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Stocks rebound after new housing data

Stocks rebounded Tuesday after upbeat data on home prices, but the outlook was clouded by doubts about a summit on the European debt crisis this week.

Major U.S. stock indexes recovered part of Monday's sharp losses of more than 1 percent. However, an air of caution remained as Spanish borrowing costs jumped and U.S. consumer confidence fell to its lowest in five months in June.

"Certainly in the United States stocks are nicely priced, and for a long-term investor it is an attractive entry point, but then what about this macro risks hovering around the market? I think it's having a dampening effect," said John De Clue, regional investment director at U.S. Bank Wealth Management in Minneapolis.

Spanish bond yields rose after demand at a bill sale fell despite significantly higher yields as hopes faded that the European Union summit later this week would produce game-changing crisis measures. Madrid formally asked on Monday for funds to bail out its banks in a move some see as a prelude for a full-blown bailout of the euro zone's fourth-largest economy.

S&P/Case Shiller data showed home prices in 20 metropolitan areas gained 0.7 percent on a seasonally adjusted basis, topping economists' expectations for a 0.4 percent gain.

Rupert Murdoch's News Corp said it was considering splitting into two publicly traded companies, and sources familiar with the matter said publishing would be separated from entertainment. Its shares jumped.

Facebook shares jumped a day before the underwriters of the social network site's recent IPO can make public their research on the company.

Reuters contributed to this report.