YAHOO [BRIEFING.COM]: Stocks finished off their lows, but still ended with large losses as negative headlines from Europe continued to flow. The headlines started with Spain formally requesting EUR100 billion to recapitalize its banks, and continued with the resignation of Greece’s newly appointed finance minister along with Cyprus asking the European Union for help. A small rally in the final hour of the session helped the major averages climb off their worst levels, but the S&P 500 still ended down 1.6%.

European bank stocks were hit hard on today’s news flow as Deutsche Bank (DB 34.28, -1.70) and Barclays (BCS 12.07, -0.54) fell 4.7% and 4.3% respectively.

Homebuilders ran to session highs following this morning’s better than expected new home sales number, but were unable to hold those levels. New home sales in May hit an annualized rate of 369,000, which is up from April's unrevised rate of 343,000, and better than the rate of 350,000 that had been broadly expected. The SPDR S&P Homebuilders ETF (XHB 19.55, -0.30) lost 1.5%.

Health care stocks were under pressure as markets await the Supreme Court’s decision on the constitutionality of Obamacare. With the Supreme Court issuing its last opinions of the term on June 28, an announcement will occur in the next couple of days. Athena Healthcare (ATHN 78.38, -0.68), Accretive Health (AH 11.16, -0.76), and CVS Caremark (CVS 45.20, -0.70) will all be in play on the announcement.

Chesapeake Energy (CHK 17.03, -1.58) and Encana Corp. (ECA 19.04, -0.82) saw large losses following reports the two companies together attempted to suppress land prices. The companies reportedly discussed ways to prevent bidding against one another in at least nine perspective deals in Michigan.    

One bright spot in today’s selloff was the fertilizer sector which was upgraded at Dahlman Rose. CF Industries (CF 183.66, +5.97), Potash Corp. (POT 41.01, +0.67), and Mosaic (MOS 51.10, +0.52) were among those who saw strong gains. The sector’s upgrade comes at a time when grain prices continue to climb amid dry weather in key crop areas.

Treasuries saw a solid advance as buying dropped the 10-yr yield 6.4 basis points to 1.608%. Today’s aggressive buying flattened the yield curve as the 2-10-yr spread narrowed to 130.5 basis points.

The Dollar Index saw modest strength, closing up 0.2% at 82.45. Gains were strongest against the euro and the Australian dollar at 0.5% and 0.6% respectively. The Japanese yen was the biggest beneficiary from today’s flight to safety, gaining 1.5% against both the euro and the Australian dollar.  

Crude oil spent its entire pit session in negative territory, dipping as low as $78.01 per barrel in afternoon action. However, the energy component came off its lows as it inched higher into the close. Crude ultimately settled down 0.7% at $79.18 per barrel. It is worth noting that according to reports, the European Union formally approved a ban on Iranian oil that will take effect on July 1. On the other hand, natural gas continued last week's advance, touching a session high of $2.72 per MMBtu. It trended slightly lower for the remainder of the session, but still finished pit trade with a 2.3% gain at $2.69 per MMBtu.

Precious metals inched higher in morning trade and picked up steam around noon despite the strong dollar. Buyers reacted to signs of a worsening Eurozone debt crisis as Greece's newly appointed finance minister resigned and Cyprus formally asked the European Union for help. Gold touched a session high of $1589.00 per ounce and closed just below that level at $1588.00 for a gain of 1.4%. Silver popped to a session high of $27.59 per ounce moments before it settled with a gain of 3.1% at $27.50 per ounce. The European Union Summit will take place later this week, and should have an impact on action in the precious metals market.

Tuesday will see the Case-Shiller 20-city Index released at 9 am ET and consumer confidence cross the wires at 10 am ET. Treasury will auction $35 bln 2-yr notes.DJ30 -138.12 NASDAQ -56.26 SP500 -21.30 NASDAQ Adv/Vol/Dec 646/1.45 bln/1870 NYSE Adv/Vol/Dec 712/753.7 mln/2346