YAHOO [BRIEFING.COM]: Technical resistance and a lack of leadership led stocks to roll over in the face of a better-than-expected weekly jobless claims report, but near-term support helped keep the averages from closing at their session lows.

Initial jobless claims for the week ended August 21 totaled 473,000, which is less than the 485,000 claims that had been widely expected. It was also down from the prior week's nine-month high of a half million. As for continuing claims, they eased to 4.46 million from 4.52 million in the prior week.

Given that the jobs report wasn't as ugly as some had feared, stocks were able to open higher and build on the prior session's advance. It didn't take long for the move to run into resistance, though. Once the S&P 500 came into contact with 1060, which marked a 50% retracement of the slide that spanned this week's high to this week's low, stocks stalled.

Following a couple of hours of muddled, listless trade, stocks rolled over. The slide stopped when the S&P 500 found support at 1045, which acted as a spring ahead of the close. However, sellers redoubled their efforts so that stocks finished with their fifth loss in six sessions. The final drop also offset the prior session's gain and left stocks to settle at a new monthly low.

Banking stocks failed to free themselves from broader market weakness, even though the KBW Bank Index had been up nearly 2% at its session high. It inevitably reversed to log a 0.7% loss, or its sixth consecutive slide. The KBW is now down 11% month-to-date.

Metals plays managed to put together solid gains, though. Specifically, shares of diversified metals and miners advanced 0.6%, while gold stocks gained 1.2%. That helped the materials sector finish with a fractional gain. It was the only sector to settle in higher ground.

Tech was the worst performing sector. It shed 1.1%. Among its members, Dell (DELL 11.75, -0.04) announced that its bid to acquire 3Par (PAR 26.03, -0.73) for $24.30 per share has been accepted. The offer beat out a bid of $24 per share from Hewlett-Packard (HPQ 38.22, -0.02).

Outsized losses among tech issues caused the Nasdaq to underperform the other headline indices. With a 6.6% year-to-date loss, the Nasdaq is also down the most in 2010.

Treasuries had surrendered early gains, but they won them back when the stock market moved lower late in the session. They also reacted positively to results from an auction of 7-year Notes. The auction drew a yield of 1.99%, a bid-to-cover ratio of 2.98, and had an indirect bidder participation rate of 56.7%. Both the bid-to-cover ratio and indirect bidder rate were above recent averages.

The dollar remained in the red for the entire session. Its 0.5% loss was largely due to a stronger euro, which climbed a 0.5% against the dollar. The euro's bounce came amid strong results from Ireland's latest debt offering, which came on the heels of a downgrade of Ireland's sovereign rating.

It was a mixed session for commodities, but the CRB Commodity Index managed to end comfortably higher helped by a 1.9% gain in grains and a 1% gain in energy.

Oct crude oil settled higher by 1.2% to $73.36 per barrel, extending its gains to a second straight session. Sept natural gas dropped 1.1% to finish at $3.83 per MMBtu. A larger-than-expected build in inventory data pushed futures to their lowest intraday level in ~11 months. It managed to bounce off those lows to recoup some of its losses.

Dec gold shed 0.2% to close at $1237.60 per ounce while Sept silver ended off 0.4% to $18.98 per ounce. Stronger-than-expected economic data stemmed the flight to safety, for the time being at least.

Advancing Sectors: (None)
Declining Sectors: Tech (-1.1%), Energy (-1.0%), Financials (-0.9%), Health Care (-0.8%), Consumer Staples (-0.7%), Consumer Discretionary (-0.7%), Utilities (-0.5%), Telecom (-0.4%), Industrials (-0.3%)
Unchanged: MaterialsDJ30 -74.25 NASDAQ -22.85 NQ100 -1.2% R2K -0.8% SP400 -0.7% SP500 -8.11 NASDAQ Adv/Vol/Dec 861/1.83 bln/1770 NYSE Adv/Vol/Dec 1064/1.04 bln/1928