With upbeat earnings continuing as the first-quarter reporting season unfolds, will the civil fraud charges against Goldman Sachs Group Inc. fade as a market concern?
On Tuesday morning, the answer appeared to be yes, with global stock market indexes moving higher a day after North American stocks rebounded from earlier losses. U.S. stock index futures were higher with about 45 minutes before markets open, suggesting that stocks will rise at the start of trading. Futures for the Dow Jones industrial average were up 25 points or 0.2 per cent. Futures for the broader S&P 500 were up 4 points or 0.3 per cent.
Goldman Sachs, which was on the receiving end of civil fraud charges launched by the U.S. Securities and Exchange Commission, certainly helped alleviate some tension after it reported very strong first quarter results before the opening bell. The financial firm reported a profit of $3.4-billion (U.S.), or $5.59 a share, up 91 per cent over last year and handily beating analysts' estimates.
These results fall into a recent pattern, where U.S. financial firms -- including Citigroup Inc. and Bank of America Corp. have reported upbeat results, even as investors grow concerned about wider SEC investigations and tighter regulations.
In other earnings news, Coca-Cola Co. reported a 20 per cent jump in its first quarter earnings. The soft-drinks maker reported a profit of $1.6-billion or 69 cents a share. Excluding some costs, earnings were 80 cents a share, beating estimates of 75 cents. However, North American sales continued to decline, while international sales -- particularly in places like India and Brazil -- were responsible for growth.
Overseas, stocks were generally higher. In Europe, the U.K.'s FTSE 100 rose 0.9 per cent and Germany's DAX index rose 1.4 per cent in afternoon trading. In Asia, Japan's Nikkei 225 fell 0.1 per cent in overnight trading.
David Berman