What a Week: Stressed Out

International politics overshadowed the economic stories this week, even though the data that streamed in had high stakes attached.

After posting strong gains last week, the major indices floundered through the final five days of the first quarter and ended in the red. The Dow Jones Industrial Average finished the week down 1% to close at 12,354.35. The S&P 500 followed up on its best week in four years by sliding 1% to close at 1420.86. And the Nasdaq Composite dropped 1.4% over the five days to end at 2421.64.

For the quarter, the S&P 500 and the Nasdaq eked out 0.1% and 0.2% gains, respectively, while the Dow slipped 0.9%.

Traders reported that testimony by Federal Reserve Chairman Ben Bernanke to the Joint Economic Committee this week took a back seat to the escalating conflict in Iran. And while Friday's Chicago Purchasing Managers Index, personal income, spending and inflation data surpassed analysts' expectations, traders responded more to protectionist measures imposed by the Bush administration on China and rumors about war games in the Persian Gulf.

"All this [data] has been overshadowed by geopolitical developments," says Joe Brusuelas, chief economist at IDEAglobal.

Meanwhile, oil prices continued their always-unwelcome gains. Crude spiked another 5.6% in the week after rising 8.9% last week. A barrel of light, sweet crude closed Friday at $65.87.

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