YAHOO [BRIEFING.COM]: Stocks started the session without much direction, but they gradually chopped their way higher to settle with solid gains at their best levels in more than two years.

Early participants were hesitant to buy, but given the stock market's uptrend many were also unwilling to sell. In turn, only a modest reaction was made to news that China added 25 basis points to its one-year deposit rate and lending rate, even though there is concern that higher rates in China could curtail the country's ability to drive a global economic recovery.

It took a while to get things going, but stocks eventually staged a gradual climb. The effort was broad based in that only energy stocks (-0.5%) and utilities stocks (-0.1%) failed to find higher ground.

Consumer discretionary stocks scored the strongest gains. As a group they advanced 1.2%. Retailers led the way with a 1.5% gain.

McDonald's (MCD 75.36, +1.91) was a leader among blue chips. The stock pulled back a bit when it failed to push past its 50-day average, but it still scored its strongest single-session gain in nine months amid news of a 5.3% increase in January global sales.

It mattered little to the broader market, but the latest round of earnings was largely lackluster. Teva (TEVA 52.02, -2.96) reported worse-than-expected results, which overshadowed news that it has hiked its quarterly dividend by 14%. Avon Products (AVP 28.47, -0.88), Beazer Homes (BZH 5.59, +0.14), and Principal Financial Group (PFG 32.24, -1.46) both posted disappointing results, too. Coventry Health Care (CVH 29.78, -1.56) posted an upside surprise, but issued downside guidance. Becton Dickinson (BDX 81.03, -4.61) had a better-than-expected bottom line, but its top line was lighter than what had been widely expected.

An absence of trading catalysts made for moderate share volume. In turn, the share tally on the NYSE came in at an unimpressive 885 million. That makes for the lowest total of 2011 and the fifth straight session in which trading volume has failed to eclipse 1 billion shares on the Big Board.

Treasuries resumed their descent by selling off in the wake of the latest 3-year Note auction. The auction produced a bid-to-cover of 3.01 and dollar demand of $96.3 billion. The indirect bidder participation rate came in at 27.6%. Selling sent the yield on the benchmark 10-year Note comfortably above 3.70% for the first time since May.

Commodities finished mixed yet again. Soft commodities (-1.2%) led all decliners, weighed on by a 4.1% sell off in May sugar prices. Precious metals (+2.1%) led all advancers, helped by a 3.1% rally in silver.

March silver rallied for 3.1% to close at $30.27 per ounce, trading to its best levels in over a month. April gold gained 1.2% to settle at $1364.10 per ounce, trading to its best levels, at $1368.70, in over two weeks. Both metals rallied on the heels of news that China is once again tightening. That news, while not surprising, stoked concerns about inflation.

It was a volatile session for March crude oil, which finished off 0.6% to $86.94 per barrel. Crude dropped earlier this morning after news broke of the Chinese rate hike. It managed to recoup those losses heading into the afternoon following reports that service workers from the Suez Canal were striking in protest to the Mubarak govt. Prices momentarily traded back above the $88 level before further reports indicated that the workers, while on strike, had nothing to do with canal traffic. As such, prices retraced the earlier bounce and crude oil closed in negative territory. March natural gas ended lower by 1.6% to $4.04 per MMBtu, marking its fourth consecutive decline.

Advancing Sectors: Consumer Discretionary (+1.2%), Financials (+0.7%), Industrials (+0.7%), Consumer Staples (+0.6%), Tech (+0.4%), Telecom (+0.3%), Materials (+0.3%), Health Care (+0.3%)
Declining Sectors: Utilities (-0.1%), Energy (-0.5%)DJ30 +71.52 NASDAQ +13.06 NQ100 +0.6% R2K +0.7% SP400 +0.5% SP500 +5.52 NASDAQ Adv/Vol/Dec 1526/1.81 bln/1109 NYSE Adv/Vol/Dec 1914/885 mln/1073