Financial stocks lead Dow higher

Financial stocks lead Dow higher
AFP
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First Published: Wed, Apr 21 2010. 07 58 AM IST
Updated: Wed, Apr 21 2010. 07 58 AM IST
New York: US stock markets rose on Tuesday, as investors took profits on recent high earners and plunged cash into resurgent financial and energy stocks.
The Dow Jones Industrial Average was up 25.01 points (0.23%) to 11,117.06 points at the close. The tech-rich Nasdaq composite added 20.20 points (0.81%) to 2,500.31 and the broad-market Standard & Poor’s 500 index gained 9.65 points (0.81%) at 1,207.17.
Shares in Goldman Sachs fell over 2% after a strong rally on Monday and an early spike in response to a stellar first quarter earnings report.
The Wall Street giant reported a greater than expected $3.6 billion profit on Tuesday for the first quarter of the year, a gain that was overshadowed by legal problems.
Last week the US Securities and Exchange Commission filed a civil suit against Goldman, alleging it allowed a leading hedge fund to put together a product for investors, which the fund was at the same time betting against.
“The Goldman Sachs situation is still front-and-center, particularly with Goldman reporting much better-than-expected earnings this morning,” said Patrick O’Hare, of Briefing.com.
AIG’s stock was up 6.5% on news that it may pursue claims against Goldman for losses incurred in derivatives trades.
But Goldman’s SEC woes aside, investors appeared to be reassured by the firm’s earnings, transferring gains to other players in the sector.
Shares in Bank of America were up over one% to $18.61 a piece, after it posted a return to profit on Monday.
Following a boardroom shake-up and losses of more than $2 billion last year, the largest US bank’s return to the black provided a glimmer of hope that its crisis-inflicted funds could be on the mend.
That optimism was compounded when Citigroup on Monday said it had returned to profit after two years spent largely in the red, posting a profit of 4.4 billion dollars in the first quarter of this year.
Its stock was also up nearly 2%.
Stocks fell in many of the on-financial firms that have helped to boost market sentiment through solid earnings in recent days, as traders appeared to lock in gains.
Shares in IBM fell almost two%, a day after the US computer giant lifted its earnings outlook for the year on Monday after posting better-than-expected first quarter results on revived technology spending.
Shares in Coca-Cola slumped over 1.5% from highs seen ahead of its earnings announcement on Tuesday. The company said its net income rose 20% versus the same quarter a year ago, as sales in traditional markets in Europe and the United States continued to languish.
Energy stocks also rallied as the price of oil rose two dollars a barrel. Oil majors Exxon and Chevron saw their stock price rise 1.08% and 0.90% respectively.
The bond market was mixed. The yield of the 10-year Treasury bond rose to 3.799 from 3.797% on Monday and that of the 30-year bond fell to 4.673 from 4.694%. Bond yields and prices move in opposite directions.
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First Published: Wed, Apr 21 2010. 07 58 AM IST
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