Morningstar Indexes: Weekly Market Report

Notwithstanding the slowdown of the housing market, investors remained optimistic about the direction of the economy, which was buoyed by strong corporate earnings, solid employment figures, and tame inflation expectations. The Morningstar US Market Index gained 1.4% for the week ending Nov. 10.

Reversing the recent domination by large-cap stocks, the Morningstar Small Cap Index fought its way back to the top with a gain of 2.2%. The Morningstar Small Core Index was the leader among the nine Morningstar style indexes, climbing 2.5% for the week. Conversely, the Morningstar Large Core Index was the worst performer, posting a gain of 0.9%.

Biotechnology stocks took the top three spots on the list of influencers for the Morningstar Small Core Index. Strong quarterly results from Isis Pharmaceuticals ISIS, Regeneron Pharmaceuticals REGN, and Alexion Pharmaceuticals ALXN boosted their share prices by 27.1%, 14.6%, and 12.9%, respectively.

More familiar names appeared on the list of leading contributors for the Morningstar Large Core Index, led by American International Group AIG. AIG's stock rose more than 4% after reporting that its net income more than doubled. Big pharma stocks tumbled after Democrats' big win in the midterm elections last week, amid concerns that an increase in pressure from the federal government on prescription drug prices will lead to lower margins. Abbott Laboratories ABT, Eli Lilly & Co. LLY, and Johnson & Johnson JNJ shares slid 3.5%, 3.5% and 2.2%, respectively.