YAHOO [BRIEFING.COM]: Volatility continued today, but this time stocks swung to their best single-session percentage gain in more than two years.

A near 7% drop during the prior session's trade -- the worst one-day rout since December 2008 -- was initially followed by bargain hunting today. Although the market's opening gain was challenged, stocks were able to regroup and climb sharply.

Gains were tested again later in the day, when the FOMC issued its latest Policy Statement. The FOMC announced today that it will keep the Fed Funds Rate at 0.00% to 0.25%, as had been broadly anticipated. However, the Committee changed its verbiage about keeping rates at exceptionally low levels for an extended period to a pledge to keep rates exceptionally low at least through mid-2013. That pledge is likely because the Committee now expects a somewhat slower pace of recovery over coming quarters.

Many participants had expected the Committee to comment on the market's recent volatility and any new threats to the global economic recovery, as implied by the US debt downgrade issued by analysts at S&P, but the Fed's failure to address those matters prompted many participants to exit their positions so as to take profits or hedge against further volatility.

As selling gained momentum, the S&P 500 actually fell to a loss of more than 1% after it had been up in excess of 2% around midday. Treasuries rallied amid the action, causing yields on several issues to fall to record lows. Even the yield on the benchmark 10-year Note dropped to a record low of 2.03%, which is less than the approximate 2.2% dividend yield currently offered by the S&P 500.

Just as stocks threatened to break down again, the S&P 500 was able to attract support in the 1100 zone. It then climbed aggressively into the close, resulting in a 6% swing from its session low to its closing high. The net gain of 4.7% made for the S&P 500's best single-session percentage spike since a 7% surge in March 2009.

Strong market breadth helped advancing share volume on the NYSE surpass 2 billion, which is more than double the total share volume tally that had been regularly averaged on the NYSE up until only one week ago.

The buying effort helped drop the Volatility Index, which is often euphemistically dubbed the Fear Gauge, back down to 35 for a 27% loss. In the prior session it had surged to 48 for the first time since May 2010.

While buying interest was both strong and broad, participants favored financials the most. The sector surged to a 8.2% gain after it had been slammed for a 10% loss yesterday. Consumer staples stocks, considered to be defensive in nature, made up the only sector that gained less than 3%.

The continued flight to safety helped Dec gold futures, which settled higher by 1.7% to $1743.00 per ounce, trade to a new all-time high in overnight trade at $1782.50. It spent most of pit trade pulling back from that high. Following the release of the FOMC decision, which took place in afterhours trade for metals, gold is attempting to trade back to its all-time highs. Sept silver shed 3.9% to close at $37.86 per ounce. Silver futures are having a hard time keeping pace with the gains in gold, which is being viewed as more of a currency in light of the tumult in global indices.

Sept crude oil settled lower by 2.5% to $79.30 per MMBtu, their lowest settling price since Sept 29 of last year. Despite trading just above the flat line for a good portion of the session, futures sold off, following equity markets lower, ahead of the release of the FOMC decision. The sell-off continued following the release as well and futures dropped back toward their overnight lows. Sept natural gas finished higher by 1.5% to $4.00 per MMBtu.

Advancing Sectors: Consumer Staples +2.2%, Utilities +3.2%, Health Care +3.8%, Telecom +4.4%, Tech +4.6%, Industrials +4.6%, Energy +4.6%, Consumer Discretionary +4.8%, Materials +5.9%, Financials +8.2%
Declining Sectors: (None)DJ30 +429.92 NASDAQ +124.83 NQ100 +4.9% R2K +6.9% SP400 +6.4% SP500 +53.07 NASDAQ Adv/Vol/Dec 2214/3.80 bln/456 NYSE Adv/Vol/Dec 2899/2.41 bln/250