* Markets eye possible Greece deal in coming days
* Lower-than-expected US GDP pours cold water on stocks
* Goldman shares tumble on criminal probe, weigh on Wall St
* Gold prices hit year's highs
(Updates to U.S. markets open)
By Walter Brandimarte and Tamawa Desai
NEW YORK/LONDON, April 30 (Reuters) - U.S. and European
stocks fell on Friday as news of a criminal investigation into
Goldman Sachs weighed on bank stocks, while the euro rose
broadly on hopes Greece may soon secure financial aid.
Slower-than-expected growth in U.S. gross domestic product
in the first quarter added to investor caution, although other
U.S. economic 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> fell 1 percent.
The Dow Jones industrial average <> edged down 6.73
points, or 0.06 percent, at 11,160.59, while the Standard &
Poor's 500 Index <.SPX> lost 3.19 points, or 0.26 percent, to
1,203.59. The Nasdaq Composite Index <> was down 10.52
points, or 0.42 percent, at 2,501.40.
The FTSEurofirst 300 <> index of top European shares
slipped 0.7 percent, pressured by banks' shares.
Shares of BP <BP.L> fell 1.8 percent, extending a fall of
recent days as worries intensified about an oil spill from one
of BP's wells in the Gulf of Mexico.
World stocks measured by the MSCI All-Country World Index
<.MIWD00000PUS> were practically flat, however, as
emerging-market stocks <.MSCIEF> climbed 0.64 percent,
offsetting losses 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 0.60 percent at
$1.3303. 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.
Sources 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 dollar erased gains against the yen <JPY=>, trading up
0.02 percent at 94.03 yen as the U.S. stock market declined.
The Japanese currency initially fell against the dollar
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.
U.S. crude oil futures rose 58 cents, or 0.68 percent, to
$85.75 per barrel. 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 United States 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)
