Goldman Sachs case, volcano ashes ground stocks

08:41, April 20, 2010      

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While Goldman Sachs' fraud case and disrupted air traffic in Europe continued to weigh on U.S. stocks on Monday, a rebound in financial shares helped to lift major indicators in late afternoon trading.

The Dow gained more than 0.5 percent, while the S&P moved back toward the 1,200 level. The tech-heavy Nasdaq pulled back from a 1. 6-percent early drop to end just a bit lower.

The Dow Jones Industrial Average rose 73.39, or 0.67 percent, to 11,092.05, the S&P 500 added 5.39, or 0.45 percent, to 1,197.52, and the Nasdaq inched down 1.15, or 0.05 percent, to 2,480.11.

Goldman Sachs shares gained 1.6 percent on Monday, after it was revealed that SEC officials didn't reach unanimity on vote to press charges against the bank. That also helped ease panic over the financial industry and sent bank shares to rebound from early lows.

Shares of Citigroup gained 7 percent, as the company reported a profit of 4.43 billion U.S. dollars, or 15 cents a share. The banking giant said quarterly revenue was 25.42 billion dollars, compared with 26.97 billion dollars in the year-ago period.

The U.S. stocks slumped on Friday after the Securities and Exchange Commission (SEC) accused Wall Street giant Goldman Sachs of defrauding investors on subprime mortgage securities. The investment bank's share plunged 13 percent following the charges.

More positive news came from the private research group Conference Board, which reported on Monday that its much-watched leading economic index increased 1.4 percent in March, a third straight monthly rise.

Oil prices fell for a third day on Monday as investors avoided riskier assets in reaction to the Goldman Sachs fraud case and European economic activities disrupted by volcano ashes. Crude futures traded in New York dropped to 80.53 dollars a barrel before settling at 81.45 dollars, more than 2 percent lower from previous session.

Airline stocks fell with Northern European airports closed for a fifth straight day due to the cloud of volcanic ash. UAL Corp. tumbled 5.1 percent while U.S. Airways fell 3.6 percent.



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