NEW YORK (Reuters) – Stocks were little changed on Friday but remained on track for a second week of declines after JPMorgan Chase & Co revealed a trading loss of at least $2 billion from a failed hedging strategy.

The news weighed on bank shares, sending the Dow component down 8.9 percent to $37.11, but indexes rebounded off their early lows, continuing a trend this week of investors using dips as an occasion to buy.

Stocks were also buoyed by upbeat consumer sentiment data and an earnings beat by Nvidia Corp.

JPMorgan estimates the business unit involved in the trading loss will lose $800 million in the current quarter, excluding private equity results and litigation expenses. The bank had previously expected the unit to earn a profit of about $200 million.

Jamie Dimon, the chief executive of the biggest U.S. bank by assets, cautioned that losses could grow by another $1 billion, another hurdle for a sector already besieged by the sovereign debt crisis in Europe and fears of slowing growth globally.

“This surprise has created a lot of uncertainty and is taking the wind out of our sails,” said Joseph Cangemi, managing director at BNY ConvergEx Group in New York. “However, I see this as specific to JPMorgan, not a systemic issue, so I would be buying if I was looking at any specific financial at this time.”

Bank of America Corp fell 3.2 percent to $7.45 while Citigroup Inc lost 4.6 percent to $29.24 and the Financial Select Sector SPDR was off 1.8 percent to $14.72. The S&P financial sector fell 0.6 percent, extending its month-to-date losses to 4.7 percent.

Financial stocks have been among the most volatile in recent months as investors question what the growth outlook for the U.S. and the debt crisis of Europe will mean for the group’s profits. JPMorgan has fallen 14 percent this month.

The Dow Jones industrial average was up 6.85 points, or 0.05 percent, at 12,861.89. The Standard & Poor’s 500 Index was up 1.43 points, or 0.11 percent, at 1,359.42. The Nasdaq Composite Index was up 15.18 points, or 0.52 percent, at 2,948.82.

The CBOE VIX Volatility Index is up 15 percent this month in a sign of growing caution.

For the week, the S&P is down 1.1 percent, the Dow is off 1.8 percent and the Nasdaq is down 1.2 percent. All three are on track for their second straight week of losses.

U.S. consumer sentiment rose more than expected, advancing to its highest level in more than four years in early May as Americans remained upbeat about the job market, according to the Thomson Reuters/University of Michigan’s preliminary May reading.

Producer prices fell 0.2 percent in April, below the expectation for flat growth.

Nvidia Corp rose 8.5 percent to $13.45 after reporting adjusted first-quarter earnings that beat expectations. The stock limited the Nasdaq’s decline and was the S&P 500′s top percentage gainer.

With 449 of the S&P 500 companies reporting results through Thursday morning, 66.4 percent exceeded estimates, according to Thomson Reuters data, compared with more than 80 percent at the start of earnings season.

(Editing by Dave Zimmerman)

NEW YORK (Reuters) – Stock index futures fell on Friday and were on track to extend the week’s losses after JPMorgan Chase & Co revealed a trading loss of at least $2 billion from a failed hedging strategy that weighed on bank shares.

The news sent shares of the Dow component down 8.1 percent to $37.42 in premarket trading, and is the latest hurdle for a sector already besieged by the sovereign debt crisis in Europe and fears of slowing growth globally.

While other gains partially offset the trading loss, JPMorgan Chase estimates the business unit with the portfolio will lose $800 million in the current quarter, excluding private equity results and litigation expenses. The bank had previously expected the unit to earn a profit of about $200 million.

Jamie Dimon, the chief executive of the biggest U.S. bank by assets, cautioned that losses could grow by another $1 billion.

“While this is an isolated incident that has nothing to do with how the economy will recover, it is very painful to hear,” said Tim Speiss, head of personal wealth advisors at EisnerAmper in New York. “Investors need to look at what this might do to JPMorgan‘s equity value, and whether it is something that could trouble the whole sector.”

Bank of America Corp fell 3 percent to $7.47 before the bell while Citigroup Inc lost 3.8 percent to $29.50 and the Financial Select Sector SPDR was off 1.9 percent to $14.70. The S&P financial sector will likely extend its losses of almost 3 percent so far this month.

Financial stocks have been among the most volatile in recent months as investors question what the growth outlook for the U.S. and the debt crisis of Europe will mean for the group’s profits. JPMorgan has fallen 11.4 percent since the end of March.

The CBOE VIX Volatility Index is up almost 10 percent this month in a sign of growing caution.

S&P 500 futures fell 7.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures sank 56 points and Nasdaq 100 futures lost 8.75 points.

For the week, the S&P is down 0.8 percent, the Dow is off 1.4 percent and the Nasdaq is down 0.8 percent. All three are on track for their second straight week of losses.

Investors are looking ahead to the April Producer Price Index, due at 8:30 a.m. (1230 GMT), as well as the Thomson Reuters/University of Michigan’s preliminary May consumer sentiment index. Economists in a Reuters survey expect a reading of 76.2 compared with 76.4 in the final April report, with producer prices flat.

Software maker CA Inc late Thursday continued its run of estimate-beating profit, as demand rose at its North American business.

Nvidia Corp shares rose 8.1 percent to $13.43 before the bell after reporting adjusted first-quarter earnings that beat expectations.

With 449 of the S&P 500 companies reporting results through Thursday morning, 66.4 percent exceeded estimates, according to Thomson Reuters data, compared with more than 80 percent at the start of earnings season.

The Dow rose modestly to break a six-day losing streak on Thursday, though a weak outlook from Cisco Systems Inc capped advances. The S&P 500 could not hold enough gains to close above its April low. Still, the index has rebounded after falling to a two-month low near 1,340 on Wednesday.

(Editing by Bernadette Baum, Dave Zimmerman)

CHARLOTTE, North Carolina (Reuters) – Demonstrators are expected to swarm Bank of America Corp’s annual shareholder meeting on Wednesday to voice anger over a range of issues from foreclosures to corporate taxes to financing for the coal industry.

The meeting, held in the bank’s headquarters city of Charlotte, North Carolina, has drawn protesters in the past, but advocacy groups operating under the name 99% Power are predicting much bigger crowds this year. Inside the meeting, stockholders will vote on the bank’s executive pay plan, elect directors and get a chance to voice their opinions to Chief Executive Brian Moynihan.

“Shareholder season is one of the only times of the year when everyday people can go face-to-face with the most powerful corporate decision makers in the country,” said Amanda Starbuck, of the Rainforest Action Network, an environmental activist group that is part of the coalition.

Inspired by the Occupy Wall Street movement, demonstrators have been targeting corporate shareholder meetings this year to keep a spotlight on concerns about economic disparity in the United States. More than 500 demonstrators engulfed Wells Fargo & Co’s meeting site in April, resulting in 24 arrests.

Charlotte officials have declared the Bank of America meeting an “extraordinary event” under an ordinance passed in January to help officials handle protests expected in the city during the Democratic National Convention in September. The ordinance allows the city to ban certain items, ranging from backpacks to crowbars, at large events.

Bank of America spokesman Scott Silvestri declined to comment on the planned protests.

The second-largest U.S. bank has faced intense scrutiny for taking government bailouts during the financial crisis, for mishandling foreclosure paperwork and for attempting to implement a now-canceled monthly $5 debit card fee last fall.

Meanwhile, stockholders aren’t happy about a stock price below $10 and a quarterly dividend slashed to a penny per share since the financial crisis. Moynihan, who will be presiding over his third annual meeting, made progress last year building the bank’s capital levels but faces questions about the company’s ability to increase future earnings. To boost profits, the bank is focused on cutting costs, including plans to eliminate about 300 jobs in its investment banking and capital markets group.

Executive compensation has become a hot issue during this year’s annual meeting season after Citigroup Inc shareholders rejected that company’s pay plan.

Moynihan received total compensation of $8.1 million in 2011, up from $1.9 million in 2010. He received no cash bonus and most of his stock pays only if the company attains certain performance goals. ISS Proxy Advisory Services and Glass Lewis & Co, which advise large shareholders on how to vote at annual meetings, have backed Bank of America’s pay plan.

Activist groups are also closely watching how Bank of America handles access to the meeting. In April, 99% Power sent a letter to Moynihan urging the bank to allow all shareholders to enter the session, after Wells Fargo excluded some people who wanted to attend its meeting in April. The group said Tuesday it plans to file complaints with the U.S. Securities and Exchange Commission and the Delaware Attorney General over Wells Fargo’s actions.

“While we respect the right of people to peacefully assemble and express their opinions, unfortunately, the protest activity in San Francisco prevented a number of our shareholders from accessing this year’s meeting,” Wells Fargo spokesman Ancel Martinez said.

(Reporting By Rick Rothacker in Charlotte, North Carolina; Editing by Steve Orlofsky)

NEW YORK (Reuters) – The S&P 500 posted its first monthly decline since November on Monday, as stocks slipped on signs the U.S. economy may be slowing and as a recession in Spain highlighted risks in the euro zone.

Despite Monday’s decline, the picture was not overwhelmingly negative. The S&P closed out April with a decline of 0.8 percent, after four straight days of gains last week helped the index pare much steeper losses for the month.

Still, a recent string of economic data suggests the economy may slow in the summer months and has caused the market to stall just shy of the four-year highs reached earlier in the month. A much sharper-than-expected decline in Midwestern business activity in April reported on Monday by an industry group was the latest evidence of a slowdown.

“We had such a strong first quarter, and we’ve lost that momentum in the last two weeks,” said Jake Dollarhide, chief executive at Longbow Asset Management in Tulsa, Oklahoma. The data “reinforces the ominous tone on Wall Street, along with the fears we have about Europe.”

Composite trading volume was among the lightest of the year at 6.1 billion on Monday compared with a daily average of this year of around 6.8 billion. The CBOE volatility index , or VIX, climbed 5.1 percent, after earlier hitting its highest level in more than a week.

Spain on Monday reported its economy contracted in the first quarter, dragging the country into recession as deep government spending cuts to reduce a massive deficit and troubles in the banking sector likely delayed any return to growth. Though expected, the news highlighted the serious headwinds the world economy faces.

Banks were among the top decliners on Wall Street after Standard & Poor’s cut the credit ratings of 11 Spanish banks on Monday, following its downgrade of Spain last week.

The S&P 500 financial sector index fell 0.6 percent while Bank of America Corp dropped 1.7 percent to $8.11. Shares of Spanish bank Santander traded in New York fell 2.2 percent to $6.33 and are down 16 percent this year.

The Dow Jones industrial average dropped 14.68 points, or 0.11 percent, to 13,213.63. The Standard & Poor’s 500 Index fell 5.45 points, or 0.39 percent, to 1,397.91. The Nasdaq Composite Index lost 22.84 points, or 0.74 percent, to 3,046.36.

The S&P 500′s 0.8 percent decline for April was a comeback from earlier in the month when worries over Europe and the U.S. economy sent it down more than 4 percent for the month.

Many investors are still worried about the potential for a pullback heading into the seasonally weak period for stocks that starts in May, especially if it is accompanied by a slowing economy and more problems in Europe.

“In equities, we stepped back to neutral several weeks ago,” said Goldman Sachs in a research note. “Our general view is that the U.S. seems to be slowing – though how much and for how long is an open question – while equity market domestic growth views remain elevated.”

Defensive sectors were the best performers in April. The telecom sector rose 3.6 percent for the month, while financials fell 1.9 percent.

Shares of Monster Beverage Corp jumped as much as 28 percent on Monday after The Wall Street Journal reported Coca-Cola Co is in talks to buy the energy drink maker, but the shares closed 0.8 percent lower after a denial from Coca-Cola.

In earnings news, Humana Inc declined 8.1 percent to $80.68 after the company, one of the largest providers of Medicare insurance for the elderly, posted a 21 percent drop in profit. The Morgan Stanley healthcare payor index declined 1.9 percent.

Exchange operator NYSE Euronext reported its quarterly profit fell by almost one-third due to a difficult trading environment and costs from its failed merger with Deutsche Boerse . Its shares fell 4.9 percent to $25.75.

According to Thomson Reuters data through Monday morning, of the 297 S&P 500 companies that have reported quarterly results so far, 72 percent topped estimates. A strong earnings season helped lift the benchmark S&P index to its best week since mid-March last week.

Shares in Apple gave back some of their post-earnings pop, falling 3.2 percent to $583.98. Last week the shares jumped 9 percent after the company blew away Wall Street earnings estimates.

On the positive side of Monday’s earnings, shares of Sunoco Inc jumped 20.5 percent to $49.29 after pipeline operator Energy Transfer Partners LP said it would buy the company for $5.35 billion in stock and cash.

Barnes & Noble Inc surged 52 percent to $20.75 after Microsoft Corp agreed to invest $300 million in the bookseller’s digital and college operations. The deal values the Nook and textbook businesses at $1.7 billion.

(Editing by Leslie Adler)

NEW YORK (Reuters) – The S&P 500 was on track for its first monthly decline since November on Monday after data hinted the U.S. economy may be slowing and Spain‘s fall into recession underscored nagging stresses in the euro zone.

But despite Monday’s declines the picture was not overwhelmingly negative. Last week saw four days of back-to-back gains that helped the index erase steeper losses for the month. The S&P closed above 1,400 for the first time in three weeks on Friday, largely helped by better-than-expected corporate earnings.

Still, a string of economic data is starting to suggest the economy may slow in the summer months and is causing the market to stall just shy of four-year highs. A gauge showing a much sharper-than-expected decline in Midwestern business activity in April was the latest such measure to point to a slowdown.

“On the trading front, in equities, we stepped back to neutral several weeks ago,” said Goldman Sachs in a research note. “Our general view is that the U.S. seems to be slowing – though how much and for how long is an open question – while equity market domestic growth views remain elevated.”

Spain‘s economy sank into recession in the first quarter as deep government spending cuts to reduce a massive deficit and troubles in the banking sector likely delayed any return to growth. Though expected the news highlighted the serious headwinds the world economy faces.

Banks were among the top decliners on Wall Street after Standard & Poor’s cut the credit ratings of 11 Spanish banks on Monday, following its downgrade of Spain last week.

The S&P 500 financial sector index fell 0.7 percent while Bank of America Corp dropped 1.2 percent to $8.15. Shares of Spanish bank Santander traded in New York fell 3.1 percent to $6.27 and are down 17 percent this year.

The Dow Jones industrial average dropped 42.15 points, or 0.32 percent, to 13,186.16. The Standard & Poor’s 500 Index dropped 7.63 points, or 0.54 percent, to 1,395.73. The Nasdaq Composite Index dropped 20.76 points, or 0.68 percent, to 3,048.44.

The S&P 500 is down 0.9 percent so far in April. Early in the month, worries over Europe and the U.S. economy sent the index down over 4 percent for the month.

In earnings news, Humana Inc declined 9 percent to $79.98 after the company, one of the largest providers of Medicare insurance for the elderly, posted a 21 percent drop in profit. The Morgan Stanley healthcare payor index declined 2.1 percent.

Exchange operator NYSE Euronext reported its quarterly profit fell by almost one-third due to a difficult trading environment and costs from its failed merger with Deutsche Boerse . Its shares were off 6.2 percent to $25.39.

According to Thomson Reuters data through Monday morning, of the 297 S&P 500 companies that have reported quarterly results so far, 72 percent topped estimates. A strong earnings season helped lift the benchmark S&P index to its best week since mid-March on Friday.

On the positive side, shares of Sunoco Inc jumped 19.7 percent to $48.95 after pipeline operator Energy Transfer Partners LP said it would buy the company for $5.35 billion in stock and cash.

Barnes & Noble Inc surged about 62 percent to $22.16 after Microsoft Corp agreed to invest $300 million in the bookseller’s digital and college operations. The deal values the Nook and textbook businesses at $1.7 billion.

(Editing by Chizu Nomiyama)

NEW YORK (Reuters) – Stocks slipped on Monday with the S&P 500 on track for its first monthly decline since November after reports hinted at a stalled U.S. recovery and Spain sank into recession, underscoring nagging euro zone stresses.

The S&P was in jeopardy of ending a 4-day run as it fell below the technically important 1,400 level. The S&P closed above 1,400 for the first time in three weeks on Friday and that point has been a key resistance for weeks.

U.S. consumers boosted spending only modestly last month and a gauge of Midwestern business activity fell sharply in April, suggesting the economy entered the second quarter with less steam.

“Obviously it is disappointing, and not a great way to start the week. We had such a strong first quarter, and we’ve lost that momentum in the last two weeks,” said Jake Dollarhide, chief executive at Longbow Asset Management in Tulsa, Oklahoma.

“(The data) reinforces the ominous tone on Wall Street, along with the fears we have about Europe,” Dollarhide said.

Spain‘s economy sank into recession in the first quarter as deep government spending cuts to reduce a massive deficit and troubles in the banking sector likely delayed any return to growth.

The Dow Jones industrial average was down 33.07 points, or 0.25 percent, at 13,195.24. The Standard & Poor’s 500 Index dropped 7.29 points, or 0.52 percent, at 1,396.07. The Nasdaq Composite Index took off 18.68 points, or 0.61 percent, at 3,050.52.

Among U.S. stocks, banks were among the top decliners after Standard & Poor’s cut the credit ratings of 11 Spanish banks on Monday, following its downgrade of Spain last week.

The S&P 500 financial sector index fell 0.7 percent while Bank of America Corp dropped 2 percent to $8.08.

Humana Inc declined 8 percent to $80.77 after the company, one of the largest providers of Medicare insurance for the elderly, posted a 21 percent drop in profit. The Morgan Stanley healthcare payor index declined 2.3 percent.

NYSE Euronext profit fell by almost one-third due to a difficult trading environment and costs from its failed merger with Deutsche Boerse . Shares were off 4.7 percent to $25.80.

According to Thomson Reuters data through Monday morning, of the 297 S&P 500 companies that have reported results, 72 percent topped estimates. A strong earnings season helped lift the benchmark S&P index to its best week since mid-March on Friday.

Barnes & Noble Inc surged almost 68 percent to $22.95 after Microsoft Corp agreed to invest $300 million in the bookseller’s digital and college operations in a deal that values the businesses at $1.7 billion.

(Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)

NEW YORK (Reuters) – Stocks fell for a second day on Thursday as labor market data showed more signs of weakness, while a warning from Qualcomm and poor results from Stanley Black & Decker also discouraged investors.

A late bounce cut the Dow’s and the S&P 500′s losses almost in half.

Apple shares, down 3.4 percent, also contributed to the day’s losses, as did renewed concerns about Europe‘s finances. Apple closed at $587.44.

Spanish government bond yields increased after a disappointing debt auction and French bond yields rose on rumors, later denied, that the country’s credit rating may be downgraded.

Qualcomm Inc led technology stocks lower, falling 6.6 percent to $62.57 a day after it warned of trouble meeting demand for some of its chips. Stanley Black & Decker fell 7.1 percent to $72.91, leading declines among industrials, the second worst-performing of the S&P 500′s top 10 sectors.

The losses followed a strong start to earnings season, confirmed Thursday by better-than-expected reports from Bank of America Corp and Morgan Stanley.

Of the 105 S&P 500 components that have reported earnings to date, 81.9 percent have beat analysts’ expectations, according to Thomson Reuters data.

“Despite the positive beat rate in earnings, some important economic data points have been losing momentum and that has to call into question whether or not this is just a soft patch or something more dramatic,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

“You overlay that with Europe again dominating the headlines … it just has investors standing on the sidelines,” she said.

Raising concerns about the economic outlook, new U.S. claims for unemployment benefits declined only slightly last week and were well above economists’ expectations. Other reports showed factory activity in the Mid-Atlantic region slowed sharply in April and existing home sales dropped in March for a second straight month.

The Dow Jones industrial average fell 68.65 points, or 0.53 percent, to end at 12,964.10. The S&P 500 Index dropped 8.22 points, or 0.59 percent, to 1,376.92. The Nasdaq Composite lost 23.89 points, or 0.79 percent, to 3,007.56.

At their session lows, the three major indexes all fell more than 1 percent.

After the closing bell, Microsoft Corp reported a small drop in fiscal third-quarter profit that still beat Wall Street’s forecast. Microsoft‘s stock rose 2.7 percent to $31.88 in extended-hours trading. In regular trading, Microsoft had slipped 0.4 percent to $31.01.

During the regular session, eBay Inc jumped 13.2 percent to $40.62 a day after the online auctioneer reported that its quarterly sales and profit grew more than expected. Late Wednesday, eBay also raised its 2012 forecasts.

Bank of America, the No. 2 U.S. bank, fell 1.7 percent to $8.77 after spending the morning higher. In contrast, Morgan Stanley rose 2.3 percent to $18.07. Both reported better-than-expected results. The S&P financial sector index fell 0.5 percent.

Biotechnology companies’ gains helped shield the Nasdaq from a bigger loss, as the stock of Human Genome Sciences Inc soared 98 percent to $14.17 – nearly doubling its price in Thursday’s session – and shares of Gilead Sciences Inc shot up 12.1 percent to $52.25.

Human Genome rejected an unsolicited $2.6 billion bid from long-time partner GlaxoSmithKline.

A combination of experimental hepatitis C drugs from Gilead and Bristol-Myers Squibb Co showed impressive results in new clinical trial data released on Thursday.

The Nasdaq biotech index climbed 1.5 percent.

About 7.43 billion shares changed hands on the New York Stock Exchange, the Nasdaq and the NYSE Amex, compared with the average 6.78 billion so far this year.

Declining issues beat advancers on the NYSE by a ratio of about 7 to 5 while on the Nasdaq, five issues fell for every three that rose.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)

NEW YORK (Reuters) – Stocks fell for a second day on Thursday as labor market data showed more signs of weakness, while a warning from Qualcomm and poor results from Stanley Black & Decker also discouraged investors.

A late bounce cut the losses of the Dow and the S&P 500 nearly in half.

Apple shares, down 3.4 percent, also contributed to the day’s losses, as did renewed concerns about Europe‘s finances. Apple closed at $587.44.

Spanish government bond yields rose after a disappointing debt auction and French bond yields rose on rumors, later denied, that the country’s credit rating may be downgraded.

Qualcomm Inc led technology stocks lower with a 6.6 percent drop a day after it warned of trouble meeting demand for some of its chips, while Stanley Black & Decker fell 7.1 percent to lead declines among industrials, the second-worst performing of the top 10 S&P 500 sectors.

The losses came amid a strong beginning to earnings season, confirmed Thursday by better-than-expected reports from Bank of America Corp and Morgan Stanley.

Of the 105 S&P 500 components that have reported earnings to date, 81.9 percent have beat analysts’ expectations, according to Thomson Reuters data.

“Despite the positive beat rate in earnings, some important economic data points have been losing momentum and that has to call into question whether or not this is just a soft patch or something more dramatic,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

“You overlay that with Europe again dominating the headlines … it just has investors standing on the sidelines,” she said.

Raising concerns about the economic outlook, new U.S. claims for unemployment benefits slipped in the latest week but were well above expectations, the Labor Department reported. Other reports showed factory activity in the Mid-Atlantic region slowed sharply and existing home sales dropped in March for a second straight month.

The Dow Jones industrial average fell 68.65 points, or 0.53 percent, to end at 12,964.10. The S&P 500 Index dropped 8.22 points, or 0.59 percent, to 1,376.92. The Nasdaq Composite lost 23.89 points, or 0.79 percent, to 3,007.56.

At their session lows, the three major indexes all fell more than 1 percent.

After the closing bell, Microsoft Corp reported a slight drop in fiscal third-quarter profit and a 6 percent jump in sales. Microsoft’s stock rose 2.5 percent to $31.78 in extended-hours trading.

During the regular session, eBay Inc jumped 13.2 percent to $40.62 a day after the online auctioneer reported that its quarterly sales and profit grew more than expected. Late Wednesday, eBay also raised its 2012 forecasts.

Bank of America, the No. 2 U.S. bank, fell 1.7 percent to $8.77 after spending the morning higher. In contrast, Morgan Stanley rose 2.3 percent to $18.07. Both reported better-than-expected results. The S&P financial sector index fell 0.5 percent.

Biotechnology companies’ gains helped shield the Nasdaq from a bigger loss, as Human Genome Sciences Inc soared 98 percent to $14.17 – nearly doubling its price in Thursday’s session – and Gilead Sciences Inc shot up 12.1 percent to $52.25.

Human Genome rejected an unsolicited $2.6 billion bid from long-time partner GlaxoSmithKline.

A combination of experimental hepatitis C drugs from Gilead and Bristol-Myers Squibb Co showed impressive results in new clinical trial data released on Thursday.

The Nasdaq biotech index climbed 1.5 percent.

About 7.4 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE Amex, compared with the average 6.77 billion so far this year.

Declining issues beat advancers on the NYSE by a ratio of about 7 to 5 while on the Nasdaq, five issues fell for every three that rose.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)

NEW YORK (Reuters) – U.S. stocks closed their worst two-week slide since November with a selloff on Friday as disappointing China growth data sparked worries the global recovery was flagging.

Concerns that Europe’s debt crisis was flaring up again added to selling pressure. Sectors taking the hardest hit were those most closely linked to growth, including materials, energy and financials.

The S&P 500 is now down 3.4 percent from this year’s closing high, after falling 2.7 percent over the past two weeks.

“Everyone is looking for global growth, but the slowing in China and the rising yields in Europe are creating questions about how strong we might expect it to be,” said Brad Sorensen, director of market and sector analysis at Charles Schwab in Denver. “That’s leading to a correction here, with financials especially taking a hit.”

The S&P financial sector index fell 2.5 percent in Friday’s session and lost 2.8 percent for the week. Bank of America Corp dropped 5.3 percent to $8.68. Morgan Stanley slumped 5.2 percent to $17.28.

The cost of insuring Spanish debt against default hit 500 basis points for the first time on fears about the high exposure of the country’s banking sector to sovereign debt.

Data showed that China‘s economy expanded 8.1 percent in the first quarter, a rate that was slower than expected and the country’s weakest pace in nearly three years.

The Dow Jones industrial average tumbled 136.99 points, or 1.05 percent, to 12,849.59 at the close. The Standard & Poor’s 500 Index slid 17.31 points, or 1.25 percent, to 1,370.26. The Nasdaq Composite Index dropped 44.22 points, or 1.45 percent, to 3,011.33.

The S&P 500 is still up 9 percent so far in 2012, but fell 2 percent over the week. The Dow lost 1.6 percent for the week and the Nasdaq dropped 2.2 percent.

This week’s losses came on top of the slide in the previous week, which was cut short a day for the Good Friday holiday. In that week, the Dow dropped 1.1 percent, while the S&P 500 slipped 0.7 percent and the Nasdaq shed 0.4 percent.

For both the Dow industrials and the benchmark S&P 500, this was the worst two-week percentage drop since late November.

Weighing on the Nasdaq, Apple Inc dropped 2.8 percent to $605.23.

In the previous two sessions of back-to-back gains, the S&P 500 had added 2.1 percent as immediate concerns about rising yields in Spain and Italy ebbed and on bets that the Chinese GDP data would surprise on the upside.

Banks fell in Friday’s session despite earnings from JPMorgan Chase & Co and Wells Fargo & Co that beat Wall Street’s expectations. JPMorgan lost 3.6 percent to $43.21. Wells Fargo fell 3.5 percent to $32.84.

Google Inc slid 4.1 percent to $624.60 a day after reporting a second straight slip in search advertising rates, though it also posted a first-quarter profit that beat expectations.

With 6 percent of the S&P 500 components having reported results, three-fourths of companies have reported profits that topped expectations.

“So far, so good with earnings, but expectations have been low, and it’s far too early to tell what the season will be like as a whole,” said David Kelly, chief market strategist for JPMorgan Funds in New York. “It’s understandable people want to take profits right now, especially given how much we’re up this year.”

Materials and energy shares dropped as copper and oil prices fell after the Chinese data. The S&P materials sector index shed 1.1 percent and an S&P energy sector index lost 1.6 percent.

Adding to concerns, two U.S. reports on Friday sent mixed signals to the Federal Reserve about how much room there might be to bolster economic growth.

The U.S. Consumer Price Index rose modestly in March among signs that a surge in gasoline costs was ebbing, but inflation still outpaced workers’ earnings and threatened to undermine spending.

The Thomson Reuters/University of Michigan survey showed U.S. consumer sentiment slipping modestly in early April as higher gasoline prices hit household budgets even as optimism about the economic outlook lifted consumers’ expectations.

Almost three-fourths of stocks traded on both the New York Stock Exchange and Nasdaq closed lower. Volume was light, with about 6.07 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 7.84 billion.

(Editing by Jan Paschal)

(Reuters) – The trustee liquidating MF Global‘s brokerage will ask a bankruptcy court on Thursday to release $685 million to former MF Global customers, a plan already introduced in court filings that has been criticized as neglecting affiliates of the failed firm.

Trustee James Giddens is responsible for recovering as much money as possible for customers, but his plan stands to be criticized by Louis Freeh, the trustee managing the assets of MF Global’s parent company.

In March, Freeh said in a court filing that he supported the distribution, but felt it evidenced neglect of claims from MF Global affiliates in favor of those of public customers.

Freeh is responsible for recovering assets of MF Global’s corporate estate or to its creditors.

Commodities customers have received about 72 percent, or $3.9 billion, of the value of their accounts, while affiliate customers have not received any payback, according to Freeh.

The latest payout would raise recovery to about 80 percent for commodities customers who traded on U.S. exchanges. They would receive about $600 million. About $50 million would go to customers who traded on foreign exchanges, with $35 million left for certain customers holding physical items like gold bars.

Customer accounts were frozen when MF Global was forced into bankruptcy after revealing exposure to risky European debt. In a February report, Giddens said that MF Global had improperly used customer money to cover corporate transactions, creating a massive hole in client funds.

The size of that hole, which is uncertain, is a point of contention for Freeh. He demanded in court papers that Giddens do more to explain how he arrived at his estimate of a $1.6 billion shortfall when futures exchange CME Group Inc has ballparked the gap at not being higher than $600 million.

MF Global’s creditors’ committee, which includes JPMorgan Chase & Co and Bank of America Corp , piggybacked on Freeh’s attack in court papers last week, demanding more transparency as a condition for approving Giddens payout plan.

Giddens countered that neither Freeh nor the creditors have a stake in the issue, which pertains to public customer funds.

RELEASE OF CLAIMS

Also standing in Giddens’ way are objections from customers who have said the trustee’s distribution would unfairly require them to release potential legal claims against third parties and assign those claims to Giddens.

Customers in court filings said they were wary of parting with claims as a prerequisite to receiving money from Giddens, and that they had not hired him and were not personally obligated to him.

Giddens said the release applies only to claims related to money already repaid to customers and would serve to minimize duplication in the filing of legal claims.

The bankruptcy is In re MF Global Holdings Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 11-15059.

The brokerage liquidation is In re MF Global Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-2790.

(Reporting By Nick Brown)