NEW YORK (AP) — The stock market appeared headed Tuesday for its best January finish since 1997. Stocks climbed because of hopes that Greece was finally close to resolving its debt problem, then lost ground after an unexpected drop in consumer confidence.
The Dow Jones industrial average was down two points at 12,652 just before 10:30 a.m. EST. The Standard & Poor’s 500 was up less than a point at 1,313. The Nasdaq composite index was up two 2,814.
For the month, the S&P 500 is up 4.5 percent. That would be its best performance to start a year since 1997, when the S&P gained 6.1 percent. Last year, the market added 2.3 percent in the first month.
Meeting in Brussels, European leaders said a final debt deal for Greece could be completed in coming days, together with a €130 billion bailout package designed to save the country from a potentially disastrous bankruptcy.
Greece is negotiating with investors who bought its government bonds. They are expected to swap their bonds for new ones with half the face value, plus a lower interest rate and longer term of maturity. In all, investors would lose about 70 percent.
A large majority of countries in the European Union agreed late Monday to sign a treaty designed to stop overspending. Europe’s debt problems remain the main worry in the markets.
Investors are increasingly worried that Portugal may need a similar deal with its private creditors. European leaders insist the Greek reduction is a one-time event. Portugal’s borrowing costs have risen to record highs.
Back home in the United States, investors have enjoyed a steady climb through January amid signs of an improving economy. Unemployment has fallen from a 10 percent peak in October 2009 to 8.5 percent.
The Dow had been up 66 points in morning trading, but it lost the gains after the Conference Board reported that its consumer confidence index fell to 61.1 in January, down from 64.8 in December. Economists had expected 68.
There were also signs that the housing market continues to struggle. Home prices fell in November for a third straight month in in 19 of the 20 cities tracked by the S&P/Case-Shiller index. The biggest declines were in Atlanta, Chicago and Detroit.
Among stocks making big moves:
— Mattel Inc. soared 6 percent because of strong demand for Barbie and Monster High dolls during the holidays. That boosted Mattel’s fourth-quarter profit by a better-than-expected 14 percent. The company also raised its dividend.
— U.S. Steel Corp. gained 4 percent after it reported strong demand for pipes from the oil industry from October through December. The company was also optimistic about this quarter.
— Agriculture conglomerate Archer Daniels Midland declined 4 percent after it reported an 89 percent drop in quarterly net income. The company said its results were weighed down by weakness in oilseeds, corn processing and agricultural services.