What a Week: Drama Kings

The foils for the stock market this week were many, but the damage was relatively minimal.

Whether traders focused on the carnage in the subprime mortgage market, a Bank of Japan rate hike, the Federal Reserve and inflation fears, or Iran missing its deadline to halt uranium enrichment, the result was just drama, drama, drama. Still, major averages remained supported by their long-term foundation of abundant liquidity.

After hitting an all-time high on Tuesday, the Dow Jones Industrial Average ended the week down 0.9% at 12,647.48. The Dow Jones Transportation Average marched to another all-time high on Wednesday, and ended the week up 1%. The Nasdaq Composite also ended the week on an up note, gaining 0.8% to close at 2515.10. And, the S&P 500 ended the week down only 0.3% to close at 1451.19.

Along with a higher-than-expected core CPI, commodities rallied sharply this week. The combination brought investors back to the "we have inflation" daisy petal, says Sam Stovall, chief investment strategist for Standard & Poor's. A variety of commodities indices like the Journal of Commerce Raw Industrial Commodity Price Index, the Goldman Sachs Commodity Index ex-energy and the CRB Raw Industrial Index, either reached or approached all-time highs.

Crude oil jumped 2.5% for the week, settling at $60.88 Friday, and gold jumped 2.3% to close at $688.30 per ounce.