Stocks closed the week sharply lower, with the S&P 500 and the Dow Jones Industrial Average posting their worst Thanksgiving week decline since the Great Depression. 

The Dow Jones Industrial Average erased their gains to finish lower, led by H-P and Chevron.

The S&P 500 and the Nasdaq also ended lower, logging a seventh consecutive decline. Some traders are watching for 1,150 on the S&P as the next key level.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended above 34.

“Again, we're trading on very thin volume—You're going to have continued downward pressure over the next 30 days,” said Todd Schoenberger, managing director at LandColt Trading. “It's very difficult to be long this market because you have so many issues—there's more potential for negative headlines than positive ones.”

In Europe, S&P downgraded Belgium one notch to AA from AA-plus, further underscoring worries over the euro zone debt contagion.

Earlier, EU officials said euro zone member states were discussing dropping private sector involvement from the permanent bailout mechanism.

Among key S&P sectors, consumer staples and utilities led the gainers, while energy and techs lagged.