Stocks fell on Friday on renewed concerns about the euro zone after the cost of insuring Spanish debt against default hit a new high.

Banks were the biggest losers. The S&P financial sector index <.GSPF> fell 1.7 percent despite earnings from JPMorgan Chase & Co and Wells Fargo & Co that beat Wall Street's expectations. [ID:nL2E8FD24F][ID:nL2E8FD2TN] JPMorgan shares slid 2.1 percent to $43.91 and Wells Fargo shares fell 2.2 percent to $33.27.

The cost of insuring Spanish debt against default hit 500 basis points for the first time on Friday as fears about the high exposure of the country's banking sector to sovereign debt drove the price of credit default swaps higher.

Data on Friday showed Spanish banks borrowed a record 316.3 billion euros from the European Central Bank in March and markets fear much of the funds have been placed in domestic sovereign debt.

We are seeing some really serious stuff in the European credit markets, said James Dailey, portfolio manager at the TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

The concern is now on global recession. The data out of China and our consumer sentiment data point to a recession, which the market has been in denial for awhile.

Data showed the annual rate of growth in China's gross domestic product slowed to 8.1 percent in the first quarter, the weakest pace in nearly three years, and below the consensus forecast of 8.3 percent. [ID:nL3E8FD8W2] That reading marked a drop from the fourth-quarter rate of 8.9 percent.

Data showed consumer sentiment slipping modestly in early April as higher gasoline prices hit household budgets even as optimism about the economic outlook lifted consumers' expectations, according to the Thomson Reuters/University of Michigan survey.

The Dow Jones industrial average <.DJI> was down 75.04 points, or 0.58 percent, at 12,911.54. The Standard & Poor's 500 Index <.SPX> was down 10.52 points, or 0.76 percent, at 1,377.05. The Nasdaq Composite Index <.IXIC> was down 32.35 points, or 1.06 percent, at 3,023.20.

Pressuring the Nasdaq, Apple Inc shares dropped 2.4 percent to $607.79.

The S&P 500 added 2.1 percent in the two previous sessions as immediate concerns about rising yields in Spain and Italy ebbed and on bets the Chinese GDP data would surprise on the upside.

Basic materials and energy shares also tumbled as copper and oil prices fell after the Chinese data. [ID:nL3E8FD23W] An S&P materials sector index <.GSPM> declined 0.6 percent and an S&P energy sector index <.GSPE> lost 1 percent.

Consumer prices rose modestly in March, boosting the view that the U.S. Federal Reserve has room to provide more support for the economy if needed.

(Reporting By Angela Moon; Editing by Jan Paschal)

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