May 2, 2010

Indexes Fall, but Bond and Commodity Funds Attract Investors: Market Recap for the Week Ending April 30

U.S. markets took a hit, but global investors were glad to buy bonds, other funds.

Major U.S. stock markets ended the week of April 26-April 30 down slightly. The Dow Jones Industrial Average declined about 2% and ended the week just above 11,000 at 11,008.The S&P 500 dropped about 2.5% and ended the week at 1,186.

Stocks were up Monday, Wednesday and Thursday, but they dropped on Tuesday due to lingering concerns over the Greek debt crisis. However, these concerns receded later in the week as European finance ministers agreed to meet soon to cope with the crisis there.

The DJIA began the week up at 11,205 on Monday afternoon then fell to 11,031 on Tuesday. Wednesday, it ticked up 53 to 11,045, and Thursday it rose 122 to close at 11,167.

Friday, though, news about further investigations of Goldman Sachs and the possibility of criminal charges pushed financials down along with the broader markets. Goldman shares fell 7.7% during the week, including a 9% drop on Friday, April 30.

Also on April 29, the FTSE All-World Index dropped 0.3%, though Asia closed higher.

Gold, meanwhile, was hitting a five-month peak, with oil on the rise as well. Gold ended the week at $1,178.50 an ounce. And oil closed Friday at $85.96 a barrel.

Downgrades to the credit ratings of Greece, Portugal and Spain, with Greece's being cut to junk status, roiled equity and bond markets around the world during the final days of April, reports EPFR Global, a research group

As a result, many investors pulled money out of Europe ex-UK regional equity funds and pushed substantial amounts into the bond funds this week.

Overall, investors continued to make net contributions to most equity and bond fund groups through Thursday, April 29, however. Emerging-markets bond funds received more than $5 billion from investors in April. Global and U.S. bond funds both took in over $2 billion, and high yield bond funds saw year-to-date inflows push over the $8 billion mark.

Flows into equity fund groups were mixed, EPFR reports. Global equity funds absorbed over $1.7 billion and EMEA equity funds had their best week since late October.

But six of the nine mutual fund sectors with mandates posted outflows, although commodity sector funds took in nearly $1 billion with funds investing in gold and precious metals accounting for 50% of that total, and Latin America equity funds recorded a third straight week of outflows.

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