YAHOO [BRIEFING.COM]: Inspired by a downturn in initial jobless claims and strength in financials, stocks started the session with strong gains, but profit takers stomped out the early advance to send the major indices lower. The selling effort snowballed as disappointing Treasury auction results hit news wires.

Though its stay in positive territory was short-lived, the stock market climbed to an early gain of 1%. The upbeat tone was supported by news that initial jobless claims for the week ending May 2 totaled 601,000, which is less than expected and down from the preceding week. That helped fit the argument that economic conditions are bottoming, even though it doesn't appear that it has become any easier to find a job -- continuing claims climbed to a new record of 6.35 million, which was in-line with expectations.

In other economic news, a preliminary reading of nonfarm productivity showed a 0.8% increase for the first quarter, but that was mostly due to reduced work hours.

Financials lent their support to the stock market's early advance by climbing more than 3.5% higher. However, participants quickly moved against the sector and caused it to close with a 3.5% loss. The swing came as participants prepare for the government's bank stress tests, which are scheduled to be released at 5:00 PM ET. Most of the government's findings have already been leaked, so the announcement shouldn't cause too much of a shock. However, officially announcing the results should help remove an element of uncertainty from the market.

Tech stocks (-3.2%), which represent the largest sector in the S&P 500 by market weight, also traded with material weakness. Despite better-than-expected earnings and an upside revenue outlook from Cisco (CSCO 18.95, -0.66), the company was a primary laggard. It and other large-cap tech holdings dragged the Nasdaq 100 to a 2.4% loss. Meanwhile, semiconductors fell 5.9%.

Without the support of tech stocks and financial stocks, the stock market was unable to resist sellers' efforts. Those efforts intensified as Treasuries fell out of favor following a $14 billion 30-year Bond auction, which failed to offer investors the yield that was desired. The results suggested that investors are less willing to invest in the government's debt at its offered rate. The 30-year Bond shed 89 ticks, which lifted its yield to 4.27%. The benchmark 10-year Note lost 36 ticks, which pushed its yield to 3.31%, a high for this year.

The broad-based selling effort sent shares of retailers 1.3% lower, even though many retailers reported monthly same-store sales results that were generally better than expected. Wal-Mart (WMT 49.89, +0.38) reported that same-store sales increased 5.0% for April, but indicated it will no longer provide monthly sales results going forward. Wal-Mart also issued downside revenue guidance for the first quarter.

There were some areas of strength, however. Consumer staples stocks (+0.4%), utilities (+0.6%), and health care stocks (+2.5%) managed to advance. The outsized gains by health care stocks came with help from managed health care providers (+8.1%).

Trading volume reached its highest level in more than one month with nearly 2 billion shares exchanging hands on the big board.DJ30 -102.43 NASDAQ -42.86 NQ100 -2.4% R2K -2.4% SP400 -2.5% SP500 -12.14 NASDAQ Adv/Vol/Dec 847/2.78 bln/1839 NYSE Adv/Vol/Dec 1063/1.97 bln/2010