German Chancellor Angela Merkel attempted to quell some fears by saying the euro zone was committed to keeping Greece in the currency union, but news that the European Central Bank had stopped providing liquidity to some Greek banks as recapitalization wasn't in place pushed markets lower.

Investors failed to be assuaged by the minutes from the Federal Reserve's most recent meeting, in which policymakers kept alive the possibility of a fresh round of monetary stimulus on downside risks to a moderately expanding economy.

Worries about Greece's political and financial future, along with political upheaval in the broader euro zone, have driven equity losses in recent weeks, sending the benchmark S.&P. index down 5.6 percent since the end of March.

By the close of trading, the Dow Jones industrial average was down 0.3 percent, the S.&P. 500 shed 0.4 perecnt and the Nasdaq composite index dropped 0.7 percent.

Industrial shares rose 0.2 percent after positive housing and industrial production data, with factory output in the United States rising in April at its fastest pace in over a year. A separate report showed a rebound in groundbreaking for homes in April, suggesting the housing market recovery was gaining.

General Electric gained 3 percent on news its finance arms won regulatory approval to resume returning some of its profit to the parent company. Such a move that could clear the way for G.E. to accelerate stock buybacks and raise its shareholder dividend.

J.C. Penney shares plunged 18 percent, its biggest one-day percentage drop since 1987, a day after the department store owner scrapped its dividend and showed its effort to remake itself as an affordable fashion-oriented retail chain took a much bigger-than-expected toll on sales in the first quarter.

In contrast, Target advanced 0.6 percent after the discount retailer raised its full-year profit view.

European stocks closed mixed, with the DAX in Germany down 0.3 percent and the CAC 40 in France up 0.3 percent.