YAHOO [BRIEFING.COM]: The stock market's inability to hold above a key technical level for the second straight session provided participants with an excuse to dump stocks in high volume for the worst single-session slide in five months.

Early attention was focused on the fourth quarter GDP report. It indicated that gross output increased at annualized rate of 3.2% from October through December. It was partly helped by a 7.1% spike in real final sales. Real final sales haven't made such a sharp climb since 1984.

While fourth quarter growth was actually above potential and greater than the 2.6% rate recorded for the third quarter, economists polled by Brieifng.com had expected, on average, fourth quarter growth of 3.2%.

There was only a minor reaction to news of the slower-than-expected growth. In fact, stocks actually benefited from minor buying in the first few minutes of trade. The morning bid was strong enough to take the S&P 500 back above 1300 to its highest level since September 2009. The broad market measure's failure to hold its ground above 1300 for the second straight session provided traders who had already argued that the stock market had become near-term overbought the opportunity to take profits. Selling pressure only accelerated as stocks slid through near-term support levels.

An interest in selling left many to shrug off the final January Consumer Sentiment Survey from the University of Michigan. The Survey improved to 74.2 from the preliminary reading of 72.7. It had been widely expected to improve to just 73.2.

Earnings were of little interest to broad market participants. And in light of the drastically soured sentiment, any blemishes on quarterly reports were treated as egregious offenses that commanded aggressive selling. Amazon.com (AMZN 171.14, -13.31) actually posted an upside surprise, but that was overshadowed by a tepid forecast. Its shares recorded their worst daily percentage drop in almost seven months to finish at a two-month low. Its weakness weighed heavily on the Nasdaq, which suffered an outsized loss after outperforming in the past few sessions.

Ford (F 16.27, -2.52) shares fell precipitously following a deep earnings miss. Honeywell (HON 55.32, -0.60) had in-line results and fell. Even San Disk (SNDK 46.80, -4.52) was dumped, despite an upside earnings surprise.

Energy stocks escaped some of this session's selling effort. The sector shed just 0.5%, thanks partly to a 4% spike in oil prices amid concerns about a spillover of social unrest in Egypt.

At 1.3 billion shares, trading volume on the NYSE was the strongest in more than a month. Volatility was stoked by this session's high-volume sell-off. Specifically, the Volatility Index, often euphemistically dubbed the Fear Gauge, soared 24% for its sharpest move since May.

The spike in volatility sent some participants into Treasuries, which made solid gains, but nothing overly impressive. The dollar benefited, too; it advanced 0.5% against a collection of competing currencies.

Commodities caught a nice bid today. The CRB Commodity Index responded with a 1.2% spike, which helped it achieve a 0.4% weekly gain.

Oil prices rallied sharply to wipe out losses earlier in the week. Weekly lows were set at $85.11 per barrel, which also marked a two-month low. However, concern about potential spillover of social unrest in Egypt helped spur buying this session. The energy component settled pit trade with a 4.3% gain at $89.34 per barrel. Natural gas attracted less support, but still ended up for the day. Contracts closed pit trade 0.2% higher at $4.33 per MMBtu.

Precious metals prices pushed higher, too. Specifically, gold gained 1.5% to $1337.70 per ounce while silver settled 3.3% higher at $27.92 per ounce. The strong gains followed a few sessions of relative weakness, in which both metals closed lower for three of the previous four sessions. Just yesterday gold prices put in their lowest level in almost four months, just below $1310 per ounce. Silver prices actually put in a one-month low near $26.70 per ounce early this morning.

Advancing Sectors: (None)
Declining Sectors: Consumer Discretionary (-3.2%), Tech (-2.3%), Telecom (-2.2%), Financials (-1.8%), Industrials (-1.8%), Health Care (-1.8%), Materials (-1.5%), Utilities (-1.3%), Consumer Staples (-1.1%), Energy (-0.5%)DJ30 -166.13 NASDAQ -68.39 NQ100 -2.6% R2K -2.5% SP400 -1.9% SP500 -23.20 NASDAQ Adv/Vol/Dec 413/2.39 bln/2221 NYSE Adv/Vol/Dec 484/1.34 bln/2533