Against this backdrop, investors moved money into US government debt, pushing prices higher and yields lower.

World equities were already under pressure as Google tumbled 6.4 percent after reporting a 23 percent jump in quarterly revenue but missing analysts' "whisper number," the unpublished estimate that some analysts give clients.

The selling pressure on world stocks accelerated after Goldman Sachs was charged with fraud by the US Securities and Exchange Commission in the structuring and marketing of a debt product tied to subprime mortgages.

During mid-day trading in New York, the Dow Jones Industrial Average was down 132.25 points, or 1.19 percent, at 11,012.32, while the Standard & Poor's 500 Index was down 21.17 points, or 1.75 percent, at 1,190.50. The Nasdaq Composite Index was down 38.19 points, or 1.52 percent, at 2,477.50.

The MSCI's global equity index dipped 1.69 percent, moving in sympathy with US markets, though shares remained set for their seventh straight weekly gain. The pan-European FTSEurofirst 300 also was down 1.52 percent.

Overall, global shares edged off 16-month highs on Friday as persistent uncertainty over Greece's ability to pay its debts tempered optimism over the global economic recovery.

The euro remained pressured and Greek bond yields rose after Athens said it was preparing to activate an IMF/EU financial aid package.

The euro was down 0.64 percent at $1.3492 from a previous close of $1.3579.

In currencies, the dollar was up against a basket of major trading-partner currencies, with the US Dollar Index up 0.44 percent at 80.837 from a previous session close of 80.482.

Against the Japanese yen, the dollar was down 0.96 percent at 92.10 from a previous session close of 92.990.

The euro retreated against the dollar, snapping a five-day winning streak due to renewed worries over Greece's ability to service its sovereign debt.

In energy and commodities prices, US light sweet crude oil fell $2.52, or 2.95 percent, to $82.99 per barrel and the June Brent contract traded down $1.76 to $85.83 a barrel.

Spot gold prices fell $25.20, or 2.18 percent, to $1,132.70.