US STOCKS-Dow, S&P slip on profit taking; Nasdaq inches up

* Banks stocks drag following news on stock offerings * SAP's comments on economy cushion Nasdaq * Dow down 1.4 pct, S&P off 1.6 pct, but Nasdaq up 0.1 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates to early afternoon, changes byline)

By Rodrigo Campos

NEW YORK, May 11 (Reuters) - U.S. stocks mostly fell on Monday, weighed by profit taking after a two-month climb and news of several banks' share offerings that cooled interest in the financial sector.

The Nasdaq was slightly higher as buying of big-cap software makers' shares offset profit-taking.

With government stress tests on big banks out of the way, and after a steep rise since from March lows, investors opted to take gains on financial issues, sending JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) down 5.7 percent to $36.71 and Bank of America Corp (BAC.N: Quote, Profile, Research) down 6 percent to $13.32.

U.S. Bancorp (USB.N: Quote, Profile, Research) lost 6.1 percent to $19.30, Capital One (COF.N: Quote, Profile, Research) fell 11.3 percent to $27.81, while BB&T Corp (BBT.N: Quote, Profile, Research) dropped 5.2 percent $24.97. The banks became the latest to seek additional capital by announcing stock offerings on Monday.

The KBW Bank index , up about 125 percent from its low set in early March, shed 4 percent as investors booked profits before the dilutive effects of the stock offerings. In comparison, the S&P 500 has risen nearly 35 percent from its March 9 closing low.

"Banks had an incredible, extraordinary run. Who wouldn't be taking profits, even if they were not issuing stock?" said Tom Alexander, head of Alexander Trading, in Savannah, Georgia.