US stocks waver as emergency call on Europe starts

FILE - In this June 4, 2012, file photo, trader Lewis Vande Pallen, center, works on the floor of the New York Stock Exchange. US stock futures are sliding along with investor confidence in the ability of the world?s economic leaders to unravel Europe?s worsening debt crisis. (AP Photo/Richard Drew, File)

FILE - In this June 4, 2012, file photo, trader Lewis Vande Pallen, center, works on the floor of the New York Stock Exchange. US stock futures are sliding along with investor confidence in the ability of the world?s economic leaders to unravel Europe?s worsening debt crisis. (AP Photo/Richard Drew, File)

NEW YORK (AP) ? U.S. stocks struggled for direction early Tuesday, ricocheting between small gains and losses.

Encouraging data about growth in the U.S. service industry, which includes industries like retail and restaurants, pushed the market up. But Europe wasn't far from anyone's mind, as world finance chiefs held an emergency conference call to discuss how to rein in the continent's troubled countries as they hurtle toward a financial cliff.

The Dow Jones industrial average was down as much as 29 points in early trading, bounced to a gain of 35 points after the service-industry report, then slowed to a gain of nine points, to 12,110, at around 11:20 a.m.

The Standard & Poor's 500 index was up four to 1,282, and the Nasdaq composite index was up eight to 2,768.

The Institute for Supply Management reported that U.S. service companies, which employ roughly 90 percent of the work force, grew at a slightly faster pace in May, marking the 29th straight month of expansion.

But Europe's debt problems, which sent the Dow to a 275-point plunge on Friday, continued to weigh heavily on Wall Street.

The German finance minister said he would oppose watering down budget cuts that stronger countries like his own want to impose on weaker countries like Greece. Spain's finance minister said the amount of money that would be needed to prop up the nation's banking sector was not excessively high. Greece's central bank governor said Cyprus was struggling to find about $2 billion to inject into its second-largest bank.

Some leaders have pushed for a central body that would have more authority over banks in all 17 countries that use the euro. A deposit-insurance program, like the one run by the Federal Deposit Insurance Corp. in the U.S., would keep fearful customers in Spain and Greece from yanking their money out of banks there, said Jim Millstein, CEO of the investment firm Millstein & Co. in Washington, D.C.

"As we saw in Lehman Brothers, when fear hits the banking system, it shuts down," said Millstein, who oversaw the Treasury Department's investments in AIG and other troubled financial institutions.

European markets were mixed. Greece's main stock index plunged 5 percent, but Germany's benchmark index was flat. Stocks mostly rose in France and Spain.

In the United States, Chesapeake Energy rose 2 percent a day after activist investor Carl Icahn engineered a shakeup on the board of directors.

Home builders Lennar and PulteGroup rose more than 4 percent after getting hammered in the last two days.

Starbucks fell 3 percent a day after announcing ambitious plans to buy a small California bakery chain and remake its food offerings. Starbucks is facing stiff competition from fast-food chains that do their own specialty coffees.

Dollar General fell 3 percent after announcing late Monday that top executives would sell some of their stock.

Associated Press

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