Profits at some of the United States' top investment banks have continued to fall as the economic slowdown causes business to dry up.

Goldman Sachs has reported a 17% fall in earnings for the three months period to the end of November, and Lehman Brothers has seen its profits slump 50% over the same quarter.

The news follows Wednesday's announcement by Morgan Stanley that its profits had fallen by 28% in the same period.

Earnings at the big banks have been hit by a slowdown in stock trading, and reluctance by firms to enter into mergers or acquisitions against a backdrop of recession.

Business received another setback after the 11 September attack on the World Trade Center.

Following the attack the US stock markets were closed for four days, and no firms floated on the market during September.

Goldman upbeat

Goldman Sachs reported profits of $497m, or 93 cents a share, for the three months to 30 November, against profits of $601m in the same quarter last year.

The figure was slightly better than expected, with analysts forecasting Goldman to earn about 90 cents a share.

Despite the drop, Goldman said it remained upbeat about its long-term outlook.

"Looking ahead, while we remain cautious about the near-term operating environment, we are confident in the strength of our franchise and the firm's longer-term growth prospects," chairman and chief executive Henry Paulson said in a statement.

In early trade on Wall Street Goldman's shares slipped 41 cents to $94.

The cost of terror

Lehman Brothers reported net income of $201m, or 73 cents a share, for the three months to 30 November.

The result was in line with analyst expectations but marked a big drop from the $399m profits it made in the same quarter last year.

The bank's focus on bond trading has prevented it from posting even worse figures.

Investors have looked on bonds as a safer option than shares in recent months, and Lehman's bond underwriting business saw a 31% increase in revenue.

Lehman's said it would be taking a $127m charge to pay for the costs of having to relocate from its nearby headquarters following the attack on the World Trade Center.

In early trade Lehman's shares were up 37 cents at $66.90.