YAHOO [BRIEFING.COM]: Though the Dow never made it out of the red, the S&P 500 and the Nasdaq Composite turned modest losses into fractional gains after participants initially reacted negatively to news of a rate hike in China.

During the weekend China's central bank tacked on another 25 basis points to its target lending rate and deposit rate. The decision, which is intended to stave off inflation, rekindled concern about slower growth in China and, in turn, a more sluggish global economic recovery. China's Shanghai Composite tumbled nearly 2% and Germany's DAX and France's CAC closed lower by 1% or more (Hong Kong's Hang Seng and Britain's FTSE were both closed for holiday observance).

Concern about slower growth coupled with losses abroad undermined domestic trade in the early going, but financials were quick to provide support. Consistent with the past couple of weeks, financials jumped out to an early lead and held their gains for the duration of the day. The sector settled with a 1.0% gain.

Though financials were initial leaders, it was only after tech stocks reversed their losses that the S&P 500 was able to find higher ground and settle a couple of points below the two-year high that it had set last week. As for the tech sector, it finished with a 0.2% gain even as large-cap issues like Microsoft (MSFT 28.07, -0.23) and Yahoo! (YHOO 16.48, -0.24) logged losses.

With so many trading desks thinly staffed around the holidays and amid severe winter storms, share volume was extraordinarily light this session -- fewer than a half billion shares traded on the NYSE. Today's tally made for one of the most lightly traded sessions of the year.

Treasuries had a quiet start to the day, but garnered some buying in the wake of a $35 billion auction of 2-year Notes. The auction drew a bid-to-cover ratio of 3.71, dollar demand of $129.9 billion, and an indirect bidder participation rate of 22.6%. For comparison, the prior auction produced a bid-to-cover ratio of 3.70, dollar demand of $129.5 billion, and an indirect bidder participation rate of 38.3%. As of the close, the 2-year Note was unchanged with its yield just below 0.65%, the benchmark 10-year Note closed about 15 ticks higher with its yield at 3.34%, and the 30-year Bond tacked on a full point so that its yield was lowered to just below 4.41%.

The dollar had a lackluster day that was spent in the red with a loss that ranged from about 0.1% to 0.2% relative to a basket of competing currencies.

Mixed action among commodities left the CRB Commodity Index to close fractionally lower today. Even though it was slim, the loss snapped the CRB's five-session streak of gains.

Oil was the primary culprit in the CRB's decline. Crude prices spent the entire session in the red before settling with a 0.5% loss at $91.06 per barrel. They had been as low as $90.51 per barrel.

Natural gas prices were weak for most of the session. They had actually dipped below their 50-day moving average to trade just below $4.00 per MMBtu, but the energy component made a late push into positive territory so that it settled with a 0.6% gain at $4.11 per MMBtu.

Precious metals prices were also a bit mixed. Gold prices held strong to a modest gain for virtually the entire session; the yellow metal settled with a 0.1% gain at $1382.40 per ounce. As for silver, it shed 0.2% to settle at almost $29.27 per ounce.

Advancing Sectors: Financials (+1.0%), Telecom (+0.3%), Tech (+0.2%), Industrials (+0.2%)
Declining Sectors: Energy (-0.4%), Consumer Staples (-0.4%), Consumer Discretionary (-0.3%), Health Care (-0.3%)
Unchanged: Utilities; MaterialsDJ30 -18.46 NASDAQ +1.67 NQ100 +0.00% R2K +0.4% SP400 +0.1% SP500 +0.78 NASDAQ Adv/Vol/Dec 1536/1.10 bln/1105 NYSE Adv/Vol/Dec 1636/467 mln/1306