YAHOO [BRIEFING.COM]: The stock market dropped dramatically in the early going as participants responded to a global sell-off, but buyers gradually stepped in with a bid that helped stocks slash losses.

The S&P 500 was down as much as 2.7% to a new two-month low this morning, but it settled the session with a more moderate loss on the order of 1%. The opening sell-off stemmed from widespread weakness among the major market averages abroad, namely Japan's Nikkei, which followed up its 6% loss in the prior session with an overnight dive of 10.6%. Explosions at nuclear facilities and threats of radiation have stoked selling in Japan and left the Nikkei to trade at a new one-year low.

The breadth of selling interest left few asset classes unscathed. As such, the CRB Commodity Index sank 3.6% to suffer its worst single-session loss since November. Among the more widely tracked commodities, oil prices dropped 4.0% to $97.18 per barrel. Weekly oil inventory data is due tomorrow morning. Not even precious metals were sparred from the sell-off; gold prices fell 2.2% to $1392.90 per ounce and silver slumped 4.8% to settle pit trade at $34.11 per ounce.

While many commodities came under severe pressure, basic materials stocks were actually leaders in the equity market's rally. The materials sector was down more than 3% at the open, but finished with a loss of less than 0.2%.

Netflix (NFLX 217.11, +15.91) distinguished itself by spiking to a gain of almost 8% as the rest of the market could only cut losses, let alone advance. The move was the stock's strongest in more than a month and was owed to an analyst upgrade at Goldman Sachs.

Amid the stock market's rebound the greenback gave back an early gain for a flat finish. Interestingly, the yen advanced despite the calamity in Japan. It was up 1.1% to 80.75 yen per dollar at the end of the day.

Early strength in Treasuries drove down the yield on the 10-year Note to a three-month low near 3.20%, but strength faded as the stock market rallied. The 10-year Note saw its yield rise to just above 3.30% by day's end.

The latest FOMC statement had little impact on trade. To no real surprise, the FOMC kept its key rate in the range 0.00% to 0.25%. It also announced that it will keep in place its plan to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011 and will continue to reinvest principal payments from its securities holdings.

Even though commodity prices have been coming down during the past few sessions, the FOMC made note that commodity prices are still up significantly since summer. Still, inflation expectations have remained stable and measures of underlying inflation have been subdued. The FOMC also made note that the recovery is on firmer footing and that overall conditions in the labor market appear to be improving gradually.

The CRB Commodity Index suffered its worst single-day drop since November with a 3.6% tumble today. That marked its sixth straight loss, which left the CRB to close below its 50-day moving average for the first time since August.

Precious metals were swept into this session's sell-off. That left gold prices to drop 2.2% to $1392.90 per ounce. Silver slumped 4.8% to settle pit trade at $34.11 per ounce.

A 4.0% drop in crude oil prices to $97.18 per barrel had some of the most damaging impact on the CRB. Prices had actually rebounded above $99 per barrel, but failed to sustain the move.

Fellow energy component natural gas actually attracted support. Prices closed pit trade 0.7% higher at $3.94 per MMBtu.

Advancing Sectors: (None)
Declining Sectors: Utilities (-1.9%), Tech (-1.6%), Financial (-1.2%), Industrials (-1.1%), Health Care (-1.1%), Consumer Staples (-1.0%), Telecom (-1.0%), Energy (-0.8%), Consumer Discretionary (-0.8%), Materials (-0.2%)DJ30 -137.74 NASDAQ -33.64 NQ100 -1.4% R2K -0.9% SP400 -0.7% SP500 -14.52 NASDAQ Adv/Vol/Dec 644/2.36 bln/1970 NYSE Adv/Vol/Dec 638/1.28 bln/2376