YAHO [BRIEFING.COM]: The possibility that General Motors and Chrysler may be facing bankruptcy along with renewed concerns that banks may need more federal financing provided market participants with two good reasons to sell stocks Monday. The downward move was underscored by broad-based weakness, which took the S&P 500 to a 3.5% loss. The S&P 500 has fallen more than 5% during the course of the last two sessions.

Stocks were under pressure for the entire session. Pessimism was provoked by news the U.S. government's auto task force determined that neither General Motors (GM 2.70, -0.92) nor privately held Chrysler submitted viable restructuring plans. The task force also indicated bankruptcy may be required for the two companies. Shares of GM lost one quarter of their market cap as a result.

In a statement, GM indicated it will address the issues to improve its long-term viability, including restructuring financial obligations.

Though automakers (-8.3%) and autoparts and equipment companies (-5.9%) displayed marked weakness for the entire session, financial stocks weighed the most on trading. Financials fell 9.4% after Treasury Secretary Geithner stated this last weekend that banks may need more bailout funds. The news weighed most heavily on diversified banks (-13.5%) and diversified financial services companies (-12.0%).

Consumer finance companies (-12.9%) also showed weakness, but their decline was more closely related to an article in The Wall Street Journal indicating an accounting rule change could block capital for certain credit card issuers.

Gains among financials were few and far between, but Fifth Third Bancorp (FITB 2.48, +0.13) was able to trade higher after announcing it will sell a majority stake in its processing business to Advent for $561 million in cash. The two companies will operate the business as a joint venture.

Though all 10 sectors in the S&P 500 closed lower, health care (-0.7%) was the only one able finish with a loss of less than 1%. Abbott Labs (ABT 47.89, +1.29) provided support to the sector, thanks to favorable reports about one of the company's stents, and separate reports late in the session that indicated Abbott held preliminary talks with Wyeth (WYE 43.00, -0.11), which suggest the company is open to ride the sector's recent merger wave.

The session's broad sense of pessimism prompted a broad-based selling effort, in which more than 90% of the companies in the S&P 500 closed with losses. Still, stocks were able to pare a portion of their losses heading into the close as the S&P 500 found support at a key technical support level around 781.

Participants return to Tuesday's trading without many market-moving earnings or economic reports to digest. There are no earnings reports of consequence heading into tomorrow's open, and the only noteworthy items on the day's economic calendar include the S&P/Case-Shiller Home Price Index for January and the Consumer Confidence Index for March. However, investors are heading into quarter-end, which could lead to additional volatility in the coming session.DJ30 -254.16 NASDAQ -43.40 NQ100 -2.5% R2K -3.0% SP400 -3.5% SP500 -28.41 NASDAQ Dec/Adv/Vol 2045/619/2.04 bln NYSE Dec/Adv/Vol 2740/356/1.51 bln