NEW YORK (TheStreet) -- U.S. stocks were trading narrowly in the red Tuesday morning, reacting to a collapse in Greek debt talks and falling oil prices. Also hurting optimism was a slide in homebuilder confidence to a four-month low.
The S&P 500 dropped 0.19%, just 4 points off its record set last week. The Dow Jones Industrial Average slipped 0.27%, and the Nasdaq fell 0.15%.
Homebuilder confidence fell to 55 in February from 57 a month earlier, according to the National Association of Home Builders housing market index. However, the gauge remained above the 50 level, indicating the industry remained optimistic.
Discussions between Greece and eurozone finance ministers broke down on Monday after Greek officials refused to accept a proposal for a six-month extension to the country's current bailout package. Greece has been seeking a more lax agreement that would continue to offer billions in relief but scrap restrictive austerity measures.
Eurozone officials said the Greek government had until Friday to request an extension, a deadline worryingly close to the official end-of-month expiration of the current bailout package. Greek Finance Minister Yanis Varoufakis remained confident a deal could be reached within 48 hours.
Germany's DAX fell 0.5% and France's CAC 40 was down 0.23%. The Athens Stock Exchange tumbled 2.5%.
Oil prices were lower, paring earlier gains and then some despite reports of risks to Middle Eastern supply. Prices had been supported earlier after the International Energy Agency warned of potential oil shortages over the next decade due to increased instability in Egypt, Libya and Iraq. West Texas Intermediate was down 3.1% to $51.14 a barrel.
"Buyers [are] growing cautious over the standoff between Greece and the EU, and worry over mounting U.S. crude oil inventories," said Citi analyst Timothy Evans. However, "background supply worries sparked by the latest dispute between Iraq and the Kurdistan Regional Government over oil exports as well as ongoing conflict in Libya are providing some support."
Manufacturing activity in New York expanded at a slower pace in February, down to 7.8 from 10 in the previous month, according to the Empire State manufacturing index. Economists had hoped for a more moderate fall to 9.5. Industrial production for January will be released Wednesday, providing a broader snapshot of manufacturing activity across the country.
Transocean (RIG) shares slipped 0.63% on the news CEO Steven Newman will step down, replaced by Chairman Ian Strachan until a replacement can be found. The company has faced challenges alongside other oil companies after the price of crude halved over the past eight months.
Starwood Hotels & Resorts (HOT) was rising, up 3%, after President and CEO Frits Van Paasschen resigned from his position. Van Paasschen, CEO since September 2007, will be replaced by director Adam Aron until a permanent replacement is hired.
Apple (AAPL) shares were 0.77% higher, just cents from a new record high. The tech company closed Friday at $127.08.
Nordstrom (JWN) slipped 0.45% after the department store chain was downgraded to "underweight" from "equal weight" by Barclays. Analysts said margins will likely see pressure over the next two years as the company ramps up omni-channel investments.
Goodyear Tire (GT) climbed more than 2% after beating analysts' estimates on its top- and bottom line over the first quarter. The company said it expects segment operating income to climb 10% to 15% over this fiscal year.
-- Written by Keris Alison Lahiff in New York.