The Cypriot parliament is scheduled to reconvene for emergency talks later this afternoon after the European Union issued it with an ultimatum to raise the 5.8 billion euros ($7.4 billion) necessary for a 10 billion euro bailout package by next Monday. The European Central Bank has said it will cut off liquidity to Cypriot banks without a deal.
European shares trimmed their earlier losses to trade near unchanged levels, but the ongoing uncertainty in Cyprus kept investors on the sidelines ahead of the weekend.
Cyprus' finance minister flew home to Cyprus after two days of talks with Russian officials in Moscow failed to deliver a deal to rescue the country.
In one piece of positive news that helped lift investor spirits, Cyprus and Greek officials agreed on a takeover of the Greek units of Cypriot banks.
In company news, Blackstone Group and General Electric's lending arm have discussed jointly pursuing Dell's financial-services business, the Wall Street Journal reported, citing people familiar with the matter.
The New York Times also said Blackstone was weighing whether to make an offer for all or part of Dell, adding some people close to the private equity firm are skeptical that any offer will materialize.
Also, Pepsi gained after the U.K. Telegraph reported that investor Nelson Peltz has taken a stake in the beverage maker and Mondelez International and may push for a merger. Separately, Pepsi is redesigning its 20-ounce bottle for the first time in nearly 17 years.
Among earnings, Tiffany rallied after upscale jeweler said it sees worldwide sales gaining 6 to 8 percent this fiscal year and posted a better-than-expected profit.
Nike jumped after the sports apparel retailer reported quarterly earnings that easily topped estimates and said future demand for its clothing and shoes gained.
And Darden Restaurants posted quarterly results that largely matched Wall Street's recently lowered estimates as consumers shied away from restaurants amid the payroll tax hike and higher gasoline prices.