Stocks slide; Google, economic reports disappoint

NEW YORK — Financial shares led the stock market lower Friday after federal regulators filed civil fraud charges against Goldman Sachs over its dealings in the subprime mortgage market.

Stocks were already lower before news of the Securities and Exchange Commission's charges against the leading investment bank. Investors were disappointed after Google reported earnings that didn't live up to forecasts.

General Electric Inc. and Bank of America Corp. also reported profits that topped forecasts, but their stocks still fell. GE's revenue came up short of expectations, while Bank of America said loan losses remain high.

The SEC charged Goldman and one of its vice presidents with failing to disclose key information to investors regarding complex mortgage-backed securities.

The charges come as the Obama administration seeks greater regulation of the nation's banks and their trading of exotic securities like those involved in the Goldman case. These kinds of investments are widely seen as one of the triggers of the financial crisis that crippled the nation's financial system in the fall of 2008.

Economic news on the housing front provided little help to the market. The Commerce Department said housing construction rose to a 16-month high in March. However, construction of single-family homes, the most important segment of the market, fell. Economists are also concerned about continued hurdles in the housing market, like rising mortgage rates and the impending end of a homebuyer tax credit.

A separate report showed consumer sentiment fell this month.

Friday's pullback comes after six straight days of gains that pushed the Dow Jones industrial average to its highest close in 18 months. Stocks have been steadily rising in recent months on growing signs that the economy is recovering, albeit slowly.

In late morning trading, the Dow fell 107.99, or 1 percent to 11,036.58. The Standard & Poor's 500 index dropped 18.34, or 1.5 percent, to 1,193.33, while the Nasdaq composite index fell 27.73, or 1.1 percent, to 2,487.96.

About two stocks fell for every one that rose on the New York Stock Exchange on the New York Stock Exchange, where volume came to 486.1 million shares, compared with 298.3 million traded at the same point Thursday.

Both Bank of America and General Electric's first-quarter results follow a trend that has taken hold throughout the week of companies topping earnings forecasts.