Stocks came off their lows but still logged a weekly decline, with the S&P and Nasdaq snapping a 5-week winning streak, following stalled debt talks in Greece, some disappointing economic reports and after S&P downgraded a handful of Italian banks.

The Dow Jones Industrial Average slumped 89.23, or 0.69 percent, to close at 12,801.23, led by DuPont and Alcoa . The blue-chip index logged its worst trading session since the beginning of the year.

The S&P 500 fell 9.31, or 0.69 percent, to end at 1,342.64. The Nasdaq slipped 23.35, or 0.80 percent to close at 2,903. Both the S&P and Nasdaq broke their 5-week winning streaks.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, closed above 20 for the first time since January.

For the week, the Dow slid 0.47 percent, the S&P erased 0.17 percent, and the Nasdaq lost 0.06 percent. For the week, Alcoa was the biggest decliner on the Dow, while Disney rose.

Among the key S&P sectors, materials were the biggest loser for the week, while techs gained.

“It’s difficult to be long this weekend…you’re gambling if you wish to be long going into the weekend,” said Todd Schoenberger, managing director at LandColt Trading. “You have all the chaos in Greece, which doesn’t help matters.”

Euro zone finance ministers said the debt-ridden nation will need to make further cutsin order to be granted bailout funds. Meanwhile, Greek workers went on strike, protesting against the austerity measures. (Read More: Portugal Could Follow Greece)

Meanwhile, Greece's Deputy Foreign Minister Marilisa Xenogiannakopoulou, a member of the socialist party, resigned in protest against the tough bailout terms, according to the state television.

In the latest round of disappointment from the euro zone, ratings agency S&P downgraded 34 of 37 Italian banks, including banking giant UniCredit, citing worries over the industry and economic risks in the country.

The move comes after the ratings agency's downgrade of Italy's sovereign rating in January to BBB+, along with downgrades of nine other euro zone countries.