Morningstar Indexes: Weekly Market Report

Markets resumed their climb with renewed vigor last week. The Morningstar US Market Index rose 1.68% for the week ending June 1, more than repairing the brief slide of the week before. The latest economic reports showed surprisingly strong job creation and growth in labor income, suggesting that the U.S. economy is set to bounce back from a weak first quarter. Merger and acquisition deals and positive earnings news also continued to boost investor confidence.

Generally, small-cap and growth stocks performed sharply better. The Morningstar Small Core Index finished on top with a 3.3% gain. The Morningstar Large Value Index's 0.73% advance was the worst showing among all our style indexes.

Washington Group International WNG, a diversified engineering and construction group, surged 21% after announcing it will be acquired by a rival firm. In general, engineering-goods makers had a strong week, with General Cable Corp. BGC and Hanover Compressor HC also contributing handsomely to the Morningstar Small Core Index.

Technology hardware giant Dell DELL gained more than 5% after reporting its highest quarterly gross profit margin in years, owing to strength in server and notebook personal computer sales. Merck MRK lost 3%, however, holding large-cap indexes back. A federal judge threw out an earlier court victory Merck had won in one of its many trials over the recalled pain medication Vioxx.