Stocks sharply pared losses on Thursday and the Nasdaq turned positive after a Reuters report that Greece had reached an agreement with European Union and International Monetary Fund inspectors on a five-year austerity plan.

The Dow Jones industrial average <.DJI> dropped 89.95 points, or 0.74 percent, to 12,019.72. The Standard & Poor's 500 Index <.SPX> fell 7.56 points, or 0.59 percent, to 1,279.58. The Nasdaq Composite Index <.IXIC> gained 8.98 points, or 0.34 percent, to 2,678.17.