Wall Street's big banks rake it in
Goldman Sachs and Citigroup both posted better-than-expected profits. That may not do much for folks on Main Street, though.
Net income at New York-based Goldman in the last quarter rose 7% to $2.26 billion, or $4.29 per share. Revenue rose 1% to $10.1 billion. Those results exceeded analysts' expectations for a profit of $3.88 per share on sales of $9.64 billion.
Citigroup, also based in New York, reported net income of $3.81 billion, or $1.23 per share, on revenue of $20.4 billion, an increase of 3%. Analysts' had forecast earnings of $1.17 per share on sales of $20.11 billion. JPMorgan Chase (JPM) also posted better-than-expected results from the latest quarter.
Both Goldman and Citi had several highlights. Goldman reported investment banking revenue of $1.57 billion in the current quarter, a gain of 36% as demand for its underwriting business jumped. Revenue in Citigroup's capital markets business rose 31% to $6.98 billion, helped by its strength in international markets. Goldman and Citigroup also benefited from cost cutting.
Whether Wall Street's rising tide will lift the boats on Main Street remains to be seen. Economic signals, for now, are painting a pessimistic picture. As the The New York Times noted, the International Monetary Fund today cut its estimates for global economic growth. Target (TGT), the second-largest retailer behind Wal-Mart (WMT), today warned that that first-quarter results would be worse than expected because of colder-than-normal weather.
Data from the National Federation of Independent Business show that owners of small businesses are less confident about the economy than they have been in recent months. And U.S. consumer confidence tumbled in March after the automatic government spending cuts known as the sequester were triggered.
Although the benefits of the Wall Street resurgence could trickle down to ordinary folks, it may take a while for that to happen.
Jonathan Berr owns a small stake in Target. Follow him on Twitter @jdberr.
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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The solid report comes a month after the retailer closed all of its Canadian operations.
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