Wall Street Mounts Ferocious Comeback; Dow Ends Slightly Lower

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After spending most of the headline-filled session stuck deep in negative territory, the markets suddenly shed a large swath of their losses in a furious, late-session comeback.

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Today's Markets

The Dow Jones Industrial Average fell 24.8 points, or 0.2%, to 12602, the S&P 500 dipped 2.8 points, or 0.21%, to 1329 and the Nasdaq Composite slumped 25.8 points, or 0.9%, to 2849.

For most of the session, every sector was in the red. Indeed, the Dow had been down 177 points at the lows of the session. However, in the last half hour of trading the energy, telecommunications, consumer staple and utility sectors all turned green. Most other sectors substantially pared down losses. Technology shares were broadly stuck in the red, leading to the Nasdaq's particularly weak performance.

Wall Street had no lack of headlines to parse through on the day.

EU leaders are beginning a summit in Brussels in which they are expected to discuss the the fiscal compact and potentially a plan for a bank union. The meeting comes at a critical time for the eurozone, which has seen its debt crisis cascade from periphery members into its core economies. Spain's costs to borrow for 10 years popped above the 7% level on the secondary market, which most analysts say is unsustainable in the long run for the bloc's fourth-biggest economy.

Expectations were fairly low going into the summit. In the past, such meetings have led to few concrete decisions and sometimes roiled the markets.

"We can't believe we keep going through this routine with no discernable effect," said Chris Beauchamp a market analyst at IG Index in London. Beauchamp reckons that unless there is a major development, traders will likely be disappointed, potentially pressuring stocks.

The Euro Stoxx 50, which tracks eurozone blue chips, slipped 0.37%, while the euro fell 0.33% to $1.2428.

In the U.S., the Supreme Court upheld President Barack Obama's hallmark health-care reform law as constitutional. It also ruled that the individual mandate, that requires individuals to carry health insurance, can stand in the form of a tax. The decision was nearly 70 pages and complex in nature, so trading desks were working to parse through it in late-morning action.

Either way, the decision has the potential to dramatically affect the health-care and health insurance industry, and is likely to be a defining factor in the 2012 elections.

News Corporation (NASDAQ:NWSA), the parent of FOX Business Network, said it intends on breaking into two distinct publicly-traded companies. One would consist of the media giant’s publishing and digital education assets and the other would house its global media and entertainment businesses.

There were also two economic reports released that garnered a muted reaction from Wall Street. A report from the Commerce Department showed the U.S. economy expanded at an annualized rate of 1.9% in the first quarter of this year, matching previous estimate and economists' forecasts.

The Labor Department said initial jobless claims fell to 386,000 from 392,000 in the prior week. Economists expected claims to fall to 385,000 from an initially-reported 387,000.

Commodities markets were broadly lower. The benchmark crude oil contract traded in New York dropped $1.97, or 2.5%, to $78.25 a barrel. Wholesale New York Harbor gasoline slipped 0.35% to $2.61 a gallon.

In metals, gold tumbled $27.30, or 1.7%, to $1,551 a troy ounce.

Foreign Markets 

The Euro Stoxx 50 slid 0.37% to 2158, the English FTSE 100 dipped 0.56% to 5493 and the German DAX sold off by 1.3% to 6149.

In Asia, the Japanese Nikkei 225 rallied 1.7% to 8874 and the Chinese Hang Seng slumped 0.79% to 19025.