February 14, 2012 / 12:07 AM / in 7 years

Shares finish flat in late rally on Greece

NEW YORK (Reuters) - Stocks erased losses to end little changed on Tuesday after a Greek government source said the conservative party leader was expected to deliver a letter of commitment to the country’s international lenders.

A sign of Greece’s commitment to the tough austerity measures demanded by euro zone leaders was a catalyst for buyers to jump into the stock market late in the session.

Euro zone finance ministers are due to hold a telephone conference call on Wednesday about a 130 billion euros bailout to avert a chaotic Greek default.

Late-day moves by stocks are often exacerbated by dealers who are hedging positions.

“There has just been no volume for the last week or so, so you are kind of able to push stocks around a little bit more,” said Sam Ginzburg, head of capital markets at First New York in New York.

Bank shares, which have been the most affected by developments out of Greece, cut some of their losses.

The Dow Jones industrial average .DJI gained 4.24 points, or 0.03 percent, to 12,878.28. The Standard & Poor's 500 Index .SPX dropped 1.27 points, or 0.09 percent, to 1,350.50. The Nasdaq Composite Index .IXIC edged up 0.44 points, or 0.02 percent, to 2,931.83.

Materials and financials were the worst performing sectors after rising more than 10 percent for the year.

The benchmark index has encountered strong resistance in the 1,355-1,360 area.

“If we don’t take out 1,360 on the S&P, the more times we try to take it out and don’t, it tells you that we keep making lower highs, which increases the probability that you have your 3, 5, 7 percent selloff,” said Ginzburg.

The S&P materials index .GSPM lost 1.3 percent as Freeport-McMoRan Copper & Gold (FCX.N) fell 3.8 percent to $42.96 and the S&P financial index .GSPF slipped 1.1 percent with Citigroup off 2.4 percent to $32.08.

Volume was light with about 6.78 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, shy of the daily average of 6.96 billion.

Economic data showed a weaker-than-expected gain in January retail sales, which was due in part to discounting in auto sales, but a rebound in an underlying measure of sales pointed to an improving economy.

The S&P retail index .RLX gained 0.3 percent after hitting an intraday high of 570.33, the highest level on record for the index.

Auto supplier BorgWarner Inc (BWA.N) added 0.7 percent to $79.41 after posting a fourth-quarter profit that beat Wall Street expectations on a 16 percent sales increase.

According to Thomson Reuters data through Tuesday morning, of the 361 companies in the S&P 500 that have posted results, 63 percent have topped expectations, tracking below recent quarters through this stage in earnings season.

Micron Technology (MU.O) shares rose 6.2 percent to $8.34 after positive comments from analysts at JPMorgan and Oppenheimer. The stock is up 32.6 percent this year.

Moody’s Investors Service put Britain’s Aaa credit rating in jeopardy for the first time late on Monday. The agency also cut its outlook on the top-tier ratings of France and Austria and downgraded the ratings of six euro-zone nations, including Spain and Italy.

Traders work on the floor of the New York Stock Exchange February 7, 2012. REUTERS/Brendan McDermid

Data from Germany suggested Europe’s bulwark economy is picking up its pace. The ZEW economic think tank’s monthly poll of economic sentiment jumped to 5.4 from minus 21.6 in January, well above the consensus forecast in a Reuters poll of analysts.

Apple (AAPL.O) plans to announce a new version of its iPad in the first week of March, a Wall Street Journal report said, citing a person briefed on the matter. [ID:nL4E8DE0RI] Apple shares rose 1.4 percent to $509.46 after closing above $500 for the first time on Monday.

Declining stocks outnumbered advancing ones on the NYSE by 1,888 to 1,088, while on the Nasdaq, decliners beat advancers 1,557 to 958.

Reporting By Chuck Mikolajczak; Editing by Kenneth Barry

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