Morningstar Indexes: Weekly Market Report

The Morningstar US Market Index rose 0.78% for the week ending May 4, its fifth straight week of gains. Investors were encouraged by a steady flow of positive earnings surprises and acquisition activity. Moreover, the latest U.S. employment numbers show a moderating pace of job creation and wage growth, which should help keep inflation and interest rates low.

All nine Morningstar style indexes finished in positive territory. As they have in recent weeks, large-cap stocks again held sway, with the Morningstar Large Value Index and the Morningstar Large Core Index claiming the top honors. The Morningstar Large Value Index gained 1.12%, while its large core peer rose 1% for the week.

Telecom giants Verizon Communications VZ and AT&T T rose 7.3% and 2.2%, respectively, as investors realized the potential impact of the companies' superb first-quarter 2007 earnings. Media conglomerate Time Warner TWX advanced 3.3% after soundly beating analysts' earnings forecasts.

Dow Jones & Co. DJ shot up 54% after the company received a generous purchase offer from News Corp. NWS. Despite the boost from Dow Jones, the Morningstar Mid Core Index finished last due to some significant detractors. These included pharmacy benefits provider Omnicare OCR, which slumped 18%, and electronics retailer Circuit City Stores CC, which dropped 9.3%. Both companies face an uncertain outlook after falling short in their latest earnings reports.