Goldman Sachs, Citi surprise markets with good profits

Goldman Sachs Group posted third-quarter earnings that more than tripled and Citigroup surprised investors by reporting a profit, adding to signs that lenders have shaken off the effects of recession.

Goldman's profit jumped to US$3.19 billion, helped by trading and investments on its own account. It will hand out up to US$23 billion, or US$630,000 per employee, in year-end bonuses.

Citigroup, which is 34 per cent owned by the US government, reported a profit of US$101 million, against expectations of a loss. It reported US$8 billion of credit losses.

Shares of Goldman fell 2 per cent to US$188.36 and Citigroup dropped 5.8 per cent to US$4.71 as the results disappointed some investors hoping for the same surge in profits managed by JPMorgan Chase this week. Lenders were among the biggest decliners on Wall Street.

The Dow Jones Industrial Average edged up 0.2 per cent to 10,030.37, having climbed above 10,000 for the first time in a year the previous day. The Standard & Poor's 500 rose 0.1 per cent to 1093.50. The Nasdaq Composite dropped 0.1 per cent to 2169.78.

Bank of America declined 3.2 per cent to US$18 and JPMorgan fell 0.3 per cent to US$47.04.

Technology shares fell after Nokia Oyj, the world's biggest maker of mobile handsets, posted as loss, sending its US depository receipts lower. The receipts tumbled 11 per cent to US$13.69. Motorola fell 3.8 per cent to US$8.09.

Chevron climbed 1.8 per cent to US$76.83 and Exxon Mobil gained 1.4 per cent to US$72.87 as the price of oil advanced.

Consumer prices rose 0.2 per cent last month, slowing from a 0.4 per cent pace in August, according to the Labor Department. That stokes the case for those Federal Reserve policymakers who have argued to keep interest rates near zero.

Americans filing for unemployment benefits for the first time fell to a nine-month low, a sign that companies are shedding fewer jobs.Applications for benefits fell by 10,000 to a lower-than-expected 514,000 last week, according to the Labor Department.

Crude oil rose to the highest level in a year after US Energy Department figures showed petrol stockpiles declined, reflecting maintenance at refineries.Inventories of petrol dropped by 5.23 million barrels last week, the biggest decline since September last year.

Gold recorded the biggest decline in three weeks, declining from a record as the US dollar strengthened, trimming demand for the precious metal as an alternative investment.

Gold futures for December delivery fell 1.3 per cent to US$1,050.60 an ounce in New York.

European stocks were mixed. The Dow Jones Stoxx 600 Index edged up 0.1 per cent to 247.28. Retailer J Sainsbury Plc surged 10 per cent after Royal Bank of Scotland analysts said it may be subject to a takeover offer from its largest shareholder, Qatar.

Swatch Group climbed 6.8 per cent after the watchmaker's Chinese partner forecast increased demand. Nokia slumped 11 per cent after posting a loss.

Among national benchmarks, the U.K.'s FTSE 100 fell 0.6 per cent to 5222.95, Germany's DAX 30 dropped 0.4 per cent to 5830.77 and France's CAC 40 was little changed at 3883.83.

-BUSINESSWIRE