Wall Street ends flat, European shares edge up

US stocks closed mostly flat on Tuesday after volatilility late in the session, with weakness in materials and energy shares offsetting strength in financials.

Shares traded higher for much of the session on the back of an unexpectedly strong read on existing home sales, which lifted banks. But those gains dissipated in the last half hour of trading, with Wall Street briefly turning solidly negative before staging a rebound.

The Dow Jones industrial average dipped 1.67 points, or 0.01 percent, to 12,502.81 at the close. But the Standard & Poor's 500 Index was up just 0.64 of a point, or 0.05 percent, to 1,316.63. The Nasdaq Composite Index declined 8.13 points, or 0.29 percent, to close at 2,839.08.

European stocks recorded their biggest daily gain in a month on Tuesday, boosted by expectations that Europe and China would take measures to foster economic growth, although lingering political uncertainty kept investors on edge.

Traders said buyers were coming back to knocked-down cyclical stocks ahead of a European Union summit on Wednesday, which was expected to discuss ways to shore up Europe's economy, such as EU 'project bonds' to finance infrastructure in troubled euro debtor states.

The FTSEurofirst 300 index of top European shares closed up 18.63 points, or 1.9 percent, at 993.67, while the euro zone's blue chip Euro STOXX 50 index gained 45.78 points, or 2.1 percent, to 2,195.94.