Stocks open lower after Goldman, Citi earnings
NEW YORK — Investors turned cautious Thursday after earnings reports from Goldman Sachs Group Inc. and Citigroup Inc. stirred worries about the troubles banks still face.
Stocks fell moderately in early trading after rallying Wednesday. Investors drew some comfort from a government report that the number of newly laid-off workers filing claims for unemployment insurance fell last week. A report on manufacturing in the New York region also topped expectations.
The economic readings couldn’t make up for disappointing profit reports, however. Optimism had grown about bank earnings after JPMorgan Morgan Chase & Co. set a high bar Wednesday with a strong profit that helped propel the Dow Jones industrials past the 10,000 mark for the first time in a year.
Goldman Sachs said it earned $3.19 billion, or $5.25 per share, in the third quarter, easily beating expectations on a sharp rise in trading profits. Revenue from Goldman’s core investment banking operations fell sharply from the previous quarter, however reflecting slow activity in dealmaking. Goldman also said it set aside about $5.35 billion for compensation and bonuses, more than a year ago.
Citigroup reported a slightly smaller loss per share than expected but said its credit losses remain high.
Tech firms Google Inc., IBM Corp. and Advanced Micro Devices are scheduled to report earnings after the market closes.
The reports Thursday brought reminders that the recovery will take time.
“Things are going in the right direction but the fundamental economic improvement is slow,” said Robert Dye, senior economist at PNC Financial Services Group. “The tendency is for the markets to get ahead of themselves and have to be rebalanced periodically.”
In early trading, the Dow fell 19.35, or 0.2 percent, to 9,996.51. The Standard & Poor’s 500 index fell 3.02, or 0.3 percent, to 1,089.00. The Nasdaq composite index fell 7.69, or 0.4 percent, to 2,164.64.
On Wednesday, the Dow jumped 144 points to close at 10,015 — its biggest gain since Aug. 21 and highest close since Oct. 3 last year. Broader stock indexes also rallied to 2009 highs.
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