U.S. stocks erased early losses amid optimism that European leaders will do more to halt contagion from the region’s debt crisis, helping the market reverse a plunge triggered by growing concern Greece will leave the euro.
The Standard & Poor’s 500 Index rose 0.2 percent to 1,318.85 at 4 p.m. in New York, after tumbling as much as 1.5 percent and dipping below 1,300.
Global stocks retreated earlier as European leaders meet to discuss the region’s crisis. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the central bank has the tools to curb any damage from Europe’s debt crisis.
Kocherlakota said in a speech in Rapid City, South Dakota, that the Fed probably can’t repair all the damage to U.S. employment from the credit crisis and fiscal policy could help to revive the job market. He said a fall off a “fiscal cliff” would argue for another round of quantitative easing by the Fed.
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