YAHOO [BRIEFING.COM]: A better-than-expected batch of jobless claims data positioned stocks for a rebound from the previous session's late sell-off, but a disappointing existing home sales report and a sharp rebound in the dollar combined to renew selling pressure and hand stocks their second straight loss.

Stocks dropped 1% in the previous session, but managed to open with a modest gain amid news that the latest initial jobless claims tally fell to its lowest level in two months by totaling 530,000 in the week ending Sept. 19. Economists, on average, had expected initial claims to total 550,000. Continuing claims were also below expectations. They were predicted to total 6.18 million, but came in at 6.14 million, instead.

Though initial claims and continuing claims remain at uncomfortable levels, their direction encouraged market participants. That is, until the midmorning release of August existing home sales data, which showed that home sales pulled back to an annualized clip of 5.1 million units. The unexpected 2.7% decline marked the first retreat since March.

The disappointing home sales data encouraged sellers to step back into the fold. Weakness among stocks was magnified as the U.S. dollar staged a strong advance, which helped the Dollar Index achieve a gain of little more than 1%. The greenback remains near 2009 lows, but renewed strength cuts into the profits of multinationals that bring their earnings back home.

The dollar's gain this session also weighed heavily on commodities, which left the CRB Commodity Index down just over 2% this session and down more than 3% week-to-date. Gold prices weighed heavily on the CRB; they closed 1.6% lower at $998.30 per ounce after closing above $1000 in each of the previous six sessions. Oil was a primary drag on the CRB as crude contracts closed with prices down 4.4% at $65.93 per barrel. Natural gas prices closed 2.6% higher at $3.96 per contract following an in-line inventory report, however.

Overall weakness among commodities and stiff selling in the broader equity market weighed heavily on materials stocks. The sector dropped 2.0%, more than any other major sector.

Financials also fared poorly. They dropped 1.8%, as a group. REITs reversed a recent hot streak as investors took profits following a couple of poor IPO turnouts.

Despite this session's broad-based selling effort, blue chips were able to contain losses. That helped the Dow hold up better than the other headline indices.

Defensive-oriented stocks also held up relatively well. As such, utilities and telecom finished just 0.1% lower. Health care fell 0.3%.

Treasuries had a strong showing. The benchmark 10-year Note closed roughly 12 ticks higher, which lowered its yield to 3.37%. Treasuries were supported by weakness among stocks and solid results from 7-year Treasury Note auction, which produced a bid-to-cover ratio of 2.8 and a high yield of 3.05%.

Advancing Sectors: (None)
Declining Sectors: Materials -2.0%, Financials -1.8%, Industrials -1.4%, Energy -1.3%, Consumer Discretionary -0.9%, Technology -0.6%, Consumer Staples -0.4%, Health Care -0.3%, Telecom -0.1%, Utilities -0.1%DJ30 -41.11 NASDAQ -23.81 NQ100 -0.8% R2K -1.9% SP400 -1.7% SP500 -10.09 NASDAQ Adv/Vol/Dec 645/2.59 bln/2018 NYSE Adv/Vol/Dec 714/1.37 bln/2306