Stocks flat amid fresh concerns over Greece

By msnbc.com news services

Stocks ended flat Tuesday amid fresh concerns over Greece's bailout and on weak U.S. retail sales that gave investors pause about a rally that had pushed a broad measure of U.S. equities to almost a seven-month high this week.

Euro zone finance ministers dropped plans for a special face-to-face meeting on Wednesday to finalize 130 billion euro bailout for Greece, and opted to hold a conference call instead.

The benchmark S&P 500 index has risen more than 25 percent from its recent low in early October, leading investors to question how much further the rally can run, especially in the face of the still-simmering European debt crisis.

Bank shares, which have been a barometer of investor sentiment toward Greece and the European debt crisis, fell.

"Greece is still very unsettled, and it makes perfect sense people are taking money out of financials," said Ken Polcari, managing director at ICAP Equities in New York.

The retail sales data curbed the appetite for risky assets and added to concerns following Moody's credit downgrade late Monday on six euro zone countries and its credit warning on France, Britain and Austria.

U.S. retail sales increased 0.4 percent in January, the Commerce Department said, less than the 0.7 percent rise expected by economists polled by Reuters.

Yet core retail sales, which exclude autos, gasoline and building materials, climbed 0.7 percent. The S&P retail index edged up to its highest on record, before paring those gains to decline 0.2 percent in late trading.

The euro extended losses against the U.S. dollar after the data, while government debt posted slight gains.

The dollar hit a multi-month high against the yen after the Bank of Japan boosted its asset-buying program.

European shares initially fell in response to the Moody's warnings and downgrades, and briefly rebounded after data on economic sentiment in Germany, Europe's largest economy, bolstered hopes that the country was returning to growth.

But the sovereign debt crisis weighed on markets.

"We see more scope for the market to scale back a bit these high expectations regarding a very smooth implementation of the Greek package," said David Schnautz, interest rate strategist at Commerzbank in London.

Reuters contributed to this report.