US STOCKS-Wall St gains but ends off highs as Citi sinks

NEW YORK (Jan 17): U.S. stocks advanced on Tuesday, pushing the S&P 500 to its highest since early August, but sharply
pared gains late in the session as Citigroup's steep drop in profit gave investors a reason to unload bank shares.
The financial sector, which has outperformed the broader market so far this year, took a hit on investors' disappointment with
Citigroup Inc's earnings.
Citigroup's stock slid 8.1 percent to $28.25 after it reported weaker-than-expected earnings. The KBW Banks Index lost 1.4
percent. Through Friday, the KBW Banks Index was up about 10 percent for the year, while the S&P 500 was about 2
percent higher.
The banks' sell-off poured cold water on a rally that drove the S&P 500 through 1,300 for the first time since August.
Stocks rallied about 1 percent across the board after data showed China's economic growth was better than expected, even
though it expanded at the weakest pace in 2-1/2 years.
"The better numbers out of China this morning got the market off to a better start, but then there wasn't much followthrough,
and you have had what looked to be from JPMorgan and Citigroup not very good-looking earnings," said Eric Kuby, chief
investment officer of North Star Investment Management Corp., in Chicago.
Citigroup's results followed similarly disappointing earnings on Friday from JPMorgan Chase & Co.
The Dow Jones industrial average rose 60.01 points, or 0.48 percent, to 12,482.07 at the close. The Standard & Poor's 500
Index added 4.58 points, or 0.36 percent, to 1,293.67. The Nasdaq Composite Index gained 17.41 points, or 0.64 percent, to
2,728.08.
After the bell, shares of Yahoo were up 3.6 percent from a close of $15.43 following news that Yahoo co-founder Jerry Yang
resigned.
Also after the close, shares of Cree, LED lighting maker, fell 5.5 percent from $23.33 after reporting a profit that fell short of
analysts' estimates and giving a revenue forecast below expectations.
Bank shares also suffered on Friday ahead of the widely expected announcement by Standard & Poor's that it was
downgrading the credit ratings of nine euro-zone countries.
"It was expected that some of the big banks would continue struggling, especially those heavily involved in investment banking
because that part of the financial system has clearly slowed down," said Bryant Evans, investment advisor and portfolio
manager at Cozad Asset Management, in Champaign, Illinois.
While Wells Fargo & Co posted a 20 percent jump in quarterly profit, its stock, which earlier had risen more than 1 percent to
a session high at $30.69, pulled back sharply from that peak and ended up just 0.7 percent at $29.81.
The Nasdaq outperformed the other major U.S. stock indexes, with shares of Applied Materials up 2.4 percent at $11.78.
RBC upgraded the stock to "outperform."
The benchmark S&P 500 briefly moved above 1,300 on an intraday basis for the first time since Aug. 1. Analysts said a
substantial move past that resistance point could trigger more buying.
On the downside, Carnival Corp shares slid 13.7 percent to $29.60 as its Italian unit, Costa Crociere, struggled to locate
HOME CONTACT US JOIN US THE EDGE PROPERTY THE EDGE SINGAPORE
First Read
Politics
Business
Commentary
Features
Personal Finance
Property
Lifestyle
Deco & Garden
Technology
Media & Advertising
Management
Sports
Insider Asia
In today's The Edge
Financial Daily
RSS
1001 Special
commemorative feature
The Edge Billion Ringgit
Club
AIA sizes up bid for $6 bln ING Asia insurance business
US STOCKS-Wall St gains but ends off highs as Citi sinks [You must be registered and logged in to see this link.]
1 of 2 18-Jan-12 7:53 AM
Back to top
JComments
missing passengers after a cruise liner capsized. Fellow cruise operator Royal Caribbean Cruises Ltd fell 6.2 percent to
$26.97.
On the U.S. economic front, a gauge of manufacturing in New York State rose to its highest level in nine months, keeping in
line with the trend of modest improvement in U.S. economic data.
Volume totalled 6.8 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, just above the daily
average of 6.68 billion.
Advancing stocks outnumbered declining ones on the NYSE by about 3 to 2, while on the Nasdaq, advancers beat decliners
by about 13 to 12.- Reuters