U.S. stocks surged back to pare the biggest one-day selloff in five months, with the Dow Jones Industrial Average cutting a loss of 550 points by two-thirds as investors speculated the rout that's wiped more than $15 trillion from global equities has gone too far too fast. A plunge that took oil past $27 a barrel sparked earlier selling that brought global equities near a bear market and fueled haven demand.

The Nasdaq Composite Index and the Standard & Poor's 500 Index shaved losses of more than 3.5 percent as chip shares and those with the most short interest rallied. The afternoon surge wasn't enough to push either into the green at the close, and both ended at the lowest levels in at least 15 months.

Equities markets buffeted by everything from China to oil and rising interest rates are off to the worst start to a year on record at the same time the Federal Reserve and other central banks have signaled a higher threshold before they'll provide relief. The rout in the oil patch is rippling through markets amid growing signs that credit quality is worsening. U.S. bonds now predict the slowest inflation since May 2009 as investors pile into haven assets.

Energy shares fell 2.9 percent, reversing a slide that was deeper than 5 percent. Indexes of chipmakers and consumer durables producers climbed as investors bought shares of some of the most shorted companies.