It was another volatile week of trading as alternating concerns about Lehman Bros.' financial position and the Fed's inflation-fighting rhetoric were intermixed with pleasing economic data and a welcome pickup in M&A news.

Despite the many twists and turns, the S&P 500 ended the week almost exactly where it began thanks to rally efforts that were waged Thursday and Friday.

To be sure, the week began on an unsettling note when Lehman Bros. pre-announced that it expected to report a second quarter loss of $2.8 billion and planned to raise $6 billion in new (and dilutive) capital. That report, and a sharp drop in the stock that ultimately followed, culminated in the ousting later in the week of the investment bank's CFO and COO from their respective positions.

Although Lehman's stock recovered some lost ground on Friday, it still declined a whopping 20% for the week. In fact, it is down 40% in the last four weeks.

Its performance weighed heavily on the financial sector, but gains in other components and a mid-week upgrade of the sector by Morgan Stanley were offsetting factors that kept losses to a minimum.

Where losses weren't so negligible was in the Treasury market, as the yield curve adjusted to shifting expectations about the timing of a possible interest rate hike from the Fed. The change in expectations was fueled by commentary from Fed officials, all of which seemed to emphasize concerns about keeping inflation expectations in check as opposed to fostering increased economic growth.