Stocks erased their earlier gains Monday after Moody's downgraded its debt rating on Greece.
Stocks had been rallying for most of the day, led by techs and industrials, as strong euro-zone industrial data buoyed hopes for the global economic recovery.
The Dow Jones Industrial Average was flat, after being up as much as 100 points earlier.
The S&P 500and Nasdaq were also hovering around the flat line. The CBOE volatility index, widely considered the best gauge of fear in the market, fell to around 28.
Moody's downgraded its debt rating on Greece by four notches, putting it in junk territory.
Peter Boockvar, equity strategist at Miller, Tabak and Co. in New York, called the move by Moody's "well behind the curve."
"The citizens [of Greece] have yet to embrace the idea of scaling back," Todd Schoenberger, managing director of LandColt Trading, explained.
Earlier, stocks rallied following news that showed euro-zone industrial output in April surged year-on-year more than in any month in almost two decades, bolstering the view that economic recovery could be gathering pace.
The euro rose after a burst of short-coveringlifted the single currency above $1.22 and further away from a four-year low.
Oil rose above $75 a barrelamid renewed optimism about the recovery, while goldfell below $1,230 an ounce.
Home Depot shares fell slightly despite Citigroup raising its view on the home improvement retailer. Citi said Home Depot's earnings should improve due to improved expense leverage, share repurchases and higher margins.
BP shares tumbled more than 9 percent following news that the cost to clean up the oil spill in the Gulf of Mexico has spiraled to nearly $1.6 billion and amid worries about the company's dividend.