The major U.S. equity indexes spent most of the day trending higher, bolstered by positive U.S. economic data, before momentum reversed on rising concerns about the funding needs of several Greek banks and the release of the minutes from the Federal Open Market Committee meeting from April 24–25. Specifically, the minutes showed that the FOMC remains concerned about the eurozone, with several members believing additional Fed action could be necessary "if the economic recovery lost momentum or the downside risks to the forecast become great enough." On the day, decliners outnumbered advancers by 2 to 1 on the NYSE. The Dow lost 33 points, with 17 of its 30 components lower; the S&P 500 slipped 5 points; and the Nasdaq moved lower by 19 points. Most Treasury prices ended the day essentially unchanged. Gold futures fell $20.50 to close at $1,536.60 an ounce, and the price of crude oil fell $1.17 to settle at $92.81 per barrel.

In Earnings News

- Staples Inc., the world's largest office-supply retailer, reported first-quarter sales that fell short of consensus forecasts and offered a cautious outlook. Its shares (SPLS) closed lower by more than 5%.

- J.C. Penney Company reported a first-quarter loss and sales figures that were larger than analysts' expectations. Its shares (JCP) fell more than 19% on the day.

- Abercrombie & Fitch Co. reported first-quarter revenue data that fell short of expectations. The company also projected slower same-store sales due to weakness across Europe. Abercrombie shares (ANF) fell 13%.

In Other Business News

- Housing starts rose 2.6% for April, exceeding analyst forecasts, after declining by 2.6% in March. While the increase in housing starts is not particularly robust, it showed that housing activity grew for both multi-family housing and single-family housing during April.

- The Federal Reserve reported that industrial production increased by 1.1% in April, higher than the 0.5% increase expected by analysts. The reports showed particular strength in utilities output and manufacturing activity, which was led by motor vehicle production.

- Legg Mason Inc. announced that it will use cash to repurchase $1.25 billion of senior debt held by a fund managed by Kohlberg Kravis Roberts & Co. The company also stated plans to issue warrants to buy back approximately $1 billion in shares of common stock. Its shares (LM) closed higher by more than 7%.

- One day ahead of what is expected to be the largest initial public offering in history, Facebook Inc. increased the amount of shares available for sale by 25%. The IPO is now expected to total 421.2 million shares.

*****

Certain products are so closely associated with their country or city of origin that they become inseparable from those places. For example, there is New England clam chowder (or that other stuff called Manhattan clam chowder), New Orleans jazz, and Japanese Kobe beef. Often, a product's origin suggests more than just history or a particular style; it can also suggest a sense of exclusivity that attaches a premium to the price.

But, what happens when a name detaches itself from its origin?

This question is at the heart of the raging debate over what defines a Swiss watch. Stated another way, when can a watch be labeled "Swiss-made"? As everyone knows, companies regularly build products with parts from all over the world. Not surprisingly, most watches follow a similar model. But, when a watch is labeled "Swiss-made," most consumers think of not only high quality and prestige but also that the watch is actually made in Switzerland. Think again.

To help protect the "Swiss-made" label, Switzerland has created guidelines to define the Swissness of a timepiece. According to the Federation of the Swiss Watch Industry, "Swiss quality depends on the amount of work actually carried out on a watch in Switzerland, even if some foreign components are used in it." More specifically, the group requires that a watch's movement be assembled and tested in Switzerland and that "at least 50% of the components of the movement should be manufactured in Switzerland." Therein lies the central point of the debate.

With the growing demand for "luxury" goods across the emerging markets, especially in China, many "Swiss-made" watches are being designed and assembled outside of Switzerland. While the timepieces are still using parts made by Swiss-based companies to meet the 50% parts rule, many in the Swiss watch industry believe their reputation and country's identity are being exploited by imposter Swiss watchmakers. As a result, many Swiss watchmakers are pushing to require 80% or more of production value—parts, movement, and assembly—to occur in Switzerland to ensure true Swissness.

Is all this simply a sense of Swiss pride, or is it more about increasing business? Most likely, it's a little of both. As The New York Times recently reported, Swiss-made watches account for about 3% of global watch production but more than 50% of the world's luxury watch market. So, yes, there is a lot of money at play.

Regardless, as I look upon my "Swiss-made" Tissot wristwatch, I wonder if it's the Swissness of its movements or the way it shines that adds to my happiness. Sure, it accurately tells time, but I think that's why cell phones were invented.

P.S. Do you believe that the U.S. economy has finally decoupled from Europe? Share your thoughts by participating in today's poll at our AdvantageVoice^® blog.

Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Advantage Funds^®. Other affiliates of Wells Fargo & Company provide subadvisory and other services for the Funds. The Funds are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate of Wells Fargo & Company. 209944

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