Last Updated Feb 11, 2015 4:45 PM EST
As a meeting in Brussels between Greek Finance Minister Yanis Varoufakis and euro-area officials wrapped up, Wall Street is in a wait-and-see mode.
After four hours of discussions, finance ministers were expected to release a common statement outlining hopes for an accord to be reached at another meeting in Brussels on Monday, European Union diplomats told Reuters.
The standoff has Germany insisting that Greece abide by the terms of its bailout, while Greek's new government is pushing for a 10 billion euro ($11.3 billion) loan extension to avert a funding crisis and obtain some breathing room under its repayment plan.
The gathering of the eurozone's 19 finance ministers is the first since the new Greek government was elected, pledging to win concessions from Greece's creditors.
"This is coming to a head quickly -- it's not as though they have months on end to work this out," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
"Our view is it gets resolved," said John Canally, chief economic and investment strategist for LPL Financial, who believes European officials will ultimately strike some compromise in which Greece remains in the eurozone.
Art Hogan, chief market strategist at Wunderlich Securities, believes there's an 80 percent chance that Wednesday's talks will result in either a break through or "a short-term fix that gets them to September."
While fixated on the simmering drama, global markets, including Europe's, are not sounding the alarms that rang in 2012, the last time Greece toyed with leaving the euro. European stocks are not far from seven-year highs, and have outpaced the U.S. stock market's performance, year to date.
Worries about the bailout talks, while real, have lessened, in large part because recent signs of growth in Europe suggest the region could withstand a Greek exit from the eurozone.
In recent weeks, economic data out of Europe has surpassed expectations. "All suggest that the eurozone economy had stopped getting worse in late 2014, after another year of subpar growth," John Canally, chief economic and investment strategist for LPL Financial, said in a note.
Lower oil prices should also help Europe, given it is a major importer of crude, along with the decline in the euro, which makes the region's goods and services cheaper in the global marketplace.
"The Syriza party is doing its best to snatch defeat from the jaws of victory," opined Luschini, who notes that Greece has a current account surplus and its economy, like the rest of Europe, is growing.
"The fact the European equity market has rallied, chalks Greece up as not a big deal. Certainly economically it's not. Its economy is the size of Connecticut. But if Greece leaves, it does it now expose a path to leave for somebody else," said Luschini.
Although Greece represents less than 3 percent of the eurozone's gross domestic product, "the equity markets are held hostage" to the bailout talks, said Hogan. Like Luschini, he thinks the greater risk surrounding Greece's potential exit from the currency union is that it could set a precedent for other troubled -- and much larger -- economies in the region, such as Italy or Spain.
European stocks closed lower on Wednesday, while U.S. markets closed mostly flat.
Until there is some resolution, the situation will "continue to whipsaw equity prices, with the biggest brunt of it is coming in European equities," said Luschini.
"It's certainly contributing to volatility in the markets," said Canally. "It's risk on, risk off, day by day."