New York  - US stocks closed lower Monday, trimming some of last week's gains ahead of a batch of quarterly earnings reports for US companies.

Alcoa Inc, which will start the quarterly round of earnings reports Tuesday night, fell 3.4 per cent. The stock decline ended five straight days of gains amid some small signs that the US economy may be on the road to recovery.

Banking shares slid after a prominent Wall Street analyst warned of more massive losses despite the government's efforts to stabilize the financial sector.

Mike Mayo, an analyst with Calyon Securities and former economist with Deutsche Bank AG, told business news channel CNBC that total industry losses related to the US mortgage crisis could exceed those of the Great Depression by the end of 2010.

Ford Motor Co was one of the few gainers on the day, surging 16 per cent after the US carmaker said it had cut its debts by 38 per cent in an effort to avoid seeking government aid to survive. Ford is alone among Detroit's Big Three carmakers in not having sought government bail-out money.

The blue-chip Dow Jones Industrial Average lost 41.74 points, or 0.52 per cent, to 7.975.85. The broader Standard & Poor's 500 Index was down 7.02 points, or 0.83 per cent, to 835.48. The technology- heavy Nasdaq Composite Index fell 15.16 points, or 0.93 per cent, to 1,606.71.

The US currency rose against the euro to 74.52 euro cents from 74.15 euro cents on Friday. The dollar climbed against the Japanese currency to 101.04 yen from 100.32 yen. dpa