Review current performance analyses and weekly statistics for stock and bond markets in the U.S. and abroad, including regional and broad-based international indexes and principal currency exchange rates.

Week Ended October 2, 2015

Stocks endure third week of declines
The major benchmarks were mixed as worries over China's waning commodity demand and the potential for new rules on drug pricing gave way to a late-week rally. Stocks in the materials and health care sectors led a steep sell-off on Monday, and investors also appeared to spurn the highly valued shares that had led the market's advance earlier in the year. The Russell 2000 Index, which is heavily weighted in richly valued biotechnology stocks and usually more volatile than the large-cap benchmarks, underperformed. The S&P MidCap 400 Index also performed poorly. All of the major benchmarks ended the week in the red for the year to date, with the Russell 2000 Index and the Dow Jones Industrial Average among the largest decliners.

Monday sell-off brings stocks back near August lows
Stocks fell sharply at the start of the week, reaching back toward the lows they had established at the end of August. Plunging commodity prices took a heavy toll on a number of mining firms, but investors appeared to be particularly concerned about leading copper producer Glencore, which is also a prominent commodities trader. T. Rowe Price traders observed that the ongoing tumble in Glencore's stock was affecting both the physical commodity and the credit markets, which may have raised uncomfortable memories for some of the systemic risks posed by Lehman Brothers and Bear Stearns.

Drug price regulation worries hit health care stocks
The health care sector was also particularly hard hit. Shares of pharmaceutical giant Valeant Pharmaceuticals International plunged as House Democrats subpoenaed the company for documentation around its drug pricing. Biotechnology stocks have soared in recent years, but some worry that widespread outrage over dramatic drug price increases could lead to new regulations and smaller profits.

Bargain hunting leads to midweek rally...
U.S. stocks regained some traction at midweek, with the S&P 500 regaining most of its Monday decline. T. Rowe Price traders attributed the rally to strength in overseas markets, bargain hunting, and technical factors, such as the need to cover short positions. Shares that had seen the sharpest declines in recent days, such as biotechnology and coal stocks, were among the biggest gainers.

...which is briefly threatened by jobs report
The release of the closely watched monthly payrolls report on Friday morning initially sent stocks lower. The Labor Department reported a weaker-than-expected increase in payrolls in September, while also revising August's gain lower. T. Rowe Price Chief U.S. Economist Alan Levenson observes that another decline in manufacturing employment was partly to blame for the weakness and probably reflects waning exports and the need to reduce domestic inventories. While the chances of a rate increase in December have diminished, he believes the Fed may still raise rates before the end of the year if employment growth rebounds in October and November. The prospect that the Fed might stay its hand may have contributed to a strong rally to close the week, however. Energy and materials shares were particularly robust in late trading on Friday.

Upcoming earnings season may change market's tone
T. Rowe Price traders note that much of the recent volatility has come against the backdrop of light news flow, and they expect that the upcoming earnings season will draw the focus back to the performance of the economy and corporate profits. Indeed, David Eiswert, one of the firm's global growth managers, recently told The Wall Street Journal that he expects earnings to be up for the year, and he is optimistic that global markets will shake off the weakness of the last few months.

U.S. Stocks1
Index2 Friday's Close Week's Change % Change
DJIA 18473.37 157.70 -7.58%
S&P 500 1951.36 20.02 -5.22%
NASDAQ Composite 4707.78 21.28 -0.60%
S&P MidCap 400 1384.16 -4.06 -4.70%
Russell 2000 1112.76 -10.04 -7.63%
This chart is for illustrative purposes only and does not represent the performance of any specific security. Past performance cannot guarantee future results.

1Source of data Reuters, obtained through Yahoo! Finance Closing data as of 4 p.m. ET.

2The Dow Jones Industrial Average and the Standard & Poor's 500 Stock Index of blue chip stocks, the Standard & Poor's MidCap 400 Index, and the Russell 2000 Index are unmanaged indexes representing various segments by market capitalization of the U.S. equity markets. The Nasdaq Composite is an unmanaged index representing the companies traded on the Nasdaq stock market and the National Market System.

Week Ended October 2, 2015

Weak September payrolls report accelerates rally in Treasuries
The September employment report from the Bureau of Labor Statistics showed that employers added only 142,000 jobs to nonfarm payrolls during the month, well below consensus expectations for 201,000 new jobs. The disappointing growth in employment accelerated the move into Treasuries that had been driving yields lower for most of the week. (Bond prices and yields move in opposite directions.) The yield on the 10-year U.S. Treasury note decreased to 1.94% after the release of the September employment data. T. Rowe Price Chief U.S. Economist Alan Levenson believes that the Federal Reserve could still raise rates in December if employment growth rebounds.

Growing expectations for more stimulus from the ECB
Eurozone government bonds also rallied amid growing expectations that the European Central Bank (ECB) will expand its monetary stimulus measures in an effort to stave off deflation. The 10-year German sovereign note's yield decreased to its lowest level in four months following the release of preliminary data showing that eurozone consumer prices fell 0.1% in September from a year earlier. Lower energy prices were a key driver of the decline in consumer prices.

Credit spreads on corporate bonds widen
Weakness in the energy sector and heightened risk aversion continued to weigh on the high yield market, which declined for the week. Credit spreads on high yield bonds reached their widest levels in over three years. (Credit spreads measure the additional yield above that of a comparable-maturity Treasury security that investors demand for holding a bond with credit risk.) In investment-grade corporate debt, credit spreads also widened as worries about the metals and mining sector made investors cautious about the broader market.

Positive week for municipal bonds
Municipal bonds generated positive returns with support from the rally in Treasuries. There was solid demand for new municipal debt issuance, including a $900 million deal from Washington State. The municipal market continued to benefit from the low level of issuance in September, the slowest month for new deals in over a year.

U.S. Treasury Yields1
Maturity October 2, 2015 September 25, 2015
2-Year 0.58% 0.69%
10-Year 1.98% 2.17%
30-Year 2.82% 2.99%

This table is for illustrative purposes only. Past performance cannot guarantee future results.

1Source of data:, as of 4 p.m. ET Friday, October 2, 2015.

Week Ended October 2, 2015

International Stocks

Foreign stock markets closed lower for the week ending October 2, 2015 with the broad international measure, the MSCI EAFE Index (Europe, Australasia, and Far East), gaining 0.69%.

Region/Country Week's Return % Change Year-to-Date
EAFE 0.69% -3.49%
Europe ex-U.K. 0.54% -2.33%
Denmark -1.20% 17.71%
France 0.46% -0.01%
Germany -0.56% -8.42%
Italy 1.18% 6.72%
Netherlands 0.36% -0.54%
Spain 1.83% -12.03%
Sweden 1.26% -5.66%
Switzerland 0.97% 0.03%
United Kingdom 0.70% -6.73%
Japan 1.28% 3.50%
AC Far East ex-Japan 1.65% -11.62%
Hong Kong 1.05% -3.70%
Korea 2.95% -10.87%
Malaysia 0.29% -25.85%
Singapore -2.20% -21.83%
Taiwan 2.64% -10.66%
Thailand -3.54% -18.74%
EM Latin America 2.70% -27.10%
Brazil 4.24% -36.55%
Mexico 1.41% -12.51%
Argentina -3.76% -21.32%
EM (Emerging Markets) 1.93% -13.93%
Hungary 1.18% 22.87%
India 2.72% -4.92%
Israel -3.55% 2.22%
Russia -2.92% 6.16%
Turkey 1.36% -30.43%

International Bond Markets

International bond markets in developed countries were higher this week, with the J.P. Morgan Global Government Bond Less U.S. Index gaining 1.63%.

Region/Country Week's Return % Change Year-to-Date
Developed Markets 1.63% -2.47%
Denmark 1.79% -5.89%
France 1.91% -5.82%
Germany 1.76% -5.61%
Italy 1.71% -3.45%
Spain 2.37% -5.83%
Sweden 1.91% -3.84%
United Kingdom 1.58% 0.64%
Japan 1.38% 0.92%
Emerging Markets 0.00% 0.00%
Argentina 0.00% 0.00%
Brazil 0.00% 0.00%
Russia 0.00% 0.00%

International Currency Markets

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

Currency Close
Week's Return
(U.S. $)
% Change
Year-to-Date (U.S. $)
Japanese yen 119.225 -1.33% -0.56%
Euro 1.12761 -0.91% 6.82%
British pound 1.52021 -0.16% 2.51%

1U.S. dollars per national currency unit.

Sources: Foreign stock markets and currency sections are from Rimes Technologies, using MSCI data. International bond markets are from J.P. Morgan.

Note: All returns are in U.S. dollars. All bond indices are J.P. Morgan. All stock indices are Morgan Stanley Capital International (MSCI).

Equity Indices
EAFE: MSCI Europe, Australasia, and Far East Index
Europe Ex-U.K.: MSCI Europe ex-U.K. Index
Far East Ex-Japan: MSCI AC Far East ex-Japan Index
Latin America: MSCI Emerging Markets Latin America Index
Emerging Markets: MSCI Emerging Markets Index
Bond Indices
Developed Markets: J.P. Morgan Global Government Bond Less U.S. Index
Emerging Markets: J.P. Morgan Emerging Markets Bond Index Plus

All charts are for illustrative purposes only and do not represent the performance of any specific security. Past performance cannot guarantee future results.