Citigroup Q1 better than estimate, oil getting higher
Global Market
Citigroup Inc. posted a $5.11 billion loss, less than analysts' estimates, and cut 9,000 jobs, it sending their shares higher and sparking a rally in U.S. stocks and the dollar.
Citigroup reported $16 billion of writedowns and increased loan reserves as customers fell behind on home, car and credit-card payments. Their net loss of $1.02 a share compared with an estimate of $1.66 by analyst. Citigroup climbed $1.08 to $25.11. The Standard & Poor's 500 Index rose 1.8 percent and the dollar gained against the euro. Revenue fell to $13.2 billion, compared with analyst estimate of $11.1 billion.
While the writedowns stuck their trading and investment-banking division revenue climbed in both the consumer and wealth-management businesses.
The company benefited from a $633 million gain on its stake in Visa Inc., which make an initial stock offering and a $663 million gain on the sale of shares in Redecard SA.
Citigroup set about $1.8 billion as reserves for bad consumer loans. The reserve set as delinquencies rose on mortgages, unsecured personal loans, credit cards and auto loans.
The bank plans to eliminate 9,000 jobs in the next year, that includes previous 2,000 of the 6,200 cuts. To replenish capital they has sold equity controlled by the governments of Abu Dhabi, Kuwait and Singapore. Analyst reports that Citigroup's consumer-loan losses may force it to raise more capital.
When announced 2007 earnings, Citigroup slashed its dividend. It allowed the bank to retain about $4.4 billion of additional capital. Analyst believes Citigroup may soon have to cut its dividend again.
Stock Market
U.S. stocks rallied after companies posted results that topped analysts' estimates.
The market climbed after Citigroup's loss was less than projections and profits at Google and Caterpillar were boosted by overseas growth. Honeywell International Inc. and Xerox Corp. also advanced on better-than- forecast results.
The S&P 500 added 24.77 to 1,390.33. The Dow Jones Industrial Average rallied 228.87 to 12,849.36. The Nasdaq Composite Index increased 61.14 to 2,402.97.
Citigroup increased $1.08 to $25.11. They said revenue fell to $13.2 billion, topping estimate of $11.1 billion from analysts. But first-quarter net loss of $1.02 a share compared with the $1.66 loss predicted by analyst. Bank of America Corp. rallied $1.09 to $38.56. JPMorgan Chase & Co. climbed 64 cents to $45.76.
Google rallied $89.87 to $539.41. Their sales rose 46 percent as more users clicked on text advertisements. Overseas sales increased 55 percent.
Caterpillar rose $6.69 to $85.28. First-quarter earnings rose 13 percent, topping analysts' estimates, as sales to China and India increased.
The dollar has fallen against major currencies, making U.S. products cheaper and increasing the dollar value of sales. Coca-Cola Co. and International Business Machines Corp. also reported profits that were boosted by the dollar's drop.
Honeywell International Inc. climbed $3.59 to $60.99. Their first-quarter earnings rose more than estimated on sales of aircraft and building controls. Record oil prices led to more sales of refining equipment produced by Honeywell's specialty- materials division.
Schlumberger Ltd. added $6.55 to $101.85. Their first-quarter profit rose 13 percent as record oil prices increased drilling by customers. Exxon Mobil Corp. rose 62 cents to $94.
Xerox Corp. added 7 cents to $14.57. Their first-quarter revenue rose more than analysts estimated. The company is improve in worldwide markets, but faces a challenging market in the U.S. E*Trade Financial Corp. rose 35 cents to $3.97. They said it expects to return to profitability this year. Newmont Mining Corp. slid $1.25 to $46.27 after gold futures tumbled 2.9 percent to $915.20 an ounce.
Currencies
The dollar rose against the euro after Citigroup Inc.'s first- quarter results fueled speculation that financial firms will weather credit market losses.
The dollar rose to $1.5809 per euro. The U.S. currency increased to 103.74 yen. The euro rose to 164.01 yen.
The pound appreciated on speculation the Bank of England may take mortgages off lenders' balance sheets.
The yen fell versus South Africa's rand and the pound as a gain in U.S. stocks encouraged investors to resume carry trades.
Implied volatility dollar-yen options fell to 12.95 percent, indicating fewer price swings in the next month.
Analyst said no chance the Federal Reserve will cut its rate by a half-percentage point on April 30, they predict a quarter- point reduction. The Dollar Index increasing to 72.228, from 71.680 yesterday.
Analysts predict that the dollar will weaken to $1.63 per euro in three months as increase U.S. import costs and prevent the ECB from cutting interest rates because of inflation.
ECB said there are upside risks to inflation. They kept the rate at of 4 percent. Crude oil climbed to a record of $117 a barrel today.
Commodities
Oil
Crude oil and gasoline climbed as better-than-expected earnings results signaled a strengthening economy that may boost demand.
U.S. stocks rallied following earnings reports from Google Inc. and Caterpillar Inc. that exceeded analyst estimates.
Crude oil for May delivery rose $1.83 to settle at $116.69 a barrel. Gasoline for May delivery rose 3.15 cents to $2.9893 a gallon.
U.S. said the government will continue to buy oil for the Strategic Petroleum Reserve, even with prices over $100 a barrel. They needs a 90-day supply of oil in reserve and currently has 55 to 56.
Deliveries of petroleum products declined to an average 20.48 million barrels a day. Gasoline supplies have fallen to the lowest since January as refiners cut their processing rates.
Crude's rally came as the dollar rose against the euro.. Today's move in the energy complex ran counter to gold, which fell as the dollar strengthened. Silver fell too.
Brent crude oil for June settlement rose $1.49 to $113.92 a barrel.
The main militant group in Nigeria said that it sabotaged a Royal Dutch Shell Plc pipeline.
A 5.2-magnitude earthquake in Illinois raised concern that it may have affected regional refinery operations. Marathon Oil Corp. shut its crude oil pipeline as a precaution after the quake struck, though it has since returned the line to service but refinery wasn't affected.
Gold
Gold fell as the dollar rebounded against the euro, reducing the appeal of the precious metal. Silver also dropped.
Gold futures for June delivery tumbled $27.20 to $915.20 an ounce. Silver futures for May delivery declined 48.5 cents to $17.82 an ounce.
The dollar rose against the euro and the yen on speculation that financial companies will survive the credit crisis. Citigroup Inc. reported a $5.11 billion first-quarter loss, less than analyst estimates. Crude-oil futures rose to a record $116.80 a barrel today.
Citigroup Inc. posted a $5.11 billion loss, less than analysts' estimates, and cut 9,000 jobs, it sending their shares higher and sparking a rally in U.S. stocks and the dollar.
Citigroup reported $16 billion of writedowns and increased loan reserves as customers fell behind on home, car and credit-card payments. Their net loss of $1.02 a share compared with an estimate of $1.66 by analyst. Citigroup climbed $1.08 to $25.11. The Standard & Poor's 500 Index rose 1.8 percent and the dollar gained against the euro. Revenue fell to $13.2 billion, compared with analyst estimate of $11.1 billion.
While the writedowns stuck their trading and investment-banking division revenue climbed in both the consumer and wealth-management businesses.
The company benefited from a $633 million gain on its stake in Visa Inc., which make an initial stock offering and a $663 million gain on the sale of shares in Redecard SA.
Citigroup set about $1.8 billion as reserves for bad consumer loans. The reserve set as delinquencies rose on mortgages, unsecured personal loans, credit cards and auto loans.
The bank plans to eliminate 9,000 jobs in the next year, that includes previous 2,000 of the 6,200 cuts. To replenish capital they has sold equity controlled by the governments of Abu Dhabi, Kuwait and Singapore. Analyst reports that Citigroup's consumer-loan losses may force it to raise more capital.
When announced 2007 earnings, Citigroup slashed its dividend. It allowed the bank to retain about $4.4 billion of additional capital. Analyst believes Citigroup may soon have to cut its dividend again.
Stock Market
U.S. stocks rallied after companies posted results that topped analysts' estimates.
The market climbed after Citigroup's loss was less than projections and profits at Google and Caterpillar were boosted by overseas growth. Honeywell International Inc. and Xerox Corp. also advanced on better-than- forecast results.
The S&P 500 added 24.77 to 1,390.33. The Dow Jones Industrial Average rallied 228.87 to 12,849.36. The Nasdaq Composite Index increased 61.14 to 2,402.97.
Citigroup increased $1.08 to $25.11. They said revenue fell to $13.2 billion, topping estimate of $11.1 billion from analysts. But first-quarter net loss of $1.02 a share compared with the $1.66 loss predicted by analyst. Bank of America Corp. rallied $1.09 to $38.56. JPMorgan Chase & Co. climbed 64 cents to $45.76.
Google rallied $89.87 to $539.41. Their sales rose 46 percent as more users clicked on text advertisements. Overseas sales increased 55 percent.
Caterpillar rose $6.69 to $85.28. First-quarter earnings rose 13 percent, topping analysts' estimates, as sales to China and India increased.
The dollar has fallen against major currencies, making U.S. products cheaper and increasing the dollar value of sales. Coca-Cola Co. and International Business Machines Corp. also reported profits that were boosted by the dollar's drop.
Honeywell International Inc. climbed $3.59 to $60.99. Their first-quarter earnings rose more than estimated on sales of aircraft and building controls. Record oil prices led to more sales of refining equipment produced by Honeywell's specialty- materials division.
Schlumberger Ltd. added $6.55 to $101.85. Their first-quarter profit rose 13 percent as record oil prices increased drilling by customers. Exxon Mobil Corp. rose 62 cents to $94.
Xerox Corp. added 7 cents to $14.57. Their first-quarter revenue rose more than analysts estimated. The company is improve in worldwide markets, but faces a challenging market in the U.S. E*Trade Financial Corp. rose 35 cents to $3.97. They said it expects to return to profitability this year. Newmont Mining Corp. slid $1.25 to $46.27 after gold futures tumbled 2.9 percent to $915.20 an ounce.
Currencies
The dollar rose against the euro after Citigroup Inc.'s first- quarter results fueled speculation that financial firms will weather credit market losses.
The dollar rose to $1.5809 per euro. The U.S. currency increased to 103.74 yen. The euro rose to 164.01 yen.
The pound appreciated on speculation the Bank of England may take mortgages off lenders' balance sheets.
The yen fell versus South Africa's rand and the pound as a gain in U.S. stocks encouraged investors to resume carry trades.
Implied volatility dollar-yen options fell to 12.95 percent, indicating fewer price swings in the next month.
Analyst said no chance the Federal Reserve will cut its rate by a half-percentage point on April 30, they predict a quarter- point reduction. The Dollar Index increasing to 72.228, from 71.680 yesterday.
Analysts predict that the dollar will weaken to $1.63 per euro in three months as increase U.S. import costs and prevent the ECB from cutting interest rates because of inflation.
ECB said there are upside risks to inflation. They kept the rate at of 4 percent. Crude oil climbed to a record of $117 a barrel today.
Commodities
Oil
Crude oil and gasoline climbed as better-than-expected earnings results signaled a strengthening economy that may boost demand.
U.S. stocks rallied following earnings reports from Google Inc. and Caterpillar Inc. that exceeded analyst estimates.
Crude oil for May delivery rose $1.83 to settle at $116.69 a barrel. Gasoline for May delivery rose 3.15 cents to $2.9893 a gallon.
U.S. said the government will continue to buy oil for the Strategic Petroleum Reserve, even with prices over $100 a barrel. They needs a 90-day supply of oil in reserve and currently has 55 to 56.
Deliveries of petroleum products declined to an average 20.48 million barrels a day. Gasoline supplies have fallen to the lowest since January as refiners cut their processing rates.
Crude's rally came as the dollar rose against the euro.. Today's move in the energy complex ran counter to gold, which fell as the dollar strengthened. Silver fell too.
Brent crude oil for June settlement rose $1.49 to $113.92 a barrel.
The main militant group in Nigeria said that it sabotaged a Royal Dutch Shell Plc pipeline.
A 5.2-magnitude earthquake in Illinois raised concern that it may have affected regional refinery operations. Marathon Oil Corp. shut its crude oil pipeline as a precaution after the quake struck, though it has since returned the line to service but refinery wasn't affected.
Gold
Gold fell as the dollar rebounded against the euro, reducing the appeal of the precious metal. Silver also dropped.
Gold futures for June delivery tumbled $27.20 to $915.20 an ounce. Silver futures for May delivery declined 48.5 cents to $17.82 an ounce.
The dollar rose against the euro and the yen on speculation that financial companies will survive the credit crisis. Citigroup Inc. reported a $5.11 billion first-quarter loss, less than analyst estimates. Crude-oil futures rose to a record $116.80 a barrel today.
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