YAHOO [BRIEFING.COM]: Rekindled concerns regarding sovereign debt drove the dollar to its best single-session percentage gain since December, but moderate weakness mired the broader equity market for the entire session.

Distress about the fiscal health of the PIIGS contingent, which includes Portugal, Italy, Ireland, Greece, and Spain, returned to the forefront with news that analysts at Fitch trimmed Portugal's sovereign debt rating to AA- from AA. The announcement dropped the euro to a 10-month low against the dollar, but bolstered the Dollar Index, which closed trade with a near 1.4% gain at a new 10-month high.

The greenback's gain hampered stocks for the entire session. Weakness was also widespread among stocks, such that declining issues outnumbered advancers by more than 3-to-1 in the S&P 500.

Financials were the only major sector to find any lasting support in the face of the broad-based slide, even after Senator Dodd stated that President Obama would like to move quickly on a financial reform bill and Kansas City Fed President Hoenig stated that it is unlikely that banks have recognized all of their financial losses. Financials finished with a 0.2% gain. No other major sector settled in positive territory.

There were a few individual names that outperformed, though. Following better-than-expected earnings, both Darden Restaurants (DRI 44.91, +1.00) and Lennar (LEN 17.69, +0.63) hit a fresh 52-week, while Adobe (ADBE 36.51, +1.29) logged its best single-session percentage advance in three months.

General Mills (GIS 72.18, -1.39) wasn't so fortunate. The company beat the consensus earnings estimate and raised guidance for the year, but its outlook was still shy of what Wall Street had forecast for fiscal 2010.

Meanwhile, ConocoPhillips (COP 52.53, +0.02) had a choppy session despite its plans for higher dividends and share repurchases and the intent to halve its equity ownership in LUKOIL. Sharply lower oil prices bogged down most of the energy complex.

Oil prices fell as low as $79.88 per barrel as a stronger dollar and a larger-than-expected 7.2 million barrel build in weekly inventories conspired against the commodity. Contracts for crude closed pit trade 1.6% lower at $80.61 per barrel.

Volatility spiked after the Volatility Index had just set a 52-week low last week. The VIX surged 7.3% in its sharpest hike since February this session.

Meanwhile, trading volume was solid, but not very impressive as 1.0 billion shares exchanged hands on the NYSE.

The dollar index's 1.3% gain was the largest single session gain since December. This increase put pressure on the market. Commodities, which are dollar denominated, were hit especially hard this session. They declined 0.8%.

The decline in commodities was led by a 2.1% decline in precious metals. Both gold and silver futures trended lower throughout the session as the dollar persisted higher. April gold closed down 1.4% at $1088.80 per ounce. May silver saw even steeper declines; it fell 2.3% to close at $16.64 per ounce.

Crude oil opened the pit trade substantially lower. A greater-than-expected build in the inventory report this morning sent the April crude oil contract to a session low at $79.88 per barrel. However, it quickly rallied back to the $81 level and traded just above the $80.50 level for the remainder of the session. April crude oil closed 1.6% lower at $80.61 per barrel.

Natural gas was the strongest energy commodity this session. It closed 0.7% lower at $4.10 per MMBtu.

Sugar futures continued their recent volatile trade this session. The May contract closed 6.6% higher at $0.177 per pound.

Treasuries failed to find support. In turn, the benchmark 10-year Note dropped more than one full point. That has lifted its yield to a one-month high near 3.85%. Pressure against Treasuries intensified after results from a $42 billion auction of 5-year Notes showed a yield of nearly 2.61%, a bid-to-cover ratio of 2.55, and an indirect bid of 39.7%. The 5-year Note fell 25 ticks so that it now yields almost 2.60%.

Though it featured some surprises, economic data proved inconsequential this session. New home sales for February decreased 2.2% month-over-month to an annualized rate of 308,000 units, which was not only worse than expected, but also an all-time low. Further, Inventories increased for the third consecutive month as builders currently carry 9.2 months of supply, which is the highest level since May 2009.

Meanwhile, durable goods orders for February climbed 0.5% and orders less transportation increased 0.9%. The headline number was in stride with expectations, but the latter number was actually stronger than expected.

Advancing Sector(s): Financials (+0.2%)
Declining Sector(s): Telecom (-1.1%), Consumer Staples (-1.0%), Utilities (-1.0%), Consumer Staples (-1.0%), Health Care (-0.9%), Energy (-0.7%), Tech (-0.6%), Industrials (-0.6%), Consumer Discretionary (-0.5%) DJ30 -52.68 NASDAQ -16.48 NQ100 -0.6% R2K -1.0% SP400 -0.8% SP500 -6.45 NASDAQ Adv/Vol/Dec 796/2.31 bln/1875 NYSE Adv/Vol/Dec 1020/1.02 bln/2007