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[BRIEFING.COM] Two factors to which the stock market turned a blind eye yesterday came back into focus today. A re-acknowledgement of rising yields and rising energy prices gave buyers reasons to break this morning. As Treasuries came under increased pressure and crude hurdled $67 per barrel, investors began to sell. By the close of trade, each of the indices had recovered from their lows. Still, a lack of leadership left the Dow and Nasdaq with losses.

Due to conflicting views over the Fed's tightening cycle, action within the stock and bond markets had been divergent over the last few sessions. Whereas equity traders espoused a more hopeful view that the end is near, Treasury traders have concentrated on the fact that interest rate uncertainty persists. The lack of language modification in the FOMC's policy directive set the bearish tone for bonds this week, and the lack of a positive catalyst has left that market with little distraction. Although the stock market has lately demonstrated resilience to rate concerns, and while it opted to shrug off rising yields yesterday, it could not continue to overlook the fact that rates are rising. Higher interest rates undermine valuation models as well as produce slower economic and earnings growth, and higher market rates serve as a bearish backdrop for the equity market.

The FOMC event remained the bond market's focal point, but two other factors fed the flames today. First, the core deflator, which was embedded in the Q4 GDP report, rose 2.4%. Second, comments that the pension reform bill will be sidelined while congress goes on recess added to the long end of the curve's troubles. Intra-day, the benchmark 10-year note's yield was near a four-year high. By the close of equity trade, it had settled to 4.86%. The improvement helped the major indices recover from their lows, but the fact remains that the 10-year is at a level not seen since June of 2004. Accordingly, rate-sensitive areas felt the heat. The Financial sector, which accounts for more than a fifth of the S&P 500, weighed heavily. Industries from banks to REITs to insurance to mortgage suffered. A notable bright spot was Bank of New York (BK 35.92 +1.50), though, which rose upon reports that it's close to selling $4 billion in branches to JP Morgan (JPM 41.53 -0.15). The market's other particularly rate-sensitive areas, like the Utilities (-1.0%) sector and homebuilding industry, also fell.

Energy prices also went under the market's radar yesterday. A reminder of ongoing geopolitical tensions and more data from the Energy Department helped them continue their streak - and brought them back into focus. Specifically, The UN Security Council approved a statement demanding Iran halt its uranium enrichment. The OPEC producing country has 30 days to freeze its enrichment. Concerns over Iran, especially as the weekend approaches, and data reflecting a more than expected drop in natural gas supply sent crude to $67.20 per barrel. In the early going, the bright side to that action had been a supportive gain in the Energy sector. That was fleeting, though, and the sector closed 0.1% lower. Facing both rising energy prices and interest rates, the Discretionary sector (-0.3%) also closed lower. A separate factor behind its decline was GM (21.06 -1.09). Afternoon reports indicated that Delphi is expected to ask a federal judge to cancel its union contracts Friday. A potential strike is more bad news for the struggling auto maker, it fears of it overshadowed news that it's closer to selling a controlling stake in GMAC.

There were some areas of the market that survived today's selling. Several metal commodities remained at or near historic highs. Silver surged 5%. Gold gained close to 3% at hit a 25-year high. Platinum and copper are also did well. Speaking of copper, Phelps Dodge (PD 81.48 +4.46) was upgraded at Morgan Stanley to Overweight from Equal Weight. The firm has a $100 price target on the stock, which is one of our recommended holdings. It and many other metal-related issues attract solid buying interest. The diversified metals and minerals industry led the S&P's 139 groups and lifting the Materials sector 0.3%. Morgan Stanley also raised its target on General Electric (GE 34.65 +0.72). That stock supported the Dow, and it helped keep the Industrials sector (+0.2%) on positive ground.

As a result of strength in its software and communication equipment industries, Tech sustained a modest (+0.3%) gain. Microsoft (MSFT 27.23 +0.21), which received U.S. government backing in an EU antitrust dispute, drove the former group. Upped handset guidance from Nokia (NOK 21.28 +1.06) and Bank of America's target increase on Cisco (CSCO 21.97 +0.40) were factors behind the latter area's advance. Early on, the Tech sector had been the market's best source of support. Semiconductors were its muscle. Better than expected earnings results from ATI Tech (ATYT 17.05 +1.32) had helped spark some follow-through buying interest, but the influential industry could not sustain gains today. Its return to the red took the steam out of the sector and contributed to the broader market's decline. Separately, Google (GOOG 388.44 -6.54) received some added attention today, after the company filed to sell 5.3 million new shares. That stock declined, but the Nasdaq still managed to (modestly) build off of the five-year high it hit yesterday.NYSE Adv/Dec 1399/1844...Nasdaq Adv/Dec 1519/1516