US stocks slipped back in a subdued session of trading on Monday, narrowly breaking a four-day winning streak after Bank of America said profit plunged in the first quarter and investors received a mixed batch of earnings from other leading corporations.

The second-largest US bank said profit dropped 77 per cent to $1.2bn, well below expectations, as more people missed credit card and home loan payments.

Bank of America shares, which have lost about 25 per cent in the past year, fell 2.5 per cent to $37.61.

For the most part, the equity market has remained stoical in the face of a series of poor earning reports from leading US financial institutions.

Last week, Citigroup, the biggest US bank, said it lost $5.1bn in the first-quarter while JPMorgan, the third-largest bank, said earnings halved but financials still ended the week 5.2 per cent ahead.

But on Monday, JPMorgan fell 1.2 per cent to $45.23 and Citigroup lost 0.3 per cent to $25.03. An index of financial stocks gave up 1.7 per cent.

The drive by financials to raise more capital looks set to continue this week.

National City, Ohio’s biggest bank, on Monday confirmed that it would raise $7bn from a consortium led by Corsair Capital after it posted a first-quarter loss.

The private equity group will buy shares at a significant discount to Friday’s closing price and the news, as well as a dividend cut, dragged the bank’s stock down 27.3 per cent to $6.06.

Colonial BancGroup shares fell, dropping 10.2 per cent to $8.91, after it cut its dividend by half and revealed plans to sell 25m shares to raise capital.

National City and Colonial BancGroup join financial institutions such as Citigroup and Wachovia that have been forced to shore up their balance sheets after subprime-related writedowns.

The benchmark S&P 500 pared its losses in the late afternoon, but closed down 0.2 per cent at 1,388.17. The Nasdaq Composite was 0.2 per cent higher at 2,408.04 while the Dow Jones Industrial Average ended the day 0.2 per cent lower at 12,825.02.

Amid the broad market sell-off, the energy and technology sectors continued their strong run of trading.

Microsoft and Apple made ground ahead of results due later in the week. Apple shares climbed 4.3 per cent to $168.16 while Microsoft shares added 1.4 per cent to $30.42.

Record high oil prices buoyed the energy sector. Hess was the leading gainer, adding 6.8 per cent to $112.41.

Coal miners also found momentum after Arch Coal said first-quarter profit more than doubled. Arch shares added 6.5 per cent to $62.18. Its peers, Peabody and Consol Energy, climbed 3.4 per cent to $68.93 and 2.1 per cent to $88.10, respectively.

Still, results from oil services companies Halliburton and Weatherford International left investors unimpressed.

Halliburton said first-quarter net profit increased 5.8 per cent while Weatherford’s earnings fell but shares in both underperformed. Halliburton edged up 0.1 per cent to $47.46 while Weatherford shares fell 1.3 per cent to $84.41.

Pharmaceuticals were in focus after two industry heavyweights reported first-quarter results. Eli Lilly said profit had more than doubled but it still missed analysts’ estimates because of a charge for dropping its inhaled insulin product. Lilly shares slipped 4.7 per cent to $49.60.

Meanwhile, Merck said quarterly profit gained 94 per cent, boosted by a $2.2bn payment from AstraZeneca for a partnership on blood pressure drugs and a treatment for Crohn’s disease. Merck shares fell 0.3 per cent to $39.63.

Quest Diagnostics was the leading gainer in the healthcare sector after it said net income jumped 32 per cent in the first quarter thanks to the acquisitions. Quest shares climbed 7.7 per cent to $49.12.

Toymakers Hasbro and Mattel also reported first-quarter earnings on Monday.

Hasbro said profits rose following strong sales of Transformers and Littlest Pet Shop products. Rival Mattel however, revealed its first loss in three years, blaming higher manufacturing costs in China and a slowdown in Barbie sales within the US.

Mattel shares sagged 8.2 per cent to $19.99 while Hasbro gained 10 per cent to $34.68.

This week, 155 S&P 500 companies and nine components of the Dow Jones Industrial Average, including American Express, McDonald’s and ConocoPhillips, report results.