US stocks trimmed most of their morning gains to trade nearly flat in a choppy trading a day after the worst selloff in equities this year erased most of the year to date gains made by most of the biggest indexes.
The Dow Jones Industrial Average most recently climbed 55.89 points or 0.3% to trade at 17,603. The blue chip index had risen by more than 115 points in morning trading.
The S&P 500 Index most recently advanced 9 points or 0.46% at 2062.4 points while the Nasdaq Composite jumped 35 points or 0.7% at 4,972 points.
“This is a holiday-shortened week and with Greece news driving the markets, we expect some erratic trading. The concern here is the kind of pullback we last saw in October. Traders will be watching the 2,040 level on the S&P 500 very closely,” Frank Cappelleri, executive director at Instinet LLC, told Market Watch.
Morning gains appeared to be fueled by speculation that Greece and its international creditors might agree on a bailout deal before the end of the day after the Wall Street Journal reported that Greece had proposed a two year deal using the bailout money.
Hopes of a deal were however dashed by Germany Chancellor Angela Merkel who told lawmakers earlier in the day that she didn’t expect any new developments today.
Greece is set to default o its 1.6 million Euro debt to the International Monetary Fund Tuesday night heightening speculation that the country will exit the common currency.
US stocks fell sharply on Monday with the Dow Jones Industrial Average and the S&P 500 Index suffering their worst one day declines since October.
Many market analysts, however the country’s prospective exit from the common currency to be a driver for equities in the long run given Greece’s small size and the US’s economic resurgence.
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