While stocks maintained a negative bias throughout much of the trading day on Tuesday, the latest news out of Greece contributed to a substantial recovery in the final minutes of trading. The major averages bounced off their lows going into the close, ending the session nearly flat.
The S&P 500 remained stuck in the red, edging down 1.27 points or 0.1 percent to 1,350.50. Meanwhile, the Dow inched up 4.24 points or less than a tenth of a percent to 12,878.28 and the Nasdaq crept up 0.44 points or less than a tenth of a percent to 2,931.83.
The late day rally came on the heels of a report from Reuters indicating that Greek conservative party leader Antonis Samaras is expected to deliver a letter of commitment to the country's international lenders Wednesday morning.
Samaras, who will likely become Greece's next prime minister after April elections, had previously indicated that he would want the Greek bailouts to be renegotiated if he were elected.
The report came on the heels of news that Eurogroup President Jean-Claude Juncker delayed a decision on a new bailout for Greece amid lingering uncertainty about the implementation of the package of austerity measures that the Greek parliament passed over the weekend.
Juncker indicated that the eurozone finance ministers will hold a conference call on Wednesday instead of holding a meeting in Brussels.
"Following today's Eurogroup Working Group meeting, it has appeared that further technical work between Greece and the troika is needed in a number of areas, including the closure of the fiscal gap of 325 million euros in 2012 and the debt sustainability analysis," Juncker said in a statement.
He added, "Furthermore, I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program."
The weakness seen on Wall Street for most of the day came on the heels of news that Moody's cut the debt ratings of six European countries, including Italy, Spain and Portugal, and warned it could cut the triple-A ratings of France, Britain and Austria.
The ratings agency attributed the actions to what it sees as Europe's weakening ability to implement austerity programs and reforms.
Traders also reacted negatively to a Commerce Department report on U.S. retail sales in the month of January, which showed that sales rose by less than expected amid a notable drop in auto sales. However, core sales, which exclude autos, gasoline and building materials, showed a notable increase.
The report showed that retail sales rose by 0.4 percent in January, while revised data showed that sales were unchanged in December. Economists had expected sales to increase by 0.7 percent compared to the 0.1 percent increase that had been reported for the previous month.
Excluding a 1.1 percent drop in sales by motor vehicle and parts dealers, retail sales actually rose by 0.7 percent in January compared to a 0.5 percent drop in December. The report also showed that core retail sales also increased by 0.7 percent in January.
Sector News
Despite the late-day recovery by the broader markets, steel stocks saw continued weakness on the day amid concerns about the outlook for global demand. Reflecting the weakness in the sector, the NYSE Arca Steel Index fell by 2/1 percent.
Gold stocks also saw notable weakness amid a decrease by the price of the precious metal. With gold for April delivery dropping $7.20 to $1,717.70 an ounce, the NYSE Arca Gold Bugs Index slid 1.2 percent.
Biotechnology, real estate, and brokerage stocks also saw continued weakness, while considerable strength emerged among trucking, computer hardware, and health insurance stocks.
Most of the major sectors were showing only modest moves by the end of the day as the result of the spike to the upside seen going into the close.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index rose by 0.6 percent and 0.2 percent, respectively, while Australia's All Ordinaries Index fell by 0.9 percent.
Meanwhile, the major European markets all saw modest weakness on the day. While the U.K.'s FTSE 100 Index edged down by 0.1 percent, the German DAX Index and the French CAC 40 Index slipped by 0.2 percent and 0.3 percent, respectively.
In the bond market, treasuries showed a strong move to the upside amid concerns about the financial situation in Europe. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 6.6 basis points to 1.924 percent.
Looking Ahead
While the latest news out of Europe is likely to be in focus on Wednesday, traders may keep an eye on U.S. reports on industrial production, homebuilder confidence, and New York manufacturing activity. The Federal Reserve is also due to release the minutes of the its latest meeting.
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