Like yesterday, the major averages attempted to advance. Again, though, attention was fixed on the Treasury market, and bond yields stifled the stock markets upward efforts.

Yesterday, the equity market finally responded to the upward push in bond yields. Conditions did not worsen today, nor did they really improve. Over the course of the week, the yield on the benchmark 10-year note went from 4.67% (last Friday) to 4.85%. That still leaves it at a 21-month high. The 4.9% on the 30-year, meanwhile, is a yield that that note hasnt seen in about a year. In the early going, Treasuries started to recover a bit. But the attempt was short-lived, and with its return to unchanged territory came the stock markets decline. Lately, the stock market has been impressively resilient to rising interest rates. It could not continue to turn a blind eye to them though, and action over the last two sessions shows that Treasuries are back in the spotlight.

Anticipation ahead of next weeks economic calendar, which features the closely-watched March Employment Report, contributed to the bond markets passive stance. Mindful that Fed policy will continue to be data-dependent, the economic front remains in focus. There were a few items on todays calendar, but none had much market-moving impact. The core PCE was relatively in-line with expectations and did not change the current trend, Personal Income and Spending reports brought no surprise, and the Chicago PMI reading was no diversion in the regional manufacturing trend.

The corporate front did not provide much of a trading catalyst, either. General Motors (GM 21.27 +0.21) occupied the headlines again. Concerns that voided union contracts at supplier Delphi will lead to a strike sparked early selling, but the stock recovered and really did not have a big effect today. Still, the Discretionary sector closed 0.4% lower. It and other especially rate-sensitive areas faced selling pressure. Homebuilders were a weak spot, the Utilities sector fell 0.7%.  The Financial sector also declined. It did demonstrate some resilience, but ultimately could not sustain a gain. Its intra-day reversal left the market without leadership.

The Energy and Materials sectors were the worst-faring. After surging recently, energy prices gave back some ground. Crude retreated from its eight-week high, but its move was not all that impressive, given the fact that it remained at $66.50 per barrel. The equity market didnt take much notice to falling energy prices, however; interest rate trends remained the driving force. Also, ongoing concerns over Iran helped temper enthusiasm that the price declines could have sparked. Conversely, the Energy sector (-1.1%) was one area of the market that did take note. The price action prompted some market-dragging profit-taking. The same thing happened within Materials (-0.7%). Several metals hit or approached historic highs this week, and pullbacks gave traders a reason to secure some recent returns across that sector.

Technology (-0.5%) was an additional factor behind the markets decline. Semiconductors had a volatile week, and the industry's drop today helped submerge the sector and stunt the Nasdaq. On a separate but related note, Google (GOOG 390.00 +1.56) received some added attention today. After the bell rang, the stock officially became a member of the S&P 500. Volume was nearly twice as much as usual, as index fund managers had to add the stock to their portfolios, but the stocks price was little changed. 

--Lisa Beilfuss, Briefing.com