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Equities closed lower after trading in a narrow range on a low volume, with investors eagerly awaiting the expected results in the coming weeks. the Dow Jones Industrial Average (DJINDICES: ^ DJI) and the S & P 500 (SNPINDEX: ^ GSPC) slightly decreased. Banking stocks drove the market down and energy stocks fell, while the consumer and health sectors advanced.
Stock Market Today
| Index | Percentage variation | Point change |
|---|---|---|
| Dow | (0.10%) | (27.53) |
| S & P 500 | (0.06%) | (1.83) |
Data source: Yahoo! Finance.
Big banks start the first quarter earnings season, with Goldman Sachs (NYSE: GS) and Citigroup (NYSE: C) report today.
Source of the image: Getty Images.
Goldman Sachs reaches a low in trading
Goldman Sachs missed revenue forecasts in the first quarter, but exceeded profit expectations and its shares fell 3.8%. Revenues decreased 12.6% to $ 8.81 billion, while the consensus of analysts was $ 9.04 billion. Earnings per share fell 17.8% to $ 5.71, but it was well over $ 4.89 estimated by Wall Street.
This decrease is largely attributable to an 18% decline in institutional customer service revenue, which generates trading products. Fixed income securities trading fell 11% and trading income fell 24%. Goldman said the December market downturn dampened the stock craze, while lower market volatility also detracted from earnings. The company also recorded a 34% decrease in sales charges due to the weakness of the IPO during the quarter. Operating expenses decreased by 11%, largely due to a 20% decrease in compensation and benefits.
Goldman was, however, right to be optimistic, saying institutional clients were becoming less cautious in March. The company is currently conducting a strategic review, which includes the addition of new diversification companies, such as the partnership with Apple on the new technology titan credit card.
Diversification and buybacks reinforce Citigroup's results
As with Goldman Sachs, Citigroup's first-quarter results were impacted by lower equity trading, but stable performance in other segments of the business dampened this effect and equities fell only 0 percent. , 1%. Revenues fell 1.6% to $ 18.58 billion, missing analysts' consensus of $ 18.63 billion. Earnings per share rose 11.3% to 1.87 USD, exceeding expectations of 1.80 USD.
Equity trading revenue fell 24%, while fixed income transactions increased 0.8%, keeping markets and securities-related services down to 5.6%, 4.7 billion dollars. Citigroup's retail banking operations generated stable revenue growth of $ 8.5 billion, while strong growth in advisory fees to institutions led to higher investment banking services revenues from 19.8% to $ 1.4 billion.
Citigroup's earnings gains were favored by a lower tax rate and a significant reduction in the number of shares. The company used $ 5 billion to repurchase shares during the quarter, which reduced the number of shares by 9% over the same period of the previous year.
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