NEW YORK (TheStreet) -- Stocks gave up some of their gains on Tuesday, as a default on Greece's debt payment due to the International Monetary Fund looks unavoidable.
The S&P 500 rose 0.38%, the Dow Jones Industrial Average added 0.34% and the Nasdaq increased 0.49%, following a major selloff in all the indices on Monday. The Dow lost 350 points on Monday and entered negative territory for the year.
While no deal is in place for Greece's debt and a default looks likely, Greek Finance Minister Yanis Varoufakis told Reuters he is hopeful a last-minute agreement will be made.
The debt-laden country has a $1.7 billion payment due to the International Monetary Fund at midnight Tuesday Athens time and reports are that Greece won't make the payment.
Greece announced over the weekend that it will hold a referendum on July 5 to allow citizens to decide if the country should remain in the 19-country eurozone. A "Grexit" would mean a return to Greece's old drachma currency.
Investors in Europe weren't optimistic about a Greek resolution, with London's FTSE 100 down 1.06%, Frankfurt's DAX down 0.78% and Paris's CAC 40 to the downside by 0.98%. The euro lost 0.53% against the dollar.
"Unless there is a last ditch agreement [Tuesday] between Athens and the creditors to extend the bailout program by five months (with partial debt relief or a commitment hereto), [Monday's] recovery in euro assets is likely to prove fleeting," wrote Societe Generale's Kenneth Broux in a note. "The probability of a deal happening is low and means Greece will fall in arrears with the IMF today if it does not honor the repayment."
Greece isn't the only country with a debt crisis on its hands. Puerto Rico's Gov. Alejandro Garcia Padilla said on Sunday that the island's $72 billion in debt is "not payable," posing risks for the U.S. municipal bond market. Though the White House said a bailout for Puerto Rico was not being considered.