US stocks closed out a miserable week with steep losses Friday as worries about growth in the United States, China and Europe eclipsed a solid start to the corporate earnings season.
All three main stock indices lost more than 1.0 percent Friday, snapping a two-day rally as investors fretted about Spain's rocky finances amid spiking borrowing costs.
The Dow Jones Industrial Average finished at 12,849.59 points, down 1.61 percent on the week.
The Standard & Poor's 500 index, a broad measure of the markets, shed 2.0 percent for the week at 1,370.26.
That was its biggest weekly decline so far this year "as European sovereign debt fears and disappointing US data weighed," Briefing.com analysts said.
The tech-rich Nasdaq tumbled 2.25 percent over the week, landing at 3,011.33.
"Looks like the steam has run out of Wall Street's sail," said Karee Venema at Schaeffer's Investment Research.
According to the company, "the last three Friday the 13ths have been down days" and Friday's action made it four in a row.
Official data revealed Friday that borrowing by Spanish banks from the European Central Bank hit a new record high in March as they snapped up emergency cheap loans.
The figures from Spain's central bank were a sign of weak confidence in Spain's troubled financial sector, with commercial banks turning to the ECB because they are struggling to borrow on interbank lending markets.
"Worries about Spain have replaced worries about Greece," said Paul Ausick at 24/7WallSt.com.
Investors fear Spain will become the next eurozone country to need an international bailout after Greece, Ireland and Portugal.
News that China's emerging economy grew at its slowest pace in almost three years in the first quarter also frayed nerves.
China said Friday its economy grew by 8.1 percent in the January-March period, well below the 8.9 percent annual rate in the last quarter of 2011.
IHS Global Insight analysts said they still believed that China will achieve a "soft landing" as it tries to control inflation.
"Nevertheless, the risk of a sharper slowdown has increased with this report," Paul Edelstein and Nigel Gault said in a research report.
"The primary channel linking the US and Chinese economies is our export sector. From that standpoint, slower Chinese growth poses a real, but limited risk to the US economy."
The health of the US economy looked murkier than it had for some time after a weak March jobs report, released when markets were closed Friday, cast a pall over trading this week.
In corporate news, Dow member Alcoa unveiled a surprise first-quarter profit Tuesday, setting an upbeat tone at the start of the quarterly earnings season.
Internet giant Google delivered what investors were searching for Thursday -- better-than-expected soaring profits -- and announced a stock split that keeps founders Larry Page and Sergey Brin in command.
Before the market opened Friday, it was the turn of two big banks to launch financial earnings. Both Wall Street behemoth JPMorgan Chase and Wells Fargo reported results that topped market expectations.
Citigroup is next, reporting Monday, heading up a week packed with heavyweights: Goldman Sachs on Tuesday, and Bank of America and Morgan Stanley on Friday.
The economic calendar brings March retail sales Monday, offering a look at how much strength the vaunted American consumer sees in the economy.
Investors will have March data on the depressed housing market, with housing starts and building permits on Tuesday, and existing-home sales on Friday.
Manufacturing will be in focus Tuesday, with industrial production numbers for March.