YAHOO [BRIEFING.COM]: Weakness among financial stocks led to a broad-based selling effort that resulted in the stock market's worst single-session percentage decline in one month. Though stocks finished off of session lows, they still closed in weak fashion, unable to garner support and limit losses as they did in the previous session.

The downturn left the S&P 500 just below 995, which is considered a support level below the psychologically significant 1000. Many market watchers regard 990 as the next level of support, followed by 980.

Tuesday started with modest losses until sellers made a concerted move against financials. The financial sector shed 3.5% as regional banks and diversified banks fell a respective 4.2% and 5.6%. Diversified financial services firms fell 4.4%.

CIT Group (CIT 1.20, -0.28) was one of the worst performers by percent lost. The company fell sharply out of favor by delaying its quarterly filing.

All 10 major sectors in the S&P 500 finished in the red. Behind financials, energy was the next worst performing sector. It finished with a 1.7% loss, less than half the loss that hit financials. Energy was dragged lower by weakness in the broader market and 1.6% decline in crude oil prices. Oil settled at $69.45 per barrel.

Neither corporate news nor economic data had any meaningful or lasting impact on the broader market this session. Stock futures did show some knee-jerk buying before the opening bell when participants learned that second quarter productivity increased a better-than-expected 6.4%, which was the strongest increase since the third quarter of 2003, and unit labor costs during the second quarter fell 5.8%, which was sharper than expected and the steepest drop in eight years. In other economic news, wholesale inventories fell for the 10th straight month by dropping a sharper-than-expected 1.7% in June.

Tomorrow afternoon the FOMC announces its rate decision and releases its latest policy directive, which could provide a meaningful catalyst to trading. Participants will also be keeping an eye on the results of tomorrow's 10-year Treasury Note auction, which carries significantly more importance than today's $37 billion auction of 3-year Treasuries. Today's auction drew a yield of 1.78% and carried a bid-to-cover ratio of nearly 2.9, which is above recent averages.

Treasuries made a bit of a pullback in the wake of the announcement, but recovered into the close. In turn, the benchmark 10-year Note gained 27 ticks, which sent its yield well below 3.7%. The yield on the 10-year Note has shed more than 10 basis points so far this week.DJ30 -96.50 NASDAQ -22.51 NQ100 -1.0% R2K -1.7% SP400 -1.4% SP500 -12.75 NASDAQ Adv/Vol/Dec 719/1.94 bln/1931 NYSE Adv/Vol/Dec 788/1.20 bln/2235