U.S. stocks closed slightly lower on Tuesday, as investors failed to hold positive momentum on domestic data and Greece debt talks. (Tweet This)
"I think we're all just hanging out for that jobs number—just bounce around a little bit above and a little bit below," said Kim Forrest, senior equity analyst at Fort Pitt Capital. "We're all waiting on the Fed and I think a lackluster jobs number is not going to give us reason to buy or sell."
Rising bond yields sent utilities more than 1 percent lower as the greatest decliner in the S&P 500. Intel fell 2 percent to continue pressuring the Dow Jones industrial average after Monday's decline on the acquisition of smaller chipmaker Altera. Earlier on Tuesday, the Dow fell more than 100 points in the open before climbing to trade about 30 points higher.
It's "not been a healthy rise," said Lance Roberts, general partner at STA Wealth Management. "News on and off again about Greece. Fairly weak (data). We're ... maybe in a short-term topping process."
The European Commission, the European Central Bank and the International Monetary Fund agreed on a proposed deal for Greece, a senior EU official said in a Reuters report. The proposal still needs acceptance from Athens, which offered a rival plan. Greece faces a Friday deadline for a $300 million euro repayment to the IMF.
U.S. stocks opened lower and recovered losses around noon following the European close. The German DAX came off lows to end about 0.9 percent lower.
"Greece was a potential obstacle and the fact that it looks like a better (chance of resolution) that took off pressure," Adam Sarhan, CEO of Sarhan Capital, said of the midday rise in stocks. Auto sales for May also boosted investor sentiment on the health of the consumer, he said.
Crude settled up $1.06, or 1.76 percent, at $61.26 a barrel for its highest close since December 9. Gains in oil boosted the energy sector about 1 percent to lead gains in the S&P 500.
"Overall some of the weaker data helped underscore what (Fed governor) Brainard said. That helped keep a lid on the Fed being aggressive this year," said Quincy Krosby, market strategist at Prudential Financial. "There are expectations that there is going to be a political resolution (on Greece)."
Analysts said the S&P 500 and Dow pared losses after coming near their 50-day moving averages, while slight gains in the Russell 2000 and the Dow transports also helped support stocks.
Earlier, the transports declined as airlines briefly plunged about 2 percent or more amid the Federal Aviation Administration's temporary halt of United Airlines flights. Morning headlines about unverifiable bomb threats against U.S. aircraft initially also weighed on sentiment.
Treasury yields followed the German bund yield higher after euro zone inflation came in at 0.3 percent in May, above the 0.2 percent forecast.
The U.S. 10-year Treasury yield traded as high as 2.279 percent after holding below 2.20 percent for the last week.
Eric Stein, co-director of global income at Eaton Vance Management, said the rally in yields began after better-than-expected economic data on Monday and accelerated on Tuesday's news out of the euro zone.
He pointed out that while the dollar gained against major world currencies on Monday, the greenback fell 1.5 percent against major world currencies on Tuesday with the euro topping $1.11. Earlier, the greenback hit a 13-year high against the yen.
Auto sales for May showed the , with pickup trucks and SUVs leading the way. General Motors sales rose 3 percent for the month, while Fiat Chrysler Automobiles saw a 4 percent increase. Ford sales declined 1 percent.
Factory orders for April showed a decline of 0.4 percent. March's figure was increased to 2.2 percent from 2.1 percent.
"We're going to have to see better data to move this market higher," said Art Hogan, chief market strategist at Wunderlich Securities. "Balance (the factory orders) out with May auto sales, we might get a push in terms of catalysts (to) neutral."
Aside from factory orders and vehicle sales, Tuesday is a quiet day for economic data ahead of a slew of releases in the next few days leading up to Friday's key monthly jobs report.
"There's not much to look at other than the negotiations between Greece and the IMF," said Randy Frederick, managing director of trading and derivatives at Charles Schwab. "I think the big thing is everybody is preparing for the big employment report at the end of this week."
Lael Brainard, a member of the Federal Open Market Committee, said that data do not suggest significant second-quarter bounce and that a strong dollar delays rate normalization.
"The market needs to get direction from the Fed," said David Kelly, chief global strategist at JP Morgan Funds. "I think governor Brainard is wrong. There are signs of the economy bouncing back in the second quarter."
Economic reports showed improvement in the last two months, but mixed data show growth is still far from robust.
The closed down 2.13 points, or 0.10 percent, at 2,109.60, with utilities leading five sectors lower and energy the greatest gainer.
The Nasdaq closed down 6.4 points, or 0.13 percent, at 5,076.52.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 14.
Advancers were a step ahead of decliners on the New York Stock Exchange, with an exchange volume of 727 million and a composite volume of 3.0 billion in the close.
Gold futures for August delivery settled up $5.70 to $1,194.40 an ounce.
In corporate news, discount retailer Dollar General closed up nearly 3 percent after reporting an 8.8 percent rise in quarterly sales, helped by higher demand for tobacco and health care products and perishable food items.
PVH closed up 7 percent after the firm said it earned an adjusted $1.50 per share for its latest quarter, beating estimates by 12 cents. Revenue was essentially in line, and the maker of Calvin Klein and other apparel brands raised its full-year outlook and announced a $500 million stock buyback. The upbeat quarter came despite the negative impact of a strong dollar.
Medtronic closed up 0.2 percent after reporting adjusted quarterly profit of $1.16 per share, beating estimates by 5 cents, with revenue also above forecasts. The medical products maker's full-year forecast is slightly below Street estimates, however, as it increases the projected negative impact of the stronger dollar.
Macy's closed up 2.5 percent after news that several .
The SPDR S&P Retail ETF (XRT) briefly gained 1 percent as retailers advanced. The index attempted to break above its 50-day moving average of 99.54.
Youku Tudou closed up nearly 8 percent following news of a partnership with Disney. The Chinese video hosting site will be the exclusive online movie marketing platform for Marvel movies and TV series.
Apple closed about half a percent lower. The iPhone maker will announce new music services at its Worldwide Developers Conference next week, according to The Wall Street Journal. Re/code also reports that the company will not announce a widely anticipated subscription TV service at the event, despite rampant speculation.
—Reuters and CNBC's Peter Schacknow contributed to this report.
On tap this week:
Monthly vehicle sales
8:15 am: ADP payroll data
8:30 am: International trade
9:45 am: Services PMI
10:00 am: ISM nonmanufacturing
2:00 pm: Beige book
2:15 pm: Chicago Fed President Charles Evan at banking symposium
4:00 pm: St. Louis Fed President James Bullard on the economy, meets press
Earnings: Vera Bradley, Five Below, Brown Forman
8:30 am: Initial claims
8:30 am: Productivity
12:00 pm: Fed Gov. Daniel Tarullo on economy
Earnings: JM Smuckers, Lands End, Joy Global, Ciena, Diamond Foods,Cooper Cos, Verifone
8:30 am: Employment report
12:30 pm: New York Fed President William Dudley on economy, Q&A
3:00 pm: Consumer credit
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