North American markets swung sharply Wednesday, suffering steep losses early in the session on worries about Europe's debt crisis and later rebounding just as sharply.

Traders initially sold shares on pessimism that a summit of European Union leaders underway in Brussels would succeed in coming up with a plan to contain the eurozone debt crisis.

But Toronto's S&P/TSX composite index closed higher by 113.02 points at 11,564.80 after earlier trading down by close to 200 points.

"You can only go down so far and then all of a sudden, some group looks at this and says stocks are down at the area where they're attractive," said Fred Ketchen, manager of equity trading at Scotia Capital.

The Canadian dollar lost 0.23 of a cent to officially close at 97.64 cents US.

The Dow Jones industrial average was down 6.66 points at 12,496.15. The Nasdaq composite index gained 11.04 points to 2,850.12 and the S&P 500 index was up 2.23 of a point at 1,318.86.

Oil falls below $90

Earlier, Germany’s central bank issued a report saying the effects of a Greek exit would be substantial but “manageable.”

And Reuters reported that eurozone officials had told the members of the currency area to prepare contingency plans in case Greece leaves.

Worries about Europe’s debt crisis have contributed to mounting losses on the markets.

Both the TSX and the Dow have plunged almost 900 points or seven per cent this month.

"Europe is the problem," added Ketchen, "and Europe will remain a big problem until they get their heads straightened out and grow up and become mature in their attitude toward their own economies and that of their own region."

The July crude contract on the New York Mercantile Exchange closed below $90, down $1.95 at $89.90 US a barrel, and down from $106 at the end of April.

The July copper contract on the Nymex dropped five cents to $3.44 US a pound — down 11 per cent this month.

Bullion for June delivery fell $28.20 to $1,548.40 US an ounce.

European markets closed sharply lower with London's FTSE 100 index down 2.5 per cent, Frankfurt's DAX off 2.3 per cent and the Paris CAC 40 down 2.6 per cent.

With files from The Canadian Press