Morningstar Indexes: Weekly Market Report

Another dose of mixed economic data on inflation left markets confused about the fate of interest rates. The Morningstar US Market Index managed to add 0.83% for the week ending June 2, as volatility continues to hound investors.

All nine Morningstar style indexes ended the week with modest gains. Mid-cap stocks outperformed their large- and small-cap peers, as the Morningstar Mid Cap Index posted a gain of 1.21%. Among the other style indexes, the Morningstar Value Index continued to maintain its dominance over its Core and Growth brethren with a 1.09% gain.

Biotech firm Celgene CELG added another 6.08% on top of last week's 6% gain on news of FDA approval for Thalomid in cancer treatment. This helped turn the fortunes of the Morningstar Mid Growth Index from being the worst-performing index last week to being the best this week, with a gain of 1.38%. The index would have fared even better if it were not for the disappointing performance of two technology companies--Novell NOVL and Advanced Micro Devices AMD. Novell, the network and security software maker, dropped 20.08% on a weak forecast for the third quarter as the firm struggles to adapt to the open source era led by rival Red Hat RHAT. And Advanced Micro Devices shed 4.84% after a strategy call with analysts failed to dispel concerns about a price war with Intel INTC.

The Morningstar Large Core Index gained a modest 0.21% to claim the position of worst-performing index. Ironically, index member Kinder Morgan KMI jumped 19.77% on news of a buyout and was the second largest gain of any stock last week. But consumer stocks Coca-Cola KO and Procter and Gamble PG and retail chains Wal-Mart WMT and Home Depot HD all finished lower to hold the index back.