Morningstar Indexes: Weekly Market Report

Markets continued to exhibit the volatile pattern of recent weeks. The Morningstar US Market Index fell 1.05% for the week ending March 16, losing most of its gain from the previous week. Subprime mortgage lending remains the main source of concern, as that sector's woes threaten to spill over into other areas. The consumer price indexes, a key measure of inflation, rose at a faster pace than expected, dimming hopes of a Federal Reserve interest rate cut in the near future.

All nine Morningstar style indexes finished in negative territory. The Morningstar Large Value Index was the worst performer with a loss of 1.32%. The Morningstar Small Growth Index was the best performer with a loss of 0.51%.

The fallout from subprime lending affected large-value stalwarts J.P. Morgan Chase & Co. JPM, Bank of America BAC, and Citigroup C, with each stock dropping between 1.6% and 3.7%. Oil prices fell significantly last week, causing ExxonMobil XOM and ConocoPhillips COP to slide 1.8% and 3.6%, respectively.

WebEx Communications WEBX, a provider of Web conferencing software, advanced 24.5% last week, contributing strongly to the Morningstar Small Growth Index. The stock surged after technology giant Cisco Systems CSCO announced it would pay a handsome premium to acquire WebEx. The news vitalized related stocks such as J2 Global Communications JCOM, an Internet-based communications services vendor, which gained 15.6%.