Stocks rebound; Spain?s bailout digested

By msnbc.com news services

Stocks rebounded from a late sell-off in the previous session Tuesday, as investors continued to digest a bailout plan for Spanish banks.

While the euro zone plan to lend Spain up to $125 billion did ease some concerns about the region's debt crisis, the June 17 election in Greece is still viewed as a major headwind that could result in that country leaving the euro currency.

"We'll be in a volatile holding pattern until the elections in Greece, and any headline during the day could really cause us to change direction," said Cort Gwon, chief strategist at HudsonView Capital Management in New York. "Sentiment changes very quickly these days, and it wouldn't surprise me if we saw another late sell-off."

Volatility was expected to persist, with trading volumes light. On Monday, the first trading day after the Spain aid package was announced, shares rallied early in the session before steadily losing ground, ending 1 percent lower.

U.S. equities have been closely correlated to developments in Europe's financial crisis on concerns about how it might impact global growth prospects.

In the United States, recent U.S. economic indicators, notably the May payroll report, have pointed to anemic growth, while data from China has also been sluggish. The S&P 500 is down 7 percent in the second quarter.

Michael Kors Holdings Ltd surged after posting stronger fourth-quarter profit growth and giving a strong full-year outlook.

JPMorgan Chase & Co has hired an ex-Goldman Sachs energy trader to expand its customer flow business in Asia amid tightening regulation over proprietary trading, a source close to the matter said.

According to a report in the Wall Street Journal, some JPMorgan executives and directors were alerted to risky practices by a team of London-based traders two years before botched bets cost the bank over $2 billion.

Reuters contributed to this report.

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