August Market Snapshot (2011)

Volatility turned extreme in equities markets during August. The decline that began in July turned into a roller-coaster as equities saw wild swings from day to day. In a single week, 2 of the Dow’s 11 worst daily point losses in history alternated with 2 of its 11 best days ever. A rally at month’s end helped push the Dow back to just over even for the year, but the S&P 500 ended the month down roughly 10% from its July 7 high. The Russell 2000 continued to be hit by the shift to larger caps, while the Global Dow also suffered from concerns about the eurozone’s larger economies.

Despite the first-ever downgrade of the United States’ credit rating, Treasuries benefitted from global anxiety; as demand pushed prices up, yields fell to historically low levels. The uncertainty also meant a string of record highs for gold, which shot up more than $250 an ounce over the month to a new record of nearly $1,900 before falling back around $1,800 an ounce. Oil prices retreated to the mid-$80s as the dollar weakened once again.

Market/Index	2010 Close	Prior Month	As of 7/29	Month Change	YTD Change
DJIA	11577.51	12143.24	11613.53	-4.36%	.31%
NASDAQ	2652.87	2756.38	2579.46	-6.42%	-2.77%
S&P 500	1257.64	1292.28	1218.89	-5.68%	-3.08%
Russell 2000	783.65	797.03	726.81	-8.81%	-7.25%
Global Dow	2087.44	2088.82	1917.29	-8.21%	-8.15%
Fed. Funds	.25%	.25%	.25%	0 bps	0 bps
10-year Treasuries	3.30%	2.82%	2.23%	-59 bps	-107 bps