NEW YORK (CNNMoney) — The rally in U.S. stocks stalled mid-day Tuesday, as investors weighed a batch of weak U.S. economic data against hopes of a fresh bailout for Greece.
At the start of the session, stocks advanced more than 1% following gains in European markets. The rally was sparked by a Wall Street Journal article that reported Germany is shifting its stance to consider lending more money to Greece.
Previously, German officials had argued private investors in Greece should share some of the burden in any new bailout, but according to the Journal, Germany is now considering lending additional assistance — even without private bondholders getting involved.
But after the strong start, stocks began to soften after U.S. data showed a decline in home prices, regional manufacturing activity and consumer confidence.
About two hours into the session, the Dow Jones industrial average rose 68 points, or 0.5%. All but one of the Dow’s components were in positive territory, with Pfizer, Chevron and Cisco leading the advance.
The S&P 500 added 7 points, or 0.5%; and the Nasdaq Composite gained 15 points, or 0.5%.
First Solar was the among best performing stocks on both indexes. Shares of the solar panel manufacturer rose more than 2%, after Germany — the world’s leading solar market — said it will shut down its nuclear reactors by 2022.
May has been a rough month for the stock market, as investors wrestle with signs of a slower recovery. The Dow is down about 2.9% from the beginning of the month, and the S&P 500 is down 2.4%.
“The market is battling between growing fears that the U.S. economy is headed toward another downturn, and some progress on the European debt problems,” said Peter Tuz, president at Chase Investment Counsel.
He added that there are some renewed talks of a double-dip in the housing market, while the recent spike in gas prices is weighing on consumer sentiment.
U.S. investors are also gearing up for the government’s highly anticipated monthly jobs report on Friday.
CNNMoney’s survey of economists forecast that the U.S. economy created 178,000 jobs in May, down from 244,000 jobs a month earlier. The unemployment rate is expected to tick down to 8.9% from 9%.
U.S. stocks rose modestly last Friday, with trading volume light as traders positioned themselves for a long holiday weekend. The stock market was closed Monday for Memorial Day.
Economy: According to the closely watched S&P Case-Shiller Index, home prices recently fell to their lowest levels since the housing bubble burst. Prices tumbled 4.2% in the first quarter, sending home prices back to levels not seen since mid-2002.
The Chicago Purchasing Managers index fell more than expected to 56.6 in May, from 67.6 the previous month. Economists were expecting the figure to slip to 62.5.
The Conference Board’s consumer sentiment index declined to 60.8 in May, from 65.4 in April. Economists were expecting consumer confidence to rise to 66.3.
Companies: Shares of Nokia tumbled 17%, after Nokia issued a sales warning that the second quarter will be lower than previously expected. The cell phone maker, which has been losing market shares to Apple and Google, also lowered its full-year outlook.
Shares of Apple rose nearly 2% after the company said that CEO Steve Jobs, who is on medical leave, will introduce the iCloud service during the Worldwide Developers Conference keynote on June 6 in San Francisco.
World markets: European stocks climbed in midday trading. Britain’s FTSE 100 rose 1%, the DAX in Germany surged 2.1% and France’s CAC 40 added 1.5%.
Asian markets ended sharply higher. The Shanghai Composite rose 1.4%, the Hang Seng in Hong Kong gained 2.2% and Japan’s Nikkei added 2%.
Early Tuesday, Moody’s placed 12 Japanese regional governments on review for a possible downgrade.
Currencies and commodities: The dollar fell against the euro, but rose versus the British pound and the Japanese yen.
Oil for July delivery rose $2.00 to $102.59 a barrel.
Gold futures for August delivery rose $2.00 to $1,539.30 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.11% from 3.06% late Friday.
The-CNN-Wire/Atlanta/+1-404-827-WIRE(9473)
TM & © 2011 Cable News Network, Inc., a Time Warner Company. All rights reserved
