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%.

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"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) .

Oil services stocks have been regaining ground, including Halliburton (HAL) , Baker Hughes (BHI) , and Cameron International (CAM) which sold off alongside major oil producers as West Texas Intermediate plunged below $64 a barrel. "Be very selective on which companies you focus on," Hodges Funds' Eric Marshall said on finding opportunities in the energy selloff. "Look at the [companies] that have the lowest cost production. There are companies out there that can make a good return on capital at $40 or $50 a barrel."

Global growth concerns continued to weigh on Wall Street's mood, though. Greek stocks plummeted as the nation's government expedited its presidential vote by two months to Dec. 17. Prime Minister Antonis Samaris rescheduled the vote after failing to gain support for next year's budget and as eurozone finance ministers granted a two-month extension to unpopular austerity measures. If Samaras fails to gain majority support in the new election, Greece's parliament will be dissolved.

National Bank of Greece (NBG) plummeted 13.7%, while the Euro Stoxx 50 ETF (FEZ) stumbled 1%.

China's Shanghai Composite saw its biggest one-day fall in five years, tanking 5.4%, after Chinese regulators tightened lending rules. However, the index remains around 40% higher for the year. Meanwhile, China's Central Economic Work Conference is meeting to determine an official 2015 GDP outlook. World Bank economists are pushing for a growth target forecast of 7%, the lowest level in a decade, so officials can focus on reform plans.

Germany's DAX was down 2.2% as imports fell the most in almost two years, down 3.1% in October and far worse than an estimated 1.5% decline. The data is just the latest worrying sign the eurozone's largest economy is suffering slowing growth and low inflation.

Airlines sold off after Spirit Airlines (SAVE) received a valuation downgrade to "market perform" from Raymond James analysts. Spirit tanked 10.4%, leading major competitors JetBlue (JBLU) , Southwest (LUV) , Delta Air Lines (DAL)  and American Airlines (AAL) lower.

Citigroup (C) warned Tuesday of a $3.5 billion charge for its fourth quarter, a result of charges related to Libor and foreign exchange investigations and other restructuring. Shares were down 1.1%, caught up in a selloff among bank stocks including Bank of America (BAC) , Morgan Stanley (MS) and Goldman Sachs (GS) .

Abercrombie & Fitch (ANF) spiked 8% on news long-time CEO Michael Jefferies would step down, effective immediately. The CEO's job had been shaky as plummeting sales and profits caused growing discord among investors

H&R Block (HRB) dropped 5.4% after the tax preparation firm reported a quarterly loss of 45 cents a share, 3 cents wider than expected. AutoZone (AZO) shares were up 4.2% after first-quarter revenue climbed more than 8% and earnings beat forecasts.

T-Mobile (TMUS) was down 6.5% after announcing a convertible stock offering of 17.4 million shares. The company said proceeds could be used to purchase additional spectrum in future auctions.

Conn's (CONN) tanked 40.1% as a third-quarter loss of 8 cents a share came in far worse than estimated profits of 68 cents. The company said the loss was due to delinquent accounts at its consumer credit-financing unit.

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-- Written by Keris Alison Lahiff in New York.