By Chuck Mikolajczak
NEW YORK (Reuters) - Stocks treaded water on Tuesday as investor angst about the euro zone's fiscal crisis offset data showing the economy's services sector grew slightly aster than expected in May.
The pace of growth in the services sector picked up in May as a gauge of new orders improved, according to an industry report released on Tuesday. The Institute for Supply Management's services index edged up to 53.7 in May from 53.5 in April, a touch above economists' forecast for it to hold steady.
The ISM data was a welcome change from recent economic reports, which coupled with concerns about the euro zone, drove the S&P 500 down more than 6 percent for May.
"The non-manufacturing ISM number was certainly a welcome bit of good news in that it beat expectations and shows the service side of the economy is still expanding," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
"It's an event-driven, data-driven market right now so while there is always a focus on the data points, because of the situation we are in, there is an inordinate amount of attention being paid to them."
Concerns about an escalation of the euro zone's debt crisis kept a weight on the market, however, and served to cap gains.
Spain's Treasury Minister Cristobal Montoro said the nation's high borrowing costs mean it is effectively shut out of the bond market and the European Union should help Madrid recapitalize its debt-laden banks.
Statements on the outcome of emergency talks among the Group of Seven industrialized nations as they tackle the euro zone's deepening crisis offered little clarity to investors. The Treasury Department said G7 finance ministers "reviewed developments in the global economy and financial markets and the policy response under consideration.
Japan's finance minister said he told G7 members that Japan is confident in Europe's response to its problems, but indicated Tokyo was prepared to intervene in order to curb its currency.
The Dow Jones industrial average <.DJI> dropped 14.30 points, or 0.12 percent, to 12,087.16. The Standard & Poor's 500 Index <.SPX> inched up just 0.02 of a point, or unchanged on a percentage basis, at 1,278.20. The Nasdaq Composite Index <.IXIC> was unchanged at 2,760.01.
In the euro zone, most major economies are now in various states of decline, according to business surveys that suggested even Germany is no longer immune to the crisis.
The S&P financial sector index <.GSPF> rose 1.3 percent, leading gains among the 10 major S&P 500 sectors. The financial sector index, however, is down more than 12 percent since the start of May.
Shares of JPMorgan Chase & Co
On the downside, Dollar General Corp
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)
