Stocks Remain Weak; Banks, Tech Drag

Stocks were lower in midday trading amid disappointing economic news, with financials and technology leading the way.

Worries about Greece subsided somewhat amid expectations that an aid package could be unveiled this weekend.

The Dow fell almost 10 points, led by JPMorgan, Bank of America and Intel. The S&P 500 and Nasdaq were also trading lower.

Utilities and consumer staples were among the sector leaders, while financials, consumer discretionary and technology sectors were the weakest links.

The U.S. government said gross domestic product grew 3.2 percent, a shade under forecasts and well below the fourth-quarter growth of 5.6 percent.

The morning also brought some disappointing news on the consumer front: Consumer sentiment fellin late April, according to the latest Thomson Reuters/University of Michigan survey.

"The key here obviously is the return of the consumer. The economy is poised to continue to grow," said Peter Cardillo, chief economist at Avalon Partners in New York. Cardillo had been forecasting a 3.75 percent GDP number but said the gains are still evidence that the economy is unlikely to re-enter a recession.

In the latest news from Greece, a European Commission spokesman said discussions over a rescue plan are likely to wrap up Saturday. A complete fiscal overhaul is likely for the nation. At the same time, Moody's downgraded its ratings on nine Greek banks.

The dollar fellagainst the euro as expectations that Greece will soon receive emergency aid helped to quiet jitters about how Athens will pay its debts while gold hit a 2010 highabove $1,180 an ounce. Oil prices roseabove $85 a barrel, heading for a third straight monthly gain.

BP remains mired in cleaning up the massive oil spill on the Mississippi River, but investors were looking for bargains in the company's stock price, which has fallen roughly 12 percent since the disaster began. Analysts said the drop represents a buying opportunity.

Transocean , which operates the Gulf oil rig, fell almost 10 percent.

Goldman Sachs took another hit: Prosecutors are opening a criminal investigationinto trading at the banking giant.

The bank has denied any wrongdoing in the case of the Securities and Exchange Commission's charge with fraud over a debt instrument it sold to investors.

Most analysts still have a "buy" rating on Goldman but Bank of America/Merrill Lynch downgraded its rating on the stock to "neutral" from "buy" this morning, saying it's hard to see the stock making any progress until the matter is resolved.

And S&P slashed its rating on Goldman to "sell" from "hold."

Morgan Stanley was fined $14 million for failing to report a big-block oil trade and UBS Securities was fined $200,000 in the same case. Moore Capital was handed a fine of $25 million for attempting to manipulate palladium and platinum futures.

In earnings news, oil giant Chevroneasily beat forecastswith $2.27 a share versus expectations of $1.94, but fell short on revenue.

D.R. Horton shares jumped to lead the S&P 500 after the homebuilder reported a profit and a sharp increase in orders. Results have started to improve across the sector, with Meritage Homes and Ryland Group earlier in the week reporting improved bottom lines.

Other builders like Hovnanian and Beazer were also trading higher.

McAfee shares tumbled more than 10 percent to become one of the S&P 500 laggards after the software maker reported results that missed Wall Street projections.

Massey Energyfell almost 10 percent amidst criminal investigation over the death of 29 miners after an explosion at the company's West Virginia coal mine. The FBI is examining possible bribery of officials at the agency that oversees the mining industry and possible criminal negligence on the part of Massey.

In M&A news, UAL's United Airlines and Continental Airlines are likely to announce a merger Mondaythat would create the world's biggest airline.

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