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The major averages ended the week on a broadly lower note with the S&P 500 registering its first weekly decline in more than two months. The benchmark index fell 1.6% to widen its weekly loss to 3.5% while the Nasdaq Composite (-1.2%) displayed relative strength, but still lost 2.7% for the week. Last evening, the House of Representatives passed a $1.1 trillion spending bill to fund the government through September, but that news took the back seat to today's main event, which took place in the oil trading pits with other markets responding to the happenings there. Overnight, the International Energy Agency issued its fourth global demand forecast cut in five months, which kept the pressure on crude oil ($57.80/bbl). The energy component ended the pit session lower by 3.7% for the day and lost nearly 11.0% for the week. Furthermore, the decline widened oil's slide from the mid-year high of $107.73/bbl to 46.3%, thus rekindling concerns about how this drop will be handled by energy companies and other entities that rely on a higher price of the commodity. This was most notable in the energy sector (-1.9%), which ended the week lower by 7.8%. Of course there is another side to lower oil prices, and the benefit that consumers are expected to receive from cheaper gasoline did not go unnoticed. However, the broader implications of the big plunge in crude price caused a reduction in overall risk exposure. Understandably, the consumer discretionary sector (-0.6%) was a spot of relative strength with retailers and restaurant names showing strength. The SPDR S&P Retail ETF (XRT 92.28, +0.57) gained 0.6%. However, the remaining cyclical sectors ended in-line with or behind the broader market. Equities tried to stage a comeback from their opening lows with a near-record high reading of the Michigan Sentiment Index providing a short-lived confidence boost that evaporated over the next hour. A fresh round of selling in the afternoon sent the major averages to new lows into the close. Outside of energy, commodity-linked sectors like industrials (-1.8%) and materials (-2.8%) bore the brunt of the pressure while influential groups like financials (-2.0%) and technology (-1.5%) did little to stem the bleeding. Among industrials, transport stocks held up relatively well with the Dow Jones Transportation Average losing 'only' 0.9%, but defense contractors kept the sector behind the broader market. The PHLX Defense Index lost 2.9% with Dow components Boeing (BA 120.77, -2.60) and General Electric (GE 24.89, -0.52) each tumbling 2.1%. Elsewhere, the technology sector ended in-line with the market. Apple (AAPL 109.85, -1.77) and IBM (IBM 155.38, -5.69) lost 1.6% and 3.5%, respectively, with the latter weighing on the Dow. On the upside, Adobe Systems (ADBE 76.06, +6.32) surged 9.1% after reporting better than expected results. Shares of Adobe helped the Nasdaq Composite end a bit ahead of the broader market, but the index was also kept from sliding deeper into the red by the outperformance of biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 306.10, -3.95) lost 1.3% after making a brief intraday appearance in the green. As for health care, the sector ended just a step ahead of the market. Safe haven demand gave a boost to Treasuries with the 10-yr yield ending lower by eight basis points at 2.10%, which represented a 21-basis point decline for the week. Also of note, the CBOE Volatility Index (VIX 21.82, +1.74) spiked almost 9.0% to its highest level since late October as participants showed demand for downside protection. The sell-off invited above average participation with more than 940 million shares changing hands at the NYSE floor. Economic data included PPI and Michigan Sentiment: Producer prices declined 0.2% in November after increasing by 0.2% while the Briefing.com consensus expected a decline of 0.1% As expected, energy prices fell for the fifth consecutive month with total costs declining 3.1% in November, which followed a 3.0% decline in October Gasoline prices dropped 6.3% After increasing 1.0% in October, food prices declined 0.2% Excluding food and energy, core PPI was unchanged in November after increasing 0.4% while the consensus expected an increase of 0.1% The University of Michigan Consumer Sentiment Index increased to 93.8 in the preliminary December reading from 88.8 while the Briefing.com consensus expected an increase to 89.5 The December reading marked the highest point in consumer sentiment since the index reached 96.9 in January 2007 Strong improvements in the labor market and lower gasoline prices offset a slightly downward trending stock market, which helped boost sentiment On Monday, the Empire Manufacturing Index for December (Briefing.com consensus 14.0) will be released at 8:30 ET while November Industrial Production (consensus 0.7%) and Capacity Utilization (consensus 79.3%) will cross the wires at 9:15 ET. The NAHB Housing Market Index for December (expected 58) will be reported at 10:00 ET and the Net Long-Term TIC Flows for October will cross at 16:00 ET. Week in Review: All Eyes on Crude The stock market slumped on Monday as the S&P 500 ended lower by 0.7% with seven sectors in the red. The price-weighted Dow (-0.6%) finished a little ahead of the benchmark index while the Nasdaq (-0.8%) and Russell 2000 (-1.3%) lagged. Equity markets around the world started the new week on a mostly lower note. However, continued hopes for stimulus from the PBoC sent China's Shanghai Composite higher by 2.8% to extend its gain over the past month to 25.0%. The advance took place after the latest trade data showed a better than expected surplus of $54.47 billion, which resulted from a 6.7% drop in imports (expected +3.5%). Hopes for additional stimulus were also present in Europe, but the key indices there could not stay out of the red amid weakness in growth-sensitive listings. Fittingly, cyclical sectors were responsible for the weakness in the U.S. with energy (-3.9%) taking it on the chin amid another decline in crude oil. The major averages ended the Tuesday session on a mixed note after starting the day with sharp losses. The Russell 2000 and Nasdaq Composite paced the rebound, climbing 1.7% and 0.5%, respectively, while the S&P 500 settled just below its flat line. Equity futures were pressured in the morning after the overnight session featured a 5.4% plunge in China's Shanghai Composite, which endured its biggest one-day decline since 2009. The dive occurred after the index soared 25.0% in a month and was catalyzed by the People's Bank of China taking measures to tighten liquidity conditions. The central bank fixed the USDCNY exchange rate at its highest level since July and imposed stricter collateral rules on short-term loans. The cautious sentiment carried over to the European session with Greece's ASE Index sinking 12.8% while the country's 10-yr yield surged 91 basis points to 7.95% after Prime Minister Antonis Samaras called for a presidential election. This took place right after the country was granted a two-month extension to meet its bailout requirements and the early indications suggest the election could put the Coalition of the Radical Left (Syriza) in power, which rattled markets. Adding insult to injury, Germany reported a 3.1% decline in November imports, which was the biggest drop in almost two years. Despite the global weakness, U.S. equities did not spend much time near their early lows. In fact, the Russell 2000, which led the rebound, marked its low five minutes into the session and never looked back. Equities ended the Wednesday session on a broadly lower note. The S&P 500 lost 1.6% with all ten sectors ending in the red while the Russell 2000 (-2.1%) underperformed. For the second day in a row, the major averages slumped at the start, but unlike Tuesday, the key indices could not stage a comeback on Wednesday with a big drop in the energy sector (-3.1%) keeping the market under pressure throughout the session. The energy sector widened its fourth-quarter loss to 15.9% with crude oil settling lower by 4.5% at $60.92/bbl. The slide took place after China reported its lowest year-over-year growth in CPI (1.4%) and OPEC cut its demand forecast. In addition, crude stockpiles showed an unexpected build. Stocks rebounded from Wednesday's broad-based weakness on Thursday, but the key indices slipped on an oil patch ahead of the close as WTI crude fell to $60/bbl. The S&P 500 added 0.5% after being up as much as 1.5% intraday. The Thursday rebound likely included a short covering element as the key indices rallied through the first hour and respected narrow ranges into the afternoon. However, selling into the close pressured the indices from their highs. Investors received a pre-market confidence boost from a better than expected Retail Sales report and a larger than expected decline in weekly initial claims. In turn, the data helped the Dollar Index (88.59, +0.33) rebound from three consecutive declines. However, the dollar strength wasn't entirely due to economic data as the greenback entered the morning with a solid overnight gain against the yen. The dollar/yen pair climbed to 119.00 (+1.1%), and retraced most of its decline from Wednesday.