By Corrie Driebusch And Saumya Vaishampayan 

Global stocks slumped and European bond yields touched fresh lows Friday, driven by a new round of jitters over Greek finances, a crackdown on stock-market borrowing in China and a flurry of subpar U.S. corporate earnings.

The Dow Jones Industrial Average recently was off 244 points, or 1.4%, at 17861. The Stoxx Europe 600 index was also 1.6% lower, mirroring declines in other major indexes across the continent.

Yields on 10-year German government bonds, known as bunds, hit a record low of 0.07%, as investors pulling cash out of stocks sought safety. Athens's main stock exchange fell almost 2.5%, taking declines so far this year to more than 11% and over the last 12 months to more than 41%, making it one of the world's worst-performing indexes.

Strategists said a lack of progress in negotiations between beleaguered Greece and its international creditors had substantially increased the risk of Greece defaulting on its debt and even exiting the euro.

"Obviously Greece is back in focus today, and there's a little bit of trepidation heading into the weekend," said R.J. Grant, associate director of equity trading KBW Inc., referring to concerns about the state of discussions between Greece and its international creditors.

Germany's DAX fell 2.6% and France's CAC 40 declined 1.6% as investors continued to worry about Greece's financial situation and the risk of a debt default.

On Friday, the yield on Greece's 10-year bonds was at 12.49%, close to a two-year high, while two-year yields were at 26.28%, close to their highest since being issued. Yields fall as bond prices rise.

An inverted yield curve, where shorter-term debt yields more than longer-dated bonds, signals investors foresee a very high risk of default.

"Athens will have to give in to its creditors demands" if it wants to avoid default, said Eirini Tsekeridou, a fixed-income research analyst at Swiss private bank Julius Baer, adding that only "real gamblers" currently would have any exposure to the country.

In the U.S., weakness in first-quarter U.S. corporate earnings also weighed on the market, traders said. The S&P 500 declined 22 points, or 1%, to 2083, and the Nasdaq Composite fell 74 points, or 1.5%, to 4934.

In earnings news, American Express Co. late Thursday said its results were hurt by the strong U.S. dollar, which reduced revenue booked in other countries. Chief Executive Kenneth Chenault reiterated the company's forecast that 2015 earnings will be flat to modestly down year over year. Shares fell 4.6%.

Advanced Micro Devices Inc. said its first-quarter loss widened as revenue slumped. The company said it was exiting its dense server systems business, effective immediately. Revenue and the loss excluding items missed expectations, pushing shares down 13%.

Also contributing to market weakness was ongoing concerns about the timing of an interest-rate increase by the U.S. central bank. The year-over-year core consumer-price index was better than expected, according to data released by the Labor Department on Friday.

"Everyone is so fixated on these inflation numbers because that is the last shoe to drop, so to speak," said James Liu, Global Market Strategist at J.P. Morgan Asset Management. The Federal Reserve, which widely is expected to begin raising short-term rates later this year, has said inflation and wage growth are among key data points it uses in deciding when interest rates should rise.

Investors had to contend with technical problems after Bloomberg's financial terminals went down globally Friday, resulting in disruption for traders who rely on the data machines to trade securities and causing the U.K. to postpone a scheduled multibillion buyback of government debt. By early afternoon in Europe, a Bloomberg spokesman said that services to most customers had been restored. Bloomberg is a competitor of Dow Jones and The Wall Street Journal on financial news.

In Asia, the Nikkei Stock Average lost 1.2% to 19652.88, on increased profit-taking and heightened concerns over forthcoming earnings results.

Exacerbating Friday's selloff in equities and ballooning risk-aversion were fears surrounding China, with the world's second-largest economy allowing fund managers to lend stocks for short selling to increase the supply of shares, the Securities Association of China said on its website on Friday.

The China Securities Regulatory Commission also said Friday that it has imposed sanctions to try to control margin finance. Buying stocks with borrowed money has been a major driver of China's stock-market run.

The Chinese stock market slumped over 5% in post-close trading, weighing on sentiment in Europe.

"Monday seems like a long way away at the moment, but there are fears that we could see a sharp selloff in Asia at the start of the week, which markets in Europe already appear to be anticipating," said Jeremy Batstone-Carr, chief economist at Charles Stanley in London.

The announcements late Friday by the China Securities Regulatory Commission, the Shanghai and Shenzhen stock exchanges and two industry associations raised fears of a selloff in China, where the main market has now doubled in the past 12 months and the riskiest index is up 70% this year.

A selloff in China could affect markets around the world, analysts said. "If China is down 5% it's going to weigh on global sentiment," said David Welch, head of equity distribution at brokerage firm Reorient.

Write to Corrie Driebusch at corrie.driebusch@wsj.com and Saumya Vaishampayan at saumya.vaishampayan@wsj.com

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