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A currency trader passes by a screen showing the Korea Composite Stock Price Index at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, on Oct. 4, 2011.

The Toronto stock market closed lower but well off its early plunge amid fresh hopes that European officials are moving to control damage from the European debt crisis.

The S&P/TSX composite index came back from a 404-point drop to close down 73.92 points at 11,177.91 after the Financial Times reported that euro zone officials were studying a bank recapitalization plan.

Investors have been concerned over the last couple of months about the slowing pace of economic revival and a possible default by Greece, which would worsen economic conditions and wreak havoc on the European financial sector.

Falling commodities helped push the loonie down 0.34 of a cent to 94.8 cents (U.S.), with oil falling $1.94 to $75.67 a barrel.

U.S. markets made a big turn-around late in the session with the Dow Jones industrial index up 153.41 points at 10,808.71.

The Nasdaq composite index pushed up 68.99 points to 2,404.82 while the S&P 500 index gained 24.72 points to 1,123.95.

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