STT State Street Corporation

State Street Global Markets, the investment research and trading arm of State Street Corporation (NYSE:STT), released today the results of the State Street Investor Confidence Index(R) for November 2005. According to the November index, investor confidence increased to 86.9 from October's reading of 78.6. Looking regionally, the confidence of North American institutional investors rose from a revised reading of 94.0 in October to 103.4 in November. European and Asian investors displayed slightly lower confidence, with the European Index falling from 70.6 to 69.9, and the Asian Index declining from 85.4 to 83.3. Developed through State Street Global Markets' research partnership, State Street Associates (SSA), by Harvard University professor Ken Froot and SSA Director Paul O'Connell, the State Street Investor Confidence Index(R) measures investor confidence on a quantitative basis, analyzing actual buying and selling patterns of institutional investors. The index is based on financial theory that assigns precise meaning to changes in investor risk sentiment, or the willingness of investors to hold proportionally more or less of their portfolio in equities. The more of their portfolio that institutional investors are willing to devote to equities, the greater their risk appetite or confidence. "We have seen that institutional investors have concurred with market prices and with consumers about higher confidence. For our institutional investors, this translates to acquisitions of risky assets across their diversified portfolios," said Froot. "Some of the macroeconomic touch points in the U.S., such as inflation, appear to be under better control than previously thought, as the Fed shifts to inflation targeting, as energy prices decline, and as the end to Fed rate increases draws near. By contrast, the European central bank may have choked off this salutary effect by making noise about beginning to raise rates only once the inflationary threat seems poised to recede." "It's clear that today's increase in investor confidence is driven entirely by improved sentiment in the U.S.," added O'Connell. European levels of confidence are very low and remain broadly unchanged this month, and Asian confidence, which has been more robust in the past, has fallen again. It is helpful that the recent conservatism of U.S. investors in taking risk is being reversed. We are still waiting for a meaningful upward change in confidence levels to take hold in the rest of the world." Since its launch in September of 2003, the State Street Investor Confidence Index(R) has become a key economic indicator for asset owners, investment managers and central banks. As the only index providing a quantitative measure tracking the common buying patterns of institutional investors around the world, the State Street Investor Confidence Index(R) offers a unique look into the investment behavior and decisions of thousands of professional investors and their investment decisions. About State Street Global Markets: State Street Global Markets provides specialized investment research and trading in foreign exchange, equities, fixed income and derivatives. Its goal is to enhance and preserve portfolio values for asset managers and asset owners. From its unique position at the crossroads of the global markets, it creates and unlocks value for its clients with original flow-based research, innovative portfolio strategies, trade process optimization, and global connectivity across multiple asset classes and markets. State Street Global Markets' research team of leading academic and industry experts are committed to continually advancing the science, including theory and application of its proprietary investor behavior research and innovative portfolio & risk management technologies to helps its clients challenge conventional thinking, shape ideas, make more informed investment decisions and deliver measurable results. About the State Street Investor Confidence Index(R): The index is released globally at 10 a.m. Eastern time in Boston on the second to last Tuesday of each month. More information on the State Street Investor Confidence Index, including frequently asked questions and a calendar of release dates, is available at http://www.statestreet.com/investorconfidenceindex. The previous month's calculations for the index are revised to account for trading activity through the end of the reporting period. About State Street: State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management and investment research and trading. With $9.8 trillion in assets under custody and $1.4 trillion in assets under management (as of September 30, 2005), State Street operates in 25 countries and more than 100 geographic markets worldwide. For more information, visit State Street's web site at www.statestreet.com. This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those related to the pace at which State Street adds new clients or at which existing clients use additional services, the value of global and regional financial markets, the pace of cross-border investment activity, changes in interest rates, the pace of worldwide economic growth and rates of inflation, the extent of volatility in currency markets, consolidations among clients and competitors, State Street's business mix, the dynamics of markets State Street serves, and State Street's success at integrating and converting acquisitions into its business. Other important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street's 2004 annual report and subsequent SEC filings. State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, November 22, 2005, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.