YAHOO [BRIEFING.COM]: Continued efforts to trim risk sent the stock market to a 1.5% loss in the early going, but a rally by financials has helped drive the broader market to a strong gain.

The prior session's selloff, which culminated in the S&P 500's worst single-session drop in more than one year, extended into this morning's trade as market participants continued to show distaste for risk. The selling that followed was broad based and took the S&P 500 down below the depths that were set during the "flash crash" two weeks ago to set a fresh three-month low.

Despite such an ominous start to trade, the dollar failed to attract the interest of safety seekers. Instead, it continued to deteriorate against the euro, which has rallied in recent sessions amid speculation that the European Central Bank might make a move to support its currency and most recently Germany's approval of the European Union's rescue package. The euro is currently up 0.5% against the greenback and on its way to a 1.5% weekly gain after setting a multiyear low Wednesday.

Treasuries attracted a strong bid, though. In turn, the yield on the benchmark 10-year Note dropped to a multimonth low near 3.10%.

While widespread weakness in the opening minutes sent stocks to losses in excess of 1%, financials were able to attract support. Heading into this session the sector had fallen more than 11%, but a bit of a relief rally started to take shape and short sellers were quickly forced to cover their positions. That has squeezed the sector to a 3% gain in the face of news that the Senate has passed its financial reform bill.

Leadership from the financial sector gave a lift to the broader market, which is now on its way to its best performance in more than a week.

With the tone of trade turned from negative to positive, Treasuries have given up all of their gains. In fact, both the 10-year Note and 30-year Bond even slipped into negative territory for a bit, but they are now back at the flat line. Their yields stand at 3.21% and 4.09%, respectively.

All of the action has brought plenty of participants in from the sidelines. That, along with the expiration of monthly options this session, has sent trading volume soaring past 1 billion shares on the NYSE.

The CRB commodity index bounced this morning as an appetite for risk returned to the market. A spike in the euro overnight resulted in a weak dollar index, creating a bid for commodities.

Both sugar and copper futures recorded gains in excess of 4%, leading the index higher. The other soft commodities were strong as well (cocoa, orange juice and coffee).

Energy commodities failed to reverse the downward trend, though. July crude oil railed to the $71 level in the late morning before retreating back into negative territory. The July contract closed 1.7% lower at $69.60 per barrel. June natural gas spike in the morning but faded in the afternoon to close 1.2% lower at $4.04 per MMBtu.

Precious metals suffered as the flight to safety play lost favor. June gold closed 1.0% lower at $1176.50 per ounce. Meanwhile, July silver closed 0.4% lower at $17.64 per ounce.