Stocks struggled to hold their gains ahead of the close as energy and techs weakened and after excitement over France and Germany's potential rescue aid for Greece waned.
The Dow Jones Industrial Average gained, led by Verizon and AT&T after finishing higher amid choppy trading in the previous session.
Tech giants Intel and Cisco were the biggest laggards on the blue-chip index.
The S&P 500 struggled to hold onto its gains, while the Nasdaq turned lower. The S&P has to close above 1,270.98 in order to break its six-week losing streak. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 22 after surging to its highest level since mid-March during the previous session.
If the S&P 500 and Dow hold on to gains, they would record their first positive week in seven.
Among key S&P sectors, consumer discretionary, telecom and financials gained while techs and energy slipped.
Today is quadruple witching, when contracts on stock index futures, stock index options, stock equity options, and single stock futures expire. Quadruple witching happens once every quarter, on the third Friday of March, June, September and December.
“The market has reached a little too far in the bearish way, but at the same time, it’s too early to say this correction is over," said Howard Ward, portfolio manager of the GAMCO Growth Fund. "I don’t think 7 percent [market decline] is enough to blow the all-clear whistle.”
“This is a tough time to trade,” said Randy Frederick, Director of Trading and Derivatives at Charles Schwab. “The summer months are going to be tough—I expect choppy, but tight ranges.”
However, Frederick remains optimistic about the year overall.
“In the third and fourth quarters, we’ll see a rebound,” he said. “When QE2 goes away, it will take a few weeks for people to have confidence and for the markets will battle back and forth. If [markets] can maintain their levels, it will give confidence that they are capable of going on their own.”
Merkel and French Sarkozy said at a press conference said that they were united behind a new aid package for Greece that would include voluntary private sector participation on the basis of the so-called "Vienna Initiative."
The news came after Greece's prime minister appointed Evangelos Venizelos as finance minister, replacing the unpopular George Papaconstantinou.
Ward noted that gold is where investors should hedge their bets as a way to protect themselves from the euro. Gold prices rallied near $1,540 an ounceas the Greek debt crisis raised risk aversion. The dollar extended losses against the euro.