Wall Street flat on euro zone worries, weak consumer sentiment

NEW YORK (Reuters) - Wall Street was little changed on Tuesday as a sharp rise in Spanish borrowing costs and weak U.S. consumer data kept investors away from risky assets ahead of the European leaders' summit later in the week.

Spain's short-term borrowing costs nearly tripled at auction when the country sold 3.08 billion euros of its short-term debt, as the Treasury paid the highest rates to sell the paper since November.

Trading is expected to be volatile ahead of a two-day summit of European Union leaders that begins Thursday. Although investors do not have high hopes, any progress made at the meeting in terms of heightening cooperation to tackle the region's 30-month long debt crisis could bring back appetite for risky assets.

"The market isn't expecting much but that's actually a good thing. I think seeds for a solution (to the euro zone's debt crisis) will be planted at the summit, which will bring relief to the market," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

U.S. consumer confidence fell to its lowest level in five months in June, the Conference Board industry group said, but separate housing data showed home prices picked up for a third month in a row in April, suggesting recovery is gaining traction in the sector.

The Dow Jones industrial average <.DJI> was down 15.18 points, or 0.12 percent, at 12,487.48. The Standard & Poor's 500 Index <.SPX> was up 0.84 points, or 0.06 percent, at 1,314.56. The Nasdaq Composite Index <.IXIC> was up 4.57 points, or 0.16 percent, at 2,840.73.

Finance chiefs of the euro zone's four biggest economies will hold last-minute talks in Paris on Tuesday evening to discuss managing the crisis in the short term and proposals for closer long-term fiscal and banking integration in preparation for the summit on Thursday and Friday.

According to a document prepared for the meeting, European leaders will discuss specific steps toward a cross-border banking union, closer fiscal integration and the possibility of a debt redemption fund.

JPMorgan Chase & Co rose 1.5 percent to $35.85 as one of the top boosts to both the Dow and S&P after Goldman Sachs added the bank to its America's conviction buy list, citing its capital and earnings power.

Goldman also downgraded Morgan Stanley to "neutral" from "buy," and removed the stock from its conviction buy list, saying earnings could be hurt by muted capital markets activity. The stock edged up 0.1 percent to $13.49.

Rupert Murdoch's News Corp is thinking of splitting into two companies, the Wall Street Journal reported, citing people familiar with the situation. Shares jumped 6.2 percent to $21.35.

(Reporting By Angela Moon, editing by Dave Zimmerman)

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