* Euro, stocks off early highs
* Spanish, Italian debt yields reverse initial decline
* Wall St extends last week's rally
By Rodrigo Campos
NEW YORK, June 11 A relief rally after the
approval of a rescue package for Spanish banks worth up to $125
billion started to wear off on Monday as investors worried about
both the details of the deal and the upcoming Greek election.
Wall Street opened higher to extend last week's rally, but
indexes were off their early levels. The S&P 500 gained 0.2
Investors were concerned about how the bailout, struck by
euro-zone finance ministers over the weekend, would be financed.
A Greek election on Sunday that could put Athens on a path to
leaving the currency bloc was also limiting enthusiasm.
Spanish and Italian bond yields rose, reversing the decline
that came after the financing announcement. Investors worried
the action on Spain was a temporary solution that doesn't
address the question of how to kick-start growth in the bloc's
"The size of the deal is meant to show a real commitment on
the part of the euro zone to stabilize the system, and that's
something the market is taking solace in," said Robert Pavlik,
chief market strategist at Banyan Partners LLC in Palm Beach
"However, this just moves the problem down the road and
shows how nervous the EU was going into the Greek election."
The Dow Jones industrial average rose 46.70 points,
or 0.37 percent, to 12,600.90. The S&P 500 Index added
3.24 points, or 0.24 percent, to 1,328.90. The Nasdaq Composite
gained 4.04 points, or 0.14 percent, to 2,862.46.
The Euro STOXX 50, the euro zone's leading index
of blue-chip shares, was up 0.9 percent and Spain's IBEX 35
was 1.1 percent higher, near its session low.
Global shares as measured by MSCI gained 0.9
The euro also gave up half its early gains, to trade
"The risk rally fell flat really quickly," said Greg
Anderson, G10 strategist at CitiFX, a division of Citigroup in
New York. "People are also very nervous ahead of the Greek
elections and there are plenty of other worms in the can."
Highlighting the uncertainty, EU and German officials said
on Monday that Spain would face supervision by international
lenders after the bailout, contradicting previous comments from
Spanish Prime Minister Mariano Rajoy.