A late afternoon surge saw US sharemarkets stage a remarkable comeback on Friday, with the Dow Jones finishing a volatile day of trading only slightly down after plunging below the 8,000 mark within minutes of opening.

At the close of trading on Friday, the Dow Jones industrial average had lost 61.97 points, or 0.72 percent, to close at 8,517.22, after being down as much as 600 points earlier in the afternoon.

The Dow opened the day horrendously, plunging 697 points within the first five minutes of trading to drop below 7900 to its lowest level since March 17, 2003. The Dow erased the early losses over the morning before plunging some 600 points in the early afternoon.

The broader Standard & Poor's 500 lost 8.01 points, or 0.88 percent, to end the week at 901.91, while the technology-based Nasdaq composite finished up 3.35 points, or 0.20 percent, to close at 1,648.47.

Both indexes followed the Dow's pattern, by plunging to over five year lows early on before making an abrupt recovery only to fall again before staging a late rally that saved the day.

A senior portfolio strategist at BLB&B Advisors, Robert Philips, told CNN Money that the magnitude of what's going on is unprecedented and people are frightened.

Twenty-five out of 30 Dow stocks fell, with the losses being led by commodity companies, with shares in oil services firms Chevron falling 7.88 percent to US$58.96 and Exxon Mobil dropping 7.50 percent to US$62.90.

Banking stocks JP Morgan Chase (up 10.93 percent to US$40.69), Bank of America (up 6.67 percent to US$20.94) and Citigroup (up 10.68 percent to US$14.31) posted gains as investors looked for bargains.

The price of oil fell US$5.93 on the New York Mercantile Exchange to close at a 13-month low of US$80.66 a barrel, while the price of gold rose US$14.50 to be worth US$901 an ounce on the COMEX index.

In currency trading, the dollar gained against the euro and the yen.

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