U.S. stocks fell on Friday as Goldman Sachs tumbled on reports of a federal probe into the Wall Street powerhouse, prompting investors to unload bank shares. The S&P financial index lost 1.8 percent, with Goldman's stock (GS.N) hitting a session low of $144.45, its lowest in more than nine months. U.S. prosecutors in New York began an investigation, a source said, raising the possibility of criminal charges against Goldman two weeks after securities regulators accused the bank of civil fraud. Bank of America-Merrill Lynch downgraded Goldman's stock to "neutral." The Dow Jones industrial average lost 81.24 points, or 0.73 percent, to 11,086.08. The Standard & Poor's 500 Index fell 12.02 points, or 1.00 percent, to 1,194.76. The Nasdaq Composite Index dropped 32.94 points, or 1.31 percent, to 2,478.98. Weighing on investor sentiment about the U.S. economy was a government estimate that gross domestic product expanded in the first quarter at an annual rate of 3.2 percent-below analysts' consensus forecast of 3.4 percent-and short of the fourth quarter's 5.6 percent pace. The PHLX oil services sector index fell 1.7 percent, with Halliburton Company off 1.9 percent at $31 and Transocean down 6.3 percent at $73.59. The White House said it will halt new U.S. offshore oil drilling until a review is conducted into a massive oil spill in the Gulf of Mexico.
