Despite all - and that's a lot - stocks up

NEW YORK - The stock market is desperately looking for good news.

On Tuesday, oil prices fell, the euro sank to a 22-month low, and the yield on the U.S. government's 10-year Treasury note fell near a historic low after a report suggested Spain will have more trouble repaying its debts.

But stocks rose anyway. In fact, they had one of their best days in an otherwise dreary month. Investors focused on hopes that China is poised to rev up its economic growth machine and that upcoming elections in Greece will help the country stay with the euro.

"The overriding news isn't that great," said Robert Pavlik, chief market strategist at investment advisers Banyan Partners. "But Greece and China are taking the pressure off the market in the short term."

Gains in industrial stocks that depend heavily on the Chinese economy, like Caterpillar and Alcoa, helped push the Dow Jones industrial average up 125.86 points. The Dow closed at 12,580.69, up 1 percent.

China is the largest market for aluminum, which Alcoa makes, and Caterpillar recently said it is aggressively courting China to sell its construction equipment. Both stocks gained 3 percent.

It was only the fifth gain for the Dow this month. The index is down 4.8 percent for May and is headed for its first monthly loss since September. The main culprits behind the decline have been the increasing likelihood that Greece will drop out of the euro currency and a worsening of Spain's financial condition.

Facebook shares fell $3.07, or 9.6 percent, to $28.84 on Tuesday, the second-steepest decline since they made their debut May 18. The initial offering price was $38.

"Perhaps there is a situation where the banks overpriced it," said Jason Pride, director of investment strategy at Glenmede, an investment firm. He added the decline was "not necessarily a vote of confidence for or against the company."

Facebook's decline did not seem to cast a long shadow over other social networking stocks. Tuesday, as shares of Facebook were trading at roughly 24 percent below their offering price, rivals like LinkedIn and Groupon were down only modestly or even up over the same period. LinkedIn closed up 1.4 percent at $99.94. Groupon was down 2 percent at $11.79.

The Standard & Poor's 500 index closed up 14.60 points at 1,332.42, and the Nasdaq composite added 33.46 points to 2,870.99.

U.S. markets were closed Monday for Memorial Day.

Oil prices fell below $91 after ratings agency Egan Jones downgraded Spain's debt Tuesday. Analysts have been concerned that Spain and other weak European economies could drag the European Union into recession this year.

Stock investors Tuesday appeared relieved with news from Greece that a party in favor of abiding by the terms of the country's financial rescue could win in national elections next month. That could avoid a rift with Greece's international creditors and keep the struggling nation within the eurozone.

Christine Hauser of the New York Times contributed to this article.