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After trading flat or lower most of the day, stocks took off in the last 90 minutes of trading Wednesday to end the day with mostly modest gains.
According to preliminary calculations, the Dow Jones industrial average ended up 46.24 points, or 0.38 percent, at 12,196.37. The Standard & Poor's 500 was 2.55 points higher, or 0.20 percent, at 1,261.02. The Nasdaq fell 0.35 points, or 0.01 percent, to 2,649.21.
Stocks had tumbled at the open as Europe’s leaders argued over how to best handle the eurozone’s debt issues.
Traders hope European leaders will agree by Friday to link their budgets more closely. France and Germany have called on them to renegotiate Europe's founding treaties and allow a central European authority to enforce greater fiscal discipline.
Hopes for a deal dimmed Wednesday when a German official said the governments appear unlikely to reach a deal this week. The official said it could take until Christmas.
"The pattern has been, get your hopes up, then be disappointed by EU summits, and that pattern has been in place for a while," said Steve Van Order, fixed income strategist at Calvert Investment Management.
"I think the hopes (for a deal in the summit) are certainly still there. There's a belief in the marketplace that the euro zone doesn't have a death wish," said Art Hogan, managing director at Lazard Capital Markets in New York.
"There is today's news and we started the week with S&P threatening to downgrade. In another time the market would be down much more than it is."
Trading volume was very light, characteristic of the wait-and-see mode Hogan described ahead of the summit.
The Associated Press and Reuters contributed to this report.
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Are we really going to start with the it must go up dramatically everyday thing AGAIN.
Let's just be happy with the fact that it didn't go down 400+ points.
I think CNBC is downright criminal in their EU coverage. They allow these Hedge Fund Managers to come on their show and talk up what most real economist see as absolutely not sustainable. The EURO Currency cannot work and will break up but the talking heads are trying to rally stocks and the sheep are all in. Do homework people and use a calculator, its not brain surgery. They need your money to push up their funds just to turn around and short you...
This market is all fixed and I think most people know that. It is few days of good news and you buy and than few days of bad news and you sell. It is a great place for gamblers/day traders but I would suggest that real investors stay away.