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Morningstar Indexes: Weekly Market Report

Week ending April 13: Markets advance as positive earnings news overcome lingering concerns about economy.

Morningstar Indexes, 04/16/2007

Markets advanced modestly last week as positive earnings news overcame lingering concern on the economic front. The Morningstar US Market Index rose 0.68% through the week ending April 13. The fallout from the subprime meltdown continues to haunt financial services stocks, and hopes of a Federal Reserve interest rate cut anytime soon have faded due to sticky inflation numbers. Markets took heart from the steady trickle of decent earnings news and merger activity, however.

All nine Morningstar style indexes finished in positive territory. Growth indexes cemented their lead over core and value counterparts for the year, capped by the Morningstar Small Growth Index's 1.08% gain. The Morningstar Mid Value Index finished last with a 0.39% return for the week.

The Morningstar Small Growth Index was boosted by ValueClick VLCK, a provider of online advertising solutions that rose 7.8% after Internet giant Google GOOG announced a deal to acquire the smaller company. The announcement sparked an even bigger rally in ValueClick's fellow digital marketing player aQuantive AQNT, which rose 14.2% on takeover speculation.

The Morningstar Mid Value Index's detractors included airline stocks AMR AMR, which dropped 7.7%, and US Airways Group LCC, which fell 5.2%. The market is anticipating lower first quarter earnings after what has proven a season of weather-related air-travel woes.

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