NEW YORK — Investors flinched today as the details emerged from Citigroup plans to turn over a big piece of itself to the government.

Stocks tumbled in the early going but pulled well off their lows after the Standard & Poor's 500 index broke through a closely watched November trading low and as the Dow Jones industrial average came within 34 points of breaching the 7,000 mark for the first time in more than 11 years.

Investors also were selling early in the day after the government's gross domestic product report showed that the economy shrank at a much faster pace than expected at the end of last year.

Bank stocks fell after Citigroup agreed to a deal in which the U.S. government and private investors including the government of Singapore and Saudi Arabian Prince Alwaleed Bin Talal will convert their preferred stock in the struggling bank to common shares. The plan won't require additional money from the U.S. government, which holds an 8 percent stake in Citigroup and would own 36 percent.

Some sort of deal with the government had been expected much of the week but the details surprised some investors. Citi tumbled 84 cents, or 34.2 percent, to $1.62 as investors worried about how much their holdings in the company would be diluted by the changes.