Stocks suffered a big loss on the last day of April as investors showed their disappointment with two economic reports and worries about a criminal investigation of Goldman Sachs. But the major indexes still had their third straight monthly gain. Investors lost some of their optimism about the economy Friday after the government's weaker-than-expected gross domestic product report and news of a drop in consumer sentiment. Reports that the government has started a criminal investigation of Goldman sent financial stocks tumbling. Investors feared that possible charges against the company could have a chilling effect on the banking industry. The Dow Jones industrial average fell 158 points, and all the major indexes fell more than 1 percent. The Dow rose 1.4 percent for April, but it snapped an eight-week winning streak. The market racheted higher and lower this week on alternating spurts of optimism and pessimism about the economy. The Dow had three triple-digit moves. But analysts have been expecting a pullback after months of gains. “The market may just be a little bit tired,” said Michael Sheldon, chief market strategist at RDM Financial Group in Westport, Conn. “A lot of good news is priced into the market.” The market initially showed little reaction to reports about a federal investigation of Goldman, but investors' displeasure grew as the day wore on. A person with knowledge of the matter told The Associated Press that the Justice Department has begun a criminal investigation of the bank over mortgage securities deals it arranged. The person spoke on condition of anonymity because the investigation is in a preliminary phase. The Securities and Exchange Commission has charged Goldman with civil fraud. “They're really going after Goldman pretty hard,” said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research. “That's got people on edge.” A Standard and amp; Poor's equity analyst downgraded Goldman's stock to a “sell” rating Friday. Its shares dropped more than 9 percent. The Dow fell 158.71, or 1.4 percent, to 11,008.61. The Standard and amp; Poor's 500 index fell 20.09, or 1.7 percent, to 1,186.69, while the Nasdaq composite index fell 50.73, or 2 percent, to 2,461.19. Friday's pullback began after the Commerce Department said the GDP rose at a 3.2 percent annual pace in the January-March period. That was below the 3.4 percent rate economists polled by Thomson Reuters had forecast. While the GDP was up for the third straight quarter, it was down from the fourth quarter's 5.6 percent, a rate that was inflated by government stimulus spending and companies restocking their depleted inventories.
