YAHOO [BRIEFING.COM]: News of extended tax cuts helped send the stock market to a new two-year high in the first few minutes of trade, but gains were eventually slashed so that stocks settled flat.

Last evening the White House made preliminary agreements with congressional officials to extend income and dividend tax cuts, as well as payroll taxes and unemployment benefits. Although the legislative process still has to play out, the reaction among market participants this morning was decidedly positive. Improved confidence on the part of investors rekindled the risk trade.

Support for stocks sent both the S&P 500 and the Nasdaq to new two-year highs, but the Dow stalled just a point below its November peak. Natural resource plays made some of the biggest bounces this morning; both the materials sector and the energy sector were up as much as 1.4%. Buying therein was further bolstered by strength among commodities.

The CRB Commodity Index was up more than 1% to a new two-year high during early trade, but it didn't take long for traders to take profits and send the Index to a 0.5% loss. Gold prices ended the day down 0.5% to $1409.00 per ounce after the continuous gold contract hit a new all time high of $1431.10 per ounce. Silver prices settled with a 0.5% gain at $29.78 per ounce after they had been at a 30-year high of $30.75 per ounce. Oil prices were clipped from a two-year high of $90.76 per barrel to settle pit trade with a 0.8% loss at $88.69 per barrel.

Stocks also fought sellers through the morning, but pressure didn't really intensify until the final hour of trade. A near eight-point drop in the S&P 500 during the course of about 40 minutes coincided with the dollar's push to a session high, or gain of 0.3%, which is right about where it was at the close. The greenback had been down 0.6% at its session low.

The stock market's afternoon slide began just before the release of consumer credit data for October. Total consumer credit climbed $3.4 billion, which is a surprise since the consensus among economists surveyed by Briefing.com had called for a $2.5 billion decline. Consumer credit for September was revised downward to reflect a $1.2 billion increase.

Though support for stocks waned late in the session, Treasuries were spurned for the entire day. So severe was the selling effort that the yield on the benchmark 10-year Note surged more than 25 basis points before it eased back a bit to 3.13%, which makes for its highest closing level since July.

There were no corporate announcements of broad consequence today, although it is worth mention that NICOR (GAS 48.79, +2.03) and AGL Resources (AGL 34.98, -2.15) will merge in an $8.6 billion transaction. Meanwhile, auto parts retailers AutoZone (AZO 260.15, -1.76) and Pep Boys (PBY 13.57, +0.61) posted pleasing quarterly results, though their shares finished mixed.

Share volume was robust this session. In fact, more than 1.6 billion shares traded hands on the NYSE. That's the greatest tally since September and more than 50% greater than the 50-day moving average on the Big Board.

Advancing Sectors: Industrials (+0.5%), Consumer Staples (+0.4%), Telecom (+0.4%), Materials (+0.1%)
Declining Sectors: Utilities (-0.5%), Energy (-0.3%)
Unchanged: Tech, Health Care, Consumer Discretionary, FinancialDJ30 -3.03 NASDAQ +3.57 NQ100 +0.0% R2K +1.1% SP400 +0.1% SP500 +0.63 NASDAQ Adv/Vol/Dec 1485/1.91 bln/1162 NYSE Adv/Vol/Dec 1496/1.63 bln/1485