NEW YORK ( TheStreet) - Stocks finished mixed on Thursday with the latest headlines from Europe stirring up volatility and eclipsing early optimism about a surprise positive read on U.S. regional manufacturing. The Dow Jones Industrial Average climbed 37 points, or 0.3%, to close at 11,542, after trading down some 110 points earlier. The S&P 500 also rebounded from negative territory, settling up 6 points, or 0.5%, at 1215. The Nasdaq pared losses as well but still lagged behind, losing 5 points, or 0.2%, at 2599 by the close.
Earlier in the day, speculation swirled that European lawmakers would be forced to delay a summit this Sunday, where they were originally expected to reach agreement on a debt crisis plan. Later German Chancellor Angela Merkel and French President Nicolas Sarkozy jointly said a plan would emerge by next Wednesday, helping stocks rebound in the afternoon. Meanwhile, violence in Greece underscored the urgency of the crisis. Greek protesters marched for a second day as policymakers vote on austerity measures aimed to keep the country from defaulting. The CBOE Volatility Index rose 0.7% to a reading of 35, after jumping above 30 at the beginning of the week. Of the 30 components within the index, 21 posted gains, led by Alcoa ( AA), Kraft Foods ( KFT) and Wal-Mart ( WMT) Technology stocks were a drag with Intel ( INTC) the worst performer in the Dow, losing nearly 3%. Metal prices pulled back Thursday, including gold for December delivery which shed $34.10 to trade at $1612.90 an ounce. Copper, which some say is a gauge of growth in emerging markets, plunged about 6%. There may be another leg down into bear market territory, writes Mark Arbeter, strategist at Standard & Poor's in a research note. "If the stock market were a medical patient, we could say the patient may get another dose of medicine (another government bailout) and that the fever and chills are subsiding for now, but don't forget about a possible relapse," he added. International stock markets finished lower. Germany's DAX plunged 2.5%, and London's FTSE declined 1.2%. Overnight, Japan's Nikkei Average tumbled 1%, and Hong Kong's Hang Seng sank 1.8%.
In the morning, stocks got a brief bounce from a surprise jump in the Federal Reserve Bank of Philadelphia's index of general business activity. The index rebounded in October to 8.7 from September's level of -17.5 when the market forecast a rise to another negative reading of -9.8. In other U.S. economic news, the Labor Department said that the number of people filing for unemployment benefits for the first time fell by 6,000 to 403,000 in the week ended Oct. 15. Claims were higher than consensus forecast but confirmed expectations that the jobs market remains anemic. The Conference Board said that its leading economic indicators index rose by 0.2% in September, extending a slight positive trend in recent months. The index points to "soft economic conditions through the end of 2011," and consumer and business confidence could weaken further, according to the report. In Thursday's earnings news, AT&T ( T) met analysts' profit expectations with earnings of 61 cents a share but missed revenue estimates with sales of $31.48 billion. The stock shed 0.3% to $28.99. A weaker deal and market environment hit private equity firm Blackstone ( BX), leading to a a loss of $342 million for the third quarter. Shares, however, gained 1.6% to $13.45. Railroad company Union Pacific ( UNP) reported better-than-expected revenue on increased fuel cost recoveries. The stock climbed 4% to $94.59. Investors also digested mixed earnings from Fifth Third Bancorp ( FITB), which beat analysts' profit expectations on lower loan-loss provisions; eBay ( EBAY), which met profit expectations but gave a weaker-than-expected outlook for the current period; and Riverbed Technology ( RVBD), which reported stronger-than-expected results after Wednesday's closing bell. In commodity markets, December crude oil contract lot 22 cents, to trade at $86.07 a barrel. The dollar index, a measure of the dollar's value against a basket of currencies, was rising 0.14%. The benchmark 10-year Treasury was down 7/32, lifting the yield to 2.187%. -- Written by Chao Deng and Melinda Peer in New York.