NEW YORK (CNNMoney.com) -- Stocks tumbled Friday after reports that Goldman Sachs is facing a criminal probe sparked analyst downgrades and a selloff in the financial sector. Worries about Greece's lingering debt problems also weighed.
The Dow Jones industrial average (INDU) lost 159 points, or 1.4%. The S&P 500 index (SPX) lost 20 points, or 1.7%. The Nasdaq composite (COMP) lost 51 points or 2%.
Stocks had seesawed in the early going but soon turned lower after ratings agency Standard & Poor's downgraded Goldman Sachs (GS, Fortune 500) following reports it is the target of a criminal investigation by federal prosecutors.
S&P downgraded the stock to "sell." Bank of America/Merrill Lynch also downgraded it to "neutral" from "buy" before the start of trading. Goldman shares fell 10%.
A number of financial shares slipped, including JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and Morgan Stanley (MS, Fortune 500). The KBW Bank (BKX) sector index lost 1.4%.
But the declines were broad based, with all 30 Dow shares retreating. In addition to the financial components, other big losers included Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500), McDonald's (MCD, Fortune 500) and Microsoft (MSFT, Fortune 500).
The stock selling propelled the CBOE Volatility (VIX) index by almost 20%. Seen as the investor fear gauge, the VIX spiked to just short of the two-month highs it touched earlier in the week.
Strong quarterly profit reports propelled markets Thursday, with the Dow, S&P 500 and Nasdaq gaining over 1% each. But investors were cautious Friday at the end of a choppy week in which worries that Greece might default on its debt sent the major indexes tumbling by more than 2% on Tuesday.
Stocks finished April with a monthly gain, but the Dow broke its 8-week winning streak, its longest up stretch in 6 years. The Nasdaq also broke its 8-week up streak. The S&P 500 had risen in 7 of the last 8 weeks.
GDP: The economy grew at a 3.2% annual rate in the first quarter, the Commerce Department reported Friday. It was short of the 3.3% economists were predicting, according to a Briefing.com survey, but was still the third quarter in a row that U.S. gross domestic product grew.
GDP rose at a 5.6% annualized rate in the fourth quarter of 2009.
Sentiment and manufacturing: The University of Michigan's final reading on April consumer sentiment was revised up to 72.2 from 69.5, beating forecasts for a revision to 71.
The Chicago PMI, a regional reading on manufacturing, rose to 63.8 in April from 58.8 in March, versus forecasts for a rise to 59.9.
Company news: Continental (CAL, Fortune 500) and UAL Corp.'s (UAUA, Fortune 500) United Airlines are in late-stage negotiations to merge, according to reports, with a deal expected as soon as this weekend. Continental shares fell 1.5% and UAL shares rose 0.6%.
Chevron (CVX, Fortune 500) was little changed after reporting quarterly sales and earnings that rose from a year earlier and topped forecasts.
With 67% of the S&P 500 having reported results, earnings are on track to have grown 53% from a year earlier and revenues 11%, according to the latest info from tracker Thomson Reuters.
World markets: In overseas trading, European markets fell, with France's CAC 40 down 0.6%, Germany's DAX down 0.2% and London's FTSE down 1.2%.
Asian markets fell, with Hong Kong's Hang Seng index down 1.5% and Japan's Nikkei down 2.6%.
The dollar and commodities: The dollar fell versus the euro and gained versus the yen.
U.S. light crude oil for June delivery settled up 98 cents to $86.15 a barrel on the New York Mercantile Exchange.
COMEX gold for June delivery rose $11.90 to settle at $1,180.70 per ounce.
Bonds: Treasury prices rallied, lowering the yield on the 10-year note to 3.66% from 3.73% Thursday. Treasury prices and yields move in opposite directions. 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.80% | 3.88% | |
| 15 yr fixed | 3.20% | 3.23% | |
| 5/1 ARM | 3.84% | 3.88% | |
| 30 yr refi | 3.82% | 3.93% | |
| 15 yr refi | 3.20% | 3.23% |
Today's featured rates:
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 32,627.97 | -234.33 | -0.71% |
| Nasdaq | 13,215.24 | 99.07 | 0.76% |
| S&P 500 | 3,913.10 | -2.36 | -0.06% |
| Treasuries | 1.73 | 0.00 | 0.12% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Ford Motor Co | 8.29 | 0.05 | 0.61% |
| Advanced Micro Devic... | 54.59 | 0.70 | 1.30% |
| Cisco Systems Inc | 47.49 | -2.44 | -4.89% |
| General Electric Co | 13.00 | -0.16 | -1.22% |
| Kraft Heinz Co | 27.84 | -2.20 | -7.32% |
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