YAHOO [BRIEFING.COM]: Strong buying in the first part of the session saw the S&P 500 climb more than 1%, but once gains started to fade sellers stepped in to hand stocks a marked loss.

The stock market extended its advance from the prior session on the back of broad-based buying this morning. All 10 sectors in the S&P 500 made their way to higher ground and the Dow even made its way back above 10,000. However, the positive tone proved fleeting.

Energy stocks had been one of the best performers. The sector was up more than 2% at its high, but it buckled to close with a 1.3% loss, which is worse than any other sector. BP Plc (BP 29.20, -5.48) remained in focus as it closed at its lowest level since 1996 amid concerns about the safety of the company's dividend.

Higher oil prices couldn't keep sellers from piling on to the sector -- contracts closed pit trade with oil priced 3.3% higher at $74.38 per barrel. The gain move was helped by a weekly inventory report that showed a larger-than-expected draw of 1.83 million barrels when a draw of 900,000 barrels had been expected.

A pullback by the euro only added to the afternoon's selling effort. The euro had been as high as $1.207, but it was down to $1.198 with a fractional gain as trade drew to a close.

All 10 major sectors gave up their gains, but retailers managed to make out with a fractional gain. Target (TGT 52.37, -0.05) couldn't quite keep out of the red, though. Its slip came despite news that it increased its quarterly dividend by 47% to $0.25 per share.

Dow component Caterpillar (CAT 56.81, +0.20) also announced a dividend increase, which will take the stock's quarterly dividend to $0.44 per share from $0.42 per share.

Economic data was limited to a wholesale inventory report for April that showed a 0.4% increase in inventories. The report did nothing for stocks.

Fed Chairman Bernanke testified before the House Budget Committee this morning, but he offered no new insight on economic conditions.

Sellers have intensified their efforts. All three of the major equity averages are now in the red at session lows.

In commodities trade, oil separated itself from the pack by swinging 3.3% higher to close pit trade at $74.38 per barrel. Its move was helped by a weekly inventory report that showed a larger-than-expected draw of 1.83 million barrels when a draw of 900,000 barrels had been expected.

Natural gas prices resumed their slide. The energy component closed at $4.68 per MMBtu, down 2.7%. Weekly inventory data is due tomorrow morning.

Precious metals failed to find support. Specifically, gold prices dropped 1.2% to $1230.20 per ounce and silver prices slid 1.6% to $18.19 per ounce. Overall, precious metals shed 1.5% this session.

The Fed's latest Beige Book was also out today. It stated that economic activity continues to improve across all 12 Fed districts, but the pace of recovery remains moderate.

An auction of the 10-year Treasury Notes drew a strong bid-to-cover of 3.2 and produced a yield of 3.24%. The results didn't have much of an immediate impact on Treasuries, but with the stock market's afternoon slide the benchmark 10-year Note was able to eke out a fractional gain.

Advancing Sectors: (None)
Declining Sectors: Energy (-1.3%), Financials (-1.0%), Tech (-0.9%), Utilities (-0.7%), Health Care (-0.6%), Materials (-0.3%), Industrials (-0.2%), Consumer Staples (-0.2%), Telecom (-0.1%)
Unchanged: Consumer Discretionary DJ30 -40.73 NASDAQ -11.72 NQ100 -0.9% R2K +0.1% SP400 +0.2% SP500 -6.31 NASDAQ Adv/Vol/Dec 1238/2.27 bln/1381 NYSE Adv/Vol/Dec 1568/1.70 bln/1472