What a Week: Hard Sell

The Dow Jones Transportation Average ended the week down 2.9% as the price of oil kept climbing to back above $63 per barrel Friday. Energy stocks such as Exxon Mobil (XOM Quote) did benefit from oil's rebound, helping the S&P 500 outperform the Dow and Nasdaq for the week.

Other economically sensitive sectors had a tough go of things as well. The retail stocks did not benefit much from Thanksgiving shopping news as the S&P Retail Index dropped 1.2% on the week amid continued weakness in industry bellwether Wal-Mart (WMT Quote). Also, Federated (FD Quote) slid 3.5% in heavy volume Friday after a Citigroup downgrade although Home Depot (HD Quote) was buoyed by speculation it may be the target of a private equity buyout.

Homebuilders such as Pulte Homes (PHM Quote) on the other hand, took off as their tie to low interest rates gave investors hope that the housing market will not collapse further. The Philadelphia Housing Sector Index jumped 2.9% on the week.

But with Treasury yields at levels far below the 5.25% fed funds rate, bond traders expect more than one rate cut in the first half of next year. Many strategists find it difficult to suggest investors jump into Treasuries at these levels, but investors are out there buying despite the warnings.

"We think the market has gotten a bit ahead of itself," says Andy Richman, fixed-income strategist in SunTrust's Personal Asset Management Division. "This is not a place to rush in."