Stock prices head lower again
It was generally a negative week for stock prices. All the major indices headed lower this week. Economic news revealed an anemic economy dimming the prospects for improved corporate profits in the next few months. Also it's time for earnings announcements and warnings. These continue to be more negative than positive. In the old days, stock prices would generally head higher when companies announced layoffs. However, layoffs mean unemployment and a decline in disposable income - and a reduction in consumer spending.

Manic market
On the whole, yields on Treasury securities were lower this week than last week. However, bond investors revealed their uncertainty over economic and inflation conditions in their trading range this week. For instance, when economic indicators (retail sales, industrial production) showed lackluster activity, bond yields fell and prices rose as market players became more sure of another 50 basis point rate drop. But then when they realized that such an aggressive move might unleash inflationary pressures, bond yields rose and prices fell. Aside from economic news, bond market players also seem to get a kick out of poor earnings warnings or analysts' company downgrades. But when they realize that such weakness in the economy is likely to generate an aggressive Fed ease -- and potential inflationary pressures - we're back to the higher prices. This manic activity pretty much sums up the week.