Greek crisis drags global stocks lower

US stocks ended lower on Tuesday after political developments in Greece fanned concerns about Europe's fiscal health, but a late rally helped indexes cut losses to close well above lows.

Stocks spent most of the session sharply lower, with selling following declines in European markets. Fears that Greece will reject an existing international bailout and potentially leave the euro prompted the selling across markets.

The Dow Jones industrial average was down 76.44 points, or 0.59 percent, at 12,932.09. The Standard & Poor's 500 Index was down 5.86 points, or 0.43 percent, at 1,363.72. The Nasdaq Composite Index was down 11.49 points, or 0.39 percent, at 2,946.27.

European shares sank to a four-month closing low after a choppy day's trade, weighed down by new doubts about Greece's commitment to its bailout pledges.

The benchmark Greek index slid 3.6 percent to its lowest level since late 1992, pressured by the banking sector which dropped almost 10 percent on Tuesday.

The FTSEurofirst 300 closed down 1.7 percent at 1,017.48, not far from its session low, having risen 0.7 percent in thin volume on Monday when the London market was shut for a holiday, as banks led a technical rebound.

In Japan, Nikkei share average rebounded from a three-month low as investors reassessed the immediate impact of the French and Greek elections, although they remained wary of further flare up in the crisis-hit euro zone.

The Nikkei closed 0.7 percent higher at 9,181.65, holding below the 50 percent retracement of its rally from November to March near 9,195. The broader Topix index gained 0.6 percent to 776.57.