"GE's miss has everybody spooked that earnings season may well be a disaster," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average gained 15.56 points to 12,340.98, with 17 of its 30 components trading higher.
Blue-chip losses were fronted by financials, with Bank of America Corp. , American Express Co. and Citigroup Inc. all down more than 2%.
The S&P 500 shed 2.2 points at 1,330.63, while the Nasdaq Composite was down 5.48 points to 2,284.76.
On the New York Mercantile Exchange, crude and gold futures both gained, with oil futures up 39 cents at $110.53 a barrel, while the spot month for gold gained $4.4 to $928 an ounce.
Ahead of the opening bell, U.S. stock futures trimmed their losses after the Commerce Department reported a slight rise in March retail sales, topping the flat expectations of analysts. .
In another sign of trouble in the embattled financial sector, Wachovia Corp. said it would raise $7 billion in capital and slash its dividend after posting a $350 million first-quarter loss. .
"Wachovia's not great news, but it certainly shouldn't catch us by surprise - we know what business they're in," said Hogan.
Shares of Circuit City Stores Inc. rose 32.6% after the consumer-electronics retailer said it is reviewing a take-out offer of at least $6 a share from Blockbuster Inc. . .
Blockbuster shares fell 11.5%.
Hogan likened the proposed merger as akin to "two drunks trying to hold each other up."
On Friday, Wall Street took its largest hit in three weeks after bellwether General Electric Co. surprised investors by reporting a 6% profit drop in the first quarter, and lowered its forecast for the rest of the year.
By Kate Gibson