Bank of America's report that its first-quarter earnings fell 77 percent on write-downs and widening credit losses comes after a week in which big-name companies in general turned in better-than-expected numbers for the first quarter.

Wall Street has at times worried that a slowing economy and a potentially hesitant consumer would crimp profit-making - especially for the financial sector - in the first three months of the year. Shares of National City, dropped after the Midwest bank said it got a $7 billion cash infusion from equity investors, lowered its dividend and posted a $171 million loss for the first quarter.

Not all of the earnings news on Monday was poor. Merck said its profit nearly doubled in the first quarter because of a $1.4 billion distribution from a partner drug company and a slight rise in sales. Both Bank of America and Merck are among the 30 stocks that comprise the Dow Jones industrial average.

With little in the way of economic data scheduled to arrive this week, investors are looking at a big flow of corporate reports for insights into the well-being of the economy. At this point, investors remain cautious, but because they have already taken huge amounts of money out of stocks, the market appears stuck in a range - fluctuating back and forth as traders recoil at disappointing news but then take advantage of bargain prices.

"The percentage of cash on the sidelines as a percentage of market value is the highest it's ever been," said Richard E. Cripps, chief market strategist for Stifel Nicolaus. "We have an acute level of risk aversion by investors - understandably so."

In early afternoon trading, the Dow fell 69.61, or 0.54 percent, to 12,779.75.

Broader stock indicators were mixed. The Standard & Poor's 500 index fell 6.84, or 0.49 percent, to 1,383.49, and the Nasdaq composite index fell 5.10, or 0.21 percent, to 2,397.87.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.74 percent from 3.70 percent late Friday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 43 cents to $116.23 per barrel on the New York Mercantile Exchange, after jumping to a record $117.40 per barrel after a rocket struck a Japanese oil tanker near Yemen and as militants in Nigeria said they had attacked pipelines. An OPEC official said over the weekend that the group isn't likely to increase production also supported prices.

Bank of America said its profit totaled $1.21 billion, or 23 cents per share. Analysts had been expecting the company, which recently acquired mortgage lender Countrywide Financial, to report earnings of 41 cents per share, according to Thomson Financial. The stock fell 75 cents, or 2 percent, to $37.81.

National City shares tumbled $2.36, or 28 percent, to $5.97.

Merck fell 9 cents to $39.67 after reporting its quarterly results, while Eli Lilly and Co. fell $2.32, or 4.4 percent, to $49.75 after reporting that strong sales for Cymbalta and Cialis helped double the drug maker's first-quarter earnings. Earnings rose to $1.06 billion from $508.7 million a year earlier, when the company booked a big charge. Still, the results missed Wall Street's expectations.

Mattel Inc. said higher product costs and legal fees led the company to post a loss for the first quarter. The world's largest toymaker, which makes Barbie dolls, Fisher-Price toys and Matchbox cars, said it saw a loss of $46.6 million compared with earnings of $12 million a year earlier. The results fell short of what Wall Street had been expecting and the stock fell $2.02, or 9.3 percent, to $19.76.

Beyond corporate results, investors also weighed action by the Bank of England on Monday to ease tightness in the credit markets. The bank said it would enact a $100 billion plan that would allow banks to swap mortgage-backed securities for British Treasury bills.

Declining issues outnumbered advancers by about 5 to 3 on the New York Stock Exchange, where volume came to 597.6 million shares.

The Russell 2000 index of smaller companies fell 4.10, or 0.57 percent, to 716.97.

Overseas, Japan's Nikkei stock average slipped 0.13 percent. Britain's FTSE 100 fell 0.06 percent, Germany's DAX index declined 0.83 percent, and France's CAC-40 fell 1.03 percent.

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