The close: Dow, TSX pare losses

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North American stocks pared their losses in afternoon trading on Thursday, after investors turned their hopes to the European leader summit and away from another round of dismal economic news and uncertainty surrounding the U.S. Supreme Court's decision on health care reform.

The Dow Jones industrial average closed at 12,602.26, down 24.75 points, or 0.2 per cent – after recovering from a 175-point hole earlier in the day. The broader S&P 500 closed at 1329.04, down 2.81 points, or 0.2 per cent. In Canada, the S&P/TSX composite index closed at 11,424.70, up 13.76 points, or 0.1 per cent.

Research In Motion Ltd. reported its quarterly financial results after markets closed. As expected, the results were awful. The BlackBerry maker reported a loss of 99 cents (U.S.) a share and revenue slid to $2.8-billion from $4.9-billion last year. It shipped just 7.8 million BlackBerry devices during the quarter, below an estimate of 8.74 million. The shares rose 0.2 per cent during regular trading hours.

Before the start of trading, the U.S. Labor Department reported the initial jobless claims for the period ended last week remained stubbornly high, at 386,000. While that was down from 392,000 last week and in line with expectations, it's considerably higher than readings seen earlier in the year.

At the same time, the third estimate for U.S. economic growth came in at 1.9 per cent, unchanged from the previous estimate and down from 3 per cent annualized growth in the fourth quarter.

In Germany, unemployment levels rose in June for the third month in a row, even as the rate held steady at 6.8 per cent, suggesting that even Europe's strongest economy is not immune to the region's problems.

Meanwhile, European leaders have begun a two-day meeting to discuss solutions to the ongoing debt crisis. While expectations had been low heading into the meeting – with Germany earlier rejecting the idea of issuing euro-area bonds – they took a turn for the better when Germany's leader cancelled a press conference in favour of more talks.

European stocks ended the day lower. Germany's DAX index fell 1.3 per cent and the U.K.'s FTSE 100 fell 0.6 per cent.

Earlier in the session, markets also seemed taken aback by the U.S. Supreme Court's decision in which it upheld President Barack Obama's health-care overhaul, which fed uncertainty about the impact on health insurers. WellPoint Inc. fell 5.2 per cent. Aetna Inc. fell 2.7 per cent.

Among other financials, JPMorgan Chase & Co.'s fell 2.5 per cent after a New York Times article suggested that its recent derivatives-based trading loss could balloon to $9-billion (U.S.).

Within Canada's benchmark index, energy stocks were strong after declining crude oil prices were overshadowed by takeover-fever. Malaysia's state-owned energy company struck a $5.5-billion deal to take over Canada's Progress Energy Resources Corp. Progress shares surged 73.6 per cent and lifted other energy stocks. However, crude oil fell to $77.69 a barrel, down $2.52.

Gold fell to $1,550.40 an ounce, down $28. Barrick Gold Corp. fell 0.4 per cent.