The stock market fell on Thursday but pared back its sharp losses late in the day amid talk of progress by European leaders in easing that region’s debt crisis.


Markets are especially skittish about any shift in expectations for the euro zone as European Union leaders gathered for the first day of a two-day summit meeting in Brussels.


“This is a process that is just going to wind on and is going to bring us periodic bouts of volatility in our markets depending on the news flow,” said Matt Kaufler, portfolio manager at Federated Investors.


Stocks opened lower after two government reports raised further concerns about weakness in the economy and the job market. The gross domestic product grew at an annual rate of only 1.9 percent in the first quarter, while the number of Americans filing new claims fell very slightly, to a seasonally adjusted 386,000, a level that suggests that hiring remained sluggish.


Those losses accelerated after a divided Supreme Court upheld the centerpiece of President Obama’s health care law.


The decision surprised many investors who say they believe that the law, which requires that most Americans obtain insurance by 2014 or face a penalty, is the hallmark of an administration that is unfriendly to business.


Stocks rebounded from most of their losses in the late afternoon, although major insurers like Aetna, which face more regulation, ended lower. The stocks of other companies reliant on Medicaid, like Wellcare Health Plans, rose as their patient rolls were expected to increase. Aetna ended down 2.7 percent to $39.85; Wellcare jumped 8.8 percent to $53.98.


“Because it was such an unexpected result from the Supreme Court today, you knew the market had to have at least a short-term violent reaction,” said Jim Paulsen, chief investment officer at Wells Capital Management. “At the end of the day, what does it really change for the performance to the end of the year? Probably not much.”


The Dow Jones industrial average, which dropped as much as 177 points, ended the day down 24.75 points, or 0.2 percent, to 12,602.26. The Standard & Poor’s 500-stock index shed 2.81 points, or 0.21 percent, to 1,329.04. The Nasdaq composite index lost 25.83 points, or 0.9 percent, to 2,849.49.


Shares of JPMorgan Chase dropped 2.5 percent to $35.88 after The New York Times reported that the bank’s losses from a recent botched trade could reach $9 billion, more than four times the original estimate.


Shares of Barclays slumped 12.1 percent to $10.84 after Britain said it had brought in the fraud squad to investigate possible crimes over attempts to manipulate lending rates, a scandal that is expected to spread to other banks. Lloyds fell 3.6 percent to $1.87.


As European Union leaders began their two-day meeting, finance officials were working on urgent measures to diminish financial market pressure on Spain and Italy, which may prove to be more difficult to bail out than smaller nations in the euro zone.


Commenting on the market’s late-day bounce-back, traders pointed to two blocks of small S.& P. futures contracts, known as e-minis, that traded in the last half-hour and might have helped to spike buying interest. More than 28,000 S.& P. e-mini futures contracts traded at 3:34 p.m. as the market jumped, the heaviest one minute of volume since the morning.


“They are thinking they might get something done in Europe — don’t believe the hype. This has been a four-, coming up on a five-year problem, and I don’t see it going away,” said Jason Weisberg, managing director at Seaport Securities.


In the bond market, the price of the Treasury’s 10-year note rose 11/32, to 101 17/32, while its yield fell to 1.58 percent, from 1.62 percent late Wednesday.