U.S. stocks closed on a sharply lower note, following a rally on Thursday, as disappointing news from China and Europe renewed worries about the outlook for global economic growth.
S&P 500 Index lost 1.25 percent to finish at 1,370.26. The Dow Jones Industrial Average retreated 1.05 percent to end at 12,849.59. The Nasdaq Composite Index closed at 3,011.33, down 1.45 percent.
China's economy grew at its slowest pace in nearly three years, a government report showed. China's gross domestic product expanded 8.1 percent in the first quarter, after a 8.9 percent growth in the fourth quarter. That was below the 8.4 percent growth forecast by economists.
On the European news front, the yield on Spain's 10-year government bond climbed to 5.93 percent after a government data showed the country's banks borrowed a record $300 billion from the European Central Bank in March.
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On the U.S. economic front, the consumer price index for March advanced 0.3 percent, while the index for all items less food and energy rose 0.2 percent, both coming inline with expectations. In February, the headline and core inflation were 0.4 percent and 0.1 percent, respectively.
U.S. consumer confidence slipped in April from a one-year high, the Thomson Reuters/University of Michigan survey showed. Consumer sentiment cooled to 75.7 from 76.2 in March.
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In corporate news, JPMorgan Chase & Co. (NYSE:JPM) lost 3.64 percent to end at $43.21 after posting better-than-expected quarterly results. The bank boosted its quarterly dividend and authorized a new $15 billion share buyback plan.
Wells Fargo & Co. (NYSE:WFC) fell 3.47 percent to finish at $32.84, following stronger-than-forecast quarterly earnings, helped by strong revenue growth. However, lower loans led to a drop in net interest margins. As at March 31, total loans were $766.5 billion, compared with $769.6 billion at December 31, 2011. Net interest margin was 3.91 percent, down from 4.05 percent in the year-ago period.
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Google Inc. (Nasdaq:GOOG) slipped 4.06 percent to close at $624.60 after the serach engine giant announced that it would issue new non-voting stock to shareholders.
Safeway Inc. (NYSE:SWY) gained 2.52 percent to finish at $21.19 on speculations of a possible takeover.
Coinstar Inc. (Nasdaq:CSTR) jumped 7.29 percent to close at $65.78 after the Redbox movie-rental kiosks operator boosted its quarterly earnings and revenue forecast. It now sees core earnings from continuing operations of $1.36 to $1.40 per share, on revenue of $567.0 million to $569.2 million. Coinstar also lifted its 2012 profit forecast.
Dow Chemical Co. (NYSE: DOW) added 1.62 percent to close at $33.20 after the company lifted its quarterly dividend by 28 percent to 32 cents.
The European markets retreated sharply tracking global cues, with Germany's DAX losing 2.36 percent to close at 6,583.90. France's CAC40 plunged 2.47 percent to end at 3,189.09. Britain's FTSE 100 dropped 1.03 percent to finish at 5,651.79.
Asian markets mostly closed higher. The Shanghai Composite Index gained 0.35 percent to end at $2,359.15. Hong Kong's Hang Seng rose 1.84 percent to close at 20,701.04. Japan's Nikkei 225 added 1.19 percent to close at 9,637.99. India's BSE Sensex finished flat at 17,094.51.
Crude oil dropped 0.74 percent to $102.87 per barrel, while natural gas price rose 0.20 percent to $1.987 per million metric British thermal units. Gold retreated 1.51 percent to $1,655.30 per ounce, and silver lost 3.32 percent to $31.445 per ounce.
In the currency market, the euro declined 0.85 percent against the U.S. dollar to $1.3076. The British pound lost 0.71 percent against the greenback to 1.5846, while the dollar gained 0.17 percent against the Japanese yen to 81.0300.