The Nasdaq Composite ended up about 2.5 percent for the week, recovering more than a 8.79 percent plunge, in its biggest intra-week reversal on record.
"I think everybody is probably a little exhausted from the week. I think everybody decides to leave early and we end the week pretty calmly," said Mark Heppenstall, managing director at Penn Mutual Asset Management. "The trading has become thin. It'll become easier to push us around."
The S&P 500 eked out a gain of about 1 point on the day, holding a 0.91 percent gain for the week. The index recovered from a 5.27 decline for its biggest intra-week reversal since the week of Sept. 19, 2008, when Lehman Brothers went bankrupt.
The Dow Jones industrial average closed down about 12 points after briefly falling more than 100 points in afternoon trade, with Wal-Mart and Johnson & Johnson the greatest weights on the index. The blue chip index was down 6.62 percent at its lows for the week and ended up 1.11 percent in its biggest reversal since the last week of October 1987.
The S&P 500 entered a Death Cross in morning trade Friday, with the 50-day moving average falling below the declining 200-day moving average for the first time since August 2011.
The energy sector closed up about 2 percent, off highs of more than 3 percent, but still the greatest S&P gainer for the day and the week. Crude oil topped $45 a barrel, up more than 20 percent from Monday's low.
Crude oil futures for October delivery settled up $2.66, or 6.25 percent, at $45.22 a barrel on the New York Mercantile Exchange.
Jeff Carbone, co-founder and managing partner of Cornerstone Financial Partners, was watching Friday's close carefully as traders head into the weekend.
"Selloff—it would show a lack of confidence," he said.
In an interview with CNBC, Fed Vice Chair Stanley Fischer said it is 'early to tell' if case for a September rate hike is more or less compelling.
"I think he studiously said not much of anything. The problem is when you say nothing everybody thinks something, so I think that's what's unfolding right now," said Dan Greenhaus, chief global strategist at BTIG.
Short-end bond yields jumped, with the 2-year Treasury note yield leaping to 0.73 percent. The 10-year Treasury yield traded near 2.18 percent. The U.S. dollar spiked, with the euro below $1.12 and the yen weaker near 121 yen against the greenback.
He attributed the last two day's stellar gains to New York Fed President's William Dudley's comments Wednesday that a September rate hike had become less compelling.
"My view is it seems like Fed tightening is worth 6 to 7 percent in the market," Ablin said.
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The final read on August consumer confidence from the University of Michigan came in at 91.9, slightly lower than the initial print and July's figure.
The data takes particular prominence after Dudley singled out the index in comments Wednesday as an indicator of the volatile stock market's impact on the economy.
Central bank policymakers convene in Jackson Hole, Wyoming, for their annual meeting. However, Fed Chair Janet Yellen is among those not attending.
"After this week's volatility I see September as off the table," said Todd Hedtke, chief investment officer at Allianz Investment Management U.S.
"I don't think the Fed story is overly exciting despite the liftoff," he said. "I think it's certainly an important situation—the development in China and things playing out there."
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Concerns about slowing growth in the world's second-largest economy increased after China devalued its currency in mid-August, setting off sharp declines in global markets over the last two weeks.
The major averages closed Thursday more than 2 percent higher and out of correction territory.
With stellar gains on Wednesday and Thursday, the S&P had its best two days since March 2009 and the Dow had its best two days since December 2008, according to Howard Silverblatt of S&P Dow Jones Indices. Still, he noted the S&P 500 has lost $1.02 trillion in the last eight days.
Stocks plunged more than 3.5 percent on Monday, with the Dow falling 1,089 points for its biggest one-day point swing. The major averages attempted to bounce Tuesday but selling accelerated into the close, with the Dow and S&P off more than 1 percent.