NEW YORK — Stocks trimmed earlier losses but still closed the day in negative territory after news that Greece will get 5.2 billion euros in aid.
Stocks had tumbled more than 1 percent earlier in the session, with the S&P 500 hitting a two-month low over concerns about political uncertainty in Greece and Spain's weak banks.
But the indexes recovered a lot of lost ground after news that the board of the European Financial Stability Facility agreed to make a payment of 5.2 billion euros in emergency aid to Greece, overcoming opposition from some euro-zone member states, according to a senior euro-zone official.
"It's a very difficult market to trade in. I'm advising my clients to just hedge out all the way into July because we are going to see some heightened volatility like today for awhile," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin, Texas.
According to preliminary calculations, the Dow Jones industrial average closed the day down 96.65 points, or 0.75 percent, at 12,835.44. The Standard & Poor's 500 Index was down 9.08 points, or 0.67 percent, at 1,354.64. The Nasdaq Composite Index was down 11.56 points, or 0.39 percent, at 2,934.71.
The recent turmoil in Europe has moved to the forefront of investor focus and has helped drive Wall Street's slide, with the benchmark S&P 500 index down five of the last six sessions as earnings season winds down and few domestic economic indicators are released.
The yield on the 10-year Spanish bond climbed over 6 percent, seen as a troublesome level among investors, after Spain came up with a plan to demand banks set aside another 35 billion euros ($45 billion) against loans to the ailing building sector. Huge bank losses have raised fears that the country may need an international bailout.
Reuters contributed to this report.
