YAHOO [BRIEFING.COM]: Stocks fell to profit taking as a lack of positive catalysts and a stronger dollar kept many buyers at bay, while volume and volatility spiked with quadruple witching.

Heading into Friday's trade the stock market had gained more than 5% since the start of the month. The climb started to steady in the prior session as stocks in the broader market moved sideways to consolidate their recent string of gains. The flat trade was regarded by several as a sign that stocks may have become tired after their run and additional advances in the near term may be harder to come by. In turn, a broad-based selling effort hit stocks for their worst session of this month.

There were neither data nor headlines to sway the mood this session to positive from negative since the economic calendar was empty and Palm (PALM 4.04, -1.61) was the primary company on the earnings calendar. The handset maker posted a paltry quarterly report that featured a worse-than-expected loss and wimpy revenue forecast. Many analysts slashed their target price for shares of PALM all the way down to $0 in response -- the stock dropped to a fresh 52-week low.

Weakness in shares of PALM, along with broader market pressure, dropped the Russell 2000 Small-Cap Index for a 1.1% loss. Small-caps are still among the best performers this year, though; they're up almost 8%, collectively.

A stronger dollar further dampened the mood among market participants. Specifically, the greenback gained 0.6% against competing currencies this session. That came on top of its 0.7% advance in the prior session to combine for the buck's best back-to-back bounce since January.

The dollar's recent strength comes amid continued headlines about proposed financial support for Greece, though any sort of clear or official resolution has remained absent.

Gains by the greenback also dragged down commodities this session, such that the CRB Commodity Index fell to a 1.1% loss. Contracts for crude closed pit trade with oil priced 1.8% lower at $80.68 per barrel. Pressure against precious metals was exacerbated by news that India's central bank increased the repo rate by 25 basis points to 5.0% and its reverse repo rate by 25 basis points to 3.5%. Gold prices closed 1.8% lower at $1107.60 per ounce, while silver settled 2.2% lower at $17.03 per ounce.

The confluence of weaker commodity prices and broader market pressure made natural resource plays this session's worst performers. As such, the materials sector dropped 1.0% and the energy sector fell 0.9%.

Telecom was the only major sector to finish with any sort of a gain. It advanced 0.4%.

Health care showed relative strength ahead of an anticipated weekend vote for health care reform. The sector finished flat.

Weakness in the euro amid headlines regarding a Greece bailout led to gains in the dollar index. Strength in the dollar index (up 0.6%) led to lower commodity prices. In turn, the CRB Commodity Index lost 1.1% this session.

Precious metals led this move to the downside, closing 2.1% lower, collectively. After the Indian Central Bank increased its repo rate 25 bps, gold and silver futures sold off precipitously. April gold closed 1.8% lower at $1107.60 per ounce. May silver saw an even more pronounced loss; it closed 2.2% lower at $17.03 per ounce.

The dollar's strength led to most energy commodities extending yesterday's steep losses. Crude oil fell sharply lower but found support at the $80 level. The April contract closed 1.8% lower at $80.68 per barrel. RBOB gasoline and heating oil futures both fell 1.9%.

Natural gas futures, on the other hand, rose this session following yesterday's debacle. The April contract traded as low as $4.05 per MMBtu early in the session before moving higher and closing up 1.7% at $4.16 per MMBtu.

Contracts for stock index futures, stock index options, stock options, and single stock futures all expired this session. That drove both trading volume and volatility sharply higher. More specifically, trading volume on the NYSE hit its highest level of the year as nearly 2 billion shares exchanged hands. Meanwhile, the Volatility Index fell 1% in the opening minutes of trade to a fresh 52-week low, but then spiked to a gain of more than 5% before it closed the session with a 2.2% increase.

Advancing Sectors: Telecom (+0.4%)
Declining Sectors: Materials (-1.0%), Energy (-0.9%), Tech (-0.8%), Financials (-0.7%), Consumer Discretionary (-0.6%), Industrials (-0.4%), Utilities (-0.2%), Consumer Staples (-0.1%)
Unchanged: Health Care DJ30 -37.19 NASDAQ -16.87 NQ100 -0.6% R2K -1.1% SP400 -1.0% SP500 -5.93 NASDAQ Adv/Vol/Dec 1039/2.90 bln/1651 NYSE Adv/Vol/Dec 901/1.98 bln/2136