Quarterly U.S. Market Report Commentary featuring the Dow Jones U.S. Total Stock Market Indexes
Quarter 2, 2012
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SECTION 01
Broad U.S. Market
SECTION 02 SECTION 03
U.S. Sectors U.S. Size Segments (large-, mid-, small- and micro-caps)
SECTION 04
U.S. Style Segments (growth and value)
SECTION 05
Summary
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About the Indexes • The indexes referenced throughout this presentation are the Dow Jones U.S. Total Stock Market Indexes℠, which provide comprehensive coverage of the U.S. equity market. • The broad Dow Jones U.S. Total Stock Market Index℠ includes all U.S. equity securities with readily available prices. • Subindexes of the broad index cover various sectors, size segments and investment styles. • The industry indexes are created based on the proprietary sector classification system described at www.djindexes.com/sectorclassification. • Detailed information on the construction of the Dow Jones U.S. Total Stock Market Indexes is available at www.djindexes.com/totalstockmarket.
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Broad U.S. Market Dow Jones U.S. Total Stock Market Index
April 2, 2012
June 29, 2012
% Change
58.90
56.63
-3.10%
Quarterly High: 58.90 (April 2) Difference: 5.86 points
Quarterly Low: 53.04 (June 4)
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Q1 2012 was up 12.91%
Broad U.S. Market Dow Jones U.S. Total Stock Market Index Total Return Performance
Marks start of 2007-09 bear market
Cumulative
Q2 -3.10%
1-Year 3.97%
3-Year 59.91%
5-Year 2.96%
10-Year 81.13%
Annualized
3-Year
5-Year
10-Year
16.94%
0.58%
6.12%
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Broad U.S. Market Dow Jones U.S. Total Stock Market Index Q2 Total Return Performance 105
4/10 Spanish, Italian borrowing costs rise dramatically.
5/1 U.S. manufacturing, corporate profit reports up.
5/6 French, Greek voters vote for antiausterity candidates.
6/21 Moody’s downgrades 15 global banks.
100 5/23 HP announces 27,000 job cuts.
95 4/13 North Korea rocket test ends in failure.
5/18 Facebook launches IPO.
90
6/9 Spain accepts bailout funds.
6/17 Greece elects pro-austerity candidates.
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6/27 Supreme Court upholds Health Care plan.
SECTION 01
Broad U.S. Market
SECTION 02 SECTION 03
U.S. Sectors U.S. Size Segments (large-, mid-, small- and micro-caps)
SECTION 04
U.S. Style Segments (growth and value)
SECTION 05
Summary
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U.S. Sectors Q2 % Total Return Performance 15% 12.00%
10% 5%
Facebook IPO hurts sector.
5.51% 2.14% 0.48%
0% -2.50%
-5% -10%
-4.49% -7.87%
-7.64%
-4.43%
-6.93%
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U.S. Federal spectrum auction to allow for creation of massive new bandwidth.
Broad U.S. Market U.S. Sector Allocation vs. Global Sector Allocation – Q2 Dow Jones U.S. Total Stock Market Index
Dow Jones Global Total Stock Market Index
25%
20% 15%
10% 5%
0%
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U.S. Sectors Total Return Performance Summary Q2 2012
1-Year
3-Year
5-Year
10-Year
Basic Materials
7.64%
-16.08%
61.48%
4.19%
114.75%
Consumer Goods
-2.50%
6.45%
67.74%
31.03%
105.23%
Consumer Services
0.48%
12.65%
91.86%
23.70%
85.87%
Financials
-4.49%
0.94%
37.96%
42.70%
1.26%
Health Care
2.14%
9.95%
56.74%
25.46%
87.04%
Industrials
-4.43%
1.43%
71.47%
1.44%
92.41%
Oil & Gas
-6.93%
-9.10%
44.09%
4.39%
199.67%
Technology
-7.87%
10.32%
65.45%
25.73%
114.14%
Telecommunications
12.00%
12.04%
61.35%
-1.09%
96.34%
5.51%
13.29%
52.46%
14.70%
127.37%
Utilities All data are cumulative.
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U.S. Sectors Q2 Total Return Performance 115 Utilities benefit from low interest rates, natural gas prices.
110 105
100 95 90 85
Crude oil falls on lower demand; natural gas falls due to glut.
80
Financials
Technology
Oil & Gas
Basic Materials
Industrials
Consumer Goods
Health Care
Consumer Services
Telecommunications
Utilities
DJ U.S. Total Stock Market Index
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U.S. Sectors Q2 Total Return Performance 105
100
Chip sector woes and Facebook’s IPO problems weigh on performance.
95
90
85 Dow Jones U.S. Total Stock Market Index
Technology
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U.S. Sectors Q2 Total Return Performance 105 100
JP Morgan announced massive trading losses. Originally estimated at $2 billion in May, it rises to $9 billion by end of June, offsetting gains by Bank of America and others.
95 90 85 Dow Jones U.S. Total Stock Market Index
Financials
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U.S. Sectors Q2 Total Return Performance 105
“Big box” retailers such as Wal-Mart, Home Depot and Costco improve on lower fuel costs and rise in consumer spending. Disney rose on the strength of the movie “The Avengers,” theme parks and TV business.
100
95
90
85 Dow Jones U.S. Total Stock Market Index
Consumer Services
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U.S. Sectors Q2 Total Return Performance 105 100
Sector impacted by both positives (lower fuel costs help delivery companies such as UPS) and negatives (defense cuts hurt contractors such as Boeing and United Technology).
95 90 85 Dow Jones U.S. Total Stock Market Index
Industrials
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U.S. Sectors Q2 Total Return Performance 105 100
Lower demand for crude oil, gasoline in Europe, China as well as the U.S. hurt this group. Gas prices fell going into all-important summer driving season. Natural gas glut drives prices to historic lows.
95
90 85 Dow Jones U.S. Total Stock Market Index
Oil & Gas
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U.S. Sectors Q2 Total Return Performance 105
Supreme Court upholding Obama’s Health Care plan is good news for hospital and Medicare/Medicaid provider stocks. It is not-so-good news for health insurers. Pharmaceutical stocks were mixed on the lead-up and aftermath of the ruling.
100 95 90 85 Dow Jones U.S. Total Stock Market Index
Health Care
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U.S. Sectors Q2 Total Return Performance 105
100
Prices for copper, steel and other materials fell throughout the quarter on falling demand in China and Europe. But food makers like Monsanto and fertilizer manufacturers like Mosaic are benefitting from agricultural investment worldwide.
95 90 85 Dow Jones U.S. Total Stock Market Index
Basic Materials
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U.S. Sectors Q2 Total Return Performance 105
Kraft Foods, Hershey and Starbucks benefited from increasing prices without negatively impacting sales. Others, such as Coca Cola, were able to achieve cost savings internally. However, sales volumes were down for many topname manufacturers.
100 95 90 85 Dow Jones U.S. Total Stock Market Index
Consumer Goods
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U.S. Sectors Q2 Total Return Performance
115
Sales of millions of new iPhones and other wireless technology created massive new revenue streams for AT&T, Sprint and Verizon. The prepaid market and the need to store enormous amounts of data led to strong earnings.
110 105 100 95 90 Dow Jones U.S. Total Stock Market Index
Telecommunications
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U.S. Sectors Q2 Total Return Performance 110
Amid still-uncertain economic conditions, investors gravitated to a sector whose bills are least likely to be ignored: utilities. A merger-and-acquisition spree in the industry is consolidating services and creating cost-saving synergies.
105 100 95 90
85 Dow Jones U.S. Total Stock Market Index
Utilities
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U.S. Sectors Q2 Leading Companies Within Top 3 Industries
Penny stock sold its payphone operations. Total Return Q2 ’12 Change %
Float Market Cap (USD)
Industry
Company
Telecommunications (12.00%)
FairPoint Communications Inc.
63.56%
134,484,386
Shenandoah Telecommunications Co.
22.06%
323,659,641
Verizon Communications Inc.
16.24%
125,620,400,659
tw telecom inc. Cl A
15.79%
3,892,737,906
Sprint Nextel Corp.
14.39%
9,752,930,147
Sempra Energy
14.88%
15,374,229,781
Artesian Resources
14.64%
167,679,824
Delta Natural Gas Co. Inc.
14.37%
146,105,958
Progress Energy Inc.
13.29%
17,604,598,770
NextEra Energy Inc.
12.66%
28,965,732,993
Arena Pharmaceuticals Inc.
225.08%
1,951,097,764
Accelr8 Technology Corp.
164.71%
29,044,756
Repros Therapeutics Inc.
114.66%
134,213,559
Osiris Therapeutics Inc.
114.26%
203,678,250
IsoRay Inc.
106.12%
29,275,324
Utilities (5.51%)
Health Care (2.14%)
Anti-obesity drug Belvic approved by FDA.
Opening liquid natural gas export facility.
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U.S. Sectors Q2 Lagging Companies Within Bottom 3 Industries
Massive losses lead to company being delisted from NYSE. Total Return Q1 ‘12 Change %
Float Market Cap (USD)
Industry
Company
Oil & Gas (-6.93%)
Tri Valley Corp.
-85.21
1,691,251
Geokinetics Inc.
-84.19
3,784,378
Hoku Corp.
-74.58
2,865,820
Houston American Energy Corp.
-78.54
19,815,197
APCO Oil & Gas International Inc.
-73.52
164,951,047
Patriot Coal Corp.
-80.45
111,368,314
Cereplast Inc.
-53.23
3,747,087
James River Coal Co.
-47.07
96,263,086
Golden Minerals Co.
-46.50
144,845,557
U.S. Silica Holdings Inc.
-46.23
137,107,058
Mitek Systems Inc.
-66.47
87,472,437
DynaVox Inc.
-63.64
11,545,559
Wave Systems Corp.
-62.90
57,168,535
Mindspeed Technologies Inc.
-61.38
85,190,720
Broadvision Inc.
-59.21
33,061,961
Micro-cap hurt by slowdown in North America operations
Basic Materials (-7.64%)
Technology (-7.87%)
Short-selling on concerns about restructuring.
Falls on earnings report miss.
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SECTION 01
Broad U.S. Market
SECTION 02 SECTION 03
U.S. Sectors U.S. Size Segments (large-, mid-, small- and micro-caps)
SECTION 04
U.S. Style Segments (growth and value)
SECTION 05
Summary
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U.S. Size Segments Q2 % Total Return Performance 0%
-2.15% -3.03% -3.79%
-5% -5.33%
-10% U.S. Mid-Cap
U.S. Small-Cap
U.S. Large-Cap
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U.S. Micro-Cap
U.S. Size Segments Large-Cap was 1-year leader last quarter too
Total Return Performance Summary
Q2 2012
1-Year
3-Year
5-Year
10-Year
U.S Large-Cap
-3.03
4.77
58.20
2.36
75.24
U.S. Mid-Cap
-5.33
-2.63
75.41
11.60
130.65
U.S. Small-Cap
-3.79
-1.89
74.27
11.49
139.55
U.S. Micro-Cap
-2.15
-0.99
58.47
-6.18
120.55
All data are cumulative.
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U.S. Size Segments Q2 Total Return Performance But they improved as economic data showed hints of improvement.
105 100 95 90
Micro-caps underperformed at beginning of quarter due to weak U.S. economic performance.
85
U.S. Large-Cap
U.S. Mid-Cap
U.S. Small-Cap
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U.S. Micro-Cap
SECTION 01
Broad U.S. Market
SECTION 02 SECTION 03
U.S. Sectors U.S. Size Segments (large-, mid-, small- and micro-caps)
SECTION 04
U.S. Style Segments (growth and value)
SECTION 05
Summary
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U.S. Style Segments Q2 % Total Return Performance 0%
-1.68%
-3.37%
-5%
-3.54% -4.03%
-4.44%
-6.92%
-10% U.S. Large-Cap U.S. Large-Cap Growth Value
U.S. Mid-Cap Value
U.S. Mid-Cap Growth
U.S. Small-Cap U.S. Small-Cap Growth Value
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U.S. Style Segments Total Return Performance Summary Q2 2012
1-Year
3-Year
5-Year
10-Year
U.S. Large-Cap Growth
-4.44
3.64
60.51
13.66
84.44
U.S. Large-Cap Value
-1.68
5.83
56.06
-8.21
65.11
U.S. Mid-Cap Growth
-6.92
-4.73
79.10
20.83
172.57
U.S. Mid-Cap Value
-3.37
0.05
70.27
1.28
91.95
U.S. Small-Cap Growth
-4.03
-3.43
76.33
17.13
156.50
U.S. Small-Cap Value
-3.54
-0.29
71.45
5.63
121.44
All data are cumulative.
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U.S. Style Segments Q2 Total Return Performance Investors seek stability in midst of Eurozone crisis, helping push up largecap value stocks.
105 100 95 90 85
U.S. Large-Cap Growth
U.S. Large-Cap Value
U.S. Mid-Cap Growth
U.S. Mid-Cap Value
U.S. Small-Cap Growth
U.S. Small-Cap Value
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SECTION 01
Broad U.S. Market
SECTION 02 SECTION 03
U.S. Sectors U.S. Size Segments (large-, mid-, small- and micro-caps)
SECTION 04
U.S. Style Segments (growth and value)
SECTION 05
Summary
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Summary: Q2 2012 performance results Dow Jones U.S. Total Stock Market index fell 3.10% in the 2 nd quarter of 2012.
Winners • Sector: Telecommunications, Utilities, Health Care • Size Segment: U.S. Micro-Cap • Style Segment: U.S. Large-Cap Value
Losers • Sector: Oil & Gas, Basic Materials, Technology • Size Segment: U.S. Mid-Cap • Style Segment: U.S. Mid-Cap Growth
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