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 index gained 0.44 points 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.
Stocks in the United States were also hurt by a discouraging report on retail sales. Bank of America led the Dow lower, dropping 3.3 percent. The Dow was down as much as 87 points at its low for the day.
Declining stocks still outnumbered advancing stocks by about 2-1. Volume was light at about 3.8 billion shares on the New York Stock Exchange.
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 investors expect the next 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.
News out of the United States was also somewhat disappointing. The Commerce Department said U.S. retail sales rose 0.4 percent last month, but analysts had been expecting 0.7 percent, and spending on auto sales was down. Automakers had reported higher sales, so Tuesday's numbers could mean they have had to offer more discounts to persuade customers to spend.
Bank of America fell 3.3 percent after Citi analyst Keith Horowitz downgraded his rating to neutral, saying the bank's "legacy issues," notably its 2008 purchase of the mortgage lender Countrywide, "will take a while to play out."
