NEW YORK (AP) - Stocks finished a quiet session moderately lower yesterday as investors grappled with concerns about the health of corporate profits after Wachovia Corp. posted disappointing quarterly results.

Investors appeared to be pausing following a sell-off on Friday and ahead of a raft of quarterly results and economic data arriving this week.

Wachovia surprised investors by posting a first-quarter loss of $393 million and cut its quarterly dividend by 41 percent to 37.5 cents. The bank, which analysts had expected to post a profit, also said it plans to raise $7 billion through a stock offering.

But investors appeared to find some encouragement in the session from a better-than-expected report on retail sales. The Commerce Department's reading on March retail sales, which showed a modest 0.2 percent rise following February's 0.6 percent decline, appeared to quell some unease about the economy. The March figure bested the flat reading analysts had predicted. Excluding a 1.1 percent rise at gasoline service stations, retail sales would have been flat last month - and possibly negative when adjusted for inflation.

"We obviously came out with more bad financial news," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, referring to the Wachovia report. "The flip side is we had retail sales come in a little better than expected. It seems like they kind of negated each other."

According to preliminary calculations, the Dow Jones industrial average fell 23.36, or 0.19 percent, to 12,302.06.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 4.51, or 0.34 percent, to 1,328.32, and the technology-laden Nasdaq composite index fell 14.42, or 0.63 percent, to 2,275.82.

Declining issues outpaced advancers by about three-to-two on the New York Stock Exchange, where volume came to 1.18 billion shares compared with 1.26 billion shares traded on Friday.

Bond prices edged lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.5 percent from 3.48 percent late on Friday.

Light, sweet crude rose $1.62 to settle at a record $111.76 per barrel as the dollar fell, helping drive prices higher.

Gold prices turned higher, and the dollar was mixed against other major currencies.

Investors sold off shares of financials, led by Wachovia, which fell $2.26, or eight percent, to $25.55. Citigroup Inc., which is due to report its quarterly results Friday, fell 85 cents, or 3.6 percent, to $22.51.

MR. Detrick noted that the Wachovia news compounded investors' concerns about the banking sector following a report on Friday from General Electric Co (GE). GE, seen as a bellwether of big business, said its financial services business was challenged in the first quarter by the slowing US economy and difficult capital markets. The conglomerate's disappointing first-quarter sent the major indexes down by more than two percent on Friday.

"This is just more bad news for financials. It just confirms that the financials are by no means out of the woods yet," Mr. Detrick said of Wachovia.

He contends many investors are holding off any major moves ahead of corporate results and economic figures on inflation due later in the week.

"Today just seems like just a break from the massive selling we saw Friday. We want more confirmation from companies reporting earnings this week if indeed earnings are going to weak or if the first inning was just a bad start to the game," he said in reference to the early first-quarter results.

In dealmaking news, Blockbuster Inc. said it is taking an unsolicited $1 billion-plus bid for Circuit City Stores Inc. directly to shareholders. Blockbuster said the consumer electronics chain has dragged out a deal that has been under negotiations for months. Circuit City jumped $1.07, or 27 percent, to $4.97, while Blockbuster fell 32 cents, or 10 percent, to $2.81.

Meanwhile, Northwest Airlines Corp. pilots have threatened to oppose a combination with Delta Air Lines Inc., but officials were nonetheless mobilising to announce a deal to create the world's biggest airline as early as today - provided the boards of the two companies give final approval to the deal, people familiar with the talks said Sunday. Northwest rose 26 cents to $11.22, while Delta advanced 47 cents, or 4.7 percent, to $10.48.

And in a sign that the slumping US economy is hurting companies overseas, Royal Philips Electronics reported a sharp drop in first-quarter profits as a decrease in television sales in North America offset growth in its health care and lighting industries.

The Russell 2000 index of smaller companies fell 2.09, or 0.3 percent, to 686.07.

Overseas, Japan's Nikkei stock average fell 3.05 percent. Britain's FTSE 100 closed down 1.08 percent, Germany's DAX index fell 0.74 percent, and France's CAC-40 fell 0.66 percent.