Stocks rebound on Goldman view, dollar gains

By Herbert Lash

NEW YORK (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) rebounded on Monday after investors reassessed the potential fallout from the fraud charges against Goldman Sachs while the dollar rose on safe-haven demand spurred by delayed Greece debt talks.

Risk aversion eased late in the day on Wall Street as fears about the impact of the Goldman case ebbed and investors turned their attention to pending results from companies reporting first-quarter earnings.

Shares of Citigroup Inc. (C.N: ) jumped 7 percent after it became the latest company to surprise on the upside, turning in its best results since 2007.

Goldman’s shares reversed course to rise 1.6 percent on expectations it will report blow-out earnings on Tuesday.

Analysts said the rebound was due in part to a Bloomberg report that said the U.S. Securities and Exchange Commission had split 3-2 along party lines to approve its enforcement case against Goldman, citing two people with knowledge of the vote.

“The fact that the vote was close has been the proximate cause for the stock’s rally. This means it wasn’t a clear cut decision by the SEC,” said Doug Kass, president of Seabreeze Partners Management, in Palm Beach, Florida.

The Dow Jones industrial average (.DJI: ) closed up 63.56 points, or 0.58 percent, at 11,082.22. The Standard & Poor’s 500 Index (.SPX: ) gained 4.16 points, or 0.35 percent, at 1,196.29. The Nasdaq Composite Index (.IXIC: ) slipped 4.22 points, or 0.17 percent, at 2,477.04.

Global shares as measured by MSCI’s all-country world index (.MIWD00000PUS: ) fell 0.6 percent, weighed by a 2 percent slide in emerging markets (.MSCIEF: ).

Concerns about a delay in planned talks in Greece with the European Union and International Monetary Fund over a possible 45 billion euro ($62.91 billion) bailout added to risk aversion earlier in the session.

Both Greek bond prices and banking shares fell. Investors are keen to see Athens activate the rescue package, but the ash cloud caused by the Icelandic volcano disrupted travel in Europe and helped delay the Greek debt talks.

Copper fell to three-week lows and crude oil slipped more than 2 percent, briefly falling below $81 a barrel, as flying restrictions in Europe ate into jet fuel demand and the Goldman fraud charges dampened risk appetite.

U.S. crude for May delivery fell $1.79 to settle at $81.45 a barrel, capping its biggest three-day loss since February 3-5. Earlier, U.S. oil touched $80.53, the lowest intraday price since March 29.

Brent crude prices for June fell $1.76 to $84.23.

Gold dropped on weakness after last week’s sell-off, hurt by softer sentiment on the charges against Goldman, a leading commodities player.

U.S. June gold futures settled down $1.10 at $1,135.80 an ounce in New York.

U.S. Treasury debt prices eased as the late surge on Wall Street spurred investors to sell lower-risk government debt and take profits from price gains made last week.

Falling share prices in Europe over the paralysis of air traffic and the absence of movement on aid for Greece helped maintain Treasuries’ appeal as a safe haven for investors.

“Equities have rebounded so Treasuries are selling off — that is really the story here, we are all watching equities,” said James Caron, head of global rates research at Morgan Stanley in New York.

The benchmark 10-year U.S. Treasury note was down 9/32 in price to yield 3.80 percent.

Overnight in Asia stocks suffered their biggest loss in 10 weeks on news of the Goldman charges and after China clamped down harder on property speculation,

MSCI’s index of Asian stocks outside Japan (.MIAPJ0000PUS: ) shed 2.1 percent, its sharpest daily loss since Feb 5. In Tokyo the Nikkei (.N225: ) was down 1.7 percent.

(Reporting by Leah Schnurr, Gertrude Chavez-Dreyfuss, Emily Flitter in New York; Alex Lawler, Atul Prakash, Ian Chua, Jan Harvey and Rebekah Curtis in London; Writing by Herbert Lash; Editing by Kenneth Barry)

Stocks rebound on Goldman view, dollar gains