Wall Street was lower in early afternoon trade on Thursday after Bank of America (NYSE: BAC; TYO: 8648) reported that profits were down by 32 percent in the third quarter.

While other banks have also produced disappointing third-quarter reports, Bank of America is seen as a predictor of the health of the US banking industry because it does business in widespread regions of the country.

The Dow Jones Industrial Average was 0.22 percent lower to 13,861.81, while the Nasdaq Composite dropped 0.35 percent to 2,782.82 and the S&P 500 was down 0.38 percent to 1,535.35.

Bank of America was $1.69 lower to $48.33 after its report.

Elsewhere in the sector, Citigroup (NYSE: C) fell 66 cents to $44. JPMorgan Chase (NYSE: JPM; TYO: 8634), which issued a better than anticipated report on Wednesday, was still down 66 cents to $45.71.

Wells Fargo (NYSE: WFC) dropped 80 cents to $33.49, while Wachovia (NYSE: WB) was 81 cents lower to $47.72.

Savings and loan Washington Mutual (NYSE: WM) was $2.83 lower to $30.24 after it issued a quarterly report showing profits down by 72 percent.

Sagging profits were not just a problem in the banking sector, however.

Candy maker Hershey Co. (NYSE: HSY) dropped $1.51 to $42.78 after it reported that profits were down 66 percent in the quarter on poor sales and higher promotional costs.

In the pharmaceuticals sector, meanwhile, Pfizer (NYSE: PFE) added 8 cents to $24.63 even though it reported that profits were down in its third quarter on lower sales and a charge to end investment in an inhaled form of insulin.

With earnings reports expected from 171 of the S&P 500’s listed companies this week, the New York equities markets were down at midday on Monday. The Dow Jones Industrial Average was down 0.1 percent to 11,331.52, while the Nasdaq Composite had dropped 0.5 percent to 2,331.13 and the S&P declined by 0.4 percent to 1,306.13.

In earnings news, Xerox reported profits down a disappointing 4.8 percent in the first quarter on slow sales. In response, its share fell 5.5 percent to $13.99. On the other hand, Caterpillar reported a much better than expected 48 percent rise in earnings, which sent shares up 1.6 percent to $79.12 early in the day. And, while American Express reported first quarter profits were up by 18 percent and it had added 1.5 million new cardholders, its shares still dropped 1.2 percent to $51.60.

So far this quarter, according to one analyst, 69 percent of companies reporting so far have had results above what had been predicted, while 19 percent have reported earnings at expected levels, and just 13 percent have come in below estimates.

Elsewhere, mergers and acquisitions were in the news as Washington Mutual said it had agreed to purchase Commercial Capital. The deal, worth $983 million, will give Washington Mutual more of a presence in the state of California. The news sent Commercial Capital’s shares up 10.7 percent to $15.67, but Washington Mutual dropped 1.6 percent to $44.31.