NEW YORK (TheStreet) -- The S&P 500 and Nasdaq recovered from session lows as small caps and oil services stocks spiked in volatile trading Tuesday. Earlier, U.S. stocks plummeted as part of a global market selloff triggered by worries over China's growth prospects and political uncertainty in Greece.
The S&P 500 was down 0.21%, recovering from a loss of more than 1% suffered over the morning session. The Dow Jones Industrial Average, down 0.45%, was still on track to post its first back-to-back loss since October. The Volatility Index (VIX.X) spiked 7%.
"It's a sign of a tired rally," said Chris Gaffney, senior market strategist for EverBank Wealth Management, in a call. "We're seeing investors take some of their cards off the table, pull some of their profits as we approach year-end and book those gains not wanting to risk an end-of-year selloff."
Meanwhile, the Nasdaq turned positive, adding 0.39% as shares of biotherapeutic drug developer Bluebird (BLUE) spiked 70% after the company said a study for a blood disorder treatment had shown positive results. The Russell 2000 added 1.6% as investors picked up bargains among small-cap energy stocks such as Triangle Petroleum (TPLM) , Petroquest (PQ) , Halcon Resources (HK) and Goodrich Petroleum (GDP) .