YAHOO [BRIEFING.COM]: A late session squeeze helped the major indices recover from sizable losses, but the move lost steam in the final few minutes of trading, leaving the major indices to pull back from positive ground and settle flat to modestly lower.

Stocks had been under pressure for nearly the entire session as many participants began to question whether the run up by stocks in recent weeks has become overextended and whether positive economic news has already been priced into stock prices. That line of thought was supported by the recognition that stocks have rallied more than 40% from their March lows amid better-than-feared data, but failed to hold gains last Friday despite what was conclusively an encouraging jobs report.

Catalysts will be lacking during the next several weeks, which could make for a slow start to the summer, but could also prove challenging for recent gains. Amid a lack of clear catalysts or headlines this session, most of the action was driven by traders' emotions.

Participants showed favor for financial stocks ahead of the Fed's official announcement regarding which companies will be allowed to repay TARP funds. Financials spent most of the session as the only major sector in positive ground, but saw their gains compound as buying intensified after the broader market moved past its afternoon highs. That prompted many short-sellers to quickly cover their positions. Financial stocks finished 1.1% higher as the best performing sector in the S&P 500.

Shares of large-cap tech weighed on the Nasdaq Composite. Apple (AAPL 143.85, -0.82) lagged after revealing a new iPhone and reducing prices on other products. Meanwhile, shares of Palm (PALM 12.16, -0.84) sunk after releasing this last weekend a highly anticipated mobile phone meant to rival Apple's iPhone.

Semiconductor giant Cisco (CSCO 19.87, +0.00) mostly showed weakness, but managed to close at the unchanged mark in its debut session on the Dow. Monday also marked the first session that Travelers (TRV 43.92, +0.47) traded in the blue chip index. The two stocks replaced shares of General Motors and Citigroup (C 3.42, -0.04) in the Dow.

Treasuries continue to grapple with sellers. In turn, the benchmark 10-year Note was knocked roughly 17 ticks lower, which pushed its yield to 3.89% from 3.86% Friday. Treasuries will remain in focus tomorrow as participants prepare for a $35 billion auction of 3-year Notes.DJ30 +1.36 NASDAQ -7.02 NQ100 -0.3% R2K -1.1% SP400 -0.7% SP500 -0.95 NASDAQ Adv/Vol/Dec 1026/1.99 bln/1657 NYSE Adv/Vol/Dec 1106/1.08 bln/1890