The Dow Jones Industrial Average was down 357.28 points, or 1.39 percent, to 25,409.36. The S&P 500 fell 24.54 points, or 0.82 percent, to 2,954.22. The Nasdaq Composite Index was up 0.89 point, or 0.01 percent, to 8,567.37.

The Dow declined more than 1,000 points several times in intraday trading, dipping below the 25,000 psychological level before closing well above it.

Most of the 30 Dow component companies closed in red territory, with Boeing and JPMorgan Chase declining 4.4 percent and 4.33 percent, respectively, leading the laggards.

All of the 11 primary S&P 500 sectors closed lower. Utilities and financials shed 3.32 percent and 2.57 percent, respectively, the top two laggards.

Investors have fled the stock market and flocked into safe-haven assets, amid concerns over the potential economic impact of COVID-19.

The 10-year Treasury yield continued to plunge on Friday, hitting fresh record low. It was at 1.156 percent. Yields move inversely to prices.

The Cboe Volatility Index, widely considered to be Wall Street's fear gauge, hit a high of 49.48, its highest level since February 2018.

U.S. Federal Reserve Chairman Jerome Powell said in a statement on Friday afternoon that while the fundamentals of the U.S. economy remain strong, the coronavirus poses evolving risks to economic activity.

He added that the central bank is closely monitoring developments and their implications for the economic outlook.

"We will use our tools and act as appropriate to support the economy," Powell said.

The major indexes pared losses immediately after Powell's statement but soon dipped deeper. The losses were cut again a few minutes before market close.

Investors saw a higher probability for further rate-cuts from the Federal Reserve amid potential economic impact of the coronavirus.

The current federal funds rate target range stands at 1.5 percent to 1.75 percent. Market expectations for a 25-basis-point rate cut in March sat at 57.2 percent, according to the CME Group's FedWatch tool. Expectations for a 50-basis-point rate cut in March was at 42.8 percent.