New York, NY (AP) - Stocks are closing lower after political instability in Greece sent U.S. and European markets reeling.

European indexes closed near multi-month lows Tuesday as Greek politicians appeared unable to form a coalition government. A key political leader said Greece is no longer bound by its earlier promises to cut spending in exchange for international bailouts.

U.S. markets opened lower and fell for most of the morning. The Dow Jones industrial average dropped nearly 200 points before late-afternoon buying erased much of the decline.

The Dow closed down 76 points at 12,932. The S&P 500 was down six at 1,363. The Nasdaq was off 11 at 2,946.

About three stocks fell for every two that rose on the New York Stock Exchange. Volume was average at 4.21 billion shares.