US STOCKS-Wall St gains as Spanish yields come off highs

* Volatile trading before weekend Greek elections
* Spanish and Italian bond yields off highs
* Michael Kors stock rallies after results, outlook
* Dow up 0.8 pct, S&P 500 up 0.6 pct, Nasdaq up 0.7 pct

By Angela Moon
NEW YORK, June 12 (Reuters) - U.S. stocks rose on Tuesday as
investors snapped up beaten-down shares in the energy and
industrial sectors while Spanish bond yields came off their
highs, giving the market some relief.
The S&P 500 index fell 6.3 percent for the month of May on
concerns about the financial crisis in Europe and signs of a
slowdown in the U.S. economy. Even after a $125 billion aid
package to Spain that was unveiled over the weekend, the S&P
fell more than 1 percent on Monday as questions remained about
the terms of the bank-rescue deal and the impact it could have
on Spanish debt levels.
Trading was volatile. Wall Street dipped earlier as yields
on Spain's 10-year bond hit a euro-era high, pointing to stress
in the nation's debt markets shortly after the announcement of
the European Union bailout over the weekend.
"Into their close, both Spanish and Italian bonds are
bouncing off their (price) lows. The daily egg shells we walk on
this week over Spain will, of course, be followed by Sunday's
election in Greece and what, if anything, the FOMC will announce
next week," said Peter Boockvar, equity strategist at Miller
Tabak & Co in New York.
The weekend elections in Greece are viewed as a major
headwind that could result in the country leaving the euro zone.
Nicholas Colas, chief market strategist at the ConvergEx
Group in New York, predicted swings in equities around the close
of European markets "since that's where all our catalysts are
coming from.
"It is nice to see us holding above 1,300 (on the S&P),
which is an important number psychologically, but it is very
possible that we see another disappointing selloff like
yesterday," he added.
The Dow Jones industrial average was up 98.32 points,
or 0.79 percent, at 12,509.55. The Standard & Poor's 500 Index
was up 8.43 points, or 0.64 percent, at 1,317.36. The
Nasdaq Composite Index was up 18.80 points, or 0.67
percent, at 2,828.53.
Volatility around the close of European markets is expected
to persist until more clarity is received on the makeup of
Greece's government and the stability of Spain's banking system.

The energy and material sectors, both heavily tethered to
sentiment about Europe, were the top performers. An S&P index of
energy stocks gained 0.7 percent and an S&P index of
materials stocks advanced 1.1 percent.
Among the most active, Valero Energy Corp rose 3
percent to $22.50 while Halliburton Inc gained 1.3
percent to $27.86. U.S. Steel Corp rose 1.7 percent to
$18.19.
Shares of Michael Kors Holdings Ltd jumped 3.8
percent to $39.64 after the designer clothing company reported a
stronger-than-expected fourth-quarter profit and gave a
full-year outlook that exceeded Wall Street's forecast.

U.S. import prices fell 1 percent in May, their biggest drop
in almost two years, as energy and food costs declined,
according to Labor Department data. The slide in import prices
matched economists' forecast. Export prices fell 0.4 percent in
May, compared with the forecast for a dip of 0.1 percent.