Stocks trade mixed on Goldman concerns, stronger Citigroup profit; Leading indicators jump

Stocks trade mixed after Goldman, Citigroup news

NEW YORK — The stock market pulled off its lows Monday after investors set aside some of their concerns about the government’s case against Goldman Sachs.

Analysts said reports that the Securities and Exchange Commission voted 3-2 along party lines to press its case against Goldman Sachs eased some of investors’ worries about the case. The SEC announced civil fraud charges against Goldman Sachs on Friday, and investors seemed placated by the fact the vote wasn’t unanimous.

The Dow Jones industrials rose about 55 points in late afternoon trading, boosted in part by a rebound in Goldman Sachs shares. Broader indexes fell modestly.

Investors are concerned about potential repercussions tied to the charges against Goldman. The suit comes just as Congress is taking up a bill to overhaul regulation of the financial industry. The measures could extend to the types of risky securities at the center of the Goldman case.

“Is financial reform going to be a big setback for financial company earnings?” said Colleen Supran, a portfolio manager at Bingham, Osborn & Scarborough in San Francisco. “And what is that going to mean for overall earnings for, say, the S&P, which is what we really care about.”

Meanwhile, airline stocks fell after most European airports remained closed for a fifth day following the spread of ash from a volcano in Iceland. Analysts estimated that airline losses topped $1 billion.

American Airlines parent AMR Corp. and United parent UAL Corp. each lost about 5 percent.

The market drew support from a jump in the Conference Board’s index of leading economic indicators. The report signals that economic activity will strengthen in the next three to six months. The Conference Board’s leading indicators index rose to 1.4 percent for March. Economists had predicted growth of 0.9 percent.

“It’s just giving you more indication that the road to recovery is not as tenuous as you might have thought,” said Brett Hryb, portfolio manager with MFC Global Investment Management in Toronto, referring to the leading indicators report.

World markets fell after China said over the weekend that it would take more steps to curb real estate prices, which have been rising sharply. The government is concerned about speculative bubbles in its fast-growing economy. China has already increased the minimum amount of money banks must hold to slow down lending. The concern is that the measures will hurt the country’s economy and a global recovery.

In the final hour of trading, the Dow rose 55.55, or 0.5 percent, to 11,074.21. The Standard & Poor’s 500 index rose 1.93, or 0.2 percent, to 1,194.06, while the Nasdaq composite index fell 7.18, or 0.3 percent, to 2,474.08.

Three stocks fell for every two that rose on the New York Stock Exchange, where volume came to 938.5 million shares compared with 1.3 billion shares traded at the same point Friday.

Bond prices slipped, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.81 percent from 3.77 percent compared with late Friday.

The dollar rose against other major currencies. Gold fell.

Crude oil fell $1.79 to $81.45 per barrel on the New York Mercantile Exchange.

Stocks dropped Friday after the SEC announced the charges against Goldman. The Dow ended with a loss of 125 points but was down as much as 170 points during trading. It closed above 11,000 last week for the first time in 18 months.

Goldman shares rose after falling for much of trading. The stock rose $1.81, or 1.1 percent, to $162.51 after tumbling 12.8 percent Friday.

Citigroup, among the hardest hit by the credit crisis, followed JPMorgan Chase & Co. and Bank of America Corp., said its profit improved because of strong investment banking operations. Citi also said its losses from failed loans fell slightly from the previous quarter, but executives remain cautious about a recovery. Citi rose 26 cents, or 5.6 percent, to $4.82.

Other big companies will report this week. International Business Machines Corp. is expected to post results after the closing bell. Apple Inc., Coca-Cola Co., Delta Air Lines Inc. and Goldman Sachs are slated to report earnings on Tuesday.

UAL fell 75 cents, or 3.3 percent, to $22.08, while AMR Corp.’s American Airlines fell 32 cents, or 3.3 percent, to $8.47.

The Russell 2000 index of smaller companies fell 4.45, or 0.6 percent, to 710.17.

Britain’s FTSE 100 fell 0.3 percent, Germany’s DAX index fell 0.3 percent, and France’s CAC-40 fell 0.4 percent. Hong Kong’s Hang Seng fell 2.1 percent and Japan’s Nikkei stock average tumbled 1.7 percent.