U.S. stocks swung between gains and losses as investors weighed European discussions to step up efforts to fight the debt crisis and the Federal Reserve’s plans to extend its program known as Operation Twist.

Stocks recovered as German Chancellor Angela Merkel said bond purchases by the European bailout fund are a possibility, while European Union President Herman Van Rompuy’s blueprint for the euro was said to discuss jointly issued short-term bills, a debt-redemption fund and common banking supervision, according to two officials familiar with the work on the project.

The Fed will expand its program to replace short-term bonds with longer-term debt by $267 billion through the end of the year in a bid to reduce unemployment and protect the expansion. The original Operation Twist was set to expire this month.

Policy makers left unchanged their view that economic conditions will probably warrant keeping interest rates “exceptionally low” at least through late 2014. The policy- making committee has kept the main interest rate in a range of zero to 0.25 percent since December 2008.