RTGAM
Despite better-than-expected first-quarter results from Goldman Sachs Group Inc. after the close of trading on Monday, major stock market indexes were relatively unchanged on Tuesday morning - suggesting that buying the rumour, selling the fact is a well-entrenched strategy these days.
U.S. stock index futures were only slightly higher with about an hour before markets open, suggesting that stocks will rise at the start of trading. Futures for the Dow Jones industrial average were up 19 points and futures for the broader S&P 500 were up 3 points - tame moves given that the Goldman Sachs earnings provide more evidence of stability returning to Wall Street.
The bank reported a profit of $1.8-billion (U.S.), or $3.23 a share, which was about twice the profit that analysts had been expecting. The report came a week after Wells Fargo & Co. pre-announced its first quarter results, with a profit expectation that was also well above analysts' forecasts.
In other earnings news, health care products heavyweight Johnson & Johnson reported that its net earnings fell 2.5 per cent in the first quarter, to $3.5-billion or $1.26 a share. Despite the dip, in part due to a rising U.S. dollar that hurt overseas sales, the per-share profit beat analysts' expectations.
Still, there was some glum news, which may be hanging over stocks: The U.S. Commerce Department reported that consumer sales fell 1.1 per cent in March, an unexpected dip following a 0.3 per cent gain in February, which suggests that rising unemployment continues to hit consumer spending and may prolong the recession.
In Europe, the U.K.'s FTSE 100 was up 0.7 per cent and Germany's DAX index was up 1.7 per cent in afternoon trading. In Asia, Japan's Nikkei 225 fell 0.9 per cent in overnight trading.
Copyright 2001 The Globe and Mail