Goldman Sachs Reports 66% Fall in Profit

Dow drops 392 points
By Newser Editors and Wire Services
Posted Jan 17, 2023 3:49 PM CST
Dow Dragged Down by Goldman Sachs Results
The logo for Goldman Sachs appears above a trading post on the floor of the New York Stock Exchange.   (AP Photo/Richard Drew)

Major US indexes closed mixed on Wall Street at the beginning of a holiday-shortened, but earnings-heavy week. The S&P 500 fell 8.12 points, or 0.2%, to 3,990.97. The Nasdaq rose 15.96 points, or 0.1%, to 11,095.11. The Dow Jones Industrial Average fell 391.76 points, or 1.1%, to 33,910.85, mostly because of a 6.4% drop in Goldman Sachs after the investment bank’s results came in far below analysts’ estimates as dealmaking dried up, the AP reports. Goldman Sachs said profits tumbled 66% to $1.33 billion in the fourth quarter. Several other companies are reporting their latest results this week, including Netflix and Procter & Gamble.

Big communications companies, and industrial and health care stocks were among the biggest weights on the market. Netflix fell 2%, Emerson Electric slid 6.8% and Pfizer dropped 3.7%. Technology sector stocks were a bright spot. Chipmaker Nvidia rose 4.8%. The broader market is coming off its best week in two months as investors review the latest round of corporate earnings to get a better sense of how much damage inflation is inflicting on the economy. Analysts still expect companies in the S&P 500 to report a drop in profits for the fourth quarter from a year earlier. That would mark the first such decline since 2020, when the pandemic was crushing the economy.

Investors are listening closely to financial updates from companies to get better determine whether inflation will continue squeezing consumers wallets and sapping corporate profits. Several banks reported encouraging financial results last week, but also said a mild recession is likely on the horizon for the US economy. M&T Bank and Netflix will report results on Thursday. After markets closed Tuesday, United Airlines reported a fourth-quarter profit and revenue higher than Wall Street expectations and gave a bullish 2023 forecast that assumes people will keep traveling despite inflation and concern about the economy, reports the AP.

(More stock market stories.)

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