NEW YORK – Stocks tumbled Friday, capping the biggest weekly drop since January, as criminal investigators took aim at Goldman Sachs Group Inc. and technology shares slid after MEMC Electronic Materials Inc. posted a loss.

The Standard & Poor’s 500 Index retreated 1.7 percent to 1,186.69, extending its weekly retreat to 2.5 percent. The Dow Jones Industrial Average plunged 158.71 points, or 1.4 percent, to 11,008.61 and lost 1.8 percent over the past five days, snapping an eight-week streak of gains, which was its longest rally since 2004.

The word criminal “sounds bad, gets everybody’s attention and is responsible for taking down financial companies,” said Jeffrey Davis, chief investment officer at Lee Munder Capital Group in Boston. “There’s concern that the government could accidentally hurt or kill companies, either Goldman or others. In Europe, there’s Barclays and it doesn’t surprise me that European businesses are feeling more pressures than the U.S. right now.”

The Goldman Sachs-led slump in financial shares overshadowed rallies in Sunoco Inc., D.R. Horton Inc. and others on better-than-estimated earnings and further evidence the U.S. recovery is holding firm. The economy grew at a 3.2 percent annual rate last quarter, compared with 3.3 percent forecast in a Bloomberg survey and 5.6 percent gain in the fourth quarter. Consumer spending rose 3.6 percent, the most in three years.

“The thing that is really important here is the personal consumption number,” said Mike Ryan, the New York-based head of wealth management research for the Americas at UBS Financial Services Inc. “This is going to be driven by a pickup in private demand. From now on, it will be important to see a consumer re-engagement given that the government won’t provide the same lift that we’ve had in 2009.”

The S&P 500 has surged 75 percent from a 12-year low in March 2009 as earnings returned to growth following a record nine-quarter slump and the Federal Reserve kept its benchmark interest rate at a record low to safeguard the recovery from recession.

Goldman Sachs tumbled 9.4 percent to $145.20 to extend its April decline to 15 percent, its worst month since October 2008. Bank of America Corp. cut its recommendation to “neutral” from “buy,” citing media reports indicating federal prosecutors are investigating the firm. Bank of America also slashed its price estimate on the shares to $160 from $220, according to a report dated today.

Prosecutors in New York are investigating transactions by Goldman Sachs after the Securities and Exchange Commission sued the firm two weeks ago on accusations of misleading investors in collateralized debt obligations. The federal review, which lawyers say is common in such a high-profile case, is being done by the U.S. attorney in Manhattan, said the people, who weren’t authorized to comment.

U.S. shares of Barclays Plc slumped 8.6 percent to $20.42. First-quarter investment banking revenue dropped more than estimated. Revenue at the Barclays Capital unit slumped 26 percent to $5.8 billion for the three months to March 31.

Financial shares in the S&P 500 slumped 2.5 percent for the biggest loss among 10 groups, nine of which fell. JPMorgan Chase & Co. slid 3.2 percent to $42.58 and Bank of America retreated 2.6 percent to $17.83.

MEMC plunged 19 percent to $12.97 for the biggest decline in the S&P 500 and the stock’s largest drop since July 2008.