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Quarter-End Insights

Closing Out a Quarter of Troubling News

The weight of ongoing sovereign debt worries along with unfavorable economic news took its toll on the market in the second quarter.

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Tough economic news and continued worries about sovereign debt in the United States and abroad weighed on the market in the second quarter of 2011. The broad-based Morningstar U.S. Index dropped 0.25% during the last 13 weeks ended June 28, 2011. The index is still 4.64% higher on the year and up by more than 24% for the past 12 months.

The phrase "double-dip recession" re-entered the investment lexicon in the quarter after a string of disappointing economic data releases. New figures on employment, housing, manufacturing, consumer spending, and more pointed to a slowdown in growth from not terribly robust first-quarter levels. Although many, including Morningstar's Bob Johnson, see growth picking up in the back half of the year, the data clearly weighed heavily on investor sentiment.

Jeremy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.