Stocks erased early gains on Wednesday, with the Dow and S&P well off their highs and the Nasdaq negative, on caution over a European summit to resolve the debt crisis and the economic outlook.

Equities rose as much as 1 percent before losing some of those gains and the Nasdaq fell as much as 1 percent, weighed down by's disappointing outlook, before recovering some losses.

Optimism before a meeting of European leaders to tackle the region's debt crisis contributed to the opening gains, but prospects for a comprehensive deal became murkier as several thorny issues remained unresolved before the summit set to begin later on Wednesday.

There are some questions about whether they will come up with something, and that lack of resolution is the main dampener for stocks, said John Carey, portfolio manager at Pioneer Investment Management in Boston.

Still, the incoming head of the European Central Bank threw a potential lifeline to the region, signaling the bank would go on buying troubled states' bonds and Germany's lower house of parliament approved a motion to strengthen the euro zone rescue fund.

Amazon fell 12 percent to $200.10 a day after forecasting a disappointing outlook for the current quarter on costs related to Kindle and other investments. On the upside, Boeing Co rose 3.6 percent to $66.02 after raising its outlook.

In the face of all this macro uncertainty, corporate disappointments will get more attention than positive ones, said Carey, who helps oversee $260 billion in assets.

The Dow Jones industrial average <.DJI> was up 57.03 points, or 0.49 percent, at 11,763.65. The Standard & Poor's 500 Index <.SPX> was up 1.91 points, or 0.16 percent, at 1,230.96. The Nasdaq Composite Index <.IXIC> was down 10.31 points, or 0.39 percent, at 2,628.11.

With corporate earnings in high gear, Ford Motor Co reported lower third-quarter earnings but beat estimates and offered a full-year forecast that suggested operating margins would fall in the current quarter. The stock fell 4 percent to $11.94.

In the latest economic data, new U.S. single-family home sales rose at their fastest pace in five months in September, but sustained price declines indicated the housing market is far from recovery.

Separately, the government said demand for U.S. durable goods rose more than expected in September to post the largest increase in six months.

About four stocks rose for every three that fell on the New York Stock Exchange, while on the Nasdaq, decliners slightly outnumbered risers.

(Editing by Kenneth Barry)