Weekly Market Highlights - July 30th, 2012

Domestic stock prices were higher on the week. The S&P 500 and Dow Industrials rallied for the third consecutive week. The Dow finished the week at its highest levels since May. Driving this week’s action were comments by European Central Bank president Mario Draghi, who said the ECB would do “whatever it takes” to keep the euro currency together. Global markets were mixed on the week . European stocks rose for the eighth consecutive week, continuing its longest such streak in six years. Draghi’s comments keyed the rally. Spain’s Ibex 35 index was the biggest beneficiary of potential ECB action. Asian markets declined due to a decline in earnings growth rates.

Treasury prices declined again this week, and yields rose. Yields on the benchmark 10‐year Treasury rose this week on Draghi’s comments. Investors shed Treasuries in favor of higher yielding issues as risk appetites returned. Yields on Spanish and Italian bonds plunged after recently spiking to record levels.

Commodity indexes declined this week. Rains in the nation’s growing regions caused soybean prices to drop from record levels. Corn was less impacted since the pollination stage is past, and rains will not provide any benefit to the crop.