* Goldman stock plunges 11 percent on SEC charges
* Euro snaps 5-day winning streak on renewed Greek fears
* US Treasuries rally with 10-year note at 3.77 percent
(Updates on mid-day U.S. markets)
By Jennifer Ablan
NEW YORK, April 16 (Reuters) - World stock markets dropped
on Friday after U.S. regulators charged Goldman Sachs Group
Inc. <GS.N> with fraud on subprime mortgages, while the euro
dropped on worries about Greece's debt crisis.
Against this backdrop, investors moved money into U.S.
government debt, pushing prices higher and yields lower.
World equities were already under pressure as Google
tumbled 6.4 percent after reporting a 23 percent jump in
quarterly revenue but missing analysts' "whisper number," the
unpublished estimate that some analysts give clients.
The selling pressure on world stocks accelerated after
Goldman Sachs was charged with fraud by the U.S. Securities and
Exchange Commission in the structuring and marketing of a debt
product tied to subprime mortgages.
The SEC lawsuit alleges that Paulson & Co, a major hedge
fund run by the billionaire John Paulson, worked with Goldman
in creating the collateralized debt obligation, and stood to
benefit as its value fell, costing investors more than $1
billion. For details click on[].
Defaults on subprime mortgages and the unraveling of
related derivatives and debt played a major role in the credit
crunch leading to a meltdown on Wall Street and the worst U.S.
recession since the 1930s.
"I don't think it's going to impact the recovery and the
improvement in the financial system, but it could be the
beginning of a period of a regulatory cloud over Goldman and
perhaps the entire investment banking industry," said Hank
Smith, chief investment officer of Haverford Trust Co in
Philadelphia.
During mid-day trading in New York, the Dow Jones
industrial average <> was down 132.25 points, or 1.19
percent, at 11,012.32, while the Standard & Poor's 500 Index
<.SPX> was down 21.17 points, or 1.75 percent, at 1,190.50. The
Nasdaq Composite Index <> was down 38.19 points, or 1.52
percent, at 2,477.50.
The MSCI's global equity index <.MIWD00000PUS> dipped 1.69
percent, moving in sympathy with U.S. markets, though shares
remained set for their seventh straight weekly gain. The
pan-European FTSEurofirst 300 <> also was down 1.52
percent.
Overall, global shares edged off 16-month highs on Friday
as persistent uncertainty over Greece's ability to pay its
debts tempered optimism over the global economic recovery.
The euro remained pressured and Greek bond yields rose
after Athens said it was preparing to activate an IMF/EU
financial aid package. [].
The euro <EUR=> was down 0.64 percent at $1.3492 from a
previous close of $1.3579.
In currencies, the dollar was up against a basket of major
trading-partner currencies, with the U.S. Dollar Index <.DXY>
up 0.44 percent at 80.837 from a previous session close of
80.482.
Against the Japanese yen, the dollar <JPY=> was down 0.96
percent at 92.10 from a previous session close of 92.990.
GREECE MOVES
The euro retreated against the dollar, snapping a five-day
winning streak due to renewed worries over Greece's ability to
service its sovereign debt.
Greece lurched closer toward asking for international aid
after it requested official talks with European authorities and
the International Monetary Fund.
European Central Bank President Jean-Claude Trichet told
euro zone finance ministers that the situation for Greek banks
remains difficult and could deteriorate further.
[]
The cost of insuring Greek sovereign debt rose some 10
basis points from Thursday's close to 428.5 bps, according to
CMA DataVision. Greek 10-year bond yields <GR10YT=TWEB> rose to
7.4 percent, widening the 10-year Greek/German government bond
yield spread.
U.S. Treasury debt, investors' favorite safe haven, rose.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
17/32, with the yield at 3.77 percent, while the 2-year U.S.
Treasury note <US2YT=RR> was up 4/32, with the yield at 0.95
percent. The 30-year U.S. Treasury bond <US30YT=RR> was up
19/32, with the yield at 4.68 percent.
In energy and commodities prices, U.S. light sweet crude oil
<CLc1> fell $2.52, or 2.95 percent, to $82.99 per barrel, and
spot gold prices <XAU=> fell $25.20, or 2.18 percent, to
$1132.70. The Reuters/Jefferies CRB Index <.CRB> was down 3.77
points, or 1.35 percent, at 275.98.
(Additional reporting by Rodrigo Campos in New York and
Sebastian Tong in London)
