Downward price trend for equities
Middle East tensions, bad earnings reports and sparse economic news all helped to lead stock prices on a downward path this past week. The news was bad for stock prices in general, although not for the small capitalization market. The Russell 2000 managed to record a 3.6 percent hike this week despite declines in the other major indices. It isn't unusual to see larger-than-average price increases in small cap stocks during economic recoveries. But then one would expect modest gains across the board.

Treasury yields still falling
Economic data, though sparse this week, were consistent with a sluggish recovery. Middle East tensions that could disrupt oil supplies and raise crude oil prices are generally viewed in a negative light by bond investors. However, the downward trend in stock prices this week ended up benefiting bond investors. The drop in yields was much smaller than last week, but the downward trend in yields (and upward trend in prices) continued.