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Goldman Sachs 82% earnings drop pulls FTSE lower
Goldman Sachs results were far worse than analysts had expected, adding to pain after disappointment overnight from IBM and Texas Instruments.
Markets
UK shares were trading near day lows as US markets are expected to fall after disappointing updates from investment banking group Goldman Sachs and tech giants IBM and Texas Instruments.
The FTSE 100 was down 39.4 points, or 0.7%, at 5108.7 ahead of the US stock market open.
The Dow is expected to fall around 120 points at the open after a slew of disappointing updates put pay to hopes that corporate results will offset weak economic data.
Around one third of the 500 largest listed US companies are due to publish quarterly earnings this week and the pictured has been mixed so far.
One of the biggest disappointments has been from Goldman Sachs. The banking group said earnings fell 82% to $613 million in the second quarter. That is equal to 78 cents a share, down from $4.93 a share a year earlier and well below analyst predictions of a fall to $2.08 per share.
After the close yesterday IBM reported better profits but lower sales and Texas Instruments reported lower than expected profits and sales.
In the UK, public finances were weaker than hoped and the latest CBI survey showed a marked fall in output and export expectations.
That pulled the pound 0.3% lower against the dollar to $1.5176.
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2 comments so far. Why not have your say?
David Warner
Jul 20, 2010 at 16:58
It would be ironic if Goldman Sachs had declined following the "Daily Mail" revelations about food speculation leading to starvation, following mortgage speculation leading to US homelessnes and UK bank failure:
http://www.dailymail.co.uk/news/article-1296068/Trading-death-Rapacious-bankers-making-fortunes-forcing-price-food-leaving-millions-starve.html
HOWEVER I am sure it's more to do with the bonus tax and having to repay some of their scammed mortgage derivative money.
Would that market were moral creatures - bring back Mr Gladstone I say!
report thisRalph Musgrave
Jul 20, 2010 at 19:42
Banks’ profit and loss accounts are largely works of fiction. Would this so called 82% earnings drop by any chance be a publicity stunt designed to attract sympathy and deflect attention from Goldman’s recent illegal activities?
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