International Monetary Fund Managing Director Christine Lagarde said she has received pledges worth about $320 billion so far in her campaign for a bigger reserve to combat threats to global growth.
Goldman Sachs more than doubled its first-quarter profits and announced plans to raise its dividend Tuesday.
The strong results masked other problems, including a 16 percent decline in revenue. To make up for that, and to propel earnings higher, Goldman turned to cost-cutting.
The storied investment bank slashed 3,000 workers over the year, or about 8 percent of its work force. It cut back on salaries, trimmed occupancy costs and paid less in brokerage fees, cutting total expenses by 14 percent.
Revenue from financial advising, where the bank advises big companies and investors on mergers and acquisitions, was one of the few areas to record a revenue gain, 37 percent.
Revenue from underwriting stock and bond sales fell 27 percent. Revenue from trading fell 14 percent, hurt by lower fees and revenue from the division that trades bonds, currencies and commodities. Total revenue fell to $9.9 billion from $11.9 billion, though that beat the $9.4 billion that analysts polled by FactSet had been expecting.
Goldman Sachs said its net income available to common shareholders rose to $2.1 billion, or $3.92 per share. That was a jump of about 128 percent from $908 million, or $1.56 per share, a year ago. The per-share earnings also beat expectations of analysts, who had been predicting $3.52.
The bank also announced it would raise its quarterly shareholder dividend to 46 cents per share from 35 cents. Though the bank didn’t say so, that’s a particular sign of strength in the current market, because it’s also a reminder that Goldman, unlike some of its peers, got permission to do so after passing the government’s most recent round of stress tests.
CEO Lloyd Blankfeink called the quarter a “solid performance.” In a prepared statement, he noted that “client activity remains relatively low in certain areas,” but said that “our mix of businesses gives the firm significant room for revenue growth as economic and market conditions continue to improve.”
For decades, Goldman has been known for beating its Wall Street competitors and churning out executives who go on to high leadership positions.
But the past few years have left it bruised. Last fall, it recorded a quarterly loss, only its second since going public in 1999. In 2010 and 2011, its net income fell year-over-year in six of the eight quarters.
Investors are trying to piece together whether the troubles are a short-term annoyance or a sign of deep-rooted problems. They wonder if the bank needs a new game plan.
Like the rest of the banking industry, Goldman has to figure out how to navigate a world of stricter government controls that will dry up some of its key revenue streams. Goldman has made big profits trading for its own account, especially when markets are volatile. But regulations taking effect this year will reduce Goldman’s ability to make those trades.
Unlike much of the banking industry, Goldman doesn’t have a large consumer banking arm to fall back on when trading and investment banking get bumpy. Its clients are largely hedge funds and multinational corporations that need to hedge their bets on foreign currencies, fluctuating interest rates and commodities.
Return on equity was about 12 percent, in line with a year ago. That was a big change from 38 percent five years ago, before the global economic meltdown.
Goldman also has public-relations problems to worry about. In the era of Occupy Wall Street, Goldman has been the target for much of the vitriol of people who blame the financial crisis on reckless practices in the banking industry. Last month, the vitriol came to a head when a mid-level executive resigned via a blistering editorial in the New York Times, where he accused the bank of losing its “moral fiber” and caring only about its own profits rather than its clients’.
The accusations are still swirling. Last week, the bank agreed to pay $22 million to settle regulators’ charges that Goldman analysts shared confidential research with favored clients. In the first quarter, the bank set aside $59 million for litigation and regulatory proceedings.
Goldman Sachs’ stock fell slightly in pre-market trading, down 73 cents to $117.
Egypt’s election commission disqualified 10 presidential hopefuls, including Hosni Mubarak’s former spy chief and fundamentalist Islamists, from running Saturday in a surprise decision that left a field of moderates in the race for the country’s first post-revolutionary leader.
The elimination of the three most powerful and controversial candidates could go in two directions with just weeks to go before the vote, observers said. It could plunge the Arab world’s most populous nation into a new political crisis, or just the opposite, defuse it.
Farouk Sultan, the head of the Supreme Presidential Election Commission that was appointed by Egypt’s military rulers to oversee the vote, said that those barred from the contest included Mubarak-era strongman Omar Suleiman, Muslim Brotherhood chief strategist Khairat el-Shater and hard-line Islamist Hazem Abu Ismail. He did not give reasons.
Disqualified candidates have 48 hours to appeal the decision, according to election rules. The final list of candidates will be announced on April 26.
The announcement came as a shock to many Egyptians as three of the 10 excluded were considered among the front-runners in a highly polarized campaign that has left the nation divided behind two strong camps: Islamists and former regime insiders who are allegedly supported by the ruling generals.
Thirteen others had their candidacy approved, including former Arab League chief Amr Moussa, moderate Islamist Abdel-Moneim Abolfotoh and former prime minister and Mubarak-era minister Ahmed Shafiq, according to Sultan.
If upheld, the decision would reshape the electoral landscape by removing the most powerful and controversial candidates and leaving moderates such as Abolfotoh, an ex-Muslim Brotherhood leader who has been trying to project crossover appeal for both religious conservatives and liberals, and Moussa, who was a member of the old regime but is popular among middle class Egyptians and who is not so closely associated with it.
The presidential election is due on May 23-24, with a possible runoff on June 16-17. The winner will be announced on June 21, less than two weeks before the July 1 deadline promised by the military rulers who took over after Mubarak to hand over power.
Abu Ismail, a lawyer-turned-preacher whose eligibility had come under scrutiny in recent weeks over the question of whether his late mother had dual Egyptian-U.S. citizenship, accused the military rulers who assumed power after Mubarak’s ouster of trying to manipulate the race from behind the scenes and warned his followers would not stay silent.
“You will drown, God willing, because you are in showdown with the people, because you are playing with fire,” he said in an interview with the Islamist TV network Al-Hakma.
Abu Ismail has led the most aggressive campaign so far. On the eve of the announcement, hundreds of his supporters surrounded the election commission’s headquarters in Cairo, forcing Sultan and his employees to evacuate under the military protection.
A new election law passed after Mubarak’s ouster bars an individual from running if the candidate, the candidate’s spouse or parents hold any citizenship other than Egyptian, and the commission had ordered the Interior Ministry to provide evidence showing whether Abu Ismail’s mother was officially documented in Egypt as having dual U.S. -Egyptian citizenship.
A spokesman for el-Shater’s campaign, Murad Mohammed Ali, also called the decision “very dangerous” and said it gives a message that “there was no revolution in Egypt no checking account payday advance.”
The Muslim Brotherhood fielded the head of its political arm Mohammed Morsi as a back-up candidate last week, fearing that el-Shater would be disqualified on the grounds that his records were not entirely cleared after serving time in prison in connection with his banned political activity under Mubarak. His lawyers say the ruling generals had dropped the charges. Morsi was not disqualified.
Despite the fiery rhetoric and promises from those disqualified to appeal, some Egyptians welcomed the news.
“This is much better,” said Ahmed Khalil, a spokesman of the liberal Free Egyptians party, which was not fielding a candidate. “These three candidates were holding extremist ideologies or holding an intelligence agenda.”
The announcement was the latest twist in an already convulated political scene as the nation struggles to redefine itself and navigate a difficult transition to civilian rule.
In the last two weeks, a court suspended the work of an Islamist-dominated, 100-member panel tasked with drafting a new constitution on the grounds its makeup violated the spirit of the interim charter that governed its formation.
Islamists as well as the largely liberal and secular activists who spearheaded the protests that led to Mubarak’s ouster had hoped to have a new constitution in place before the election in order to curtail the powers of the president after nearly three decades of autocratic rule.
The Muslim Brotherhood _ which along with hard-line ultraconservative Salafis captured more than 70 percent of the parliament seats in the first post-revolutionary elections _ announced on March 31 that el-Shater would run for president.
That reversed an earlier pledge not to seek the office and came after weeks of complaints by the Brotherhood that the parliament they control is toothless and that the ruling military was preventing it from forming a government.
In what was seen as a countermove backed by the generals, Suleiman made an unexpected announcement a week later that he was entering the race for the presidential elections. Suleiman said he had decided to run to block Islamist rule and provide stability after more than a year of turmoil.
A judge close to the commission, who spoke on condition of anonymity because he wasn’t authorized to disclose the information, said that Suleiman has not presented the proper number of endorsements. Each candidate needed at least 30,000 endorsements, including at least 1,000 from each of the country’s 15 provinces, to join the race.
His campaign spokesman Mohammed Mishal promised to present extra endorsements that have not been used, giving him a gateway to re-enter the race.
Another campaign spokeswoman Reem Mamdouh said in an interview with the local CBC television network that they had not been officially notified about the decisions but would definite appeal.
“Suleiman will never withdraw and let down the hopes of the large constituency of Egyptians who supported him. This is not happening,” she said.
Ayman Nour, a liberal presidential hopeful, said the commission told him he was disqualified because of his imprisonment as a dissident under Mubarak’s regime and because his name was not listed among registered voters.
He also promised to appeal, saying the decision was “politicized as the whole race is deeply politicized.”
The Times of London is being sued over email hacking, a lawyer said Friday, an indication that the scandal over media misdeeds at Rupert Murdoch’s British newspapers continues to spread.
Lawyer Mark Lewis told The Associated Press that his firm had filed suit against the 227-year-old publication over its hacking of police blogger Richard Horton’s email account.
“We did lodge papers,” Lewis confirmed in an email, adding that the suit was filed on Tuesday.
The Times unmasked Horton as the detective behind the award-winning “NightJack” blog in a controversial 2009 piece which Horton unsuccessfully sued to try to suppress.
According to an account of the lawsuit published in Britain’s New Statesman magazine, Horton’s lawyer raised the possibility that the detective’s Hotmail account had been illegal accessed _ an allegation dismissed as “baseless” in 2009 by Times lawyer Alastair Brett pay day loans.
However, in public statements and in testimony before an official inquiry into media ethics, senior Times managers admitted that one of their reporters had accessed Horton’s account.
“‘Baseless’ was not the best word to use,” Brett told the inquiry last month.
Times publisher News International did not immediately return an email or a call Friday.
China
Hospital operator Tenet Healthcare Corp. has agreed to pay $42.8 million to resolve allegations it overbilled Medicare for the treatment of patients who needed intense inpatient rehabilitation.
The Dallas company said today that the settlement resolves inquiries by the U.S. Department of Justice, Department of Health and Human Services and the U.S. Attorney’s Office for the Northern District of Georgia.
The allegations involve the admission of patients at 25 facilities from May 2005 to December 2007. No information was immediately available on whether any of the facilities were in the St. Louis area, where Tenet operates two medical centers: Des Peres and St. Louis University hospitals.
The Justice Department said Tenet billed Medicare for patients who did not meet the standards for admission to inpatient rehab facilities. Medicare pays those facilities at a higher rate because patients require more difficult rehabilitation and more medical supervision than patients at other types of facilities no faxing pay day loans.
The Justice Department said it was the single largest U.S. recovery to date involving inappropriate inpatient rehab admissions.
Tenet said it already set aside money to cover the settlement and will make the payment in the second quarter.
The company said it now operates only eight inpatient rehabilitation centers. It also runs 50 hospitals and around 100 outpatient health centers.
Tenet said it identified overpayments at one facility in Georgia in 2007, and disclosed those payments to the government.
Shares of Tenet Healthcare Corp. fell 14 cents, or 2.7 percent, to $4.97 in midday trading Tuesday. Its shares have traded in a 52-week range of $3.46 to $7.56 per share.
Stocks pulled back sharply as Wall Street got its first chance to react to a slowdown in hiring in the United States in March.
The Dow Jones industrial average dropped 136 points to 12,923 in the first half-hour of trading. The Standard & Poor’s 500 index was off 17 at 1,381, and the Nasdaq composite lost 40 points to 3,040.
The losses were broad _ only 13 stocks in the S&P 500 rose. Financial stocks fell the most. Bank of America was off 3 percent, Citigroup 2.5 percent.
The U.S. added just 120,000 jobs in March, about half the pace from December through February. The slowdown interrupted the strongest stretch of job growth since the Great Recession. The government released its jobs report on Friday, but the stock market was closed.
The stock market had already started to pull back from its strongest first quarter since 1998. The Dow closed as high as 13,264 earlier last week, then lost more than 200 points in three days.
Even before the job number came out, investors were worried that the Federal Reserve does not appear inclined to take further steps to stimulate the economy.
This week, investors will turn their attention to first-quarter corporate earnings reports. Aluminum maker Alcoa releases its results Tuesday, becoming the first company among the 30 in the Dow to do so. Two major banks, JPMorgan Chase and Well Fargo, report on Friday.
Analysts are expecting quarterly earnings to decline slightly compared with a year earlier. That would break a streak of nine straight quarters of earnings growth since 2009.
The yield on the 10-year Treasury note fell to 2.04 percent from 2.06 percent Friday.
In other corporate news:
_ AOL shot up 44 percent after the company agreed to sell hundreds of patents and patent applications to Microsoft for a little more than $1 billion. The company plans to return some of the cash to shareholders.
_ Avon fell 3 percent after the struggling beauty products company named a former executive at Johnson & Johnson, Sherilyn S. McCoy, to be its CEO. She starts April 23.
Canada
UPDATED at 3:30 p.m. with federal indictment.
ST. CHARLES • A federal indictment charging the founders of an auto service contract company with various crimes was unsealed just hours after one of the brothers at the head of US Fidelis pleaded guilty to state fraud and stealing charges.
The federal indictment unsealed this afternoon charges Darain Atkinson and his brother Cory Atkinson with two counts of filing false tax returns and one count of conspiracy to commit mail and wire fraud.
Just three years ago, the brothers were self-made millionaires with palatial homes, fleets of exotic cars and more than 1,100 employees working at the Wentzville headquarters of the auto service contract company they founded, US Fidelis.
But prosecutors say that the Atkinsons got more than $71 million from US Fidelis and its predecessor from 2006 through 2008, and used most of the money for personal expenses, including luxury boats and vehicles and multi-million dollar homes in St. Charles County, Lake Tahoe and the Cayman islands.
They never reported the millions received in 2006 and 2007 as income, prosecutors said.
Earlier in the afternoon, Darain Atkinson pleaded guilty to insurance fraud, stealing and unlawful merchandising practices in the St. Charles County courtroom of Circuit Judge Jon Cunningham. Eleven other charges against Atkinson were dropped. Prosecutors recommended a sentence of eight years. Sentencing was set for July 16.
Darain Atkinson’s attorney, Scott Rosenblum, said that sentencing in the state case would not happen until the federal matter is resolved, and will likely result in no additional prison time.
“He’s done everything he can not only to accept his responsibility, he’s surrendered everything he’s owned to make things good,” said Rosenblum flexcheck cash advance.
In the 14 state charges originally filed against Darain Atkinson, 47, who was president of US Fidelis, and 13 counts against Cory Atkinson, 42, the company’s vice president, prosecutors allege that their company intentionally cheated consumers by:
• Keeping refunds they owed customers who canceled coverage.
• Charging fees higher than authorized in sales contracts.
• Lying during sales pitches about limitations on coverage and caps on claims paid, and falsely suggesting to consumers that US Fidelis was affiliated with automakers and dealers.
• Selling insurance without a license when it peddled so-called product warranties, a form of vehicle coverage that is conditional on the purchase and use of certain auto additives.
US Fidelis collapsed in late 2009. Last month in a proposed legal settlement filed in bankruptcy court in St. Louis, the company agreed to pay $1.45 million to 556 former company employees.
Cory Atkinson’s state case is pending and a trial is set for September.
Missouri Attorney General Chris Koster attended Darain Atkinson’s hearing. Koster said afterwards that since the Atkinson’s were indicted, his office has received fewer complaints about other vehicle service contract providers.
“I think the indictment of US Fidelis sent a shockwave through this industry,” he said.
European Central Bank President Mario Draghi comments on inflation, monetary policy and the region
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