Spurred by continuous weak economic news, the fixed-income markets turned in one of the strongest performances of the year.

The rally that began two weeks ago faltered at the begining of last week. But when news of the unusually sharp decline in durable-goods orders hit the wire services, the bond markets took off. The implication of the poor economic news is that, at least for the near term, the Federal Reserve wont't have to tighten money by raising interest rates.

Yields have tumbled in all areas. In the short sector, six-month certificates of deposits have dropped 50 basis points (a basis point is one-hundredth of a percentage point); one-year Treasury bills fell by more than 50 basis points; the new two-year notes, which came with an average return of 9.77 percent on Tuesday, fell 30 basis points.

Long Treasuries toppled 22 basis points, while long municipal dollar bonds advanced anywhere from 1 to 2 points. The surge witnessed not only dealer activity, but good retail demand, which is what is required to keep a rally alive.

The upward thrust swept along most of the new underwritings that sold last week. A variety of corporate issues returned anywhere from 9.55 percent on the triple-A Gulf Oil debentures to 13.31 percent on the B-rated Integrated Resources Inc.

New tax-free bonds were also in demand. The $125 million MAC issue, priced at 8 1/8 percent, quickly cleaned up.

When considering the purchase of a long utility bond, it would be helpful to compare the yield spread between long 30-year Treasuries and new triple-A public utilities.

For the past 12 months, the corporates have returned an average 47 basis points more yield. At one point, you could have picked up as much as 66 basis points, while the least you could have picked up would have been 32.