* Markets eye possible Greece deal in coming days
* Goldman shares tumble on U.S. criminal probe
* Lower-than-expected US GDP pours cold water on stocks
* Gold prices hit year's highs
(Updates with European stocks close)
By Walter Brandimarte
NEW YORK, April 30 (Reuters) - U.S. and European stocks
fell on Friday as news of a criminal investigation into Goldman
Sachs weighed on bank shares, while the euro rose broadly on
hopes Greece may secure financial aid in the next few days.
Slower-than-expected U.S. economic growth in the first
quarter added to investor caution, although other data released
later signaled vigor in the economic recovery, sending oil
prices higher.
Treasury prices rose as stock losses triggered safe-haven
buying and some investors preferred to take risk off the table
on the last day of the month.
Shares of Goldman Sachs Group Inc <GS.N> plunged nearly 8
percent on news that U.S. federal prosecutors are investigating
the bank, raising the possibility of criminal charges against
the company or its employees. For details, see
[].
"The Goldman news could lead investors to believe that
there will be more intensive regulation than before, which
could put a bit of a dampening effect on financials in
general," said Michael Sheldon, chief market strategist, RDM
Financial, Westport, Connecticut.
The investigation comes as the U.S. Senate enters the
second day of debate by the full house on a proposed overhaul
of financial regulation.
The S&P financial index <.GSPF> lost 1.4 percent.
The Dow Jones industrial average <> lost 57.89 points,
or 0.52 percent, to 11,109.43, while the Standard & Poor's 500
Index <.SPX> declined 9.15 points, or 0.76 percent, to
1,197.63. The Nasdaq Composite Index <> was down 23.33
points, or 0.93 percent, at 2,488.59.
Technology stocks fell sharply, with the PHLX semiconductor
index <.SOXX>down 3.7 percent.
In Europe, shares closed lower for a third straight week.
The FTSEurofirst 300 <> index of top European shares fell
0.72 percent on Friday, pressured by stocks of banks and oil
companies.
Shares of BP <BP.L> dropped 1.49 percent, extending a fall
of recent days as worries intensified about an oil spill from
one of the firm's wells in the Gulf of Mexico.
Barclays <BARC.L> closed down 6.4 percent as results from
its investment banking arm, Barclays Capital, disappointed as
revenue growth failed to match the lofty levels reported by
many rivals.
For the week, the pan-European benchmark index lost 2.7
percent, and was down 1.5 percent in the month of April. The
index is still up more than 64 percent from a lifetime low hit
on March 9, 2009.
World stocks measured by the MSCI All-Country World Index
<.MIWD00000PUS> edged down 0.36 percent, as gains of 0.6
percent in emerging-market stocks <.MSCIEF> cushioned the fall
in developed countries.
GREECE HOPES
The euro extended recent gains against the dollar, as
expectations Greece will soon receive emergency aid helped to
quiet jitters about how Athens will pay its debts.
The European single currency <EUR=> was up 0.36 percent at
$1.3272. Still, the euro is down more than 1 percent in April,
its fifth straight month of declines.
"The next week is really a very decisive week for the euro
zone as well as for Europe as a whole," said Tammo Greetfeld,
equity strategist at UniCredit in Munich.
People familiar with the Greece aid talks said officials
were expected to announce details of the aid package by Monday,
but investors were cautious, awaiting details on the plan as
well as the reaction in Athens, where angry unions were
readying strikes to protest against severe austerity measures.
[]
The anxiety about Greece's debt negotiations, combined with
U.S. stock losses, fed steady safe-haven demand for U.S.
Treasuries.
The benchmark 10-year note <US10YT=RR> rose 15/32 in price,
with the yield at 3.6743 percent. The 30-year bond <US30YT=RR>
was up 20/32 in price, with the yield at 4.5533 percent.
"We are seeing stocks getting hit, and we still have fears
about Greece," said Thomas Roth, executive director in U.S.
government bond trading at Mitsubishi UFJ Securities USA in New
York.
The dollar gained 0.19 percent against the Japanese
currency <JPY=> to 94.19 yen after the Bank of Japan earlier on
Friday left interest rates unchanged, but unexpectedly released
a statement saying policy makers agreed that new efforts to
bolster the economy were needed.
Despite the central bank statement, BOJ chief Masaaki
Shirakawa said he saw no need to ease policy now, adding that
the bank is considering new ways to bolster growth.
[]
U.S. crude oil futures rose 58 cents, or 0.68 percent, to
$85.75 per barrel as data provided more signs of economic
recovery. April is set to be the first month since September
2008 when the front-month contract has traded continuously
above $80 a barrel.
U.S. GDP growth in the first quarter came in at a 3.2
percent annual rate, lagging projections for growth of 3.4
percent, but consumer spending rose, signaling a sustainable
recovery is taking hold.
A separate report showing that business activity in the
U.S. Midwest expanded more than expected in April added a
positive tone on the economy.
Gold prices reached their highest level this year, trading
above $1,180 an ounce <XAU=> on a safe-haven alternative amid
European debt worries.
(Additional reporting by Ryan Vlastelica in New York; Editing
by Leslie Adler)
