YAHOO [BRIEFING.COM]: Market participants displayed their bearish side by driving stocks down to weekly lows following a flurry of headlines from Europe. Some relief was offered in the final hour, but sellers redoubled their efforts.

News that the latest initial jobless claims tally declined to 381,000, which is less than the 395,000 initial claims that had been broadly expected, helped strengthen sentiment ahead of the open. Participants were hardly surprised by the European Central Bank (ECB) decision to lower its main refinancing operations rate to 1.00% from 1.25% and also trim the rate on its marginal lending facility to 1.75% from 2.00%, but buying was further bolstered by the ECB's move to extend collateral eligibility to asset-backed securities.

Buying interest was checked before the opening bell, though. The shift in sentiment was spurred by news that the ECB has turned more cautious in its economic outlook and that the vote to reduce interest rates was not unanimous. The proof of dissension among Europe's leading policy makers made many participants skeptical of the ability of officials at the eurozone summit, which is scheduled to conclude tomorrow, to progress in their efforts to overcome persistently precarious economic and financial conditions.

Also out today, the European Banking Authority's stress test results determined that bank recapitalization needs increased since a series of test results were issued in October. German banks were hit with especially stiff selling pressure following the report.

Amid the messy mosaic of eurozone headlines and a weaker picture of European banks, stocks were left to descend steadily throughout the session. In the closing minutes stocks tried to trim losses in conjunction with headlines that suggested a banking license may be tied to the eurozone bailout fund so as to allow direct bank recapitalization, but buying was quickly countered by sellers who were only stopped by the closing bell.

It was another headline driven session for commodities. An ECB rate cut, coupled with comments from ECB head Mario Draghi, caused for volatile trade in gold, silver and crude oil. Gold, which settled lower by 1.9% at $1712.30 per ounce, sold off sharply in morning trade and continued its sell-off throughout the session. Futures put in lows at $1707.80 and ended just above those levels. Silver closed down 3.2% at $31.59 per ounce. Similar to trade in gold, silver sold off sharply in morning trade and extended that pullback through the day, closing just above lows at $31.43.

Crude oil settled lower by 2.1% at $98.34 per barrel. Futures found support at their 20 day-ema around $98.40 and spent the majority of the session bouncing around that level. Natural gas rallied sharply following the release of this morning's inventory data, which showed a larger-than-expected draw down. Futures traded as high as $3.55, but began pulling back from those highs soon afterwards. Natural gas ended higher by 1% at $3.54 per MMBtu.

Advancing Sectors: (None)
Declining Sectors: Consumer Staples -1.0%, Utilities -1.5%, Tech -1.5%, Health Care -1.8%, Telecom -1.8%, Consumer Discretionary -2.0%, Industrials -2.3%, Energy -2.6%, Materials -3.0%, Financials -3.7%DJ30 -198.67 NASDAQ -52.83 NQ100 -1.6% R2K -3.1% SP400 -2.6% SP500 -26.66 NASDAQ Adv/Vol/Dec 363/1.82 bln/2171 NYSE Adv/Vol/Dec 405/930 mln/2600