Goldman results fail to impress market

NEW YORK - Investors got the results they wanted from Goldman Sachs, but the stock market's response was just a modest pop.

Mixed economic data yesterday reminded investors of the challenges businesses still face and left the market zigzagging all day. Stocks gained on a handful of strong earnings, while Treasurys tumbled on news of a jump in inflation.

Investors were pleased that Goldman Sachs Group Inc.'s second-quarter earnings easily surpassed analysts' forecasts thanks to big gains in trading and underwriting. But the release of the results came as an anticlimax, as anticipation of a strong report sent the entire stock market soaring Monday.

Johnson & Johnson also had better-than-expected results, although its profits fell 3.5 percent.

Stocks could get a boost today; Intel Corp. issued a strong profit report and better-than-expected forecast after the market closed yesterday.

Even with strong earnings reports, however, signals about the economy remain mixed. Retail sales posted their largest gain in five months in June, but much of that increase came from higher gas prices.

Investors were also uneasy after a separate report showed wholesale prices rising far more than expected last month and the most since November 2007, due partly to higher energy costs. That sent Treasurys falling and their yields climbing.

The Dow rose 27.81, or 0.3 percent, to 8,359.49. The Standard & Poor's 500 index rose 4.79, or 0.5 percent, to 905.84, while the Nasdaq composite index rose 6.52, or 0.4 percent, to 1,799.73.

Stocks had risen sharply higher on Monday, lifting the Dow 2.3 percent, after Meredith Whitney, a respected banking analyst, upgraded her view on Goldman. The shift stoked hopes that financial companies would show continued improvement.

But Goldman's actual results had little impact as investors' focus quickly turned to the rest of the financial industry.

"Here we have a best-in-class sort of company reporting outstanding results," said Craig Peckham, an analyst with Jefferies & Co. "The earnings reports we get in the financial sector from here on out quite honestly are coming from companies that just don't have the same kind of cachet."

Goldman rose 22 cents to $149.66. Investors also expect reports from JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. this week.

There were mixed forecasts from several companies. Johnson & Johnson gained 51 cents to $58.23 after its report. Its rheumatoid arthritis drug Remicade is manufactured by Horsham-based Centocor Ortho Biotech Inc., a division of Johnson & Johnson, at a facility in Malvern.

Dell Inc. warned that quarterly gross margins would fall below first-quarter levels due to higher component costs and pressure to keep prices low. The stock fell $1.05, or 8.1 percent, to $11.97.