Wall St flat after biggest selloff in three months

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks were little changed on Tuesday a day after Wall Street suffered its biggest drop since early October and as data showed the pace of momentum in the U.S. economy had slowed.

Financial data firm Markit's final reading on U.S. services sector growth fell in December to 53.3, its lowest since February, from the preliminary 53.6 reading and the 56.2 in November. A separate gauge from the Institute of Supply Management also fell short of expectations while factory orders fell for a fourth straight month.

The main headwinds for equities remain unresolved as crude prices continue to fall and an election in Greece, which may trigger its exit from the euro zone, is some three weeks ahead, said Art Hogan, chief market strategist at Wunderlich Securities in New York.

"That adds to the concern the euro zone is facing an economic slowdown and some of the weaker members have more debt than they can handle," said Hogan.

Speaking of the sharp decline in oil prices in recent months, Hogan said there is concern "there is something larger at play rather than just the market dynamic of oil.

"People think there must be a much larger global economic slowdown to cause this, and the reaction is to sell equities."

Crude oil prices continued their descent on Tuesday, with Brent down as much as 3.5 percent and U.S. crude down as much as 3.1 percent. Both were recently down more than 2 percent.

The S&P 500 fell 1.8 percent on Monday to post its worst day in almost three months, with energy shares leading the decline as swooning oil prices compounded global economic concerns. The energy sector of the S&P 500 fell 4 percent.

The Dow Jones industrial average rose 17.23 points, or 0.1 percent, to 17,518.88, the S&P 500 gained 1.56 points, or 0.08 percent, to 2,022.14 and the Nasdaq Composite dropped 9.25 points, or 0.2 percent, to 4,643.32.

AOL Inc shares rose 5.5 percent to $47.20 the day after a report that Verizon Communications approached AOL about a potential acquisition or joint venture. The Bloomberg story cited people with knowledge of the matter.

CytRx Corp shares jumped 21.1 percent to $3.45 after preliminary findings showed its experimental cancer drug was effective on a small group of patients with a deadly form of brain cancer.

Shares of Minerva Neurosciences surged 41.7 percent to $8.50 the day after data showed an analog of the company's experimental compound showed improvements in treating symptoms of Parkinson's disease in primates.

Advancing issues outnumbered declining ones on the NYSE by 1,422 to 1,391, for a 1.02-to-1 ratio on the upside; on the Nasdaq, 1,516 issues fell and 892 advanced for a 1.70-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 11 new 52-week highs and 9 new lows; the Nasdaq Composite was recording 22 new highs and 24 new lows.

(Additional reporting by Rodrigo Campos; Editing by Chizu Nomiyama, Nick Zieminski and Meredith Mazzilli)