A mixed jobs report from the Labor Department, including a revision that showed that 2009 job losses were far greater than thought, called into question the strength of the U.S. recovery.

In Europe, the European Union's inability to chart a path forward for debt-ridden Greece, Ireland and Spain also led investors to fear a return to the credit freeze of 2008 and scurry for havens. Investors on Friday fled countries from Portugal to Argentina on concerns that their widening deficits could signal future debt defaults.

"Greece's debt problems and the contagion effects to other southern European countries or beyond are real and are likely to stay with us for some time," Barclays Capital Research, a division of the big British bank, warned in a research note.

The potential of new global financial woes piled on top of U.S. employment worries. Shortly after opening, the Dow Jones Industrial Average sank below 10,000, at one point down 170 points. It swung 120 points in the final hour of trading, however, as investors repositioned in case of a weekend solution in Europe, perhaps involving a rescue by the International Monetary Fund.

Friday's global stock-market turmoil could continue next week. The downturn in recent weeks has doused investors and hit the retirement plans of ordinary Americans alike, eroding last year's wealth gains.