US stocks ended mixed on Monday as the market kept some of its momentum from last week and was able to shake off a disappointing earnings report from Bank of America.

The Dow Jones Industrial Average closed down 24.34 points (0.19 percent) at 12 825.02, recouping most of its early losses of nearly 100 points.

The Nasdaq composite rose 5.07 points (0.21 percent) to 2408.04 and the broad-market Standard & Poor's 500 index finished lower by 2.16 points (0.16 percent) at 1388.17.

Analysts said the market was ripe for a pullback after the main indexes surged more than four percent in the past week, amid a growing sense that the worst of the credit crunch was over.

Traders moved to lock in some of those gains, and Bank of America's report accentuated the trend. The largest US bank by market worth said Monday that its profit fell a hefty 77 percent from a year ago, and offered a cautious outlook.

Yet BlackRock chief investment officer Bob Doll said the overall earnings picture is generally positive.

"On the earnings front, the first-quarter reporting season is now well underway, and despite some gloomy predictions to the contrary, the non-financial corporate sector has been holding up well, helped by the weak dollar, strong exports, share buybacks and a continued healthy manufacturing sector," he said.

"At present, we continue to believe that the long-term outlook for equities remains reasonably constructive."

Al Goldman, market strategist at Wachovia Securities, said he expected "some normal profit taking after last week's big advance" but was nonetheless optimistic.

"Investors feel the worst is behind us"

"The message of the market since the Bear Stearns debacle a month ago, and the subsequent further writedowns, losses and capital infusions by the big banks and brokers is that increasingly investors feel the worst is behind us, and they have begun to look to better times ahead," he said.

Fred Dickson at DA Davidson & Co. said he expects the market to hold in a trading range until investors become convinced an economic recovery is at hand.

"Investors appear to be looking 'beyond the valley' toward the potential for an economic recovery later this year," Dickson said.

"The economy should get some help from the Fed's interest rate cuts and the administration's $165-billion rebate program, but high and rising food and energy prices most likely will cut into the possibility of a big rebound in consumer spending later this year. These concerns raise the question in our mind as to how long and how deep the current economic chasm is."

Bank of America shares slumped 2.46 percent to 37.61 dollars after its earnings report.

Meanwhile National City Corp. tumbled 27.6 percent to 6.03 dollars after the ailing regional bank said it would get seven-billion dollars in fresh capital, by issuing new shares.

Elsewhere, Mattel skidded 8.2 percent to 20.00 dollars after the toy giant reported a quarterly loss of $46.6-million.

Bonds firmed. The yield on the 10-year US Treasury bond dipped to 3.712 percent from 3.743 percent Friday and that on the 30-year bond eased to 4.476 percent against 4.517 percent. Bond yields and prices move in opposite directions.

AFP