Updated from 3:32 p.m. ESTThe first quarter isn't living up to expectations for battered Wall Street investment banks and brokerages. After falling sharply since early January, securities-industry stocks were down again Tuesday on concerns a recovery will take longer than investors had hoped. Underwriting and trading businesses have slowed in recent months from already weak fourth-quarter levels, analysts said. In the meantime, worries about corporate-credit quality are growing as the Enron story continues to unfold, raising concerns about banks' and brokerages' exposure to bad debt. Data on the fiscal first quarter that ended February show mergers and acquisitions and debt deals so far have declined vs. the November-ended quarter, and could continue to fall in coming months. Trading volumes, meanwhile, are flat vs. the fourth quarter and down vs. the year-ago period. Equity underwriting has been the one positive for the group so far, but it's up only after a dismal fourth quarter. Despite declining since early January, sector stocks may have more room to fall, analysts said. "It's hard to predict these businesses three to six months out," said James Mitchell, an analyst with Putnam Lovell Securities. "The economy is expected to pick up in the second half, but capital markets may take longer to recover." The American Stock Exchange Broker/Dealer Index has fallen 17% since Jan. 4 and was down 4% Tuesday. Individual stocks were down across the board. Goldman Sachs ( GS) fell 5.2% to $78.45, Lehman Brothers ( LEH) fell 4.4% to $55.43, Morgan Stanley Dean Witter ( MWD) fell 2.8% to $47.04, Merrill Lynch ( MER) fell 3.7% to $46.50 and Bear Stearns ( BSC) dropped 4.3% to $53.87. Larger banks like J.P. Morgan Chase ( JPM) and Citigroup ( C) also fell, losing 3.4% to $29.03 and 4.3% to $42.22, respectively.