Stocks fell for a fourth day on Thursday, but recovered most of their losses after the House, in the barest sign of progress, said it would come back to work on the fiscal crisis this weekend.

It was a ragged session for stocks, with shares falling more than 1 percent after the Senate majority leader, Harry Reid, warned that a deal was unlikely before the deadline, only to rebound on news that the House would reconvene Sunday, a day before the Dec. 31 deadline when tax increases and federal spending cuts would be mandated.

“There’s no conviction in the move or the overall market, based on the across-the-board reduction we’ve seen in volume,” said Joseph Cangemi, managing director at ConvergEx Group, in New York. “But there will be continued weakness until there’s sustained positive direction coming from our leaders.”

The market has been prone to quick reactions to headlines and those moves have sometimes seemed more pronounced because of reduced trading volume. About 5.12 billion shares changed hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT, formerly known as NYSE Amex, well below the daily average this year of about 6.48 billion shares.

Investors are looking for any hint that lawmakers will avert the $600 billion in tax increase and spending cuts that are scheduled to take effect next week and that could push the nation’s economy into recession.

“Markets turned around in a heartbeat, as the House session is the first announcement of anything getting done,” said Randy Bateman, chief investment officer of Huntington Asset Management, in Columbus, Ohio, which oversees $14.5 billion in assets. “I’m not convinced it will result in a deal, but you could get enough concessions by both parties to at least avoid the immediacy of going over the cliff.”

In a sign of the anxiety, the CBOE Volatility Index, or VIX, rose above 20 for the first time since July, suggesting rising worries, but ended down 0.4 percent as the stock market rebounded.

Stocks in the materials and the financial sectors, which are more vulnerable to the economy’s performance, bore the brunt of the selling before recovering. Shares of Bank of America fell 0.6 percent to $11.47 while Freeport-McMoRan Copper Gold fell 0.7 percent to $33.68.

Some of 2012’s biggest gainers bucked the broader trend and rallied, a sign of year-end “window dressing.” Expedia, the online travel agency, was the top percentage gainer in the Standard Poor’s 500-stock index, climbing 4.1 percent to $60.30. The price of its stock has doubled this year.

The Dow Jones industrial average slipped 18.28 points, or 0.14 percent, to 13,096.31 at the close. The S. P. declined 1.73 points, or 0.12 percent, to 1,418.10. The Nasdaq composite index fell 4.25 points, or 0.14 percent, to close at 2,985.91.

The Marvell Technology Group, the chip maker, fell 3.5 percent to $7.14 after it said it would seek to overturn a jury’s finding of patent infringement. The stock fell more than 10 percent in the previous session after a jury found that Marvell had infringed patents held by Carnegie Mellon University and ordered the company to pay $1.17 billion in damages.

The four-day decline was the S. P. 500’s longest losing streak in three months. The index has lost 1.8 percent over the period as investors grappled with the possibility that a budget deal might not be reached until next year.

President Obama arrived back in Washington from Hawaii to restart stalled negotiations with Congress. The House speaker, John A. Boehner, and other Republican leaders were to hold a conference call with other Republican lawmakers. The expectation was that lawmakers would be told to get back to Washington quickly if the Senate passed a bill.

The Treasury secretary, Timothy F. Geithner, announced the first of a series of measures that should push back the date when the federal government would hit its legal borrowing authority, a limit known as the debt ceiling, by about two months.

Economic data seemed to confirm worries about the impact of the budget impasse on the economy.

The Conference Board, an industry group, said its index of consumer confidence in December fell to 65.1 as the budget crisis restrained growing optimism about the economy. The gauge fell more than expected from 71.5 in November.

Interest rates were lower. The Treasury’s benchmark 10-year note rose 5/32, to 99 1/32 and the yield fell to 1.73 percent from 1.75 percent late Wednesday.

Article source: http://www.nytimes.com/2012/12/28/business/daily-stock-market-activity.html?partner=rss&emc=rss