All 10 S&P sectors were negative and the S&P 500 energy, financials and materials sectors were each down about 1 percent. The CBOE Volatility index, often referred to as Wall Street's fear index, jumped 11 percent, its biggest percentage gain in three months.

Investors have anxiously awaited a bailout package for Greece so the country might avoid a messy debt default but complications have tied up talks for weeks.

An agreement finally came this week but it was dealt a blow as workers in Greece went on strike to oppose fiscal reform measures requested by the European Union and International Monetary Fund. Greek Finance Minister Evangelos Venizelos said the nation needs to reach a decision within days on accepting the terms of a bailout.

It's all about the Greeks, said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital Markets, Baltimore. But, he said, the market's had a tremendous run, and it's not unusual for us to have a cooling off period.

Some analysts said they saw Friday's decline as just a pause in an overall higher trend.

Technically, we're firing on all cylinders, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

This market move in the short run is likely to play out to the April-May period. On the S&P, I think odds are extremely high we'll take out the 1,370 high, which we hit in May of 2011, and if the market continues on... it would not surprise me to (see) 1,425 or 1,450 in the first half of this year.

Even with the day's decline, the S&P 500 is up 6.7 percent since the start of the year and remains at seven-month highs.

The Dow Jones industrial average was down 109.17 points, or 0.85 percent, at 12,781.29. The Standard & Poor's 500 Index was down 9.42 points, or 0.70 percent, at 1,342.53. The Nasdaq Composite Index was down 18.37 points, or 0.63 percent, at 2,908.86.

If stocks end lower, the S&P 500 would break a five-week winning streak. The day's declines also put the S&P 500 on track to end a three-day streak of gains.

U.S. consumer sentiment data also weighed on the market. The Thomson Reuters/University of Michigan overall index of consumer sentiment fell to 72.5 in early February from January's 75.0, which was the highest level since February 2011.

Zaro said 80 percent of New York Stock Exchange stocks were trading above their 200-day moving average, a sign of overbought conditions.

Among financials, shares of JPMorgan Chase & Co slipped 0.9 percent to $37.52 while manufacturer Caterpillar , down 1.3 percent at $111.33, was the biggest drag on the Dow.

On the Nasdaq, Expedia fell 2.1 percent to $33.44, a day after delivering disappointing results.