YAHOO [BRIEFING.COM]: Stocks started the session near the neutral line, but ultimately the path of least resistance was into the red, resulting in the stock market’s tenth loss in 12 sessions and new multi-month lows for the major averages.

Market participants that opted to abide by the adage, “Sell in May and Go Away” appear prescient with stocks on the slide and down more than 6% month to date. Precarious conditions in the Eurozone have prompted many to take their cues from the euro, often pressuring stocks when the currency takes a dive. Despite efforts to stabilize against the dollar, the euro ultimately eased down to a loss of about 0.2% as of the closing bell. At about $1.270, the euro hasn’t been that low since January.

Giving further credence to Eurozone concerns, Greece's long-term rating was cut to CCC from B- by analysts at Fitch in response to heightened risk that the country will exit the euro. After it was indicated yesterday that some of Greece’s banks may no longer be eligible for the services of the European Central Bank, speculation picked up today that Spanish banks may be on the brink of another downgrade.

Negativity surrounding European banks tainted the perception of domestic Financial stocks, forcing the sector down to a 2.1% loss.

Consumer Discretionary stocks were actually the worst performers of the session. They sank 2.7%. Abercrombie & Fitch (ANF 36.55, -2.95) extended the precipitous drop that it suffered in the prior session, while GameStop (GME 18.52, -2.32) and Dollar Tree (DLTR 95.13, -6.17) both fell hard in response to downside guidance that cast a pall over earnings results. Bucking the negative broad market bias and calls for a strategic overhaul, Sears Holding (SHLD 52.42, +1.55) pleased shareholders by announcing a spin-off of Sears Canada alongside its latest quarterly results. Retail giant Walmart (WMT 61.67, +2.48) also scored an impressive gain, thanks to a strong report.

Apple (AAPL 530.12, -15.96) dropped to a new two-month low as traders rotated out of the Tech heavyweight. Shares of AAPL had rallied almost 60% from the start of the year to their record high in April, but they are now down more than 15% since setting their zenith. The stock’s slide today created an especially heavy drag on the Nasdaq.

Widespread weakness among stocks sent the Volatility Index up more than 8% to 24 for the first time in 2012. The euphemistically titled “Fear Gauge” is now up in excess of 60% from the lows that it set less than two months ago.

Heightened volatility and continued weakness among stocks resulted in further rotation into Treasuries. It was reported shortly after the close that the Note’s yield set a new record low narrowly beneath 1.70%.

Data today ranged from the unsurprising to the disappointing. Specifically, the latest initial jobless claims tally totaled 370,000, which is unchanged from the prior week and on par with the 365,000 claims that had been broadly expected.

The May reading of Philadelphia Fed Index fell to -5.8 from 8.5 in the prior month. Economists polled by Briefing.com had expected, on average, an improvement to 8.8.

Leading Indicators also surprised to the downside. They showed a 0.1% decline, which contrasts with the 0.2% increase that had been broadly forecasted.

Crude oil began pit trade in positive territory and set a session high of $93.64 per barrel just minutes later. However, the energy component gave up all of its gain and then struggled in negative territory, finally settling with a 0.3% loss at $92.54 per barrel. Meanwhile, momentum behind the recent climb in natural gas ended as the commodity opened in the red and then extended its slide following inventory data that showed a build of 61 bcf when a build of 60 bcf was what had been widely anticipated. Session lows were set near $2.51 per MMBtu, but a rally into the close took prices up to $2.60 per MMBtu for a 0.8% loss. 

Gold and silver came off their 2012 lows as they climbed as high as $1579.80 per ounce and $28.30 per ounce, respectively, in today’s pit trade. Strength in the pair came partly in response to a flatter dollar that followed and a surprisingly weak Philadelphia Fed Index number. Despite a slight pullback into the close, gold managed to book a gain of 2.5% as it closed at $1574.80 per ounce, while silver settled 3.2% higher at $28.04 per ounce

Advancing Sectors: Telecom +0.4%
Declining Sectors: Utilities -0.6%, Consumer Staples -0.7%, Energy -0.7%, Health Care -1.0%, Tech -1.7%, Industrials -2.0%, Materials -2.1%, Financials -2.1%, Consumer Discretionary -2.7%DJ30 -156.06 NASDAQ -60.35 NQ100 -2.1% R2K -2.3% SP400 -2.7% SP500 -19.94 NASDAQ Adv/Vol/Dec 484/2.06 bln/2023 NYSE Adv/Vol/Dec 420/945 mln/2665