YAHOO [BRIEFING.COM]: Both stocks and commodities spent the entire session trading with considerable weakness as a broad-based selling effort took hold following a steep sell-off in China's Shanghai Composite Index.

The Shanghai Composite dropped 6.7% on Monday to hit a three-month closing low and log its second worst monthly performance in 15 years amid valuation concerns and fears that tighter lending in China will impede the flow of investment funds. Investors and traders responded to the selling effort by sending many of the major global averages lower. In turn, the Dow Jones World Index lost 0.8%.

The major U.S. indices managed to trim some of their losses into the close, though. The late lift came as consumer staples stocks garnered enough support to finish with a 0.3% gain, the only one seen among the major sectors in the S&P 500.

Health care stocks finished just 0.2% lower and financials limited their loss to 0.4% after being down nearly 2% in the early going. The financial sector's rebound came amid buying in diversified bank stocks (+0.8%), even though Reuters reported that a highly regarded analyst expects U.S. bank earnings to remain dismal this year. However, the report indicated that regional banks (-0.8%) would be the ones to continue booking losses into 2010.

Weakness among stocks bled into commodities pits and sent oil prices down 3.9% to $69.92 per barrel. Meanwhile, gold prices lost 0.5% to settle at $953.50 per ounce. In a broader measure of the weakness surrounding commodities, the CRB Commodity Index dropped 1.6%.

The decline among basic commodities and weakness in the equity market left materials stocks and energy stocks to suffer some of the worst losses in the broader market. They dropped a respective 1.4% and 1.8%. BJ Services (BJS 16.06, +0.63) was one of the few energy holdings to garner support, but that was only because Baker Hughes (BHI 34.45, -3.64) announced it will pay cash and stock to acquire the smaller oil services company in a transaction valued at roughly $5.5 billion.

Disney (DIS 26.04, -0.80) announced that it will make an acquisition of its own. The broadcasting and entertainment company will take over Marvel Entertainment (MVL 48.37, +9.72) for $30 per share in cash and approximately 0.745 shares of DIS.

Outside of the M&A news, there weren't many corporate headlines for participants to digest. Such will likely be the cast tomorrow since there aren't any major companies scheduled to announce their quarterly results prior to Tuesday's opening bell. However, ISM manufacturing data for August, construction spending data for July, and pending home sales data for July are likely to provide participants with direction.

Vehicle sales data are also expected to be released tomorrow, although Ford (F 7.60 -0.13) already stated that its U.S. auto sales for August were up year-over-year earlier. The specific number of sales has yet to be released, but many believe that the results were driven by the one-time incentives of the Cash for Clunkers program.

Trading volume climbed above its 50-day moving average by coming in near 1.4 billion shares on the NYSE. That's the first non options-expiration session in which trading volume surpassed the moving average mark since early August.DJ30 -47.92 NASDAQ -19.71 NQ100 -1.1% R2K -1.3% SP400 -1.3% SP500 -8.31 NASDAQ Adv/Vol/Dec 749/2.29 bln/1938 NYSE Adv/Vol/Dec 795/1.38 bln/2205