“But two things that will change my attitude about this market is if we see a depression in Europe and a hard-landing in China,” he cautioned.
While Lloyd expects volatility to continue, he says investors should take advantage of the dips. In particular, he likes techs, consumer discretionary and some financials including JPMorgan.
JPMorgan shares gained, after being punished in the last few sessions following the bank's disclosure of a $2 billion trading loss. Meanwhile, CEO Jamie Dimon won a shareholder endorsement of his pay packageand was above to keep his post as chairman of the board.
Chesapeake Energy tumbled after the natural gas producer said it will increase its borrowing to $4 billion as it faces a liquidity crunch. In addition, Standard & Poor's cut its rating on the firm to "BB-" from "BB," one notch lower into "junk" status.
On the economic front, homebuilder sentiment jumped to 29 in May from 24 in April, according to the National Association of Home Builders/Wells Fargo Housing Market index, beating expectations for 26 and hitting a 5-year high. Major homebuilders including KBHome , DRHorton and Lennar rallied.
Among earnings, Home Depot slumped after the Dow component posted weaker-than-expected sales.
Groupon surged, adding to the previous session's sharp rally, after the daily-deal site reported quarterly results that beat Wall Street's expectations.
TJX rallied to lead the S&P 500 gainers after the parent company of T.J. Maxx posted better-than-expected earnings and boosted its full-year guidance. Meanwhile, Saks fell after the upscale department-store chain warned that gross margin will fall in the current quarter.
Retailer JCPenney is scheduled to post earnings after the bell.
Avon Products tumbled after Cotywithdrew its $10.7 billion takeover bid for the cosmetics company, saying Avon had missed its deadline to begin discussions.
Facebook increased its IPO range to raise more than $12 billion, valuing the social-network giant at roughly $104 billion. The firm is scheduled to price its shares on Thursday and begin trading on Friday.
Also on the economic front, Empire State manufacturing index rebounded in May, according to the New York Federal Reserve.
Consumer prices were flat in April, in line with economists' expectations, while retail sales edged up slightly as the boost from an unusually warm winter faded. And business inventories gained slightly to a record $1.58 trillion, according to the Commerce Department.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter:
Coming Up This Week:
WEDNESDAY: Weekly mortgage apps, housing starts, industrial production, oil inventories, FOMC minutes, AIG shareholders mtg, Southwest Air shareholders mtg; Earnings from Target, Abercrombie & Fitch, Deere, Staples, Limited Brands
THURSDAY: Jobless claims, Philadelphia Fed survey, e-commerce retail sales, leading indicators, Facebook pricing, Home Depot shareholders mtg, Intel shareholders mtg; Earnings from Wal-Mart, Dollar Tree, Ross Stores, Aeropostale, Gap, Marvell Tech
FRIDAY: Facebook begins trading, JCPenney shareholders mtg, G8 summit begins; Earnings from Ann
More From CNBC.com: