Goldman Sachs turned in a quarterly profit that exceeded Wall Street’s expectations but investors remained unmoved, sending the shares down.
But a jump in oil prices, as Europe emerged from its aviation shutdown, sparked the rest of the market, sending all stock indexes higher.
Oil futures, which were down 5.1% over a three-day losing streak, rose $US2 or 2.5% to $US83.45 a barrel in New York.
Tuesday’s bunch of earnings produced mixed results, with IBM, Johnson & Johnson and Coca-Cola all declining after their results failed to impress investors.
The Dow Jones Industrial Average closed 25 points or 0.3% higher at 11,117.06, helped by gains in Exxon Mobil and Chevron.
The S&P 500-stock index was up 0.8% to 1207.17, led by a 1.9% gain in its energy sector. The Nasdaq Composite was up 0.8% to reach the 2500 level.
Goldman Sachs’ first quarter soared 91% from a year earlier to $US3.46 billion, driven by strong trading and bond underwriting, which took total revenue up 36% to $US12.78 billion.
While the result was ahead of forecasts, Goldman Sachs faces a big threat to its business from fraud charges laid last Friday by the US gpovernment.
The Washington Post has revealed the charges were made after an impasse with the investment bank and that the five-member Securities & Exchange Commission was split over its decision to go ahead with charges.
In the UK, the Financial Services Authority announced it would launch a formal investigation into Goldman Sachs transactions and allegations it sold securities that were designed to fail and benefit other parties.
Meanwhile, the Goldman Sachs employee at the centre of the fraud charges, London-based Fabrice Tourre, has been de-registered from the FSA and is on indefinite paid leave.
Other markets: Europe, Asia up
European markets rose on positive global earnings news and a return to normal in air services in most parts of the Continent.
The pan-European Stoxx 600 index gained 1.3% at 269.76. The UK's FTSE 100 ended up 1.0% at 5783.69. France's CAC-40 rose 1.4% to 4926.65 and Frankfurt's DAX climbed 1.7% to 6264.23.
In Asia, Thailand's benchmark stock index surged 5.4% as investors snapped up recently beaten-down shares. Most other Asian markets gained modestly after an overnight rise on Wall Street.
Japan's Nikkei Stock Average of 225 companies, however, slipped 0.1% to 10,900.68, surrendering early gains in cautious trade after a rate increase by India.
Hong Kong's Hang Seng Index added 1% to 21623.38, Australia's S&P/ASX 200 rose 0.2% to 4925.76, and Korea's Kospi advanced 0.7% to 1718.03.
Mumbai's Sensitive Index gained 0.3% to 17460.58, after the Indian central bank raised interest rates by a quarter percentag point, in line with most expectations.
China's Shanghai Composite ended nearly flat at 2979.53, as property shares remained weak after recent policy tightening measures.
Regional airline stocks rebounded on hopes that air-travel constraints are lifted across much of Europe. Singapore Airlines advanced 1.7%, Cathay Pacific Airways tacked on 1% and All Nippon Airways rose 2.8%.
In Thailand, the SET Index rallied 39.47 points to 765.76 after falling 8% over the previous three sessions.
Commodities: Oil, gold up
Crude oil futures rebounded in New York from three days of steep declines. Light, sweet crude oil futures for May delivery expired at $US83.45 a barrel, up $US2, or 2.5%.
The June contract, which takes over as the front month on Wednesday, gained 72USc, or 0.9%, to $US83.85 a barrel.
The gain halted a three-day skid in which the May contract fell as low as $US80.52 a barrel, and dropped $US4.39 a barrel, or 5.1%, to $US81.45 a barrel on Monday.
Gold closed higher as a willingness to take risk returned to the market and investors used a price retreat over the last two business days as a buying opportunity.
June gold, the contract month with the most open positions, rose $US3.40, or 0.30%, to settle at $US1139.20 an ounce in New York. Scarcely traded but nearby April gold gained $US3.40, or 0.30%, to $US1138.60.
Wed, 21 Apr 2010