3.40% -9 bps 10 bps Last Week's Headlines Moody's sparked renewed eurozone anxiety when it downgraded Greek sovereign debt from Ba1 to B1, indicating it considers Greek bonds in danger of default in the future. Moody's also lowered Spain's credit rating slightly, to Aa2 from Aa1. Surging oil prices in January helped push the U.S. trade deficit to its highest level in five months. The Census Bureau said January's gap between exports and imports rose almost 15%, from $40.3 billion to $46.3 billion. Though exports of goods increased by $4 billion, imports rose more than $10 billion. And the pain may not be over yet; the Commerce Department's chief economist said the most recent spike in oil prices won't be reflected in the data until the April and May reports. Chinese officials said growth of both exports and imports slowed there in February, resulting in an unusual $7.3 billion trade deficit. February foreclosures were down 27% from the year before, according to RealtyTrac, which attributed the decline to slower processing of paperwork by banks. Ten states accounted for more than 70% of foreclosure filings, which fell 14% from January to a 36-month low. Higher gas prices didn't deter Americans from spending more in February. The Census Bureau said retail sales rose 1% from January, and were up 8.9% from a year ago. Auto and vehicle-related sales were particularly strong, up 25.9%. Eye on the Week Ahead Investors will continue to assess the potential global economic aftershocks of the Japanese earthquake. Tuesday's Fed statement will be watched for hints of any change in future bond-buying plans, while inflation numbers also will be of interest. Key dates and data releases: import/export prices, international capital flows, Federal Reserve Open Market Committee announcement (3/15); housing starts, wholesale inflation (3/16); consumer inflation, industrial production (3/17); quadruple witching options expiration (3/18). 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--