YAHOO [BRIEFING.COM]: Stocks started the session with a 1% gain, but rolled over to trade with a 1% loss as participants discarded news that legislative leaders agreed on a debt deal to focus on the tenuous U.S. economy.

Participants first applauded news that leaders of the House and Senate have agreed to certain spending cuts and an increased debt ceiling so as to help avoid a default on U.S. debt. Of course, many recognized that an official vote has yet to be made. Also, debt rating agencies have yet to weigh in, leaving some to wonder whether or not the U.S. will lose its coveted top-notch AAA credit rating.

Nonetheless, the news helped stocks stage a nice gap up at the open. The move offered stocks relief from the near 4% slide that they had suffered during the course of last week's trade. It didn't take long for support to fade, though. Stocks steadily descended from their opening high, then gained momentum to the downside with the release of the latest ISM Manufacturing Index.

The ISM Index for July was widely expected to come in at 54.0. It fell to 50.9 from 55.3 in the prior month instead. As for manufacturing activity abroad, China's PMI Manufacturing Index for July dipped to 50.7 from 50.9 in June. The final July reading for the eurozone PMI Manufacturing Index stayed at 50.5, but Germany's PMI Manufacturing Index for July came in at 52.0, which is slightly less than the 52.1 that was posted in the preliminary reading. France's PMI Manufacturing reading inched up to 50.5 from the 50.1 that was posted in the preliminary reading.

Europe's bourses suffered a rush of aggressive selling shortly before they closed. Their weak finish coincided with additional selling pressure in the broad U.S. equity market.

The S&P 500 may have settled in the red, which made for its sixth straight loss, but it was able to work its way up from its midday low. That meant that it avoided closing below its 200-day moving average after it had traded below the key technical line earlier in the day.

Favor for relatively conservative, dividend paying plays made telecom and utilities today's top performers. As a group, telecom stocks advanced 0.9%. Utilities managed to muster a collective gain of 0.3%.

Every other major sector suffered a loss. Health care stocks were hit the hardest. The sector ended the day with a 1.7% loss, although it had been down by about 2.5% at its session low. Managed care plays slumped as participants shrugged off an upside earnings surprise by Humana (HUM 72.36, -2.22) to focus on the threat of pricing pressure within the industry.

Overall weakness among stocks helped send Treasuries higher again. In turn, the yield on the benchmark 10-year Note dropped below 2.75% for the first time since November.

The greenback also benefited from buying interest. It had trailed a basket of major foreign currencies in the early going, but managed to rally to a 0.8% gain, as of the close of trade. The dollar is still down about 6% for the year, though.

Precious metals rallied off of their respective intraday lows following this morning's ISM econ number, which was worse than expected. Dec gold futures rallied back to unchanged, momentarily trading into positive territory, but pulled back from that area heading into the close. They finished lower by 0.5% to $1621.70 per ounce. Sept silver came up just shy of unchanged, but like gold, pulled back into negative territory heading into the close. It finished lower by 2% to $39.31 per ounce.

The ISM number caused Sept crude oil, which settled lower by 0.9% to $94.89 per barrel, to sell off throughout the morning. It notched lows at $93.42 in mid-morning trade, marking a sell off of over 5 points. Futures managed a modest bounce in afternoon trade, to finish with modest losses. Sept natural gas ended higher by 1.1% to $4.19 per MMBtu.

Advancing Sectors: Telecom +0.9%, Utilities +0.3%
Declining Sectors: Energy -0.1%, Tech -0.2%, Consumer Staples -0.3%, Financials -0.3%, Materials -0.4%, Industrials -0.5%, Consumer Discretionary -0.6%, Health Care -1.7%DJ30 -10.75 NASDAQ -11.77 NQ100 -0.4% R2K -0.5% SP400 -0.7% SP500 -5.34 NASDAQ Adv/Vol/Dec 1189/2.23 bln/1400 NYSE Adv/Vol/Dec 1616/1.11 bln/1428