Stocks slipped back into the red late on Friday after fluctuating between big gains and losses in a wildly volatile session with trading volume in equities and options on track to set another record.

That was a turnabout from early afternoon, when investors saw a buying opportunity following the sharp sell-off that took the S&P 500 down 10 percent over the last 10 sessions.

In early afternoon trading, the stock market had extended its rebound after Italian Prime Minister Silvio Berlusconi said his country will introduce a constitutional principle of a balanced budget, adding that: "We will accelerate measures" in an austerity program, with the "aim of a balanced budget in 2013."

Helping the market during that rebound, sources said the European Central Bank was ready to buy Italian and Spanish bonds if Berlusconi commits to bringing forward specific reforms.

"We've had a correction, but it's not a huge correction at this point. If we have a very large correction, that might push us into a double dip," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland.

The Dow Jones industrial average was down 5.83 points, or 0.05 percent, at 11,377.85. The Standard & Poor's 500 Index was down 5.32 points, or 0.44 percent, at 1,194.75. The Nasdaq Composite Index was down 29.84 points, or 1.17 percent, at 2,526.55.

At Thursday's close, the S&P 500 was down about 10 percent for the last 10 trading sessions.

Trading volume was at 12.7 billion shares by late afternoon trade, significantly higher than the daily average of about 7.5 billion.

Trading in options through mid-afternoon was about 25 million contracts -- nearly twice the expected pace and putting it on track to set a daily record near 40 million contracts, according to Trade Alert President Henry Schwartz.

Exchange-traded funds tracking Italian and Spanish stocks rose. The iShares MSCI Italy Index jumped 4.6 percent, while the iShares MSCI Spanish Index advanced 6.1percent.

Stocks had been lower for much of the day as worries about slower global growth remained firmly intact despite stronger-than-expected U.S. jobs data.

Thursday's intense selling -- taking both the Dow and the S&P 500 down 4 percent and the Nasdaq down 5 percent --

reflected frustration with politicians' inability to address pressing concerns over high public debt in Europe and the United States as growth in the world's large industrial economies shows signs of stalling.

Slower growth in manufacturing and services in the United States also have renewed concern about another U.S. recession.

U.S. non-farm payrolls data showed a gain of 117,000 jobs in July compared with a forecast for an increase of 85,000, while the country's unemployment rate dipped to 9.1 percent last month from 9.2 percent in June, the Labor Department reported.

Also affecting stocks was talk of a possible S&P downgrade of U.S. debt after the close.

The recent steep sell-off has put all three major indexes in negative territory for the year.

Credit Suisse on Friday reduced its year-end view on the S&P 500 to 1,350 from 1,450, citing weaker-than-expected growth.

Reflecting the market's volatility, the CBOE Volatility Index or VIX rose 7.3 percent to 33.97. The index had touched an intraday high at 39.25, its highest level since May 2010.