The stock market is truly a mysterious beast, or as we like to say here at the Fool, a wee bit foolish (notice the lowercase F). The week began with more bad news on the oil spill front as the amount of oil gushing from BP's (NYSE: BP) well was revised upward from 35,000 barrels a day to 60,000 per day. Over in Europe there was another downgrade of Greece, although Moody's seems to have been a little late to the endless downgrade party. Finally, on Thursday we awoke to news that the job picture continues to deteriorate domestically as initial claims for jobless benefits rose by 12,000, while economists were predicting a fall of 6,000.

However, as the stream of bad news this week paints an ugly picture for the economy, the equity markets don't seem to care, as the Dow Jones Industrial average is likely to post consecutive weekly gains.

While most investors never want to miss a rally, it's important to be protected in case the realities of an economic downturn begin to coincide with the stock market.

Picking stocks with high dividend yields is an essential part of any portfolio, and a great way to offer some downside protection in an unpredictable market. Three high-yielding stock with good balance sheets are Altria (NYSE: MO), Dupont (DD), and McDonald's (NYSE: MCD).

Please also be reminded that dividend stocks are not risk free. It was only a few months ago that investment gurus were recommending BP's for its safety as a high yielder.

Andrew Bond does not own shares in the any of the companies mentioned. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.