Quarterly Market Update – Q3 2012

Domestic equities confounded anyone worried about a possible repeat of August 2011 and reached year-to-date highs in mid-September. The Dow hit a level not seen since December 2007, while the S&P 500’s quarterly gain left it up more than 14% for all of 2012. The Nasdaq has done even better, gaining more than 6% in Q3, and almost 20% so far this year. The Russell 2000 was in third place for the year despite being edged out during the quarter by the Global Dow, which trailed domestic equities year-to-date despite last quarter’s nearly 5% advance.

The 10-year Treasury bond yield hit a new low in late July as demand pushed prices up; however, it edged back upward a bit by the end of the quarter. After spiking close to $100 in mid-September, oil prices fell back to end the quarter at $92 a barrel, more than 8% higher than at the end of June. Gold moved steadily upward, gaining more than 10% for the quarter and ending at roughly $1,775 an ounce. Meanwhile, the dollar hit $84 in July against a basket of six foreign currencies, then gave up more than 5% to end the quarter at roughly $79.

Equities data reflect price changes, not total return.