NEW YORK ( TheStreet) -- Buckle up, it looks like we're in for some turbulence. This wasn't the way the market was supposed to react to news of Spain's bailout request. The idea last week was that taking concrete steps to address the situation would be a positive, a start toward crafting an aggressive solution. Instead, all that $125 billion figure bought was a few hours of enthusiasm before the realization set in that another credit line might not be the way out of this mess. When the closing bell sounded, the Dow Jones Industrial Average, which was coming off its best weekly performance on both a point and percentage basis, had swung more than 250 points from peak to trough, and the blue-chip index's year-to-date appreciation was back under 2%. The VIX showed rising consternation as well, leaping 11% on Monday to finish at 23.56. One thing that last week's rally did seem to accomplish was setting a near-term low for stocks after May's debacle, and that should provide some comfort for the bulls, according to Gary Thayer, chief macro strategist at Wells Fargo. "
The U.S. stock market passed a big test this past week, holding at important support after several central banks cut interest rates in order to boost economic growth," he wrote on Monday. "The stock market still faces other tests, including the Greek elections and the next Federal Reserve policy meeting. If the outcomes are positive, the U.S. stock market could be poised for a summer rally." But that rosy view seems a bit too pat at the moment, given the headlines from Europe can turn at any time and there's not much to look forward to from Corporate America with second-quarter earnings season still roughly a month away. If $125 billion for Spain is being interpreted as little more than temporary bandage for the bigger problem, the eurocrats still have a lot of work to do (and monies to dole out.) For its part, UBS is also staying optimistic. Early Monday the firm reaffirmed its year-end target of 1475 for the S&P 500, saying it believes stocks "are likely to rebound between now and year-end on the back of continued earnings strength and greater clarity from Europe." But that doesn't mean there won't be some tense moments.
"While the S&P 500 has risen 94% since bottoming out in March 2009, the vast majority of this return occurred in the first 14 months," UBS noted. "Since then, stocks have gained 8% in an environment that has frequently alternated between risk-on and risk-off. We expect this pattern of volatile returns over a flatter trendline to persist." So how does the firm think investors should approach current market conditions? UBS expects the most consistent stock performers to be companies that are having success growing the top line or else those who have the biggest dividend payouts. To that end, it highlighted the 20 stocks that delivered the biggest upside surprises to revenue expectations in the first quarter as well the 20 stocks with the highest payout ratios. The only name that shows up on both lists is Sunoco ( SUN). Intuitive Surgical ( ISRG), Western Digital ( WDC), and DR Horton ( DHI) are among the companies on the revenue-surprise list, while Wynn Resorts ( WYNN), Johnson & Johnson ( JNJ), and Iron Mountain ( IRM) are featured among the dividend payers. As for Tuesday's scheduled news, the earnings calendar is light with FactSet Research Systems ( FDS), LDK Solar ( LDK), Michael Kors Holdings ( KORS), and Casey's General Stores ( CASY) among the few companies on the docket. On the economic front, Tuesday brings export and import prices for May at 8:30 a.m. ET; and the Treasury Department's budget report for last month at 2 p.m. ET. Companies making news after Monday's closing bell included Seagate Technology ( STX), Juniper Networks ( JNPR), and Finisar ( FNSR). Shares of Seagate, the hard drive maker, surged more than 3% to $23.27 on volume of 130,000, according to Nasdaq.com, after David Einhorn of Greenlight Capital disclosed ownership of more than 23 million shares, or a 5.4% stake, in the company. That's an increase from the 14.5 million shares, or 3.4% stake, that Einhorn disclosed as of March 31. A buyback announcement was driving buyers to Juniper, which was adding less than 1% to $16.52 in late trades. The networking equipment maker, whose stock is down more than 40% in past year and hit a 52-week low of $16.38 in Monday's session, announced a new $1 billion buyback authorization. And finally, Finisar was active in the extended session after the optical communications company gave a weak outlook for its fiscal first quarter ending in July. The company sees a non-GAAP profit of 11 to 15 cents a share in the quarter on revenue of between $218 million to $233 million. The current average estimate of analysts polled by Thomson Reuters is for earnings of 24 cents a share on revenue of $250.4 million in the quarter. Finisar shares lost 9.5% in Monday's regular session to close at $13.47, and the stock ran as low as $12.70 in late trades before rebounding. The stock was last quoted at $13.52, up a nickel, on volume of nearly 650,000, according to Nasdaq.com. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron.