U.S. stocks eased on Thursday as mixed messages about Greece's debt talks kept investor uncertainty high along with a sharp drop in Chinese shares after brokers tightened margin rules.
Seven of the 10 major S&P 500 sectors were lower, with the industrials sector .SPLRCI falling the most, 0.4 percent, a day after the Nasdaq closed at a record high.
International Monetary Fund Managing Director Christine Lagarde said there was still a lot of work to do before Greece and its international lenders could clinch a cash-for-reforms deal.
Greece's government said it aims to reach an agreement with lenders by Sunday. A euro zone official said Greece will not be able to get the money still available under its current bailout plan if it does not agree to the outline of a such a deal by the end of the week.
"Everybody is coming out with a different story. I'm looking for an EU-endorsed comment rather than something coming from Greece to be sort of the final arbiter on what the sentiment really is with regard to a resolution," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, which manages about $67 billion in assets.
Shares of Caterpillar (CAT.N) fell 2.2 percent to $86.01 and helped to drag down the S&P 500 and Dow, while shares of transportation companies extended recent losses. The Dow Jones transportation average .DJT was down 0.9 percent.
The Dow Jones industrial average .DJI fell 36.87 points, or 0.2 percent, to 18,126.12, the S&P 500 .SPX lost 2.69 points, or 0.13 percent, to 2,120.79 and the Nasdaq Composite .IXIC dropped 8.62 points, or 0.17 percent, to 5,097.98.
In China, indexes plummeted 6 percent after more brokerages tightened margin trading requirements in a move seen aimed at curbing risks in a red-hot market.
Investors also were cautious ahead of Friday's reading on U.S. gross domestic product.
Among gainers, action camera maker GoPro Inc (GPRO.O) rose 6.6 percent to $56.81 after GoPro and Google Inc (GOOGL.O) introduced a virtual reality system using 16 cameras and Google software. Google shares were near flat at $554.18.
Declining issues outnumbered advancing ones on the NYSE by 1,756 to 1,282, for a 1.37-to-1 ratio on the downside; on the Nasdaq, 1,468 issues fell and 1,277 advanced for a 1.15-to-1 ratio favoring decliners.
The S&P 500 posted 16 new 52-week highs and seven new lows; the Nasdaq Composite recorded 85 new highs and 45 new lows.
About 5.7 billion shares changed hands on U.S. exchanges, below the 6.2 billion daily average for the month to date, according to BATS Global Markets.
(Editing by Savio D'Souza and Nick Zieminski)
US STOCKS-Futures edge higher, post-holiday trading seen light
NEW YORK, Dec 26 U.S. stock index futures edged higher on Thursday, suggesting the market's upward movement will continue, although trading was expected to be light following the Christmas holiday.
Thursday is the first full day of trading since Monday, following an early close on Tuesday and Wednesday's Christmas holiday. Volume has been anemic, with many traders away, and the light action could amplify market volatility.
Nevertheless, markets showed an upward bias, with the Dow pointing to a sixth straight day of gains, its longest winning streak since March.
"There's nothing to drive markets decisively higher other than continued momentum, but I don't see that stopping. It has been a long time since we've had such an absence of headwinds," said Pete Benson, partner of Beacon Capital Management in Franklin, Tennessee.
The government will release weekly jobless claims at 8:30 a.m. (1330 GMT). Claims are seen falling to 345,000 from 379,000 the previous last week.
Both the Dow and S&P 500 closed at record highs on Tuesday. However, further upside may be limited at these levels, especially in the absence of major trading catalysts.
Stock movers may include United Parcel Service a day after the shipping company said poor weather and a high volume of holiday packages delayed the arrival of Christmas presents around the world.
Also, Amazon.com Inc offered compensation to affected customers with shipping refunds and $20 gift cards.
"There will be a lot more active trading on this space today, and it will be interesting to see how the negative talk on social media influences the stock," said Benson. "However, if this does turn out to be a big negative for shipping companies today, I think that will just be a blip."
In the latest black eye for the retail industry, the hackers who attacked Target Corp and compromised up to 40 million credit cards and debit cards also managed to steal encrypted personal identification numbers, a senior payments executive told Reuters.
S&P 500 futures rose 1.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 62 points and Nasdaq 100 futures rose 6.25 points.
The S&P 500 has soared 28.5 percent this year, largely due to stimulus measures from the U.S. Federal Reserve. The index is on track for its best year since 1997. The Dow is up 24.8 percent in 2013 while the Nasdaq has jumped 37.6 percent for the year.
Japan's SoftBank Corp was in talks to acquire U.S. wireless carrier T-Mobile US Inc and was discussing funding for a deal with financial institutions, sources close to the matter told Reuters. Shares of T-Mobile rose 3.4 percent to $33.30 in premarket trading.