Wall Street's top investment bank Goldman Sachs reported today that its fiscal first-quarter net income fell 53% on $2 billion in losses on residential mortgages, credit products and investments, marking an end to 10 straight quarters of higher year-over-year earnings.

Net income fell to $1.51 billion, or $3.23 a share, in the three months ended Feb. 29 from $3.2 billion, or $6.67, a year earlier

The fixed income business reported about $1 billion of losses on residential mortgages and securities, as well as a $1 billion loss on high-yield, or leveraged, loans. The firm's principal investments division posted a loss of $532 million, including the fall in the value of its investment in China's ICBC and $410 million from stakes in other companies and real estate. A year ago, the unit produced a $1.7 billion gain.

However, results still exceeded analyst expectations.

"Market conditions are clearly very difficult," said Chairman and Chief Executive Lloyd C. Blankfein. "But we saw strong customer activity across many of our franchise businesses in the first quarter. Although market conditions present many challenges at the moment, they also offer considerable opportunities."

Lehman Brothers reported a 57% fall in fiscal first-quarter net income amid weakness in its fixed-income business, but it also met analysts' expectations.

First-quarter net income declined to $489 million, or 81 cents a share, from $1.15 billion, or $1.96, a year earlier, the New York-based firm said in statement today.

A $1.8 billion writedown resulted from a slump in the mortgage market. The reduction in asset valuation pushed fixed-income revenue 88 percent lower, to $262 million.

Chairman and Chief Executive Officer Richard S. Fuld Jr. said, "our results reflect the value of our continued commitment to building a diversified platform and our focus on managing risk and maintaining a strong capital and liquidity position."