NEW YORK (

TheStreet

) -- Stocks finished Friday's session and the week in the red but posted gains for April. Investors, reacting to reports of a Goldman Sachs criminal probe and ongoing uncertainty regarding Washington's financial reform bill, chose a cautious stance to wind down the week and the month.

The

Dow Jones Industrial Average

closed down by 159 points, or 1.4%, at 11,009, putting it 1.8% lower for the week but 1.4% higher on the month. The

S&P 500

dropped 20 points, or 1.7%, to close at 1187. It lost 2.5% during the week but finished the month ahead, by 1.5%. The

Nasdaq

lost 51 points, or 2%, to close at 2461. It shed 2.7% on the week but finished April 2.6% higher.

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"GDP seems to be a bit of a nonevent because

Goldman Sachs

(GS) - Get Report

appears to be taking the day," said Joe Kinahan, chief derivatives strategist for TD Ameritrade. "If it wasn't Goldman Sachs, it would be the bond crisis in Europe."

The U.S. Commerce Department said

gross domestic product grew 3.2% in the first quarter but markets showed little reaction on the news.

The

financial sector was one of the day's weakest with Washington debating financial reform legislation and reports that Goldman Sachs may be facing a criminal investigation over its mortgage security deals. Bank of America/Merrill analysts downgraded Goldman Sachs to neutral from buy, and Standard & Poor's lowered its rating to sell from hold. Goldman's stock lost $15.04, or 9.4%, at $145.20.

TD Ameritrade's Kinahan believes markets are merely taking a breath after the recent run-up but said he is interested to see how the Goldman Sachs charges "spill off onto everyone else."

"If Goldman is found guilty, then I do think there could be a broad selloff on that -- and if financial regulation goes through. I think that trading restrictions could inhibit liquidity, but it depends on how far the government goes," Kinahan said, adding, "I think the market is worried about the law of unintended consequences. There seems to be such a political rush to get reform through so there are concerns that they may not be thinking things through as much as they should."

According to

Reuters

, talks between

Greece, the European Central Bank, the International Monetary Fund and the European Union could conclude as soon as Saturday.

Overseas, Hong Kong's Hang Seng rose 1.6%, and Japan's Nikkei gained 1.2%. The FTSE in London fell by 1.2%, and the DAX in Frankfurt slipped 0.2%.

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The Economy

The U.S. economy grew 3.2% in the first quarter, which was slightly below the 3.3% growth that economists had been forecasting. The expansion compares with previous growth of 5.6%.

"The largest contributions to growth came from personal consumption expenditures, which added 2.6 percentage points to growth, and a rise in inventory investment, which added 1.6 percentage points," said Economic Policy Institute economist Josh Bivens. "Perhaps the most encouraging sign in the report is the second straight quarter of growth in equipment and software investment, adding 0.8 percentage points to overall growth."

However, Bivens cautioned, inventory investment will taper off and government spending has been declining.

"This decline is surely in part a function of the extreme fiscal crisis facing states. Given balanced budget rules at the state-level, this implies that states will be cutting spending and/or raising taxes for years to come and hence exerting a powerful drag on growth."

Chicago's Institute for Supply Management said Chicago PMI rose to 63.8 in April , compared with a March reading of 58.8. April's figure surpassed the level of 59.9 that Wall Street had been expecting.

Consumer sentiment rose to 72.2 in April, according to the University of Michigan's Consumer Sentiment Index for April. The level is better than the reading of 71 that economists had been projecting.

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Company News

The financial sector was one of the weakest of the session with

JPMorgan Chase

(JPM) - Get Report

and

Bank of America

(BAC) - Get Report

among stocks putting the most pressure on the Dow, alongside

Caterpillar

(CAT) - Get Report

and

General Electric

(GE) - Get Report

.

Procter & Gamble

(PG) - Get Report

,

Wal-Mart

(WMT) - Get Report

and

AT&T

(T) - Get Report

, meanwhile, were the Dow's top performers.

Shares of

offshore oil drillers weakened after President Obama's administration called a halt to new offshore drilling until they've determined what caused the oil rig to explode.

Transocean

(RIG) - Get Report

owns the rig being used for

BP's

(BP) - Get Report

underwater well. Their stocks lost 7.9% and 0.8%, respectively.

Chevron

(CVX) - Get Report

posted a first-quarter adjusted profit of $1.98 a share, which topped the profit of $1.94 a share that Wall Street had been expecting. Sales rose 33.3% to $48.2 billion, which fell short of forecasts for sales of $53.2 billion. Its stock shed 85 cents, or 1%, at $81.44.

Continental Airlines

(CAL) - Get Report

and

UAL's

( UAUA) United Airlines are expected to announce a merger on Monday,

The Wall Street Journal

reports.

Constellation Energy

( CEG) swung to a profit in the first quarter but reduced its 2011 guidance, citing lower commodity prices. Shares lost $2.21, or 5.9%, at $35.35.

DR Horton

(DHI) - Get Report

reported better-than-expected second-quarter earnings but cautioned that market conditions for homebuilders are still challenging. The stock gained 45 cents, or 3.2%, to $14.69.

China Sunergy

(CSUN)

surpassed analysts' estimates with a first-quarter profit of 18 cents a share on sales of $104 million. Shares rose 6%, to $4.80.

Futures exchanges operator

IntercontinentalExchange

(ICE) - Get Report

agreed to buy

Climate Exchange

, which operates the European Climate Exchange, the Chicago Climate Exchange and the Chicago Climate Futures Exchange. The deal values Climate Exchange at roughly 395 million pounds ($604 million).

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Commodities and the Dollar

Crude oil for June delivery added 98 cents, or 1.2%, to settle at $86.15 a barrel.

Elsewhere in commodity markets, the June

gold contract gained $11.90, or 1%, to settle at $1,180.70 an ounce.

The

dollar was trading lower against a basket of currencies, with the

dollar index down by 0.2%.

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Treasuries

The benchmark 10-year Treasury strengthened 18/32, lowering the yield to 3.663%.

The two-year note rose 3/32, dropping the yield to 0.964%. The 30-year bond gained 1 3/32, diluting the yield to 4.526%.

--Written by Melinda Peer in New York

.

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