U.S. stocks waver; euro dives on Greece turmoil

Stronger news about the U.S. economy stilled the ripples from Europe's latest political impasse Tuesday, pushing U.S. stocks between modest gains and losses.

The euro and European stocks plunged as trading in New York began after efforts to form a government in Greece collapsed. Newly-elected political leaders there disagree about whether to accept more international bailouts and continue with painful spending cuts.

In the U.S., stocks staged a midmorning rally after word that confidence among U.S. builders rose to a five-year high in May. The index has risen for seven of the past eight months. Homebuilders rallied: KB Home and Lennar Corp. rose 4 percent; Hovnanian Enterprises, 5 percent.

Earlier, a survey by the New York Federal Reserve found that manufacturing activity in the New York region rebounded this month far more strongly than economists had expected.

The early rise deflated before stocks reached new daily highs at midday. By the afternoon, the indexes again were flat for the day.

The Dow Jones industrial average was down 8 points to 12,686 as of 2:08 p.m. EDT. It was lifted by JPMorgan Chase and Bank of America, shaking off recent losses related to a surprise $2 billion trading loss that JPMorgan announced last week.

The Standard & Poor's 500 index fell one to 1,337. The Nasdaq composite index rose 11 to 2,913.

Stocks are having their worst month in the past eight. For the month, the Dow is down 518 points — about 4 percent — after hitting a four-year high on May 1. The average is on track to post its first monthly loss since September, when it fell 6 percent.

If the Dow closes higher, it will be only its second up day since the peak reached on May 1.

The euro fell as low as $1.2731, a four-month low against the dollar, after Greek socialist leader Evangelos Venizelos declared that attempts to form a governing coalition there had failed and new elections will be held next month. If voters elect parties opposed to the terms of the country's financial rescue, Greece could be expelled from the euro, shocking global markets.

Stock indexes in France, Britain and Germany gave up earlier gains after Mr. Venizelos' remarks and closed sharply lower.

Home Depot slumped 1.6 percent, the most of the 30 companies in the Dow, after the world's biggest home-improvement company forecast revenue that was below what Wall Street analysts were expecting.

Among other stocks making big moves:

• TJX Cos., which owns the T.J. Maxx, Marshalls and HomeGoods store chains, shot up 7 percent, the most in the S&P 500 index. The discount retailer reported a 58 percent surge in first-quarter income and raised its full-year profit forecast.

• Avon Products Inc. fell 10 percent, the most in the S&P 500 index, after Coty Inc. canceled its unsolicited, $10.7 billion bid for the cosmetics retailer.

• Groupon leapt 12 percent after the online daily discount site reported first-quarter revenue that exceeded analysts' expectations.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.