What a Week: Role Reversal

Meanwhile, the energy sector, which is expected to show the least profit growth this year, had a strong week.

Traders spent their days trying to time the bottom in the price of oil, and many felt that Thursday's brief slide below $50 per barrel was the jackpot. Oil futures rallied Friday to end the week up 11 cents at $51.99.

Fueled by stronger-than-expected earnings from oil services company Schlumberger, shares of the Oil Services HOLDRs Trust(OIH) gained 4.9%. Shares of Schlumberger gained 5.4% Friday on the heels of its earnings report. The Energy Select Sector SPDR(XLE) exchange-traded fund also jumped 4.6% this week.

Exxon Mobil's (XOM) shares gained 3.7% this week to help stabilize the Dow Jones Industrial Average, which was pressured by earnings-related drops.

Economic bellwether General Electric(GE) couldn't wow investors with its earnings Friday, despite doubling its profits. Investors honed in on the company's restatement of earnings going back to 2001, as well as concerns about its acquisition strategy. Shares of GE were the worst-performing in the Dow on Friday, falling 2.7%.

The Dow slipped a fraction Friday and ended the week up only 9 points to close at 12,565.53. The S&P 500 finished the week down less than a point on the week, to close at 1430.50.

The week's economic data were strong all around, with a higher-than-expected industrial production and capacity utilization report, rising housing starts and building permits, and another week of declining jobless claims. Headline inflation reflected higher energy prices a few months ago, but the core readings were benign. Federal Reserve Chairman Ben Bernanke testified in front of the Senate Budget Committee, but said only one thing about the current economy: that the industrial production numbers this week show strength in the manufacturing sector. An upturn in the Philadelphia Fed Manufacturing Index helped prove his point.

On all the good news, the fed funds futures market continued to push out the likelihood of a rate cut well into the second half of the year. With all this acceleration, odds of a rate hike even crept into the conversation.

Stock investors have accepted the rate outlook at this point, but bonds were still adjusting. The sum of the parts was an unchanged 4.77% yield on the 10-year on the week. Foreign buyers and large institutions stepped in to buy longer-dated Treasury bonds when yields neared 4.8%.

Within the walls of a single week, the markets got rather volatile. A trader might have made a nice bundle shorting oil to $50 and buying it again. And tech may have been ugly this week, but the Nasdaq is still up 1.5% for the year -- which is only three weeks long at this point. Likewise, the S&P 500 and the Dow are up 0.9% and 0.8% for the year. Annualize that!

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting

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