Stocks fell more than 1 percent Friday as gloomy corporate news and a report showing anemic U.S. economic growth prompted investors to stay on the sidelines or pocket gains.

The blue-chip Dow Jones industrials fell 133.69 points, or 1.58 percent, to 8,306.35. The broad Standard & Poor's 500 index lost 12.62 points, or 1.38 percent, to 898.81. The technology-packed Nasdaq Composite index dropped 22.69 points, or 1.56 percent, to 1,434.54.

For the week, the Dow fell 0.38 percent, the Nasdaq gained 0.63 percent and the S&P 500 index advanced 0.59 percent.

"It's not so much a lot of sellers, rather a distinct lack of buyers," said Robert Basel, senior trader at Smith Barney. "GDP came in a bit weaker and the market had had a run in the past few weeks and was due for a pullback."

The government reported that U.S. GDP, the broadest measure of the economy's health, grew by an anemic 1.6 percent in the first three months of the year as the war in Iraq and severe winter weather took a toll on spending and investment.

That was faster than the 1.4 percent growth rate in the fourth quarter of last year, but it fell far short of the revival in growth some economists had been hoping to see. U.S. economists in a Reuters poll had expected a 2.3 percent rise in GDP.

"What we are going through now is a period of breathing," said Ed Hemmelgarn, president and chief investment officer of Shaker Investments, which oversees $800 million. "We have got to start getting the economy growing at a faster rate. Now it is not growing fast enough to produce jobs growth."

"We have come so far, so quick," said Ozan Akcin, chief market strategist at Ehrenkrantz King Nussbaum. "We do have some confidence returning to the market. Investors are paying attention to fundamentals like earnings, but I don't think the economic part of the fundamentals is going to change overnight."

This week marked the busiest period of the first-quarter earnings season, and many companies posted results that beat Wall Street's expectations. Others, however, missed estimates or warned of tough conditions ahead. The market has climbed since mid-March, but investors are still worried over the health of the U.S. economy.

AMR Corp. (AMR) surged 41 cents, or 10 percent, to $4.45 and ranked as the most-active share on the New York Stock Exchange. Flight attendants at its American Airlines unit said they have agreed to a revised concession deal aimed at helping stave off bankruptcy for the world's largest carrier.

Smith Barney downgraded the U.S. chip sector to "underweight" from "market weight" and lowered the sector for semiconductor equipment as well, saying weak demand for handsets and PCs would affect both groups.

Intel (INTC), the world's largest maker of computer chips and a Dow member, fell 67 cents, or 3.5 percent, to $18.28 and ranked No. 2 among Nasdaq's most-active issues. The Philadelphia Stock Exchange semiconductor index sank 4.99 percent.

R.J. Reynolds (RJR) fell $6.02 to $28.18 after it had a profit that beat expectations but slashed its earnings forecast for the year due to the tough U.S. cigarette market.

Altria Group Inc. (MO), parent of cigarette maker Philip Morris USA, skidded $1.89 to $31.01, or 5.7 percent, making it among the biggest losers in the blue-chip Dow.

Big decliners on the Dow included 3M Co. (MMM), down $2.82 at $122.90 after Banc of America Securities cut its rating to "neutral" from "buy," saying positives for the industrial conglomerate are reflected in its valuation.

GenVec Inc. (GNVC) surged 75 percent, or $1.15 to $2.68, after the biotech company said it received a U.S. government grant to develop a vaccine for SARS.

Dow stock Merck & Co. (MRK) fell $1.55 to $56.75. It said it will cease development of a drug for asthma and chronic obstructive pulmonary disease because of safety concerns.

Ford (F) tumbled 54 cents, or 5 percent, to $9.96, and General Motors, a Dow member, fell $1.04, or 2.8 percent, to $35.62. UBS Warburg cut its ratings on the world's two top car makers.

Amazon.com Inc. (AMZN) was a bright spot, rallying $3.85 to $28.97 after the Web retailer posted a narrower loss and a 28 percent jump in revenue and also raised its 2003 outlook.

About 1.33 billion shares traded on the New York Stock Exchange and 1.48 billion shares changed hands on Nasdaq.

The Russell 2000 index, the barometer of smaller company stocks, fell 3.77, or 1 percent, to 388.50.

Overseas, Japan's Nikkei stock average finished Friday down 2 percent. In Europe, France's CAC-40 lost 1.3 percent, Britain's FTSE 100 declined 0.7 percent and Germany's DAX index fell 1.9 percent.

Reuters and the Associated Press contributed to this report.