Stocks closed with sizable losses but recouped more than half their early steep slide, as the failure of one of Portugal's biggest banks to meet a debt payment renewed worries about the fragility of Europe's banking system.
The Russell 2000 was the weakest performer, falling 1.1%, while the S&P 500 settled 0.4% lower after being down as much as 1% at the open.
The rebound off lows was based on the belief that the bank woes in Portugal would remain isolated, and some observers said investors were just using the downbeat news as an excuse to sell after the 6% rally in just six weeks.
Participation remained rather subdued, with 640M shares traded at the NYSE floor.
Investors jumped into assets typically seen as safe havens, such as gold and U.S. and German government bonds; the 10-year German bund traded at its strongest level in two years, while the U.S. 10-year note trimmed its gain to 4 ticks and the yield slipped just 2 bps to 2.54%.