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Stocks waver after upbeat housing data

Updated at 10:45 a.m. ET: Stocks were wavering Tuesday after sharp losses in the prior session and as a Spanish bill auction met with falling demand.

The S&P/Case Shiller composite index, released before the open, showed single-family home prices picked up for a third month in a row in April, suggesting the recovery in the housing market is gaining traction.

“This looks like a solid turn,” David Blitzer, head of the S&P Index Committee, told CNBC. “It’s going to take a few months to cement all the evidence together, but it’s looking pretty good.”

Stocks fell on Monday to put the S&P 500 market index near break-even for June, as investors saw little reason to be optimistic about a European Union summit this week.

Spain's short-term borrowing costs nearly tripled at auction when the country sold 3.08 billion euros of its short-term debt, as the Treasury paid the highest rates to sell the paper since November.

Finance chiefs of the euro zone's four biggest economies will hold last-minute talks in Paris on Tuesday evening to discuss managing the crisis in the short term and proposals for closer long-term fiscal and banking integration in preparation for the summit later in the week.

According to a document prepared for the meeting, European leaders will discuss specific steps toward a cross-border banking union, closer fiscal integration and the possibility of a debt redemption fund.

"The market is going to pay attention and listen to any chatter that comes out over the next couple of days about what they think is going to come out of the summit," said Ken Polcari, managing director at ICAP Equities in New York.

"We are stuck in this predicament because the market is waiting for some real catalyst to push it one way or the other."

Cyprus became the latest euro zone member to ask for an aid package on Monday, adding to concerns about European leaders' ability to handle the crisis.

Rupert Murdoch's News Corp is thinking of splitting into two companies.

Reuters contributed to this report.