Stocks Tentatively Turn Positive

Worries that Italy or Spain would have trouble paying down debt have been hanging over markets worldwide. And expectations that Greece could default on its debts pushed interest rates on the country’s 10-year government bonds up further Tuesday, to more than 24 percent.

By contrast, United States government bonds of the same maturity were yielding 1.99 percent.

Investors were struggling with uncertainty over the European debt crisis and questions over which way the American economy is going, said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research. That fear of the unknown makes markets especially volatile, he said. Traders seemed to be hanging on every piece of news or rumor out of Europe.

“It’s a difficult environment for a long-term investor,” Mr. Detrick said. “Any news can take you significantly higher or lower. There’s just so much volatility.”

Mr. Detrick said the uncertainty has started to drive retail investors out of stocks. Americans pulled $36 billion out of American stock funds in August, according to preliminary data from the Investment Company Institute. That’s second only to the $47 billion withdrawn from stock funds at the height of the financial crisis in October 2008.

Best Buy plunged 7.6 percent to $23.06, the biggest loss of any stock in the Standard Poor’s 500-stock index, after the electronic retailer reported a fall in quarterly profit. Sales in stores open a year or longer dropped 2.8 percent.

A weak reading of business sentiment kept the market’s gains in check. An index of small business conditions from the National Federation of Independent Business dropped to a 13-month low in August. The N.F.I.B. said companies surveyed had weaker expectations for sales and a bleaker view of the overall economy.

In afternoon trading, the S. P. 500 was up 7.89 points, or 0.7 percent, to 1,170.16. The Dow Jones average of 30 blue-chip stocks gained 33.45 points, or 0.3 percent, to 11,094.57, and the Nasdaq composite index added 26.61 points, or 1.1 percent, to 2,521.70.

The Dow and S. P. 500 have lost more than 4.6 percent this month amid worries that Europe’s debt crisis could knock the United States into another recession.

In Europe, the Euro Stoxx 50 index of blue-chip shares closed up 2.1 percent to 2036.64. In Britain, the FTSE 100 rose 0.9 percent to 5,174.25, and the DAX in Germany gained 1.9 percent to 5,166.36.

The euro was slightly higher on Monday at $1.37.

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