Wall Street flat as new Greece concerns arise

NEW YORK (Reuters) - Stocks were flat on Tuesday as news that Greece would hold a new election gave investors another reason to be cautious despite several days of equity losses.

Futures had indicated strong gains after the S&P fell for four of the past five sessions, with a stronger-than-expected read on New York manufacturing adding to the positive sentiment. But that proved short-lived as issues in Europe again came to the forefront.

Nine days following an inconclusive vote that failed to result in the formation of a government, Greece said it will hold a new election, prolonging a political crisis that pushes the country closer to bankruptcy and exit from the euro.

"Europe is in pretty deep trouble, and there is no end in sight at this moment," said Weyman Gong, chief investment strategist at Signature in Norfolk, Virginia. "The unity of the currency is very uncertain at this moment, and unless Germany is willing to shell out a lot of money to stabilize the system, things may eventually have to break up."

European shares <.FTEU3> fell 0.6 percent.

The Dow Jones industrial average <.DJI> was up 4.39 points, or 0.03 percent, at 12,699.74. The Standard & Poor's 500 Index <.SPX> was up 0.27 points, or 0.02 percent, at 1,338.62. The Nasdaq Composite Index <.IXIC> was up 3.00 points, or 0.10 percent, at 2,905.58.

The S&P 500 index closed at its lowest level since February on Monday. Concerns about the situation in Europe have been a primary mover for the weakness, which have taken the benchmark index down more than 4 percent so far this month.

Investors are closely watching 1,340 on the S&P, a key support level. A prolonged period under 1,340 could trigger more selling.

Banking stocks, which have suffered in the recent declines, were the day's top percentage gainers, up 0.3 percent.

Bank of America Corp rose 1.2 percent to $7.44. JPMorgan Chase & Co rose 1.6 percent to $36.37. JPMorgan shares have slumped over the past week after suffering multi-billion trading losses that have resulted in the exit of a top executive.

Retail sales rose 0.1 percent in April, slightly under expectations, while consumer prices were flat in the month. A report on manufacturing in New York state was sharply higher than expected.

Home Depot Inc fell 2.5 percent to $48.59 before reporting sales that missed expectations. Loews Companies Inc fell 1.7 percent to $29.03.

Groupon Inc late Monday reported its first quarterly profit, sending shares 16 percent higher to $13.57.

Facebook Inc has increased the price range in Silicon Valley's biggest-ever initial public offering to raise more than $12 billion, giving the biggest social network a potential market capitalization exceeding $100 billion.

Avon Products Inc slumped 11 percent to $18.37 in premarket trading after Coty Inc withdrew its $10.7 billion takeover bid for the company, saying it had missed a deadline to start discussing a deal.

(Editing by Dave Zimmerman)

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