NEW YORK — The stock market rallied in the last half-hour Tuesday, seizing on reports that suggested the unraveling Greek debt talks might be saved after all. Stocks finished flat after languishing in the red for most of the day.
The Dow Jones industrial average gained 4.24 points to close at 12,878.28, about 12 points shy of its best finish this year. The Standard & Poor’s 500 lost 1.27 points to close at 1,350.50. The Nasdaq composite gained 0.44 point to 2,931.83.
As usual, it was about Greece. U.S. stocks were weighed down as European finance chiefs canceled a meeting planned for Wednesday to discuss a second international bailout for the country.
The meeting was called off after Athens failed to deliver on several demands made by its partners in the euro currency union. Greece needs a $171 billion bailout by March 20 to avoid a default that could rattle the world financial system.
U.S. stocks also were hurt by a discouraging report on retail sales. Bank of America led the decliners on the Dow, dropping 3.3 percent.
“For now, it looks like Greece may be able to kick the can down the road again,” said Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “The issue overseas is less a function of whether they come to an agreement with respect to Greece. The odds are that they will. The larger issue is how much continuing deterioration do you have in the European economy?”
The Dow was down as much as 87 points at its low for the day. But the market found hope in reports quoting Greek government officials as saying party leaders would promise by today to implement deep spending cuts and other reforms.
The stock market has been rising slowly but steadily most of this year, despite the unresolved debt crisis in Europe and a stalemate over U.S. tax policy and benefits for the long-term unemployed.
For most of Tuesday, investors appeared to be waiting for more clarity on all those issues before sinking more money into stocks, said Colleen Supran, a principal at the investment adviser Bingham, Osborn & Scarborough.
“Everyone wants to know the rules of the game before making these decisions,” Supran said.
The late-day rally was a sign that investors expect the coming round of Greek debt talks to resolve some of those outstanding questions. The talks have brought incremental and sometimes contradictory developments that have confused some investors.
Bloomberg News contributed to this report.
