A day after Dow breaches 10,000, stock wander as earnings from Goldman, Citigroup disappoint

Stocks waver as Goldman, Citi earnings disappoint

NEW YORK — Investors held off making big moves after earnings reports from Goldman Sachs Group Inc. and Citigroup Inc. brought reminders of the troubles banks still face.

Stocks zigzagged Thursday afternoon, a day after major indexes vaulted to their highest levels in a year on strong profit reports from JPMorgan Chase & Co. and Intel Corp. The Dow Jones industrials wavered around the 10,000 level, having pierced through the psychological barrier the day before for the first time since last October.

A jump in oil lifted energy stocks, which buffered some of losses in financial stocks.

JPMorgan helped set a high bar for bank earnings, and investors didn’t like as much what they heard from rivals Goldman Sachs and Citigroup. Goldman’s net income of $3.19 billion beat expectations on strong trading profits, but its stock fell on disappointment over a sharp fall in investment banking revenues. Citigroup reported a slightly smaller loss per share than expected but said credit losses remain high.

Investors drew some comfort from government reports that new unemployment claims fell more than expected last week and that manufacturing activity in the New York region has improved.

“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.”

The day’s moves were modest, and traders weren’t alarmed to see some consolidation the day after such a strong rally. Major stock indexes have rocketed off of 12-year lows in March but remain well below the highs of two years ago.

Seeing the Dow Jones industrials at five digits for the first time in a year could spook some traders who worry that stocks have been too quick to rebound. Others say that skepticism is a signal that the market will continue to defy expectations and advance.

Analysts expect corporate earnings reports will shape trading for the next several weeks. Google Inc., IBM Corp. and chip maker Advanced Micro Devices are slated to report results after the closing bell.

With big numbers from technology companies imminent, traders didn’t make big moves.

In late afternoon trading, the Dow rose 4.69, or 0.1 percent, to 10,020.55. The Standard & Poor’s 500 index rose 0.35, or less than 0.1 percent, to 1,092.37. The Nasdaq composite index fell 4.26, or 0.2 percent, to 2,167.97.

Falling stocks narrowly outpaced those that rose on the New York Stock Exchange, where volume came to 928.8 million shares compared with 915.2 million shares traded at the same point Wednesday.

On Wednesday, the Dow jumped 144 points to close at 10,015 — its highest close since Oct. 3 last year. Since March, the Dow has jumped 53 percent, while the S&P 500 index is up 61.4 percent and the Nasdaq is up 71.2 percent.

Crude oil rose $2.40 to settle at $77.58 a barrel on the New York Mercantile Exchange after refiners that make gasoline and other fuels cut back on production last week, according to a government report.

The Labor Department said the number of newly laid-off workers filing claims for unemployment insurance fell to its lowest level since January. First-time claims for jobless benefits dropped to 514,000, better than the 525,000 economists were expecting, according to Thomson Reuters.

The main index from New York Federal Reserve’s Empire State Manufacturing Survey rose 16 points in October to 34.6, its highest level in five years.

Investors scoured earnings reports for indications about revenue. Traders want to see companies grow their profits through sales and not just cost-cutting. Of the companies in the S&P 500 index that have posted results for the July-September quarter, 62 percent have reported revenue that topped analysts expectations, according to S&P.

Andrew Neale, partner and portfolio manager at Fogel Neale Partners in New York, said some investors are on edge about Goldman’s report because drop in some revenue measures are raising concerns about how the company will generate higher profits.

“A lot of people think that this could be a high-water mark in terms of trading revenue,” he said.

Goldman fell $4.53, or 2.4 percent, to $187.75, while Citigroup lost 29 cents, or 5.9 percent, to $4.71.

Financials have led the market’s seven-month rally after getting pounded in late 2008 and early this year so some modest retreats aren’t alarming traders. Goldman has jumped 192 percent since March, while Citi has surged 363 percent.

Technology stocks slipped after mobile phone maker Nokia Corp. reported a third-quarter loss as sales fell. Shares of the Finnish company fell $1.72, or 11.2 percent, to $13.67.

Energy stocks rose as oil jumped. Oil refiner Tesoro Corp. rose $1.06, or 7.3 percent, to $15.64.

Bond prices slipped as the economic reports signaled improvement in the economy. The yield on the benchmark 10-year Treasury note rose to 3.47 percent from 3.42 percent late Wednesday.

The Russell 2000 index of smaller companies fell 1.18, or 0.2 percent, to 622.81.

Overseas, Britain’s FTSE 100 fell 0.6 percent, Germany’s DAX index lost 0.4 percent, and France’s CAC-40 rose less than 0.1 percent. Japan’s Nikkei stock average jumped 1.8 percent.