YAHOO [BRIEFING.COM]: Stocks settled just shy of session highs to secure strong gains. The effort was led by Energy.

For the second straight session the Energy sector outperformed the broad market. Building on its 1.1% bounce in the prior session the sector climbed almost 2% today. It was led by shares of oil and gas exploration players and drilling outfits. As an aside, oil prices closed pit trade with a 1.2% gain at $80.28 per barrel, despite news that the latest weekly inventory report featured a smaller-than-expected draw, which is generally regarded by analysts as a bearish sign because it points to softer demand.

Consumer Discretionary stocks also performed well in the prior session, but were unable to put together a sustainable gain in trade today. As such, the sector settled with a sligh loss.

Corporate earnings were limited to only a handful of widely held names, including General Mills (GIS 37.55, -0.60), which posted an upside earnings surprise that was overshadowed by weak guidance. Monsanto (MON 80.89, +3.02) and Lennar (LEN 28.70, +1.31) reported strong earnings of their own, but the latter was likely helped by some better-than-expected pending home sales numbers.

Pending home sales spiked during May by 5.9% to exceed the 0.5% uptick that had been broadly expected. The jump also makes for a positive turn from the 5.5% drop that was experienced in the prior month.

In other economic news, durable goods orders increased in May by 1.1%, which is more than double the 0.5% increase that had been expected, on average, among economists polled by Briefing.com. Excluding transportation related items, durable goods orders increased in May by a much more tepid 0.4%, which is less than the 0.7% increase that had been broadly anticipated. Prior month data was revised to show that overall orders declined by 0.2% and orders less transportation declined by 0.6%.

There weren't many headlines out of Europe ahead of the two-day European Union summit, but yields on the debt of Italy and Spain did eased back narrowly. The euro traded with limited movement for most of the session, but by the closing bell it was down nearly 0.2% against the greenback.

Treasuries also traded quitely for most of the session. Lackluster results from an offering of 5-year Notes did not drive any meaningful action. The offering drew a Bid-to-Cover of 2.61, Dollar Demand of $91.5 billion, and an Indirect Bidder participation rate of 35.1%. For comparison, the prior auction drew a much better Bid-to-Cover of 2.99, Dollar Demand of $104.7 billion, and an Indirect Bidder rate of 42.6%. An average of the past six auctions results in a Bid-to-Cover of 2.98, Dollar Demand of $104.2 billion, and an Indirect Bidder participation rate of 44.6%.

Crude oil rose to a session high of $80.92 per barrel in morning pit action before it pulled back to a session low of $79.76 per barrel following weaker-than-anticipated inventory data that showed a draw of 133,000 barrels when a draw of 1.3 million barrels had been expected. The energy component regained strength in afternoon floor trade, though; it settled the session with a 1.2% gain at $80.28 per barrel.

Natural gas had a strong start to its pit session. However, it came under selling pressure after touching a session high of $2.94 per MMBtu. The energy component gave up all of the session's gains and settled with a 0.4% loss at $2.80 per MMBtu.

Gold began pit trade in negative territory and dropped to a session low of $1563.10 per ounce. It popped into positive territory to a session high of $1584.60 per ounce in the absence of any clear catalysts. Following choppy action ahead of tomorrow's EU Summit, gold managed to settle the session at $1578.80 per ounce, or 0.3% higher. Silver, on the other hand, extended yesterday's slide as it spent most of its floor session in the red. It briefly broke into positive territory and touched a session high of $27.27 per ounce, but ultimately finished with a 0.3% loss at $26.96 per ounce.

Advancing Sectors: Energy +1.9%, Financials +1.2%, Industrials +1.1%, Utilities +1.1%, Health Care +1.1%, Materials +0.9%, Consumer Staples +0.7%, Tech +0.7%, Telecom +0.3%
Declining Sectors: Consumer Discretionary -0.1%DJ30 +92.34 NASDAQ +21.26 NQ100 +0.6% R2K +1.5% SP400 +0.9% SP500 +11.86 NASDAQ Adv/Vol/Dec 1766/1.63 bln/709 NYSE Adv/Vol/Dec 2387/684 mln/660