(Reuters) – U.S. stocks were little changed on Monday after a decisive Greek election victory by the leftist Syriza party spurred concern over fresh instability in the euro zone, even as the possibility of Greece leaving the bloc was considered remote.
The Syriza party looked set to take on Greece’s international lenders, with leader Alexis Tsipras pledging to end five years of austerity and renegotiate Greece’s debt agreements. Potential conflicts with other euro zone governments could put more strain on the currency bloc.
While the United States has limited direct exposure to Greece’s relatively small economy, volatility in Europe could hurt multinational companies. If the euro continues to weaken against the dollar, that could be a headwind for earnings.
“The ongoing display of angst is that Greece removes itself from the euro zone. It’s the unknown about things breaking up,” said Frank Davis, director of sales and trading at LEK Securities in New York. “We consider that a remote possibility, but it makes sense for us to take a pause and reassess our fundamentals.”
The German government said a third debt restructuring was out of the question for Greece, though it opened the door to a possible extension of the country’s current bailout program.
In deal news, Rock-Tenn Co (RKT.N) and MeadWestvaco Corp (MWV.N) said they would combine to form a packaging company worth $16 billion, with MeadWestvaco shareholders owning a majority stake. Rock-Tenn rose 9.4 percent to $68.93 while MeadWestvaco rose 18 percent to $53.02 as the S&P 500’s biggest gainer.
D.R. Horton Inc (DHI.N) climbed 5.7 percent to $24.41 after the homebuilder’s revenue growth beat expectations. Homebuilders .HGX rose 1.5 percent.
With 19 percent of S&P 500 companies having reported earnings, 71.6 percent have topped expectations, while 54.7 percent have beaten revenue forecasts, according to Thomson Reuters data. That compares with the long-term average of 63 percent for earnings and 61 percent for revenue.
At 11:54 a.m. (1654 GMT), the Dow Jones industrial average .DJI fell 11.98 points, or 0.07 percent, to 17,660.62, the S&P 500 .SPX gained 0.69 points, or 0.03 percent, to 2,052.51 and the Nasdaq Composite .IXIC added 0.77 points, or 0.02 percent, to 4,758.65.