YAHOO [BRIEFING.COM]: Stocks benefited from buying interest in the early going, but a midmorning shift in sentiment sent stocks to their fourth round of losses in five sessions.

Most of Fed Chairman Bernanke's comments to the Senate Banking Committee were consistent with what he expressed yesterday, but he did make note that a default by the Treasury would destroy trust and confidence among investors. That remark came after analysts at Moody's decided to put the Aaa credit rating of the U.S. on review for possible downgrade.

Earlier this week the minutes from the most recent FOMC meeting indicated that the Fed would be willing to provide further quantitative easing, if conditions deemed it necessary, but Bernanke confirmed today that the Fed does not yet have such a plan ready.

Even though it was already established that talk about further quantitative easing by the Fed was nothing more than that, market participants seemed to use Bernanke's confirmation of that point as reason to sell into the stock market's slide, which took the three major equity averages down from solid gains to varied losses.

Of the three, the Nasdaq suffered the worst loss. Google (GOOG 528.94, -9.32) was a heavy drag ahead of its quarterly report. In contrast, the Dow was able to limit its loss amid support from JPMorgan Chase (JPM 40.35, +0.73), which bested the consensus earnings estimate for its latest quarter to trade to a weekly high. However, other diversified financial services stocks and banking plays failed to share in the stock's strength, resulting in a 0.8% loss for the overall financial sector.

An upbeat quarterly report also helped Yum! Brands (YUM 56.37, +0.79) trade with strength, but a miss and downside guidance from Marriott (MAR 34.69, -2.45) made the hotel operator drop to a July low. Weakness in MAR shares imbued many of its peers.

Outside of earnings news, News Corp (NWSA 15.44, -0.49) has come under FBI investigation to see whether or not employees of the company hacked into cellular phones for stories.

Shares of ConocoPhillips (COP 75.61, +1.21) opened trade with a gain of almost 8% in response to news that the company will be separate its refining and marketing operations from its exploration and production business so as to form two publicly traded companies. Support steadily faded as trade progressed, although the stock still settled with a gain. The stock had been an early source of support for the energy sector, which was up more than 1% in the early going, but ended the session with a 0.5% loss.

The dollar traded with increased volatility today. Early this morning it was undercut by the Moody's news, but it managed to rebound in response to rekindled concerns about fiscal conditions among countries in the eurozone periphery. The euro caught a bid around the time that Italy announced its Senate passed a set of austerity measures, but was later backed down as the dollar rallied to close the session with a 0.6% gain against a broader collection of currencies.

Participants got a sizable dose of data this morning, but none had any real impact on sentiment this session. Initial jobless claims for the week ended July 9 totaled 405,000, which is slightly less than the 410,000 that was widely expected, but down from the prior week's upwardly revised initial claims count of 427,000. Continuing claims climbed to 3.73 million from 3.71 million.

Producer prices for June fell 0.4% from the prior month, but core producer prices posted a 0.3% monthly increase. A 0.2% decline in overall prices and a 0.2% increase in core prices had been expected, on average, among economists polled by Briefing.com.

Retail sales for June were up 0.1%, which was better than the 0.2% decline that had been broadly expected, but sales less autos were flat, as had been anticipated.

Commentary out of the Fed Chairman, at his second day of testimony on the Hill, backed away from talk of QE3. This followed yesterday's testimony, where Mr. Bernanke said the Fed remains prepared to respond should economic developments indicate that an adjustment in the stance of monetary policy would be appropriate. Today the Chairman said that the Fed is not prepared, at this point, to take further action. That comment helped the dollar rebound. It also created volatility for select commodities, including gold, silver and crude oil.

In overnight trade, gold futures traded to a fresh all-time high at $1594.90 per ounce. Futures remained near those highs in mid-morning trade, when Mr. Bernanke's comments hit the wires. This caused for futures to pull back to the flat line. Gold managed to trade back into positive territory to finish the session higher by 0.2% to $1588.40 per ounce. Sept silver saw the same pullback as gold, as prices dropped back to near the flat line. It managed to retrace some of its sell off to finish higher by 1.3% to $38.65 per ounce.

The comments from Mr. Bernanke caused for August crude oil, which settled lower by 2.4% to $95.69 per barrel, to sell off sharply. Prices dropped over 4 points to session lows at $94.53. They managed to rebound off those lows, modestly at least, to finish above the $95 mark. This morning's inventory data, which showed a slightly larger-than-expected build, caused natural gas to drop to low at $4.25. Futures spent the remainder of the session retracing that sell off, ending lower by 0.5% at $4.38 per MMBtu.

Advancing Sectors: (None)
Declining Sectors: Health Care -0.1%, Utilities -0.5%, Energy -0.5%, Consumer Staples -0.5%, Telecom -0.7%, Consumer Discretionary -0.8%, Financials -0.8%, Materials -0.9%, Industrials -1.0%, Tech -1.0%DJ30 -54.49 NASDAQ -33.18 NQ100 -1.2% R2K -1.6% SP400 -1.3% SP500 -8.85 NASDAQ Adv/Vol/Dec 589/1.95 bln/1977 NYSE Adv/Vol/Dec 640/925 mln/2400