US stocks drop over Greece bailout fears

U.S. stocks edged lower on Monday as investors found little reason to extend a five-week rally on lingering uncertainty over whether Greece would accept the terms of a bailout.

Another deadline lasped in Athens as political leaders failed to respond to bailout terms from the European Union and International Monetary Fund. Greece needs the funds by March in order to meet big debt repayments and avoid a messy default.

The S&P's recent rally had been helped by a run of better-than-expected US economic data, which was capped by Friday's solid employment report. Recent actions by central banks in Europe and the United States to maintain loose monetary policies have also helped reduce volatility in equity markets.

But the S&Ps rise of 7 percent so far this year, along with worries over Europe's ability to resolve its debt crisis and some weak corporate results, has kept many investors at bay.

"We've had an ultra-strong move, and I think it would be prudent to take some hedges to protect yourself," said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, who helps oversee $14.5 billion in assets. "There will be more negativity if the deal doesn't go through, even if the market has been driven more by earnings than Europe lately."

The Dow Jones industrial average was down 42.38 points, or 0.33 percent, at 12,819.85. The Standard & Poor's 500 Index was down 2.74 points, or 0.20 percent, at 1,342.16. The Nasdaq Composite Index was down 4.55 points, or 0.16 percent, at 2,901.11.