US Stocks trim losses, but end in red on Greek woes (ext)

NEW YORK (CNNMoney) -- U.S. stocks recovered most of their lost ground Monday afternoon but struggled to pull out of the red as concerns over Greece continued to weigh on the market.

Stocks started the day down about 1% after the weekend came and went without Greek leaders reaching an agreement on a debt-relief deal. But as the trading session wore on, the major indexes trimmed most of those losses.

The Dow Jones industrial average (INDU) finished 7 points lower, or 0.1%. Earlier, the blue chip index had declined 131 points. The S&P 500 (SPX) lost 3 points, or 0.3%, and the Nasdaq (COMP) slumped 5 points, or 0.2%.

Stocks pared their losses as investors hope that European Union leaders, gathered in Brussels for their first summit of the year, will announce good news following their meeting.

Prior to any formal statements, Swedish prime minister Fredrik Reinfeldt told CNN that 25 of 27 European Union members have signed on to a fiscal compact aimed at strengthening budgetary discipline and deepening political ties to avoid a repeat European debt crisis. He noted that the Czech Republic cannot sign on yet (due to political obstacles), and U.K. Prime Minster David Cameron has already refused.
Investors are also looking for leaders to back a treaty to speed up implementation of the European Stability Mechanism, a move designed to strengthen the region's financial firewall.

Despite hopes for progress in Europe, investors remained concerned about the lack of an agreement in Greece. Greek officials finished the weekend without a deal with private-sector creditors. Without such a deal, the country jeopardizes its access to bailout funds and might not be able to make a €14 billion debt payment that's due March 20.

"As long as there is an unresolved issue as its relates to Greece and Europe overall in the background, investors can't move too far forward," said Dave Hinnenkamp, CEO of KDV Wealth Management. "The market has been focusing on the domestic news, but the impact of that is starting to fade and the background is shining through again."

The difficult debt negotiations in Greece have revived concerns about a default, and investors are also growing worried about Portugal, where borrowing costs continue to soar.

The dollar rose against the euro and the British pound but fell versus the Japanese yen. Oil for March delivery slipped 78 cents to settle at $98.78 a barrel. Gold futures for April delivery fell $1.00 to settle at $1,734.40 an ounce.